Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 06, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | WIRELESS TELECOM GROUP INC | ||
Entity Central Index Key | 0000878828 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 16,642,027 | ||
Entity Common Stock, Shares Outstanding | 21,660,318 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash & cash equivalents | $ 4,910 | $ 4,245 |
Accounts receivable - net of reserves of $38 and $69, respectively | 5,520 | 6,152 |
Inventories - net of reserves of $1,129 and $969, respectively | 8,796 | 7,325 |
Prepaid expenses and other current assets | 2,172 | 1,871 |
TOTAL CURRENT ASSETS | 21,398 | 19,593 |
PROPERTY PLANT AND EQUIPMENT - NET | 1,824 | 2,147 |
OTHER ASSETS | ||
Goodwill | 11,512 | 10,069 |
Acquired intangible assets, net | 5,242 | 2,219 |
Deferred income taxes, net | 5,701 | 6,013 |
Right of use assets | 1,680 | 1,436 |
Other assets | 561 | 874 |
TOTAL OTHER ASSETS | 24,696 | 20,611 |
TOTAL ASSETS | 47,918 | 42,351 |
CURRENT LIABILITIES | ||
Short term debt | 512 | 2,696 |
Accounts payable | 1,546 | 2,227 |
Short term leases | 534 | 440 |
Accrued expenses and other current liabilities | 7,997 | 2,657 |
Deferred revenue | 924 | 42 |
TOTAL CURRENT LIABILITIES | 11,513 | 8,062 |
LONG TERM LIABILITIES | ||
Long term debt | 8,895 | |
Long term leases | 1,200 | 1,018 |
Other long term liabilities | 82 | 77 |
Deferred tax liability | 377 | 503 |
TOTAL LONG TERM LIABILITIES | 10,554 | 1,598 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued | ||
Common stock, $.01 par value, 75,000,000 shares authorized, 34,888,904 and 34,488,252 shares issued, 21,669,361 and 21,300,252 shares outstanding | 349 | 345 |
Additional paid in capital | 50,163 | 49,062 |
Retained earnings/(deficit) | (946) | 7,142 |
Treasury stock at cost, 13,219,543 and 13,188,000 shares | (24,556) | (24,509) |
Accumulated other comprehensive income | 841 | 651 |
TOTAL SHAREHOLDERS' EQUITY | 25,851 | 32,691 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 47,918 | $ 42,351 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserves | $ 38 | $ 69 |
Inventories, reserves | $ 1,129 | $ 969 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 34,888,904 | 34,488,252 |
Common stock, shares outstanding | 21,669,361 | 21,300,252 |
Treasury stock, shares | 13,219,543 | 13,188,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income/(Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Net revenues | $ 41,748 | $ 48,921 |
Cost of revenues | 20,781 | 26,632 |
Gross profit | 20,967 | 22,289 |
Operating expenses | ||
Research and development | 6,389 | 5,917 |
Sales and marketing | 6,955 | 7,677 |
General and administrative | 9,907 | 10,174 |
Goodwill impairment charge | 4,742 | |
Loss on change in fair value of contingent consideration | 1,073 | |
Total operating expenses | 29,066 | 23,768 |
Operating loss | (8,099) | (1,479) |
Other income/(expense) | 187 | (2) |
Interest expense | (985) | (305) |
Loss before taxes | (8,897) | (1,786) |
Tax benefit | (809) | (1,372) |
Net loss | (8,088) | (414) |
Other comprehensive income/(loss): | ||
Foreign currency translation adjustments | 190 | 539 |
Comprehensive income/(loss) | $ (7,898) | $ 125 |
Loss per share: | ||
Basic | $ (0.37) | $ (0.02) |
Diluted | $ (0.37) | $ (0.02) |
Weighted average shares outstanding: | ||
Basic | 21,657 | 21,111 |
Diluted | 21,657 | 21,111 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid In Capital [Member] | Retained Earnings/(Deficit) [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Balance at Dec. 31, 2018 | $ 344 | $ 48,479 | $ 7,556 | $ (24,509) | $ 112 | $ 31,982 |
Balance, shares at Dec. 31, 2018 | 34,393,252 | |||||
Net loss | (414) | (414) | ||||
Issuance of restricted stock | $ 1 | (1) | ||||
Issuance of restricted stock, shares | 95,000 | |||||
Share-based compensation expense | 584 | 584 | ||||
Cumulative translation adjustment | 539 | 539 | ||||
Balance at Dec. 31, 2019 | $ 345 | 49,062 | 7,142 | (24,509) | 651 | 32,691 |
Balance, shares at Dec. 31, 2019 | 34,488,252 | |||||
Net loss | (8,088) | (8,088) | ||||
Issuance of restricted stock | $ 1 | (1) | ||||
Issuance of restricted stock, shares | 50,000 | |||||
Share-based compensation expense | 474 | 474 | ||||
Cumulative translation adjustment | 190 | 190 | ||||
Issuance of shares in connection with stock options exercised | 15 | 15 | ||||
Issuance of shares in connection with stock options exercised, shares | 20,000 | |||||
Forfeiture of restricted stock | ||||||
Forfeiture of restricted stock, shares | (16,667) | |||||
Issuance of shares in connection with Holzworth acquisition | $ 3 | 462 | 465 | |||
Issuance of shares in connection with Holzworth acquisition, shares | 347,319 | |||||
Issuance of warrants | 151 | 151 | ||||
Shares withheld for employee taxes | (47) | (47) | ||||
Balance at Dec. 31, 2020 | $ 349 | $ 50,163 | $ (946) | $ (24,556) | $ 841 | $ 25,851 |
Balance, shares at Dec. 31, 2020 | 34,888,904 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | ||
Net loss | $ (8,088) | $ (414) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,238 | 2,151 |
Goodwill impairment | 4,742 | |
Amortization of debt issuance fees | 297 | 63 |
Share-based compensation expense | 474 | 584 |
Deferred rent | (29) | (24) |
Deferred income taxes | 178 | (551) |
Provision for doubtful accounts | (31) | 25 |
Inventory reserves | 157 | 103 |
Changes in assets and liabilities, net of acquisition: | ||
Accounts receivable | 1,209 | 2,465 |
Inventories | (186) | (502) |
Prepaid expenses and other assets | 923 | 42 |
Accounts payable | (842) | (1,055) |
Payment of contingent consideration | (772) | |
Accrued expenses and other liabilities | 1,938 | (2,035) |
Net cash provided by operating activities | 2,980 | 80 |
CASH FLOWS USED BY INVESTING ACTIVITIES | ||
Capital expenditures | (364) | (392) |
Acquisition of business, net of cash acquired | (8,246) | (426) |
Net cash used by investing activities | (8,610) | (818) |
CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES | ||
Revolver borrowings | 39,935 | 36,544 |
Revolver repayments | (42,289) | (35,712) |
Term loan borrowings | 8,400 | |
Term loan repayments | (426) | (152) |
Debt issuance fees | (1,327) | (110) |
Paycheck Protection Program loan | 2,045 | |
Payment of contingent consideration | (782) | |
Proceeds from exercise of stock options | 16 | |
Tax withholding payments for vested equity awards | (46) | |
Net cash provided/(used) by financing activities | 6,308 | (212) |
Effect of exchange rate changes on cash and cash equivalents | (13) | 180 |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 665 | (770) |
Cash and cash equivalents, at beginning of period | 4,245 | 5,015 |
CASH AND CASH EQUIVALENTS, AT END OF PERIOD | 4,910 | 4,245 |
SUPPLEMENTAL INFORMATION: | ||
Cash paid during the period for interest | 703 | 185 |
Cash paid during the period for income taxes | $ 65 | $ 108 |
Description of Company and Summ
Description of Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Company and Summary of Significant Accounting Policies | NOTE 1 - DESCRIPTION OF COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Organization and Basis of Presentation Wireless Telecom Group, Inc., a New Jersey corporation, together with its subsidiaries (“we”, “us”, “our” or the “Company”), specializes in the design and manufacture of advanced radio frequency (“RF”) and microwave devices which enable the development, testing and deployment of wireless technology. The Company provides unique, highly customized and configured solutions which drive innovation across a wide range of traditional and emerging wireless technologies. Our customers include wireless carriers, aerospace companies, defense contractors, military and government agencies, satellite communication companies, network equipment manufacturers, tower companies, semiconductor device manufacturers, system integrators, neutral host providers and medical device manufacturers. Our products include components, modules, instruments, systems and software used across the lifecycle of wireless connectivity and communication development, deployment and testing. Our customers use these products in relation to commercial infrastructure development, the expansion and upgrade of distributed antenna systems, deployment of small cell technology, use of medical devices and private long-term evolution (“LTE”) and 5G networks. In addition, the Company’s products are used in the development and testing of satellite communication systems, radar systems, semiconductor devices, automotive electronics and avionics. The accompanying consolidated financial statements include the accounts of Wireless Telecom Group, Inc., doing business as and operating under the trade name, Noisecom, and its wholly owned subsidiaries including Boonton Electronics Corporation (“Boonton”), Microlab/FXR LLC (“Microlab”), Holzworth Instrumentation, Inc. (“Holzworth”), Wireless Telecommunications Ltd. and CommAgility Limited (“CommAgility”). They have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and balances have been eliminated in consolidation. In June 2020 the Company completed an internal reorganization and now presents its operations as one reportable segment. Prior to June 2020 the Company presented its operations in three reportable segments. The Company identifies segments in accordance with ASC 280 Segment Reporting Use of Estimates The accompanying financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. The most significant estimates and assumptions include management’s analysis in support of inventory valuation, accounts receivable valuation, valuation of deferred tax assets, returns reserves, warranty accruals, goodwill and intangible assets, estimated fair values of stock options and vesting periods of performance-based stock options and restricted stock. Concentrations of Credit Risk, Purchases and Fair Value Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Credit evaluations are performed on customers requiring credit over a certain amount. Credit risk is mitigated to a lesser extent through collateral such as letters of credit, bank guarantees or payment terms like cash in advance. For the twelve months ended December 31, 2020, no one customer accounted for more than 10% of the Company’s total consolidated revenues. For the twelve months ended December 31, 201,9 one CommAgility customer accounted for 24.8% of the Company’s total consolidated revenues. At December 31, 2020, one customer exceeded 10% of consolidated gross accounts receivable at 12.7%. At December 31, 2019 one customer exceeded 10% of consolidated gross accounts receivable at 12.9%. For the year ended December 31, 2020, two suppliers exceeded 10% of consolidated inventory purchases at 14% each. For the year ended December 31, 2019, three suppliers comprised or exceeded 10% of consolidated inventory purchases at 18% and 14% and 10%, respectively. Cash and Cash Equivalents Cash and cash equivalents represent deposits in banks and highly liquid investments purchased with maturities of three months or less at the date of purchase. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable and contract assets for unbilled receivables are stated at the amount owed by the customer, net of allowances for doubtful accounts, returns and rebates. Estimated allowances for doubtful accounts are reviewed periodically taking into account the customer’s recent payment history, the customer’s current financial statements and other information regarding the customer’s credit worthiness. Account balances are charged off against the allowance when it is determined the receivable will not be recovered. Inventories Inventories are stated at the lower of cost or net realizable value. Inventory cost is determined on an average cost basis. Net realizable value is based upon an estimated average selling price reduced by estimated costs of completion, disposal and transportation. Reductions in inventory valuation are included in cost of revenues in the accompanying Consolidated Statements of Operations and Comprehensive Income/Loss. Finished goods and work-in-process include material, labor and overhead expenses. The Company reviews inventory for excess and obsolescence based on best estimates of future demand, product lifecycle status and product development plans. The Company uses historical information along with these future estimates to reduce the inventory cost basis. Subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Inventory carrying value is net of inventory reserves of approximately $1.1 million as of December 31, 2020 and $1.0 million as of December 31, 2019. December 31, December 31, Inventories consist of (in thousands): 2020 2019 Raw materials $ 4,644 $ 4,023 Work-in-process 618 406 Finished goods 3,534 2,896 $ 8,796 $ 7,325 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets generally consist of income tax receivables, contract assets for unbilled receivables, prepaid insurance, prepaid maintenance agreements and the short term portion of debt issuance costs. The income tax receivable balance included in prepaid and other current assets was $1.2 million and $1.1 million as of December 31, 2020 and December 31, 2019, respectively. Property, Plant and Equipment Property, plant and equipment are reflected at cost, less accumulated depreciation. Upon application of acquisition accounting, property, plant and equipment are measured at estimated fair value as of the acquisition date to establish a new historical cost basis. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives for the property, plant and equipment are: Machinery and computer equipment/software 3-8 years Furniture and fixtures 5-7 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the estimated economic life of the improvement. Repairs and maintenance are charged to operations as incurred; renewals and betterments are capitalized. Business Combinations The Company uses the acquisition method of accounting for business combinations which requires the tangible and intangible assets acquired and liabilities assumed to be recorded at their respective fair market value as of the acquisition date. Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired. The fair values of the assets acquired and liabilities assumed are determined based upon the Company’s valuation and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is evaluated for impairment annually, or more frequently if events occur or circumstances change that would indicate that goodwill might be impaired, by first performing a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment. Based on that qualitative evaluation, if the Company determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise we perform a quantitative impairment test. The Company has three reporting units with goodwill – Holzworth, Microlab and CommAgility. The Company performed a qualitative assessment in the fourth quarter of 2020 of each reporting unit. The qualitative assessment of Holzworth and Microlab did not indicate any impairment of goodwill. As a result of declining demand of CommAgility’s signal processing hardware cards from a single customer and the particularly high uncertainty associated with the ultimate trajectory of the pandemic, including the degree to which governments continue to restrict business and personal activities, and the impact that uncertainty has on the growth of new software license and services revenue to offset the signal processing hardware sales decline, the Company performed a quantitative impairment test of the goodwill of the CommAgility reporting unit. For goodwill impairment testing using the quantitative approach, the Company estimates the fair value of the selected reporting unit using the income approach and the market approach. Fair value under the income approach is derived primarily through the use of a discounted cash flow model based on our best estimate of amounts and timing of future revenues and cash flows and our most recent business and strategic plans. Fair value under the market approach is derived by applying a multiple to our best estimate of future revenue. The Company applies equal weighting to the income approach and the market approach to arrive at an estimated fair value. The estimated fair value is compared to the carrying value of the reporting unit, including goodwill. If the fair value of the reporting unit exceeds the carrying value, no impairment charge is recorded. If the carrying value of the reporting unit exceeds the fair value an impairment charge is recorded to goodwill in the amount by which carrying value exceeds fair value. Both the income approach and market approach require judgmental assumptions about projected revenue growth, future operating margins, discount rates and terminal values over a multi-year period. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment. While the Company believes it has made reasonable estimates and assumptions to calculate the fair value of its reporting units, it is possible a material change could occur. In the fourth quarter of 2020, the Company recorded a goodwill impairment charge of $4.7 million related to the CommAgility reporting unit. The non-cash impairment charge was due to a number of factors that arose as part of our quantitative assessment, including an assessment of our historical results and the significant decline in hardware sales in 2020, the difficulty of predicting future customer demand, the uncertainty of future sales of 4G hardware cards, the uncertainty of the growth of 5G software and services revenues due to the early stages of 5G adoption for new technology and expectations for 5G deployments, the uncertainty of the continued future impacts of the COVID 19 pandemic on customer spending, and the potential for a more prolonged recovery for enterprise spending and longer-term investment. Despite the asset impairment charge the Company believes the markets in which CommAgility operates, specifically LTE and 5G private networks, have long term growth potential and the Company is committed to growing the revenue and profitability of the reporting unit. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of our impairment analysis. After recording the 2020 goodwill impairment charge, the Company’s consolidated goodwill balance as of December 31, 2020 was comprised of $1.4 million related to the Microlab reporting unit, $6.0 million related to the Holzworth reporting unit and $4.1 million related to the CommAgility reporting unit. As of December 31, 2019, the Company’s consolidated goodwill balance of $10.1 million was comprised of $1.4 million related to the Microlab reporting unit and $8.7 million related to the CommAgility reporting unit. Management’s qualitative assessment performed in the fourth quarter of 2019 did not indicate any impairment of goodwill. Intangible and Long-lived Assets Intangible assets include acquired technology, patents, non-competition agreements, customer relationships and tradenames. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to twelve years. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less costs to sell. The estimated useful lives of intangible and long-lived assets are based on many factors including assumptions regarding the effects of obsolescence, demand, competition and other economic factors, expectations regarding the future use of the asset, and our historical experience with similar assets. The assumptions used to determine the estimated useful lives could change due to numerous factors including product demand, market conditions, technological developments, economic conditions and competition. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually and more frequently if events occur or circumstances change that indicate an asset may be impaired. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: 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 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 categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The Company’s term loan and revolving credit facility bear interest at a variable interest rate plus an applicable margin and, therefore, carrying amount approximates fair value. We believe the carrying value of the loan obtained under the Paycheck Protection Program approximates fair value due to the expected short term nature of the loan. During the fourth quarter of 2020, the Company recorded a goodwill impairment charge of $4.7 million related to the CommAgility reporting unit. The determination of the impairment charge was based on the income and market approaches which are based on the present value of future cash flows and an estimated multiple of future revenues, respectively. The determination of the impairment charge was based on Level 3 valuation inputs. Contingent Consideration Under the terms of the Holzworth Share Purchase Agreement (as defined in Note 2) the Company is required to pay additional purchase price in the form of deferred purchase price payments and an earnout if certain financial targets are achieved for the years ending December 31, 2020 and December 31, 2021 (see Note 2). As of the acquisition date, the Company estimated the fair value of the deferred purchase price and earnout remaining to be paid related to the 2020 and 2021 financial targets to be $660,000 and $2.4 million, respectively. The earnout may be paid in cash or common stock at the Company’s option. The Company is required to reassess the fair value of the contingent consideration at each reporting period. The significant inputs used in this fair value estimate include estimated gross revenues and Adjusted EBITDA, as defined in the Holzworth Share Purchase Agreement, and scenarios for the earnout periods for which probabilities are assigned to each scenario to arrive at a single estimated outcome. The estimated outcome is then discounted based on the individual risk analysis of the liability. The contingent consideration liabilities are considered a Level 3 fair value measurement. Due to the better than expected financial performance of the Holzworth reporting unit during fiscal 2020, the Company recorded an increase to the contingent consideration liabilities in the amount of $1.1 million in the fourth quarter of 2020. The adjustment was recorded as a loss on change in fair value of contingent consideration in the Consolidated Statement of Operations and Comprehensive Income/(Loss). Foreign Currency Translation Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where the local currency is the functional currency, are translated from foreign currencies into U.S. dollars at period-end exchange rates while income and expenses are translated at the weighted average spot rate for the periods presented. Translation gains or losses related to net assets located outside the U.S. are shown as a component of accumulated other comprehensive income in the Consolidated Statements of Changes in Shareholders’ Equity. Aggregate foreign currency gains and losses, such as those resulting from the settlement of receivables or payables in a currency other than the subsidiary’s functional currency, are recorded in the Consolidated Statements of Operations and Comprehensive Income/(Loss) (included in other income/expense). Foreign currency transaction gains were $64,000 in fiscal 2020. Foreign currency transaction losses in in fiscal 2019 were not material. Other Comprehensive Income/(Loss) Other comprehensive income/(loss) is recorded directly to a separate section of shareholders’ equity in accumulated other comprehensive income and includes unrealized gains and losses excluded from net income/(loss). These unrealized gains and losses consist of changes in foreign currency translation. Research and Development Costs Research and development (R&D) costs are charged to operations when incurred. R&D costs include salaries and benefits, depreciation expense on equipment used for R&D purposes and third-party material and consulting costs, if clearly related to an R&D activity. Salaries and benefits of engineers working on customer contracts for which the Company is earning services or consulting revenues are allocated to costs of revenues. The amounts charged to operations for R&D costs for the years ended December 31, 2020 and 2019 were $6.4 million and $5.9 million, respectively. Advertising Costs Advertising expenses are charged to operations during the year in which they are incurred and aggregated to $235,000 and $91,000 for the years ended December 31, 2020 and 2019, respectively. Stock-Based Compensation The Company follows the provisions of Accounting Standards Codification (“ASC”) 718, “Compensation – Stock Compensation” which requires that compensation expense be recognized, based on the fair value of the equity awards on the date of grant. The fair value of restricted share awards and restricted stock unit awards is determined using the market value of our common stock on the date of the grant. The fair value of stock options at the date of grant are estimated using the Black-Scholes option pricing model. When performance-based stock options are granted, the Company takes into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107) when determining assumptions. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of our shares using daily price observations over an observation period that approximates the expected life of the options. The risk-free rate is based on the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. The Company accounts for forfeitures for all equity awards when they occur. Management estimates are necessary in determining compensation expense for stock options with performance-based vesting criteria. Compensation expense for this type of stock-based award is recognized over the period from the date the performance conditions are determined to be probable of occurring through the implicit service period, which is the date the applicable conditions are expected to be met. If the performance conditions are not considered probable of being achieved, no expense is recognized until such time as the performance conditions are considered probable of being met, if ever. If the award is forfeited because the performance condition is not satisfied, previously recognized compensation cost is reversed. Management evaluates performance conditions on a quarterly basis. Income Taxes The Company records deferred taxes in accordance with ASC 740, “Accounting for Income Taxes”. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and determines the necessity for a valuation allowance. The Company evaluates which portion, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating loss carry-forwards. Under ASC 740, the Company must recognize and disclose uncertain tax positions only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The amounts recognized in the financial statements attributable to such position, if any, are recorded if there is a greater than 50% likelihood of being realized upon the ultimate resolution of the position. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition or disclosure in its consolidated financial statements. Earnings/(Loss) Per Common Share Basic earnings/(loss) per share is calculated by dividing net income/(loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings/(loss) per share is calculated by dividing net income/(loss) available to common shareholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options using the treasury stock method, the weighted average number of unvested restricted shares, the weighted-average number of restricted stock units and the weighted average number of warrants to purchase common stock outstanding for the period. Shares from stock options and warrants are included in the diluted earnings per share calculation only when options exercise prices are lower than the average market value of the common shares for the period presented. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding. For the Years Ended December 31, 2020 2019 Weighted average common shares outstanding 21,656,906 21,110,632 Potentially dilutive equity awards 313,341 522,996 Weighted average common shares outstanding, assuming dilution 21,970,247 21,633,628 The weighted average number of options and warrants to purchase common stock not included in diluted loss per share because the effects are anti-dilutive, or the performance condition was not met in 2020 was 3,114,792. The estimated number of shares issuable under the terms of the Holzworth earnout, if the entire earnout was paid in shares of common stock, (see Note 2) at December 31, 2020 was 1,559,807. The weighted average number of options to purchase common stock not included in diluted loss per share in 2019, because the effects are anti-dilutive or the performance condition was not met, was 1,324,548. Recent Accounting Pronouncements Adopted in 2020 In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software, Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. |
Acquisition of Holzworth
Acquisition of Holzworth | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Acquisition of Holzworth | NOTE 2 – Acquisition of Holzworth On November 13, 2019 the Company entered into a Share Purchase Agreement with Holzworth Instrumentation Inc. (“Holzworth”), its founders and shareholders (collectively, the “Sellers”), as amended by a First Amendment to Share Purchase Agreement, dated January 31, 2020 and a Second Amendment to Share Purchase Agreement dated February 19, 2021 (collectively, the “Share Purchase Agreement”). On February 7, 2020, the Company completed the acquisition (the “Acquisition”) of all of the outstanding shares of Holzworth, from the Sellers. Holzworth instruments which include signal generators and phase noise analyzers are used by government labs, aerospace and defense companies, the semiconductor industry, and network equipment providers, among others, in research and automated test environments. Holzworth is a complimentary business for our Boonton and Noisecom brands with a common customer base and channel partners. For the twelve months ended December 31, 2020, net revenues of $8.8 million, and operating income of $1.4 million, respectively, was included in the Consolidated Statements of Operations and Comprehensive Income/(Loss) related to the Holzworth business, representing the results from the date of acquisition. For the twelve months ended December 31, 2020, the Company recorded $243,000 of transaction expenses related to the Acquisition and these expenses were recognized in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income/(Loss). The aggregate purchase price for the Acquisition is a maximum of $17.0 million, consisting of payments in cash and stock, a working capital adjustment, and contingent consideration in the form of deferred purchase price payments and an earnout. Additionally, the parties made a 338(h)(10) election to treat the Acquisition as a purchase and sale of assets, and the Company has agreed to pay any incremental taxes of Sellers resulting from that election. At closing, a portion of the purchase price was paid to the Sellers through the issuance of 347,319 shares of the Company’s common stock, valued at approximately $500,000 based upon a 90-day volume weighted average price for shares of stock of the Company. The shares issued to the Sellers are subject to Lock-up and Voting Agreements. During 2020, the Company paid $8.3 million in net cash to the Sellers consisting of $7.2 million in cash at close, $600,000 in indemnification holdback payments and $750,000 in deferred purchase price reduced by $292,000 of a working capital adjustment that was owed to the Company by the Sellers. The final indemnification holdback payment of $200,000 is due on March 31, 2021. The Sellers earned a second deferred purchase price payment of $750,000 by way of exceeding $1.25 million in EBITDA (as defined in the Share Purchase Agreement) for the twelve months ended December 31, 2020. Additionally, the Sellers earned $3.4 million in additional purchase price in the form of an earnout (“Year 1 Earnout”) which was also based on Holzworth’s EBITDA for the twelve months ended December 31, 2020. On February 19, 2021, the Company entered into the Second Amendment to Share Purchase Agreement (the “Second Amendment”) with Holzworth. The Second Amendment, among other things, converted the second deferred purchase price of $750,000 into unsecured seller notes with interest at an annual rate of 6.5% starting from April 1, 2021 until final payment. The payment date has been changed from March 31, 2021 to three equal installments of $250,000, plus accrued interest, due on July 1, 2021, October 1, 2021 and January 1, 2022. Additionally, the parties amended the payment dates of the earnout consideration. The payment date of the first earnout payment based on the financial results of the calendar year ended 2020 (“Year 1 Earnout”) has been amended from March 31, 2021 to (i) six (6) equal quarterly installments of 10% of the Year 1 Earnout payable on the last business day of each calendar quarter between June 30, 2021 and September 30, 2022 and (ii) one (1) installment payment equal to 40% of the Year 1 Earnout on December 31, 2022. The Year 1 Earnout is payable in cash or shares of the Company’s common stock based on the 90 trading day volume weighted average price immediately preceding final determination of the Year 1 Earnout or $2.19 per share. The estimated payment for the Year 1 Earnout is $3.4 million which is recorded in accrued expenses and other current liabilities in the Consolidated Balance Sheet as of December 31, 2020. The Company may also be required to pay additional amounts in cash and stock as earnout consideration based on Holzworth’s EBITDA for the fiscal year ending December 31, 2021 (“Year 2 Earnout”). The Year 2 Earnout will be equal to two times the amount, if any, by which Holzworth’s EBITDA for fiscal year December 31, 2021 exceeds Holzworth’s EBITDA for fiscal year 2020. Pursuant to the Second Amendment to the Share Purchase Agreement the Year 2 Earnout is payable in 4 equal quarterly installments payable on the last business day of each calendar quarter between March 31, 2022 and December 31, 2022. The aggregate earnout payments cannot exceed $7.0 million. Pursuant to the Share Purchase Agreement the Company entered into a lock-up and voting agreement (the “Lock-up and Voting Agreement”) with each of the Sellers. Pursuant to the Lock-up and Voting Agreement, each Seller agrees to restrict the sale, assignment, transfer, encumbrance or other disposition of its portion of the Stock Consideration (the “Lock-up Shares”). For a period commencing on the closing date of the Acquisition (the “Effective Date”) and ending on the date which is 36 calendar months following the Effective Date, each Seller agreed that, without the prior written consent by the Company, such Seller would not sell, assign, transfer, encumber or otherwise dispose of the Lock-up Shares or enter into any swap, option or short sale, among other transactions. Upon the prior written consent of the Company, a Seller may transfer Lock-up Shares as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the Seller or a family member; provided In addition, each Seller, subject to certain limitations, agreed, among other things, to appear at each meeting of the shareholders of the Company and vote all of such Seller’s Lock-up Shares (a) in favor or against any proposal presented to the shareholders in the same manner that the Company’s Board of Directors (the “Board”) recommends shareholders vote on such proposal and (b) in favor of any proposal presented to the shareholders with respect to an action of the Company which the Board has approved, but as to which the Board has not made any recommendation, including in favor of any proposal to adjourn or postpone any meeting of the Company’s shareholders if such adjournment or postponement is conducted in accordance with the terms of the Lock-up and Voting Agreement. To the extent any shares of Company common stock are issued in payment of any Earnout Consideration (as defined in the Share Purchase Agreement) in accordance with the terms of the Share Purchase Agreement, such shares shall be subject to all applicable transfer restrictions, voting and other provisions set forth in the Lock-up and Voting Agreement, with the Effective Date with respect to such shares being the date such shares are issued; provided that, to the extent the portion of the first $1.5 million of Earnout Consideration that is paid in cash represents less than 30% of such Earnout Consideration, the portion of shares of Company common stock issued as Earnout Consideration constituting the difference between the cash percentage paid and 30% of the first $1.5 million of Earnout Consideration shall not be considered Lock-Up Shares. In addition, in the Second Amendment, the parties added a requirement that any earned but unpaid earnout consideration will be accelerated in the event the Company desires to enter into a material asset or equity acquisition in the future. The acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations As of September 30, 2020, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed were completed, including the validation of the underlying cash flows used to determine the fair value of the identified intangible assets and contingent consideration. The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from the Acquisition along with measurement period adjustments recorded from the preliminary purchase price allocation to September 30, 2020 (in thousands): Amounts Recognized as of Acquisition Date Measurement Period Adjustments Amounts Recognized as of Acquisition Date Cash at close $ 7,219 $ - $ 7,219 Equity issued at close 465 - 465 Purchase price holdback 800 - 800 Working capital adjustment (295 ) 3 (292 ) Deferred purchase price 1,300 110 1,410 Contingent consideration 555 1,885 2,440 Total purchase price 10,044 1,998 12,042 Cash 30 - 30 Accounts receivable 485 29 514 Inventory 1,218 220 1,438 Intangible assets 4,500 (240 ) 4,260 Other assets 960 7 967 Fixed assets 144 - 144 Accounts payable (129 ) - (129 ) Accrued expenses (425 ) (4 ) (429 ) Deferred revenue (13 ) - (13 ) Other long term liabilities (740 ) - (740 ) Net assets acquired 6,030 12 6,042 Goodwill $ 4,014 $ 1,986 $ 6,000 Goodwill is calculated as the excess of consideration paid over the net assets acquired and represents synergies, assembled workforce, organic growth and other benefits that are expected to arise from integrating Holzworth into our operations. The goodwill recorded in this transaction is expected to be tax deductible. The following unaudited pro forma information presents the Company’s operations as if the Holzworth acquisition and related financing activities had occurred on January 1, 2019. The pro forma information includes the following adjustments (i) amortization of acquired intangible assets; (ii) interest expense incurred in connection with the Term Loan Facility (described in further detail in Note 3) used to finance the acquisition of Holzworth; and (iii) inclusion of acquisition-related expenses in the earliest period presented. The amounts related to Holzworth included in the following unaudited pro forma information are based on their historical results and, therefore, may not be indicative of the actual results when operated as part of the Company. The pro forma adjustments represent management’s best estimates based on information available at the time the pro forma information was prepared and may differ from the adjustments that may actually have been required. Accordingly, the unaudited pro forma financial information should not be relied upon as being indicative of the results that would have been realized had the Holzworth acquisition occurred as of the date indicated or that may be achieved in the future. The following table presents the unaudited pro forma consolidated results of operations for the Company for the twelve months ended December 31, 2020 and 2019 as though the Acquisition had been completed as of January 1, 2019 (in thousands, except per share amounts): 2020 Pro-forma 2019 Pro-forma Net revenues $ 41,845 $ 54,761 Net income/(loss) $ (8,212 ) $ (1,754 ) Earnings per diluted share $ (0.38 ) $ (0.08 ) |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 3 – Debt Debt consists of the following (in thousands): December 31, 2020 Revolver at LIBOR plus margin $ - Term loan at LIBOR plus margin 8,316 Less: Debt issuance costs, net of amortization (831 ) Less: Fair value of warrants, net of amortization (123 ) Paycheck Protection Program loan 2,045 Total Debt 9,407 Less: Debt maturing within one year (512 ) Non-current portion of long term debt $ 8,895 Term loan payments by period (in thousands): 2021 $ 512 2022 2,129 2023 84 2024 84 2025 7,552 Total $ 10,361 In connection with the Holzworth acquisition, on February 7, 2020, the Company, as borrower, and its subsidiaries, as guarantors, and Muzinich BDC, Inc., as lender (“Muzinich”), entered into a Term Loan Facility, which provides for a term loan in the principal amount of $8.4 million (the “Initial Term Loan”). All proceeds of the Initial Term Loan were used to fund the cash portion of the purchase price for the Holzworth acquisition. Principal payments on the Initial Term Loan are $21,000 per quarter with a balloon payment at maturity which is February 7, 2025. The Term Loan Facility includes an upfront fee of 2.50% of the aggregate principal amount of the Initial Term Loan. In connection with the Term Loan Facility, the Company incurred costs of $1.0 million, including the aforementioned 2.5% upfront fee to Muzinich, which were recorded as a reduction of the carrying amount of the debt and are being amortized over the term of the loan. On May 4, 2020, the Company entered into the First Amendment to the Term Loan Facility which, among other things, amended the definition of “Indebtedness” to include the PPP loan as long as the proceeds are used for allowable purposes under the CARES Act, the receipt of the loan does not violate the Credit Facility and the Company submits an application for forgiveness and substantially all of the loan is forgiven. On February 25, 2021, the Company and its subsidiaries entered into the Second Amendment to the Credit Agreement and Limited Waiver (“Amendment 2”) with Muzinich, in which Muzinich agreed to waive the Company’s obligation to comply with the consolidated leverage ratio and fixed charge coverage ratio financial covenants in the Term Loan Facility for the fiscal quarter ending December 31, 2020. We were not in compliance with such covenants primarily as a result of the impact the COVID-19 