Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 08, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | INSIGNIA SYSTEMS INC/MN | ||
Entity Central Index Key | 0000875355 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 1,786,296 | ||
Entity Public Float | $ 5,460,000 | ||
Document Annual Report | true | ||
Entity File Number | 001-13471 | ||
Entity Incorporation State Country Code | MN | ||
Entity Tax Identification Number | 41-1656308 | ||
Entity Address Address Line 1 | 212 Third Avenue N, Suite 356 | ||
Entity Address City Or Town | Minneapolis | ||
Entity Address State Or Province | MN | ||
Entity Address Postal Zip Code | 55401 | ||
City Area Code | 763 | ||
Icfr Auditor Attestation Flag | false | ||
Local Phone Number | 392-6200 | ||
Security 12b Title | Common Stock, $0.01 par value | ||
Trading Symbol | ISIG | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | Baker Tilly US, LLP | ||
Auditor Location | Minneapolis, Minnesota | ||
Auditor Firm Id | 23 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 3,766,000 | $ 7,128,000 |
Restricted cash | 85,000 | 0 |
Accounts receivable, net | 5,247,000 | 5,857,000 |
Inventories | 19,000 | 85,000 |
Income tax receivable | 4,000 | 241,000 |
Prepaid production costs | 867,000 | 376,000 |
Other prepaid expense | 366,000 | 335,000 |
Total Current Assets | 10,354,000 | 14,022,000 |
Other Assets: | ||
Property and equipment, net | 113,000 | 75,000 |
Operating lease right-of-use assets | 183,000 | 37,000 |
Other, net | 0 | 155,000 |
Total Assets | 10,650,000 | 14,289,000 |
Current Liabilities: | ||
Accounts payable | 2,539,000 | 3,148,000 |
Accrued liabilities: | ||
Compensation | 464,000 | 424,000 |
Sales tax | 1,287,000 | 1,011,000 |
Other | 1,430,000 | 1,071,000 |
Current portion of long-term debt | 0 | 464,000 |
Current portion of operating lease liabilities | 76,000 | 56,000 |
Deferred revenue | 842,000 | 180,000 |
Total Current Liabilities | 6,638,000 | 6,354,000 |
Long-Term Liabilities: | ||
Accrued income taxes | 711,000 | 677,000 |
Long-term debt | 0 | 590,000 |
Operating lease liabilities | 108,000 | 0 |
Total Long-Term Liabilities | 819,000 | 1,267,000 |
Commitments and Contingencies | 0 | 0 |
Common stock, par value $.01: Authorized shares - 5,714,000 | ||
Issued and outstanding shares - 1,782,000 and 1,748,000 at December 31, 2021 and 2020, respectively | 18,000 | 17,000 |
Additional paid-in capital | 16,296,000 | 16,238,000 |
Accumulated deficit | (13,121,000) | (9,587,000) |
Total Shareholders' Equity | 3,193,000 | 6,668,000 |
Total Liabilities and Shareholders' Equity | $ 10,650,000 | $ 14,289,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | ||
Services revenues | $ 19,503,000 | $ 16,904,000 |
Products revenues | 0 | 578,000 |
Total Net Sales | 19,503,000 | 17,482,000 |
Cost of services | 16,273,000 | 13,934,000 |
Cost of goods sold | 0 | 533,000 |
Impairment loss - services | 0 | 159,000 |
Gross Profit | 3,230,000 | 2,856,000 |
Operating Expenses: | ||
Selling | 1,931,000 | 2,877,000 |
Marketing | 1,032,000 | 1,015,000 |
General and administrative | 5,058,000 | 3,998,000 |
Gain on sale of business | 0 | (195,000) |
Total Operating Expenses | 8,021,000 | 7,695,000 |
Operating Loss | (4,791,000) | (4,839,000) |
Other income (expense) | ||
Gain on forgiveness of debt and accrued interest | (1,062,000) | 0 |
Income from Employee Retention Credit | 273,000 | 0 |
Interest expense, net | (36,000) | (32,000) |
Miscellaneous | 0 | 65,000 |
Other income | 1,299,000 | 33,000 |
Loss Before Taxes | (3,492,000) | (4,806,000) |
Income tax expense (benefit) | 42,000 | (191,000) |
Net Loss | $ (3,534,000) | $ (4,615,000) |
Net loss per share: | ||
Basic | $ (2.01) | $ (2.66) |
Diluted | $ (2.01) | $ (2.66) |
Shares used in calculation of net loss per share: | ||
Basic | 1,760,000 | 1,734,000 |
Diluted | 1,760,000 | 1,734,000 |
CONDENSED STATEMENTS OF SHAREHO
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 1,725,000 | |||
Balance, amount at Dec. 31, 2019 | $ 11,083,000 | $ 16,000 | $ 16,039,000 | $ (4,972,000) |
Issuance of common stock, net, shares | 5,000 | |||
Issuance of common stock, net, amount | 20,000 | $ 0 | 20,000 | 0 |
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, shares | 16,000 | |||
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, amount | (1,000) | $ 1,000 | (2,000) | 0 |
Value of stock-based compensation | 172,000 | 0 | 172,000 | 0 |
Common stock issued for accrued liabilities | 9,000 | $ 0 | 9,000 | |
Restricted stock award issuance, shares | 2,000 | |||
Restricted stock award issuance, amount | 0 | $ 0 | 0 | 0 |
Net loss | (4,615,000) | $ 0 | 0 | (4,615,000) |
Balance, shares at Dec. 31, 2020 | 1,748,000 | |||
Balance, amount at Dec. 31, 2020 | 6,668,000 | $ 17,000 | 16,238,000 | (9,587,000) |
Issuance of common stock, net, shares | 6,000 | |||
Issuance of common stock, net, amount | 27,000 | $ 1,000 | 26,000 | 0 |
Value of stock-based compensation | 232,000 | 0 | 232,000 | 0 |
Net loss | (3,534,000) | $ 0 | 0 | (3,534,000) |
Repurchase of common stock upon vesting of restricted stock units, shares | 28,000 | |||
Repurchase of common stock upon vesting of restricted stock units, amount | (200,000) | $ 0 | (200,000) | 0 |
Balance, shares at Dec. 31, 2021 | 1,782,000 | |||
Balance, amount at Dec. 31, 2021 | $ 3,193,000 | $ 18,000 | $ 16,296,000 | $ (13,121,000) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||
Net loss | $ (3,534,000) | $ (4,615,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 60,000 | 477,000 |
Impairment loss | 0 | 159,000 |
Gain on sale of business | 0 | 195,000 |
(Gain) Loss on sale of property and equipment | (6,000) | 35,000 |
Changes in allowance for doubtful accounts | 87,000 | 203,000 |
Stock-based compensation expense | 232,000 | 172,000 |
Gain on forgiveness of debt and accrued interest | (1,062,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 523,000 | 1,679,000 |
Inventories | 66,000 | 135,000 |
Income tax receivable | 237,000 | (115,000) |
Prepaid expenses and other | (392,000) | (327,000) |
Accounts payable | (572,000) | 115,000 |
Accrued liabilities | 665,000 | 623,000 |
Accrued income taxes | 34,000 | 34,000 |
Deferred revenue | 662,000 | 40,000 |
Net cash used in operating activities | (3,000,000) | (1,580,000) |
Investing activities: | ||
Purchases of property and equipment | (106,000) | (61,000) |
Proceeds from sale of custom print business | 0 | 200,000 |
Proceeds from sale of property and equipment | 16,000 | 0 |
Net cash provided by (used in) investing activities | (90,000) | 139,000 |
Financing activities: | ||
Cash dividends paid ($0.70 per share) | (14,000) | (14,000) |
Proceeds from issuance of common stock, net | 27,000 | 20,000 |
