Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | RUBICON TECHNOLOGY, INC. | ||
Trading Symbol | RBCN | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 2,410,265 | ||
Entity Public Float | $ 18,473,527 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001410172 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-33834 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-4419301 | ||
Entity Address, Address Line One | 900 East Green Street | ||
Entity Address, City or Town | Bensenville | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60106 | ||
City Area Code | (847) | ||
Local Phone Number | 295-7000 | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum llp | ||
Auditor Location | New York, NY | ||
Title of 12(b) Security | NONE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 1,590 | $ 11,260 |
Restricted cash | 120 | |
Short-term investments | 14,751 | |
Accounts receivable, net | 671 | 719 |
Inventories, net | 325 | 658 |
Other inventory supplies | 124 | 133 |
Prepaid expenses and other current assets | 47 | 167 |
Assets held for sale | 529 | |
Total current assets | 2,877 | 28,217 |
Grants receivable | 250 | |
Inventories, non-current, net | 650 | 468 |
Property and equipment, net | 2,182 | 2,301 |
Total assets | 5,959 | 30,986 |
Liabilities and stockholders’ equity | ||
Accounts payable | 438 | 545 |
Accrued payroll | 128 | 426 |
Accrued and other current liabilities | 223 | 220 |
Corporate income and franchise taxes | 304 | 327 |
Accrued real estate taxes | 67 | 78 |
Advance payments | 4 | 2 |
Current portion of long term debt, net of unamortized finance costs | 25 | |
Total current liabilities | 1,189 | 1,598 |
Long term debt, net of current portion and unamortized finance costs | 1,566 | |
Total liabilities | 2,755 | 1,598 |
Commitments and contingencies (see Note 11) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 1,000,000 undesignated shares authorized, no shares issued or outstanding | ||
Common stock, $0.001 par value 8,200,000 shares authorized; 3,011,917 and 2,995,680 shares issued; 2,462,889 and 2,446,652 shares outstanding | 29 | 29 |
Additional paid-in capital | 349,520 | 376,640 |
Treasury stock, at cost, 549,028 and 549,028 shares | (15,147) | (15,147) |
Accumulated other comprehensive loss | (1) | |
Accumulated deficit | (331,198) | (332,133) |
Total stockholders’ equity | 3,204 | 29,388 |
Total liabilities and stockholders’ equity | $ 5,959 | $ 30,986 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 8,200,000 | 8,200,000 |
Common stock, shares issued | 3,011,917 | 2,995,680 |
Common stock, shares outstanding | 2,462,889 | 2,446,652 |
Treasury stock, shares | 549,028 | 549,028 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 3,587 | $ 4,061 |
Cost of goods sold | 2,147 | 2,798 |
Gross profit | 1,440 | 1,263 |
Operating expenses: | ||
General and administrative | 2,346 | 2,130 |
Sales and marketing | 136 | 210 |
Gain on sale or disposal of assets | (1,410) | (613) |
Other gain | (217) | |
Income (loss) from continuing operations | 585 | (464) |
Other income: | ||
Interest income | 105 | 5 |
Interest expense | (39) | |
Realized gain on equity investments | 18 | |
Grant revenue | 250 | |
Total other income | 334 | 5 |
Income (loss) before income taxes from continuing operations | 919 | (459) |
Income tax expense | ||
Income (loss) from continuing operations | 919 | (459) |
Income (loss) from discontinued operations, net of taxes | 16 | (271) |
Net income (loss) | $ 935 | $ (730) |
Net income (loss) per common share: basic | ||
Continuing operations (in Dollars per share) | $ 0.38 | $ (0.19) |
Discontinued operations (in Dollars per share) | 0.01 | (0.11) |
Net income (loss) per common share: diluted | ||
Continuing operations (in Dollars per share) | 0.37 | (0.19) |
Discontinued operations (in Dollars per share) | $ 0.01 | $ (0.11) |
Weighted average common shares outstanding used in computing net income (loss) per common share | ||
Basic (in Shares) | 2,448,682 | 2,439,764 |
Diluted (in Shares) | 2,455,897 | 2,439,764 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Income (loss) from continuing operations | $ 919 | $ (459) |
Income (loss) from discontinued operations | 16 | (271) |
Net income (loss) | 935 | (730) |
Other comprehensive income: | ||
Unrealized gain (loss) on investments, net of taxes | 1 | (1) |
Other comprehensive gain (loss) | 1 | (1) |
Comprehensive income (loss) | $ 936 | $ (731) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Common stock | Treasury stock | Additional paid-in capital | Accum other comp loss | Accum deficit | Total |
Balance at Dec. 31, 2020 | $ 29 | $ (15,147) | $ 376,456 | $ (331,403) | $ 29,935 | |
Balance (in Shares) at Dec. 31, 2020 | 2,971,283 | (549,028) | ||||
Stock-based compensation | 371 | 371 | ||||
Common stock issued, net of shares withheld for employee taxes | (187) | (187) | ||||
Common stock issued, net of shares withheld for employee taxes (in Shares) | 24,397 | |||||
Unrealized loss on investments, net of tax | (1) | (1) | ||||
Net Income (loss) | (730) | (730) | ||||
Balance at Dec. 31, 2021 | $ 29 | $ (15,147) | 376,640 | (1) | (332,133) | 29,388 |
Balance (in Shares) at Dec. 31, 2021 | 2,995,680 | (549,028) | ||||
Stock-based compensation | 182 | 182 | ||||
Restricted stock issued, net of shares withheld for employee taxes | (203) | (203) | ||||
Restricted stock issued, net of shares withheld for employee taxes (in Shares) | 15,338 | |||||
Return of shareholder capital | (27,092) | (27,092) | ||||
Common stock issued, net of shares withheld for employee taxes | (7) | (7) | ||||
Common stock issued, net of shares withheld for employee taxes (in Shares) | 899 | |||||
Unrealized loss on investments, net of tax | 1 | 1 | ||||
Net Income (loss) | 935 | 935 | ||||
Balance at Dec. 31, 2022 | $ 29 | $ (15,147) | $ 349,520 | $ (331,198) | $ 3,204 | |
Balance (in Shares) at Dec. 31, 2022 | 3,011,917 | (549,028) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Income (loss) from continuing operations | $ 919 | $ (459) |
Adjustments to reconcile net income (loss) from continuing operations to net cash used in continuing operations | ||
Depreciation and amortization | 120 | 140 |
Gain on sale or disposal of assets | (1,410) | (613) |
Gain on sale of equity investments | (18) | |
Other gain | (189) | |
Stock-based compensation | 182 | 371 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 41 | (236) |
Inventories | 151 | 356 |
Other inventory supplies | (6) | 6 |
Prepaid expenses and other assets | 158 | 108 |
Grants receivable | (250) | |
Accounts payable | 12 | 19 |
Accrued payroll | (298) | 215 |
Corporate income and franchise taxes | (22) | 19 |
Accrued real estate taxes | (11) | 7 |
Advance payments | 2 | (16) |
Accrued and other current liabilities | 98 | 22 |
Net cash used in operating activities from continuing operations | (521) | (61) |
Cash flows from discontinued operations | (262) | |
Cash flows from investing activities | ||
Proceeds from sale or disposal of assets | 1,954 | 643 |
Purchase of investments | (1,055) | (6) |
Proceeds from sale of investments | 15,823 | 3 |
Net cash provided by investing activities | 16,722 | 640 |
Cash flows from financing activities | ||
Proceeds from mortgage, net of escrow funding and loan costs | 1,560 | |
Mortgage loan principal payments | (9) | |
Taxes paid related to net share settlement of equity awards | (210) | (187) |
Return of shareholder capital | (27,092) | |
Net cash used in financing activities | (25,751) | (187) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (9,550) | 130 |
Cash, cash equivalents and restricted cash, beginning of year | 11,260 | 11,130 |
Cash, cash equivalents and restricted cash, end of year | 1,710 | 11,260 |
Supplemental disclosure of cash flow: | ||
Cash paid for interest | $ 33 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of business Rubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of two subsidiaries, Rubicon Worldwide LLC, doing business as Rubicon Technology Worldwide LLC (“RTW”), and Rubicon Technology BP LLC. In June 2021, the operations of Rubicon DTP LLC, doing business as Direct Dose Rx (“Direct Dose”) were discontinued. RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on a global basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specialized pharmacy that provided prescription medications, over-the-counter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals and directly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and come in easy-to-use perforated strip-packaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by Direct Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions. Principles of consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Worldwide LLC, doing business as Rubicon Technology Worldwide LLC, Rubicon Technology BP LLC, and the discontinued operations of Rubicon DTP LLC. All intercompany transactions and balances have been eliminated in consolidation. A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows. Cash, cash equivalents and restricted cash The Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of time deposits with banks, unsettled trades and brokerage money market accounts. As part of the Loan the lender required approximately 12 months in “payment reserves” totaling $120,000 which are restricted from use by the Company until it can meet certain debt service ratio requirements. Investments When the Company invests its available cash, it primarily invests in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock, equity-related securities and corporate notes. Investments classified as available-for-sale debt securities are carried at fair value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, to liquidate in order to support our current operations are classified as short-term. We review our available-for-sale debt securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. We consider various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. As of December 31, 2022, the Company had no such investments, and no impairment was recorded as of December 31, 2021. Purchases of Equity Securities by the Issuer In November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company used all of the original authorized $3,000,000. On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. On July 5, 2022 the Company announced that it had entered into a definitive Stock Purchase and Sale Agreement (“Purchase Agreement”) with Janel Corporation (“Janel”), pursuant to which Janel would commence a cash tender offer (the “Offer”) to purchase up to 45% of the outstanding shares of Rubicon’s common stock on a fully-diluted basis at a price of $20.00 per share. The transaction was subsequently consummated in August of 2022. Pursuant to the terms of the Company’s stock repurchase plan, this transaction resulted in the automatic termination of the plan. There was no share repurchase activity during the years ended December 31, 2022 and 2021, respectively. Accounts receivable The majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible and such write-offs, net of payments received, are recorded as a reduction to the allowance. Accounts receivable is comprised of a net total of $671,000 and $719,000 for the years ended December 31, 2022 and 2021, respectively. The breakdown of accounts receivable for continuing operations and discontinued operations is as follows: Year Ended December 31, 2022 2021 (in thousands) Continuing Operations: Trade receivables $ 683 $ 732 Allowance for doubtful accounts (6 ) (7 ) Discontinued Operations: Trade receivables 6 6 Allowance for doubtful accounts (12 ) (12 ) Balance of accounts receivable, net $ 671 $ 719 Inventories Inventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other relevant information. The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2022 was $7,052,000 compared to $7,749,000 at December 31, 2021. For the year ended December 31, 2022, there was a reduction in excess or obsolete inventory of $697,000, which was attributable to consumed inventory which had previously been reserved. For the year ended December 31, 2021, there was a reduction in excess or obsolete inventory of $159,000, which was attributable to consumed inventory which had previously been reserved. The Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. As