Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-11916 | |
Entity Registrant Name | WIRELESS TELECOM GROUP, INC. | |
Entity Central Index Key | 0000878828 | |
Entity Tax Identification Number | 22-2582295 | |
Entity Incorporation, State or Country Code | NJ | |
Entity Address, Address Line One | 25 Eastmans Road | |
Entity Address, City or Town | Parsippany | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07054 | |
City Area Code | (973) | |
Local Phone Number | 386-9696 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | WTT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,421,183 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash & cash equivalents | $ 1,283 | $ 4,910 |
Accounts receivable - net of reserves of $216 and $143, respectively | 7,420 | 5,520 |
Inventories - net of reserves of $1,241 and $1,129 respectively | 9,655 | 8,796 |
Prepaid expenses and other current assets | 2,058 | 2,172 |
TOTAL CURRENT ASSETS | 20,416 | 21,398 |
PROPERTY PLANT AND EQUIPMENT - NET | 1,629 | 1,824 |
OTHER ASSETS | ||
Goodwill | 11,461 | 11,512 |
Acquired intangible assets, net | 4,249 | 5,242 |
Deferred income taxes | 6,162 | 5,701 |
Right of use assets | 1,282 | 1,680 |
Other assets | 548 | 561 |
TOTAL OTHER ASSETS | 23,702 | 24,696 |
TOTAL ASSETS | 45,747 | 47,918 |
CURRENT LIABILITIES | ||
Short term debt | 150 | 512 |
Accounts payable | 2,205 | 1,546 |
Short term leases | 572 | 534 |
Accrued expenses and other current liabilities | 7,656 | 7,997 |
Deferred revenue | 691 | 924 |
TOTAL CURRENT LIABILITIES | 11,274 | 11,513 |
LONG TERM LIABILITIES | ||
Long term debt | 3,578 | 8,895 |
Long term leases | 766 | 1,200 |
Other long term liabilities | 1,678 | 82 |
Deferred tax liability | 444 | 377 |
TOTAL LONG TERM LIABILITIES | 6,466 | 10,554 |
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 35,550,342 and 34,888,904 shares issued, 22,310,889 and 21,669,361 shares outstanding | 355 | 349 |
Additional paid in capital | 51,305 | 50,163 |
Retained earnings/(deficit) | 171 | (946) |
Treasury stock at cost, 13,239,453 and 13,219,543 shares | (24,600) | (24,556) |
Accumulated other comprehensive income | 776 | 841 |
TOTAL SHAREHOLDERS’ EQUITY | 28,007 | 25,851 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 45,747 | $ 47,918 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserves | $ 216 | $ 143 |
Inventories, reserves | $ 1,241 | $ 1,129 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 35,550,342 | 34,888,904 |
Common stock, shares outstanding | 22,310,889 | 21,669,361 |
Treasury stock, shares | 13,239,453 | 13,219,543 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net revenues | $ 12,824,000 | $ 10,868,000 | $ 36,168,000 | $ 31,404,000 |
Cost of revenues | 6,284,000 | 5,214,000 | 17,549,000 | 15,655,000 |
Gross profit | 6,540,000 | 5,654,000 | 18,619,000 | 15,749,000 |
Operating expenses | ||||
Research and development | 1,435,000 | 1,826,000 | 4,281,000 | 5,080,000 |
Sales and marketing | 1,854,000 | 1,732,000 | 5,266,000 | 5,111,000 |
General and administrative | 2,800,000 | 2,444,000 | 8,469,000 | 7,322,000 |
Loss on Change in Contingent Consideration | 1,000,000 | 1,000,000 | ||
Total operating expenses | 7,089,000 | 6,002,000 | 19,016,000 | 17,513,000 |
Operating income/(loss) | (549,000) | (348,000) | (397,000) | (1,764,000) |
Extinguishment of PPP loan | 2,045,000 | |||
Other income/(expense) | 20,000 | (43,000) | 29,000 | 252,000 |
Interest expense | (365,000) | (256,000) | (947,000) | (727,000) |
Income/(Loss) before taxes | (894,000) | (647,000) | 730,000 | (2,239,000) |
Tax provision/(benefit) | (707,000) | 128,000 | (386,000) | 352,000 |
Net income/(loss) | (187,000) | (775,000) | 1,116,000 | (2,591,000) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments | (152,000) | 565,000 | (64,000) | (406,000) |
Comprehensive income/(loss) | $ (339,000) | $ (210,000) | $ 1,052,000 | $ (2,997,000) |
Income/(Loss) per share: | ||||
Basic | $ (0.01) | $ (0.04) | $ 0.05 | $ (0.12) |
Diluted | $ (0.01) | $ (0.04) | $ 0.05 | $ (0.12) |
Weighted average shares outstanding: | ||||
Basic | 22,233,876 | 21,703,268 | 21,899,799 | 21,642,955 |
Diluted | 22,234,000 | 21,703,000 | 24,219,000 | 21,643,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS PROVIDED/(USED) BY OPERATING ACTIVITIES | ||
Net Income/(Loss) | $ 1,116 | $ (2,591) |
Adjustments to reconcile net income/(loss) to net cash provided/(used) by operating activities: | ||
Depreciation and amortization | 1,604 | 1,631 |
Extinguishment of PPP loan | (2,045) | |
Amortization of debt issuance fees | 217 | 215 |
Share-based compensation expense | 301 | 360 |
Deferred rent | (22) | (22) |
Deferred income taxes | (387) | 1,057 |
Provision for doubtful accounts | 72 | (28) |
Inventory reserves | 115 | 119 |
Changes in assets and liabilities, net of acquisition: | ||
Accounts receivable | (1,998) | (1,343) |
Inventories | (993) | (461) |
Prepaid expenses and other assets | 459 | (226) |
Accounts payable | 728 | (451) |
Accrued expenses and other liabilities | 1,368 | 888 |
Net cash provided/(used) by operating activities | 535 | (852) |
CASH FLOWS PROVIDED/(USED) BY INVESTING ACTIVITIES | ||
Capital expenditures | (417) | (228) |
Acquisition of business, net of cash acquired | (200) | (7,189) |
Net cash provided/(used) by investing activities | (617) | (7,417) |
CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES | ||
Revolver borrowings | 50,220 | 27,432 |
Revolver repayments | (50,175) | (29,786) |
Term loan borrowings | 345 | 8,400 |
Term loan repayments | (4,191) | (405) |
Debt issuance fees | (1,305) | |
PPP loan | 2,045 | |
Payment of contingent consideration | (460) | |
Proceeds from exercise of stock options | 209 | 15 |
Shares withheld for employee taxes | (44) | (31) |
ATM shares sold | 565 | |
Net cash provided/(used) by financing activities | (3,531) | 6,365 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (14) | (138) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,627) | (2,042) |
Cash and Cash Equivalents, at Beginning of Period | 4,910 | 4,245 |
CASH AND CASH EQUIVALENTS, AT END OF PERIOD | 1,283 | 2,203 |
SUPPLEMENTAL INFORMATION: | ||
Cash paid during the period for interest | 698 | 527 |
Cash paid during the period for income taxes | $ 150 | $ 53 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | AOCI Attributable to Parent [Member] | Total |
Balances at Dec. 31, 2019 | $ 345 | $ 49,062 | $ 7,142 | $ (24,509) | $ 651 | $ 32,691 |
Balance, shares at Dec. 31, 2019 | 34,488,252 | |||||
Net income/(loss) | (1,147) | (1,147) | ||||
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 in connection with term debt | 151 | 151 | ||||
Shares withheld for employee taxes | (26) | (26) | ||||
Share-based compensation expense | 81 | 81 | ||||
Cumulative translation adjustment | (935) | (935) | ||||