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units | (200,000) | (1,000) |
Proceeds from PPP loan | 0 | 1,054,000 |
Net cash provided by (used in) financing activities | (187,000) | 1,059,000 |
Decrease in cash and cash equivalents and restricted cash | (3,277,000) | (382,000) |
Cash and cash equivalents and restricted cash at beginning of year | 7,128,000 | 7,510,000 |
Cash and cash equivalents and restricted cash at end of year | 3,851,000 | 7,128,000 |
Supplemental disclosures for cash flow information: | ||
Cash (paid) refunded during the year for income taxes | 230,000 | (112,000) |
Non-cash investing and financing activities: | ||
Purchase of property and equipment included in accounts payable | 13,000 | 11,000 |
Common stock issued for accrued liabilities | 0 | 9,000 |
Receivables recorded from sale of custom print business | 0 | 100,000 |
Receivables recorded from sale of property and equipment | 0 | 195,000 |
Operating lease right of use asset obtained in exchange for lease obligations | 219,000 | $ 0 |
Forgiveness of debt and accrued interest | $ 1,062,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
1. Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business . Sale of Custom Print Business. Revenue Recognition . Cash and Cash Equivalents and Restricted Cash December 31, 2021 December 31, 2020 Cash and cash equivalents $ 3,766,000 $ 7,128,000 Restricted cash 85,000 — Total cash and cash equivalents and restricted cash $ 3,851,000 $ 7,128,000 Restricted Cash. Fair Value of Financial Measurements . The hierarchy is divided into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable, and accounts payable. Accounts Receivable . Changes in the Company’s allowance for doubtful accounts are as follows: December 31 2021 2020 Beginning balance $ 268,000 $ 65,000 Bad debt provision 71,000 203,000 Accounts written-off 111,000 — Recoveries (95,000 ) — Ending balance $ 355,000 $ 268,000 Inventories December 31 2021 2020 Raw materials $ — $ 32,000 Work-in-process — 2,000 Finished goods 19,000 51,000 $ 19,000 $ 85,000 Prepaid Production Costs. Property and Equipment. Production tooling, machinery and equipment 1 – 6 years Office furniture and fixtures 1 – 3 years Computer equipment and software 3 – 5 years Leasehold improvements 1 –3 years Leases. Impairment of Long-Lived Assets A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available. At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the end of the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. Restructuring. Sales Taxes. Income Taxes Stock-Based Compensation . The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. Advertising Costs Net Income (Loss) Per Share Weighted average common shares outstanding for the years ended December 31, 2021 and 2020 were as follows: Year ended December 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,760,000 1,734,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards — — Denominator for diluted net loss per share - weighted average shares 1,760,000 1,734,000 Due to the net loss incurred during the years ended December 31, 2021 and 2020, all stock awards were anti-dilutive for the period. Immaterial Error in Three and Nine Months Ended September 30, 2021. In accordance with Staff Accounting Bulletin (SAB) 99 (“Materiality”) the Company evaluated this error, including both qualitative and quantitative considerations, and concluded this error did not result in a material misstatement of the previously issued financial statements for the three and nine months ended September 30, 2021. Use of Estimates |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition | |
2. Revenue Recognition | 2. Revenue Recognition. Revenue from Contracts with Customers Performance Obligations Taxes collected from customers and remitted to governmental authorities are excluded from revenue on the net basis of accounting. The Company includes shipping and handling fees in revenues. Shipping and handling costs associated with outbound freight after control over a product has been passed to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The following is a description of the Company’s performance obligations included in its primary revenue streams and the timing or method of revenue recognition for each: Merchandising, On-Pack, and Non-POPS Signage Solutions POPS Signage Solution Services. Each of the individual activities under the Company’s services, including production activities, are inputs to an integrated sign display service. Customers receive and consume the benefits from the promotional displays over the duration of the contracted display cycle. Additionally, the display of the signs does not have an alternative use to the Company and the Company has an enforceable right to payment for services performed to date. As a result, the Company recognizes the transaction price for service performance obligations as revenue over time. Given the nature of the Company’s performance obligations is to provide a display service over the duration of a specified period or periods, the Company recognizes revenue on a straight-line basis over the display service period as it best reflects the timing of transfer of its sign solutions. Products . Disaggregation of Revenue In the following table, revenue is disaggregated by major revenue stream and timing of revenue recognition. Year ended December 31, 2021 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 6,659,000 $ — $ 6,659,000 Products and services transferred at a point in time 12,844,000 — 12,844,000 Total $ 19,503,000 $ — $ 19,503,000 Year ended December 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 10,670,000 $ — $ 10,670,000 Products and services transferred at a point in time 6,234,000 578,000 6,812,000 Total $ 16,904,000 $ 578,000 $ 17,482,000 Contract Costs Sales commissions paid to internal or external sales representatives are eligible for capitalization because they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company is applying the practical expedient in Accounting Standards Codification 340-40-25-4 that allows the incremental costs of obtaining a contract to be recorded as an expense when incurred when the amortization period of the asset that would have otherwise been recognized is one year or less. These costs are included in selling expenses. Deferred Revenue Significant changes in deferred revenue during the period are as follows: Balance at December 31, 2020 $ 180,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (180,000 ) Cash received in advance and not recognized as revenue 842,000 Balance at December 31, 2021 $ 842,000 Transaction Price Allocated to Remaining Performance Obligations The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, which reflect the majority of its performance obligations. This practical expedient is being applied to arrangements for certain incomplete services and unshipped custom signage materials. Among our contracts with an expected duration of greater than one year, we anticipate that revenue of $111,000 and $57,000 related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2021 will be recognized during 2022 and 2023, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment | |
Property and Equipment | 3. Property and Equipment. 2021 2020 Property and Equipment: Production tooling, machinery and equipment $ 27,000 $ 2,349,000 Office furniture and fixtures 95,000 425,000 Computer equipment and software 753,000 1,447,000 Leasehold improvements 19,000 — Construction in-progress 4,000 17,000 898,000 4,238,000 Accumulated depreciation and amortization (785,000 ) (4,163,000 ) Net Property and Equipment $ 113,000 $ 75,000 Depreciation expense for the years ended December 31, 2021 and 2020 was $60,000 and $314,000, respectively. During December 2020, in connection with the outsourcing of most printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022. The receivables that were due in 2021 were collected. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 4. Leases. The Company’s leases include options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Therefore, the renewals to extend the lease terms are not included in the Company’s right of use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company used its incremental borrowing rate of approximately 4.8% in determining the present value of the lease payments based on the information available at the lease commencement date. The cost components of the Company’s operating leases were as follows: Year ended December 31, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 38,000 $ 28,000 $ — $ 13,000 $ 79,000 Variable lease cost 24,000 16,000 — 12,000 52,000 Short-term lease cost — — 28,000 — 28,000 Total $ 62,000 $ 44,000 $ 28,000 $ 25,000 $ 159,000 Year ended December 31, 2020 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 150,000 $ — $ — $ — $ 150,000 Variable lease cost 104,000 — — — 104,000 Short-term lease cost — — 40,000 — 40,000 Total $ 254,000 $ — $ 40,000 $ — $ 294,000 Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased corporate headquarters which are paid based on actual costs incurred by the lessor. Maturities of the Company’s lease liabilities for is corporate headquarters and its warehouse operating leases are as follows as of December 31, 2021: 2022 $ 83,000 2023 72,000 2024 40,000 Total lease payments $ 195,000 Less: Interest (11,000 ) Present value of lease liabilities $ 184,000 The remaining lease terms as of December 31, 2021 for the Company’s corporate headquarters and its warehouse leases were 2.5 years and 1.2 years, respectively. The cash outflow for operating leases for the years ended December 31, 2021 and December 31, 2020 were $97,000 and $222,000, respectively. Operating lease liabilities and right-of-use assets were increased for new non-cash leases by $219,000 for the year ended December 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 5. Commitments and Contingencies. Legal. In July 2019, the Company filed suit against News America in the U.S. District Court in Minnesota, alleging violations of federal and state antitrust and tort laws by News America. The complaint alleges that News America has monopolized the national market for third-party in-store advertising and promotion products and services through various wrongful acts designed to harm the Company, its last significant competitor. The suit seeks, among other relief, an injunction sufficient to prevent further antitrust injury and an award of treble damages to be determined at trial for the harm caused to our Company. In August 2019, News America filed an answer and counterclaim. In October 2019, News America moved for a judgment on the pleadings. Management believes that the counterclaim is without merit, and the Company filed a response brief on November 11, 2019. The Company also moved to dismiss the counterclaim against it. The court heard oral arguments from both parties on January 14, 2020, and subsequently denied both motions. On July 10, 2020 the parties cross-moved for summary judgment on the counterclaim. On December 7, 2020, the Court granted News America’s motion for summary judgment on the counterclaim in part, requiring Insignia to strike certain allegations from its complaint and finding News America’s request for attorneys’ fees and costs premature. Following the close of discovery, on August 27, 2021, News America moved for summary judgment on Insignia’s claims. On September 17, 2021, Insignia filed its response opposing summary judgment. On October 1, 2021, News America filed its reply brief. The court cancelled a hearing on the motion originally scheduled for January 26, 2022, and referred the case to mediation. News America’s summary judgment motion remains pending. At this stage of the proceedings, the Company is unable to determine the likelihood of an unfavorable outcome or estimate any potential resulting liability. Retailer Agreements |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Shareholders' Equity | |
Shareholders' Equity | 6. Shareholders’ Equity Stock-Based Compensation. The following table summarizes the stock-based compensation expense that was recognized in the Company’s statements of operations for the years ended December 31, 2021 and 2020: Year ended December 31 2021 2020 Cost of sales $ 24,000 $ 5,000 Selling 25,000 38,000 Marketing 12,000 (1,000 ) General and administrative 171,000 130,000 $ 232,000 $ 172,000 The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards with the following weighted average assumptions: 2021 2020 Stock Purchase Plan Options: Expected life (years) 1.0 1.0 Expected volatility 142 % 59 % Dividend yield 0 % 0 % Risk-free interest rate 0.1 % 1.6 % The Company uses the graded attribution method to recognize expense for unvested stock-based awards. Forfeitures are recognized as incurred. Stock Options, Restricted Stock, Restricted Stock Units, and Other Stock-Based Compensation Awards Under the terms of the 2018 Plan, the number of shares of our common stock that may be the subject of awards and issued under the 2018 Plan was initially 128,571 plus any shares remaining available for future grants under the 2013 Plan on the effective date of the 2018 Plan. All equity awards made during 2021 and 2020 were under the 2018 Plan. Under the terms of the 2018 Plan, the Company may grant awards in a variety of instruments including stock