of December 31, 2022 and 2021, the balance of the lower of cost or market reserve was $8,000 and $25,000, respectively, representing a decrease of $17,000 resulting from sales of related reserved inventory. In 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventory reserve and cost of goods sold of $27,000. In 2022 and 2021, the Company used some of its previously written down two-inch diameter core material in production of optical and industrial sapphire wafers and did not record any additional adjustments for the years ended December 31, 2022 and December 31, 2021. The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipated sales. The Company did not record any write-downs of its raw materials inventory for the years ended December 31, 2022 and December 31, 2021. Inventories are composed of the following: As of December 31, 2022 2021 (in thousands) Raw materials $ 367 $ 468 Work-in-process 379 328 Finished goods 229 330 $ 975 $ 1,126 As of December 31, 2022 and 2021, the Company made the determination that raw material inventories were such that the likelihood of significant usage within the current year was doubtful and reclassified such raw material inventories as non-current in the reported financial statements. For the year ended December 31, 2022, an additional $302,000 of current inventory was reclassified as non-current. Also, during the year ended December 31, 2022, there were sales of non-current inventory totaling $95,000. There were no inventories of discontinued operations at years ended December 31, 2022 and 2021, respectively. Other inventory supplies The Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process. Assets held for sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale. On September 19, 2022, the Company completed the sale of its parcel of land located in Batavia, Illinois pursuant to the terms and conditions of the agreement of sale, dated as of February 7, 2022. The selling price for the property was $722,000. The Company realized net proceeds of approximately $600,000 after the payment of real estate taxes, brokerage and legal fees, transfer taxes and other expenses. Grants receivable and grant revenue Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and its subsequent amendments in sections 206 and 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, provides for a refundable payroll tax credit (Employee Retention Credit or ERC) to eligible employers with less than 500 employees who paid qualified wages after March 12, 2020, and before June 30, 2021. During the quarter ended June 30, 2022, the Company determined that although it did not meet the eligibility conditions during the period beginning March 12, 2020, and ending December 31, 2020, it did qualify to claim the ERC for the periods ending March 31, 2021, and June 30, 2021. As such, the Company recorded Grant Revenue and Grants Receivable of approximately $250,000 related to its pending ERC claim analogous to ASC Subtopic 958-605. Since the Company does not expect to receive the funds for the ERC claim for at least twelve months, the receivable has been classified as a non-current asset on its balance sheet. Property and equipment Property and equipment consisted of the following: As of December 31, 2022 2021 (in thousands) Machinery, equipment and tooling $ 3,263 $ 3,296 Buildings 1,711 1,711 Information systems 819 819 Land and land improvements 594 594 Furniture and fixtures 7 7 Total cost 6,394 6,427 Accumulated depreciation and amortization (4,212 ) (4,126 ) Property and equipment, net $ 2,182 $ 2,301 Property and equipment are carried at cost and depreciated over their estimated useful lives using the straight-line method. The cost of maintenance and repairs is charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was $120,000 and $140,000 for the years ended December 31, 2022 and 2021, respectively. The estimated useful lives are as follows: Asset description Life Buildings 39 years Machinery, equipment and tooling 3-10 years Furniture and fixtures 7 years Information systems 3 years There was no property and equipment of discontinued operations as of December 31, 2022 and 2021, respectively. Warranty cost The Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost of warranty-related claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets. The following table presents changes in the Company’s product warranty liability: Year Ended December 31, 2022 2021 (in thousands) Balance, beginning of period $ 1 $ 1 Charged to cost of sales (16 ) (9 ) Actual product warranty expenditures 16 9 Balance, end of period $ 1 $ 1 The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements or deliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000 for the years ended December 31, 2022 and 2021, respectively. Current and long-term debt The Company reports debt issuance costs as an adjustment to the carrying amount of the related debt in accordance with ASC 835-30-45. The amortization of such costs is included in interest expense for the period. On August 15, 2022, Rubicon Technology BP LLC, a Delaware limited liability company (the “ Borrower Loan Note Lender The following table shows the net proceeds from the Loan at the time of its origination: Proceeds From (in thousands) Initial loan amount $ 1,620 Loan costs (22 ) Escrow funding for property tax (38 ) Net proceeds from mortgage loan $ 1,560 Current and long-term debt, net, are shown in the table below: December 31, 2022 December 31, 2021 (in thousands) Mortgage note $ 1,611 $ — Unamortized loan costs (20 ) — Total debt 1,591 — Less: short-term portion 25 — Long-term portion $ 1,566 $ — The Company had no interest expense for the year ended December 31, 2021. Total interest and amortization expense on the Company’s debt obligations during years ended December 31, 2022, and December 31, 2021, respectively, are as follows: December 31, 2022 December 31, 2021 (in thousands) Interest expense $ 37 $ — Amortization of loan costs 2 — Total interest expense $ 39 $ — The following table presents the future maturities of long-term debt and the related loan costs amortization for the years ended December 31: Principal Amort. Costs Debt, Net of (in thousands) 2023 $ 29 $ (4 ) $ 25 2024 31 (4 ) 27 2025 33 (4 ) 29 2026 35 (4 ) 31 2027 1,483 (4 ) 1,479 Total $ 1,611 $ (20 ) $ 1,591 Fair value of financial instruments The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, and accounts payable. The carrying values of these assets and liabilities approximate their fair values due to the short-term nature of these instruments at December 31, 2022 and 2021. Concentration of credit risks and other risks and uncertainties Financial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term investments and accounts receivable. As of December 31, 2022, the Company had $1,200,000 on deposit at financial institutions in excess of amounts insured by the FDIC. This compares to $8,100,000 as of December 31, 2021. The Company performs a periodic evaluation of these institutions for relative credit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on these balances. The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These types of services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantially depend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demand for its products, which could have a material adverse impact on the Company. Concentration of credit risk related to revenue and accounts receivable is discussed in Note 5. Revenue recognition Revenues recognized include product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars. Shipping and handling costs The Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connection with these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements. Sales tax The Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements of Operations and records a liability until remitted to the respective tax authority. Stock-based compensation The Company requires all share-based payments to employees, including grants of employee stock options, to be measured at fair value and expensed in the Consolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements of Operations for these share-based payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants. Accounting for uncertainty in income taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2022 and 2021. The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006, 2008, 2009 and 2012 through 2021 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012 through 2021 are open to examination by state tax authorities. Currently, the Company is trying to determine whether, and the extent to which, it has a Malaysian withholding tax obligation. It is performing related due diligence with Malaysian tax experts to resolve the issue, and has recorded an appropriate liability for the potential tax obligation. Income taxes Deferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and are measured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits of NOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuation allowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a tax strategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based on an evaluation in accordance with the accounting standards, as of December 31, 2022 and 2021, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence . Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and those differences could be material. Other comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net income (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. Net income (loss) per common share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares (a) any outstanding stock options based on the treasury stock method and (b) restricted stock units (“RSU”). Diluted net loss per common share was the same as basic net loss per common share for the year December 31, 2021, because the effects of potentially dilutive securities were anti-dilutive. New accounting pronouncements adopted The Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact the Company’s consolidated financial statements and related disclosures. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 2. SEGMENT INFORMATION Revenue is attributed by geographic region based on ship-to location of the Company’s customers. The following table summarizes revenue by geographic region: Year Ended December 31, 2022 2021 (in thousands) North America $ 2,940 $ 3,671 Asia 567 349 Other 80 41 Total revenue $ 3,587 $ 4,061 All revenues from continuing operations for the years ended December 31, 2022 and 2021, were from the sale of optical sapphire products and related materials. All of our assets were located in the United States for the years ended December 31, 2022 and 2021. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
INVESTMENTS | 3. INVESTMENTS When the Company invests its available cash, it primarily invests in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock, equity-related securities and corporate notes. Investments classified as available-for-sale debt securities are carried at fair value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, to liquidate in order to support our current operations are classified as short-term. There were no short-term investments of the Company at December 31, 2022. The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2021: Gross Gross Amortized unrealized unrealized Fair cost gains losses value (in thousands) Short-term investments: U.S. Treasury securities $ 14,751 $ — $ — $ 14,751 Total short-term investments $ 14,751 $ — $ — $ 14,751 The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, 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. ● Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s fixed income available-for-sale securities consist of U.S. Treasury securities, high-quality investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock, equity related securities and corporate notes. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2022: Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 6 $ — $ — $ 6 Investments: Available-for-sales securities—current: U.S. Treasury securities — — — — Total $ 6 $ — $ — $ 6 The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2021: Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 3,137 $ — $ — $ 3,137 Investments: Available-for-sales securities—current: U.S. Treasury securities — 14,751 — 14,751 Total $ 3,137 $ 14,751 $ — $ 17,888 There are no terms or conditions restricting the Company from redeeming any of its investments. In addition to the debt securities noted above, the Company had approximately $1,600,000 and $8,100,000 of time deposits included in cash and cash equivalents as of December 31, 2022 and 2021, respectively. |