Balances at Mar. 31, 2020 | $ 348 | 49,756 | 5,995 | (24,535) | (284) | 31,280 |
Balance, shares at Mar. 31, 2020 | 34,818,904 | |||||
Balances at Dec. 31, 2019 | $ 345 | 49,062 | 7,142 | (24,509) | 651 | 32,691 |
Balance, shares at Dec. 31, 2019 | 34,488,252 | |||||
Net income/(loss) | (2,591) | |||||
ATM shares sold | ||||||
Balances at Sep. 30, 2020 | $ 349 | 50,049 | 4,552 | (24,540) | 245 | 30,655 |
Balance, shares at Sep. 30, 2020 | 34,888,904 | |||||
Balances at Mar. 31, 2020 | $ 348 | 49,756 | 5,995 | (24,535) | (284) | 31,280 |
Balance, shares at Mar. 31, 2020 | 34,818,904 | |||||
Net income/(loss) | (668) | (668) | ||||
Share-based compensation expense | 128 | 128 | ||||
Cumulative translation adjustment | (36) | (36) | ||||
Balances at Jun. 30, 2020 | $ 348 | 49,884 | 5,327 | (24,535) | (320) | 30,704 |
Balance, shares at Jun. 30, 2020 | 34,818,904 | |||||
Net income/(loss) | (775) | (775) | ||||
Issuance of shares in connection with stock options exercised | 15 | 15 | ||||
Issuance of shares in connection with stock options exercised, shares | 20,000 | |||||
Issuance of restricted stock | $ 1 | (1) | ||||
Issuance of restricted stock, shares | 50,000 | |||||
Shares withheld for employee taxes | (5) | (5) | ||||
Share-based compensation expense | 151 | 151 | ||||
Cumulative translation adjustment | 565 | 565 | ||||
Balances at Sep. 30, 2020 | $ 349 | 50,049 | 4,552 | (24,540) | 245 | 30,655 |
Balance, shares at Sep. 30, 2020 | 34,888,904 | |||||
Balances at Dec. 31, 2020 | $ 349 | 50,163 | (946) | (24,556) | 841 | 25,851 |
Balance, shares at Dec. 31, 2020 | 34,888,904 | |||||
Net income/(loss) | (233) | (233) | ||||
Shares withheld for employee taxes | (17) | (17) | ||||
Share-based compensation expense | 114 | 114 | ||||
Cumulative translation adjustment | 75 | 75 | ||||
Balances at Mar. 31, 2021 | $ 349 | 50,277 | (1,179) | (24,573) | 916 | 25,790 |
Balance, shares at Mar. 31, 2021 | 34,888,904 | |||||
Balances at Dec. 31, 2020 | $ 349 | 50,163 | (946) | (24,556) | 841 | 25,851 |
Balance, shares at Dec. 31, 2020 | 34,888,904 | |||||
Net income/(loss) | 1,116 | |||||
ATM shares sold | (565) | |||||
Balances at Sep. 30, 2021 | $ 355 | 51,305 | 171 | (24,600) | 776 | 28,007 |
Balance, shares at Sep. 30, 2021 | 35,550,342 | |||||
Balances at Mar. 31, 2021 | $ 349 | 50,277 | (1,179) | (24,573) | 916 | 25,790 |
Balance, shares at Mar. 31, 2021 | 34,888,904 | |||||
Net income/(loss) | 1,537 | 1,537 | ||||
Issuance of restricted stock | $ 2 | (2) | ||||
Issuance of restricted stock, shares | 223,517 | |||||
Share-based compensation expense | 89 | 89 | ||||
Cumulative translation adjustment | 12 | 12 | ||||
Balances at Jun. 30, 2021 | $ 351 | 50,364 | 358 | (24,573) | 928 | 27,428 |
Balance, shares at Jun. 30, 2021 | 35,112,421 | |||||
Net income/(loss) | (187) | (187) | ||||
Issuance of shares in connection with stock options exercised | $ 1 | 208 | 209 | |||
Issuance of shares in connection with stock options exercised, shares | 140,000 | |||||
Issuance of shares in connection with Holzworth acquisition | 73 | 73 | ||||
Issuance of shares in connection with Holzworth acquisition, shares | 33,220 | |||||
Shares withheld for employee taxes | (27) | (27) | ||||
Share-based compensation expense | 98 | 98 | ||||
ATM shares sold | $ 3 | 562 | 565 | |||
ATM shares sold, shares | 264,701 | |||||
Cumulative translation adjustment | (152) | (152) | ||||
Balances at Sep. 30, 2021 | $ 355 | $ 51,305 | $ 171 | $ (24,600) | $ 776 | $ 28,007 |
Balance, shares at Sep. 30, 2021 | 35,550,342 |
Summary of Significant Accounti
Summary of Significant Accounting Principles and Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Principles and Policies | NOTE 1 - Summary of Significant Accounting Principles and Policies Basis of Presentation and Preparation 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. Oura 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. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company’s latest annual report (Form 10-K). The Company’s fiscal periods are based on the calendar year. Except as otherwise specified, references to “third quarter(s)” or “three months” indicate the Company’s three month period ended September 30, 2021 and September 30, 2020, and references to “year-end” indicate the fiscal year ended December 31, 2020. Consolidated Financial Statements In the opinion of management, the accompanying consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to fairly present the Company’s results for the interim periods being presented. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2020. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with US GAAP have been reduced for interim periods in accordance with SEC rules. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021. Critical Accounting Estimates The preparation of our consolidated financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period. We base our assumptions, judgements and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains and created significant volatility and disruption of financial markets. Although disruptions related to the COVID-19 pandemic did not impact our estimates and judgements as of the date of this report, it is reasonably possible that our accounting estimates and judgements may change as new events occur and additional information becomes available or is obtained. Furthermore, actual results could differ materially from our estimates as of the date of issuance of this Quarterly Report on Form 10-Q under different assumptions or conditions. For further information about our critical accounting estimates, see the discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Concentration Risk 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 three months ended September 30, 2021 no one customer accounted for greater than 10 10.32% 12.5% 10% One customer accounted for 12.2% 12.7% 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. Contingent Consideration Under the terms of the Holzworth Share Purchase Agreement, the Company is required to pay additional purchase price in the form of deferred purchase price payments and an earnout based on Holzworth’s financial results for the years ended December 31, 2020 and 2021. 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. The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations Due to the anticipated better than expected financial performance of the Holzworth reporting unit for fiscal year 2021, the Company recorded an increase to the contingent consideration liabilities in the amount of $1.0 million in the three months ended September 30, 2021, which represents the Company’s best estimate of the earnout payable based on the expected financial results for the year ending December 31, 2021. This earnout will be payable in four equal installments in fiscal 2022. As of September 30, 2021, amounts due for the Holzworth deferred purchase price and earnout were $ 500,000 4.1 |