pandemic had on our consolidated financial results. Amendment 2, among other things, amends the definition of consolidated EBITDA to include certain cash tax benefits related to our UK tax jurisdiction and reduced our consolidated leverage ratio for the twelve month periods ended September 30, 2021 from 3.00 to 2.75, December 31, 2021 from 2.75 to 2.25, March 31, 2022 from 2.50 to 2.00 and June 30, 2022 from 2.25 to 2.00. Additionally, the interest rate margin was increased from 7.25% to 9.25% effective January 1, 2021 and will step down to 8.50% and 7.25% upon the Company achieving consolidated EBITDA on a trailing twelve-month basis of $4.0 million and $6.3 million, respectively. Muzinich and the Company also agreed on an excess cash flow payment of $428,000 and Muzinich provided consent for the Company to change the deferred purchase price payments to and enter into notes with the Holzworth sellers in the amount of $750,000, as described below. The Company may prepay the Initial Term Loan at any time. Prepayments made prior to (a) February 7, 2022 are subject to a prepayment premium in the amount of 2.0% of the prepaid principal amount and (b) February 7, 2023 are subject to a prepayment premium in the amount of 1.0% of the prepaid principal amount. The Company is required to make prepayments of the Initial Term Loan with the proceeds of certain asset dispositions, insurance recoveries and extraordinary receipts, subject to specified reinvestment rights. The Company is also required to make prepayments of the Initial Term Loan upon the issuance of certain indebtedness and to make an annual prepayment based upon the Company’s excess cash flow. Mandatory prepayments with asset sale, insurance or condemnation proceeds and excess cash flow may be made without penalty. Mandatory prepayments with the proceeds of indebtedness are subject to the same prepayment penalties as are applicable to voluntary prepayments. The Term Loan Facility provides for an additional $11.6 million term loan (the “Second Term Loan”) to be used for a second unannounced acquisition opportunity (the “Additional Acquisition”). There can be no assurance that the Additional Acquisition will be completed. In the event the Additional Acquisition is completed, the Second Term Loan will be made available to the Company on the same terms and conditions as the Initial Term Loan, including interest rate, amortization schedule and financial covenants, subject to the payment of an additional upfront fee and satisfaction of customary conditions to funding. The Term Loan Facility is secured by liens on substantially all of the Company’s and its subsidiaries’ assets including a pledge of the equity interests in the Company’s subsidiaries. The Term Loan Facility contains customary affirmative and negative covenants for a transaction of this type, including, among others, the provision of annual, quarterly and monthly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters, restrictions on incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, entering into affiliate transactions and asset sales. In addition, the Company must maintain certain financial covenants typical for this type of arrangement, including a consolidated leverage ratio, a consolidated fixed charge coverage ratio and minimum liquidity of its foreign subsidiaries. The consolidated leverage ratio, as described above, is defined as the ratio of total consolidated indebtedness, as defined, to consolidated EBITDA, as defined. Prior to Amendment 2, the required leverage ratio started at 4.75 to 1.0 for the twelve month periods ended March 31, 2020 and June 30, 2020, and decreased in various increments to 4.0 to 1.0 for the twelve months ended September 30, 2020, 3.75 to 1.0 for the twelve months ended December 31, 2020, 2.75 to 1.0 for the twelve months ended December 31, 2021 and 2.0 to 1.0 for the twelve months ended December 31, 2022 and thereafter. The consolidated fixed charge coverage ratio is the ratio of consolidated EBITDA, as defined, less consolidated capital expenditures and cash income taxes paid to consolidated fixed charges, as defined, calculated on a twelve-month basis. The consolidated fixed charge coverage ratio for the twelve month periods ended March 31, 2020, June 30, 2020 and September 30, 2020 must be 1.35 to 1 and increases in various increments on a quarterly basis to 1.5 to 1.0 for the twelve month period ended December 31, 2020 and 2021, and to 1.75 to 1.0 for the 12 months ending December 31, 2022 and thereafter. Lastly, the Company must maintain minimum liquidity, defined as cash and availability under the UK borrowing base, as defined, of $1.0 million over any trailing four-week period until such time as the foreign subsidiary has positive EBITDA, as defined, for three consecutive quarters and the Holzworth deferred purchase price has been paid in full. The Term Loan Facility also provides for a number of events of default, including, among others, nonpayment, bankruptcy, inaccuracy of representations and warranties, breach of covenant, change in control, entry of final judgement or order, breach of material contracts, and as long as the Company’s consolidated leverage ratio is greater than 1.0 to 1.0 (as calculated in accordance with the terms of the Term Loan Facility), the cessation of service of any two of Tim Whelan, Michael Kandell or Daniel Monopoli as Chief Executive Officer, Chief Financial Officer or Chief Technology Officer, respectively, of the Borrower without a satisfactory replacement within 60 days. Any exercise of remedies by Muzinich is subject to compliance with the intercreditor agreement entered into at the closing of the Term Loan Facility among the Company, Muzinich and Bank of America, N.A., as lender under the Credit Facility referenced below. The Company entered into a Credit Facility with Bank of America, N.A. (the “Lender”) on February 16, 2017 (the “Credit Facility”), which provided for a term loan in the aggregate principal amount of $760,000 (the “Term Loan”) and an asset based revolving loan (the “Revolver”), which is subject to a Borrowing Base Calculation (as defined in the Credit Facility) of up to a maximum availability of $9.0 million (“Revolver Commitment Amount”). The borrowing base is calculated as a percentage of eligible accounts receivable and inventory, as defined, subject to certain caps and limits. The borrowing base is calculated on a monthly basis and interest is calculated at LIBOR plus a margin. The proceeds of the Term Loan and Revolver were used to finance the acquisition of CommAgility in 2017. In connection with the Holzworth acquisition, on February 7, 2020, the Company and certain of its subsidiaries (the “Borrowers”), and Bank of America, N.A. entered into Amendment No. 5 (“Amendment 5”) to the Credit Facility. By entering into Amendment 5, Holzworth, together with CommAgility Limited, became borrowers under the Credit Facility. The obligations of the Borrowers under the Credit Facility are guaranteed by Wireless Telecom Group, Ltd. CommAgility Limited and Wireless Telecom Group, Ltd. are both wholly owned subsidiaries of the Company. Amendment 5 (a) effected certain modifications to the Credit Facility to accommodate the Holzworth acquisition, the Company’s incurrence of the Initial Term Loan and the granting of the related liens and security interests, (b) subject to the satisfaction of certain conditions precedent, made available to CommAgility an asset based revolving loan, subject to a borrowing base calculation applicable to CommAgility’s assets, of up to a maximum availability of $5.0 million (the “UK Revolver Commitment”), (c) reduced the interest rate margin applicable to revolving loans made under the Credit Facility from a range of 2.75% to 3.25% to a range of 2.00% to 2.50%, based on the Borrowers’ Fixed Charge Coverage Ratio (as defined in the Credit Facility) of the most recently completed fiscal quarter, (d) extended the Revolver Termination Date to March 31, 2023 and (e) conditioned the Borrowers’ ability to make certain debt payments under the Term Loan Facility (described above) upon compliance with a liquidity test. In all other material respects, the Credit Facility remains unchanged. Effectiveness of Amendment 5 was conditioned upon, among other things, the prepayment of the remaining principal balance ($304,000) of the $760,000 term loan made available under the Credit Facility and the payment of a closing fee in the amount of $25,000. The Borrowers satisfied all such conditions on February 7, 2020. In connection with the Amendment the Company incurred costs of $270,000 which are capitalized as other current and non-current assets in the Consolidated Balance Sheets and are being amortized over the term of the revolver. On May 4, 2020, the Company, its subsidiaries and Bank of America entered into Amendment No. 6 which, among other things, amended the definition of “Debt” to include the PPP loan as long as the proceeds are used for allowable purposes under the CARES Act and the Company promptly submits an application for forgiveness and substantially all of the loan is forgiven. On February 25, 2021, the Company, its subsidiaries and Bank of America entered into Amendment No. 7 which revised the Credit Facility to accommodate the changes to the deferred purchase price payments to and notes with the Holzworth sellers as described above and provided Bank of America’s consent to the Company entering into the Muzinich Second Amendment, as described above. As of December 31, 2020, the interest rate on the Term Loan Facility was 8.25% and the interest rate on the Revolver was 2.15%. The Company had zero drawn on the asset based revolver as of December 31, 2020. On May 4, 2020, the Company received $2.0 million pursuant to a loan from Bank of America N.A. under the Paycheck Protection Program (“PPP”) of the 2020 Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) administered by the Small Business Association (“SBA”). The loan has an interest rate of 1% and a term of 24 months. A repayment schedule has not yet been provided by Bank of America. Accordingly, the full amount of the term loan has been shown as due in May 2022. Funds from the loan may only be used for certain purposes, including payroll, benefits, rent and utilities. The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount of the loan upon application to the SBA for forgiveness by the Company. The loan is evidenced by a promissory note, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The Company may prepay the loan at any time prior to maturity with no prepayment penalties. As of December 31, 2020, the Company has applied for forgiveness of the loan, however, has elected to account for the loan in accordance with Accounting Standard Codification 470 Debt Issuance of Stock Warrants Pursuant to the Term Loan Facility, the Company issued a Warrant, dated February 7, 2020 (the “Warrant”), to Muzinich. Under the Warrant, Muzinich has the right to purchase 266,167 shares of common stock of the Company at an exercise price of $1.3923 per share (an aggregate value of approximately $370,588), based on a 90-day volume weighted average price for shares of stock of the Company (the “Warrant Stock”). The Warrant is exercisable for an indefinite period from the date of the Warrant and may be exercised on a cashless basis. The number of shares of common stock deliverable upon exercise of the Warrant is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events. Additionally, the exercise price may be adjusted based on a formula in the event of a common stock offering by the Company at an offering price below fair market value, as defined, and below exercise price. In connection with the issuance of the Warrant, the Company granted Muzinich one demand registration right and piggyback registration rights with respect to the Warrant Stock, subject to certain exceptions. If the Additional Acquisition (as defined in Term Loan Facility The stock warrants issued to Muzinich are classified as equity. The fair value of the warrants, as calculated using the Black Scholes model as of the issuance date, was approximately $150,000 and was recorded as a reduction to the carrying value of the debt. The significant inputs included in the Black Scholes calculation were a risk free rate of 1.41%, volatility of 48.7% and the stock price on date of grant of $1.34. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 4 - LEASES The Company’s lease agreements consist of building leases for its operating locations and office equipment leases for printers and copiers with lease terms that range from less than 12 months to 8 years. At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. The Company’s leases for office equipment such as printers and copiers contain lease and non-lease components (i.e. maintenance). The Company accounts for lease and non-lease components of office equipment as a single lease component. All of the Company’s leases are operating leases and are presented as right of use lease asset, short term lease liability and long term lease liability on the Consolidated Balance Sheets as of December 31, 2020 and 2019. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rate. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease term and is included in cost of revenues and general and administrative expenses on the Consolidated Statement of Operations and Comprehensive Income/(Loss). An initial right-of-use asset of $1.9 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard on January 1, 2019. With our acquisition of Holzworth on February 7, 2020, we acquired a right-of-use asset of $789,000. There have been no other right-of-use assets recognized since the date of adoption of the new lease standard. Cash paid for amounts included in the present value of operating lease liabilities was $648,000 and $508,000 during the twelve months ended December 31, 2020 and 2019, respectively, and is included in operating cash flows. Operating lease costs were $1.0 million and $892,000 during the twelve months ended December 31, 2020 and 2019, respectively. The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of December 31, 2020. (in thousands) December 31, 2020 Maturity of Lease Liabilities 2021 $ 619 2022 637 2023 276 2024 158 2025 163 Thereafter 69 Total undiscounted operating lease payments 1,922 Less: imputed interest (188 ) Present Value of operating lease liabilities $ 1,734 Balance sheet classification Current lease liabilities $ 534 Long-term lease liabilities 1,200 Total operating lease liabilities $ 1,734 Other information Weighted-average remaining lease term (months) 44 Weighted-average discount rate for operating leases 5.88 % |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 5 – REVENUE Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that transferred at a point in time accounted for approximately 99% of the Company’s total revenue for the twelve months ended December 31, 2020 and 2019. Nature of Products and Services Hardware The Company generally has one performance obligation in its arrangements involving the sales of radio frequency solutions, digital signal processing hardware, power meters, analyzers, noise/signal generators, phase noise analyzers and other components. When the terms of a contract include the transfer of multiple products, each distinct product is identified as a separate performance obligation. Generally, satisfaction occurs when control of the promised goods is transferred to the customer in exchange for consideration in an amount for which we expect to be entitled. Generally, control is transferred when legal title of the asset moves from the Company to the customer. We sell our products to a customer based on a purchase order, and the shipping terms per each individual order are primarily used to satisfy the single performance obligation. However, in order to determine control has transferred to the customer, the Company also considers: ● when the Company has a present right to payment for the asset ● when the Company has transferred physical possession of the asset to the customer ● when the customer has the significant risks and rewards of ownership of the asset ● when the customer has accepted the asset Software Arrangements involving licenses of software in the CommAgility brand may involve multiple performance obligations, most notably subsequent releases of the software. The Company has concluded that each software release in a multiple deliverable arrangement involving CommAgility software licenses is a distinct performance obligation and, accordingly, transaction price is allocated to each release when the customer obtains control of the software. Performance obligations that are not distinct at contract inception are combined. Specifically, with the Company’s sales of software, contracts that include customization may result in the combination of the customization services with the license as one distinct performance obligation and recognized over time. The duration of these performance obligations are typically one year or less. Services Arrangements involving calibration and repair services of the Company’s products are generally considered a single performance obligation and are recognized as the services are rendered. Shipping and Handling Shipping and handling activities performed after the customer obtains control are accounted for as fulfillment activities and recognized as cost of revenues. Significant Judgments For the Company’s more complex software and services arrangements significant judgment is required in determining whether licenses and services are distinct performance obligations that should be accounted for separately, or, are not distinct and thus accounted for together. Further, in cases where we determine that performance obligations should be accounted for separately, judgment is required to determine the standalone selling price for each distinct performance obligation. Certain of the Company shipments include a limited return right. In accordance with Topic 606 the Company recognizes revenue net of expected returns. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract assets (unbilled revenue) or contract liabilities (deferred revenue) on the Company’s Consolidated Balance Sheet. The Company records a contract asset when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Unbilled revenue is $260,000 and $147,000 as of December 31, 2020 and 2019, respectively, and recorded in prepaid expenses and other current assets. Deferred revenue is $924,000 and $42,000 as of December 31, 2020 and 2019, respectively. The increase in deferred revenue from the prior year is primarily due to billings in advance of revenue recognition for certain CommAgility projects involving multiple performance obligations. Disaggregated Revenue We disaggregate our revenue from contracts with customers by product family and geographic location as we believe it best depicts how the nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below (in thousands). Twelve Months Ended Twelve Months Ended Total net revenues by revenue type Passive and active RF solutions $ 17,633 $ 21,830 Noise generators and components 13,356 6,198 Power meters and analyzers 5,737 6,109 Signal processing hardware 1,672 13,013 Software licenses 1,284 14 Services 2,066 1,757 Total net revenue $ 41,748 $ 48,921 Total net revenues by geographic areas Americas $ 31,329 $ 30,161 EMEA 6,329 16,500 APAC 4,090 2,260 Total net revenue $ 41,748 $ 48,921 Net revenues are attributable to a geographic area based on the destination of the product shipment. The majority of shipments in the Americas are to customers located within the United States. For the years ended December 31, 2020 and 2019, sales in the United States amounted to $30.6 million and $30.0 million, respectively. For the year ended December 31, 2020 shipments to the EMEA region were largely concentrated in the UK, Russia and France. Shipments to the UK, Russia and France in 2020 amounted to $1.7 million, $897,000 and $859,000, respectively. For the year ended December 31, 2019 shipments to the EMEA region were largely concentrated in the UK, Germany and Italy. Shipments to the UK, Germany and Italy in 2019 amounted $12.7 million, $737,000 and $506,000, respectively. The largest concentration of shipments in the APAC region is to China. For the years ended December 31, 2020 and 2019, shipments to China amounted to $2.0 million and $1.3 million, of all shipments to the APAC region, respectively. There were no other shipments significantly concentrated in one country in the APAC region. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 6 - GOODWILL AND INTANGIBLE ASSETS Goodwill consists of the following (in thousands): Holzworth Microlab CommAgility Total Balance as of January 1, 2019 $ - $ 1,351 $ 8,427 $ 9,778 Foreign currency translation - - 291 291 Balance as of December 31, 2019 - 1,351 8,718 10,069 Holzworth acquisition 6,000 - - 6,000 Goodwill impairment - - (4,742 ) (4,742 ) Foreign currency translation - - 185 185 Balance as of December 31, 2020 $ 6,000 $ 1,351 $ 4,161 $ 11,512 Intangible assets consist of the following (in thousands): December 31, 2020 Gross Carrying Amount Accumulated Amortization Foreign Exchange Translation Net Carrying Amount Customer relationships $ 5,075 $ (2,564 ) $ 121 $ 2,632 Patents 615 (491 ) 26 150 Proprietary technology 1,550 (142 ) - 1,408 Non-compete agreements 1,107 (1,150 ) 43 - Holzworth tradename 400 (31 ) - 369 CommAgility tradename 629 - 54 683 Total $ 9,376 $ (4,378 ) $ 244 $ 5,242 December 31, 2019 Gross Carrying Amount Accumulated Amortization Foreign Exchange Translation Net Carrying Amount Customer relationships $ 2,766 $ (1,644 ) $ 113 $ 1,235 Patents 615 (365 ) 25 275 Non-compete agreements 1,107 (1,101 ) 43 49 CommAgility tradename 629 - 31 660 Total $ 5,117 $ (3,110 ) $ 212 $ 2,219 Amortization of acquired intangible assets was $1.3 million and $1.1 million for the twelve months ended December 31, 2020 and 2019, respectively. Amortization of proprietary technology is included in costs of revenues in the Consolidated Statements of Operations and Comprehensive Income/(Loss). Amortization of all other acquired intangible assets is included in general and administrative expenses. The estimated future amortization expense related to intangible assets is as follows as of December 31, 2020 (in thousands): 2021 $ 1,307 2022 665 2023 573 2024 573 2025 573 Thereafter 868 Total $ 4,559 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 7 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, consist of the following as of December 31 (in thousands): 2020 2019 Machinery & computer equipment/software $ 9,085 $ 8,662 Furniture & fixtures 483 461 Leasehold improvements 1,358 1,331 Gross property, plant and equipment 10,926 10,454 Less: Accumulated depreciation 9,102 8,307 Net property, plant and equipment $ 1,824 $ 2,147 Depreciation expense of $1.1 million and $841,000 was recorded for the years ended December 31, 2020 and 2019, respectively. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | NOTE 8 - OTHER ASSETS Other assets consist of the following as of December 31 (in thousands): 2020 2019 Product demo assets $ 187 $ 128 Debt issuance costs - Revolver 127 91 Deferred costs 82 82 Income tax receivable 65 230 Security deposit 63 50 Deferred S3 costs - 255 Other 37 38 Total $ 561 $ 874 Product demo assets are net of accumulated amortization expense of $397,000 and $317,000 as of December 31, 2020 and 2019, respectively. Amortization expense related to demo assets was $84,000 and $249,000 in 2020 and 2019, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses And Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | NOTE 9 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following as of December 31 (in thousands): 2020 2019 Holzworth earnout $ 3,423 $ - Holzworth deferred purchase price 950 - Payroll and related benefits 864 308 Commissions 605 430 Goods received not invoiced 458 346 Professional fees 331 464 Sales and use and VAT tax 315 355 Return reserve 212 199 Warranty reserve 140 160 Bonus 123 126 Harris arbitration liability 116 49 Severance - 102 Other 460 118 Total $ 7,997 $ 2,657 |