options, restricted stock and restricted stock units to employees, consultants and directors generally at an exercise price at or above 100% of fair market value at the close of business on the date of grant. Stock options expire 10 years after the date of grant and generally vest over three years. The Company issues new shares of common stock upon grant of restricted stock, when stock options are exercised, and when restricted stock units are vested and/or settled. The following table summarizes activity under the 2003, 2013 and 2018 Plans: Plan Shares Available for Grant Plan Options Outstanding Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at January 1, 2020 117,661 42,416 $ 16.66 Restricted stock units and awards granted - 2018 Plan (31,782 ) — Cancelled or forfeited - 2018 Plan options 1,070 (1,070 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 3,091 — 9.58 Cancelled or forfeited - 2013 Plan options 2,241 (2,241 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,450 — 13.34 Cancelled or forfeited - 2003 Plan options — (8,607 ) 24.23 Balance at December 31, 2020 93,731 30,498 14.69 Restricted stock units and awards granted - 2018 Plan (5,514 ) — Cancelled or forfeited - 2018 Plan options 2,584 (2,584 ) 13.36 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 5,508 — 8.69 Stock options exercised — (1,973 ) 13.59 $ 17,100 Cancelled or forfeited - 2013 Plan options 292 (292 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,047 — 12.39 Cancelled or forfeited - 2003 Plan options — (6,527 ) 19.66 Balance at December 31, 2021 97,648 19,122 $ 13.23 The following table summarizes information about the stock options outstanding at December 31, 2021: Options Outstanding Options Exercisable Ranges of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $8.26 - $13.65 13,759 5.07 years $ 12.33 10,363 $ 11.90 $15.54 - $21.63 5,363 2.39 years 15.54 5,363 15.54 19,122 4.32 years $ 13.23 15,726 $ 13.14 Options outstanding under the Plans expire at various dates during the period from May 2022 through August 2028. Options outstanding at December 31, 2021 had an aggregate intrinsic value of $188,322. Options outstanding at December 31, 2020 had no intrinsic value. Options exercisable at December 31, 2021 had a weighted average remaining life of 3.82 years and an aggregate intrinsic value of $156,298. No options were granted in either 2021 or 2020. The number of options exercisable at December 31, 2020 was 21,123. During the year ended December 31, 2021, no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors. In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Plan. The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000. The shares are scheduled to vest the earlier of June 10, 2022 or the day immediately preceding the date of the next annual shareholder meeting. During the year ended December 31, 2020, the Company issued 24,282 restricted stock units. The shares underlying the awards were assigned a weighted average value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants. These awards vested on December 31, 2021. During December 2020, non-employee members of the Board of Directors received restricted stock grants totaling 7,500 shares. The shares underlying the awards were assigned a value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants, for a total value of $45,000, and were vested in full the day immediately preceding the date of the 2021 annual shareholder meeting, June 9, 2021. Restricted stock and restricted stock unit transactions during the years ended December 31, 2021 and 2020 are summarized as follows: Number of Shares Weighted average grant date fair value Unvested shares at January 1, 2020 44,659 $ 12.16 Granted 31,782 6.00 Vested (22,315 ) 11.36 Forfeited or surrendered (4,162 ) 10.30 Unvested shares at December 31, 2020 49,964 $ 8.76 Granted 5,514 8.16 Vested (40,392 ) 8.33 Forfeited or surrendered (6,555 ) 9.28 Unvested shares at December 31, 2021 8,531 $ 10.01 As of December 31, 2021, there was approximately $5,000 of total unrecognized compensation costs related to outstanding stock options, which is expected to be recognized over a weighted average period of 0.6 years. As of December 31, 2021, there was approximately $30,000 of total unrecognized compensation costs related to restricted stock and restricted stock units, which is expected to be recognized over a weighted average period of 0.5 years. Employee Stock Purchase Plan. Dividends. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 7. Income Taxes. Year Ended December 31 2021 2020 Current taxes - Federal $ — $ (233,000 ) Current taxes - State 42,000 42,000 Income tax expense (benefit) $ 42,000 $ (191,000 ) The actual tax benefit attributable to loss before taxes differs from the expected tax benefit computed by applying the U.S. federal corporate income tax rate of 21% as follows: Year Ended December 31 2021 2020 Federal statutory rate 21.0 % 21.0 % Stock-based awards 2.0 (0.8 ) State taxes 3.6 3.6 Impact of uncertain tax positions (1.0 ) (0.7 ) Valuation allowance (34.3 ) (19.6 ) PPP forgiveness 7.5 — Other — 0.8 Effective federal income tax rate (1.2 )% 4.3 % Components of resulting noncurrent deferred tax assets (liabilities) are as follows: As of December 31 2021 2020 Deferred tax assets Accrued expenses $ 507,000 $ 376,000 Inventory reserve 23,000 9,000 Stock-based awards 31,000 65,000 Reserve for bad debts 88,000 33,000 Net operating loss and credit carryforwards 2,507,000 1,422,000 Other 33,000 47,000 Depreciation 33,000 52,000 Valuation allowance (3,146,000 ) (1,946,000 ) Total deferred tax assets $ 76,000 $ 58,000 Deferred tax liabilities Prepaid expenses $ (76,000 ) $ (58,000 ) Total deferred tax liabilities (76,000 ) (58,000 ) Net deferred income tax liabilities $ — $ — As of December 31, 2021, the Company had a Federal net operating loss (NOL) to carry forward of approximately $9,700,000 and state NOLs of approximately $7,400,000 to carry forward. The Federal NOLs can be carried forward indefinitely. The expiration of state NOLs carried forward varies by taxing jurisdiction. Future utilization of NOLs carried forward may be subject to certain limitations under Section 382 of the Internal Revenue Code. In March 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The CARES Act, among other provisions, allows for companies to carry back federal NOLs generated in 2018, 2019 and 2020 for up to five years for refunds of federal taxes paid. This provision created an opportunity for the Company to utilize NOLs not previously expected to be utilized. Thus in 2020, the Company reversed approximately $215,000 of its valuation allowance against the NOLs in its deferred tax assets