Accounting Pronouncements
Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Pronouncements | NOTE 2 – Accounting Pronouncements Recently Adopted Accounting Standards There have been no changes to our significant accounting policies as described in the 2020 Form 10-K that had a material impact on our consolidated financial statements and related notes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) 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 | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of Holzworth | NOTE 3 – Acquisition of Holzworth On February 7, 2020 the Company completed the acquisition of all of the outstanding shares of Holzworth. Holzworth instruments which include signal generators and phased noise analyzers are used by government labs, 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. The acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations At closing, a portion of the purchase price was paid to the Sellers through the issuance of 347,319 500,000 During 2020, the Company paid $ 8.3 7.2 600,000 750,000 292,000 200,000 The Sellers earned a second deferred purchase price payment of $ 750,000 1.25 3.4 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 6.5% The payment date has been changed from March 31, 2021 to three equal installments of $ 250,000 Additionally, the parties amended the payment dates of the earnout consideration. The payment date of the 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, at the Company’s option, based on the 90 trading day volume weighted average price immediately preceding final determination of the Year 1 Earnout or $2.19 per share. 3.4 210,000 73,000 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, the Year 2 Earnout is payable in four equal quarterly installments payable on the last business day of each calendar quarter between March 31, 2022 and December 31, 2022. 7.0 17.0 Due to the anticipated better than expected financial performance of the Holzworth reporting unit for fiscal year 2021, the Company recorded an increase to the contingent consideration liabilities in the amount of $ 1.0 The following table summarizes the components of the purchase price and the allocation of the purchase price at fair value at the acquisition date (in thousands): Schedule of Business Consideration Amounts Recognized as of Acquisition Date Cash at close $ 7,219 Equity issued at close 465 Purchase price holdback 800 Working capital adjustment (292 ) Deferred purchase price 1,410 Contingent consideration 2,440 Total purchase price 12,042 Cash 30 Accounts receivable 514 Inventory 1,438 Intangible assets 4,260 Other assets 967 Fixed assets 144 Accounts payable (129 ) Accrued expenses (429 ) Deferred revenue (13 ) Other long term liabilities (740 ) Net assets acquired 6,042 Goodwill $ 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 Company’s post acquisition consolidated goodwill is shown below (in thousands): Schedule of Post Acquisition Consolidated Goodwill Holzworth Microlab CommAgility Total Balance as of January 1, 2020 $ - $ 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 Foreign currency translation - - 45 45 Balance as of March 31, 2021 $ 6,000 $ 1,351 $ 4,206 $ 11,557 Foreign currency translation - - 7 7 Balance as of June 30, 2021 $ 6,000 $ 1,351 $ 4,213 $ 11,564 Beginning balance $ 6,000 $ 1,351 $ 4,213 $ 11,564 Foreign currency translation - - (103 ) (103 ) Balance as of September 30, 2021 $ 6,000 $ 1,351 $ 4,110 $ 11,461 Closing balance $ 6,000 $ 1,351 $ 4,110 $ 11,461 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 4 – Debt Debt consists of the following (in thousands): Schedule of Debt September 30, 2021 Revolver at LIBOR plus margin $ 45 Term loan at LIBOR plus margin 4,125 Less: Debt issuance costs, net of amortization (678 ) Less: Fair value of warrants, net of amortization (101 ) CIBLS Loan at Bank of England plus margin 337 Total Debt 3,728 Less: Debt maturing within one year (150 ) Non-current portion of long term debt $ 3,578 Term loan payments by period (in thousands): Schedule of Term Loan Payments Remainder of 2021 $ 21 2022 126 2023 168 2024 168 2025 3,936 Thereafter 43 Total $ 4,462 Muzinich Term Loan Facility 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 21,000 February 7, 2025 2.50 1.0 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 (as defined below) 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. The Company received notice in June 2021 that the loan and accrued interest were fully forgiven, as described below. 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, amended the definition of consolidated EBITDA to include certain cash tax benefits related to our U.K. 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. 7.25 9.25 8.50 7.25 428,000 750,000 On May 27, 2021, the Company and its subsidiaries entered into the Third Amendment to the Credit Agreement and Limited Waiver (“Amendment 3)” with Muzinich in which Muzinich, among other things, permitted CommAgility to enter into the CIBLS Loan Agreement with Lloyds Bank Plc. See description below. On September 28, 2021, the Company and its subsidiaries entered into the Fourth Amendment to Credit Agreement and Limited Waiver (“Amendment 4”) with Muzinich. Amendment 4 was executed in connection with a prepayment of the principal balance of the Muzinich term loan in the amount of $ 3.7 95,000 2% 74,000 Under the terms of Amendment 4, the interest rate margin was decreased from 9.25% to 8.75% when trailing twelve month Consolidated EBITDA, as defined, excluding the US R&D tax credit, is less than or equal to $4.0 million and decreased from 8.50% to 8.00% when trailing twelve month Consolidated EBITDA, as defined, excluding the US R&D tax credit, is greater than $4.0 million but equal to or less than $6.3 million. Muzinich also agreed to waive compliance with the financial covenant set forth in Section 7.11(c) of the Credit Agreement from September 28, 2021 until March 31, 2022. Section 7.11(c) requires the trailing four week average liquidity, as defined, of the Company’s CommAgility subsidiary to be no less than $1.0 million. 3.7 Credit Facility with Bank of America, N.A. The Company entered into a Credit Facility with Bank of America, N.A. (“Bank of America”) on February 16, 2017 (the “Credit Facility”), which provided for a term loan in the aggregate principal amount of $ 760,000 9.0 In connection with the Acquisition, on February 7, 2020, the Company and certain of its subsidiaries (the “Borrowers”), and Bank of America entered into Amendment No. 5 to the Credit Facility (“BOA Amendment 5”). By entering into BOA 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. Additionally, the Company prepaid the remaining principal balance of the BOA Term Loan in the amount of $ 304,000 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. The Company received notice in June 2021 that the loan and accrued interest were fully forgiven, as described below. 