Discontinued Operations_ Closur
Discontinued Operations: Closure of Direct Dose Rx | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations: Closure of Direct Dose Rx [Abstract] | |
DISCONTINUED OPERATIONS: Closure of Direct Dose Rx | 4. DISCONTINUED OPERATIONS: Closure of Direct Dose Rx On June 24, 2021, the Company’s Board of Directors decided effective immediately to close its pharmacy operations dba Direct Dose Rx. Immediately thereafter, Direct Dose Rx began transitioning its customers to other providers and began the process of closing its operations. Direct Dose was launched as a start-up pharmacy primarily to deliver medications and vitamins to patients being discharged from skilled nursing facilities. The Company does not believe that the costs associated with such closure will be material. Based on the Company’s review and analysis of ASC 205-20 Presentation of Discontinued Operations it concluded to present the discontinued operations separately. Year Ended December 31, 2022 2021 (in thousands) Revenues (discontinued operations) $ — $ 370 Operating Expense (discontinued operations) (16 ) 641 Income/loss from operations of discontinued operations, net of taxes $ 16 $ (271 ) |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 31, 2022 | |
Significant Customers [Abstract] | |
SIGNIFICANT CUSTOMERS | 5. SIGNIFICANT CUSTOMERS For the year ended December 31, 2022, the Company had six customers that accounted for approximately 15%, 12%, 12%, 11%, 11%, and 11% of its revenue from continuing operations. For the year ended December 31, 2021, the Company had three customers that accounted for approximately 22%, 12%, and 12% of its revenue from continuing operations. Customers individually representing more than 10% of trade receivables accounted for approximately 74% and 80% of accounts receivable as of December 31, 2022 and 2021, respectively. |
Assets Held for Sale and Long-L
Assets Held for Sale and Long-Lived Assets | 12 Months Ended |
Dec. 31, 2022 | |
Assets Held for Sale and Long-Lived Assets [Abstract] | |
ASSETS HELD FOR SALE AND LONG-LIVED ASSETS | 6. ASSETS HELD FOR SALE AND LONG-LIVED ASSETS When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs an analysis to review the recoverability of the asset’s carrying value using estimates of the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques which assume the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. On September 19, 2022, the Company completed the sale of its parcel of land located in Batavia, Illinois pursuant to the terms and conditions of the agreement of sale, dated as of February 7, 2022. The selling price for the property was $722,000. The Company realized net proceeds of approximately $600,000 after the payment of real estate taxes, brokerage and legal fees, transfer taxes and other expenses. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 7. STOCKHOLDERS’ EQUITY Common stock At the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved amendments to the Company’s Eighth Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to (i) effect a reverse stock split of the Company’s common stock; and (ii) decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstanding immediately following the reverse stock split. On May 3, 2017, following the annual meeting, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to (a) implement the reverse stock split at a ratio of 1-for-10; and (b) to reduce the number of authorized shares of common stock from 40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. With the completion of the reverse stock split, the Company’s shares began trading above the required $1.00 per share closing bid price, as required by the Listing Qualifications Department of NASDAQ. The share information has been retroactively reflected for the effects of this reverse stock split for all periods presented. Preferred stock At the Company’s annual meeting of stockholders held on May 10, 2018, the Company’s stockholders approved an amendment to the Certificate of Incorporation to decrease the Company’s authorized number of shares of preferred stock from 5,000,000 shares to 1,000,000 shares. The Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to decrease the authorized number of preferred shares, consequently reducing the number of total authorized shares from 13,200,000 to 9,200,000. Common shares reserved As of December 31, 2022, the Company had reserved 300 shares of common stock for issuance upon the exercise of outstanding common stock options. Also, 320,273 shares of the Company’s common stock were reserved for future grants of stock options and RSUs (or other similar equity instruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of December 31, 2022. |
Stockholder Rights Agreement
Stockholder Rights Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Stockholder Rights Agreement [Abstract] | |
STOCKHOLDER RIGHTS AGREEMENT | 8. STOCKHOLDER RIGHTS AGREEMENT On December 18, 2017, the Company entered into a Section 382 Rights Agreement with American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agreement”) in an effort to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its net NOLs to reduce potential future federal income tax obligations may become substantially limited. The Company’s ability to utilize its NOLs may be substantially limited if the Company experiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). The Rights Agreement is intended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company’s outstanding common stock without the approval of the Company’s Board of Directors (the “Board”). The Board authorized the issuance of one Right for each outstanding share of common stock, par value $0.001 per share, of the Company, payable to stockholders of record date of the close of business on January 2, 2018. One Right will also be issued together with each share of the Company’s common stock issued after January 2, 2018 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms, provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) for a purchase price of $40.00. If issued, each one-thousandth of a share of Series A Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company, including, without limitation, any dividend, voting or liquidation rights. The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of the outstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stock representing 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficially owns 4.9% or more of the outstanding common stock), and (ii) ten business days (or such later date as may be specified by the Board prior to such time as any person becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in such person becoming an Acquiring Person (the “Distribution Date”). Until the Distribution Date, common stock certificates or the ownership statements issued with respect to uncertificated shares of common stock will evidence the Rights. Any transfer of shares of common stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date, separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of common stock unless and until the Board has determined to effect an exchange pursuant to the Rights Agreement (as described below). In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the purchase price, a number of shares of the Company’s common stock (or, in certain circumstances, cash, property or other securities of the Company) having a market value equal to two times the purchase price. However, Rights are subject to redemption and exchange at the option of the Company. In the event that, at any time following a person becoming an Acquiring Person, (i) the Company engages in a merger or other business combination transaction in which the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation and the common stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (except Rights which have previously been voided) shall thereafter have the right to receive, upon exercise of the Right, common stock of the acquiring company having a value equal to two times the purchase price. At any time until the earlier of December 18, 2023, and ten calendar days following the first date of public announcement that a person has become an Acquiring Person or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of the existence of an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. At any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that have become void), in whole or in part, at an exchange ratio of one share of common stock, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange of any Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (or fractional share of Series A Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and privileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio. Each one one-thousandth of a share of Series A Preferred Stock, if issued: (i) will be nonredeemable and junior to any other series of preferred stock the Company may issue (unless otherwise provided in the terms of such other series), (ii) will entitle holders to preferential cumulative quarterly dividends in an amount per share of Series A Preferred Stock equal to the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’s common stock, (iii) will entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series A Preferred Stock plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power as one share of common stock, and (v) will entitle holders to a per share payment equal to the payment made on one share of the Company’s common stock, if shares of the common stock are exchanged via merger, consolidation, or a similar transaction. Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit of Series A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock. The Rights and the Rights Agreement will expire on the earliest of (i) December 18, 2023, (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv) the date that the Board determines that the Rights Agreement is no longer necessary for the preservation of material valuable Tax Benefits, (v) the beginning of a taxable year of the Company to which the Board determines that no NOL tax benefits may be carried forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, that the Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders. The Board may adjust the purchase price, the number of shares of Series A Preferred Stock or other securities or assets issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series A Preferred Stock or common stock. With certain exceptions, no adjustments to the purchase price will be required until cumulative adjustments amount to at least 1% of the purchase price. For so long as the Rights are redeemable, the Board may supplement or amend any provision of the Rights Agreement in any respect without the approval of the holders of the Rights. From and after the time the Rights are no longer redeemable, the Board may supplement or amend the Rights Agreement only to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Agreement which the Company may deem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights Agreement again becoming amendable other than in accordance with this sentence. In connection with the adoption of the Rights Agreement and authorization and declaration of the dividend of the Rights, on December 18, 2017, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware. The Certificate of Designation became effective on December 18, 2017. In connection with the execution of the Purchase Agreement, on June 27, 2022, the Company’s Board of Directors approved Amendment No. 2 (the “Amendment”) to the Rights Agreement. The Amendment, among other things, renders the Rights Agreement inapplicable to the Offer, the Purchase Agreement and the transactions contemplated under the Purchase Agreement. In addition, the Amendment provides that neither the Purchaser, nor any of its affiliates or associates will become an “Acquiring Person” or “Beneficial Owner” (as such terms are defined in the Rights Agreement), and a Distribution Date and Stock Acquisition Date (as such terms are defined in the Rights Agreement) will not be deemed to have occurred, as a result of the announcement of the Offer, the execution of the Purchase Agreement, or the consummation of the Offer or of the other transactions contemplated by the Purchase Agreement. The Amendment also extends the final expiration date of the Rights Agreement to September 1, 2025. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Stock Incentive Plans [Abstract] | |