Accounting for Stock Based Comp
Accounting for Stock Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Accounting for Stock Based Compensation | NOTE 10 - ACCOUNTING FOR STOCK BASED COMPENSATION The Company follows the provisions of ASC 718. The Company’s results for the years ended December 31, 2020 and December 31, 2019 include stock based compensation expense totaling $474,000 and $584,000, respectively. Such amounts have been included in the Consolidated Statement of Operations and Comprehensive Income/(Loss) within operating expenses. Incentive Compensation Plan In 2012, the Company’s Board of Directors and shareholders approved the 2012 Incentive Compensation Plan (the “Initial 2012 Plan”), which provides for the grant of equity, including restricted stock awards, restricted stock units, non-qualified stock options and incentive stock options in compliance with the Internal Revenue Code of 1986, as amended, to employees, officers, directors, consultants and advisors of the Company who are expected to contribute to the Company’s future growth and success. When originally approved, the Initial 2012 Plan provided for the grant of awards relating to 2 million shares of common stock, plus those shares subject to awards previously issued under the Company’s 2000 Stock Option Plan that expire, are canceled or are terminated after adoption of the Initial 2012 Plan without having been exercised in full and would have been available for subsequent grants under the 2000 Stock Option Plan. In June 2014, the Company’s shareholders approved the Amended and Restated 2012 Incentive Compensation Plan (the “2012 Plan”) allowing for an additional 1.6 million shares of the Company’s common stock to be available for future grants under the 2012 Plan. The 2012 Plan provides that if awards are forfeited, expire or otherwise terminate without issuance of the shares underlying the awards, or if the award does not result in issuance of all or part of the shares underlying the award, the unissued shares are again available for awards under the 2012 Plan. As a result of certain award forfeitures and cancellations, as of December 31, 2020, there are approximately 227,000 shares available for issuance under the 2012 Plan. All service-based (time vesting) options granted have ten-year terms from the date of grant and typically vest annually and become fully exercisable after a maximum of five years. However, vesting conditions are determined on a grant by grant basis. Performance-based options granted have ten-year terms and vest and become fully exercisable when determinable performance targets are achieved. Performance targets are approved by the Company’s compensation committee of the Board of Directors. Under the 2012 Plan, options may be granted to purchase shares of the Company’s common stock exercisable only at prices equal to or above the fair market value on the date of the grant. The following summarizes the components of stock-based compensation expense for the years ending December 31 (in thousands): 2020 2019 Service based restricted stock awards $ 117 $ 278 Service based restricted stock units 205 245 Performance based stock options 99 (90 ) Service based stock options 53 151 $ 474 $ 584 As of December 31, 2020, $423,000 of unrecognized compensation costs related to unvested stock options is expected to be recognized over a remaining weighted average period of 4.9 years, $93,000 of unrecognized compensation costs related to unvested restricted shares is expected to be recognized over a remaining weighted average period of 2.3 years and $81,000 of unrecognized compensation costs related to unvested restricted stock units is expected to be recognized over 6 months. During the twelve months ended December 31, 2020 the Company reversed $6,000 and $16,000 in share based compensation expense related to 6,250 unvested stock options and 16,667 unvested restricted shares, respectively, which were forfeited as a result of an employee exiting the company. During the twelve months ended December 31, 2019 the Company reversed $121,000 in share based compensation expense related to 240,000 unvested stock options that were forfeited as a result of employees exiting the company. Restricted Common Stock Awards A summary of the status of the Company’s non-vested restricted common stock, as granted under the Company’s approved equity compensation plans, as of December 31, 2020 and 2019, and changes during the twelve months ended December 31, 2020 and 2019, are presented below: 2020 2019 Non-vested Restricted Shares Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1 262,540 $ 1.63 232,123 $ 1.68 Granted 50,000 $ 1.20 95,000 $ 1.56 Vested and issued (95,203 ) $ 1.66 (64,583 ) $ 1.70 Forfeited (16,667 ) $ 1.56 - - Non-vested as of December 31 200,670 $ 1.52 262,540 $ 1.63 On August 4, 2020 the Company granted 50,000 restricted share awards to our Chief Revenue Officer under the 2012 plan. The fair market value of the award is $1.20 per granted share and the award vests in four equal installments of 12,500 shares on August 1 of 2021, 2022, 2023 and 2024, respectively. The following table summarizes the restricted common stock awards granted during the years ended December 31, 2020 and 2019 under the 2012 Plan: Number of Shares Fair Market Value per Granted Share Vesting 2020 8/4/20 – Service grant - Employee 50,000 $ 1.20 Annual vesting through August 2024 2019 1/11/19 - Service grant - Employees 95,000 $ 1.56 Annual vesting through January 2022 Restricted Stock Units: In fiscal 2020 and fiscal 2019 the Company granted Restricted Stock Units (“RSU”) to each of our board members. Each RSU represents the Company’s obligation to issue one share of the Company’s common stock subject to the RSU award agreement and 2012 Plan. The RSUs vest on the day before the first anniversary of the grant date or, if earlier, the effective date of a separation of service due to death or disability, provided the board member has rendered continuous service to the Company as a member of the board of directors from grant date to vesting date. Once vested, the RSU will be settled by delivery of shares to the board member no later than 30 days following: 1) the third anniversary of the grant date, 2) separation from service following, or coincident with, a vesting date, or 3) a change in control. A summary of the status of the Company’s non-vested restricted stock units, as granted under the Company’s approved equity compensation plans, as of December 31, 2020 and 2019, and changes during the twelve months ended December 31, 2020 and 2019, are presented below: 2020 2019 Non-vested Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1 147,917 $ 1.56 125,000 $ 2.25 Granted 161,507 $ 1.21 147,917 $ 1.56 Vested and issued (147,917 ) $ 1.56 (125,000 ) $ 2.25 Forfeited - - - - Non-vested as of December 31 161,507 $ 1.21 147,917 $ 1.56 Number of Shares Fair Market Value per Granted Share Vesting 2020 6/4/2020 - Service grant – Board of Directors 150,000 $ 1.18 Annual board meeting – June 2021 12/28/2020 – Service grant – Board of Directors 11,507 $ 1.66 Annual board meeting – June 2021 2019 5/30/2019 - Service grant – Board of Directors 125,000 $ 1.55 Annual board meeting – June 2020 7/8/2019 – Service grant – Board of Directors 22,917 $ 1.58 Annual board meeting – June 2020 Performance-Based Stock Option Awards On August 4, 2020 the Company granted 150,000 performance-based stock options to our Chief Revenue Officer under the 2012 Plan. On April 7, 2020 the Company granted 970,000 performance-based stock options to various employees under the 2012 Plan. The performance options granted on both August 4 and April 7, 2020 vest when the Company achieves consolidated revenue targets as outlined in the schedule below: Consolidated annualized gross revenues $55.0 million – 25% vesting Consolidated annualized gross revenues $61.5 million – 50% vesting Consolidated annualized gross revenues $69.0 million – 75% vesting Consolidated annualized gross revenues $77.5 million – 100% vesting Consolidated annualized gross revenues include revenue from Holzworth from acquisition date (February 7, 2020) forward, but do not include any additional acquisitions from February 7, 2020 forward. Consolidated annualized gross revenues is calculated on a calendar year basis (i.e. twelve months ended December 31). In accordance with ASC 718 , A summary of performance-based stock option activity, and related information for the years ended December 31, 2020 and December 31, 2019 follows: 2020 2019 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding as of January 1 105,000 $ 1.61 305,000 $ 1.45 Granted 1,120,000 $ 1.50 - - Exercised (20,000 ) $ 0.78 - - Forfeited - - (200,000 ) $ 1.36 Expired - - - - Outstanding as of December 31 1,205,000 $ 1.52 105,000 $ 1.61 Exercisable at December 31 - - 20,000 $ 0.78 As of December 31, 2020, none of the performance-based stock options outstanding were exercisable as the performance metrics were not met. The aggregate intrinsic value of performance-based stock options outstanding that were “in the money” (exercise price was lower than market price) as of December 31, 2020 was $325,000 and the weighted average remaining life was 7.7 years. The aggregate intrinsic value of performance-based stock options outstanding that were “in the money” (exercise price was lower than the market price) as of December 31, 2019 was $13,000 and the weighted average remaining contractual life was 1.0 years. As of December 31, 2019, 20,000 performance-based stock options were exercisable. The range of exercise prices of outstanding performance-based options at December 31, 2020 is $1.20 to $1.83 with a weighted average exercise price of $1.52 per share. Service-Based Stock Option Awards A summary of service-based stock option activity and related information for the years ended December 31, 2020 and 2019 follows: 2020 2019 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding as of January 1 1,950,000 $ 1.52 1,975,000 $ 1.52 Granted - - 15,000 $ 1.56 Exercised - - - - Forfeited (6,250 ) $ 1.66 (40,000 ) $ 1.52 Expired (18,750 ) $ 1.66 - - Outstanding as of December 31 1,925,000 $ 1.52 1,950,000 $ 1.52 Exercisable at December 31 1,736,250 $ 1.51 1,515,000 $ 1.50 The aggregate intrinsic value of service-based stock options outstanding that were “in the money” (exercise price was lower than the market price) as of December 31, 2020 was $455,000 and the weighted average remaining contractual life was 6 years. The aggregate intrinsic value of exercisable “in the money” service-based stock options as of December 31, 2020 was $415,000 and the weighted average remaining contractual life was 6 years. The aggregate intrinsic value of service-based stock options outstanding that were “in the money” (exercise price was lower than the market price) as of December 31, 2019 was $77,600 and the weighted average remaining contractual life was 2.6 years. The aggregate intrinsic value of exercisable “in the money” service-based stock options as of December 31, 2019 was $72,225 and the weighted average remaining contractual life was 3.0 years. The range of exercise prices of outstanding service-based options at December 31, 2020 is $1.30 to $1.92 with a weighted average exercise price of $1.52 per share. The following table presents the assumptions used to estimate the fair value of stock option awards granted during the twelve months ended December 31, 2020 and 2019: Number of Options Option Term (in years) Exercise Price Risk Free Interest Rate Expected Volatility Fair Value at Grant Date Expected Dividend Yield 2020 4/7/2020 – Performance grant - Employees 970,000 10 $ 1.50 0.48 % 50.85 % $ 0.86 $ 0.00 8/4/2020 – Performance grant - Employees 150,000 10 $ 1.20 0.19 % 52.06 % $ 1.20 $ 0.00 2019 1/11/2019 – Service Grant - Employees 15,000 3 $ 1.56 2.52 % 49.80 % $ 0.56 $ 0.00 |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Related Information | NOTE 11 - SEGMENT AND RELATED INFORMATION In June 2020, as a result of certain internal reorganizations completed over the prior six to nine months, the Company concluded it now operates as one reportable segment in accordance with ASC 280 Segment Reporting. Prior to June 2020 the Company operated as three reportable segments. In June 2020 we determined that the Chief Operating Decision Maker (“CODM”) as defined in ASC 280 evaluates operating results and makes decisions on how to allocate resources at the consolidated level. Although the CODM reviews key performance indicators including bookings, shipments and gross profit at a product group level, this information by itself is not sufficient enough to make operating decisions. Rather, operating decisions are made based on review of consolidated profitability metrics rather than the individual results of each product group. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plan | NOTE 12 - RETIREMENT PLAN The Company has a 401(k) profit sharing plan covering all eligible U.S. employees. Company contributions to the plan for the years ended December 31, 2020 and 2019 amounted to $44,000 and $286,000, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 - INCOME TAXES The components of income tax (benefit)/expense related to net income/(loss) from operations are as follows (in thousands): Years Ended December 31, 2020 2019 Current: Federal $ - $ (9 ) State 73 45 Foreign (1,060 ) (859 ) Deferred: Federal 182 (188 ) State 129 (233 ) Foreign (133 ) (128 ) Total $ (809 ) $ (1,372 ) The following is a reconciliation of the maximum statutory federal tax rate to the Company’s effective tax relative to operations: Years Ended December 31, 2020 2019 % of % of Statutory federal income tax rate (21.0 )% (21.0 )% State income tax net of federal tax benefit (6.6 ) 0.1 Foreign rate difference 7.7 7.2 Change in valuation allowance 9.4 (10.6 ) Permanent differences 8.5 0.9 Research and development incentive (8.1 ) (53.1 ) Global intangible low-taxed income - 1.3 Other 1.1 (1.6 ) Total (9.0 )% (76.8 )% In 2020, the difference between the statutory and effective tax rate is due primarily to permanent differences between U.S. GAAP book income and taxable income including the goodwill impairment charge for the CommAgility reporting unit and the loss on contingent consideration related to the Holzworth earnout. Additionally, in 2020 the difference between the statutory and effective tax rate was due to an increase in the state net operating loss valuation allowance and research and development deductions in the United Kingdom. In 2019, the difference between the statutory and effective tax rate is due primarily to research and development deductions in the United Kingdom and a reduction in the state net operating loss valuation allowance. The components of deferred income taxes are as follows (in thousands): Years Ended December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 11,888 $ 11,538 Inventory 509 397 Research and development credit 648 648 Stock compensation 335 285 Other 280 326 Gross deferred tax asset 13,660 13,194 Less valuation allowance (7,668 ) (6,652 ) Total deferred tax asset $ 5,992 $ 6,542 Deferred tax liabilities: Goodwill and intangible assets (368 ) (757 ) Fixed assets (300 ) (275 ) Total deferred tax liability $ (668 ) $ (1,032 ) Net deferred tax asset $ 5,324 $ 5,510 The Company has domestic federal and state net operating loss carryforwards as of December 31, 2020 of approximately $16.3 million and $42.4 million, respectively, which begin to expire in 2029. $600,000 of the federal net operating loss carryforward and $1.6 million of state net operating loss carryforward has no expiration. The Company also has foreign net operating loss carryforwards at December 31, 2020 of approximately $15.7 million for German trade tax purposes, which has no expiration. Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses. The Company’s valuation allowances of $7.7 million and $6.7 million at December 31, 2020 and 2019, respectively, are associated with the Company’s foreign net operating loss carryforward from an inactive foreign entity, state net operating loss carryforward and a state research and development credit. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. As of December 31, 2020, management believes that it is more likely than not that the Company will fully realize the benefits of its deferred tax assets associated with its domestic federal net operating loss carryforward. The Company does not have any significant unrecognized tax positions and does not anticipate a significant increase or decrease in unrecognized tax positions within the next twelve months. The Company has elected to record taxes related to the global intangible low-taxed income as a period cost. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 - COMMITMENTS AND CONTINGENCIES Warranties The Company typically provides one to three year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers. Legal Proceeding As previously disclosed, on June 5, 2019, L3Harris Corporation (“Harris”) filed a request for arbitration before the American Arbitration Association in accordance with the terms of an executed purchase order, statement of work and software license agreement (collectively referred to as “Agreements”) with CommAgility entered into in 2014. Harris claimed that CommAgility breached the Agreements by offering for sale, marketing, and promoting techniques, capabilities, products and services that incorporate Work Product, as defined in the Agreements, owned by Harris. In its arbitration demand, Harris claimed that CommAgility caused Harris significant monetary damages, the sum of which could not be determined until such time as discovery has been conducted but was estimated by Harris to be less than $250,000. Harris did not include a request for monetary damages in its Statement of Claim, which was filed with the arbitration panel on May 22, 2020. On December 10, 2020, Harris released CommAgility from any and all claims that Harris may have had against CommAgility related to the Agreements before arbitration proceedings began. In 2020, the Company incurred approximately $50,000 in legal expense related to this matter. The remainder of legal expenses incurred in 2019 and 2020 related to this matter were covered under our professional indemnity insurance policy. Risks and Uncertainties The Company has been and continues to be unable to accurately predict the full impact that the COVID-19 Pandemic will have on our results of operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures, the nature and length of actions taken by governments, businesses and individuals to contain or mitigate its impact, the severity and duration of the economic impact caused by the pandemic, the uncertainty surrounding possible treatments and rollout of vaccines, along with the effectiveness of our response. Our compliance with containment and mitigation measures has impacted our day-to-day operations and is expected to continue to disrupt our business and operations, as well as that of our key customers, suppliers (including contract manufacturers) and other counterparties, at least through the third quarter of 2021. Proprietary information and know-how are important to the Company’s commercial success. There can be no assurance that others will not either develop independently the same or similar information or obtain and use proprietary information of the Company. Certain key employees have signed confidentiality and non-compete agreements regarding the Company’s proprietary information. The Company believes that its products do not infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not assert infringement claims in the future. The Company’s deferred tax asset is recorded at tax rates expected to be in existence when those assets are utilized. Should the tax rates change materially in the future the amount of deferred tax asset could be materially impacted. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15 – SUBSEQUENT EVENTS Second Amendment to Holzworth Share Purchase Agreement On February 19, 2021, the Company entered into the Second Amendment with Holzworth and Sellers. The Second Amendment, among other things, converted the second deferred purchase price of $750,000 into unsecured seller notes with interest at an annual rate of 6.5% starting from April 1, 2021 until final payment. The payment date has been changed from March 31, 2021 to three equal installments of $250,000, plus accrued interest, due on July 1, 2021, October 1, 2021 and January 1, 2022. Additionally, the parties amended the payment dates of the earnout consideration. The payment date of the first earnout payment based on the financial results of the calendar year ended 2020 (“Year 1 Earnout”) has been amended from March 31, 2021 to (i) six (6) equal quarterly installments of 10% of the Year 1 Earnout payable on the last business day of each calendar quarter between June 30, 2021 and September 30, 2022 and (ii) one (1) installment payment equal to 40% of the Year 1 Earnout on December 31, 2022. The Year 1 Earnout is payable in cash or shares of the Company’s common stock based on the 90 trading day volume weighted average price immediately preceding final determination of the Year 1 Earnout or $2.19 per share. The estimated payment for the Year 1 Earnout is $3.4 million which is recorded in accrued expenses and other current liabilities in the Consolidated Balance Sheet as of December 31, 2020. The parties also amended the provisions with respect to restrictions on transfer to adjust for the change in timing of earnout payments, as described above. Finally, the parties added a requirement that any earned but unpaid earnout consideration will be accelerated in the event the Company desires to enter into a material asset or equity acquisition in the future. Second Amendment to Muzinich Credit Agreement and Limited Waiver On February 25, 2021, the Company, its subsidiaries and Muzinich entered into Amendment 2, in which Muzinich agreed to waive the Company’s obligation to comply with the consolidated leverage ratio and fixed charge coverage ratio financial covenants in the Term Loan Facility for the fiscal quarter ending December 31, 2020. We were not in compliance with such covenants primarily as a result of the impact the COVID-19 pandemic had on our consolidated financial results. Amendment 2, among other things, amended the definition of consolidated EBITDA to include certain cash tax benefits related to our UK tax jurisdiction and reduced our consolidated leverage ratio for the twelve month periods ended September 30, 2021 from 3.00 to 2.75, December 31, 2021 from 2.75 to 2.25, March 31, 2022 from 2.50 to 2.00 and June 30, 2022 from 2.25 to 2.00. Additionally, the interest rate margin was increased from 7.25% to 9.25% effective January 1, 2021 and will step down to 8.50% and 7.25% upon the Company achieving consolidated EBITDA on a trailing twelve-month basis of $4.0 million and $6.3 million, respectively. Muzinich and the Company also agreed on an excess cash flow payment of $428,000 and Muzinich provided consent for the Company to enter into the aforementioned notes with the Holzworth Sellers in the amount of $750,000, as described above. Amendment No. 7 to the Loan and Security Agreement with Bank of America, N.A. On February 25, 2021, the Company, its subsidiaries and Bank of America entered into Amendment No. 7 which revised the Credit Facility to accommodate the changes to the deferred purchase price payments to and notes with the Holzworth sellers as described above and provided Bank of America’s consent to the Company entering into the Muzinich Second Amendment, as described above. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | NOTE 16– SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following is a summary of selected quarterly financial data from operations (in thousands, except per share amounts). 2020 Quarter 1st 2nd 3rd 4th Net revenues $ 9,429 $ 11,108 $ 10,868 $ 10,343 Gross profit 4,428 5,668 5,654 5,218 Operating income/(loss) (1,354 ) (59 ) (348 ) (6,336 ) Net income/(loss) (1,147 ) (668 ) (775 ) (5,498 ) Diluted earnings/(loss) per share $ (0.05 ) $ (0.03 ) $ (0.04 ) $ (0.25 ) 2019 Quarter 1st 2nd 3rd 4th Net revenues $ 13,032 $ 13,508 $ 10,812 $ 11,569 Gross profit 5,727 6,133 4,825 5,604 Operating income/(loss) (398 ) 146 (677 ) (550 ) Net income/(loss) (345 ) 157 (460 ) 235 Diluted earnings/(loss) per share $ (0.02 ) $ 0.01 $ (0.02 ) $ 0.01 NOTE: The quarterly amounts above may not add to the full year Consolidated Statements of Operations and Comprehensive Income/(Loss) due to rounding |
Description of Company and Su_2
Description of Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Wireless Telecom Group, Inc., a New Jersey corporation, together with its subsidiaries (“we”, “us”, “our” or the “Company”), specializes in the design and manufacture of advanced radio frequency (“RF”) and microwave devices which enable the development, testing and deployment of wireless technology. The Company provides unique, highly customized and configured solutions which drive innovation across a wide range of traditional and emerging wireless technologies. Our customers include wireless carriers, aerospace companies, defense contractors, military and government agencies, satellite communication companies, network equipment manufacturers, tower companies, semiconductor device manufacturers, system integrators, neutral host providers and medical device manufacturers. Our products include components, modules, instruments, systems and software used across the lifecycle of wireless connectivity and communication development, deployment and testing. Our customers use these products in relation to commercial infrastructure development, the expansion and upgrade of distributed antenna systems, deployment of small cell technology, use of medical devices and private long-term evolution (“LTE”) and 5G networks. In addition, the Company’s products are used in the development and testing of satellite communication systems, radar systems, semiconductor devices, automotive electronics and avionics. The accompanying consolidated financial statements include the accounts of Wireless Telecom Group, Inc., doing business as and operating under the trade name, Noisecom, and its wholly owned subsidiaries including Boonton Electronics Corporation (“Boonton”), Microlab/FXR LLC (“Microlab”), Holzworth Instrumentation, Inc. (“Holzworth”), Wireless Telecommunications Ltd. and CommAgility Limited (“CommAgility”). They have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and balances have been eliminated in consolidation. In June 2020 the Company completed an internal reorganization and now presents its operations as one reportable segment. Prior to June 2020 the Company presented its operations in three reportable segments. The Company identifies segments in accordance with ASC 280 Segment Reporting |
Use of Estimates | Use of Estimates The accompanying financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. The most significant estimates and assumptions include management’s analysis in support of inventory valuation, accounts receivable valuation, valuation of deferred tax assets, returns reserves, warranty accruals, goodwill and intangible assets, estimated fair values of stock options and vesting periods of performance-based stock options and restricted stock. |
Concentrations of Credit Risk, Purchases and Fair Value | Concentrations of Credit Risk, Purchases and Fair Value Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Credit evaluations are performed on customers requiring credit over a certain amount. Credit risk is mitigated to a lesser extent through collateral such as letters of credit, bank guarantees or payment terms like cash in advance. For the twelve months ended December 31, 2020, no one customer accounted for more than 10% of the Company’s total consolidated revenues. For the twelve months ended December 31, 201,9 one CommAgility customer accounted for 24.8% of the Company’s total consolidated revenues. At December 31, 2020, one customer exceeded 10% of consolidated gross accounts receivable at 12.7%. At December 31, 2019 one customer exceeded 10% of consolidated gross accounts receivable at 12.9%. For the year ended December 31, 2020, two suppliers exceeded 10% of consolidated inventory purchases at 14% each. For the year ended December 31, 2019, three suppliers comprised or exceeded 10% of consolidated inventory purchases at 18% and 14% and 10%, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent deposits in banks and highly liquid investments purchased with maturities of three months or less at the date of purchase. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable and contract assets for unbilled receivables are stated at the amount owed by the customer, net of allowances for doubtful accounts, returns and rebates. Estimated allowances for doubtful accounts are reviewed periodically taking into account the customer’s recent payment history, the customer’s current financial statements and other information regarding the customer’s credit worthiness. Account balances are charged off against the allowance when it is determined the receivable will not be recovered. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Inventory cost is determined on an average cost basis. Net realizable value is based upon an estimated average selling price reduced by estimated costs of completion, disposal and transportation. Reductions in inventory valuation are included in cost of revenues in the accompanying Consolidated Statements of Operations and Comprehensive Income/Loss. Finished goods and work-in-process include material, labor and overhead expenses. The Company reviews inventory for excess and obsolescence based on best estimates of future demand, product lifecycle status and product development plans. The Company uses historical information along with these future estimates to reduce the inventory cost basis. Subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Inventory carrying value is net of inventory reserves of approximately $1.1 million as of December 31, 2020 and $1.0 million as of December 31, 2019. December 31, December 31, Inventories consist of (in thousands): 2020 2019 Raw materials $ 4,644 $ 4,023 Work-in-process 618 406 Finished goods 3,534 2,896 $ 8,796 $ 7,325 |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets generally consist of income tax receivables, contract assets for unbilled receivables, prepaid insurance, prepaid maintenance agreements and the short term portion of debt issuance costs. The income tax receivable balance included in prepaid and other current assets was $1.2 million and $1.1 million as of December 31, 2020 and December 31, 2019, respectively. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are reflected at cost, less accumulated depreciation. Upon application of acquisition accounting, property, plant and equipment are measured at estimated fair value as of the acquisition date to establish a new historical cost basis. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives for the property, plant and equipment are: Machinery and computer equipment/software 3-8 years Furniture and fixtures 5-7 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the estimated economic life of the improvement. Repairs and maintenance are charged to operations as incurred; renewals and betterments are capitalized. |
Business Combinations | Business Combinations The Company uses the acquisition method of accounting for business combinations which requires the tangible and intangible assets acquired and liabilities assumed to be recorded at their respective fair market value as of the acquisition date. Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired. The fair values of the assets acquired and liabilities assumed are determined based upon the Company’s valuation and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is evaluated for impairment annually, or more frequently if events occur or circumstances change that would indicate that goodwill might be impaired, by first performing a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment. Based on that qualitative evaluation, if the Company determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise we perform a quantitative impairment test. The Company has three reporting units with goodwill – Holzworth, Microlab and CommAgility. The Company performed a qualitative assessment in the fourth quarter of 2020 of each reporting unit. The qualitative assessment of Holzworth and Microlab did not indicate any impairment of goodwill. As a result of declining demand of CommAgility’s signal processing hardware cards from a single customer and the particularly high uncertainty associated with the ultimate trajectory of the pandemic, including the degree to which governments continue to restrict business and personal activities, and the impact that uncertainty has on the growth of new software license and services revenue to offset the signal processing hardware sales decline, the Company performed a quantitative impairment test of the goodwill of the CommAgility reporting unit. For goodwill impairment testing using the quantitative approach, the Company estimates the fair value of the selected reporting unit using the income approach and the market approach. Fair value under the income approach is derived primarily through the use of a discounted cash flow model based on our best estimate of amounts and timing of future revenues and cash flows and our most recent business and strategic plans. Fair value under the market approach is derived by applying a multiple to our best estimate of future revenue. The Company applies equal weighting to the income approach and the market approach to arrive at an estimated fair value. The estimated fair value is compared to the carrying value of the reporting unit, including goodwill. If the fair value of the reporting unit exceeds the carrying value, no impairment charge is recorded. If the carrying value of the reporting unit exceeds the fair value an impairment charge is recorded to goodwill in the amount by which carrying value exceeds fair value. Both the income approach and market approach require judgmental assumptions about projected revenue growth, future operating margins, discount rates and terminal values over a multi-year period. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment. While the Company believes it has made reasonable estimates and assumptions to calculate the fair value of its reporting units, it is possible a material change could occur. In the fourth quarter of 2020, the Company recorded a goodwill impairment charge of $4.7 million related to the CommAgility reporting unit. The non-cash impairment charge was due to a number of factors that arose as part of our quantitative assessment, including an assessment of our historical results and the significant decline in hardware sales in 2020, the difficulty of predicting future customer demand, the uncertainty of future sales of 4G hardware cards, the uncertainty of the growth of 5G software and services revenues due to the early stages of 5G adoption for new technology and expectations for 5G deployments, the uncertainty of the continued future impacts of the COVID 19 pandemic on customer spending, and the potential for a more prolonged recovery for enterprise spending and longer-term investment. Despite the asset impairment charge the Company believes the markets in which CommAgility operates, specifically LTE and 5G private networks, have long term growth potential and the Company is committed to growing the revenue and profitability of the reporting unit. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of our impairment analysis. After recording the 2020 goodwill impairment charge, the Company’s consolidated goodwill balance as of December 31, 2020 was comprised of $1.4 million related to the Microlab reporting unit, $6.0 million related to the Holzworth reporting unit and $4.1 million related to the CommAgility reporting unit. As of December 31, 2019, the Company’s consolidated goodwill balance of $10.1 million was comprised of $1.4 million related to the Microlab reporting unit and $8.7 million related to the CommAgility reporting unit. Management’s qualitative assessment performed in the fourth quarter of 2019 did not indicate any impairment of goodwill. |
Intangible and Long-lived Assets | Intangible and Long-lived Assets Intangible assets include acquired technology, patents, non-competition agreements, customer relationships and tradenames. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to twelve years. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less costs to sell. The estimated useful lives of intangible and long-lived assets are based on many factors including assumptions regarding the effects of obsolescence, demand, competition and other economic factors, expectations regarding the future use of the asset, and our historical experience with similar assets. The assumptions used to determine the estimated useful lives could change due to numerous factors including product demand, market conditions, technological developments, economic conditions and competition. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually and more frequently if events occur or circumstances change that indicate an asset may be impaired. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: 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 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 categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The Company’s term loan and revolving credit facility bear interest at a variable interest rate plus an applicable margin and, therefore, carrying amount approximates fair value. We believe the carrying value of the loan obtained under the Paycheck Protection Program approximates fair value due to the expected short term nature of the loan. During the fourth quarter of 2020, the Company recorded a goodwill impairment charge of $4.7 million related to the CommAgility reporting unit. The determination of the impairment charge was based on the income and market approaches which are based on the present value of future cash flows and an estimated multiple of future revenues, respectively. The determination of the impairment charge was based on Level 3 valuation inputs. |
Contingent Consideration | Contingent Consideration Under the terms of the Holzworth Share Purchase Agreement (as defined in Note 2) the Company is required to pay additional purchase price in the form of deferred purchase price payments and an earnout if certain financial targets are achieved for the years ending December 31, 2020 and December 31, 2021 (see Note 2). As of the acquisition date, the Company estimated the fair value of the deferred purchase price and earnout remaining to be paid related to the 2020 and 2021 financial targets to be $660,000 and $2.4 million, respectively. The earnout may be paid in cash or common stock at the Company’s option. The Company is required to reassess the fair value of the contingent consideration at each reporting period. The significant inputs used in this fair value estimate include estimated gross revenues and Adjusted EBITDA, as defined in the Holzworth Share Purchase Agreement, and scenarios for the earnout periods for which probabilities are assigned to each scenario to arrive at a single estimated outcome. The estimated outcome is then discounted based on the individual risk analysis of the liability. The contingent consideration liabilities are considered a Level 3 fair value measurement. Due to the better than expected financial performance of the Holzworth reporting unit during fiscal 2020, the Company recorded an increase to the contingent consideration liabilities in the amount of $1.1 million in the fourth quarter of 2020. The adjustment was recorded as a loss on change in fair value of contingent consideration in the Consolidated Statement of Operations and Comprehensive Income/(Loss). |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where the local currency is the functional currency, are translated from foreign currencies into U.S. dollars at period-end exchange rates while income and expenses are translated at the weighted average spot rate for the periods presented. Translation gains or losses related to net assets located outside the U.S. are shown as a component of accumulated other comprehensive income in the Consolidated Statements of Changes in Shareholders’ Equity. Aggregate foreign currency gains and losses, such as those resulting from the settlement of receivables or payables in a currency other than the subsidiary’s functional currency, are recorded in the Consolidated Statements of Operations and Comprehensive Income/(Loss) (included in other income/expense). Foreign currency transaction gains were $64,000 in fiscal 2020. Foreign currency transaction losses in in fiscal 2019 were not material. |