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. On September 28, 2021, the Company and its subsidiaries entered into Amendment No. 8 (“BOA Amendment 8”) in which Bank of America consented to the aforementioned principal prepayment of the Muzinich term loan and amended the definition of Fixed Charge Coverage Ratio to treat the Muzinich principal prepayment as being made on October 1, 2020. Additionally, Bank of America and the Company agreed that, in accordance with the Credit Facility, the LIBOR should be replaced with a successor rate in accordance with the provisions of BOA Amendment 5. Accordingly, BOA Amendment 8 defines the LIBOR successor rate for loans denominated in U.S. dollars to be the Bloomberg Short-Term Bank Yield Index rate (“BSBY”), loans denominated in Sterling to be the Sterling Overnight Index Average Reference Rate (“SONIA”) and loans denominated in Euros to be the Euro Interbank Offered Rate (“EURIBOR”). Loans drawn after the effective date of BOA Amendment 8 will bear interest as the successor rates named above plus the applicable margin, as defined. As of September 30, 2021, the interest rate on the Term Loan Facility was 9.75 2.13 45,000 PPP Loan On May 4, 2020, the Company received $ 2 1 Debt CIBLS Loan On May 27, 2021, CommAgility entered into the Coronavirus Business Interruption Loan Agreement (“CIBLS Loan”) with Lloyds Bank PLC (“Lloyds”). Under the terms of the CIBLS Loan CommAgility can draw up to a maximum of £ 250,000 2.35 On July 1, 2021 CommAgility executed a draw down of the maximum amount of £ 250,000 21 316,000 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Equity | NOTE 5 – Equity On July 21, 2021, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (the “Agent”), to issue and sell through the Agent, shares of the Company’s common stock, par value $ 0.01 12,000,000 From July 21, 2021 through August 6, 2021 the Agent sold 264,701 738,827 The registration statement pursuant to which the shares were sold expired on September 17, 2021 and was not renewed. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | NOTE 6 – 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 8 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 September 30, 2021 and December 31, 2020. 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 $ 1.9 789,000 168,000 500,000 167,000 483,000 Operating lease costs for the three and nine months ended September 30, 2021 were $ 258,000 825,000 269,000 791,000 The following table presents information about the amount and timing of cash flows arising from the Company’s leases as of September 30, 2021: Schedule of Maturity of Operating Lease Liabilities (in thousands) September 30, 2021 Maturity of Lease Liabilities Remainder of 2021 $ 156 2022 637 2023 276 2024 158 2025 163 Thereafter 69 Total Undiscounted operating lease payments 1,459 Less: imputed interest (121 ) Present value of operating lease liabilities $ 1,338 Balance sheet classification Current lease liabilities $ 572 Long-term lease liabilities 766 Total operating lease liabilities $ 1,338 Other information Weighted-average remaining term (months) for operating leases 37 Weighted-average discount rate for operating leases 5.88 % |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 7 – 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 97 100 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 when 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; and ● 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 unbilled revenue when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Unbilled revenue was $ 179,000 260,000 691,000 924,000 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). Schedule of Disaggregated Revenue Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Total net revenues by revenue type Passive and active RF components $ 5,444 $ 4,407 $ 12,809 $ 14,527 Signal generators and components 3,485 3,970 10,003 8,598 Signal analyzers and power meters 1,996 1,451 5,392 4,297 Signal processing hardware 813 106 3,825 1,471 Software licenses 178 443 1,509 1,157 Services 908 491 2,630 1,354 Total net revenue $ 12,824 $ 10,868 $ 36,168 $ 31,404 Total net revenues by geographic areas Americas $ 9,547 $ 8,958 $ 26,018 $ 23,598 EMEA 1,815 1,145 5,390 4,793 APAC 1,462 765 4,760 3,013 Total net revenue $ 12,824 $ 10,868 $ 36,168 $ 31,404 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 – Income Taxes The Company records deferred taxes in accordance with ASC 740, “ Accounting for Income Taxes 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 major tax jurisdictions are New Jersey, Colorado and the United Kingdom (“U.K.”). 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 September 30, 2021, the Company’s net deferred tax asset of approximately $ 6.2 7.7 The Company recorded a tax benefit of $ 386,000 The Company recorded a tax provision of $ 352,000 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Income/(Loss) per share: | |
Earnings (Loss) Per Share | NOTE 9 – Earnings (Loss) Per 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, the number of shares issuable under the terms of the Holzworth earnout and the weighted average number of warrants to purchase common stock outstanding for the period. Shares from stock options 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. Schedule of Weighted Average Common Shares Outstanding 2021 2020 2021 2020 For the Three Months For the Nine Months Ended September 30, Ended September 30, 2021 2020 2021 2020 Weighted average common shares outstanding 22,233,876 21,703,268 21,899,799 21,642,955 Potentially dilutive equity awards 2,449,930 388,366 2,319,127 295,186 Weighted average common shares outstanding, assuming dilution 24,683,806 22,091,634 24,218,926 21,938,141 For the three and nine months ended September 30, 2021, the weighted average number of options to purchase common stock not included in potentially dilutive equity awards because the performance condition was not met was 1,205,000 1,430,889 For the three and nine months ended September 30, 2020, 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, was 3,246,167 2,924,650 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 10 – Inventories Inventory carrying value is net of inventory reserves of $ 1.2 1.1 Inventories consist of (in thousands): Schedule of Inventory September 30, 2021 December 31, 2020 Raw materials $ 6,067 $ 4,644 Work-in-process 787 618 Finished goods 2,801 3,534 Total Inventory $ 9,655 $ 8,796 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses And Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | NOTE 11 – Accrued Expenses and Other Current Liabilities As of September 30, 2021, and December 31, 2020 accrued expenses and other current liabilities consisted of the following (in thousands): Schedule of Accrued Expenses and Other Current Liabilities September 30, 2021 December 31, 2020 Holzworth earnout – short term $ 2,521 $ 3,423 Payroll and related benefits 1,141 864 Goods received not invoiced 1,085 458 Holzworth deferred purchase price 500 950 Professional fees 481 331 Commissions 462 605 Bonus 446 123 Returns reserve 248 212 Sales and use and VAT tax 216 315 Warranty reserve 140 140 Harris arbitration liability - 116 Other 416 460 Total $ 7,656 $ 7,997 |
