Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 26, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | VirTra, Inc | ||
Entity Central Index Key | 0001085243 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 27,876,144 | ||
Entity Common Stock, Shares Outstanding | 7,775,030 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 6,841,984 | $ 1,415,091 |
Certificates of deposit | 1,915,000 | |
Accounts receivable, net | 1,378,270 | 2,307,972 |
Interest receivable | 7,340 | |
Inventory, net | 3,515,997 | 1,949,414 |
Unbilled revenue | 5,408,598 | 3,579,942 |
Prepaid expenses and other current assets | 382,445 | 353,975 |
Total current assets | 17,527,294 | 11,528,734 |
Long-term assets: | ||
Property and equipment, net | 1,381,744 | 1,028,198 |
Operating lease right-of-use asset, net | 1,094,527 | 1,390,873 |
Intangible assets, net | 271,048 | 217,930 |
That's Eatertainment note receivable, long term, net, related party | 291,110 | |
Security deposits, long-term | 86,500 | 19,712 |
Other assets, long-term | 500,114 | 351,236 |
Deferred tax asset, net | 1,892,000 | 1,792,000 |
Investment in That's Eatertainment, related party | 840,000 | |
Total long-term assets | 5,225,933 | 5,931,059 |
Total assets | 22,753,227 | 17,459,793 |
Current liabilities: | ||
Accounts payable | 345,573 | 621,127 |
Accrued compensation and related costs | 843,101 | 611,487 |
Accrued expenses and other current liabilities | 772,884 | 334,751 |
Note payable, current | 266,037 | |
Operating lease liability, short-term | 321,727 | 297,244 |
Deferred revenue, short-term | 4,708,575 | 2,490,845 |
Total current liabilities | 7,257,897 | 4,355,454 |
Long-term liabilities: | ||
Deferred revenue, long-term | 1,920,346 | 1,748,257 |
Note payable, long-term | 1,063,243 | |
Operating lease liability, long-term | 853,155 | 1,174,882 |
Total long-term liabilities | 3,836,744 | 2,923,139 |
Total liabilities | 11,094,641 | 7,278,593 |
Commitments and contingencies (See Note 11) | ||
Stockholders' equity: | ||
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding | ||
Common stock, value | 778 | 775 |
Additional paid-in capital | 13,893,660 | 13,894,680 |
Accumulated deficit | (2,235,852) | (3,714,255) |
Total stockholders' equity | 11,658,586 | 10,181,200 |
Total liabilities and stockholders' equity | 22,753,227 | 17,459,793 |
Class A Common Stock [Member] | ||
Stockholders' equity: | ||
Common stock, value | ||
Class B Common Stock [Member] | ||
Stockholders' equity: | ||
Common stock, value |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 7,775,030 | 7,745,030 |
Common stock, shares outstanding | 7,775,030 | 7,745,030 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 2,500,000 | 2,500,000 |
Common stock, shares issued | ||
Common stock, shares outstanding | ||
Class B Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | ||
Common stock, shares outstanding |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||
Total revenue | $ 19,087,631 | $ 18,711,923 |
Cost of sales | 7,187,210 | 8,998,232 |
Gross profit | 11,900,421 | 9,713,691 |
Operating expenses: | ||
General and administrative | 9,070,730 | 8,105,860 |
Research and development | 1,603,379 | 1,345,513 |
Net operating expense | 10,674,109 | 9,451,373 |
Income from operations | 1,226,312 | 262,318 |
Other income (expense): | ||
Other income | 49,539 | 115,736 |
Other expense | (16,248) | (6,606) |
Net other income | 33,291 | 109,130 |
Income before provision for income taxes | 1,259,603 | 371,448 |
Provision for income taxes | (218,800) | 446,725 |
Net income (loss) | $ 1,478,403 | $ (75,277) |
Net income (loss) per common share: | ||
Basic | $ 0.19 | $ (0.01) |
Diluted | $ 0.19 | $ (0.01) |
Weighted average shares outstanding: | ||
Basic | 7,757,037 | 7,747,655 |
Diluted | 7,835,830 | 7,747,655 |
Net Sales [Member] | ||
Revenues: | ||
Total revenue | $ 19,038,074 | $ 18,558,741 |
That's Eatertainment Royalties/Licensing Fees, Former Related Party [Member] | ||
Revenues: | ||
Total revenue | 45,247 | 130,625 |
Other Royalties/Licensing Fees [Member] | ||
Revenues: | ||
Total revenue | $ 4,310 | $ 22,557 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 783 | $ 14,272,834 | $ (37,308) | $ (3,638,978) | $ 10,597,331 | |
Balance, shares at Dec. 31, 2018 | 7,827,651 | |||||
Stock options exercised | $ 2 | 11,424 | 11,426 | |||
Stock options exercised, shares | 10,775 | |||||
Stock options repurchased | (34,076) | (34,076) | ||||
Purchase of treasury stock | (318,204) | (318,204) | ||||
Treasury stock cancelled | $ (10) | (355,502) | 355,512 | |||
Treasury stock cancelled, shares | (93,396) | |||||
Net income | (75,277) | (75,277) | ||||
Balance at Dec. 31, 2019 | $ 775 | 13,894,680 | (3,714,255) | 10,181,200 | ||
Balance, shares at Dec. 31, 2019 | 7,745,030 | |||||
Stock options exercised | $ 3 | 30,163 | 30,166 | |||
Stock options exercised, shares | 30,000 | |||||
Stock options repurchased | (31,183) | (31,183) | ||||
Net income | 1,478,403 | 1,478,403 | ||||
Balance at Dec. 31, 2020 | $ 778 | $ 13,893,660 | $ (2,235,852) | $ 11,658,586 | ||
Balance, shares at Dec. 31, 2020 | 7,775,030 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net Income (loss) | $ 1,478,403 | $ (75,277) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 380,154 | 307,952 |
Right of use amortization | 296,346 | 283,984 |
Reserve for note receivable | 291,110 | 108,174 |
Deferred taxes | (100,000) | 608,000 |
Impairment of investment in That's Eatertainment, former related party | 840,000 | 280,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 929,702 | (1,005,962) |
That's Eatertainment note receivable, net, related party | (4,673) | |
Trade note receivable, net | 652 | |
Interest receivable | 7,340 | 14,045 |
Inventory, net | (2,291,394) | (819,357) |
Unbilled revenue | (1,828,656) | (2,890,789) |
Prepaid expenses and other current assets | (28,470) | 23,545 |
Other assets | (148,878) | (58,938) |
Security deposits, long-term | (66,788) | 320,044 |
Accounts payable and other accrued expenses | 394,193 | (108,881) |
Payments on operating lease liability | (297,244) | (249,254) |
Deferred revenue | 2,389,819 | 1,352,439 |
Net cash provided by (used in) operating activities | 2,245,637 | (1,914,296) |
Cash flows from investing activities: | ||
Purchase of certificates of deposit | (3,560,000) | |
Redemption of certificates of deposit | 1,915,000 | 5,135,000 |
Purchase of intangible assets | (62,007) | (226,078) |
Purchase of property and equipment | (171,452) | |
Proceeds from sale of property and equipment | 3,640 | |
Net cash provided by investing activities | 1,852,993 | 1,181,110 |
Cash flows from financing activities: | ||
Repurchase of stock options | (31,183) | (34,076) |
Repayment of debt | (11,250) | |
Stock options exercised | 30,166 | 11,426 |
Purchase of treasury stock | (318,204) | |
Note payable-PPP Loan | 1,329,280 | |
Net cash provided by (used in) financing activities | 1,328,263 | (352,104) |
Net increase (decrease) in cash | 5,426,893 | (1,085,290) |
Cash, beginning of period | 1,415,091 | 2,500,381 |
Cash, end of period | 6,841,984 | 1,415,091 |
Supplemental disclosure of cash flow information: | ||
Taxes refunded | (118,800) | (161,275) |
Interest paid | 8,566 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of That's Eatertainment note receivable to long term, former related party | 292,138 | |
Conversion of inventory to property and equipment | 724,811 | 481,945 |
Treasury stock cancelled | 355,512 | |
Operating lease right of use asset and liabilities, net of deferred rent | $ 1,674,857 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | Note 1. Organization and Significant Accounting Policies Organization and Business Operations VirTra, Inc. (the “Company,” “VirTra,” “we,” “us” or “our”), located in Tempe, Arizona, is a global provider of judgmental use of force training simulators, firearms training simulators and driving simulators for the law enforcement, military, educational and commercial markets. The Company’s patented technologies, software, and scenarios provide intense training for de-escalation, judgmental use-of-force, marksmanship and related training that mimics real-world situations. VirTra’s mission is to save and improve lives worldwide through practical and highly-effective virtual reality and simulator technology. The Company sells its products worldwide through a direct sales force and international distribution partners. The original business started in 1993 as Ferris Productions, Inc. In September 2001, Ferris Productions, Inc. merged with GameCom, Inc. to ultimately become VirTra, Inc., a Nevada corporation. During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S., accelerating during half of March and April as federal, state and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. On March 30, 2020, the Governor for the State of Arizona issued a stay-at-home order which expired on May 15, 2020, upon which Arizona entered Phase I of reopening. The Company carefully reviewed all rules and regulations of the government orders and determined it met the requirements of an essential business to remain open. The Company had the majority of its staff begin working remotely in mid-March, with only essential personnel continue working at the manufacturing and production facilities and currently remains in Arizona’s Phase I of reopening. This situation is rapidly changing and additional impacts to the business may arise that we are not aware of currently. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The ultimate impact of the pandemic on the Company’s results of operations, financial position, liquidity or capital resources cannot be reasonably estimated at this time. To date, the COVID-19 restrictions have resulted in reduced customer shipments and customer system installations. These recent developments are expected to result in lower recognized revenue and possibly lower gross margin when they occur. To date, there have been no order cancellations; rather, there have only been delays in when orders ship or installations occur and all delayed orders remain in backlog. Although not a material component of our company, a significant adverse change in the business climate could continue to affect the value of the Company’s long-term investment in TEC, including the long-term note receivable from TEC. Any future impact cannot be reasonably estimated at this time. The Company is no longer investing in Certificates of Deposits as a precautionary measure to increase its liquid cash position and preserve financial flexibility considering uncertainty in the U.S. and global markets resulting from COVID-19. Additionally, the Company’s stock repurchase program was suspended as a result of interim rulings for public-company recipients of a Paycheck Protection Program (“PPP”) loan under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The stock repurchase suspension will remain in effect for the duration of the outstanding PPP loan. Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, allowance for doubtful accounts and notes receivable, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets and intangible assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. Reclassifications Certain reclassifications have been made to the 2019 financial statements to conform to the 2020 financial statement presentation. These reclassifications had no effect on net income or cash flows as previously reported. Revenue Recognition The Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer (Topic 606) (“ASC 606”) on January 1, 2018 and the Company elected to use the modified retrospective transition method which requires application of ASC 606 to uncompleted contracts at the date of adoption. The adoption of ASC 606 did not have a material impact on the financial statements. Under ASC 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant judgment is necessary when making these determinations. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customizable software, the sale of customized content scenarios, and the sale of extended service-type warranties. Sales discounts are presented in the financial statements as reductions in determining net revenues. Credit sales are recorded as current assets (accounts receivable and unbilled revenue). Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current and long-term liabilities (deferred revenue) until earned. The following briefly summarizes the nature of our performance obligations and method of revenue recognition: Performance Obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over the period of services being rendered Extended service-type warranty Deferred and recognized over the life of the extended warranty Customized software and content Upon transfer of control or over the period services are performed depending on the terms of the contract Customized content scenario As performance obligation is transferred over time (input method using time and materials expended) Sales-based royalty exchanged for license of intellectual property Recognized as the performance obligation is satisfied over time – which is as the sales occur The Company recognizes revenue upon transfer of control or upon completion of the services for the simulator and accessories; for the installation and training and customized software performance obligations as the customer has the right and ability to direct the use of these products and services and the customer obtains substantially all of the remaining benefit from these products and services at that time. Revenue from certain customized content contracts may be recognized over the period the services are performed based on the terms of the contract. For the sales-based royalty exchanged for license of intellectual property, the Company recognized revenue as the sales occur over time. The Company recognizes revenue on a straight-line basis over the period of services being rendered for the extended service-type warranties as these warranties represent a performance obligation to “stand ready to perform” over the duration of the warranties. As such, the warranty service is performed continuously over the warranty period. Each contract states the transaction price. The contracts do not include variable consideration, significant financing components or noncash consideration. The Company has elected to exclude sales and similar taxes from the measurement of the transaction price. The contract’s transaction price is allocated to the performance obligations based upon their stand-alone selling prices. Discounts to the stand-alone selling