which the Company carried back to claim a refund of federal taxes paid. The Company received this refund in 2021. The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the years ended December 31, 2021 and 2020 was $1,200,000 and $943,000, respectively. The Company has recorded a liability of $711,000 and $677,000 for uncertain tax positions taken in tax returns in previous years as of December 31, 2021 and 2020, respectively. This liability is reflected as accrued income taxes on the Company’s balance sheets. The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2018 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2018 are no longer open in major state and local tax jurisdictions. The Company believes that it is reasonably possible that a decrease of up to $665,000 in unrecognized tax benefits related to state exposures may be necessary in the third quarter of 2022, which would reduce accrued income taxes and increase income tax benefit. A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows: Balance at January 1, 2020 $ 643,000 Increases due to interest and state tax 34,000 Balance at December 31, 2020 677,000 Increases due to interest and state tax 34,000 Balance at December 31, 2021 $ 711,000 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | 8. Employee Benefit Plans |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2021 | |
Concentrations | |
Concentrations | 9. Concentrations. Major Customers Export Sales |
Loan
Loan | 12 Months Ended |
Dec. 31, 2021 | |
Loan | |
Loan | 10. Loan. In accordance with the requirements of the CARES Act, the Company used the proceeds from the loan exclusively for qualified expenses under the PPP, including payroll costs, rent and utility costs, as further detailed in the CARES Act and applicable guidance issued by the SBA. Interest was accrued on the outstanding balance of the Note at a rate of 1.00% per annum. The Note was scheduled to mature on April 22, 2022 and required 18 equal monthly payments of principal and interest. The Company’s application for forgiveness of the amount due under the Note, including accrued interest, was approved by the SBA on January 29, 2021. Accordingly, for the year ended December 31, 2021 the debt of $1,054,000, plus accrued interest of $8,000 was eliminated with a gain on debt extinguishment included in other income. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Description of Business | Description of Business . |
Sale of our Custom Print Business | Sale of Custom Print Business. |
Revenue Recognition | Revenue Recognition . |
Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash December 31, 2021 December 31, 2020 Cash and cash equivalents $ 3,766,000 $ 7,128,000 Restricted cash 85,000 — Total cash and cash equivalents and restricted cash $ 3,851,000 $ 7,128,000 |
Fair Value of Financial Measurements | Fair Value of Financial Measurements . The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable, and accounts payable. |
Restricted Cash | Restricted Cash. |
Accounts Receivable | Accounts Receivable . Changes in the Company’s allowance for doubtful accounts are as follows: December 31 2021 2020 Beginning balance $ 268,000 $ 65,000 Bad debt provision 71,000 203,000 Accounts written-off 111,000 — Recoveries (95,000 ) — Ending balance $ 355,000 $ 268,000 |
Inventories | Inventories December 31 2021 2020 Raw materials $ — $ 32,000 Work-in-process — 2,000 Finished goods 19,000 51,000 $ 19,000 $ 85,000 Prepaid Production Costs. Property and Equipment. Production tooling, machinery and equipment 1 – 6 years Office furniture and fixtures 1 – 3 years Computer equipment and software 3 – 5 years Leasehold improvements 1 –3 years |
Leases | Leases. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available. At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the end of the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. |
Use of Estimates | Use of Estimates |
Stock-Based Compensation | Stock-Based Compensation . The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. |
Advertising Costs | Advertising Costs |
Net Income (Loss) per Share | Net Income (Loss) Per Share Weighted average common shares outstanding for the years ended December 31, 2021 and 2020 were as follows: Year ended December 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,760,000 1,734,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards — — Denominator for diluted net loss per share - weighted average shares 1,760,000 1,734,000 Due to the net loss incurred during the years ended December 31, 2021 and 2020, all stock awards were anti-dilutive for the period. |
Restructuring | Restructuring. |
Sales Taxes | Sales Taxes. |
Income Taxes | Income Taxes |
Immaterial Error | Immaterial Error in Three and Nine Months Ended September 30, 2021. In accordance with Staff Accounting Bulletin (SAB) 99 (“Materiality”) the Company evaluated this error, including both qualitative and quantitative considerations, and concluded this error did not result in a material misstatement of the previously issued financial statements for the three and nine months ended September 30, 2021. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents | December 31, 2021 December 31, 2020 Cash and cash equivalents $ 3,766,000 $ 7,128,000 Restricted cash 85,000 — Total cash and cash equivalents and restricted cash $ 3,851,000 $ 7,128,000 |
Allowance for doubtful accounts | December 31 2021 2020 Beginning balance $ 268,000 $ 65,000 Bad debt provision 71,000 203,000 Accounts written-off 111,000 — Recoveries (95,000 ) — Ending balance $ 355,000 $ 268,000 |
Inventories | December 31 2021 2020 Raw materials $ — $ 32,000 Work-in-process — 2,000 Finished goods 19,000 51,000 $ 19,000 $ 85,000 |
Schedule of property and Equipment | Production tooling, machinery and equipment 1 – 6 years Office furniture and fixtures 1 – 3 years Computer equipment and software 3 – 5 years Leasehold improvements 1 –3 years |
Weighted average common shares outstanding | Year ended December 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,760,000 1,734,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards — — Denominator for diluted net loss per share - weighted average shares 1,760,000 1,734,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition | |
Deferred revenue | Year ended December 31, 2021 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 6,659,000 $ — $ 6,659,000 Products and services transferred at a point in time 12,844,000 — 12,844,000 Total $ 19,503,000 $ — $ 19,503,000 Year ended December 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 10,670,000 $ — $ 10,670,000 Products and services transferred at a point in time 6,234,000 578,000 6,812,000 Total $ 16,904,000 $ 578,000 $ 17,482,000 Balance at December 31, 2020 $ 180,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (180,000 ) Cash received in advance and not recognized as revenue 842,000 Balance at December 31, 2021 $ 842,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment | |
Property and equipment | 2021 2020 Property and Equipment: Production tooling, machinery and equipment $ 27,000 $ 2,349,000 Office furniture and fixtures 95,000 425,000 Computer equipment and software 753,000 1,447,000 Leasehold improvements 19,000 — Construction in-progress 4,000 17,000 898,000 4,238,000 Accumulated depreciation and amortization (785,000 ) (4,163,000 ) Net Property and Equipment $ 113,000 $ 75,000 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Cost components of operating leases | Year ended December 31, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 38,000 $ 28,000 $ — $ 13,000 $ 79,000 Variable lease cost 24,000 16,000 — 12,000 52,000 Short-term lease cost — — 28,000 — 28,000 Total $ 62,000 $ 44,000 $ 28,000 $ 25,000 $ 159,000 Year ended December 31, 2020 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 150,000 $ — $ — $ — $ 150,000 Variable lease cost 104,000 — — — 104,000 Short-term lease cost — — 40,000 — 40,000 Total $ 254,000 $ — $ 40,000 $ — $ 294,000 |
Maturity of Lease Liabilities | 2022 $ 83,000 2023 72,000 2024 40,000 Total lease payments $ 195,000 Less: Interest (11,000 ) Present value of lease liabilities $ 184,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Shareholders' Equity | |
Stock-based compensation expense | Year ended December 31 2021 2020 Cost of sales $ 24,000 $ 5,000 Selling 25,000 38,000 Marketing 12,000 (1,000 ) General and administrative 171,000 130,000 $ 232,000 $ 172,000 |
Weighted average assumptions | 2021 2020 Stock Purchase Plan Options: Expected life (years) 1.0 1.0 Expected volatility 142 % 59 % Dividend yield 0 % 0 % Risk-free interest rate 0.1 % 1.6 % |
Stock option activity | Plan Shares Available for Grant Plan Options Outstanding Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at January 1, 2020 117,661 42,416 $ 16.66 Restricted stock units and awards granted - 2018 Plan (31,782 ) — Cancelled or forfeited - 2018 Plan options 1,070 (1,070 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 3,091 — 9.58 Cancelled or forfeited - 2013 Plan options 2,241 (2,241 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,450 — 13.34 Cancelled or forfeited - 2003 Plan options — (8,607 ) 24.23 Balance at December 31, 2020 93,731 30,498 14.69 Restricted stock units and awards granted - 2018 Plan (5,514 ) — Cancelled or forfeited - 2018 Plan options 2,584 (2,584 ) 13.36 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 5,508 — 8.69 Stock options exercised — (1,973 ) 13.59 $ 17,100 Cancelled or forfeited - 2013 Plan options 292 (292 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,047 — 12.39 Cancelled or forfeited - 2003 Plan options — (6,527 ) 19.66 Balance at December 31, 2021 97,648 19,122 $ 13.23 |
Stock options outstanding | Options Outstanding Options Exercisable Ranges of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $8.26 - $13.65 13,759 5.07 years $ 12.33 10,363 $ 11.90 $15.54 - $21.63 5,363 2.39 years 15.54 5,363 15.54 19,122 4.32 years $ 13.23 15,726 $ 13.14 |
Restricted stock and restricted stock unit activity | Number of Shares Weighted average grant date fair value Unvested shares at January 1, 2020 44,659 $ 12.16 Granted 31,782 6.00 Vested (22,315 ) 11.36 Forfeited or surrendered (4,162 ) 10.30 Unvested shares at December 31, 2020 49,964 $ 8.76 Granted 5,514 8.16 Vested (40,392 ) 8.33 Forfeited or surrendered (6,555 ) 9.28 Unvested shares at December 31, 2021 8,531 $ 10.01 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income tax benefit | Year Ended December 31 2021 2020 Current taxes - Federal $ — $ (233,000 ) Current taxes - State 42,000 42,000 Income tax expense (benefit) $ 42,000 $ (191,000 ) |
Reconciliation of effective federal income tax rate | Year Ended December 31 2021 2020 Federal statutory rate 21.0 % 21.0 % Stock-based awards 2.0 (0.8 ) State taxes 3.6 3.6 Impact of uncertain tax positions (1.0 ) (0.7 ) Valuation allowance (34.3 ) (19.6 ) PPP forgiveness 7.5 — Other — 0.8 Effective federal income tax rate (1.2 )% 4.3 % |
Deferred tax assets (liabilities) | As of December 31 2021 2020 Deferred tax assets Accrued expenses $ 507,000 $ 376,000 Inventory reserve 23,000 9,000 Stock-based awards 31,000 65,000 Reserve for bad debts 88,000 33,000 Net operating loss and credit carryforwards 2,507,000 1,422,000 Other 33,000 47,000 Depreciation 33,000 52,000 Valuation allowance (3,146,000 ) (1,946,000 ) Total deferred tax assets $ 76,000 $ 58,000 Deferred tax liabilities Prepaid expenses $ (76,000 ) $ (58,000 ) Total deferred tax liabilities (76,000 ) (58,000 ) Net deferred income tax liabilities $ — $ — |
Uncertain tax positions | Balance at January 1, 2020 $ 643,000 Increases due to interest and state tax 34,000 Balance at December 31, 2020 677,000 Increases due to interest and state tax 34,000 Balance at December 31, 2021 $ 711,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||
Cash and cash equivalents | $ 3,766,000 | $ 7,128,000 |
Restricted cash | 85,000 | 0 |
Total cash, cash equivalents and retricted cash | $ 3,851,000 | $ 7,128,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Beginning balance | $ 268,000 | $ 65,000 |
Bad debt provision | 71,000 | 203,000 |
Accounts written-off | 111,000 | 0 |
Recoveries | (95,000) | 0 |
Ending balance | $ 355,000 | $ 268,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||
Raw materials | $ 0 | $ 32,000 |
Work-in-process | 0 | 2,000 |
Finished goods | 51,000 | 19,000 |
Inventories | $ 19,000 | $ 85,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) | 12 Months Ended |
Dec. 31, 2021 | |
Production Tooling, Machinery and Equipment | Minimum | |
Estimated useful lives | 1 |
Production Tooling, Machinery and Equipment | Maximum | |
Estimated useful lives | 6 |
Office Furniture and Fixtures | Minimum | |
Estimated useful lives | 1 |
Office Furniture and Fixtures | Maximum | |
Estimated useful lives | 3 |
Computer Equipment and Software | Minimum | |
Estimated useful lives | 3 |
Computer Equipment and Software | Maximum | |
Estimated useful lives | 5 |
Leasehold Improvements | Minimum | |
Estimated useful lives | 1 |
Leasehold Improvements | Maximum | |
Estimated useful lives | 3 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 5) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Denominator for basic net loss per share - weighted average shares | 1,760,000 | 1,734,000 |
Effect of dilutive securities: stock options, restricted stock and restricted stock units | 0 | 0 |