STOCK INCENTIVE PLANS | 9. STOCK INCENTIVE PLANS In August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the “2007 Plan”), and which allowed for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Plan entitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of the common stock on the grant date. On June 24, 2016, the 2007 Plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016 Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’s stockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. The committee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may be exercised. Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan that subsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Plan will automatically terminate on March 17, 2026, unless the Company terminates it sooner. The following table summarizes the activity of the stock incentive and equity plans: Shares Number of Weighted- Number of Number of Outstanding at January 1, 2021 292,355 20,100 $ 9.71 99,570 48,753 Granted (59,580 ) — — — 28,030 Exercised/issued — (15,000 ) 6.10 — (3,750 ) Canceled/forfeited 71,956 (1,050 ) 44.10 — (45,003 ) Outstanding at December 31, 2021 304,731 4,050 14.16 99,570 28,030 Granted — — — — — Exercised/issued — (2,250 ) 6.10 — (28,030 ) Canceled/forfeited 15,542 (1,500 ) 20.26 — — Outstanding at December 31, 2022 320,273 300 $ 44.10 99,570 — There were no option grants made during 2022. At December 31, 2022, the exercise prices of outstanding options were as follows: Exercise price Number of Average Number of $44.10 300 1.94 300 300 1.94 300 There were no options that were granted or became vested in the years ended December 31, 2022 or 2021, respectively. The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock. Based on the fair value of the common stock at December 31, 2022 there was no intrinsic value arising from 300 stock options exercisable or outstanding. The Company used historical stock prices as the basis for its volatility assumptions. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The expected term for the year ended December 31, 2022, is based upon the Company’s median average life of its options. The forfeiture rate is based on the past history of forfeited options. The expense is being allocated using the straight-line method. For the years ended December 31, 2022 and 2021, respectively, there was no recorded stock option compensation expense. As of December 31, 2022 and 2021, respectively, there were no options granted, and all outstanding options awarded have been fully vested. There were no RSUs granted in the year ended December 31, 2022, and there were no RSUs outstanding at December 31, 2022. The following table summarizes the award vesting terms for the RSUs granted in the year ended December 31, 2021: Number of RSUs Target 12,500 $ 12.00 12,500 $ 13.00 The RSUs vest in the amounts set forth below on the first date the 15-trading day average closing price of the Company’s common stock equals or exceeds the corresponding target price for the common stock before December 28, 2025. On the date of grant of RSUs to a key executive, the closing price of the common stock was $9.20. During the twelve months ended December 31, 2021, neither tranche vested. The Company used Monte Carlo simulation model valuation technique to determine the fair value of RSUs granted because the awards vest based upon achievement of market price targets. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs: Granted December Daily expected stock price volatility 2.1383 % Daily expected dividend yield 0.0 % Average daily risk-free interest rate 0.0039 % The daily expected stock price volatility is based on a four-year historical volatility of the Company’s common stock. The daily expected dividend yield is based on annual expected dividend payments. The average daily risk-free interest rate is based on the three-year treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years. The RSUs granted in December 2021 had a grant date fair value of $151,000. There were no grants with market price targets issued in the year ended December 31, 2021. A summary of the Company’s RSUs is as follows: RSUs Weighted- Aggregate Non-vested RSUs as of January 1, 2021 48,753 $ 6.34 Granted 28,030 9.90 Vested (3,750 ) 8.00 Cancelled (45,003 ) 7.45 Non-vested RSUs as of December 31, 2021 28,030 7.28 Granted — — Vested (28,030 ) 9.29 Cancelled — — Non-vested RSUs at December 31, 2022 — $ — $ — The fair value of each RSU is the market price on the date of grant and is being recorded as compensation expense ratably over the vesting terms or the expected achievement of market price targets based on the Monte Carlo simulation model. In the event that an RSU vests in a given period, the remaining balance of the fair value of the RSU is expensed in that period. All outstanding RSUs vested in 2022, and as a result, the remaining fair value of $151,000 was recorded as compensation expense was recognized in the year ended December 31, 2022. For the year ended December 31 2021, the Company recorded $30,000 of RSU expense. The RSUs are forfeited by a participant upon termination for any reason, and there is no proportionate or partial vesting in the periods between the vesting dates. As of December 31, 2021, there was $151,000 of unrecognized compensation cost related to the non-vested RSUs. For the years ended December 31, 2022 and December 31, 2021, the Company recorded no compensation related to restricted stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which, among other provisions, reduced the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The SEC issued guidance, Staff Accounting Bulletin 118, on accounting for the tax effects of the Act. The guidance allowed the Company to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment. The Company has completed its accounting for the tax effects of enactment of the Act. The deemed inclusion from the repatriation tax increased from $3.9 million at the time of provision to $5.0 million at the time the calculation was finalized for the tax return. The increase of the inclusion related primarily to the refinement of Malaysia earnings and profits. As the Company is in a full valuation allowance position, an equal benefit adjustment was recorded for the impact of the increase of the deemed repatriation tax. Components of income before income taxes and the income tax provision are as follows: Income (loss) before income taxes is all U.S.-based for the years ended December 31, 2022 and 2021, respectively. Income taxes Year Ended December 31, 2022 2021 (in thousands) Current U.S. $ — $ — State — — Total current income tax expense — — Deferred U.S. — — State — — Total deferred income tax expense (benefit) — — Total income tax expense (benefit) $ — $ — The reconciliation of income tax computed at the federal statutory rate to income before taxes is as follows: Year Ended December 31, 2022 2021 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes net of federal benefit (5.4 ) (6.9 ) Valuation allowance 26.4 27.9 — % — % Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows at December 31: 2022 2021 (in thousands) Deferred tax assets: Allowance for doubtful accounts $ 5 $ 5 Inventory reserves 2,928 3,033 Consumables excess reserve 162 162 Accrued liabilities 15 155 Warrant interest expense 195 195 Stock compensation expense 706 775 State net operating loss 13,425 13,358 Net operating loss carryforward 39,759 39,597 Capital loss carryforward 6,755 Tax credits 669 669 Depreciation 219 423 Valuation allowance (58,068 ) (65,079 ) Total deferred tax assets 15 47 Deferred tax liability: Prepaid expenses (15 ) (47 ) Net deferred tax liability $ — $ — In February 2018, the FASB issued ASU No. 2018-02 (“ASU 2018-02), Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income The Company adopted the guidance in ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes At December 31, 2022, we had separate Federal, Illinois and Indiana NOL carryforwards of $189 million, $181 million and $723,000, respectively. The Federal NOLs will begin to expire in 2026, the Illinois NOLs will begin to expire in 2024, and the Indiana NOLs will begin to expire in 2039. With the adoption of ASU 2016-09 in 2017, we recorded a deferred tax asset related to $26.4 million of unrecorded Federal and State NOLs attributable to stock option exercises. NOLs attributable to the stock option exercise were fully offset by the valuation allowance (as described above). We have recorded an uncertain tax position of $2.6 million that further reduces the net operating loss deferred tax assets reported in the financial statements. In addition, at December 31, 2022, we had Federal research and development credits of $662,000, which will begin to expire in 2028. The Company completed an analysis of the utilization of NOLs subject to limits based upon certain ownership changes as of December 31, 2022. The results of this analysis indicated no ownership change limiting the utilization of net operating losses and tax credits. The Company prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. At December 31, 2022 and 2021, the Company had $1.1 million of unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded on the Company’s financial statements as an offset to the valuation allowance related to tax positions taken in 2012. It is not reasonably possible that the amount will change in the next twelve months. There were no material changes to prior year or current year positions taken during the year ended December 31, 2022. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2022 and 2021. The Company files income tax returns in the United States federal jurisdiction and in a state jurisdiction. During 2009, the Company began foreign operations in Malaysia and is subject to local income taxes in that jurisdiction. The Company’s Malaysia tax returns for the periods ended December 31, 2010 through 2012 have been audited by the Malaysia Inland Revenue Board with no changes made to the taxable income for those years. All other tax years in Malaysia are open to examination by tax authorities. The Company’s federal tax returns for the periods ended December 31, 2010, 2008 and 2007 have been audited by the Internal Revenue Service (IRS) with no changes made to the Company’s taxable losses for those years. The Company’s state tax returns for the periods ended December 31, 2009 through 2012 have been audited by the Illinois Department of Revenue with no changes made to the Company’s taxable losses for those years. Due to the existence of NOL carryforwards, tax years ended December 31, 2006, 2008, 2009 and 2012 through 2021 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012 through 2021 are open to examination by state tax authorities. Tax years 2013 through 2019 are open to examination by the Malaysia Inland Revenue Board. Due to the closing of the Rubicon Malaysia operations, the Company no longer considers the undistributed earnings of Rubicon Malaysia to be indefinitely reinvested. Upon liquidation of Rubicon Malaysia, it is anticipated any cash left after the liquidation will be brought back to the U.S. via a payment of principal towards the intercompany loan. A withholding tax may be payable to the Malaysian government on the interest portion of the loan. Currently, the Company is trying to determine whether, and the extent to which, it has a Malaysian withholding tax obligation. It is performing related due diligence with Malaysian tax experts to resolve the issue, and has recorded an appropriate liability for the potential tax obligation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. The full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. The magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in a material impact to the Company’s financial statements in future reporting periods. Operating Leases The Company adopted ASU 2016-02 in the first quarter of the fiscal year ending December 31, 2019. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated financial statements, as the Company does not have any material lease agreements. Rubicon DTP did lease a building for its manufacturing and offices, however such lease was not considered material to the Company’s financial statements. Direct Dose’s net rent expense under operating leases in 2022 and 2021 amounted to $0 and $26,784, respectively. On January 6, 2021, Direct Dose entered into a one-year lease for an aggregate commitment of approximately $35,500, which was terminated early per agreement with lessor as of September 9, 2021. Litigation From time to time, the Company experiences routine litigation in the ordinary course of its business. There are no outstanding material matters as of December 31, 2022 and through the date of this filing. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Benefit Plan [Abstract] | |