prices, if any, are allocated proportionately to each performance obligation. Disaggregation of Revenue Under ASC 606, disaggregated revenue from contracts with customers depicts the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors. The Company has evaluated revenues recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2020 2019 Total Revenue $ Commercial Government International Total Commercial Government International Total Simulators and accessories $ 1,052,223 $ 12,450,793 $ 299,430 $ 13,802,446 $ 530,742 $ 11,069,039 $ 1,992,819 $ 13,592,600 Extended service-type warranties 74,290 2,408,379 $ 138,771 2,621,440 35,148 2,132,864 203,421 2,371,433 Customized software and content 100,109 1,957,635 $ - 2,057,744 103,424 1,457,424 68,702 1,629,550 Installation and training 17,004 534,478 $ 4,962 556,444 46,630 678,211 240,317 965,158 Licensing and royalties 49,557 - $ - 49,557 153,182 - - 153,182 Total Revenue $ 1,293,183 $ 17,351,285 $ 443,163 $ 19,087,631 $ 869,126 $ 15,337,538 $ 2,505,259 $ 18,711,923 For the year ended December 31, 2020, governmental customers comprised $17,351,285, or 91% of total net sales, commercial customers comprised $1,293,183 or 7% of total net sales and international customers comprised $443,163, or 2% of total net sales. By comparison, for the year ended December 31, 2019, governmental customers comprised $15,337,538, or 82% of total net sales, commercial customer comprised $869,126 or 5% of total net sales and international customers comprised $2,505,259, or 13% of total net sales. For the years ended December 31, 2020 and 2019, the Company recorded $794,524 and $191,289, respectively, in STEP revenue, or 4% and 1%, respectively, of total net sales. Customer Deposits Customer deposits consist of prepaid deposits received for equipment purchase orders and for Subscription Training Equipment Partnership (“STEP”) operating agreements that expire annually. Customer deposits are considered a deferred liability until the completion of the customer’s contract performance obligation. When revenue is recognized, the deposit is applied to customer’s receivable balance. Customer deposits are recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $2,517,175 and $651,073 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $325,844 and $180,041, respectively, related to customer deposits that were included in deferred revenue, long-term, at the beginning of each period. Changes in deferred revenue amounts related to customer deposits will fluctuate from year to year based upon the mix of customers required to prepay deposits under the Company’s credit policy. Warranty The Company warranties its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. Deferred revenue for separately priced extended warranties one year or less totaled $2,191,400 and $1,829,052 at December 31, 2020 and 2019, respectively. Deferred revenue for separately priced extended warranties longer than one year totaled $1,920,346 and $1,748,257 at December 31, 2020 and 2019, respectively. The accrual for the one-year manufacturer’s warranty liability totaled $352,000 and $257,000 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $2,621,440 and $2,371,433, respectively, related to the extended service-type warranties that was amortized from the deferred revenue balance at the beginning of each period. Changes in deferred revenue amounts related to extended service-type warranties will fluctuate from year to year based upon the average remaining life of the warranties at the beginning of the period and new extended service-type warranties sold during the period. Customer Retainage Customer retainage is recorded as a current liability under deferred revenue on the accompanying balance sheets and totaled $0 and $10,720 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $10,720 and $122,500, respectively, related to customer retainage that were included in the liability at the beginning of each period. Changes in deferred revenue amounts related to customer retainage will fluctuate from year to year based upon the customer’s contract completion date, allowing the Company to invoice and recover the retainage. Licensing and Royalties with Former Related Party As discussed further in Note 9. Co-Venture Agreement with Modern Round, the Company licenses intellectual property to Modern Round, LLC (“MR”), a wholly-owned subsidiary of That’s Eatertainment Corp. (“TEC”), f/k/a Modern Round Entertainment Corp. (“MREC”), a former related party, in exchange for sales-based royalties. Revenues from this agreement are recognized in accordance with the terms of the contract as the sales occur. The Company receives additional immaterial sales-based royalties from strategic partners. Effective October 12, 2020, TEC and MREC no longer meet the requirements to be considered related parties. STEP Revenue The Company’s STEP operations consist principally of renting its simulator products under operating agreements expiring in one year. At the commencement of a STEP agreement, any rental payments received are deferred and no income is recognized. Subsequently, payments are amortized and recognized as revenue on a straight-line basis over the term of the agreement. The agreements are generally for a period of 12 months and can be renewed for additional 12-month periods. Agreements may be terminated by either party upon written notice of termination at lease sixty days prior to the end of the 12-month period. The payments are generally fixed for the first year of the agreement, with increases in payments in subsequent years to be mutually agreed upon. The agreements do not include variable lease payments or free rent periods. In addition, the agreements do not provide for the underlying assets to be purchased at its fair market values at interim periods or at maturity. Each STEP agreement comes with full customer support and stand-ready advance replacement parts to maintain each system for the duration of the lease. The amount that the Company expects to derive from the STEP equipment following the end of the agreement term is dependent upon the number of agreement terms renewed. The agreements do not include a residual value guarantee. Fair Value Measurements ASC Topic 820, Fair Value Measurements Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimate of assumptions that market participants would use in pricing the asset or liability. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, certificates of deposit, accounts receivable, notes and interest receivables, accounts payable, and accrued liabilities. The fair value of financial instruments, except for long-term notes receivable, approximates their carrying values, using level 3 inputs, at December 31, 2020 and 2019 due to their short maturities. The fair value of the notes receivable approximates its carrying value, using level 3 inputs, at December 31, 2020 and 2019. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. Certificates of Deposit and Mutual Funds The Company invests its excess cash in certificates of deposit and money market mutual funds issued by financial institutions with high credit ratings. The certificates of deposit generally have average maturities of approximately six months and are subject to penalties for early withdrawal. The money market mutual funds are open ended and can be withdrawn at any time without penalty. Accounts and Notes Receivable and Allowance for Doubtful Accounts The Company recognizes an allowance for losses on accounts receivable based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. Accounts receivable do not bear interest and are charged off after all reasonable collection efforts have been taken. The Company maintained an allowance for doubtful accounts of $34,959 and $34,177 at December 31, 2020 and 2019, respectively. Notes receivable are carried at their estimated collectible amounts. Interest income on notes receivable is recognized using the effective interest method. Notes receivable are periodically evaluated for collectability based on the credit history, the current financial condition of the counter party, and the known and inherent risks in the notes. Notes receivable are placed on nonaccrual status when they become 90 days past due and the customer has not made a payment in over 60 days. Upon suspension of the accrual of interest, interest income is subsequently recognized to the extent cash payments are received. Accrual of interest is resumed when notes are removed from non-accrual status. Notes receivable are charged against the allowance for credit losses when they are deemed to be uncollectible. Due to the ongoing uncertainty resulting from the Covid pandemic, the Company has recorded a reserve for the full amount of a note receivable and accrued interest from a former related party totaling $311,367 in 2020. During 2019, the Company realized a full credit loss against a note receivable totaling $369,286. The allowance for uncollectible notes receivable was $311,367 and $108,174 at December 31, 2020 and 2019, respectively. Inventory Inventory is stated at the lower of cost or net realizable value with cost being determined on the average cost method. Work in progress and finished goods inventory includes an allocation for capitalized labor and overhead. The Company routinely evaluates the carrying value of inventory for slow moving and potentially obsolete inventory and, when appropriate, will record an adjustment to reduce inventory to its estimated net realizable value. Inventory reserves were $120,652 and $120,652 at December 31, 2020 and 2019, respectively. Investments in Other Companies The Company accounts for investments in other companies that do not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company has elected to utilize the cost minus impairment approach because the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 9. Co-Venture Agreement with Modern Round. Management regularly evaluates the recoverability of its investment based on the investee company’s performance and financial position. For the year ended December 31, 2020 and 2019, the Company recognized an impairment loss of $840,000 and $280,000, respectively. Management regularly assesses the classification of its investments. Property and Equipment Property and equipment are carried at cost, net of depreciation. Gains or losses related to retirements or disposition of fixed assets are recognized in operations in the period incurred. Costs of normal repairs and maintenance are charged to expense as incurred, while betterments or renewals are capitalized. Depreciation commences at the time the assets are placed in service or for STEP equipment under agreements, when the equipment is made available for use by the customer. Depreciation is provided using the straight-line method over the estimated economic lives of the assets or for leasehold improvements, over the shorter of the estimated useful life or the remaining lease term. For STEP equipment under agreements, depreciation is provided using the straight-line method over the sixty-month maximum useful life instead of the remaining agreement term. Estimated useful lives are summarized as follows: Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years STEP equipment 5 years Leasehold improvements 7 years Intangible Assets Intangible assets at December 31, 2020 are comprised of various patents. We compute amortization expense on the patents using the straight-line method over the estimated remaining useful lives of 16 years. We compute amortization expense on media content using the straight-line method over the weighted average remaining period which is 16 years. Cost of Products Sold Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Cost of products sold includes depreciation of STEP contract fixed assets. Shipping costs incurred related to product delivery are included in cost of products sold. Advertising Costs Costs associated with advertising are expensed as incurred. Advertising expense was $512,655 and $828,692 for the years ended December 31, 2020 and 2019, respectively. These costs include domestic and international tradeshows, website, and sales promotional materials. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs primarily include expenses, including labor, directly related to research and development support. Research and development expense was $1,603,379 and $1,345,513 for the years ended December 31, 2020 and 2019, respectively. Legal Costs Legal costs relating to loss contingencies are expensed as incurred. See Note 10. Commitments and Contingencies. Concentration of Credit Risk and Major Customers and Suppliers Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, certificates of deposit, accounts receivable and notes receivable. The Company’s cash, cash equivalents and certificates of deposit are maintained with financial institutions with high credit standings and are FDIC insured deposits. The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. The Company had uninsured cash and cash equivalents of $6,338,896 and $1,069,887 at December 31, 2020 and 2019, respectively. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Historically, the Company has experienced minimal charges relative to doubtful accounts. Management performs ongoing evaluations of the collectability of its notes receivable and maintains an allowance for estimated losses. As of December 31, 2020, the Company did not hold any notes receivables. (See Note 2. Notes Receivable and Note 9 Co-Venture Agreement with Modern Round) Historically, the Company primarily sells its products to U.S. federal and state agencies. For the year ended December 31, 2020, one agency comprised 16% of total net sales. By comparison, for the year ended December 31, 2019, one agency comprised 18% and one agency comprised 12% of total net sales. As of December 31, 2020, one federal agency comprised 8.5% and one state agency comprised 31% of total accounts receivable. By comparison, as of December 31, 2019, one federal agency comprised 30% and one international customer comprised 20% of total accounts receivables. Income Taxes Deferred tax assets and liabilities are recorded based on the difference between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes are required. In assessing realizable deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. After review of the deferred tax asset and valuation allowance in accordance with ASC 740, management determined that it is more likely than not that the Company will fully realize all of its deferred tax asset and no valuation allowance was recorded at December 31, 2020 and 2019. The Company did not recognize any assets or liabilities relative to uncertain tax positions at December 31, 2020 and 2019. Interest or penalties, if any, will be recognized in income tax expense. Since there are no significant unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements. The Company reflects tax benefits, only if it is more likely than not that the Company will be able to sustain the tax return position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. Management does not believe that there are any uncertain tax positions at December 31, 2020 or 2019. The Company is potentially subject to tax audits for its United States federal and various state income and excise tax returns for tax years between 2014 and 2020; however, earlier years may be subject to audit under certain circumstances. Tax audits by their very nature are often complex and can require several years to complete. Impairment of Long-Lived Assets Long lived assets, such as equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the asset. At December 31, 2020 and 2019, the Company concluded that there has been no indication of impairment to the carrying value of its long-lived assets. As such, no impairment has been recorded. Stock Based Compensation The Company measures the cost of awards of equity instruments based on the grant date fair value of the awards. The Company calculates the fair value of stock-based awards using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected term and risk-free interest rates. There were no grants of stock-based awards during the years ended December 31, 2020 and 2019. The expected term of the options is the estimated period of time until exercise and was determined using an average of vesting and contractual terms, as we did not have sufficient historical experience of similar awards. The risk-free interest rate is based on the implied yield available on United States Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. The estimated fair value of stock-based compensation awards and other options is amortized to expense on a straight-line basis over the relevant vesting period. The Company has elected to recognize forfeitures as they occur rather than estimating them at the time of grant. Net Income (Loss)per Common Share The net income per common share is computed by dividing net income by the weighted average of common shares outstanding. Diluted net income per share reflects the potential dilution, using the treasury stock method, that would occur if outstanding stock options and warrants were exercised. Earnings per share computations are as follows: Year Ended December 31, 2020 2019 Net income/(loss) $ 1,478,403 $ (75,277 ) Weighted average common stock outstanding 7,757,037 7,747,655 Incremental shares from stock options 78,793 - Weighted average common stock outstanding diluted 7,835,830 7,747,655 Net income/(loss) per common share and common equivalent shares Basic $ 0.19 $ (0.01 ) Diluted $ 0.19 $ (0.01 ) The Company has potentially dilutive securities outstanding that are not included in the diluted earnings per share calculation for the years ended December 31, 2020 and 2019 because their effect would be anti-dilutive. These potentially dilutive securities, comprised entirely of the Company’s stock options, totaled 98,750 and 26,667 for the years ended December 31, 2020 and 2019, respectively. New Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also simplifies aspects of accounting for franchise taxes and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its financial statements. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Notes Receivable | Note 2. Notes Receivable An unsecured promissory note was executed on March 23, 2018 by a customer converting its past-due trade receivable from the sale of goods and services in the amount of $400,906. The customer made periodic payments on the note and the principal and accrued interest due as of December 31, 2018 was $374,034. Due to the uncertainty of collection, the Company had recorded an allowance against the note receivable balance in the amount of $266,813 at December 31, 2018. During 2019, the Company received a single payment of $10,000. Legal judgement was pursued and the Company was awarded a court ordered judgement against the customer totaling $396,575 plus interest to accrue at 6.25% per annum from the date of judgement until paid. In November 2019 the customer dissolved its legal entity and the balance of the note receivable $102,473 was written off to bad debt expense at December 31, 2019. The Company accepted an unsecured convertible promissory note (the “Convertible Note”) from TEC, a former related party (see Note 8. Co-Venture Agreement with Modern Round), in the amount of $292,138 for a portion of their minimum royalty payment due as of May 31, 2018. The Convertible Note bears interest at the rate of five percent (5%) per annum and contains a provision requiring remittance of not less than 20% of the net proceeds of any private or public offering of its securities in reduction of the Convertible Note. The Convertible Note has a conversion right, at the sole discretion of the Company, to convert the outstanding balance of principal and accrued interest at any time for shares of common stock of TEC. Prior to the due date, the Company may elect to convert the Convertible Note for shares of common stock in TEC at a twenty-five percent (25%) discount to the price of shares sold to the public in a public offering in connection with a go-public transaction. The issuance of common stock upon conversion shall be made without charge to the Company. No fractional shares shall be issued upon conversion and in lieu of fractional shares, TEC will pay the Company the amount of any obligation that is not converted. Any unpaid balance of principal and accrued interest becomes due and collectible on the earlier of (i) August 1, 2019 (maturity date), or (ii) if declared due and payable in the event of Default. In July 2019, the Convertible Note’s maturity date was extended to August 2020, with all other terms remaining unchanged. Under the terms of the Convertible Note, TEC remitted a payment of $16,000 of which $14,972 was applied to accrued interest and $1,028 to principal. In July, 2020, the Convertible Note’s maturity date was extended to August, 2023, all other promissory note terms remain unchanged. The Convertible Note’s principal and accrued interest due as of December 31, 2020 and 2019 was $311,367 and $296,811, respectively. Due to the ongoing effects of COVID-19 and the inability of TEC meet its payment obligations under the terms of the Convertible Note, the Company has recorded a reserve in the full amount of the note and accrued interest. The reserve for collectability as of December 31, 2020 and 2019 was $311,367 and $5,701, respectively. See Note 9-Co-Venture Agreement with Modern Round. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3. Inventory Inventory consisted of the following as of: December 31, 2020 December 31, 2019 Raw materials and work in process $ 3,636,649 $ 2,070,066 Reserve (120,652 ) (120,652 ) Total inventory $ 3,515,997 $ 1,949,414 During 2020 and 2019, the Company evaluated the useful life of its spare parts inventory. As a result of this evaluation, the Company classified $500,114 and $351,236 of spare replacement parts as Other Assets, long-term on the Balance Sheet at December 31, 2020 and 2019, respectively. In addition, during 2020 and 2019, the Company transferred $724,811 and $292,138, respectively, from inventory to property and equipment. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consisted of the following as of: December 31, 2020 December 31, 2019 Computer equipment $ 1,115,326 $ 1,115,326 Furniture and office equipment 223,925 223,925 Machinery and equipment 1,096,898 1,096,898 Leasehold improvements 334,934 334,934 STEP equipment 1,206,757 481,946 Total property and equipment 3,977,840 3,253,029 Less: Accumulated depreciation (2,596,096 ) (2,224,831 ) Property and equipment, net $ 1,381,744 $ 1,028,198 Depreciation expense, including STEP depreciation, was $371,265 and $299,804 for the years ended December 31, 2020 and 2019, respectively. |
Intangible Asset
Intangible Asset | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset | Note 5. Intangible Asset Intangible asset consisted of the following as of: December 31, 2020 December 31, 2019 Patents $ 160,000 $ 160,000 Capitalized media content 128,085 66,078 Total intangible asset 288,085 226,078 Less: Accumulated amortization (17,037 ) (8,148 ) Intangible asset, net $ 271,048 $ 217,930 Amortization expense was $8,889 and $8,148 for the years ended December 31, 2020 and 2019, respectively. The weighted average remaining period is 16 years. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 6. Leases The Company leases approximately 37,729 rentable square feet of office and warehouse space from an unaffiliated third party for our corporate office, manufacturing, assembly, warehouse and shipping facility located at 7970 South Kyrene Road, Tempe, Arizona 85284. From 2016 through March 2019, the Company leased approximately 4,529 rentable square feet of office and industrial space from an unaffiliated third party for our machine shop at 2169 East 5th St., Tempe, Arizona 85284. In April 2019, the Company relocated the machine shop from the Fifth St. location to 7910 South Kyrene Road, located within the same business complex as our main office. The Company executed a lease amendment to add an additional 5,131 rentable square feet for the machine shop and extended its existing office lease through April 2024. The Company’s lease agreements do not contain any residual value guarantees, restrictive covenants or variable lease payments. The Company has not entered into any financing leases. In addition to base rent, the Company’s lease generally provides for additional payments for other charges, such as rental tax. The lease includes fixed rent escalations. The Company’s lease does not include an option to renew. The Company determines if an arrangement is a lease at inception. Operating leases are recorded in operating lease right of use assets, net, operating lease liability – short-term, and operating lease liability – long-term on its balance sheets. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 4.5%. Significant judgement is required when determining the Company’s incremental borrowing rate. The Company uses the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Effective January 1, 2019, the Company obtained a right-of-use asset in exchange for a new operating lease liability in the amount of $1,721,380 and derecognized $46,523 deferred rent for an adjusted operating lease right-of-use asset in the net amount of $1,674,857. The balance sheet classification of lease assets and liabilities was as follows: Balance Sheet Classification December 31, 2020 December 31, 2019 Assets Operating lease right-of-use assets, beginning of period $ 1,390,873 $ 1,674,857 Amortization for the year ended $ (296,346 ) $ (283,984 ) Total operating lease right-of-use asset $ 1,094,527 $ 1,390,873 Liabilities Current Operating lease liability, short-term $ 321,727 $ 297,244 Non-current Operating lease liability, long-term $ 853,155 $ 1,174,882 Total lease liabilities $ 1,174,882 $ 1,472,126 Future minimum lease payments as of December 31, 2020 under non-cancelable operating leases are as follows: 2021 $ 368,060 2022 379,097 2023 390,562 2024 131,152 Total lease payments 1,268,871 Less: imputed interest (93,989 ) Operating lease liability $ 1,174,882 The Company had a deferred rent liability of $0 and $0 as of December 31, 2020 and 2019, respectively, relative to the increasing future minimum lease payments. Rent expense for the years ended December 31, 2020 and 2019 was $412,315 and $499,612, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 7. Accrued Expenses Accrued compensation and related costs consisted of the following as of: December 31, 2020 December 31, 2019 Salaries and wages payable $ 278,331 $ 192,161 Employee benefits payable 634 11,259 Accrued paid time off (PTO) 366,827 287,846 Profit sharing payable 197,309 120,221 Total accrued compensation and related costs $ 843,101 $ 611,487 Accrued expenses and other current liabilities consisted of the following as of: December 31, 2020 December 31, 2019 Manufacturer’s warranties $ 352,000 $ 257,000 Warranties-other - 74,176 Loss contingencies - - Taxes payable 316,076 2,382 Miscellaneous payable 104,808 1,193 Total accrued expenses and other current liabilities $ 772,884 $ 334,751 |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Note Payable | Note 8. Note Payable On May 8, 2020, VirTra received a Promissory Note (the “PPP Note”) in the amount of $1,320,714 under the PPP from Wells Fargo Bank, N.A (the “Lender”). The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. Under the terms of the PPP loan, up to the entire amount of principal and accrued interest may be forgiven to the extent PPP loan proceeds are used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration (the “SBA”) for the PPP loan. The Company intends to use its entire PPP Note amount for designated qualifying expenses and to apply for forgiveness in accordance with the PPP loan terms. No assurance can be given that the Company will obtain forgiveness of the PPP Note in whole or in part. With respect to any portion of the PPP Note that is not forgiven, the PPP Note will be subject to customary provisions for a loan of this type, including customary events of default relating to, among other things, payment defaults, breaches of the provisions of the PPP Note and cross-defaults on any other loan with the Lender or other creditors. Under this approach, the Company will initially account for the PPP Note as a debt instrument and apply the interest method considering the six-month payment deferral allowed for the loan. The PPP Note is payable over two years at a fixed interest rate of 1%. The payments due and payable monthly are in the amount of $55,604 commencing November 6, 2020 and continuing on the 8th day of each month thereafter until maturity on May 8, 2022. Under conventional terms at loan maturity the total repayment could total $1,320,714 principal and $18,720 of interest over the two-year period, for a combined repayment of $1,339,434. Any portion not forgiven, can be prepaid at any time prior to maturity with no prepayment penalties. The Paycheck Protection Program Flexibility Act (the “Flexibility Act”), signed on June 5, 2020, amended certain provisions of the PPP, including the deferral period and repayment terms. The Flexibility Act extends the deferral period of payments of PPP loan principal, interest, and fees to the date when the SBA makes a final decision on the borrower’s application for forgiveness, or 10 months after the last day of the covered period if a borrower has not applied for forgiveness (whichever is earlier). This extension applies regardless of the terms of the PPP and does not require an amendment of the PPP. As such, the Company has not made any payments on the PPP note during 2020. The entire PPP Note amount is recorded as a financial liability on the Company’s balance sheet with the next twelve months of principal plus accrued interest recorded as short-term liabilities and the remaining principal note balance recorded as a long-term liability. The PPP note payable amounts consist of the following: December 31, 2020 December 31, 2019 Short-term liabilities: Note payable, principal $ 257,471 $ - Accrued interest on note 8,566 - Note payable, short-term $ 266,037 $ - Long-term liabilities: Note payable, long term $ 1,063,243 $ - |