Denominator for diluted net loss per share - weighted average shares | 1,760,000 | 1,734,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Aug. 31, 2020 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2011 | |
Impairment loss | $ 159,000 | ||||||||
Amortization | $ 158,000 | ||||||||
Term of Agreement | 10 years | 10 years | |||||||
Cash received | $ 200,000 | ||||||||
Short-term receivable | 75,000 | ||||||||
Long-term receivable | 25,000 | ||||||||
Remaining receivable balance | $ 25,000 | $ 25,000 | $ 25,000 | ||||||
Gain on sale of print business | 195,000 | 0 | $ 195,000 | ||||||
Insured cash sweep account | $ 3,849,000 | 3,849,000 | 3,849,000 | 7,113,000 | |||||
Insured cash sweep account | 19.00% | ||||||||
pre tax restructuring charges | $ 201,000 | 201,000 | |||||||
Advertising expense | 34,000 | 69,000 | |||||||
Benefits under employee retentation credit | $ 293,000 | ||||||||
Benefits reduced due to filling and preparation costs | 20,000 | ||||||||
Net benefit after deducting filling and preparation costs | 273,000 | ||||||||
Receivables recorded from sale of property and equipment | 0 | 195,000 | |||||||
Sale of custom print business | $ 300,000 | ||||||||
Net loss | $ (3,534,000) | $ (4,615,000) | |||||||
Decrease net loss per share | $ (2.01) | $ (2.66) | |||||||
Impact of Error Adjustment | |||||||||
Net loss | $ 273,000 | $ 273,000 | $ 273,000 | ||||||
Decrease net loss per share | $ 0.15 | $ 0.15 | $ 0.15 | ||||||
Cost of Sales | |||||||||
pre tax restructuring charges | 81,000 | ||||||||
Operating Expenses | |||||||||
pre tax restructuring charges | $ 120,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total Net Sales | $ 19,503,000 | $ 17,482,000 |
Service [Member] | ||
Total Net Sales | 19,503,000 | 16,904,000 |
Product [Member] | ||
Total Net Sales | 0 | 578,000 |
Products and Services Transferred Over Time | ||
Total Net Sales | 6,659,000 | 10,670,000 |
Products and Services Transferred Over Time | Service [Member] | ||
Total Net Sales | 6,659,000 | 10,670,000 |
Products and Services Transferred Over Time | Product [Member] | ||
Total Net Sales | 0 | 0 |
Products and Services Transferred at a Point in Time | ||
Total Net Sales | 12,844,000 | 6,812,000 |
Products and Services Transferred at a Point in Time | Service [Member] | ||
Total Net Sales | 12,844,000 | 6,234,000 |
Products and Services Transferred at a Point in Time | Product [Member] | ||
Total Net Sales | $ 0 | $ 578,000 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Revenue Recognition | |
Deferred revenue, beginning | $ 180,000 |
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied | 180,000 |
Cash received in advance and not recognized as revenue | 842,000 |
Deferred revenue, ending | $ 842,000 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 19,503,000 | $ 17,482,000 |
2022 | ||
Revenue | 111,000 | |
2023 | ||
Revenue | $ 57,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property and equipment, gross | $ 898,000 | $ 4,238,000 |
Accumulated depreciation and amortization | (785,000) | (4,163,000) |
Property and equipment, net | 113,000 | 75,000 |
Production Tooling, Machinery and Equipment | ||
Property and equipment, gross | 27,000 | 2,349,000 |
Office Furniture And Fixtures | ||
Property and equipment, gross | 95,000 | 425,000 |
Computer Equipment and Software | ||
Property and equipment, gross | 753,000 | 1,447,000 |
Leasehold Improvements | ||
Property and equipment, gross | 19,000 | 0 |
Construction in Progress | ||
Property and equipment, gross | $ 4,000 | $ 17,000 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Depreciation expense | $ 60,000 | $ 314,000 |
Net book value of property plant and equipment | 230,000 | |
Receivables recorded from sale of property and equipment | $ 0 | 195,000 |
Loss on sale of property and equipment | $ (35,000) |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating lease cost | $ 79,000 | $ 150,000 |
Variable lease cost | 52,000 | 104,000 |
Short-term lease cost | 28,000 | 40,000 |
Total | 159,000 | 294,000 |
Prior Corporate Headquarters | ||
Operating lease cost | 38,000 | 150,000 |
Variable lease cost | 24,000 | 104,000 |
Short-term lease cost | 0 | 0 |
Total | 62,000 | 254,000 |
Corporate Headquarters | ||
Operating lease cost | 28,000 | 0 |
Variable lease cost | 16,000 | 0 |
Short-term lease cost | 0 | 0 |
Total | 44,000 | 0 |
Additional Office Space | ||
Operating lease cost | 0 | 0 |
Variable lease cost | 0 | 0 |
Short-term lease cost | 28,000 | 40,000 |
Total | 28,000 | 40,000 |
Warehouse | ||
Operating lease cost | 13,000 | 0 |
Variable lease cost | 12,000 | 0 |
Short-term lease cost | 0 | 0 |
Total | $ 25,000 | $ 0 |
Leases (Details 1)
Leases (Details 1) | Dec. 31, 2021USD ($) |
Leases | |
2022 | $ 83,000 |
2023 | 72,000 |
2024 | 40,000 |
Total lease payments | 195,000 |
Less: interest | (11,000) |
Present value of lease liabilities | $ 184,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted cash | $ 85,000 | |
Incremental borrowing rate | 4.80% | |
Increase in Operating lease liabilities and right-of-use | $ 219,000 | |
Cash outflow for operating leases | $ 97,000 | $ 222,000 |
Corporate Headquarters | ||
Remaining lease term | 2 years 6 months | |
Warehouse | ||
Remaining lease term | 1 year 2 months 12 days |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Aggregate purchase obligation | $ 50,000 | |
Fixed and store-based payments | $ 199,000 | $ 2,765,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | $ 232,000 | $ 172,000 |
Cost of Sales | ||
Stock-based compensation expense | 24,000 | 5,000 |
Marketing Expenses | ||
Stock-based compensation expense | 12,000 | 1,000 |
Selling Expenses | ||
Stock-based compensation expense | 25,000 | 38,000 |
General and Administrative Expense | ||
Stock-based compensation expense | $ 171,000 | $ 130,000 |
Shareholders Equity (Details 1)
Shareholders Equity (Details 1) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shareholders' Equity | ||
Expected life | 1 year | 1 year |
Expected volatility | 142.00% | 59.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 0.10% | 1.60% |
Shareholders Equity (Details 2)
Shareholders Equity (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Granted | (5,514) | (31,782) |
Plan shares available for grant, ending | 97,648 | 93,731 |
Granted | 0 | 0 |
Plan options outstanding, ending | 19,122 | 30,498 |
Weighted average exercise price per share, ending | $ 13.23 | $ 14.69 |
Granted | $ 0 | $ 0 |
Stock options exercised, plan shares available for grant | 0 | |
Stock options exercised, plan options outstanding | (1,973) | |
Stock options exercised, weighted average exercise per share | $ 13.59 | |