Accounting for Stock Based Comp
Accounting for Stock Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Accounting for Stock Based Compensation | NOTE 12 - Accounting for Stock Based Compensation The Company’s results for the three months ended September 30, 2021 and 2020 include $ 98,000 151,000 301,000 360,000 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 no In the second quarter of 2021, the Company’s Board of Directors and shareholders approved the 2021 Long Term Incentive Plan (the “2021 Incentive Plan”), which provides for the grant of equity-based and cash incentives, including stock awards, stock unit awards, performance unit awards, non-qualified stock options, incentive stock options and cash awards, including dividend equivalent rights to employees, officers, directors or other service providers of the Company who are expected to contribute to the Company’s future growth and success. The 2021 Incentive Plan provides for the grant of awards relating to 1.5 On August 2, 2021 the Company granted 25,000 2.70 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES There have been no material changes in our commitments and contingencies and risks and uncertainties as of September 30, 2021 from that previously disclosed in our annual report on Form 10-K for the year ended December 31, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 - SUBSEQUENT EVENTS There were no subsequent events or transactions requiring recognition or disclosure in the consolidated financial statements, and the notes thereto, through the date the financial statements were issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles and Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation 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. Oura 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. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company’s latest annual report (Form 10-K). The Company’s fiscal periods are based on the calendar year. Except as otherwise specified, references to “third quarter(s)” or “three months” indicate the Company’s three month period ended September 30, 2021 and September 30, 2020, and references to “year-end” indicate the fiscal year ended December 31, 2020. |
Consolidated Financial Statements | Consolidated Financial Statements In the opinion of management, the accompanying consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to fairly present the Company’s results for the interim periods being presented. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2020. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with US GAAP have been reduced for interim periods in accordance with SEC rules. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021. |
Critical Accounting Estimates | Critical Accounting Estimates The preparation of our consolidated financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period. We base our assumptions, judgements and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains and created significant volatility and disruption of financial markets. Although disruptions related to the COVID-19 pandemic did not impact our estimates and judgements as of the date of this report, it is reasonably possible that our accounting estimates and judgements may change as new events occur and additional information becomes available or is obtained. Furthermore, actual results could differ materially from our estimates as of the date of issuance of this Quarterly Report on Form 10-Q under different assumptions or conditions. For further information about our critical accounting estimates, see the discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. |
Concentration Risk | Concentration Risk 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 three months ended September 30, 2021 no one customer accounted for greater than 10 10.32% 12.5% 10% One customer accounted for 12.2% 12.7% |
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. |
Contingent Consideration | Contingent Consideration Under the terms of the Holzworth Share Purchase Agreement, the Company is required to pay additional purchase price in the form of deferred purchase price payments and an earnout based on Holzworth’s financial results for the years ended December 31, 2020 and 2021. 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. The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations Due to the anticipated better than expected financial performance of the Holzworth reporting unit for fiscal year 2021, the Company recorded an increase to the contingent consideration liabilities in the amount of $1.0 million in the three months ended September 30, 2021, which represents the Company’s best estimate of the earnout payable based on the expected financial results for the year ending December 31, 2021. This earnout will be payable in four equal installments in fiscal 2022. As of September 30, 2021, amounts due for the Holzworth deferred purchase price and earnout were $ 500,000 4.1 |
Acquisition of Holzworth (Table
Acquisition of Holzworth (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Consideration | The following table summarizes the components of the purchase price and the allocation of the purchase price at fair value at the acquisition date (in thousands): Schedule of Business Consideration Amounts Recognized as of Acquisition Date Cash at close $ 7,219 Equity issued at close 465 Purchase price holdback 800 Working capital adjustment (292 ) Deferred purchase price 1,410 Contingent consideration 2,440 Total purchase price 12,042 Cash 30 Accounts receivable 514 Inventory 1,438 Intangible assets 4,260 Other assets 967 Fixed assets 144 Accounts payable (129 ) Accrued expenses (429 ) Deferred revenue (13 ) Other long term liabilities (740 ) Net assets acquired 6,042 Goodwill $ 6,000 |