BENEFIT PLAN | 12. BENEFIT PLAN The Company sponsors a 401(k) savings plan (the “Plan”). Employees are eligible to participate in the Plan upon reaching 18 years of age. Employees make contributions to the Plan through payroll deferrals. Employer matching contributions are discretionary. There were no employer matching contributions for the years ended December 31, 2022 and 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On February 20, 2023, Mr. Brog tendered his resignation as a Class II director, which became effective on February 22, 2023. On February 20, 2023, the Company entered into a Confidential Separation Agreement and General Release with Mr. Brog, in connection with Mr. Brog’s resignation from the Company as Chief Executive Officer, President and Acting Chief Financial Officer. Pursuant to the Separation Agreement, Mr. Brog was entitled to receive, among other things, a payment of $112,000 for the assignment to the Company by Mr. Brog of 57,593 shares of common stock of the Company held by Mr. Brog. The Separation Agreement also contained a general release of claims against the Company, as well as certain other customary covenants, including covenants pertaining to non-disparagement and confidentiality. On February 24, 2023, the Board of Directors named Joseph Ferrara as the Executive Officer and Chief Financial Officer, and approved an annual salary of $200,000 and a bonus with terms to be agreed upon at a later date, subject to the Company’s customary compensation policies. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of business | Description of business Rubicon Technology, Inc. (“Rubicon” or the “Company”) currently consists of two subsidiaries, Rubicon Worldwide LLC, doing business as Rubicon Technology Worldwide LLC (“RTW”), and Rubicon Technology BP LLC. In June 2021, the operations of Rubicon DTP LLC, doing business as Direct Dose Rx (“Direct Dose”) were discontinued. RTW is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. RTW sells its products on a global basis to customers in North America, Europe and Asia. RTW maintains its operating facility in the Chicago metropolitan area. In June 2021 the operations of Direct Dose Rx were discontinued. The costs associated with such closure were not material. Direct Dose Rx was a specialized pharmacy that provided prescription medications, over-the-counter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals and directly to retail customers who want such medications delivered to their home. The delivered products were sorted by the dose, date, and time to be taken and come in easy-to-use perforated strip-packaging as opposed to separate pill bottles. Direct Dose Rx was licensed to operate in 11 states. The services offered by Direct Dose Rx benefited patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions. |
Principles of consolidation | Principles of consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Worldwide LLC, doing business as Rubicon Technology Worldwide LLC, Rubicon Technology BP LLC, and the discontinued operations of Rubicon DTP LLC. All intercompany transactions and balances have been eliminated in consolidation. A summary of the Company’s significant accounting policies applied in the preparation of the accompanying Consolidated Financial Statements follows. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash The Company considers all unrestricted highly liquid investments immediately available to be cash equivalents. Cash equivalents primarily consist of time deposits with banks, unsettled trades and brokerage money market accounts. As part of the Loan the lender required approximately 12 months in “payment reserves” totaling $120,000 which are restricted from use by the Company until it can meet certain debt service ratio requirements. |
Investments | Investments When the Company invests its available cash, it primarily invests in U.S. Treasury securities, investment grade commercial paper, FDIC guaranteed certificates of deposit, common stock, equity-related securities and corporate notes. Investments classified as available-for-sale debt securities are carried at fair value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in equity securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statements of Operations. Investments in which we have the ability and intent, if necessary, to liquidate in order to support our current operations are classified as short-term. We review our available-for-sale debt securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. We consider various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. As of December 31, 2022, the Company had no such investments, and no impairment was recorded as of December 31, 2021. |
Purchases of Equity Securities by the Issuer | Purchases of Equity Securities by the Issuer In November 2018, the Company’s Board of Directors authorized a program to repurchase up to $3,000,000 of its common stock. In July 2020, the Company used all of the original authorized $3,000,000. On December 14, 2020, Rubicon’s Board of Directors authorized an additional $3,000,000 for the repurchase of the Company’s common stock. On July 5, 2022 the Company announced that it had entered into a definitive Stock Purchase and Sale Agreement (“Purchase Agreement”) with Janel Corporation (“Janel”), pursuant to which Janel would commence a cash tender offer (the “Offer”) to purchase up to 45% of the outstanding shares of Rubicon’s common stock on a fully-diluted basis at a price of $20.00 per share. The transaction was subsequently consummated in August of 2022. Pursuant to the terms of the Company’s stock repurchase plan, this transaction resulted in the automatic termination of the plan. There was no share repurchase activity during the years ended December 31, 2022 and 2021, respectively. |
Accounts receivable | Accounts receivable The majority of the Company’s accounts receivable are due from defense subcontractors, industrial manufacturers, fabricators and resellers. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Losses from credit sales are provided for in the financial statements. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time a customer’s account is past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible and such write-offs, net of payments received, are recorded as a reduction to the allowance. Accounts receivable is comprised of a net total of $671,000 and $719,000 for the years ended December 31, 2022 and 2021, respectively. The breakdown of accounts receivable for continuing operations and discontinued operations is as follows: Year Ended December 31, 2022 2021 (in thousands) Continuing Operations: Trade receivables $ 683 $ 732 Allowance for doubtful accounts (6 ) (7 ) Discontinued Operations: Trade receivables 6 6 Allowance for doubtful accounts (12 ) (12 ) Balance of accounts receivable, net $ 671 $ 719 |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Net realizable value is determined based on an estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other relevant information. The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented. The excess and obsolete inventory reserve at December 31, 2022 was $7,052,000 compared to $7,749,000 at December 31, 2021. For the year ended December 31, 2022, there was a reduction in excess or obsolete inventory of $697,000, which was attributable to consumed inventory which had previously been reserved. For the year ended December 31, 2021, there was a reduction in excess or obsolete inventory of $159,000, which was attributable to consumed inventory which had previously been reserved. The Company also carries a lower of cost or market inventory reserve based on net realizable value using most recent sales prices to determine market value. As of December 31, 2022 and 2021, the balance of the lower of cost or market reserve was $8,000 and $25,000, respectively, representing a decrease of $17,000 resulting from sales of related reserved inventory. In 2021 we sold inventory that was valued at the lower of cost or market resulting in a reduction in both the lower of cost or market inventory reserve and cost of goods sold of $27,000. In 2022 and 2021, the Company used some of its previously written down two-inch diameter core material in production of optical and industrial sapphire wafers and did not record any additional adjustments for the years ended December 31, 2022 and December 31, 2021. The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipated sales. The Company did not record any write-downs of its raw materials inventory for the years ended December 31, 2022 and December 31, 2021. Inventories are composed of the following: As of December 31, 2022 2021 (in thousands) Raw materials $ 367 $ 468 Work-in-process 379 328 Finished goods 229 330 $ 975 $ 1,126 As of December 31, 2022 and 2021, the Company made the determination that raw material inventories were such that the likelihood of significant usage within the current year was doubtful and reclassified such raw material inventories as non-current in the reported financial statements. For the year ended December 31, 2022, an additional $302,000 of current inventory was reclassified as non-current. Also, during the year ended December 31, 2022, there were sales of non-current inventory totaling $95,000. There were no inventories of discontinued operations at years ended December 31, 2022 and 2021, respectively. |
Other inventory supplies | Other inventory supplies The Company’s other inventory supplies include stock of consumable assets and spare parts used in the manufacturing process. |
Assets held for sale | Assets held for sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale. On September 19, 2022, the Company completed the sale of its parcel of land located in Batavia, Illinois pursuant to the terms and conditions of the agreement of sale, dated as of February 7, 2022. The selling price for the property was $722,000. The Company realized net proceeds of approximately $600,000 after the payment of real estate taxes, brokerage and legal fees, transfer taxes and other expenses. |
Grants receivable and grant revenue | Grants receivable and grant revenue Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and its subsequent amendments in sections 206 and 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, provides for a refundable payroll tax credit (Employee Retention Credit or ERC) to eligible employers with less than 500 employees who paid qualified wages after March 12, 2020, and before June 30, 2021. During the quarter ended June 30, 2022, the Company determined that although it did not meet the eligibility conditions during the period beginning March 12, 2020, and ending December 31, 2020, it did qualify to claim the ERC for the periods ending March 31, 2021, and June 30, 2021. As such, the Company recorded Grant Revenue and Grants Receivable of approximately $250,000 related to its pending ERC claim analogous to ASC Subtopic 958-605. Since the Company does not expect to receive the funds for the ERC claim for at least twelve months, the receivable has been classified as a non-current asset on its balance sheet. |