Co-Venture Agreement with Moder
Co-Venture Agreement with Modern Round | 12 Months Ended |
Dec. 31, 2020 | |
Co-venture Agreement With Modern Round | |
Co-Venture Agreement with Modern Round | Note 9. Co-Venture Agreement with Modern Round On January 16, 2015, the Company entered into a Co-Venture Agreement (the “Co-Venture Agreement”) with MR, a wholly-owned subsidiary of TEC, a related party at that time. Mitchell Saltz, who was a member of our Board of Directors until his passing in October 2020, was the former Chairman of the Board and majority stockholder of TEC. The Co-Venture Agreement granted TEC an exclusive non-transferrable license to use the Company’s technology and certain equipment solely for use at locations to operate the concept, as defined in the Co-Venture Agreement. Additionally, under the terms of the Co-Venture Agreement, equity representing five percent (5%) of Modern Round’s ownership interest, on a fully-diluted basis, was issued to the Company. TEC agreed to pay the Company, during the term of the Co-Venture Agreement, a royalty based on gross revenue, as defined and subject to certain minimum royalties commencing with the first twelve-month period subsequent to the respective milestone date of June 1, 2017. Under the terms of the original agreement, if the total royalty payments for locations in the United States and Canada together did not total at least the minimum royalty amount specified in the agreement, TEC may pay to VirTra the difference between the amount of total royalty payments and the minimum specified in the agreement to maintain exclusivity. On August 16, 2017, the Company amended the Co-Venture Agreement to permit TEC to sublicense the VirTra technology to third party operators of stand-alone location-based entertainment companies. TEC agreed to pay the Company royalties for any such sublicenses in an amount equal to 10% of the revenue paid to TEC in cases where TEC pays for the cost of the equipment for such location or 14% of the revenue paid to TEC in cases where it does not pay for the cost of the equipment. On July 23, 2018, the Company further amended the Co-Venture Agreement to (i) confirm the minimum royalty deficiency benefit due for the royalty period ended May 31, 2018; (ii) establish payment terms for the minimum royalty deficiency benefit due, to include both cash and promissory note payment; (iii) clarify the exclusivity provisions of the Co-Venture Agreement; and (iv) amend the minimum royalty calculations to only TEC branded facilities. On July 31, 2019, the Company executed the First Amendment to Convertible Promissory Note with TEC to extend the Convertible Note’s maturity date for one additional year to August 1, 2020 and TEC remitted a payment in the amount of $16,000. All other terms and conditions of the Convertible Note remain unchanged. In April 2018, MR effected a 1-for-12,000 reverse stock split, followed by a 2,000-for-1 forward stock split completed in November 2018. As a result, the Company holds at December 31, 2019, 560,000 shares of TEC common stock representing approximately 4.8% of the issued and outstanding common shares of TEC. During the year ended December 31, 2020 and 2019, the Company recognized an impairment loss of $840,000 and $280,000, respectively. The Company recorded its investment at cost minus impairment as of December 31, 2020 and 2019, at $0 and $840,000, respectively. In addition, as of December 31, 2020, the Company held a warrant to purchase 25,577 shares of TEC common stock, at an exercise price of $2.4436 per share, as adjusted. This warrant became exercisable on the date of grant of April 14, 2015 and expires on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. As of October 11, 2020, TEC ceased to be a related party. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10. Related Party Transactions During the years ended December 31, 2020 and 2019, the Company redeemed 40,000 and 34,225 previously awarded options reaching expiration from related parties, including the Company’s CEO, COO, an employee, a Board Director and other executive officers. These redemptions canceled the stock options and resulted in a total of $73,987 and $38,353 in additional compensation expense in 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, related parties exercised 30,000 and 5,000 previously awarded options for the exercise price of $30,163 and $5,650, respectively, resulting in issuance of common stock to the CEO and one member of the Board of Directors. Mr. Saltz, who was a member of our Board of Directors until his passing in October 2020, was the former Chairman of the Board and majority stockholder of TEC. The Company has entered into a Co-venture Agreement with TEC (See Note 9 Co-Venture Agreement with Modern Round) The Company owns 560,000 shares of TEC common stock representing approximately 4.8% of the issued and outstanding shares of TEC common stock. The Company recognized $46,247 and $130,625 for license fees (royalties) for the years ended December 31, 2020 and 2019, pursuant to the terms of the Co-Venture Agreement. At December 31, 2020 and 2019, TEC had accounts receivable balances outstanding of $0. As of October 11, 2020, TEC ceased to be a related party. Mr. Richardson, who is a member of our Board of Directors, is also acting CEO of Natural Point, Inc., a vendor of the Company. In 2020 and 2019, the Company purchased specialized equipment from Natural Point in the amount of $232,218 and $167,302, respectively. At December 31, 2020 and 2019 the Company had an outstanding balance payable to Natural Point of $0 and $34,865, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies General or Threatened Litigation From time to time, the Company is notified of threatened litigation or that a claim is being made against it. The Company evaluates contingencies on an on-going basis and has established loss provisions for matters in which losses are probable and the amount of loss can be reasonably estimated. In June 2018, the Company initiated a declaratory judgment action in the Superior Court of the State of Arizona. A former customer had raised allegations of breach of contract and breach of warranty and the Company sought relief and clarification from the Superior Court regarding the allegations and the Company’s obligations under the contract with the former customer. In May 2019, the Company entered into a settlement agreement of $76,250. The agreement does not constitute an admission of any unlawful conduct or wrongdoing. The Company had established a probable and estimated loss contingency of $40,000 as of December 31, 2018. The full amount of the settlement has been paid at December 31, 2019. The Company evaluated the collection history on its trade note receivable (See Note 2. Notes Receivable) and determined the note was in default. Based on collection history, interest accrual was suspended as of the last payment received in February 2019. In accordance with the terms of the note, accelerated payment was demanded. The Company filed a verified complaint in the Superior Court of Arizona for the outstanding principal balance plus accrued interest, late fees and reasonable attorneys’ fees. On September 20, 2019, the Superior Court of Arizona awarded, in favor of VirTra, a Form of Judgement totaling $396,575, with interest accruing at the rate of 6.25% from date of judgment until such amount has been paid in full. In November 2019 the customer dissolved its legal entity and the balance of the note receivable $102,473 was written off to bad debt expense at December 31, 2019. Employment Agreements On April 2, 2012, the Company entered into three-year Employment Agreements with its Chief Executive Officer and Chief Operating Officer that call for base annual salaries of $195,000 and $175,000, respectively, subject to cost of living adjustments, and containing automatic one-year extension provisions. These contracts have been renewed annually and have been adjusted based on the same percentage increase approved for Company-wide cost-of-living adjustments. As of December 31, 2020, the Chief Executive Officer’s base annual salary was $248,791 and the Chief Operating Officer’s base annual salary was $223,274. Profit Sharing VirTra provides a discretionary profit-sharing program that pays out a percentage of Company profits each year as a cash bonus to eligible employees. The cash payment is typically split into two equal payments and distributed pro-rata in April and October of the following year only to active employees. For the years ended December 31, 2020 and 2019, the amount expensed to operations was $206,869 and $93,160, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The Company accounts for its deferred tax assets and liabilities, including excess tax benefits of share-based payments, based on the tax ordering of deductions to be used on its tax returns. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities for the years ended December 31 is as follows: 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 324,000 $ 762,000 Tax Credits 907,000 286,000 Deferred revenue 152,000 58,000 Non-qualified stock option expense 120,000 136,000 Investment in TEC 89,000 51,000 Reserves, accruals and other 254,000 231,000 Accumulated depreciation and amortization 46,000 268,000 Total deferred tax assets 1,892,000 1,792,000 Less: Valuation allowance - - Net deferred tax asset $ 1,892,000 $ 1,792,000 Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three-year period. Such limitation of the net operating losses has not occurred. The Company believes it has approximately $1.1 million of federal net operating loss carry-forwards as of December 31, 2020, that are available to offset future taxable income that expire starting in 2031, and approximately $474,000 which can be carried forward indefinitely. Significant components of the (provision) for income tax for the years ended December 31 as follows: 2020 2019 Current $ (119,000 ) $ (162,000 ) Deferred (100,000 ) 608,000 Change in valuation allowance - - Provision for income taxes $ (219,000 ) $ 446,000 The Company is subject to federal and state taxes. Reconciliations of the Company’s effective income tax rate to the federal statutory rate for the years ended December 31 are as follows: 2020 2019 $ % $ % Federal income tax expense at the statutory rate $ 265,000 21.0 % $ 78,000 21.0 % State income taxes, net of federal benefit 69,000 5.5 % 20,000 5.4 % Permanent differences 186,654 14.8 % 79,665 21.4 % True ups to tax return and other (739,654 ) -58.7 % 268,335 72.2 % Change in federal income tax rates - 0.0 % - 0.0 % Change in valuation allowance - 0.0 % - 0.0 % Provision (benefit) for income taxes $ (219,000 ) -59.0 % $ 446,000 120.1 % The benefit for income taxes increased in 2020 from a true-up of the deferred tax asset and temporary timing differences in deferred revenue, reserves, depreciation and amortization, and net operating loss carryforward, offset by an adjustment for taxes prepaid and refunded from prior year tax over payments. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13. Stockholders’ Equity Authorized Capital Common Stock. Authorized Shares Rights and Preferences (i) Each holder of common stock shall be entitled to one (1) vote for each share of common stock held of record by such holder. The holders of shares of common stock shall not have cumulative voting rights. (ii) Each holder of Class A Common Stock shall be entitled to ten (10) votes for each share of Class A Common Stock held of record by such holder. The holders of shares of Class A Common Stock shall not have cumulative voting rights. (iii) The holders of common stock and Class A Common Stock shall vote together as a single class on all matters on which stockholders are generally entitled to vote. (iv) The holders of Class B Common Stock shall not be entitled to vote on any matter, except that the holders of Class B Common Stock shall be entitled to vote separately as a class with respect to amendments to the Articles of Incorporation that increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely. Preferred Stock Authorized Shares Rights and Preferences Stock Repurchase On October 25, 2016 the Company’s Board of Directors authorized the repurchase of up to $1 million of its common stock under Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. Purchases made pursuant to this authorization will be made in the open market, in privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with the Rule 10b-18. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. On January 9, 2019, VirTra’s Board of Directors authorized an additional $1 million be allocated for the repurchase of VirTra’s stock under the existing 10b-18 plan. The Company’s stock repurchase program was suspended as a results of interim rulings for public-company recipients of a PPP loan under the CARES Act. The stock repurchase suspension will remain in effect for the duration of the outstanding PPP loan. Treasury Stock During the year ended December 31, 2020, the Company purchased no treasury shares. During the year ended December 31, 2019, the Company purchased 82,689 treasury shares at an average cost of $3.85 per share. At December 31, 2019, all treasury shares outstanding had been cancelled and returned to shares authorized. Year Ended December 31, 2020 2019 Period: Total Average Total Average Repurchased Shares - January-March - $ - 68,239 $ 3.82 Repurchased Shares - April-June - $ - 14,450 $ 3.97 Repurchased Shares - July-September - $ - - $ - Repurchased Shares - October-December - $ - - $ - Total - $ - 82,689 $ 3.85 Repurchased Shares Status Repurchased Shares Cancelled - 82,689 Repurchased Shares Held in Treasury - - Total - 82,689 Approximate Funds Remaining in Repurchase Plan as of December 31, 2020 $ - Non-qualified Stock Options The Company has periodically issued non-qualified stock options to key employees, officers and directors under a stock option compensation plan approved by the Board of Directors in 2009. Terms of option grants are at the discretion of the Board of Directors and are generally seven years. Upon the exercise of these options, the Company expects to issue new authorized shares of its common stock. The following table summarizes all non-qualified stock options as of: December 31, 2020 December 31, 2019 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 234,167 $ 2.47 279,167 $ 2.25 Granted - - - - Redeemed (40,000 ) 0.88 (34,225 ) 1.13 Exercised (30,000 ) 1.01 (10,775 ) 1.06 Expired / terminated - - - - Options outstanding, end of year 164,167 $ 3.13 234,167 $ 2.47 Options exercisable, end of year 164,167 $ 3.13 234,167 $ 2.47 The Company did not have any non-vested stock options outstanding as of December 31, 2020. The weighted average contractual term for options outstanding and exercisable at December 31, 2020 and 2019 was 7 years. The aggregate intrinsic value of the options outstanding and exercisable at December 31, 2020 and 2019 was $138,487 and $731,112, respectively. The total intrinsic value of options exercised during the years ended December 31, 2020 and 2019 was $63,437 and $14,770, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those stock options that have an exercise price lower than the fair value of the Company’s common stock. Options with an exercise price above the fair value of the Company’s common stock are considered to have no intrinsic value. For the years ended December 31, 2020 and 2019, the Company received payments related to the exercise of options in the amount of $30,166 and $11,426, respectively. The total fair value of shares vested during the years ended December 31, 2020 and 2019 is $0 and $0, respectively. The following table summarizes information about stock options outstanding and exercisable as of December 31, 2020: Range of Number of Weighted Number of Weighted $.80 - $.99 11,250 $ 0.98 11,250 $ 0.98 $1.00 - $1.99 33,750 $ 1.68 33,750 $ 1.68 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 164,167 $ 3.13 164,167 $ 3.13 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2019: Range of Number of Weighted Number of Weighted $.80 - $.99 70,000 $ 0.87 70,000 $ 0.87 $1.00 - $1.99 45,000 $ 1.60 45,000 $ 1.60 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 234,167 $ 2.47 234,167 $ 2.47 2017 Equity Incentive Plan On August 23, 2017, our Board approved, subject to stockholder approval at the annual meeting of stockholders on October 6, 2017, the VirTra, Inc. 2017 Equity Incentive Plan (the “Equity Plan”). The Equity Plan is intended to make available incentives that will assist us to attract, retain and motivate employees, including officers, consultants and directors. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards. A total of 1,187,500 shares of our common stock was initially authorized and reserved for issuance under the Equity Plan. This reserve automatically increased on January 1, 2019, and each subsequent anniversary through 2027, by an amount equal to the smaller of (a) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Board. Awards may be granted under the Equity Plan to our employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. All awards will be evidenced by a written agreement between us and the holder of the award and may include any of the following: stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and cash-based awards and other stock-based awards. At December 31, 2020 and 2019, there were no options issued under the Equity Plan. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, allowance for doubtful accounts and notes receivable, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets and intangible assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2019 financial statements to conform to the 2020 financial statement presentation. These reclassifications had no effect on net income or cash flows as previously reported. |
Revenue Recognition | Revenue Recognition The Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer (Topic 606) (“ASC 606”) on January 1, 2018 and the Company elected to use the modified retrospective transition method which requires application of ASC 606 to uncompleted contracts at the date of adoption. The adoption of ASC 606 did not have a material impact on the financial statements. Under ASC 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant judgment is necessary when making these determinations. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customizable software, the sale of customized content scenarios, and the sale of extended service-type warranties. Sales discounts are presented in the financial statements as reductions in determining net revenues. Credit sales are recorded as current assets (accounts receivable and unbilled revenue). Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current and long-term liabilities (deferred revenue) until earned. The following briefly summarizes the nature of our performance obligations and method of revenue recognition: Performance Obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over the period of services being rendered Extended service-type warranty Deferred and recognized over the life of the extended warranty Customized software and content Upon transfer of control or over the period services are performed depending on the terms of the contract Customized content scenario As performance obligation is transferred over time (input method using time and materials expended) Sales-based royalty exchanged for license of intellectual property Recognized as the performance obligation is satisfied over time – which is as the sales occur The Company recognizes revenue upon transfer of control or upon completion of the services for the simulator and accessories; for the installation and training and customized software performance obligations as the customer has the right and ability to direct the use of these products and services and the customer obtains substantially all of the remaining benefit from these products and services at that time. Revenue from certain customized content contracts may be recognized over the period the services are performed based on the terms of the contract. For the sales-based royalty exchanged for license of intellectual property, the Company recognized revenue as the sales occur over time. The Company recognizes revenue on a straight-line basis over the period of services being rendered for the extended service-type warranties as these warranties represent a performance obligation to “stand ready to perform” over the duration of the warranties. As such, the warranty service is performed continuously over the warranty period. Each contract states the transaction price. The contracts do not include variable consideration, significant financing components or noncash consideration. The Company has elected to exclude sales and similar taxes from the measurement of the transaction price. The contract’s transaction price is allocated to the performance obligations based upon their stand-alone selling prices. Discounts to the stand-alone selling prices, if any, are allocated proportionately to each performance obligation. Disaggregation of Revenue Under ASC 606, disaggregated revenue from contracts with customers depicts the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors. The Company has evaluated revenues recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2020 2019 Total Revenue $ Commercial Government International Total Commercial Government International Total Simulators and accessories $ 1,052,223 $ 12,450,793 $ 299,430 $ 13,802,446 $ 530,742 $ 11,069,039 $ 1,992,819 $ 13,592,600 Extended service-type warranties 74,290 2,408,379 $ 138,771 2,621,440 35,148 2,132,864 203,421 2,371,433 Customized software and content 100,109 1,957,635 $ - 2,057,744 103,424 1,457,424 68,702 1,629,550 Installation and training 17,004 534,478 $ 4,962 556,444 46,630 678,211 240,317 965,158 Licensing and royalties 49,557 - $ - 49,557 153,182 - - 153,182 Total Revenue $ 1,293,183 $ 17,351,285 $ 443,163 $ 19,087,631 $ 869,126 $ 15,337,538 $ 2,505,259 $ 18,711,923 For the year ended December 31, 2020, governmental customers comprised $17,351,285, or 91% of total net sales, commercial customers comprised $1,293,183 or 7% of total net sales and international customers comprised $443,163, or 2% of total net sales. By comparison, for the year ended December 31, 2019, governmental customers comprised $15,337,538, or 82% of total net sales, commercial customer comprised $869,126 or 5% of total net sales and international customers comprised $2,505,259, or 13% of total net sales. For the years ended December 31, 2020 and 2019, the Company recorded $794,524 and $191,289, respectively, in STEP revenue, or 4% and 1%, respectively, of total net sales. |
Customer Deposits | Customer Deposits Customer deposits consist of prepaid deposits received for equipment purchase orders and for Subscription Training Equipment Partnership (“STEP”) operating agreements that expire annually. Customer deposits are considered a deferred liability until the completion of the customer’s contract performance obligation. When revenue is recognized, the deposit is applied to customer’s receivable balance. Customer deposits are recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $2,517,175 and $651,073 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $325,844 and $180,041, respectively, related to customer deposits that were included in deferred revenue, long-term, at the beginning of each period. Changes in deferred revenue amounts related to customer deposits will fluctuate from year to year based upon the mix of customers required to prepay deposits under the Company’s credit policy. |
Warranty | Warranty The Company warranties its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. Deferred revenue for separately priced extended warranties one year or less totaled $2,191,400 and $1,829,052 at December 31, 2020 and 2019, respectively. Deferred revenue for separately priced extended warranties longer than one year totaled $1,920,346 and $1,748,257 at December 31, 2020 and 2019, respectively. The accrual for the one-year manufacturer’s warranty liability totaled $352,000 and $257,000 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $2,621,440 and $2,371,433, respectively, related to the extended service-type warranties that was amortized from the deferred revenue balance at the beginning of each period. Changes in deferred revenue amounts related to extended service-type warranties will fluctuate from year to year based upon the average remaining life of the warranties at the beginning of the period and new extended service-type warranties sold during the period. |
Customer Retainage | Customer Retainage Customer retainage is recorded as a current liability under deferred revenue on the accompanying balance sheets and totaled $0 and $10,720 at December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company recognized revenue of $10,720 and $122,500, respectively, related to customer retainage that were included in the liability at the beginning of each period. Changes in deferred revenue amounts related to customer retainage will fluctuate from year to year based upon the customer’s contract completion date, allowing the Company to invoice and recover the retainage. |
Licensing and Royalties with former Related Party | Licensing and Royalties with Former Related Party As discussed further in Note 9. Co-Venture Agreement with Modern Round, the Company licenses intellectual property to Modern Round, LLC (“MR”), a wholly-owned subsidiary of That’s Eatertainment Corp. (“TEC”), f/k/a Modern Round Entertainment Corp. (“MREC”), a former related party, in exchange for sales-based royalties. Revenues from this agreement are recognized in accordance with the terms of the contract as the sales occur. The Company receives additional immaterial sales-based royalties from strategic partners. Effective October 12, 2020, TEC and MREC no longer meet the requirements to be considered related parties. |
STEP Revenue | STEP Revenue The Company’s STEP operations consist principally of renting its simulator products under operating agreements expiring in one year. At the commencement of a STEP agreement, any rental payments received are deferred and no income is recognized. Subsequently, payments are amortized and recognized as revenue on a straight-line basis over the term of the agreement. The agreements are generally for a period of 12 months and can be renewed for additional 12-month periods. Agreements may be terminated by either party upon written notice of termination at lease sixty days prior to the end of the 12-month period. The payments are generally fixed for the first year of the agreement, with increases in payments in subsequent years to be mutually agreed upon. The agreements do not include variable lease payments or free rent periods. In addition, the agreements do not provide for the underlying assets to be purchased at its fair market values at interim periods or at maturity. Each STEP agreement comes with full customer support and stand-ready advance replacement parts to maintain each system for the duration of the lease. The amount that the Company expects to derive from the STEP equipment following the end of the agreement term is dependent upon the number of agreement terms renewed. The agreements do not include a residual value guarantee. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimate of assumptions that market participants would use in pricing the asset or liability. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, certificates of deposit, accounts receivable, notes and interest receivables, accounts payable, and accrued liabilities. The fair value of financial instruments, except for long-term notes receivable, approximates their carrying values, using level 3 inputs, at December 31, 2020 and 2019 due to their short maturities. The fair value of the notes receivable approximates its carrying value, using level 3 inputs, at December 31, 2020 and 2019. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. |