Schedule of Post Acquisition Consolidated Goodwill | The Company’s post acquisition consolidated goodwill is shown below (in thousands): Schedule of Post Acquisition Consolidated Goodwill Holzworth Microlab CommAgility Total Balance as of January 1, 2020 $ - $ 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 Foreign currency translation - - 45 45 Balance as of March 31, 2021 $ 6,000 $ 1,351 $ 4,206 $ 11,557 Foreign currency translation - - 7 7 Balance as of June 30, 2021 $ 6,000 $ 1,351 $ 4,213 $ 11,564 Beginning balance $ 6,000 $ 1,351 $ 4,213 $ 11,564 Foreign currency translation - - (103 ) (103 ) Balance as of September 30, 2021 $ 6,000 $ 1,351 $ 4,110 $ 11,461 Closing balance $ 6,000 $ 1,351 $ 4,110 $ 11,461 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following (in thousands): Schedule of Debt September 30, 2021 Revolver at LIBOR plus margin $ 45 Term loan at LIBOR plus margin 4,125 Less: Debt issuance costs, net of amortization (678 ) Less: Fair value of warrants, net of amortization (101 ) CIBLS Loan at Bank of England plus margin 337 Total Debt 3,728 Less: Debt maturing within one year (150 ) Non-current portion of long term debt $ 3,578 |
Schedule of Term Loan Payments | Term loan payments by period (in thousands): Schedule of Term Loan Payments Remainder of 2021 $ 21 2022 126 2023 168 2024 168 2025 3,936 Thereafter 43 Total $ 4,462 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
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 leases as of September 30, 2021: Schedule of Maturity of Operating Lease Liabilities (in thousands) September 30, 2021 Maturity of Lease Liabilities Remainder of 2021 $ 156 2022 637 2023 276 2024 158 2025 163 Thereafter 69 Total Undiscounted operating lease payments 1,459 Less: imputed interest (121 ) Present value of operating lease liabilities $ 1,338 Balance sheet classification Current lease liabilities $ 572 Long-term lease liabilities 766 Total operating lease liabilities $ 1,338 Other information Weighted-average remaining term (months) for operating leases 37 Weighted-average discount rate for operating leases 5.88 % |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Schedule of Disaggregated Revenue Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Total net revenues by revenue type Passive and active RF components $ 5,444 $ 4,407 $ 12,809 $ 14,527 Signal generators and components 3,485 3,970 10,003 8,598 Signal analyzers and power meters 1,996 1,451 5,392 4,297 Signal processing hardware 813 106 3,825 1,471 Software licenses 178 443 1,509 1,157 Services 908 491 2,630 1,354 Total net revenue $ 12,824 $ 10,868 $ 36,168 $ 31,404 Total net revenues by geographic areas Americas $ 9,547 $ 8,958 $ 26,018 $ 23,598 EMEA 1,815 1,145 5,390 4,793 APAC 1,462 765 4,760 3,013 Total net revenue $ 12,824 $ 10,868 $ 36,168 $ 31,404 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income/(Loss) per share: | |
Schedule of Weighted Average Common Shares Outstanding | Schedule of Weighted Average Common Shares Outstanding 2021 2020 2021 2020 For the Three Months For the Nine Months Ended September 30, Ended September 30, 2021 2020 2021 2020 Weighted average common shares outstanding 22,233,876 21,703,268 21,899,799 21,642,955 Potentially dilutive equity awards 2,449,930 388,366 2,319,127 295,186 Weighted average common shares outstanding, assuming dilution 24,683,806 22,091,634 24,218,926 21,938,141 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of (in thousands): Schedule of Inventory September 30, 2021 December 31, 2020 Raw materials $ 6,067 $ 4,644 Work-in-process 787 618 Finished goods 2,801 3,534 Total Inventory $ 9,655 $ 8,796 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses And Other Current Liabilities | |
Schedule of Accrued Expenses and Other Current Liabilities | As of September 30, 2021, and December 31, 2020 accrued expenses and other current liabilities consisted of the following (in thousands): Schedule of Accrued Expenses and Other Current Liabilities September 30, 2021 December 31, 2020 Holzworth earnout – short term $ 2,521 $ 3,423 Payroll and related benefits 1,141 864 Goods received not invoiced 1,085 458 Holzworth deferred purchase price 500 950 Professional fees 481 331 Commissions 462 605 Bonus 446 123 Returns reserve 248 212 Sales and use and VAT tax 216 315 Warranty reserve 140 140 Harris arbitration liability - 116 Other 416 460 Total $ 7,656 $ 7,997 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles and Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share Purchase Agreement [Member] | Holzworth Instrumentation Inc [Member] | Sellers [Member] | |||||
Product Information [Line Items] | |||||
Deferred purchase price second payment | $ 500,000 | $ 500,000 | |||
Expected earnout payment | $ 4,100,000 | $ 4,100,000 | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | No One Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration credit risk, percentage | 10.00% | 10.00% | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration credit risk, percentage | 12.50% | 10.32% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration credit risk, percentage | 12.20% | 12.70% |
Schedule of Business Considerat
Schedule of Business Consideration (Details) - USD ($) $ in Thousands | Feb. 07, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 11,461 | $ 11,564 | $ 11,557 | $ 11,512 | $ 10,069 | |
Holzworth Instrumentation Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash at close | $ 7,219 | |||||
Equity issued at close | 465 | |||||
Purchase price holdback | 800 | |||||
Working capital adjustment | (292) | |||||
Deferred purchase price | 1,410 | |||||
Contingent consideration | 2,440 | |||||
Total purchase price | 12,042 | |||||
Cash | 30 | |||||
Accounts receivable | 514 | |||||
Inventory | 1,438 | |||||
Intangible assets | 4,260 | |||||
Other assets | 967 | |||||
Fixed assets | 144 | |||||
Accounts payable | (129) | |||||
Accrued expenses | (429) | |||||
Deferred revenue | (13) | |||||
Other long term liabilities | (740) | |||||
Net assets acquired | 6,042 | |||||
Goodwill | $ 6,000 | $ 6,000 | $ 6,000 | $ 6,000 | $ 6,000 |
Schedule of Post Acquisition Co
Schedule of Post Acquisition Consolidated Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Beginning balance | $ 11,564 | $ 11,557 | $ 11,512 | $ 10,069 |
Holzworth acquisition | 6,000 | |||
Goodwill Impairment | (4,742) | |||
Foreign currency translation | (103) | 7 | 45 | 185 |
Closing balance | 11,461 | 11,564 | 11,557 | 11,512 |
Holzworth Instrumentation Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Beginning balance | 6,000 | 6,000 | 6,000 | |
Holzworth acquisition | 6,000 | |||
Goodwill Impairment | ||||
Foreign currency translation | ||||
Closing balance | 6,000 | 6,000 | 6,000 | 6,000 |
Microlab/FXR LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Beginning balance | 1,351 | 1,351 | 1,351 | 1,351 |
Holzworth acquisition | ||||
Goodwill Impairment | ||||
Foreign currency translation | ||||
Closing balance | 1,351 | 1,351 | 1,351 | 1,351 |
CommAgility Limited [Member] | ||||
Business Acquisition [Line Items] | ||||
Beginning balance | 4,213 | 4,206 | 4,161 | 8,718 |