Property and equipment | Property and equipment Property and equipment consisted of the following: As of December 31, 2022 2021 (in thousands) Machinery, equipment and tooling $ 3,263 $ 3,296 Buildings 1,711 1,711 Information systems 819 819 Land and land improvements 594 594 Furniture and fixtures 7 7 Total cost 6,394 6,427 Accumulated depreciation and amortization (4,212 ) (4,126 ) Property and equipment, net $ 2,182 $ 2,301 Property and equipment are carried at cost and depreciated over their estimated useful lives using the straight-line method. The cost of maintenance and repairs is charged to expense as incurred. Significant renewals and improvements are capitalized. Depreciation expense associated with property and equipment was $120,000 and $140,000 for the years ended December 31, 2022 and 2021, respectively. The estimated useful lives are as follows: Asset description Life Buildings 39 years Machinery, equipment and tooling 3-10 years Furniture and fixtures 7 years Information systems 3 years There was no property and equipment of discontinued operations as of December 31, 2022 and 2021, respectively. |
Warranty cost | Warranty cost The Company’s sales terms include a warranty that its products will meet certain specifications. The Company records a current liability for the expected cost of warranty-related claims at the time of sale. The warranty reserve is included in accrued and other current liabilities on the Consolidated Balance Sheets. The following table presents changes in the Company’s product warranty liability: Year Ended December 31, 2022 2021 (in thousands) Balance, beginning of period $ 1 $ 1 Charged to cost of sales (16 ) (9 ) Actual product warranty expenditures 16 9 Balance, end of period $ 1 $ 1 The Company does not provide maintenance or other services and it does not have sales that involve bill & hold arrangements, multiple elements or deliverables. However, the Company does provide product warranty for up to 90 days, for which the Company has accrued a warranty reserve of $1,000 and $1,000 for the years ended December 31, 2022 and 2021, respectively. |
Current and long-term debt | Current and long-term debt The Company reports debt issuance costs as an adjustment to the carrying amount of the related debt in accordance with ASC 835-30-45. The amortization of such costs is included in interest expense for the period. On August 15, 2022, Rubicon Technology BP LLC, a Delaware limited liability company (the “ Borrower Loan Note Lender The following table shows the net proceeds from the Loan at the time of its origination: Proceeds From (in thousands) Initial loan amount $ 1,620 Loan costs (22 ) Escrow funding for property tax (38 ) Net proceeds from mortgage loan $ 1,560 Current and long-term debt, net, are shown in the table below: December 31, 2022 December 31, 2021 (in thousands) Mortgage note $ 1,611 $ — Unamortized loan costs (20 ) — Total debt 1,591 — Less: short-term portion 25 — Long-term portion $ 1,566 $ — The Company had no interest expense for the year ended December 31, 2021. Total interest and amortization expense on the Company’s debt obligations during years ended December 31, 2022, and December 31, 2021, respectively, are as follows: December 31, 2022 December 31, 2021 (in thousands) Interest expense $ 37 $ — Amortization of loan costs 2 — Total interest expense $ 39 $ — The following table presents the future maturities of long-term debt and the related loan costs amortization for the years ended December 31: Principal Amort. Costs Debt, Net of (in thousands) 2023 $ 29 $ (4 ) $ 25 2024 31 (4 ) 27 2025 33 (4 ) 29 2026 35 (4 ) 31 2027 1,483 (4 ) 1,479 Total $ 1,611 $ (20 ) $ 1,591 |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, and accounts payable. The carrying values of these assets and liabilities approximate their fair values due to the short-term nature of these instruments at December 31, 2022 and 2021. |
Concentration of credit risks and other risks and uncertainties | Concentration of credit risks and other risks and uncertainties Financial instruments that could potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term investments and accounts receivable. As of December 31, 2022, the Company had $1,200,000 on deposit at financial institutions in excess of amounts insured by the FDIC. This compares to $8,100,000 as of December 31, 2021. The Company performs a periodic evaluation of these institutions for relative credit standing. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant risk of loss on these balances. The Company uses third parties for certain finishing functions for its products, including the slicing and polishing of its sapphire crystal inventory. These types of services are only available from a limited number of third parties. The Company’s ability to successfully outsource these finishing functions will substantially depend on its ability to develop, maintain and expand its strategic relationship with these third parties. As a result, the Company may be unable to meet the demand for its products, which could have a material adverse impact on the Company. Concentration of credit risk related to revenue and accounts receivable is discussed in Note 5. |
Revenue recognition | Revenue recognition Revenues recognized include product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts with Customers The Company does not provide maintenance or other services and we do not have sales that involve multiple elements or deliverables. All of the Company’s revenue is denominated in U.S. dollars. |
Shipping and handling costs | Shipping and handling costs The Company records costs incurred in connection with shipping and handling of products as cost of goods sold. Amounts billed to customers in connection with these costs are included in revenue and are not material for any of the periods presented in the accompanying financial statements. |
Sales tax | Sales tax The Company collects and remits sales taxes on products sold to customers and reports such amounts under the net method in its Consolidated Statements of Operations and records a liability until remitted to the respective tax authority. |
Stock-based compensation | Stock-based compensation The Company requires all share-based payments to employees, including grants of employee stock options, to be measured at fair value and expensed in the Consolidated Statements of Operations over the service period (generally the vesting period) of the grant. Expense is recognized in the Consolidated Statements of Operations for these share-based payments. The Company uses Black Scholes option pricing model in order to determine the fair value of stock option grants. |
Accounting for uncertainty in income taxes | Accounting for uncertainty in income taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2022 and 2021. The Company is subject to taxation in the U.S. and in a U.S. state jurisdiction. Due to the existence of NOL carryforwards, tax years ended December 31, 2006, 2008, 2009 and 2012 through 2021 are open to examination by tax authorities for Federal purposes. Due to NOL carryforwards at the State level, tax years ended 2012 through 2021 are open to examination by state tax authorities. Currently, the Company is trying to determine whether, and the extent to which, it has a Malaysian withholding tax obligation. It is performing related due diligence with Malaysian tax experts to resolve the issue, and has recorded an appropriate liability for the potential tax obligation. |
Income taxes | Income taxes Deferred tax assets and liabilities are provided for temporary differences between financial reporting and income tax bases of assets and liabilities, and are measured using the enacted tax rates and laws expected to be in effect when the differences will reverse. Deferred income taxes also arise from the future benefits of NOL carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Full valuation allowances on net deferred tax assets are maintained until an appropriate level of profitability that generates taxable income is deemed sustainable or until a tax strategy is developed that would enable the Company to conclude that it is more likely than not that a portion of the deferred tax assets will be realizable. Based on an evaluation in accordance with the accounting standards, as of December 31, 2022 and 2021, a valuation allowance has been recorded against the net U.S. and Malaysia deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence . |
Use of estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and those differences could be material. |
Other comprehensive income (loss) | Other comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net income (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. |
Net income (loss) per common share | Net income (loss) per common share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares (a) any outstanding stock options based on the treasury stock method and (b) restricted stock units (“RSU”). Diluted net loss per common share was the same as basic net loss per common share for the year December 31, 2021, because the effects of potentially dilutive securities were anti-dilutive. |
New accounting pronouncements adopted | New accounting pronouncements adopted The Company has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact the Company’s consolidated financial statements and related disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Accounts receivable for continuing operations and discontinued operations | Year Ended December 31, 2022 2021 (in thousands) Continuing Operations: Trade receivables $ 683 $ 732 Allowance for doubtful accounts (6 ) (7 ) Discontinued Operations: Trade receivables 6 6 Allowance for doubtful accounts (12 ) (12 ) Balance of accounts receivable, net $ 671 $ 719 |
Schedule of inventories | As of December 31, 2022 2021 (in thousands) Raw materials $ 367 $ 468 Work-in-process 379 328 Finished goods 229 330 $ 975 $ 1,126 |
Schedule of property and equipment | As of December 31, 2022 2021 (in thousands) Machinery, equipment and tooling $ 3,263 $ 3,296 Buildings 1,711 1,711 Information systems 819 819 Land and land improvements 594 594 Furniture and fixtures 7 7 Total cost 6,394 6,427 Accumulated depreciation and amortization (4,212 ) (4,126 ) Property and equipment, net $ 2,182 $ 2,301 |
Schedule of estimated useful lives | Asset description Life Buildings 39 years Machinery, equipment and tooling 3-10 years Furniture and fixtures 7 years Information systems 3 years |
Schedule of product warranty liability | Year Ended December 31, 2022 2021 (in thousands) Balance, beginning of period $ 1 $ 1 Charged to cost of sales (16 ) (9 ) Actual product warranty expenditures 16 9 Balance, end of period $ 1 $ 1 |
Schedule of net proceeds from the loan | Proceeds From (in thousands) Initial loan amount $ 1,620 Loan costs (22 ) Escrow funding for property tax (38 ) Net proceeds from mortgage loan $ 1,560 |
Schedule of future maturities of long-term debt | December 31, 2022 December 31, 2021 (in thousands) Mortgage note $ 1,611 $ — Unamortized loan costs (20 ) — Total debt 1,591 — Less: short-term portion 25 — Long-term portion $ 1,566 $ — |
Schedule of debt obligations | December 31, 2022 December 31, 2021 (in thousands) Interest expense $ 37 $ — Amortization of loan costs 2 — Total interest expense $ 39 $ — |
Schedule of future maturities of long-term debt | Principal Amort. Costs Debt, Net of (in thousands) 2023 $ 29 $ (4 ) $ 25 2024 31 (4 ) 27 2025 33 (4 ) 29 2026 35 (4 ) 31 2027 1,483 (4 ) 1,479 Total $ 1,611 $ (20 ) $ 1,591 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of revenue by geographic region | Year Ended December 31, 2022 2021 (in thousands) North America $ 2,940 $ 3,671 Asia 567 349 Other 80 41 Total revenue $ 3,587 $ 4,061 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Schedule of amortized cost and gross unrealized losses on all securities | Gross Gross Amortized unrealized unrealized Fair cost gains losses value (in thousands) Short-term investments: U.S. Treasury securities $ 14,751 $ — $ — $ 14,751 Total short-term investments $ 14,751 $ — $ — $ 14,751 |