Certificates of Deposit and Mutual Funds | Certificates of Deposit and Mutual Funds The Company invests its excess cash in certificates of deposit and money market mutual funds issued by financial institutions with high credit ratings. The certificates of deposit generally have average maturities of approximately six months and are subject to penalties for early withdrawal. The money market mutual funds are open ended and can be withdrawn at any time without penalty. |
Accounts and Notes Receivable and Allowance for Doubtful Accounts | Accounts and Notes Receivable and Allowance for Doubtful Accounts The Company recognizes an allowance for losses on accounts receivable based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. Accounts receivable do not bear interest and are charged off after all reasonable collection efforts have been taken. The Company maintained an allowance for doubtful accounts of $34,959 and $34,177 at December 31, 2020 and 2019, respectively. Notes receivable are carried at their estimated collectible amounts. Interest income on notes receivable is recognized using the effective interest method. Notes receivable are periodically evaluated for collectability based on the credit history, the current financial condition of the counter party, and the known and inherent risks in the notes. Notes receivable are placed on nonaccrual status when they become 90 days past due and the customer has not made a payment in over 60 days. Upon suspension of the accrual of interest, interest income is subsequently recognized to the extent cash payments are received. Accrual of interest is resumed when notes are removed from non-accrual status. Notes receivable are charged against the allowance for credit losses when they are deemed to be uncollectible. Due to the ongoing uncertainty resulting from the Covid pandemic, the Company has recorded a reserve for the full amount of a note receivable and accrued interest from a former related party totaling $311,367 in 2020. During 2019, the Company realized a full credit loss against a note receivable totaling $369,286. The allowance for uncollectible notes receivable was $311,367 and $108,174 at December 31, 2020 and 2019, respectively. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value with cost being determined on the average cost method. Work in progress and finished goods inventory includes an allocation for capitalized labor and overhead. The Company routinely evaluates the carrying value of inventory for slow moving and potentially obsolete inventory and, when appropriate, will record an adjustment to reduce inventory to its estimated net realizable value. Inventory reserves were $120,652 and $120,652 at December 31, 2020 and 2019, respectively. |
Investments in Other Companies | Investments in Other Companies The Company accounts for investments in other companies that do not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company has elected to utilize the cost minus impairment approach because the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 9. Co-Venture Agreement with Modern Round. Management regularly evaluates the recoverability of its investment based on the investee company’s performance and financial position. For the year ended December 31, 2020 and 2019, the Company recognized an impairment loss of $840,000 and $280,000, respectively. Management regularly assesses the classification of its investments. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, net of depreciation. Gains or losses related to retirements or disposition of fixed assets are recognized in operations in the period incurred. Costs of normal repairs and maintenance are charged to expense as incurred, while betterments or renewals are capitalized. Depreciation commences at the time the assets are placed in service or for STEP equipment under agreements, when the equipment is made available for use by the customer. Depreciation is provided using the straight-line method over the estimated economic lives of the assets or for leasehold improvements, over the shorter of the estimated useful life or the remaining lease term. For STEP equipment under agreements, depreciation is provided using the straight-line method over the sixty-month maximum useful life instead of the remaining agreement term. Estimated useful lives are summarized as follows: Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years STEP equipment 5 years Leasehold improvements 7 years |
Intangible Assets | Intangible Assets Intangible assets at December 31, 2020 are comprised of various patents. We compute amortization expense on the patents using the straight-line method over the estimated remaining useful lives of 16 years. We compute amortization expense on media content using the straight-line method over the weighted average remaining period which is 16 years. |
Cost of Products Sold | Cost of Products Sold Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Cost of products sold includes depreciation of STEP contract fixed assets. Shipping costs incurred related to product delivery are included in cost of products sold. |
Advertising Costs | Advertising Costs Costs associated with advertising are expensed as incurred. Advertising expense was $512,655 and $828,692 for the years ended December 31, 2020 and 2019, respectively. These costs include domestic and international tradeshows, website, and sales promotional materials. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs primarily include expenses, including labor, directly related to research and development support. Research and development expense was $1,603,379 and $1,345,513 for the years ended December 31, 2020 and 2019, respectively. |
Legal Costs | Legal Costs Legal costs relating to loss contingencies are expensed as incurred. See Note 10. Commitments and Contingencies. |
Concentration of Credit Risk and Major Customers and Suppliers | Concentration of Credit Risk and Major Customers and Suppliers Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, certificates of deposit, accounts receivable and notes receivable. The Company’s cash, cash equivalents and certificates of deposit are maintained with financial institutions with high credit standings and are FDIC insured deposits. The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. The Company had uninsured cash and cash equivalents of $6,338,896 and $1,069,887 at December 31, 2020 and 2019, respectively. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Historically, the Company has experienced minimal charges relative to doubtful accounts. Management performs ongoing evaluations of the collectability of its notes receivable and maintains an allowance for estimated losses. As of December 31, 2020, the Company did not hold any notes receivables. (See Note 2. Notes Receivable and Note 9 Co-Venture Agreement with Modern Round) Historically, the Company primarily sells its products to U.S. federal and state agencies. For the year ended December 31, 2020, one agency comprised 16% of total net sales. By comparison, for the year ended December 31, 2019, one agency comprised 18% and one agency comprised 12% of total net sales. As of December 31, 2020, one federal agency comprised 8.5% and one state agency comprised 31% of total accounts receivable. By comparison, as of December 31, 2019, one federal agency comprised 30% and one international customer comprised 20% of total accounts receivables. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recorded based on the difference between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes are required. In assessing realizable deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. After review of the deferred tax asset and valuation allowance in accordance with ASC 740, management determined that it is more likely than not that the Company will fully realize all of its deferred tax asset and no valuation allowance was recorded at December 31, 2020 and 2019. The Company did not recognize any assets or liabilities relative to uncertain tax positions at December 31, 2020 and 2019. Interest or penalties, if any, will be recognized in income tax expense. Since there are no significant unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements. The Company reflects tax benefits, only if it is more likely than not that the Company will be able to sustain the tax return position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. Management does not believe that there are any uncertain tax positions at December 31, 2020 or 2019. The Company is potentially subject to tax audits for its United States federal and various state income and excise tax returns for tax years between 2014 and 2020; however, earlier years may be subject to audit under certain circumstances. Tax audits by their very nature are often complex and can require several years to complete. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long lived assets, such as equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the asset. At December 31, 2020 and 2019, the Company concluded that there has been no indication of impairment to the carrying value of its long-lived assets. As such, no impairment has been recorded. |
Stock Based Compensation | Stock Based Compensation The Company measures the cost of awards of equity instruments based on the grant date fair value of the awards. The Company calculates the fair value of stock-based awards using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected term and risk-free interest rates. There were no grants of stock-based awards during the years ended December 31, 2020 and 2019. The expected term of the options is the estimated period of time until exercise and was determined using an average of vesting and contractual terms, as we did not have sufficient historical experience of similar awards. The risk-free interest rate is based on the implied yield available on United States Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. The estimated fair value of stock-based compensation awards and other options is amortized to expense on a straight-line basis over the relevant vesting period. The Company has elected to recognize forfeitures as they occur rather than estimating them at the time of grant. |
Net Income (Loss) per Common Share | Net Income (Loss)per Common Share The net income per common share is computed by dividing net income by the weighted average of common shares outstanding. Diluted net income per share reflects the potential dilution, using the treasury stock method, that would occur if outstanding stock options and warrants were exercised. Earnings per share computations are as follows: Year Ended December 31, 2020 2019 Net income/(loss) $ 1,478,403 $ (75,277 ) Weighted average common stock outstanding 7,757,037 7,747,655 Incremental shares from stock options 78,793 - Weighted average common stock outstanding diluted 7,835,830 7,747,655 Net income/(loss) per common share and common equivalent shares Basic $ 0.19 $ (0.01 ) Diluted $ 0.19 $ (0.01 ) The Company has potentially dilutive securities outstanding that are not included in the diluted earnings per share calculation for the years ended December 31, 2020 and 2019 because their effect would be anti-dilutive. These potentially dilutive securities, comprised entirely of the Company’s stock options, totaled 98,750 and 26,667 for the years ended December 31, 2020 and 2019, respectively. |
New Accounting Pronouncements | New Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also simplifies aspects of accounting for franchise taxes and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its financial statements. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenues | The Company has evaluated revenues recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2020 2019 Total Revenue $ Commercial Government International Total Commercial Government International Total Simulators and accessories $ 1,052,223 $ 12,450,793 $ 299,430 $ 13,802,446 $ 530,742 $ 11,069,039 $ 1,992,819 $ 13,592,600 Extended service-type warranties 74,290 2,408,379 $ 138,771 2,621,440 35,148 2,132,864 203,421 2,371,433 Customized software and content 100,109 1,957,635 $ - 2,057,744 103,424 1,457,424 68,702 1,629,550 Installation and training 17,004 534,478 $ 4,962 556,444 46,630 678,211 240,317 965,158 Licensing and royalties 49,557 - $ - 49,557 153,182 - - 153,182 Total Revenue $ 1,293,183 $ 17,351,285 $ 443,163 $ 19,087,631 $ 869,126 $ 15,337,538 $ 2,505,259 $ 18,711,923 |
Schedule of Estimated Useful Life of Property and Equipment | Estimated useful lives are summarized as follows: Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years STEP equipment 5 years Leasehold improvements 7 years |
Schedule of Earnings Per Share | Earnings per share computations are as follows: Year Ended December 31, 2020 2019 Net income/(loss) $ 1,478,403 $ (75,277 ) Weighted average common stock outstanding 7,757,037 7,747,655 Incremental shares from stock options 78,793 - Weighted average common stock outstanding diluted 7,835,830 7,747,655 Net income/(loss) per common share and common equivalent shares Basic $ 0.19 $ (0.01 ) Diluted $ 0.19 $ (0.01 ) |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory consisted of the following as of: December 31, 2020 December 31, 2019 Raw materials and work in process $ 3,636,649 $ 2,070,066 Reserve (120,652 ) (120,652 ) Total inventory $ 3,515,997 $ 1,949,414 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following as of: December 31, 2020 December 31, 2019 Computer equipment $ 1,115,326 $ 1,115,326 Furniture and office equipment 223,925 223,925 Machinery and equipment 1,096,898 1,096,898 Leasehold improvements 334,934 334,934 STEP equipment 1,206,757 481,946 Total property and equipment 3,977,840 3,253,029 Less: Accumulated depreciation (2,596,096 ) (2,224,831 ) Property and equipment, net $ 1,381,744 $ 1,028,198 |
Intangible Asset (Tables)