Stock options exercised, aggregate intrinsic value | $ 17,100 | |
Stock Option Plan 2013 | Employee Stock Option [Member] | ||
Cancelled or forfeited | 292 | 2,241 |
Cancelled | $ 292 | $ 2,241 |
Cancelled or forfeited per share | $ 15.54 | $ 15.54 |
Stock Option Plan 2013 | Restricted Stock and Restricted Stock Units | ||
Cancelled or forfeited | 1,047 | 1,450 |
Cancelled | $ 0 | $ 0 |
Cancelled or forfeited per share | $ 12.39 | $ 13.34 |
Stock Option Plan 2018 | Employee Stock Option [Member] | ||
Cancelled or forfeited | 2,584 | 1,070 |
Cancelled | $ 2,584 | $ 1,070 |
Cancelled or forfeited per share | $ 13.36 | $ 13.65 |
Stock Option Plan 2018 | Restricted Stock and Restricted Stock Units | ||
Cancelled or forfeited | 5,508 | 3,091 |
Cancelled | $ 0 | $ 0 |
Cancelled or forfeited per share | $ 8.69 | $ 9.58 |
Stock Option Plan 2003 | Employee Stock Option [Member] | ||
Cancelled or forfeited | 0 | 0 |
Cancelled | $ 6,527 | $ 8,607 |
Cancelled or forfeited per share | $ 19.66 | $ 24.23 |
Shareholders Equity (Details 3)
Shareholders Equity (Details 3) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Options outstanding | shares | 19,122 |
Weighted average remaining contractual life outstanding | 4 years 3 months 25 days |
Weighted average exercise price per share outstanding | $ 13.23 |
Options exercisable | shares | 15,726 |
Weighted average exercise price per share exercisable | $ 13.14 |
Exercise Price Range One | |
Options outstanding | shares | 13,759 |
Weighted average remaining contractual life outstanding | 5 years 25 days |
Weighted average exercise price per share outstanding | $ 12.33 |
Options exercisable | shares | 10,363 |
Weighted average exercise price per share exercisable | $ 11.90 |
Ranges of exercise prices lower | 8.26 |
Ranges of exercise prices upper | $ 13.65 |
Exercise Price Range Two | |
Options outstanding | shares | 5,363 |
Weighted average remaining contractual life outstanding | 2 years 4 months 20 days |
Weighted average exercise price per share outstanding | $ 15.54 |
Options exercisable | shares | 5,363 |
Weighted average exercise price per share exercisable | $ 15.54 |
Ranges of exercise prices lower | 15.54 |
Ranges of exercise prices upper | $ 21.63 |
Shareholders Equity (Details 4)
Shareholders Equity (Details 4) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shareholders' Equity | ||
Restricted stock and restricted stock units outstanding, beginning | 49,964 | 44,659 |
Granted | 5,514 | 31,782 |
Vested | (40,392) | (22,315) |
Forfeited or surrendered | (6,555) | (4,162) |
Restricted stock and restricted stock units outstanding, ending | 8,531 | 49,964 |
Weighted average grant date fair value outstanding, beginning | $ 8.76 | $ 12.16 |
Granted | 8.16 | 6 |
Vested | 8.33 | 11.36 |
Forfeited or surrendered | 9.28 | 10.30 |
Weighted average grant date fair value outstanding, ending | $ 10.01 | $ 8.76 |
Shareholders Equity (Details Na
Shareholders Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Aggregate intrinsic value of options outstanding | $ 188,322 | $ 0 |
Weighted average remaining life of options exercisable | 3 years 9 months 25 days | |
Aggregate intrinsic value of options exercisable | $ 156,298 | |
Options exercisable | 21,123 | |
Unrecognized compensation costs related to stock options | $ 5,000 | |
Unrecognized compensation costs related to restricted stock units | 30,000 | |
Stock-based compensation expense | 232,000 | 172,000 |
Employee Stock [Member] | ||
Stock-based compensation expense | $ 23,000 | $ 18,000 |
Employees purchased shares | 4,541 | 6,152 |
Shares are reserved for future employee purchases | 24,436 | |
Restricted Stock and Restricted Stock Units | ||
Stock-based compensation expense | $ 45,000 | |
Unrecognized compensation costs period of recognition | 6 months |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Current taxes - Federal | $ 0 | $ (233,000) |
Current taxes - State | 42,000 | 42,000 |
Income tax expense (benefit) | $ 42,000 | $ (191,000) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Federal statutory rate | 21.00% | 21.00% |
Stock based awards | (2.00%) | (0.80%) |
State taxes | (3.60%) | (3.60%) |
Impact of uncertain tax positions | 1.00% | 0.70% |
Valuation allowance | 34.30% | 19.60% |
PPP forgiveness | 7.50% | 0.00% |
Other | 0.00% | (0.80%) |
Effective federal income tax rate | (1.20%) | 4.30% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Accrued expenses | $ 507,000 | $ 376,000 |
Inventory reserve | 23,000 | 9,000 |
Stock-based awards | 31,000 | 65,000 |
Reserve for bad debts | 88,000 | 33,000 |
Net operating loss and credit carryforwards | 2,507,000 | 1,422,000 |
Other | 33,000 | 47,000 |
Depreciation | 33,000 | 52,000 |
Valuation allowance | (3,146,000) | (1,946,000) |
Total deferred tax assets | 76,000 | 58,000 |
Deferred Tax Liabilities: | ||
Prepaid expenses | (76,000) | (58,000) |
Total deferred tax liabilities | (76,000) | (58,000) |
Net deferred income tax liabilities | $ 0 | $ 0 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Liability for uncertain tax positions, beginning | $ 677,000 | $ 643,000 |
Increases due to interest and state tax | 34,000 | 34,000 |
Liability for uncertain tax positions, ending | $ 711,000 | $ 677,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in the valuation allowance | $ 1,200,000 | $ 943,000 | ||
Liability for uncertain tax positions | 711,000 | 677,000 | $ 643,000 | $ 665,000 |
Deferred tax asset valuation allowance | 3,146,000 | $ 1,946,000 | ||
State And Local Jurisdiction [Member] | ||||
Net operating loss to carry forward | 7,400,000 | |||
Domestic Country [Member] | ||||
Net operating loss to carry forward | $ 9,700,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Benefit Plans | ||
Employee contribution percentage | 50.00% | 0.50% |
Matching employer contribution | $ 41,000 | $ 62,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable | Customer One | ||
Customer's percentage of net sales | 19.00% | 17.00% |
Accounts Receivable | Customer Two | ||
Customer's percentage of net sales | 25.00% | 10.00% |
Sales Revenue, Net | Customer One | ||
Customer's percentage of net sales | 15.00% | 14.00% |
Sales Revenue, Net | Customer Two | ||
Customer's percentage of net sales | 12.00% |
Loan (Details Narrative)
Loan (Details Narrative) | 1 Months Ended | 12 Months Ended |
Apr. 30, 2020USD ($)integer | Dec. 31, 2021USD ($) | |
Loan (Details Narrative) | ||
Debt face amount | $ 1,054,000 | |
Rate of interest per annum | 1.00% | |
Laon maturity date | Apr. 22, 2022 | |
Number of monthly payments of principal and interest | integer | 18 | |
Accrued interest | $ 8,000 | |
Paycheck protection program loan amount | $ 1,054,000 |