Holzworth acquisition | ||||
Goodwill Impairment | (4,742) | |||
Foreign currency translation | (103) | 7 | 45 | 185 |
Closing balance | $ 4,110 | $ 4,213 | $ 4,206 | $ 4,161 |
Acquisition of Holzworth (Detai
Acquisition of Holzworth (Details Narrative) - Holzworth Instrumentation Inc [Member] - USD ($) | Feb. 19, 2021 | Feb. 07, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 12,042,000 | |||||
[custom:BusinessAcquisitionsForEquityIssuedWorkingCapitalAdjustment] | (292,000) | |||||
Business Combination, Consideration Transferred | $ 2,440,000 | |||||
Share Purchase Agreement [Member] | Maximum [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 17,000,000 | |||||
Business Combination, Consideration Transferred | 7,000,000 | |||||
Share Purchase Agreement [Member] | Year 2 Earnout [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Estimated earnout payable | $ 1,000,000 | |||||
Share Purchase Agreement [Member] | Amendment 2 [Member] | Year 1 Earnout [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued during period, value | $ 73,000 | |||||
Installment description | The payment date of the 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, at the Company’s option, 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 | $ 3,400,000 | |||||
Earnout paid amount | $ 210,000 | $ 210,000 | ||||
Share Purchase Agreement [Member] | Amendment 2 [Member] | Year 2 Earnout [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Installment description | Pursuant to the Second Amendment, the Year 2 Earnout is payable in four 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] | Amendment 2 [Member] | Unsecured Seller Notes [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Debt Conversion, Converted Instrument, Amount | $ 750,000 | |||||
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. | |||||
Debt Instrument, Periodic Payment | $ 250,000 | |||||
Share Purchase Agreement [Member] | Sellers [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued for common stock, shares | 347,319 | |||||
Stock issued during period, value | $ 500,000 | |||||
Payments to sellers | 8,300,000 | |||||
Cash consideration | 7,200,000 | |||||
[custom:PaymentsForIndemnificationHoldback] | $ 200,000 | 600,000 | ||||
[custom:BusinessCombinationsFirstDeferredPurchasePrice] | 750,000 | |||||
[custom:BusinessAcquisitionsForEquityIssuedWorkingCapitalAdjustment] | 292,000 | |||||
[custom:BusinessCombinationSecondDeferredPurchasesPrice] | 750,000 | |||||
Expected earnout payment | 3,400,000 | |||||
Share Purchase Agreement [Member] | Sellers [Member] | Second Deferred Purchase Price [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Amount of EBITDA target to receive | $ 1,250,000 |
Schedule of Debt (Details)
Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | ||
Total Debt | $ 3,728 | |
Less: Debt maturing within one year | (150) | |
Non-current portion of long term debt | 3,578 | $ 8,895 |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Debt | 4,125 | |
Less: Debt issuance costs, net of amortization | (678) | |
Less: Fair value of warrants, net of amortization | (101) | |
CIBLS Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Debt | 337 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Debt | $ 45 |
Schedule of Term Loan Payments
Schedule of Term Loan Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2021 | $ 21 |
2022 | 126 |
2023 | 168 |
2024 | 168 |
2025 | 3,936 |
Thereafter | 43 |
Total | $ 4,462 |
Debt (Details Narrative)
Debt (Details Narrative) | Sep. 28, 2021USD ($) | Jul. 02, 2021GBP (£) | Feb. 25, 2021USD ($) | May 04, 2020USD ($) | Feb. 07, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | May 27, 2021GBP (£) | Jan. 31, 2021 | Jan. 02, 2021 | Dec. 31, 2020USD ($) | Feb. 16, 2017USD ($) |
Short-term Debt [Line Items] | ||||||||||||
[custom:AssetBasedRevolver-0] | $ 45,000 | |||||||||||
Draw down | 50,220,000 | $ 27,432,000 | ||||||||||
Short term debt | 150,000 | $ 512,000 | ||||||||||
Long-term Debt | 4,462,000 | |||||||||||
Paycheck Protection Program Loan [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, face amount | $ 2,000,000 | |||||||||||
Debt instrument, stated interest rate | 1.00% | |||||||||||
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 had an interest rate of 1% and a term of 24 months. A repayment schedule was not provided by Bank of America. Accordingly, as of December 31, 2020 the full amount of the term loan was shown as due in May 2022. | |||||||||||
CIBLS Loan [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, stated interest rate | 2.35% | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | £ | £ 250,000 | |||||||||||
Draw down | £ | £ 250,000 | |||||||||||
Short term debt | 21,000 | |||||||||||
Long-term Debt | $ 316,000 | |||||||||||
Muzinich BDC, Inc [Member] | Initial Term Loan Facility [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, face amount | $ 8,400,000 | |||||||||||
Debt Instrument, Periodic Payment, Principal | $ 21,000 | |||||||||||
Debt instrument, maturity date | Feb. 7, 2025 | |||||||||||
Percentage for upfront fee | 2.50% | |||||||||||
Debt incurred costs | $ 1,000,000 | |||||||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Amendment 4 [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, prepayment amount | $ 3,700,000 | |||||||||||
Interest Payable | $ 95,000 | |||||||||||
Prepayment premium | 2.00% | |||||||||||
Prepayment premium | $ 74,000 | |||||||||||
Loan description | the interest rate margin was decreased from 9.25% to 8.75% when trailing twelve month Consolidated EBITDA, as defined, excluding the US R&D tax credit, is less than or equal to $4.0 million and decreased from 8.50% to 8.00% when trailing twelve month Consolidated EBITDA, as defined, excluding the US R&D tax credit, is greater than $4.0 million but equal to or less than $6.3 million. Muzinich also agreed to waive compliance with the financial covenant set forth in Section 7.11(c) of the Credit Agreement from September 28, 2021 until March 31, 2022. Section 7.11(c) requires the trailing four week average liquidity, as defined, of the Company’s CommAgility subsidiary to be no less than $1.0 million. | |||||||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Amendment 2 [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
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% | 7.25% | ||||||||||
[custom:ExcessCashFlowPayment] | $ 428,000 | |||||||||||
Debt Conversion, Converted Instrument, Amount | $ 750,000 | |||||||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Amendment 2 [Member] | TTM $4Million EBITDA [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, effective interest rate | 8.50% | |||||||||||
Muzinich BDC, Inc [Member] | Term Loan Facility [Member] | Amendment 2 [Member] | TTM $6.3Million EBITDA [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, effective interest rate | 7.25% | |||||||||||