Intangible Asset (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Asset | Intangible asset consisted of the following as of: December 31, 2020 December 31, 2019 Patents $ 160,000 $ 160,000 Capitalized media content 128,085 66,078 Total intangible asset 288,085 226,078 Less: Accumulated amortization (17,037 ) (8,148 ) Intangible asset, net $ 271,048 $ 217,930 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Balance Sheet Classification of Lease Assets and Liabilities | The balance sheet classification of lease assets and liabilities was as follows: Balance Sheet Classification December 31, 2020 December 31, 2019 Assets Operating lease right-of-use assets, beginning of period $ 1,390,873 $ 1,674,857 Amortization for the year ended $ (296,346 ) $ (283,984 ) Total operating lease right-of-use asset $ 1,094,527 $ 1,390,873 Liabilities Current Operating lease liability, short-term $ 321,727 $ 297,244 Non-current Operating lease liability, long-term $ 853,155 $ 1,174,882 Total lease liabilities $ 1,174,882 $ 1,472,126 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of December 31, 2020 under non-cancelable operating leases are as follows: 2021 $ 368,060 2022 379,097 2023 390,562 2024 131,152 Total lease payments 1,268,871 Less: imputed interest (93,989 ) Operating lease liability $ 1,174,882 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Compensation and Related Costs | Accrued compensation and related costs consisted of the following as of: December 31, 2020 December 31, 2019 Salaries and wages payable $ 278,331 $ 192,161 Employee benefits payable 634 11,259 Accrued paid time off (PTO) 366,827 287,846 Profit sharing payable 197,309 120,221 Total accrued compensation and related costs $ 843,101 $ 611,487 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of: December 31, 2020 December 31, 2019 Manufacturer’s warranties $ 352,000 $ 257,000 Warranties-other - 74,176 Loss contingencies - - Taxes payable 316,076 2,382 Miscellaneous payable 104,808 1,193 Total accrued expenses and other current liabilities $ 772,884 $ 334,751 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes payable | The PPP note payable amounts consist of the following: December 31, 2020 December 31, 2019 Short-term liabilities: Note payable, principal $ 257,471 $ - Accrued interest on note 8,566 - Note payable, short-term $ 266,037 $ - Long-term liabilities: Note payable, long term $ 1,063,243 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities for the years ended December 31 is as follows: 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 324,000 $ 762,000 Tax Credits 907,000 286,000 Deferred revenue 152,000 58,000 Non-qualified stock option expense 120,000 136,000 Investment in TEC 89,000 51,000 Reserves, accruals and other 254,000 231,000 Accumulated depreciation and amortization 46,000 268,000 Total deferred tax assets 1,892,000 1,792,000 Less: Valuation allowance - - Net deferred tax asset $ 1,892,000 $ 1,792,000 |
Schedule of Significant Components of Income Tax Provision | Significant components of the (provision) for income tax for the years ended December 31 as follows: 2020 2019 Current $ (119,000 ) $ (162,000 ) Deferred (100,000 ) 608,000 Change in valuation allowance - - Provision for income taxes $ (219,000 ) $ 446,000 |
Schedule of Reconciliation of Income Tax Rate | The Company is subject to federal and state taxes. Reconciliations of the Company’s effective income tax rate to the federal statutory rate for the years ended December 31 are as follows: 2020 2019 $ % $ % Federal income tax expense at the statutory rate $ 265,000 21.0 % $ 78,000 21.0 % State income taxes, net of federal benefit 69,000 5.5 % 20,000 5.4 % Permanent differences 186,654 14.8 % 79,665 21.4 % True ups to tax return and other (739,654 ) -58.7 % 268,335 72.2 % Change in federal income tax rates - 0.0 % - 0.0 % Change in valuation allowance - 0.0 % - 0.0 % Provision (benefit) for income taxes $ (219,000 ) -59.0 % $ 446,000 120.1 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Repurchased and Cancelled Treasury Shares | At December 31, 2019, all treasury shares outstanding had been cancelled and returned to shares authorized. Year Ended December 31, 2020 2019 Period: Total Average Total Average Repurchased Shares - January-March - $ - 68,239 $ 3.82 Repurchased Shares - April-June - $ - 14,450 $ 3.97 Repurchased Shares - July-September - $ - - $ - Repurchased Shares - October-December - $ - - $ - Total - $ - 82,689 $ 3.85 Repurchased Shares Status Repurchased Shares Cancelled - 82,689 Repurchased Shares Held in Treasury - - Total - 82,689 Approximate Funds Remaining in Repurchase Plan as of December 31, 2020 $ - |
Schedule of Non-qualified Stock Options | The following table summarizes all non-qualified stock options as of: December 31, 2020 December 31, 2019 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 234,167 $ 2.47 279,167 $ 2.25 Granted - - - - Redeemed (40,000 ) 0.88 (34,225 ) 1.13 Exercised (30,000 ) 1.01 (10,775 ) 1.06 Expired / terminated - - - - Options outstanding, end of year 164,167 $ 3.13 234,167 $ 2.47 Options exercisable, end of year 164,167 $ 3.13 234,167 $ 2.47 |
Schedule of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2020: Range of Number of Weighted Number of Weighted $.80 - $.99 11,250 $ 0.98 11,250 $ 0.98 $1.00 - $1.99 33,750 $ 1.68 33,750 $ 1.68 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 164,167 $ 3.13 164,167 $ 3.13 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2019: Range of Number of Weighted Number of Weighted $.80 - $.99 70,000 $ 0.87 70,000 $ 0.87 $1.00 - $1.99 45,000 $ 1.60 45,000 $ 1.60 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 234,167 $ 2.47 234,167 $ 2.47 |
Organization and Significant _4
Organization and Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 19,087,631 | $ 18,711,923 | |
Deferred revenue liability current | $ 4,708,575 | 2,490,845 | |
Extended warranties description | The Company warranties its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. | ||
Extended service-type warranties | $ 2,621,440 | 2,371,433 | |
Customer Retainage | 0 | 10,720 | |
Allowance for doubtful accounts | 34,959 | 34,177 | |
Credit loss against note recievable | 311,367 | 369,286 | |
Allowance uncollectible notes receivables | 291,110 | 108,174 | |
Inventory reserves | 120,652 | 120,652 | |
Impairment Loss | $ 840,000 | 280,000 | |
Weighted average remaining period | 16 years | ||
Advertising expense | $ 512,655 | 828,692 | |
Research and development | 1,603,379 | 1,345,513 | |
Deposit insurance coverage limit | 250,000 | ||
Uninsured cash and cash equivalents | $ 6,338,896 | $ 1,069,887 | |
Potentially dilutive securities | 98,750 | 26,667 | |
STEP Revenue [Member] | |||
Revenue | $ 794,524 | $ 191,289 | |
Concentration of credit risk | 4.00% | 1.00% | |
Accounts Receivables [Member] | |||
Allowance for doubtful accounts | $ 266,813 | ||
Allowance uncollectible notes receivables | $ 102,473 | ||
Federal Agency [Member] | STEP Revenue [Member] | |||
Concentration of credit risk | 16.00% | 18.00% | |
Federal Agency One [Member] | STEP Revenue [Member] | |||
Concentration of credit risk | 12.00% | ||
One Federal Agency [Member] | Accounts Receivables [Member] | |||
Concentration of credit risk | 8.50% | 30.00% | |
One State Agency [Member] | Accounts Receivables [Member] | |||
Concentration of credit risk | 31.00% | ||
Customer Retainage [Member] | |||
Revenue | $ 10,720 | $ 122,500 | |
Warranty [Member] | One Year or Less [Member] | |||
Extended warranties | 2,191,400 | 1,829,052 | |
Warranty [Member] | Longer Than One Year [Member] | |||
Extended warranties | 1,920,346 | 1,748,257 | |
Warranty [Member] | One Year [Member] | |||
Extended warranties | 352,000 | 257,000 | |
Customer Deposits [Member] | |||
Revenue | 325,844 | 180,041 | |
Deferred revenue liability current | 2,517,175 | 651,073 | |
Government Customers [Member] | |||
Revenue | $ 17,351,285 | ||
Concentration of credit risk | 91.00% | ||
Commercial Customers [Member] | |||
Revenue | $ 1,293,183 | $ 869,126 | |
Concentration of credit risk | 7.00% | 5.00% | |
International Customers [Member] | |||
Revenue | $ 443,163 | $ 2,505,259 | |
Concentration of credit risk | 2.00% | 13.00% | |
Governmental Customers [Member] | |||
Revenue | $ 15,337,538 | ||
Concentration of credit risk | 82.00% | ||
One International Customer [Member] | Accounts Receivables [Member] | |||
Concentration of credit risk | 20.00% |
Organization and Significant _5
Organization and Significant Accounting Policies - Schedule of Disaggregation of Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Simulators and accessories | $ 13,802,446 | $ 13,592,600 |
Extended service-type warranties | 2,621,440 | 2,371,433 |
Customized software and content | 2,057,744 | 1,629,550 |
Installation and training | 556,444 | 965,158 |
Licensing and royalties | 49,557 | 153,182 |
Total Revenue | 19,087,631 | 18,711,923 |
Commercial [Member] | ||
Simulators and accessories | 1,052,223 | 530,742 |
Extended service-type warranties | 74,290 | 35,148 |
Customized software and content | 100,109 | 103,424 |
Installation and training | 17,004 | 46,630 |
Licensing and royalties | 49,557 | 153,182 |
Total Revenue | 1,293,183 | 869,126 |
Government [Member] | ||
Simulators and accessories | 12,450,793 | 11,069,039 |
Extended service-type warranties | 2,408,379 | 2,132,864 |
Customized software and content | 1,957,635 | 1,457,424 |
Installation and training | 534,478 | 678,211 |
Licensing and royalties | ||
Total Revenue | 17,351,285 | 15,337,538 |
International [Member] | ||
Simulators and accessories | 299,430 | 1,992,819 |
Extended service-type warranties | 138,771 | 203,421 |
Customized software and content | 68,702 | |
Installation and training | 4,962 | 240,317 |
Licensing and royalties | ||
Total Revenue | $ 443,163 | $ 2,505,259 |
Organization and Significant _6
Organization and Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P3Y |
Computer Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P5Y |
Furniture and Office Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P5Y |
Furniture and Office Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P7Y |
Machinery and Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P5Y |
Machinery and Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P7Y |
STEP Equipment [Member] | |
Estimated useful lives of assets | P5Y |
Leasehold Improvements [Member] | |
Estimated useful lives of assets | P7Y |
Organization and Significant _7
Organization and Significant Accounting Policies - Schedule of Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Net income/(loss) | $ 1,478,403 | $ (75,277) |
Weighted average common stock outstanding | 7,757,037 | 7,747,655 |
Incremental shares from stock options | 78,793 | |
Weighted average common stock outstanding diluted | 7,835,830 | 7,747,655 |
Net income/(loss) per common share and common equivalent shares - Basic | $ 0.19 | $ (0.01) |
Net income/(loss) per common share and common equivalent shares - Diluted | $ 0.19 | $ (0.01) |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Mar. 23, 2018 | Jul. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Conversion of past due trade receivable | $ 400,906 | ||||
Debt instrument principal and accrued interest | $ 374,034 | ||||
Allowance for doubtful accounts | $ 34,959 | $ 34,177 | |||
Received single payment | 10,000 | ||||
Legal judgement, fee | $ 396,575 | ||||
Accrued interest for judgement | 6.25% | ||||
Written off to bad debt expense | 291,110 | $ 108,174 | |||
Principal amount | 257,471 | ||||
Reserve for collectability | 311,367 | 5,701 | |||
Accounts Receivables [Member] | |||||
Allowance for doubtful accounts | $ 266,813 | ||||
Written off to bad debt expense | 102,473 | ||||
TEC [Member] | |||||
Debt instrument principal and accrued interest | 311,367 | $ 296,811 | |||
Loan receibale | $ 292,138 | ||||
Royalty payment, due date | May 31, 2018 | ||||
Interest rate | 5.00% | ||||
Debt, description | The Convertible Note bears interest at the rate of five percent (5%) per annum and contains a provision requiring remittance of not less than 20% of the net proceeds of any private or public offering of its securities in reduction of the Convertible Note. The Convertible Note has a conversion right, at the sole discretion of the Company, to convert the outstanding balance of principal and accrued interest at any time for shares of common stock of TEC. Prior to the due date, the Company may elect to convert the Convertible Note for shares of common stock in TEC at a twenty-five percent (25%) discount to the price of shares sold to the public in a public offering in connection with a go-public transaction. The issuance of common stock upon conversion shall be made without charge to the Company. No fractional shares shall be issued upon conversion and in lieu of fractional shares, TEC will pay the Company the amount of any obligation that is not converted. Any unpaid balance of principal and accrued interest becomes due and collectible on the earlier of (i) August 1, 2019 (maturity date), or (ii) if declared due and payable in the event of Default. | ||||
Debt instrument, maturity date | Aug. 1, 2019 | Aug. 1, 2019 | |||
TEC [Member] | Convertible Debt [Member] | |||||
Debt instrument, maturity date, description | The Convertible Note's maturity date was extended to August 2020 | ||||
Payment for remission of convertible debt | $ 16,000 | ||||
Debt instrument accrued interest | 14,972 | ||||
Principal amount | $ 1,028 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Spare parts as other assets, long-term | $ 500,114 | $ 351,236 |
Transfer from inventory to property and equipment | $ 724,811 | $ 292,138 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 3,636,649 | $ 2,070,066 |
Reserve | (120,652) | (120,652) |
Total inventory, net | $ 3,515,997 | $ 1,949,414 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
STEP Equipment [Member] | ||
Depreciation expense | $ 371,265 | $ 299,804 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total property and equipment | $ 3,977,840 | $ 3,253,029 |
Less: Accumulated depreciation | (2,596,096) | (2,224,831) |
Property and equipment, net | 1,381,744 | 1,028,198 |
Computer Equipment [Member] | ||
Total property and equipment | 1,115,326 | 1,115,326 |
Furniture and Office Equipment [Member] | ||
Total property and equipment | 223,925 | 223,925 |
Machinery and Equipment [Member] | ||
Total property and equipment | 1,096,898 | 1,096,898 |
Leasehold Improvements [Member] | ||
Total property and equipment | 334,934 | 334,934 |
STEP Equipment [Member] | ||
Total property and equipment | $ 1,206,757 | $ 481,946 |
Intangible Asset (Details Narra
Intangible Asset (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 8,889 | $ 8,148 |
Weighted average remaining period | 16 years |
Intangible Asset - Schedule of
Intangible Asset - Schedule of Intangible Asset (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total intangible asset | $ 288,085 | $ 226,078 |
Less: Accumulated amortization | (17,037) | (8,148) |
Intangible asset, net | 271,048 | 217,930 |
Patents [Member] | ||
Total intangible asset | 160,000 | 160,000 |