Other Comprehensive Income/(Loss) | Other Comprehensive Income/(Loss) Other comprehensive income/(loss) is recorded directly to a separate section of shareholders’ equity in accumulated other comprehensive income and includes unrealized gains and losses excluded from net income/(loss). These unrealized gains and losses consist of changes in foreign currency translation. |
Research and Development Costs | Research and Development Costs Research and development (R&D) costs are charged to operations when incurred. R&D costs include salaries and benefits, depreciation expense on equipment used for R&D purposes and third-party material and consulting costs, if clearly related to an R&D activity. Salaries and benefits of engineers working on customer contracts for which the Company is earning services or consulting revenues are allocated to costs of revenues. The amounts charged to operations for R&D costs for the years ended December 31, 2020 and 2019 were $6.4 million and $5.9 million, respectively. |
Advertising Costs | Advertising Costs Advertising expenses are charged to operations during the year in which they are incurred and aggregated to $235,000 and $91,000 for the years ended December 31, 2020 and 2019, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company follows the provisions of Accounting Standards Codification (“ASC”) 718, “Compensation – Stock Compensation” which requires that compensation expense be recognized, based on the fair value of the equity awards on the date of grant. The fair value of restricted share awards and restricted stock unit awards is determined using the market value of our common stock on the date of the grant. The fair value of stock options at the date of grant are estimated using the Black-Scholes option pricing model. When performance-based stock options are granted, the Company takes into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107) when determining assumptions. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of our shares using daily price observations over an observation period that approximates the expected life of the options. The risk-free rate is based on the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. The Company accounts for forfeitures for all equity awards when they occur. Management estimates are necessary in determining compensation expense for stock options with performance-based vesting criteria. Compensation expense for this type of stock-based award is recognized over the period from the date the performance conditions are determined to be probable of occurring through the implicit service period, which is the date the applicable conditions are expected to be met. If the performance conditions are not considered probable of being achieved, no expense is recognized until such time as the performance conditions are considered probable of being met, if ever. If the award is forfeited because the performance condition is not satisfied, previously recognized compensation cost is reversed. Management evaluates performance conditions on a quarterly basis. |
Income Taxes | Income Taxes The Company records deferred taxes in accordance with ASC 740, “Accounting for Income Taxes”. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and determines the necessity for a valuation allowance. The Company evaluates which portion, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating loss carry-forwards. Under ASC 740, the Company must recognize and disclose uncertain tax positions only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The amounts recognized in the financial statements attributable to such position, if any, are recorded if there is a greater than 50% likelihood of being realized upon the ultimate resolution of the position. Based on the evaluations noted above, the Company has concluded that there are no significant uncertain tax positions requiring recognition or disclosure in its consolidated financial statements. |
Earnings (Loss) Per Common Share | Earnings/(Loss) Per Common Share Basic earnings/(loss) per share is calculated by dividing net income/(loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings/(loss) per share is calculated by dividing net income/(loss) available to common shareholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options using the treasury stock method, the weighted average number of unvested restricted shares, the weighted-average number of restricted stock units and the weighted average number of warrants to purchase common stock outstanding for the period. Shares from stock options and warrants are included in the diluted earnings per share calculation only when options exercise prices are lower than the average market value of the common shares for the period presented. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive. In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding. For the Years Ended December 31, 2020 2019 Weighted average common shares outstanding 21,656,906 21,110,632 Potentially dilutive equity awards 313,341 522,996 Weighted average common shares outstanding, assuming dilution 21,970,247 21,633,628 The weighted average number of options and warrants to purchase common stock not included in diluted loss per share because the effects are anti-dilutive, or the performance condition was not met in 2020 was 3,114,792. The estimated number of shares issuable under the terms of the Holzworth earnout, if the entire earnout was paid in shares of common stock, (see Note 2) at December 31, 2020 was 1,559,807. The weighted average number of options to purchase common stock not included in diluted loss per share in 2019, because the effects are anti-dilutive or the performance condition was not met, was 1,324,548. |
Recent Accounting Pronouncements Adopted in 2020 | Recent Accounting Pronouncements Adopted in 2020 In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software, Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. |
Description of Company and Su_3
Description of Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Inventory, Current | Inventory carrying value is net of inventory reserves of approximately $1.1 million as of December 31, 2020 and $1.0 million as of December 31, 2019. December 31, December 31, Inventories consist of (in thousands): 2020 2019 Raw materials $ 4,644 $ 4,023 Work-in-process 618 406 Finished goods 3,534 2,896 $ 8,796 $ 7,325 |
Schedule of Property Plant and Equipment Estimated Useful Lives | The estimated useful lives for the property, plant and equipment are: Machinery and computer equipment/software 3-8 years Furniture and fixtures 5-7 years |
Schedule of Weighted Average Number of Shares | In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding. For the Years Ended December 31, 2020 2019 Weighted average common shares outstanding 21,656,906 21,110,632 Potentially dilutive equity awards 313,341 522,996 Weighted average common shares outstanding, assuming dilution 21,970,247 21,633,628 |
Acquisition of Holzworth (Table
Acquisition of Holzworth (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Business Consideration | The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from the Acquisition along with measurement period adjustments recorded from the preliminary purchase price allocation to September 30, 2020 (in thousands): Amounts Recognized as of Acquisition Date Measurement Period Adjustments Amounts Recognized as of Acquisition Date Cash at close $ 7,219 $ - $ 7,219 Equity issued at close 465 - 465 Purchase price holdback 800 - 800 Working capital adjustment (295 ) 3 (292 ) Deferred purchase price 1,300 110 1,410 Contingent consideration 555 1,885 2,440 Total purchase price 10,044 1,998 12,042 Cash 30 - 30 Accounts receivable 485 29 514 Inventory 1,218 220 1,438 Intangible assets 4,500 (240 ) 4,260 Other assets 960 7 967 Fixed assets 144 - 144 Accounts payable (129 ) - (129 ) Accrued expenses (425 ) (4 ) (429 ) Deferred revenue (13 ) - (13 ) Other long term liabilities (740 ) - (740 ) Net assets acquired 6,030 12 6,042 Goodwill $ 4,014 $ 1,986 $ 6,000 |
Schedule of Pro-Forma for Operation | The following table presents the unaudited pro forma consolidated results of operations for the Company for the twelve months ended December 31, 2020 and 2019 as though the Acquisition had been completed as of January 1, 2019 (in thousands, except per share amounts): 2020 Pro-forma 2019 Pro-forma Net revenues $ 41,845 $ 54,761 Net income/(loss) $ (8,212 ) $ (1,754 ) Earnings per diluted share $ (0.38 ) $ (0.08 ) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following (in thousands): December 31, 2020 Revolver at LIBOR plus margin $ - Term loan at LIBOR plus margin 8,316 Less: Debt issuance costs, net of amortization (831 ) Less: Fair value of warrants, net of amortization (123 ) Paycheck Protection Program loan 2,045 Total Debt 9,407 Less: Debt maturing within one year (512 ) Non-current portion of long term debt $ 8,895 |
Schedule of Term Loan Payments | Term loan payments by period (in thousands): 2021 $ 512 2022 2,129 2023 84 2024 84 2025 7,552 Total $ 10,361 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Maturity of Operating Lease Liabilities | The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of December 31, 2020. (in thousands) December 31, 2020 Maturity of Lease Liabilities 2021 $ 619 2022 637 2023 276 2024 158 2025 163 Thereafter 69 Total undiscounted operating lease payments 1,922 Less: imputed interest (188 ) Present Value of operating lease liabilities $ 1,734 Balance sheet classification Current lease liabilities $ 534 Long-term lease liabilities 1,200 Total operating lease liabilities $ 1,734 Other information Weighted-average remaining lease term (months) 44 Weighted-average discount rate for operating leases 5.88 % |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | See details in the tables below (in thousands). Twelve Months Ended Twelve Months Ended Total net revenues by revenue type Passive and active RF solutions $ 17,633 $ 21,830 Noise generators and components 13,356 6,198 Power meters and analyzers 5,737 6,109 Signal processing hardware 1,672 13,013 Software licenses 1,284 14 Services 2,066 1,757 Total net revenue $ 41,748 $ 48,921 Total net revenues by geographic areas Americas $ 31,329 $ 30,161 EMEA 6,329 16,500 APAC 4,090 2,260 Total net revenue $ 41,748 $ 48,921 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consists of the following (in thousands): Holzworth Microlab CommAgility Total Balance as of January 1, 2019 $ - $ 1,351 $ 8,427 $ 9,778 Foreign currency translation - - 291 291 Balance as of December 31, 2019 - 1,351 8,718 10,069 Holzworth acquisition 6,000 - - 6,000 Goodwill impairment - - (4,742 ) (4,742 ) Foreign currency translation - - 185 185 Balance as of December 31, 2020 $ 6,000 $ 1,351 $ 4,161 $ 11,512 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): December 31, 2020 Gross Carrying Amount Accumulated Amortization Foreign Exchange Translation Net Carrying Amount Customer relationships $ 5,075 $ (2,564 ) $ 121 $ 2,632 Patents 615 (491 ) 26 150 Proprietary technology 1,550 (142 ) - 1,408 Non-compete agreements 1,107 (1,150 ) 43 - Holzworth tradename 400 (31 ) - 369 CommAgility tradename 629 - 54 683 Total $ 9,376 $ (4,378 ) $ 244 $ 5,242 December 31, 2019 Gross Carrying Amount Accumulated Amortization Foreign Exchange Translation Net Carrying Amount Customer relationships $ 2,766 $ (1,644 ) $ 113 $ 1,235 Patents 615 (365 ) 25 275 Non-compete agreements 1,107 (1,101 ) 43 49 CommAgility tradename 629 - 31 660 Total $ 5,117 $ (3,110 ) $ 212 $ 2,219 |
Schedule of Intangible Assets, Future Amortization Expense | The estimated future amortization expense related to intangible assets is as follows as of December 31, 2020 (in thousands): 2021 $ 1,307 2022 665 2023 573 2024 573 2025 573 Thereafter 868 Total $ 4,559 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, consist of the following as of December 31 (in thousands): 2020 2019 Machinery & computer equipment/software $ 9,085 $ 8,662 Furniture & fixtures 483 461 Leasehold improvements 1,358 1,331 Gross property, plant and equipment 10,926 10,454 Less: Accumulated depreciation 9,102 8,307 Net property, plant and equipment $ 1,824 $ 2,147 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following as of December 31 (in thousands): 2020 2019 Product demo assets $ 187 $ 128 Debt issuance costs - Revolver 127 91 Deferred costs 82 82 Income tax receivable 65 230 Security deposit 63 50 Deferred S3 costs - 255 Other 37 38 Total $ 561 $ 874 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses And Other Current Liabilities | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following as of December 31 (in thousands): 2020 2019 Holzworth earnout $ 3,423 $ - Holzworth deferred purchase price 950 - Payroll and related benefits 864 308 Commissions 605 430 Goods received not invoiced 458 346 Professional fees 331 464 Sales and use and VAT tax 315 355 Return reserve 212 199 Warranty reserve 140 160 Bonus 123 126 Harris arbitration liability 116 49 Severance - 102 Other 460 118 Total $ 7,997 $ 2,657 |
Accounting for Stock Based Co_2
Accounting for Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Share-based Compensation Expense | The following summarizes the components of stock-based compensation expense for the years ending December 31 (in thousands): 2020 2019 Service based restricted stock awards $ 117 $ 278 Service based restricted stock units 205 245 Performance based stock options 99 (90 ) Service based stock options 53 151 $ 474 $ 584 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the status of the Company’s non-vested restricted common stock, as granted under the Company’s approved equity compensation plans, as of December 31, 2020 and 2019, and changes during the twelve months ended December 31, 2020 and 2019, are presented below: 2020 2019 Non-vested Restricted Shares Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1 262,540 $ 1.63 232,123 $ 1.68 Granted 50,000 $ 1.20 95,000 $ 1.56 Vested and issued (95,203 ) $ 1.66 (64,583 ) $ 1.70 Forfeited (16,667 ) $ 1.56 - - Non-vested as of December 31 200,670 $ 1.52 262,540 $ 1.63 A summary of the status of the Company’s non-vested restricted stock units, as granted under the Company’s approved equity compensation plans, as of December 31, 2020 and 2019, and changes during the twelve months ended December 31, 2020 and 2019, are presented below: 2020 2019 Non-vested Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested as of January 1 147,917 $ 1.56 125,000 $ 2.25 Granted 161,507 $ 1.21 147,917 $ 1.56 Vested and issued (147,917 ) $ 1.56 (125,000 ) $ 2.25 Forfeited - - - - Non-vested as of December 31 161,507 $ 1.21 147,917 $ 1.56 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the restricted common stock awards granted during the years ended December 31, 2020 and 2019 under the 2012 Plan: Number of Shares Fair Market Value per Granted Share Vesting 2020 8/4/20 – Service grant - Employee 50,000 $ 1.20 Annual vesting through August 2024 2019 1/11/19 - Service grant - Employees 95,000 $ 1.56 Annual vesting through January 2022 Number of Shares Fair Market Value per Granted Share Vesting 2020 6/4/2020 - Service grant – Board of Directors 150,000 $ 1.18 Annual board meeting – June 2021 12/28/2020 – Service grant – Board of Directors 11,507 $ 1.66 Annual board meeting – June 2021 2019 5/30/2019 - Service grant – Board of Directors 125,000 $ 1.55 Annual board meeting – June 2020 7/8/2019 – Service grant – Board of Directors 22,917 $ 1.58 Annual board meeting – June 2020 |
Schedule of Estimate Fair Value Assumptions Stock Option Awards Granted | The following table presents the assumptions used to estimate the fair value of stock option awards granted during the twelve months ended December 31, 2020 and 2019: Number of Options Option Term (in years) Exercise Price Risk Free Interest Rate Expected Volatility Fair Value at Grant Date Expected Dividend Yield 2020 4/7/2020 – Performance grant - Employees 970,000 10 $ 1.50 0.48 % 50.85 % $ 0.86 $ 0.00 8/4/2020 – Performance grant - Employees 150,000 10 $ 1.20 0.19 % 52.06 % $ 1.20 $ 0.00 2019 1/11/2019 – Service Grant - Employees 15,000 3 $ 1.56 2.52 % 49.80 % $ 0.56 $ 0.00 |
Performance Based Stock Options [Member] | |
Schedule of Stock Option Activity | A summary of performance-based stock option activity, and related information for the years ended December 31, 2020 and December 31, 2019 follows: 2020 2019 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding as of January 1 105,000 $ 1.61 305,000 $ 1.45 Granted 1,120,000 $ 1.50 - - Exercised (20,000 ) $ 0.78 - - Forfeited - - (200,000 ) $ 1.36 Expired - - - - Outstanding as of December 31 1,205,000 $ 1.52 105,000 $ 1.61 Exercisable at December 31 - - 20,000 $ 0.78 |
Service-Based Stock Option Awards [Member] | |
Schedule of Stock Option Activity | A summary of service-based stock option activity and related information for the years ended December 31, 2020 and 2019 follows: 2020 2019 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding as of January 1 1,950,000 $ 1.52 1,975,000 $ 1.52 Granted - - 15,000 $ 1.56 Exercised - - - - Forfeited (6,250 ) $ 1.66 (40,000 ) $ 1.52 Expired (18,750 ) $ 1.66 - - Outstanding as of December 31 1,925,000 $ 1.52 1,950,000 $ 1.52 Exercisable at December 31 1,736,250 $ 1.51 1,515,000 $ 1.50 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax (Benefit)/Expense | The components of income tax (benefit)/expense related to net income/(loss) from operations are as follows (in thousands): Years Ended December 31, 2020 2019 Current: Federal $ - $ (9 ) State 73 45 Foreign (1,060 ) (859 ) Deferred: Federal 182 (188 ) State 129 (233 ) Foreign (133 ) (128 ) Total $ (809 ) $ (1,372 ) |
Schedule of Effective Tax Relative Operations Reconciliation of Maximum Statutory Federal Tax Rate | The following is a reconciliation of the maximum statutory federal tax rate to the Company’s effective tax relative to operations: Years Ended December 31, 2020 2019 % of % of Statutory federal income tax rate (21.0 )% (21.0 )% State income tax net of federal tax benefit (6.6 ) 0.1 Foreign rate difference 7.7 7.2 Change in valuation allowance 9.4 (10.6 ) Permanent differences 8.5 0.9 Research and development incentive (8.1 ) (53.1 ) Global intangible low-taxed income - 1.3 Other 1.1 (1.6 ) Total (9.0 )% (76.8 )% |
Schedule of Components Deferred Income Taxes | The components of deferred income taxes are as follows (in thousands): Years Ended December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 11,888 $ 11,538 Inventory 509 397 Research and development credit 648 648 Stock compensation 335 285 Other 280 326 Gross deferred tax asset 13,660 13,194 Less valuation allowance (7,668 ) (6,652 ) Total deferred tax asset $ 5,992 $ 6,542 Deferred tax liabilities: Goodwill and intangible assets (368 ) (757 ) Fixed assets (300 ) (275 ) Total deferred tax liability $ (668 ) $ (1,032 ) Net deferred tax asset $ 5,324 $ 5,510 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data From Operations | The following is a summary of selected quarterly financial data from operations (in thousands, except per share amounts). 2020 Quarter 1st 2nd 3rd 4th Net revenues $ 9,429 $ 11,108 $ 10,868 $ 10,343 Gross profit 4,428 5,668 5,654 5,218 Operating income/(loss) (1,354 ) (59 ) (348 ) (6,336 ) Net income/(loss) (1,147 ) (668 ) (775 ) (5,498 ) Diluted earnings/(loss) per share $ (0.05 ) $ (0.03 ) $ (0.04 ) $ (0.25 ) 2019 Quarter 1st 2nd 3rd 4th Net revenues $ 13,032 $ 13,508 $ 10,812 $ 11,569 Gross profit 5,727 6,133 4,825 5,604 Operating income/(loss) (398 ) 146 (677 ) (550 ) Net income/(loss) (345 ) 157 (460 ) 235 Diluted earnings/(loss) per share $ (0.02 ) $ 0.01 $ (0.02 ) $ 0.01 NOTE: The quarterly amounts above may not add to the full year Consolidated Statements of Operations and Comprehensive Income/(Loss) due to rounding |
Description of Company and Su_4
Description of Company and Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | Feb. 07, 2020USD ($) | Dec. 31, 2020USD ($)Integershares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) |
Number of reportable segments | Integer | 1 | |||
Inventory reserves carrying value | $ 1,129 | $ 969 | ||
Prepaid and other current assets | 2,172 | 1,871 | ||
Goodwill impairment charge | 4,742 | |||