Muzinich BDC, Inc [Member] | Term Loan [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, stated interest rate | 9.75% | |||||||||||
Bank of America, N.A [Member] | Revolving Credit Facility [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, stated interest rate | 2.13% | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 9,000,000 | |||||||||||
Bank of America, N.A [Member] | Term Loan [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Debt instrument, face amount | $ 760,000 | |||||||||||
[custom:PrepaymentOfRemainingPrinicipalBalance] | $ 304,000 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Jul. 21, 2021 | Aug. 06, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Sales Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value | $ 0.01 | |||
Number of shares sold | 264,701 | |||
Proceeds from sale of stock | $ 738,827 | |||
Sales Agreement [Member] | Maximum [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Proceeds from Issuance Initial Public Offering | $ 12,000,000 |
Schedule of Maturity of Operati
Schedule of Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases | ||
Remainder of 2021 | $ 156 | |
2022 | 637 | |
2023 | 276 | |
2024 | 158 | |
2025 | 163 | |
Thereafter | 69 | |
Total Undiscounted operating lease payments | 1,459 | |
Less: imputed interest | (121) | |
Present value of operating lease liabilities | 1,338 | |
Current lease liabilities | 572 | $ 534 |
Long-term lease liabilities | $ 766 | $ 1,200 |
Weighted-average remaining term (months) for operating leases | 37 months | |
Weighted-average discount rate for operating leases | 5.88% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Feb. 07, 2020 | Jan. 02, 2019 | |
Operating Lease, Right-of-Use Asset | $ 1,282,000 | $ 1,282,000 | $ 1,680,000 | ||||
Operating Lease, Payments | 168,000 | $ 167,000 | 500,000 | $ 483,000 | |||
Operating Lease, Cost | $ 258,000 | $ 269,000 | $ 825,000 | $ 791,000 | |||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating Lease, Right-of-Use Asset | $ 1,900,000 | ||||||
Accounting Standards Update 2016-02 [Member] | Holzworth Instrumentation Inc [Member] | |||||||
Operating Lease, Right-of-Use Asset | $ 789,000 | ||||||
Minimum [Member] | |||||||
Operating lease, term | 12 months | 12 months | |||||
Maximum [Member] | |||||||
Operating lease, term | 8 years | 8 years |
Schedule of Disaggregated Reven
Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 12,824 | $ 10,868 | $ 36,168 | $ 31,404 |
Americas [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 9,547 | 8,958 | 26,018 | 23,598 |
EMEA [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1,815 | 1,145 | 5,390 | 4,793 |
Asia Pacific [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1,462 | 765 | 4,760 | 3,013 |
Passive and Active RF Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 5,444 | 4,407 | 12,809 | 14,527 |
Signal Generators and Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 3,485 | 3,970 | 10,003 | 8,598 |
Signal Analyzers and Power Meters [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1,996 | 1,451 | 5,392 | 4,297 |
Signal Processing Hardware [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 813 | 106 | 3,825 | 1,471 |
Software Licenses [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 178 | 443 | 1,509 | 1,157 |
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 908 | $ 491 | $ 2,630 | $ 1,354 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Prepaid Expense and Other Assets, Current | $ 2,058,000 | $ 2,058,000 | $ 2,172,000 | ||
Deferred Revenue | 691,000 | 691,000 | 924,000 | ||
Unbilled Revenues [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Prepaid Expense and Other Assets, Current | $ 179,000 | $ 179,000 | $ 260,000 | ||
Transferred at Point in Time [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized at a point in time (shipment), percentage | 97.00% | 100.00% | 97.00% | 100.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Deferred tax assets, net | $ 6,200,000 | $ 6,200,000 | ||
Deferred tax assets, valuation allowance | 7,700,000 | 7,700,000 | ||
Income Tax Expense (Benefit) | 707,000 | $ (128,000) | 386,000 | $ (352,000) |
Income Tax Expense (Benefit) | $ (707,000) | $ 128,000 | $ (386,000) | $ 352,000 |
Schedule of Weighted Average Co
Schedule of Weighted Average Common Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income/(Loss) per share: | ||||
Weighted average common shares outstanding | 22,233,876 | 21,703,268 | 21,899,799 | 21,642,955 |
Potentially dilutive equity awards | 2,449,930 | 388,366 | 2,319,127 | 295,186 |
Weighted average common shares outstanding, assuming dilution | 24,683,806 | 22,091,634 | 24,218,926 | 21,938,141 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Antidilutive securities excluded from computation of earnings, amount | 1,205,000 | 3,246,167 | 1,205,000 | 2,924,650 |
Holzworth Instrumentation Inc [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Weighted-average number of shares issuable under the terms of earnout | 1,430,889 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,067 | $ 4,644 |
Work-in-process | 787 | 618 |
Finished goods | 2,801 | 3,534 |
Total Inventory | $ 9,655 | $ 8,796 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Inventories, reserves | $ 1,241 | $ 1,129 |
Schedule of Accrued Expenses an
Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accrued Expenses And Other Current Liabilities | ||
Holzworth earnout – short term | $ 2,521 | $ 3,423 |
Payroll and related benefits | 1,141 | 864 |
Goods received not invoiced | 1,085 | 458 |
Holzworth deferred purchase price | 500 | 950 |
Professional fees | 481 | 331 |
Commissions | 462 | 605 |
Bonus | 446 | 123 |
Returns reserve | 248 | 212 |
Sales and use and VAT tax | 216 | 315 |
Warranty reserve | 140 | 140 |
Harris arbitration liability | 116 | |
Other | 416 | 460 |
Total | $ 7,656 | $ 7,997 |
Accounting for Stock Based Co_2
Accounting for Stock Based Compensation (Details Narrative) - USD ($) | Aug. 02, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Employee Benefits and Share-based Compensation | $ 98,000 | $ 151,000 | $ 301,000 | $ 360,000 | |||
Common Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock, shares | 223,517 | 50,000 | |||||
2012 Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grants | 0 | 0 | |||||
2012 Plan [Member] | Additional Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grants | 1,600,000 | ||||||
2021 Incentive Plan [Member] | Each of Six Independent Board Members [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock, shares | 25,000 | ||||||
Shares issued price per share | $ 2.70 | ||||||
2021 Incentive Plan [Member] | Common Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grants | 1,500,000 |