Capitalized Media Content [Member] | ||
Total intangible asset | $ 128,085 | $ 66,078 |
Leases (Details Narrative)
Leases (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2019ft² | Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | Jun. 30, 2019ft² | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) | |
Incremental in borrowing rate | 4.50% | |||||
Operating lease liability | $ 1,174,882 | $ 1,472,126 | $ 1,721,380 | |||
Deferred rent | 0 | 0 | 46,523 | |||
Operating lease right of use asset | 1,094,527 | 1,390,873 | $ 1,674,857 | $ 1,674,857 | ||
Rent expenses | $ 412,315 | $ 499,612 | ||||
Lease Amendment [Member] | ||||||
Rentable square feet | ft² | 5,131 | |||||
Lease expires, description | April 2024 | |||||
Office and Warehouse Space [Member] | Unaffiliated Third Party [Member] | ||||||
Rentable square feet | ft² | 37,729 | |||||
Office and Industrial Space [Member] | Unaffiliated Third Party [Member] | ||||||
Rentable square feet | ft² | 4,529 |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Classification of Lease Assets and Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | |
Leases [Abstract] | |||
Operating lease right-of-use assets, beginning balance | $ 1,390,873 | $ 1,674,857 | |
Amortization | (296,346) | (283,984) | |
Total operating lease right-of-use asset, ending balance | 1,094,527 | 1,390,873 | |
Operating lease liability, short-term, current | 321,727 | 297,244 | |
Operating lease liability, long-term, non current | 853,155 | 1,174,882 | |
Total lease liabilities | $ 1,174,882 | $ 1,472,126 | $ 1,721,380 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 |
Leases [Abstract] | |||
2021 | $ 368,060 | ||
2022 | 379,097 | ||
2023 | 390,562 | ||
2024 | 131,152 | ||
Total lease payments | 1,268,871 | ||
Less: imputed interest | (93,989) | ||
Operating lease liability | $ 1,174,882 | $ 1,472,126 | $ 1,721,380 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Compensation and Related Costs (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Salaries and wages payable | $ 278,331 | $ 192,161 |
Employee benefits payable | 634 | 11,259 |
Accrued paid time off (PTO) | 366,827 | 287,846 |
Profit sharing payable | 197,309 | 120,221 |
Total accrued compensation and related costs | $ 843,101 | $ 611,487 |
Accrued Expenses - Schedule o_2
Accrued Expenses - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Manufacturer's warranties | $ 352,000 | $ 257,000 |
Warranties-other | 74,176 | |
Taxes payable | 316,076 | 2,382 |
Miscellaneous payable | 104,808 | 1,193 |
Total accrued expenses and other current liabilities | $ 772,884 | $ 334,751 |
Note Payable (Detail Narrative)
Note Payable (Detail Narrative) - USD ($) | May 08, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt instrument principal amount | $ 257,471 | |||
Debt instrument periodic payment | $ 374,034 | |||
Paycheck Protection Program Loan [Member] | Convertible Promissory Note [Member] | ||||
Debt instrument principal amount | $ 1,320,714 | |||
Debt interest rate | 1.00% | |||
Debt instrument periodic payment | $ 55,604 | |||
Debt instrument maturity date | May 8, 2022 | |||
Debt instrument interest amount | $ 18,720 | |||
Debt instrument term | 2 years | |||
Repayment of notes payable | $ 1,339,434 |
Note Payable - Schedule of Note
Note Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Note payable, principal | $ 257,471 | |
Accrued interest on note | 8,566 | |
Note payable, short-term | 266,037 | |
Note payable, long term | $ 1,063,243 |
Co-Venture Agreement with Mod_2
Co-Venture Agreement with Modern Round (Details Narrative) - USD ($) | Jul. 31, 2019 | Aug. 16, 2017 | Jan. 16, 2015 | Apr. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reverse stock split | MR effected a 1-for-12,000 reverse stock split, followed by a 2,000-for-1 forward stock split completed in November 2018. | ||||||
Investment | $ 840,000 | ||||||
TEC [Member] | |||||||
Debt instrument maturity date | Aug. 1, 2019 | Aug. 1, 2019 | |||||
Number of common stock held | 560,000 | 560,000 | |||||
Issued and outstanding percentage | 4.80% | 4.80% | |||||
Impairment loss | $ 840,000 | $ 280,000 | |||||
Number of warrants to purchase shares of common stock | 25,577 | ||||||
Warrant exercise price per share | $ 2.4436 | ||||||
Warrant description | This warrant became exercisable on the date of grant of April 14, 2015 and expires on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. | ||||||
Amendment to Co-Venture Agreement [Member] | |||||||
Ownership interest for fully diluted basis | 5.00% | ||||||
Royalty percentage | 10.00% | ||||||
Percentage of revenue paid for cost of equipment | 14.00% | ||||||
First Amendment to Convertible Promissory Note [Member] | TEC [Member] | |||||||
Debt instrument maturity date | Aug. 1, 2020 | ||||||
Payments of public offering | $ 16,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of previously awarded options redeemed | 40,000 | 34,225 |
Compensation expenses | $ 73,987 | $ 38,353 |
Exercise price amount | 30,166 | 11,426 |
Co-Venture Agreement [Member] | ||
Royalties/license fee income | $ 46,247 | $ 130,625 |
TEC [Member] | ||
Number of common stock held | 560,000 | 560,000 |
Issued and outstanding percentage | 4.80% | 4.80% |
Accounts receivable | $ 0 | $ 0 |
Natural Point, Inc [Member] | ||
Purchased specialized equipment amount | 232,218 | 167,302 |
Outstanding balance | $ 0 | $ 34,865 |
CEO and Board of Directors [Member] | ||
Related party exercised options | 30,000 | 5,000 |
Exercise price amount | $ 30,163 | $ 5,650 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 20, 2019 | Apr. 02, 2012 | May 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Settlement amount | $ 76,250 | |||||
Estimated loss contingency | $ 40,000 | |||||
Estimated loss contingency sought | $ 396,575 | |||||
Intetrest accruing rate | 6.25% | |||||
Written off to bad debt expense | $ 291,110 | $ 108,174 | ||||
Amount credited to operations from forfeited awards | 206,869 | 93,160 | ||||
Chief Executive Officer [Member] | ||||||
Annual salaries | 248,791 | |||||
Chief Operating Officer [Member] | ||||||
Annual salaries | $ 223,274 | |||||
Three Year Employment Agreements [Member] | Chief Executive Officer [Member] | ||||||
Annual salaries | $ 195,000 | |||||
Three Year Employment Agreements [Member] | Chief Operating Officer [Member] | ||||||
Annual salaries | $ 175,000 | |||||
Note Receivable [Member] | ||||||
Written off to bad debt expense | $ 102,473 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Ownership percentage | 50.00% |
Federal net operating loss carry-forwards | $ 1,100,000 |
Operating loss carry-forwards expiration description | expire starting in 2031 |
Future taxable income carryforward | $ 474,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 324,000 | $ 762,000 |
Tax Credits | 907,000 | 286,000 |
Deferred revenue | 152,000 | 58,000 |
Non-qualified stock option expense | 120,000 | 136,000 |
Investment in TEC | 89,000 | 51,000 |
Reserves, accruals and other | 254,000 | 231,000 |
Accumulated depreciation and amortization | 46,000 | 268,000 |
Total deferred tax assets | 1,892,000 | 1,792,000 |
Less: Valuation allowance | ||
Net deferred tax asset | $ 1,892,000 | $ 1,792,000 |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current | $ (119,000) | $ (162,000) |
Deferred | (100,000) | 608,000 |
Change in valuation allowance | ||
Provision for income taxes | $ (218,800) | $ 446,725 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax expense at the statutory rate | $ 265,000 | $ 78,000 |
State income taxes, net of federal benefit | 69,000 | 20,000 |
Permanent differences | 186,654 | 79,665 |
True ups to tax return and other | (739,654) | 268,335 |
Change in federal income tax rates | ||
Change in valuation allowance | ||
Provision (benefit) for income taxes | $ (218,800) | $ 446,725 |
Federal income tax expense at the statutory rate, percentage | 21.00% | 21.00% |
State income taxes, net of federal benefit, percentage | 5.50% | 5.40% |
Permanent differences, percentage | 14.80% | 21.40% |
True ups to tax return and other, percentage | (58.70%) | 72.20% |
Change in federal income tax rates, percentage | 0.00% | 0.00% |
Change in valuation allowance, percentage | 0.00% | 0.00% |
Provision (benefit) for income taxes, percentage | (59.00%) | 120.10% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 09, 2019 | Aug. 23, 2017 | Oct. 25, 2016 | |
Common stock shares authorized | 50,000,000 | 50,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock shares issued | 7,775,030 | 7,745,030 | |||
Preferred stock shares authorized | 2,500,000 | 2,500,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Additional treasury shares purchased | 82,689 | ||||
Average price paid per share | $ 3.85 | ||||
Stock related to exercise of options | $ 30,166 | $ 11,426 | |||
Options outstanding and exercisable, term | 7 years | ||||
Aggregate intrinsic value of options outstanding and exercisable | $ 138,487 | 731,112 | |||
Total intrinsic value of options exercised | $ 63,437 | $ 14,770 | |||
2017 Equity Incentive Plan [Member] | |||||
Number of common stock capital shares reserved for future issuance | 1,187,500 | ||||
Percentage of common stock shares issued and outstanding | 3.00% | ||||
2017 Equity Incentive Plan [Member] | |||||
Options issued | |||||
Board of Directors [Member] | |||||
Common stock shares authorized to repurchase | 1,000,000 | 1,000,000 | |||
Class A Common Stock [Member] | |||||
Common stock shares authorized | 2,500,000 | 2,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock shares issued | |||||
Common stock voting rights | Each holder of Class A Common Stock shall be entitled to ten (10) votes for each share of Class A Common Stock held of record by such holder. | ||||
Class B Common Stock [Member] | |||||
Common stock shares authorized | 7,500,000 | 7,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock shares issued | |||||
Common Stock [Member] | |||||
Common stock shares authorized | 50,000,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Stock related to exercise of options | $ 3 | $ 2 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Repurchased and Cancelled Treasury Shares (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total Number of Shares Repurchased | 82,689 | |
Average Price Paid per Share | $ 3.85 | |
Repurchased Shares Cancelled | 82,689 | |
Repurchased Shares Held in Treasury | ||
Approximate Funds Remaining in Repurchase Plan as of December 31, 2020 | ||
January to March [Member] | ||
Total Number of Shares Repurchased | 68,239 | |
Average Price Paid per Share | $ 3.82 | |
April to June [Member] | ||
Total Number of Shares Repurchased | 14,450 | |
Average Price Paid per Share | $ 3.97 | |
July To September [Member] | ||
Total Number of Shares Repurchased | ||
Average Price Paid per Share | ||
October to December [Member] | ||
Total Number of Shares Repurchased | ||
Average Price Paid per Share |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Non-qualified Stock Options (Details) - Non-Qualified Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Stock Options, Options outstanding, beginning of year | 234,167 | 279,167 |
Number of Stock Options, Granted | ||
Number of Stock Options, Redeemed | (40,000) | (34,225) |
Number of Stock Options, Exercised | (30,000) | (10,775) |
Number of Stock Options, Expired / terminated | ||
Number of Stock Options, Options outstanding, end of year | 164,167 | 234,167 |
Number of Stock Options, Options exercisable, end of year | 164,167 | 234,167 |
Weighted Exercise Price, Option outstanding, beginning of year | $ 2.47 | $ 2.25 |
Weighted Exercise Price, Granted | ||
Weighted Exercise Price, Redeemed | 0.88 | 1.13 |
Weighted Exercise Price, Exercised | 1.01 | 1.06 |
Weighted Exercise Price, Expired / terminated | ||
Weighted Exercise Price, Option outstanding end of quarter | 3.13 | 2.47 |
Weighted Exercise Price, Options exercisable, end of quarter | $ 3.13 | $ 2.47 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Stock Options Outstanding and Exercisable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Range of Exercise Price, lower range limit | $ 0.40 | $ 0.40 |
Range of Exercise Price, upper range limit | $ 2.99 | $ 2.99 |
Number of Options Outstanding | 164,167 | 234,167 |
Weighted Average Exercise Price | $ 3.13 | $ 2.47 |
Number of Options Exercisable | 164,167 | 234,167 |
Weighted Average Exercise Price | $ 3.13 | $ 2.47 |
Exercise Price Range One [Member] | ||
Range of Exercise Price, lower range limit | 0.80 | 0.80 |
Range of Exercise Price, upper range limit | $ 0.99 | $ 0.99 |
Number of Options Outstanding | 11,250 | 70,000 |
Weighted Average Exercise Price | $ 0.98 | $ 0.87 |
Number of Options Exercisable | 11,250 | 70,000 |
Weighted Average Exercise Price | $ 0.98 | $ 0.87 |
Exercise Price Range Two [Member] | ||
Range of Exercise Price, lower range limit | 1 | 1 |
Range of Exercise Price, upper range limit | $ 1.99 | $ 1.99 |
Number of Options Outstanding | 33,750 | 45,000 |
Weighted Average Exercise Price | $ 1.68 | $ 1.60 |
Number of Options Exercisable | 33,750 | 45,000 |
Weighted Average Exercise Price | $ 1.68 | $ 1.60 |
Exercise Price Range Three [Member] | ||
Range of Exercise Price, lower range limit | 2 | 2 |
Range of Exercise Price, upper range limit | $ 2.99 | $ 2.99 |
Number of Options Outstanding | 42,500 | 42,500 |
Weighted Average Exercise Price | $ 2.48 | $ 2.48 |
Number of Options Exercisable | 42,500 | 42,500 |
Weighted Average Exercise Price | $ 2.48 | $ 2.48 |
Exercise Price Range Four [Member] | ||
Range of Exercise Price, lower range limit | 3 | 3 |
Range of Exercise Price, upper range limit | $ 3.99 | $ 3.99 |
Number of Options Outstanding | 25,000 | 25,000 |
Weighted Average Exercise Price | $ 3.50 | $ 3.50 |
Number of Options Exercisable | 25,000 | 25,000 |
Weighted Average Exercise Price | $ 3.50 | $ 3.50 |
Exercise Price Range Five [Member] | ||
Range of Exercise Price, lower range limit | 4 | 4 |
Range of Exercise Price, upper range limit | $ 4.99 | $ 4.99 |
Number of Options Outstanding | 25,000 | 25,000 |
Weighted Average Exercise Price | $ 4.25 | $ 4.25 |
Number of Options Exercisable | 25,000 | 25,000 |
Weighted Average Exercise Price | $ 4.25 | $ 4.25 |
Exercise Price Range Six [Member] | ||
Range of Exercise Price, lower range limit | 5 | 5 |
Range of Exercise Price, upper range limit | $ 5.99 | $ 5.99 |
Number of Options Outstanding | 26,667 | 26,667 |
Weighted Average Exercise Price | $ 5.50 | $ 5.50 |
Number of Options Exercisable | 26,667 | 26,667 |
Weighted Average Exercise Price | $ 5.50 | $ 5.50 |