Goodwill | 11,512 | 10,069 | $ 9,778 | |
Foreign currency transaction gains | 64 | |||
Research and development costs | 6,389 | 5,917 | ||
Advertising expenses | $ 235 | $ 91 | ||
Percentage of largest benefit to tax benefits recognized | 50.00% | |||
Effects anti-dilutive computation of earnings per share amount | shares | 3,114,792 | 1,324,548 | ||
Holzworth Instrumentation Inc [Member] | ||||
Goodwill impairment charge | ||||
Goodwill | $ 4,014 | 6,000 | ||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | ||||
Estimated fair value of deferred purchase price and earn-out for 2020 financial targets | 660 | |||
Estimated fair value of deferred purchase price and earn-out for 2021 financial targets | $ 2,400 | |||
CommAgility Limited [Member] | ||||
Goodwill impairment charge | 4,742 | |||
Goodwill | 4,161 | 8,718 | 8,427 | |
Microlab [Member] | ||||
Goodwill impairment charge | ||||
Goodwill | 1,351 | 1,351 | $ 1,351 | |
Holzworth [Member] | ||||
Goodwill | 6,000 | |||
Loss on change in consideration | $ 1,100 | |||
Number of earnout shares issuable | shares | 1,559,807 | |||
Income Tax Receivable [Member] | ||||
Prepaid and other current assets | $ 1,200 | $ 1,100 | ||
No One Customer Exceeded [Member] | Revenues [Member] | ||||
Concentration credit risk, percentage | 10.00% | |||
One Customer [Member] | Revenues [Member] | ||||
Concentration credit risk, percentage | 24.80% | |||
One Customer [Member] | Accounts Receivable [Member] | ||||
Concentration credit risk, percentage | 12.70% | 12.90% | ||
One Customer Exceeded [Member] | Accounts Receivable [Member] | ||||
Concentrationrisk significant customers percentage of gross amounts threshold | 10.00% | 10.00% | ||
Two Suppliers Exceeded [Member] | Inventory Purchases [Member] | ||||
Threshold percentage of inventory purchases attributable to significant supplier | 10.00% | |||
Two Suppliers [Member] | Inventory Purchases [Member] | ||||
Concentration risk significant suppliers percentage of inventory purchases threshold | 14.00% | |||
Three Suppliers Exceeded [Member] | Inventory Purchases [Member] | ||||
Threshold percentage of inventory purchases attributable to significant supplier | 10.00% | |||
Suppliers One [Member] | Inventory Purchases [Member] | ||||
Concentration risk significant suppliers percentage of inventory purchases threshold | 18.00% | |||
Suppliers Two [Member] | Inventory Purchases [Member] | ||||
Concentration risk significant suppliers percentage of inventory purchases threshold | 14.00% | |||
Suppliers Three [Member] | Inventory Purchases [Member] | ||||
Concentration risk significant suppliers percentage of inventory purchases threshold | 10.00% |
Description of Company and Su_5
Description of Company and Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Raw materials | $ 4,644 | $ 4,023 |
Work-in-process | 618 | 406 |
Finished goods | 3,534 | 2,896 |
Inventory net | $ 8,796 | $ 7,325 |
Description of Company and Su_6
Description of Company and Summary of Significant Accounting Policies - Schedule of Property Plant and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Machinery and Computer Equipment/Software [Member] | Minimum [Member] | |
Useful lives | 3 years |
Machinery and Computer Equipment/Software [Member] | Maximum [Member] | |
Useful lives | 8 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Useful lives | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Useful lives | 7 years |
Description of Company and Su_7
Description of Company and Summary of Significant Accounting Policies - Schedule of Weighted Average Number of Shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Weighted average common shares outstanding | 21,657 | 21,111 |
Potentially dilutive equity awards | 313,341 | 522,996 |
Weighted average common shares outstanding, assuming dilution | 21,970,247 | 21,633,628 |
Acquisition of Holzworth (Detai
Acquisition of Holzworth (Details Narrative) - USD ($) $ in Thousands | Feb. 19, 2021 | Feb. 07, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Net revenues | $ 10,343 | $ 10,868 | $ 11,108 | $ 9,429 | $ 11,569 | $ 10,812 | $ 13,508 | $ 13,032 | $ 41,748 | $ 48,921 | ||
Operating income | (6,336) | $ (348) | $ (59) | $ (1,354) | $ (550) | $ (677) | $ 146 | $ (398) | (8,099) | $ (1,479) | ||
Holzworth Instrumentation Inc [Member] | ||||||||||||
Cash consideration | $ 10,044 | 12,042 | ||||||||||
Working capital adjustment | 295 | 292 | ||||||||||
Aggregate earnout payments | $ 555 | 2,440 | ||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | ||||||||||||
Net revenues | 8,800 | |||||||||||
Operating income | 1,400 | |||||||||||
Incidental transaction expenses paid | 243 | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Amendment 2 [Member] | Subsequent Event [Member] | Unsecured Seller Notes [Member] | ||||||||||||
Conversion of note | $ 750 | |||||||||||
Annual interest rate | 6.50% | |||||||||||
Debt maturity description | The payment date has been changed from March 31, 2021 to three equal installments of $250,000, plus accrued interest, due on July 1, 2021, October 1, 2021 and January 1, 2022. | |||||||||||
Installments payments | $ 250 | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Year 1 Earnout [Member] | Amendment 2 [Member] | Subsequent Event [Member] | ||||||||||||
Installment description | The payment date of the first earnout payment based on the financial results of the calendar year ended 2020 ("Year 1 Earnout") has been amended from March 31, 2021 to (i) six (6) equal quarterly installments of 10% of the Year 1 Earnout payable on the last business day of each calendar quarter between June 30, 2021 and September 30, 2022 and (ii) one (1) installment payment equal to 40% of the Year 1 Earnout on December 31, 2022. The Year 1 Earnout is payable in cash or shares of the Company's common stock based on the 90 trading day volume weighted average price immediately preceding final determination of the Year 1 Earnout or $2.19 per share. | |||||||||||
Earnout payment amount | $ 3,400 | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Year 2 Earnout [Member] | Amendment 2 [Member] | Subsequent Event [Member] | ||||||||||||
Installment description | Pursuant to the Second Amendment to the Share Purchase Agreement the Year 2 Earnout is payable in 4 equal quarterly installments payable on the last business day of each calendar quarter between March 31, 2022 and December 31, 2022. | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Sellers [Member] | ||||||||||||
Stock issued for common stock, shares | 347,319 | |||||||||||
Stock issued for common stock | $ 500 | |||||||||||
Payments to sellers | 8,300 | |||||||||||
Cash consideration | 7,200 | |||||||||||
Payments for indemnification holdback | 600 | |||||||||||
Working capital adjustment | (292) | |||||||||||
Deferred purchase price payment | 750 | |||||||||||
Expected earnout payment | 3,400 | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Sellers [Member] | Second Deferred Purchase Price [Member] | ||||||||||||
Expected deferred purchase price payment | 750 | 750 | ||||||||||
Amount of EBITDA target to receive full deferred purchase price payments | $ 1,250 | 1,250 | ||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Sellers [Member] | March 31, 2021 [Member] | ||||||||||||
Payments for indemnification holdback | 200 | |||||||||||
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Maximum [Member] | ||||||||||||
Aggregate purchase price for the acquisition | 17,000 | |||||||||||
Aggregate earnout payments | $ 7,000 | |||||||||||
Lock-up and Voting Agreement [Member] | Holzworth Instrumentation Inc [Member] | ||||||||||||
Aggregate earnout payments | $ 1,500 | |||||||||||
Percentage for earnout consideration | 30.00% | |||||||||||
Earnout consideration, description | To the extent any shares of Company common stock are issued in payment of any Earnout Consideration (as defined in the Share Purchase Agreement) in accordance with the terms of the Share Purchase Agreement, such shares shall be subject to all applicable transfer restrictions, voting and other provisions set forth in the Lock-up and Voting Agreement, with the Effective Date with respect to such shares being the date such shares are issued; provided that, to the extent the portion of the first $1.5 million of Earnout Consideration that is paid in cash represents less than 30% of such Earnout Consideration, the portion of shares of Company common stock issued as Earnout Consideration constituting the difference between the cash percentage paid and 30% of the first $1.5 million of Earnout Consideration shall not be considered Lock-Up Shares. |
Acquisition of Holzworth - Sche
Acquisition of Holzworth - Schedule of Business Consideration (Details) - USD ($) $ in Thousands | Feb. 07, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill | $ 11,512 | $ 10,069 | $ 9,778 | ||
Holzworth Instrumentation Inc [Member] | |||||
Cash at close | $ 7,219 | 7,219 | |||
Equity issued at close | 465 | 465 | |||
Purchase price holdback | 800 | 800 | |||
Working capital adjustment | (295) | (292) | |||
Deferred purchase price | 1,300 | 1,410 | |||
Contingent consideration | 555 | 2,440 | |||
Total purchase price | 10,044 | 12,042 | |||
Cash | 30 | 30 | |||
Accounts receivable | 485 | 514 | |||
Inventory | 1,218 | 1,438 | |||
Intangible assets | 4,500 | 4,260 | |||
Other assets | 960 | 967 | |||
Fixed assets | 144 | 144 | |||
Accounts payable | (129) | (129) | |||
Accrued expenses | (425) | (429) | |||
Deferred revenue | (13) | (13) | |||
Other long term liabilities | (740) | (740) | |||
Net assets acquired | 6,030 | 6,042 | |||
Goodwill | $ 4,014 | $ 6,000 | |||
Holzworth Instrumentation Inc [Member] | Adjustment [Member] | |||||
Cash at close | |||||
Equity issued at close | |||||
Purchase price holdback | |||||
Working capital adjustment | 3 | ||||
Deferred purchase price | 110 | ||||
Contingent consideration | 1,885 | ||||
Total purchase price | 1,998 | ||||
Cash | |||||
Accounts receivable | 29 | ||||
Inventory | 220 | ||||
Intangible assets | (240) | ||||
Other assets | 7 | ||||
Fixed assets | |||||
Accounts payable | |||||
Accrued expenses | (4) | ||||
Deferred revenue | |||||
Other long term liabilities | |||||
Net assets acquired | 12 | ||||
Goodwill | $ 1,986 |
Acquisition of Holzworth - Sc_2
Acquisition of Holzworth - Schedule of Pro-Forma for Operation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | ||
Net revenues | $ 41,845 | $ 54,761 |
Net income/(loss) | $ (8,212) | $ (1,754) |
Earnings per diluted share | $ (0.38) | $ (0.08) |
Debt (Details Narrative)
Debt (Details Narrative) $ / shares in Units, $ in Thousands | Feb. 25, 2021USD ($) | May 04, 2020 | Feb. 07, 2020USD ($)Integer$ / sharesshares | Dec. 31, 2020USD ($) | Jan. 31, 2021 | Jan. 01, 2021 | Feb. 16, 2017USD ($) |
Paycheck Protection Program Loan [Member] | |||||||
Loan description | On May 4, 2020, the Company received $2.0 million pursuant to a loan from Bank of America N.A. under the Paycheck Protection Program ("PPP") of the 2020 Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") administered by the Small Business Association ("SBA"). The loan has an interest rate of 1% and a term of 24 months. A repayment schedule has not yet been provided by Bank of America. Accordingly, the full amount of the term loan has been shown as due in May 2022. | ||||||
Muzinich BDC, Inc [Member] | Warrant [Member] | |||||||
Fair value of warrants | $ 150 | ||||||
Muzinich BDC, Inc [Member] | Warrant [Member] | Risk Free Interest Rate [Member] | |||||||
Warrants and rights outstanding, measurement input | Integer | 1.41 | ||||||
Muzinich BDC, Inc [Member] | Warrant [Member] | Volatility [Member] | |||||||
Warrants and rights outstanding, measurement input | Integer | 48.7 | ||||||
Muzinich BDC, Inc [Member] | Warrant [Member] | Stock Price [Member] | |||||||
Warrants and rights outstanding, stock price | $ / shares | $ 1.34 | ||||||
Muzinich BDC, Inc [Member] | Initial Term Loan Facility [Member] | |||||||
Debt instrument, face amount | $ 8,400 | ||||||
Principal payment | $ 21 | ||||||
Debt instrument, maturity date | Feb. 7, 2025 | ||||||
Percentage for upfront fee | 2.50% | ||||||
Debt incurred costs | $ 1,000 | ||||||
Loan covenant, description | The required leverage ratio started at 4.75 to 1.0 for the twelve month periods ended March 31, 2020 and June 30, 2020, and decreased in various increments to 3.75 to 1.0 for the twelve months ended December 31, 2020, 2.75 to 1.0 for the twelve months ended December 31, 2021 and 2.0 to 1.0 for the twelve months ended December 31, 2022 and thereafter. The consolidated fixed charge coverage ratio is the ratio of consolidated EBITDA, as defined, less consolidated capital expenditures and cash income taxes paid to consolidated fixed charges, as defined, calculated on a twelve-month basis. The consolidated fixed charge coverage ratio for the twelve month periods ended March 31, 2020, June 30 2020 and September 30, 2020 must be 1.35 to 1 and increases in various increments on a quarterly basis to 1.5 to 1.0 for the twelve month period ended December 31, 2020 and 2021, and to 1.75 to 1.0 for the 12 months ending December 31, 2022 and thereafter. Lastly, the Company must maintain minimum liquidity, defined as cash and availability under the UK borrowing base, as defined, of $1.0 million over any trailing four-week period until such time as the foreign subsidiary has positive EBITDA, as defined, for three consecutive quarters and the Holzworth deferred purchase price has been paid in full. The Term Loan Facility also provides for a number of events of default, including, among others, nonpayment, bankruptcy, inaccuracy of representations and warranties, breach of covenant, change in control, entry of final judgement or order, breach of material contracts, and as long as the Company's consolidated leverage ratio is greater than 1.0 to 1.0 (as calculated in accordance with the terms of the Term Loan Facility), the cessation of service of any two of Tim Whelan, Michael Kandell or Daniel Monopoli as Chief Executive Officer, Chief Financial Officer or Chief Technology Officer, respectively, of the Company without acceptable replacements within 60 days. | ||||||
Muzinich BDC, Inc [Member] | Initial Term Loan Facility [Member] | Warrant [Member] | |||||||
Warrants to purchase common stock | shares | 266,167 | ||||||
Warrants exercise price | $ / shares | $ 1.3923 | ||||||
Warrants to purchase common stock, value | $ 370,588 | ||||||
Warrants volume weighted average price, description | 90-day volume weighted average price for shares of stock of the Company | ||||||
Muzinich BDC, Inc [Member] | Initial Term Loan Facility [Member] | February 7, 2022 [Member] | |||||||
Prepayment premium, rate | 2.00% | ||||||
Muzinich BDC, Inc [Member] | Initial Term Loan Facility [Member] | February 7, 2023 [Member] | |||||||
Prepayment premium, rate | 1.00% | ||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Amendment 2 [Member] | |||||||
Debt instrument, stated interest rate | 7.25% | ||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Subsequent Event [Member] | Amendment 2 [Member] | |||||||
Loan covenant, description | Leverage ratio for the twelve month periods ended September 30, 2021 from 3.00 to 2.75, December 31, 2021 from 2.75 to 2.25, March 31, 2022 from 2.50 to 2.00 and June 30, 2022 from 2.25 to 2.00. | ||||||
Debt instrument, stated interest rate | 9.25% | ||||||
Excess cash flow payment | $ 428 | ||||||
Deferred purchase price conversion to loan | $ 750 | ||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Subsequent Event [Member] | Amendment 2 [Member] | TTM $4Million EBITDA [Member] | |||||||
Debt instrument, effective interest rate | 8.50% | ||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Subsequent Event [Member] | Amendment 2 [Member] | TTM $6.3Million EBITDA [Member] | |||||||
Debt instrument, effective interest rate | 7.25% | ||||||
Muzinich BDC, Inc [Member] | Second Term Loan Facility [Member] | |||||||
Debt instrument, face amount | $ 11,600 | ||||||
Muzinich BDC, Inc [Member] | Second Term Loan Facility [Member] | Additional Warrant [Member] | |||||||
Warrants to purchase common stock | shares | 367,564 | ||||||
Warrants exercise price | $ / shares | $ 1.3923 | ||||||
Warrants to purchase common stock, value | $ 511,765 | ||||||
Warrants volume weighted average price, description | 90-day volume weighted average price for shares of stock of the Company | ||||||
Muzinich BDC, Inc [Member] | Term Loan [Member] | |||||||
Debt instrument, stated interest rate | 8.25% | ||||||
Bank of America, N.A [Member] | Revolving Loan [Member] | |||||||
Line of credit facility, maximum borrowing capacity | $ 9,000 | ||||||
Line of credit, rate | 2.15% | ||||||
Bank of America, N.A [Member] | Amendment No. 5 [Member] | Revolving Loan [Member] | |||||||
Debt incurred costs | $ 270 | ||||||
Borrowers' fixed charge coverage ratio, description | Reduced the interest rate margin applicable to revolving loans made under the Credit Facility from a range of 2.75% to 3.25% to a range of 2.00% to 2.50%, based on the Borrowers' Fixed Charge Coverage Ratio | ||||||
Line of credit facility, maturity date | Mar. 31, 2023 | ||||||
Prepayment of remaining principal balance | $ 304 | ||||||
Debt instrument closing fees | 25 | ||||||
Bank of America, N.A [Member] | Amendment No. 5 [Member] | Revolving Loan [Member] | CommAgility Limited [Member] | |||||||
Line of credit facility, maximum borrowing capacity | 5,000 | ||||||
Bank of America, N.A [Member] | Term Loan [Member] | |||||||
Debt instrument, face amount | $ 760 | $ 760 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total Debt | $ 9,407 | |
Less: Debt maturing within one year | (512) | |
Non-current portion of long term debt | 8,895 | |
Revolving Loan [Member] | ||
Total Debt | ||
Term Loan [Member] | ||
Less: Debt issuance costs, net of amortization | (831) | |
Less: Fair value of warrants, net of amortization | (123) | |
Total Debt | 8,316 | |
Paycheck Protection Program [Member] | ||
Total Debt | $ 2,045 |
Debt - Schedule of Term Loan Pa
Debt - Schedule of Term Loan Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 512 |
2022 | 2,129 |
2023 | 84 |
2024 | 84 |
2025 | 7,552 |
Total | $ 10,361 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Feb. 07, 2020 | Jan. 02, 2019 | |
Operating lease, right-of-use asset | $ 1,680 | $ 1,436 | ||
Operating lease liabilities | 648 | 508 | ||
Operating lease costs | $ 1,000 | $ 892 | ||
ASU 2016-02 [Member] | ||||
Operating lease, right-of-use asset | $ 1,900 | |||
ASU 2016-02 [Member] | Holzworth Instrumentation Inc [Member] | ||||
Operating lease, right-of-use asset | $ 789 | |||
Minimum [Member] | ||||
Operating lease, term | 12 months | |||
Maximum [Member] | ||||
Operating lease, term | 8 years |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 619 | |
2022 | 637 | |
2023 | 276 | |
2024 | 158 | |
2025 | 163 | |
Thereafter | 69 | |
Total undiscounted operating lease payments | 1,922 | |
Less: imputed interest | (188) | |
Present Value of operating lease liabilities | 1,734 | |
Current lease liabilities | 534 | $ 440 |
Long-term lease liabilities | 1,200 | $ 1,018 |
Total operating lease liabilities | $ 1,734 | |
Weighted-average remaining lease term (months) | 44 months | |
Weighted-average discount rate for operating leases | 5.88% |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Prepaid expenses and other current assets | $ 2,172 | $ 1,871 | $ 2,172 | $ 1,871 | ||||||
Deferred revenue | 924 | 42 | 924 | 42 | ||||||
Net revenues | 10,343 | $ 10,868 | $ 11,108 | $ 9,429 | 11,569 | $ 10,812 | $ 13,508 | $ 13,032 | 41,748 | 48,921 |
United States [Member] | ||||||||||
Net revenues | 30,600 | 30,000 | ||||||||
UK [Member] | ||||||||||
Net revenues | 1,700 | 12,700 | ||||||||
Russia [Member] | ||||||||||
Net revenues | 897 | |||||||||
France [Member] | ||||||||||
Net revenues | 859 | |||||||||
Germany [Member] | ||||||||||
Net revenues | 737 | |||||||||
Italy [Member] | ||||||||||
Net revenues | 506 | |||||||||
China [Member] | ||||||||||
Net revenues | 2,000 | 1,300 | ||||||||
Unbilled Revenue [Member] | ||||||||||
Prepaid expenses and other current assets | $ 260 | $ 147 | $ 260 | $ 147 | ||||||
Transferred at Point in Time [Member] | ||||||||||
Revenue recognized at a point in time (shipment), percentage | 99.00% | 99.00% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total net revenue | $ 10,343 | $ 10,868 | $ 11,108 | $ 9,429 | $ 11,569 | $ 10,812 | $ 13,508 | $ 13,032 | $ 41,748 | $ 48,921 |
Americas [Member] | ||||||||||
Total net revenue | 31,329 | 30,161 | ||||||||
EMEA [Member] | ||||||||||
Total net revenue | 6,329 | 16,500 | ||||||||
APAC [Member] | ||||||||||
Total net revenue | 4,090 | 2,260 | ||||||||
Passive and Active RF Solutions [Member] | ||||||||||
Total net revenue | 17,633 | 21,830 | ||||||||
Noisel Generators and Components [Member] | ||||||||||
Total net revenue | 13,356 | 6,198 | ||||||||
Power Meters and Analyzers [Member] | ||||||||||
Total net revenue | 5,737 | 6,109 | ||||||||
Signal Processing Hardware [Member] | ||||||||||
Total net revenue | 1,672 | 13,013 | ||||||||
Software Licenses [Member] | ||||||||||
Total net revenue | 1,284 | 14 | ||||||||
Services [Member] | ||||||||||
Total net revenue | $ 2,066 | $ 1,757 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of acquired intangible assets | $ 1,300 | $ 1,100 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Beginning Balance | $ 10,069 | $ 9,778 |