Schedule of financial assets measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 6 $ — $ — $ 6 Investments: Available-for-sales securities—current: U.S. Treasury securities — — — — Total $ 6 $ — $ — $ 6 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 3,137 $ — $ — $ 3,137 Investments: Available-for-sales securities—current: U.S. Treasury securities — 14,751 — 14,751 Total $ 3,137 $ 14,751 $ — $ 17,888 |
Discontinued Operations_ Clos_2
Discontinued Operations: Closure of Direct Dose Rx (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations: Closure of Direct Dose Rx [Abstract] | |
Schedule of discontinued operations | Year Ended December 31, 2022 2021 (in thousands) Revenues (discontinued operations) $ — $ 370 Operating Expense (discontinued operations) (16 ) 641 Income/loss from operations of discontinued operations, net of taxes $ 16 $ (271 ) |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Incentive Plans [Abstract] | |
Schedule of activity of stock incentive and equity plans | Shares Number of Weighted- Number of Number of Outstanding at January 1, 2021 292,355 20,100 $ 9.71 99,570 48,753 Granted (59,580 ) — — — 28,030 Exercised/issued — (15,000 ) 6.10 — (3,750 ) Canceled/forfeited 71,956 (1,050 ) 44.10 — (45,003 ) Outstanding at December 31, 2021 304,731 4,050 14.16 99,570 28,030 Granted — — — — — Exercised/issued — (2,250 ) 6.10 — (28,030 ) Canceled/forfeited 15,542 (1,500 ) 20.26 — — Outstanding at December 31, 2022 320,273 300 $ 44.10 99,570 — |
Schedule of exercise prices of outstanding options | Exercise price Number of Average Number of $44.10 300 1.94 300 300 1.94 300 |
Schedule of award vesting terms for the RSUs granted | Number of RSUs Target 12,500 $ 12.00 12,500 $ 13.00 |
Schedule of valuation technique to determine the fair value of RSU | Granted December Daily expected stock price volatility 2.1383 % Daily expected dividend yield 0.0 % Average daily risk-free interest rate 0.0039 % |
Schedule of Company’s RSUs | RSUs Weighted- Aggregate Non-vested RSUs as of January 1, 2021 48,753 $ 6.34 Granted 28,030 9.90 Vested (3,750 ) 8.00 Cancelled (45,003 ) 7.45 Non-vested RSUs as of December 31, 2021 28,030 7.28 Granted — — Vested (28,030 ) 9.29 Cancelled — — Non-vested RSUs at December 31, 2022 — $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Year Ended December 31, 2022 2021 (in thousands) Current U.S. $ — $ — State — — Total current income tax expense — — Deferred U.S. — — State — — Total deferred income tax expense (benefit) — — Total income tax expense (benefit) $ — $ — |
Schedule of reconciliation of income tax computed at the federal statutory rate to income before taxes | Year Ended December 31, 2022 2021 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes net of federal benefit (5.4 ) (6.9 ) Valuation allowance 26.4 27.9 — % — % |
Schedule of significant components of the Company’s net deferred income taxes | 2022 2021 (in thousands) Deferred tax assets: Allowance for doubtful accounts $ 5 $ 5 Inventory reserves 2,928 3,033 Consumables excess reserve 162 162 Accrued liabilities 15 155 Warrant interest expense 195 195 Stock compensation expense 706 775 State net operating loss 13,425 13,358 Net operating loss carryforward 39,759 39,597 Capital loss carryforward 6,755 Tax credits 669 669 Depreciation 219 423 Valuation allowance (58,068 ) (65,079 ) Total deferred tax assets 15 47 Deferred tax liability: Prepaid expenses (15 ) (47 ) Net deferred tax liability $ — $ — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Sep. 19, 2022 | Aug. 15, 2022 | Jul. 05, 2022 | Jul. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 14, 2020 | Nov. 30, 2018 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Payment reserves | $ 120,000 | |||||||
Original authorized amount | $ 3,000,000 | |||||||
Cash tender percent | 45% | |||||||
Price of per shares (in Dollars per share) | $ 20 | |||||||
Accounts receivable net total | 671,000 | $ 719,000 | ||||||
Excess and obsolete inventory reserve | 7,052,000 | 7,749,000 | ||||||
Inventory reserve and cost of goods sold | 697,000 | 159,000 | ||||||
Cost or market reserve | 8,000 | 25,000 | ||||||
Decrease in inventory reserves | 17,000 | 27,000 | ||||||
Inventory current | 302,000 | |||||||
Non-current inventory | 95,000 | |||||||
Selling price for the property | $ 722,000 | |||||||
Net proceeds | $ 600,000 | 600,000 | ||||||
Grant receivable | 250,000 | |||||||
Depreciation expense with property and equipment | 120,000 | 140,000 | ||||||
Warranty reserve | 1,000 | 1,000 | ||||||
Promissory note | $ 1,620,000 | |||||||
Amortization term | 25 years | |||||||
Total payment restricted | $ 120,000 | |||||||
Foreign Financial Institutions, Actual Deposits | $ 1,200,000 | |||||||
Cash, FDIC Insured Amount | $ 8,100,000 | |||||||
Settlement percentage | 50% | |||||||
Board of Directors [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Repurchase of common stock | $ 3,000,000 | $ 3,000,000 | ||||||
Current and Long-Term Debt [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Interest rate percentage | 6% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Accounts receivable for continuing operations and discontinued operations - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Continuing Operations: | ||
Trade receivables | $ 683 | $ 732 |
Allowance for doubtful accounts | (6) | (7) |
Discontinued Operations: | ||
Trade receivables | 6 | 6 |
Allowance for doubtful accounts | (12) | (12) |
Balance of accounts receivable, net | $ 671 | $ 719 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of inventories - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Inventories [Abstract] | ||
Raw materials | $ 367 | $ 468 |
Work-in-process | 379 | 328 |
Finished goods | 229 | 330 |
Inventories | $ 975 | $ 1,126 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 6,394 | $ 6,427 |
Accumulated depreciation and amortization | (4,212) | (4,126) |
Property and equipment, net | 2,182 | 2,301 |
Machinery, equipment and tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 3,263 | 3,296 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,711 | 1,711 |
Information systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 819 | 819 |
Land and land improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 594 | 594 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 7 | $ 7 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives | 12 Months Ended |
Dec. 31, 2022 | |
Buildings [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Property and equipment, estimated useful lives | 39 years |
Machinery, equipment and tooling [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Machinery, equipment and tooling [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Property and equipment, estimated useful lives | 10 years |
Furniture and fixtures [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Information systems [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of product warranty liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Product Warranty Liability [Abstract] | ||
Balance, beginning of period | $ 1 | $ 1 |
Charged to cost of sales | (16) | (9) |
Actual product warranty expenditures | 16 | 9 |
Balance, end of period | $ 1 | $ 1 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of net proceeds from the loan $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Schedule of Net Proceeds From the Loan [Abstract] | |
Initial loan amount | $ 1,620 |
Loan costs | (22) |
Escrow funding for property tax | (38) |
Net proceeds from mortgage loan | $ 1,560 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details) - Schedule of future maturities of long-term debt - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Future Maturities of Long Term Debt [Abstract] | ||
Mortgage note | $ 1,611 | |
Unamortized loan costs | (20) | |
Total debt | 1,591 | |
Less: short-term portion | 25 | |
Long-term portion | $ 1,566 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details) - Schedule of debt obligations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Debt Obligations [Abstract] | ||
Interest expense | $ 37 | |
Amortization of loan costs | 2 | |
Total interest expense | $ 39 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details) - Schedule of future maturities of long-term debt $ in Thousands | Dec. 31, 2022 USD ($) |
Principal Portion of Payment [Member] | |
Debt Instrument [Line Items] | |
2023 | $ 29 |
2024 | 31 |
2025 | 33 |
2026 | 35 |
2027 | 1,483 |
Total | 1,611 |
Amort of Loan Costs [Member] | |
Debt Instrument [Line Items] | |
2023 | (4) |
2024 | (4) |
2025 | (4) |
2026 | (4) |
2027 | (4) |
Total | (20) |
Debt, Net of Unamortized Loan Costs [Member] | |
Debt Instrument [Line Items] | |
2023 | 25 |
2024 | 27 |
2025 | 29 |
2026 | 31 |
2027 | 1,479 |
Total | $ 1,591 |
Segment Information (Details) -
Segment Information (Details) - Schedule of revenue by geographic region - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 3,587 | $ 4,061 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,940 | 3,671 |
Asia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 567 | 349 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 80 | $ 41 |
Investments (Details)
Investments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Investments [Abstract] | ||
Cash and cash equivalents | $ 1,600,000 | $ 8,100,000 |
Investments (Details) - Schedul
Investments (Details) - Schedule of amortized cost and gross unrealized losses on all securities - Short-term Investments [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Short-term investments: | |
Amortized cost | $ 14,751 |
Gross unrealized gains | |
Gross unrealized losses | |
Fair value | 14,751 |
U.S. Treasury Securities [Member] | |
Short-term investments: | |
Amortized cost | 14,751 |
Gross unrealized gains | |
Gross unrealized losses | |
Fair value | $ 14,751 |
Investments (Details) - Sched_2
Investments (Details) - Schedule of financial assets measured at fair value on a recurring basis - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sales securities—current: | ||
Total | $ 6 | $ 17,888 |
Money market funds [Member] | ||
Cash equivalents: | ||
Cash equivalents | 6 | 3,137 |
U.S. Treasury securities [Member] | ||
Available-for-sales securities—current: | ||
Available-for-sale securities — current | 14,751 | |
Level 1 [Member] | ||
Available-for-sales securities—current: | ||
Total | 6 | 3,137 |
Level 1 [Member] | Money market funds [Member] | ||
Cash equivalents: | ||
Cash equivalents | 6 | 3,137 |
Level 1 [Member] | U.S. Treasury securities [Member] | ||
Available-for-sales securities—current: | ||
Available-for-sale securities — current | ||
Level 2 [Member] | ||
Available-for-sales securities—current: | ||
Total | 14,751 | |
Level 2 [Member] | Money market funds [Member] | ||
Cash equivalents: | ||
Cash equivalents | ||
Level 2 [Member] | U.S. Treasury securities [Member] | ||
Available-for-sales securities—current: | ||
Available-for-sale securities — current | 14,751 | |
Level 3 [Member] | ||
Available-for-sales securities—current: | ||
Total | ||
Level 3 [Member] | Money market funds [Member] | ||
Cash equivalents: | ||
Cash equivalents | ||
Level 3 [Member] | U.S. Treasury securities [Member] | ||
Available-for-sales securities—current: | ||
Available-for-sale securities — current |
Discontinued Operations_ Clos_3
Discontinued Operations: Closure of Direct Dose Rx (Details) - Schedule of discontinued operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Discontinued Operations [Abstract] | ||
Revenues (discontinued operations) | $ 370 | |
Operating Expense (discontinued operations) | (16) | 641 |
Income/loss from operations of discontinued operations, net of taxes | $ 16 | $ (271) |
Significant Customers (Details)
Significant Customers (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Trade Accounts Receivable [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 10% | |
Trade Accounts Receivable [Member] | Customer individually [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 74% | 80% |
Sales Revenue, Net [Member] | Customer One [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 15% | 22% |
Sales Revenue, Net [Member] | Customer One [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 12% | 12% |
Sales Revenue, Net [Member] | Customer three [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 12% | 12% |
Sales Revenue, Net [Member] | Customer Four [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 11% | |
Sales Revenue, Net [Member] | Customer Five [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 11% | |
Sales Revenue, Net [Member] | Customer Six [Member] | ||
Significant Customers (Details) [Line Items] | ||
Concentration risk percentage | 11% |
Assets Held for Sale and Long_2
Assets Held for Sale and Long-Lived Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 19, 2022 | Dec. 31, 2022 | |
Assets Held for Sale and Long-Lived Assets [Abstract] | ||
Sale of property | $ 722,000 | |
Net proceeds | $ 600,000 | $ 600,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | May 10, 2018 | May 03, 2017 |
Stockholders' Equity (Details) [Line Items] | ||||
Authorized shares | 13,200,000 | |||
Price per share (in Dollars per share) | $ 1 | |||
Preferred stock authorized | 1,000,000 | 1,000,000 | ||
Reserved common stock shares for issuance | 300 | |||
Common stock reserved for future grants | 320,273 | |||
Common Stock [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Authorized shares | 45,000,000 | |||
Minimum [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Preferred stock authorized | 1,000,000 | |||
Minimum [Member] | Common Stock [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Authorized shares | 40,000,000 | |||
Minimum [Member] | Preferred Stock [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Preferred stock authorized | 9,200,000 | |||
Maximum [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Preferred stock authorized | 5,000,000 | |||
Maximum [Member] | Common Stock [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Authorized shares | 8,200,000 | |||
Maximum [Member] | Preferred Stock [Member] | ||||
Stockholders' Equity (Details) [Line Items] | ||||
Preferred stock authorized | 13,200,000 |
Stockholder Rights Agreement (D
Stockholder Rights Agreement (Details) - $ / shares | 1 Months Ended | 12 Months Ended |
Dec. 18, 2017 | Dec. 31, 2022 | |
Stockholder Rights Agreement (Details) [Line Items] | ||
Redemption price | $ 0.001 | |
Percentage of purchase price | 1% | |
Common Stock [Member] | ||
Stockholder Rights Agreement (Details) [Line Items] | ||
Outstanding share of common stock, par value | $ 0.001 | |
Preferred Stock [Member] | ||
Stockholder Rights Agreement (Details) [Line Items] | ||
Preferred stock, par value | 0.001 | |
Series A Preferred Stock [Member] | ||
Stockholder Rights Agreement (Details) [Line Items] | ||
Purchase price | $ 40 | |
Dividends, description | (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of the Company’s common stock | |
Per share of series A preferred stock | $ 1,000 | |
Business Combination [Member] | ||
Stockholder Rights Agreement (Details) [Line Items] | ||
Acquiring beneficial ownership, description | ten business days after a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 4.9% or more of outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of the outstanding common stock as of the close of business on December 18, 2017, by obtaining beneficial ownership of any additional shares of common stock representing 0.5% or more of the shares of common stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of the common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time such person still beneficially owns 4.9% or more of the outstanding common stock) | |
Percentage of company assets | 50% | |
Board of Directors [Member] | ||
Stockholder Rights Agreement (Details) [Line Items] | ||
Beneficial ownership percentage | 4.90% |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2007 | |
Stock Incentive Plans (Details) [Line Items] | |||
Common stock reserved for future issuance of awards (in Shares) | 300 | ||
Stock options exercisable or outstanding. | $ 300 | ||
Closing price of common stock (in Dollars per share) | $ 9.2 | ||
Derived service period | 4 years | ||
Grant date fair value of restricted stock units | $ (203,000) | ||
compensation cost | $ 151,000 | ||
2007 Stock Incentive Plan [Member] | |||
Stock Incentive Plans (Details) [Line Items] | |||
Maximum number of shares awarded or sold (in Shares) | 440,769 | ||
2016 Plan [Member] | |||
Stock Incentive Plans (Details) [Line Items] | |||
Common stock reserved for future issuance of awards (in Shares) | 222,980 | ||
Plan termination date, description | The 2016 Plan will automatically terminate on March 17, 2026, unless the Company terminates it sooner. | ||
Restricted Stock Units (RSUs) [Member] | |||
Stock Incentive Plans (Details) [Line Items] | |||
Grant date fair value of restricted stock units | $ 151,000 | ||
compensation cost | $ 151,000 | ||
RSU expense | $ 30,000 |
Stock Incentive Plans (Detail_2
Stock Incentive Plans (Details) - Schedule of activity of stock incentive and equity plans - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Activity of Stock Incentive and Equity Plans [Abstract] | ||
Shares available for grant, Beginning Balance | 304,731 | 292,355 |
Number of options outstanding, Beginning Balance | 4,050 | 20,100 |
Weighted-average option exercise price, Beginning Balance (in Dollars per share) | $ 14.16 | $ 9.71 |
Number of restricted stock shares issued, Beginning Balance | 99,570 | 99,570 |
Number of RSUs outstanding, Beginning Balance | 28,030 | 48,753 |
Shares available for grant, Ending Balance | 320,273 | 304,731 |
Number of options outstanding, Ending Balance | 300 | 4,050 |
Weighted-average option exercise price, Ending Balance (in Dollars per share) | $ 44.1 | $ 14.16 |
Number of restricted stock shares issued, Ending Balance | 99,570 | 99,570 |
Number of RSUs outstanding, Ending Balance | 28,030 | |
Shares available for grant, Granted | (59,580) | |
Number of options outstanding, Granted | ||
Weighted-average option exercise price, Granted (in Dollars per share) | ||
Number of restricted stock shares issued, Granted | ||
Number of RSUs outstanding, Granted | 28,030 | |
Shares available for grant, Exercised/issued | ||
Number of options outstanding, Exercised/issued | (2,250) | (15,000) |
Weighted-average option exercise price, Exercised/issued (in Dollars per share) | $ 6.1 | $ 6.1 |
Number of restricted stock shares issued, Exercised/issued | ||
Number of RSUs outstanding, Exercised/issued | (28,030) | (3,750) |
Shares available for grant, Canceled/forfeited | 15,542 | 71,956 |
Number of options outstanding, Canceled/forfeited | (1,500) | (1,050) |
Weighted-average option exercise price, Canceled/forfeited (in Dollars per share) | $ 20.26 | $ 44.1 |
Number of restricted stock shares issued, Canceled/forfeited | ||
Number of RSUs outstanding, Canceled/forfeited | (45,003) |
Stock Incentive Plans (Detail_3
Stock Incentive Plans (Details) - Schedule of exercise prices of outstanding options | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of options outstanding | 300 |
Average remaining contractual life (years) | 1 year 11 months 8 days |
Number of options exercisable | 300 |
$44.10 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price (in Dollars per share) | $ / shares | $ 44.1 |
Number of options outstanding | 300 |
Average remaining contractual life (years) | 1 year 11 months 8 days |
Number of options exercisable | 300 |
Stock Incentive Plans (Detail_4
Stock Incentive Plans (Details) - Schedule of award vesting terms for the RSUs granted | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Restricted Stock Units RSUs One [Member] | |
Stock Incentive Plans (Details) - Schedule of award vesting terms for the RSUs granted [Line Items] | |
Number of RSUs | $ 12,500 |
Target price | 12 |
Restricted Stock Units RSUs Two [Member] | |
Stock Incentive Plans (Details) - Schedule of award vesting terms for the RSUs granted [Line Items] | |
Number of RSUs | 12,500 |
Target price | $ 13 |
Stock Incentive Plans (Detail_5
Stock Incentive Plans (Details) - Schedule of valuation technique to determine the fair value of RSU | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of Valuation Technique to Determine The Fair Value of Rsu [Abstract] | |
Daily expected stock price volatility | 2.1383% |
Daily expected dividend yield | 0% |
Average daily risk-free interest rate | 0.0039% |
Stock Incentive Plans (Detail_6
Stock Incentive Plans (Details) - Schedule of Company’s RSUs - Restricted Stock Units (RSUs) [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Incentive Plans (Details) - Schedule of Company’s RSUs [Line Items] | ||
Non-vested RSUs outstanding, Beginning balance | 28,030 | 48,753 |
Weighted-average price at time of grant, Beginning balance | $ 7.28 | $ 6.34 |
Non-vested RSUs outstanding, Granted | 28,030 | |
Weighted-average price at time of grant, Granted | $ 9.9 | |
Non-vested RSUs outstanding, Vested | (28,030) | (3,750) |
Weighted-average price at time of grant, Vested | $ 9.29 | $ 8 |
Non-vested RSUs outstanding, Cancelled | (45,003) | |
Weighted-average price at time of grant, Cancelled | $ 7.45 | |
Non-vested RSUs outstanding, Ending balance | 28,030 | |
Weighted-average price at time of grant, Ending balance | $ 7.28 | |
Aggregate intrinsic value |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes (Details) [Line Items] | |||
Description of federal expire | The Federal NOLs will begin to expire in 2026, the Illinois NOLs will begin to expire in 2024, and the Indiana NOLs will begin to expire in 2039. | ||
Deferred tax asset | $ 26,400,000 | ||
Uncertain tax | 2,600,000 | ||
Research and development | 662,000 | ||
Unrecognized tax | 1,100,000 | $ 1,100,000 | |
Maximum [Member] | |||
Income Taxes (Details) [Line Items] | |||
U.S. corporate tax rate | 35% | ||
Repatriation tax | 5,000,000 | ||
Minimum [Member] | |||
Income Taxes (Details) [Line Items] | |||
U.S. corporate tax rate | 21% | ||
Repatriation tax | 3,900,000 | ||
Federal [Member] | |||
Income Taxes (Details) [Line Items] | |||
Net operating loss carryforward | 189,000,000 | ||
Illinois [Member] | |||
Income Taxes (Details) [Line Items] | |||
Net operating loss carryforward | 181,000,000 | ||
Indiana [Member] | |||
Income Taxes (Details) [Line Items] | |||
Net operating loss carryforward | $ 723,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Income Taxes | ||
U.S. | ||
State | ||
Total current income tax expense | ||
Deferred | ||
U.S. | ||
State | ||
Total deferred income tax expense (benefit) | ||
Total income tax expense (benefit) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of reconciliation of income tax computed at the federal statutory rate to income before taxes | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Reconciliation of Income Tax Computed At The Federal Statutory Rate To Income Before Taxes [Abstract] | ||
U.S. federal statutory rate | (21.00%) | (21.00%) |
State taxes net of federal benefit | (5.40%) | (6.90%) |
Valuation allowance | 26.40% | 27.90% |
Effective income tax rate |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of significant components of the Company’s net deferred income taxes - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 5 | $ 5 |
Inventory reserves | 2,928 | 3,033 |
Consumables excess reserve | 162 | 162 |
Accrued liabilities | 15 | 155 |
Warrant interest expense | 195 | 195 |
Stock compensation expense | 706 | 775 |
State net operating loss | 13,425 | 13,358 |
Net operating loss carryforward | 39,759 | 39,597 |
Capital loss carryforward | 6,755 | |
Tax credits | 669 | 669 |
Depreciation | 219 | 423 |
Valuation allowance | (58,068) | (65,079) |
Total deferred tax assets | 15 | 47 |
Deferred tax liability: | ||
Prepaid expenses | (15) | (47) |
Net deferred tax liability |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 06, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating leases | $ 0 | $ 26,784 | |
One-year lease for an aggregate commitment | $ 35,500 |
Benefit Plan (Details)
Benefit Plan (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Benefit Plan [Abstract] | |
Benefit plan, description | Employees are eligible to participate in the Plan upon reaching 18 years of age. |
Subsequent Events (Details)
Subsequent Events (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Subsequent Events [Abstract] | |
Payment assignment | $ 112,000 |
Shares of common stock (in Shares) | shares | 57,593 |
Annual salary | $ 200,000 |