Foreign currency translation | 185 | 291 |
Holzworth acquisition | 6,000 | |
Goodwill impairment | (4,742) | |
Ending Balance | 11,512 | 10,069 |
Microlab [Member] | ||
Beginning Balance | 1,351 | 1,351 |
Foreign currency translation | ||
Holzworth acquisition | ||
Goodwill impairment | ||
Ending Balance | 1,351 | 1,351 |
CommAgility Limited [Member] | ||
Beginning Balance | 8,718 | 8,427 |
Foreign currency translation | 185 | 291 |
Holzworth acquisition | ||
Goodwill impairment | (4,742) | |
Ending Balance | 4,161 | 8,718 |
Holzworth Instrumentation Inc [Member] | ||
Beginning Balance | ||
Foreign currency translation | ||
Holzworth acquisition | 6,000 | |
Goodwill impairment | ||
Ending Balance | $ 6,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Gross Carrying Amount | $ 9,376 | $ 5,117 |
Accumulated Amortization | (4,378) | (3,110) |
Foreign Exchange Translation | 244 | 212 |
Net Carrying Amount | 5,242 | 2,219 |
Customer Relationships [Member] | ||
Gross Carrying Amount | 5,075 | 2,766 |
Accumulated Amortization | (2,564) | (1,644) |
Foreign Exchange Translation | 121 | 113 |
Net Carrying Amount | 2,632 | 1,235 |
Patents [Member] | ||
Gross Carrying Amount | 615 | 615 |
Accumulated Amortization | (491) | (365) |
Foreign Exchange Translation | 26 | 25 |
Net Carrying Amount | 150 | 275 |
Proprietary Technology [Member] | ||
Gross Carrying Amount | 1,550 | |
Accumulated Amortization | (142) | |
Foreign Exchange Translation | ||
Net Carrying Amount | 1,408 | |
Non-compete Agreements [Member] | ||
Gross Carrying Amount | 1,107 | 1,107 |
Accumulated Amortization | (1,150) | (1,101) |
Foreign Exchange Translation | 43 | 43 |
Net Carrying Amount | 49 | |
Holzworth Trade Name [Member] | ||
Gross Carrying Amount | 400 | |
Accumulated Amortization | (31) | |
Foreign Exchange Translation | ||
Net Carrying Amount | 369 | |
CommAgility Trade Name [Member] | ||
Gross Carrying Amount | 629 | 629 |
Accumulated Amortization | ||
Foreign Exchange Translation | 54 | 31 |
Net Carrying Amount | $ 683 | $ 660 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 1,307 |
2022 | 665 |
2023 | 573 |
2024 | 573 |
2025 | 573 |
Thereafter | 868 |
Total | $ 4,559 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,100 | $ 841 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Gross property, plant and equipment | $ 10,926 | $ 10,454 |
Less: accumulated depreciation | 9,102 | 8,307 |
Net property, plant and equipment | 1,824 | 2,147 |
Machinery and Computer Equipment/Software [Member] | ||
Gross property, plant and equipment | 9,085 | 8,662 |
Furniture and Fixtures [Member] | ||
Gross property, plant and equipment | 483 | 461 |
Leasehold Improvements [Member] | ||
Gross property, plant and equipment | $ 1,358 | $ 1,331 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Total demo asset accumulated depreciation | $ 397 | $ 317 |
Amortization of product demo intangible assets | $ 84 | $ 249 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Product demo assets | $ 187 | $ 128 |
Debt issuance costs - Revolver | 127 | 91 |
Deferred costs | 82 | 82 |
Income tax receivable | 65 | 230 |
Security deposit | 63 | 50 |
Deferred S3 costs | 255 | |
Other | 37 | 38 |
Total | $ 561 | $ 874 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Holzworth earnout | $ 3,423 | |
Holzworth deferred purchase price | 950 | |
Payroll and related benefits | 864 | 308 |
Commissions | 605 | 430 |
Goods received not invoiced | 458 | 346 |
Professional fees | 331 | 464 |
Sales and use and VAT tax | 315 | 355 |
Return reserve | 212 | 199 |
Warranty reserve | 140 | 160 |
Bonus | 123 | 126 |
Harris arbitration liability | 116 | 49 |
Severance | 102 | |
Other | 460 | 118 |
Total | $ 7,997 | $ 2,657 |
Accounting for Stock Based Co_3
Accounting for Stock Based Compensation (Details Narrative) - USD ($) | Aug. 04, 2020 | Apr. 07, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2014 | Dec. 31, 2012 |
Stock based compensation expense | $ 474,000 | $ 584,000 | |||||||||||||
Net revenues | $ 10,343,000 | $ 10,868,000 | $ 11,108,000 | $ 9,429,000 | $ 11,569,000 | $ 10,812,000 | $ 13,508,000 | $ 13,032,000 | 41,748,000 | 48,921,000 | |||||
Employee Stock Option [Member] | |||||||||||||||
Unrecognized compensation costs | 423,000 | $ 423,000 | |||||||||||||
Unrecognized compensation costs periods | 4 years 10 months 25 days | ||||||||||||||
Reversed stock based compensation expense | $ 6,000 | $ 121,000 | |||||||||||||
Unvested stock forfeited during the period | 6,250 | 240,000 | |||||||||||||
Restricted Stock Awards [Member] | |||||||||||||||
Unrecognized compensation costs | 93,000 | $ 93,000 | |||||||||||||
Unrecognized compensation costs periods | 2 years 3 months 19 days | ||||||||||||||
Reversed stock based compensation expense | $ 16,000 | ||||||||||||||
Unvested stock forfeited during the period | 16,667 | ||||||||||||||
Restricted shares granted during the period | 50,000 | 95,000 | |||||||||||||
Fair market value | $ 1.66 | $ 1.70 | |||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 95,203 | 64,583 | |||||||||||||
Restricted Stock Awards [Member] | Chief Revenue Officer [Member] | |||||||||||||||
Restricted shares granted during the period | 50,000 | ||||||||||||||
Fair market value | $ 1.20 | ||||||||||||||
Restricted Stock Awards [Member] | Chief Revenue Officer [Member] | August 1 2021 [Member] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 12,500 | ||||||||||||||
Restricted Stock Awards [Member] | Chief Revenue Officer [Member] | August 1 2022 [Member] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 12,500 | ||||||||||||||
Restricted Stock Awards [Member] | Chief Revenue Officer [Member] | August 1 2023 [Member] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 12,500 | ||||||||||||||
Restricted Stock Awards [Member] | Chief Revenue Officer [Member] | August 1 2024 [Member] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 12,500 | ||||||||||||||
Restricted Stock Units [Member] | |||||||||||||||
Unrecognized compensation costs | $ 81,000 | $ 81,000 | |||||||||||||
Unrecognized compensation costs periods | 6 months | ||||||||||||||
Restricted shares granted during the period | 161,507 | 147,917 | |||||||||||||
Fair market value | $ 1.56 | $ 2.25 | |||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number | 147,917 | 125,000 | |||||||||||||
Performance Based Stock Options [Member] | |||||||||||||||
Unvested stock forfeited during the period | 200,000 | ||||||||||||||
Number of options | 1,120,000 | ||||||||||||||
Share based compensation grant price per share | $ 0.78 | $ 0.78 | |||||||||||||
Stock options outstanding, shares | 1,205,000 | 105,000 | 1,205,000 | 105,000 | 305,000 | ||||||||||
Weighted average remaining contractual term | 7 years 8 months 12 days | 1 year | |||||||||||||
Aggregate intrinsic value outstanding | $ 325,000 | $ 13,000 | $ 325,000 | $ 13,000 | |||||||||||
Stock options exercisable | 20,000 | 20,000 | |||||||||||||
Share-based payment arrangement, option, exercise price range, lower range limit | $ 1.20 | ||||||||||||||
Share-based payment arrangement, option, exercise price range, upper range limit | 1.83 | ||||||||||||||
Weighted average exercise price | $ 1.52 | $ 1.61 | $ 1.52 | $ 1.61 | $ 1.45 | ||||||||||
Service Based Stock Options [Member] | |||||||||||||||
Unvested stock forfeited during the period | 6,250 | 40,000 | |||||||||||||
Number of options | 15,000 | ||||||||||||||
Share based compensation grant price per share | $ 1.51 | $ 1.50 | $ 1.51 | $ 1.50 | |||||||||||
Stock options outstanding, shares | 1,925,000 | 1,950,000 | 1,925,000 | 1,950,000 | 1,975,000 | ||||||||||
Weighted average remaining contractual term | 6 years | 2 years 7 months 6 days | |||||||||||||
Aggregate intrinsic value outstanding | $ 455,000 | $ 77,600 | $ 455,000 | $ 77,600 | |||||||||||
Stock options exercisable | 1,736,250 | 1,515,000 | 1,736,250 | 1,515,000 | |||||||||||
Share-based payment arrangement, option, exercise price range, lower range limit | $ 1.30 | ||||||||||||||
Share-based payment arrangement, option, exercise price range, upper range limit | $ 1.92 | ||||||||||||||
Aggregate intrinsic value exercisable | $ 415,000 | $ 72,225 | $ 415,000 | $ 72,225 | |||||||||||
Aggregate intrinsic value weighted average remaining contractual life | 6 years | 3 years | |||||||||||||
Weighted average exercise price | $ 1.52 | $ 1.52 | $ 1.52 | $ 1.52 | $ 1.52 | ||||||||||
Initial 2012 Plan [Member] | |||||||||||||||
Shares available for future grants | 2,000,000 | ||||||||||||||
2012 Plan [Member] | |||||||||||||||
Shares available for future grants | 227,000 | 227,000 | |||||||||||||
2012 Plan [Member] | Performance Based Stock Option [Member] | |||||||||||||||
Number of options | 150,000 | 970,000 | |||||||||||||
2012 Plan [Member] | Performance Based Stock Option [Member] | 25% Vesting [Member] | |||||||||||||||
Net revenues | $ 55,000,000 | $ 55,000,000 | |||||||||||||
Consolidated annualized gross revenues, vesting percentage | 25.00% | 25.00% | |||||||||||||
2012 Plan [Member] | Performance Based Stock Option [Member] | 50% Vesting [Member] | |||||||||||||||
Net revenues | $ 61,500,000 | $ 61,500,000 | |||||||||||||
Consolidated annualized gross revenues, vesting percentage | 50.00% | 50.00% | |||||||||||||
2012 Plan [Member] | Performance Based Stock Option [Member] | 75% Vesting [Member] | |||||||||||||||
Net revenues | $ 69,000,000 | $ 69,000,000 | |||||||||||||
Consolidated annualized gross revenues, vesting percentage | 75.00% | 75.00% | |||||||||||||
2012 Plan [Member] | Performance Based Stock Option [Member] | 100% Vesting [Member] | |||||||||||||||
Net revenues | $ 77,500,000 | $ 77,500,000 | |||||||||||||
Consolidated annualized gross revenues, vesting percentage | 100.00% | 100.00% | |||||||||||||
2012 Plan [Member] | Additional Shares [Member] | |||||||||||||||
Shares available for future grants | 1,600,000 |
Accounting for Stock Based Co_4
Accounting for Stock Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock based compensation Expense | $ 474 | $ 584 |
Restricted Stock Awards [Member] | ||
Stock based compensation Expense | 117 | 278 |
Restricted Stock Units [Member] | ||
Stock based compensation Expense | 205 | 245 |
Performance Based Stock Options [Member] | ||
Stock based compensation Expense | 99 | (90) |
Service Based Stock Options [Member] | ||
Stock based compensation Expense | $ 53 | $ 151 |
Accounting for Stock Based Co_5
Accounting for Stock Based Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards [Member] | ||
Number of Shares, Non-vested Beginning | 262,540 | 232,123 |
Number of Shares, Granted | 50,000 | 95,000 |
Number of Shares, Vested and Issued | (95,203) | (64,583) |
Number of Shares, Forfeited | (16,667) | |
Number of Shares, Non-vested Ending | 200,670 | 262,540 |
Weighted Average Grant Date Fair Value, Non-vested Beginning | $ 1.63 | $ 1.68 |
Weighted Average Grant Date Fair Value, Granted | 1.20 | 1.56 |
Weighted Average Grant Date Fair Value, Vested and Issued | 1.66 | 1.70 |
Weighted Average Grant Date Fair Value, Forfeited | 1.56 | |
Weighted Average Grant Date Fair Values, Non-vested Ending | $ 1.52 | $ 1.63 |
Restricted Stock Units [Member] | ||
Number of Shares, Non-vested Beginning | 147,917 | 125,000 |
Number of Shares, Granted | 161,507 | 147,917 |
Number of Shares, Vested and Issued | (147,917) | (125,000) |
Number of Shares, Forfeited | ||
Number of Shares, Non-vested Ending | 161,507 | 147,917 |
Weighted Average Grant Date Fair Value, Non-vested Beginning | $ 1.56 | $ 2.25 |
Weighted Average Grant Date Fair Value, Granted | 1.21 | 1.56 |
Weighted Average Grant Date Fair Value, Vested and Issued | 1.56 | 2.25 |
Weighted Average Grant Date Fair Value, Forfeited | ||
Weighted Average Grant Date Fair Values, Non-vested Ending | $ 1.21 | $ 1.56 |
Accounting for Stock Based Co_6
Accounting for Stock Based Compensation - Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards [Member] | 8/4/20 - Service Grant [Member] | Employees [Member] | ||
Number of Shares | 50,000 | |
Fair Market Value per Granted Share | $ 1.20 | |
Vesting | Annual vesting through August 2024 | |
Restricted Stock Awards [Member] | 1/11/19 - Service Grant [Member] | Employees [Member] | ||
Number of Shares | 95,000 | |
Fair Market Value per Granted Share | $ 1.56 | |
Vesting | Annual vesting through January 2022 | |
Restricted Stock Units [Member] | 6/4/2020 - Service Grant [Member] | Board of Directors [Member] | ||
Number of Shares | 150,000 | |
Fair Market Value per Granted Share | $ 1.18 | |
Vesting | Annual board meeting - June 2021 | |
Restricted Stock Units [Member] | 12/28/2020 - Service Grant [Member] | Board of Directors [Member] | ||
Number of Shares | 11,507 | |
Fair Market Value per Granted Share | $ 1.66 | |
Vesting | Annual board meeting - June 2021 | |
Restricted Stock Units [Member] | 5/30/2019 - Service Grant [Member] | Board of Directors [Member] | ||
Number of Shares | 125,000 | |
Fair Market Value per Granted Share | $ 1.55 | |
Vesting | Annual board meeting - June 2020 | |
Restricted Stock Units [Member] | 7/8/2019 - Service Grant [Member] | Board of Directors [Member] | ||
Number of Shares | 22,917 | |
Fair Market Value per Granted Share | $ 1.58 | |
Vesting | Annual board meeting - June 2020 |
Accounting for Stock Based Co_7
Accounting for Stock Based Compensation - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Performance Based Stock Options [Member] | ||
Option, Outstanding Beginning | 105,000 | 305,000 |
Option, Granted | 1,120,000 | |
Option, Exercised | (20,000) | |
Option, Forfeited | (200,000) | |
Option, Expired | ||
Option, Outstanding Ending | 1,205,000 | 105,000 |
Option, Exercisable | 20,000 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 1.61 | $ 1.45 |
Weighted Average Exercise Price, Granted | 1.50 | |
Weighted Average Exercise Price, Exercised | 0.78 | |
Weighted Average Exercise Price, Forfeited | 1.36 | |
Weighted Average Exercise Price, Expired | ||
Weighted Average Exercise Price, Outstanding Ending | 1.52 | 1.61 |
Weighted Average Exercise Price, Exercisable | $ 0.78 | |
Service Based Stock Options [Member] | ||
Option, Outstanding Beginning | 1,950,000 | 1,975,000 |
Option, Granted | 15,000 | |
Option, Exercised | ||
Option, Forfeited | (6,250) | (40,000) |
Option, Expired | 18,750 | |
Option, Outstanding Ending | 1,925,000 | 1,950,000 |
Option, Exercisable | 1,736,250 | 1,515,000 |
Weighted Average Exercise Price, Outstanding Beginning | $ 1.52 | $ 1.52 |
Weighted Average Exercise Price, Granted | 1.56 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited | 1.66 | 1.52 |
Weighted Average Exercise Price, Expired | 1.66 | |
Weighted Average Exercise Price, Outstanding Ending | 1.52 | 1.52 |
Weighted Average Exercise Price, Exercisable | $ 1.51 | $ 1.50 |
Accounting for Stock Based Co_8
Accounting for Stock Based Compensation - Schedule of Estimate Fair Value Assumptions Stock Option Awards Granted (Details) - Employees [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
4/7/2020 - Performance Grant [Member] | ||
Number of options | 970,000 | |
Option term | 10 years | |
Exercise price | $ 1.50 | |
Risk Free interest rate | 0.48% | |
Expected volatility | 50.85% | |
Fair Value at grant date | $ 0.86 | |
Expected dividend yield | 0.00% | |
8/4/2020 - Performance Grant [Member] | ||
Number of options | 150,000 | |
Option term | 10 years | |
Exercise price | $ 1.20 | |
Risk Free interest rate | 0.19% | |
Expected volatility | 52.06% | |
Fair Value at grant date | $ 1.20 | |
Expected dividend yield | 0.00% | |
1/11/2019 - Service Grant [Member] | ||
Number of options | 15,000 | |
Option term | 3 years | |
Exercise price | $ 1.56 | |
Risk Free interest rate | 2.52% | |
Expected volatility | 49.80% | |
Fair Value at grant date | $ 0.56 | |
Expected dividend yield | 0.00% |
Segment and Related Informati_2
Segment and Related Information (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Integer | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Payment for pension benefits | $ 44 | $ 286 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating loss carryforwards, valuation allowance | $ 7,700 | $ 6,700 |
Federal Tax [Member] | ||
Operating loss carryforwards | 16,300 | |
Operating loss carryforwards no expiration | 600 | |
State Tax [Member] | ||
Operating loss carryforwards | 42,400 | |
Operating loss carryforwards no expiration | $ 1,600 | |
Domestic Federal Tax and State Tax [Member] | ||
Operating loss carryforwards expiration description | Begin to expire in 2029 | |
Foreign Tax [Member] | ||
Operating loss carryforwards no expiration | $ 15,700 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax (Benefit)/Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current: Federal | $ (9) | |
Current: State | 73 | 45 |
Current: Foreign | (1,060) | (859) |
Deferred: Federal | 182 | (188) |
Deferred: State | 129 | (233) |
Deferred: Foreign | (133) | (128) |
Total | $ (809) | $ (1,372) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Relative Operations Reconciliation of Maximum Statutory Federal Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (21.00%) | (21.00%) |
State income tax net of federal tax benefit | (6.60%) | 0.10% |
Foreign rate difference | 7.70% | 7.20% |
Change in valuation allowance | 9.40% | (10.60%) |
Permanent differences | 8.50% | 0.90% |
Research and development incentive | (8.10%) | (53.10%) |
Global intangible low-taxed income | 1.30% | |
Other | 1.10% | (1.60%) |
Total | (9.00%) | (76.80%) |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 11,888 | $ 11,538 |
Inventory | 509 | 397 |
Research and development credit | 648 | 648 |
Stock compensation | 335 | 285 |
Other | 280 | 326 |
Gross deferred tax asset | 13,660 | 13,194 |
Less valuation allowance | (7,668) | (6,652) |
Total deferred tax asset | 5,992 | 6,542 |
Goodwill and intangible assets | (368) | (757) |
Fixed assets | (300) | (275) |
Total deferred tax liability | (668) | (1,032) |
Net deferred tax asset | $ 5,324 | $ 5,510 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Harris Corporation [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Jun. 05, 2019 | |
Legal expense | $ 50 | |
Maximum [Member] | ||
Estimated possible loss | $ 250 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Amendment 2 [Member] - USD ($) $ in Thousands | Feb. 25, 2021 | Feb. 19, 2021 | Jan. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 |
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | |||||
Debt instrument, stated interest rate | 7.25% | ||||
Subsequent Event [Member] | Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | |||||
Deferred purchase price conversion to loan | $ 750 | ||||
Loan covenant, description | Leverage ratio for the twelve month periods ended September 30, 2021 from 3.00 to 2.75, December 31, 2021 from 2.75 to 2.25, March 31, 2022 from 2.50 to 2.00 and June 30, 2022 from 2.25 to 2.00. | ||||
Debt instrument, stated interest rate | 9.25% | ||||
Excess cash flow payment | $ 428 | ||||
Subsequent Event [Member] | Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Year 1 Earnout [Member] | |||||
Installment description | The payment date of the first earnout payment based on the financial results of the calendar year ended 2020 ("Year 1 Earnout") has been amended from March 31, 2021 to (i) six (6) equal quarterly installments of 10% of the Year 1 Earnout payable on the last business day of each calendar quarter between June 30, 2021 and September 30, 2022 and (ii) one (1) installment payment equal to 40% of the Year 1 Earnout on December 31, 2022. The Year 1 Earnout is payable in cash or shares of the Company's common stock based on the 90 trading day volume weighted average price immediately preceding final determination of the Year 1 Earnout or $2.19 per share. | ||||
Earnout payment amount | $ 3,400 | ||||
Subsequent Event [Member] | Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Unsecured Seller Notes [Member] | |||||
Deferred purchase price conversion to loan | $ 750 | ||||
Debt maturity description | The payment date has been changed from March 31, 2021 to three equal installments of $250,000, plus accrued interest, due on July 1, 2021, October 1, 2021 and January 1, 2022. | ||||
Installments payments | $ 250 | ||||
Debt instrument, stated interest rate | 6.50% | ||||
Subsequent Event [Member] | TTM $4Million EBITDA [Member] | Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | |||||
Debt instrument, effective interest rate | 8.50% | ||||
Subsequent Event [Member] | TTM $6.3Million EBITDA [Member] | Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | |||||
Debt instrument, effective interest rate | 7.25% |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data From Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Net revenues | $ 10,343 | $ 10,868 | $ 11,108 | $ 9,429 | $ 11,569 | $ 10,812 | $ 13,508 | $ 13,032 | $ 41,748 | $ 48,921 |
Gross profit | 5,218 | 5,654 | 5,668 | 4,428 | 5,604 | 4,825 | 6,133 | 5,727 | 20,967 | 22,289 |
Operating income/(loss) | (6,336) | (348) | (59) | (1,354) | (550) | (677) | 146 | (398) | (8,099) | (1,479) |
Net income/(loss) | $ (5,498) | $ (775) | $ (668) | $ (1,147) | $ 235 | $ (460) | $ 157 | $ (345) | $ (8,088) | $ (414) |
Diluted earnings/(loss) per share | $ (0.25) | $ (0.04) | $ (0.03) | $ (0.05) | $ 0.01 | $ (0.02) | $ 0.01 | $ (0.02) |