Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-13810 | |
Entity Registrant Name | Socket Mobile, Inc. | |
Entity Central Index Key | 0000944075 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 39700 Eureka Drive | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | CA | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 94560 | |
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 | 6,050,655 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,715,024 | $ 5,060,105 | $ 6,935,710 | $ 9,688,696 |
Cost of revenues | 1,353,498 | 2,430,464 | 3,350,469 | 4,659,213 |
Gross profit | 1,361,526 | 2,629,641 | 3,585,241 | 5,029,483 |
Operating expenses: | ||||
Research and development | 859,510 | 997,483 | 1,740,148 | 1,891,219 |
Sales and marketing | 722,160 | 771,097 | 1,489,956 | 1,527,011 |
General and administrative | 589,730 | 643,215 | 1,255,846 | 1,346,397 |
Total operating expenses | 2,171,400 | 2,411,795 | 4,485,950 | 4,764,627 |
Operating income (loss) | (809,874) | 217,846 | (900,709) | 264,856 |
Interest expense, net | (8,149) | (29,307) | (27,641) | (57,808) |
Other income | 50,000 | 70,000 | ||
Net income (loss) before income taxes | (768,023) | 188,539 | (858,350) | 207,048 |
Income tax expense | (68,749) | (75,419) | ||
Net income (loss) | $ (768,023) | $ 119,790 | $ (858,350) | $ 131,629 |
Net income (loss) per share: | ||||
Basic | $ (0.13) | $ 0.02 | $ (0.14) | $ 0.02 |
Diluted | $ (0.13) | $ 0.02 | $ (0.14) | $ 0.02 |
Weighted average shares outstanding: | ||||
Basic | 6,009,383 | 5,999,159 | 6,011,670 | 5,969,666 |
Diluted | 6,009,383 | 6,271,507 | 6,011,670 | 6,203,889 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 926,983 | $ 958,860 |
Accounts receivable, net | 1,770,112 | 2,837,006 |
Inventories, net | 3,253,709 | 3,178,908 |
Prepaid expenses and other current assets | 255,339 | 312,127 |
Deferred cost on shipments to distributors | 153,793 | 233,823 |
Total current assets | 6,359,936 | 7,520,724 |
Property and equipment: | ||
Machinery and office equipment | 2,271,539 | 2,195,405 |
Computer equipment | 1,279,482 | 1,336,445 |
Property and equipment, gross | 3,551,021 | 3,531,850 |
Accumulated depreciation | (2,699,040) | (2,667,340) |
Property and equipment, net | 851,981 | 864,510 |
Goodwill | 4,427,000 | 4,427,000 |
Other long-term assets | 180,825 | 202,611 |
Deferred tax assets | 5,506,934 | 5,506,934 |
Operating lease right-of-use assets | 794,735 | 936,708 |
Total assets | 18,121,411 | 19,458,487 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,831,685 | 2,084,848 |
Accrued payroll and related expenses | 458,178 | 566,350 |
Deferred revenue on shipments to distributors | 432,506 | 611,029 |
Short term portion of deferred service revenue | 28,086 | 32,900 |
Bank lines of credit | 450,000 | 1,412,449 |
Notes payable – current portion | 578,259 | 333,333 |
Operating lease – current portion | 455,928 | 419,288 |
Finance lease – current portion | 8,291 | |
Total current liabilities | 4,234,642 | 5,468,488 |
Long-term portion of operating lease | 508,328 | 715,062 |
Long-term portion of deferred service revenue | 33,382 | 40,711 |
Long-term portion of notes payable | 713,774 | |
Total liabilities | 5,490,126 | 6,224,261 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value: Authorized – 20,000,000 shares, Issued and outstanding – 6,009,109 shares at June 30, 2020 and 6,017,674 shares at December 31, 2019 | 6,009 | 6,018 |
Additional paid-in capital | 61,322,389 | 61,066,971 |
Accumulated deficit | (48,697,113) | (47,838,763) |
Total stockholders’ equity | 12,631,285 | 13,234,226 |
Total liabilities and stockholders’ equity | $ 18,121,411 | $ 19,458,487 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,009,109 | 6,017,674 |
Common stock, shares outstanding | 6,009,109 | 6,017,674 |
Stockholders' Equity (Unaudited
Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2018 | $ 5,883 | $ 60,523,901 | $ (48,125,349) | $ 12,404,435 |
Beginning Balance (in shares) at Dec. 31, 2018 | 5,883,109 | |||
Restricted stock grants | 116 | (116) | ||
Restricted stock grants (in shares) | $ 116,050 | |||
Stock-based compensation | $ 121,965 | 121,965 | ||
Net gain (loss) | 11,839 | 11,839 | ||
Ending Balance at Mar. 31, 2019 | $ 5,999 | 60,645,750 | (48,113,510) | 12,538,239 |
Ending Balance (in shares) at Mar. 31, 2019 | 5,999,159 | |||
Beginning Balance at Dec. 31, 2018 | $ 5,883 | 60,523,901 | (48,125,349) | $ 12,404,435 |
Beginning Balance (in shares) at Dec. 31, 2018 | 5,883,109 | |||
Restricted stock grants | 116,050 | |||
Net gain (loss) | $ 131,629 | |||
Ending Balance at Jun. 30, 2019 | $ 5,999 | 60,782,785 | (47,993,720) | 12,795,064 |
Ending Balance (in shares) at Jun. 30, 2019 | 5,999,159 | |||
Beginning Balance at Mar. 31, 2019 | $ 5,999 | 60,645,750 | (48,113,510) | 12,538,239 |
Beginning Balance (in shares) at Mar. 31, 2019 | 5,999,159 | |||
Stock-based compensation | 137,035 | |||
Net gain (loss) | 119,790 | 119,790 | ||
Ending Balance at Jun. 30, 2019 | $ 5,999 | 60,782,785 | (47,993,720) | 12,795,064 |
Ending Balance (in shares) at Jun. 30, 2019 | 5,999,159 | |||
Beginning Balance at Dec. 31, 2019 | $ 6,018 | 61,066,971 | (47,838,763) | 13,234,226 |
Beginning Balance (in shares) at Dec. 31, 2019 | 6,017,674 | |||
Repurchase of common stock | $ (5) | (8,491) | 8,496 | |
Repurchase of common stock (in shares) | (4,967) | |||
Cancellation of restricted stocks | $ (3) | 3 | ||
Cancellation of restricted stocks (in shares) | (3,200) | |||
Stock-based compensation | 132,065 | 132,065 | ||
Net gain (loss) | (90,327) | (90,327) | ||
Ending Balance at Mar. 31, 2020 | $ 6,010 | 61,190,548 | (47,929,090) | 13,267,468 |
Ending Balance (in shares) at Mar. 31, 2020 | 6,009,507 | |||
Beginning Balance at Dec. 31, 2019 | $ 6,018 | 61,066,971 | (47,838,763) | $ 13,234,226 |
Beginning Balance (in shares) at Dec. 31, 2019 | 6,017,674 | |||
Restricted stock grants | 293,000 | |||
Stock-based compensation | $ 263,434 | |||
Net gain (loss) | (858,350) | |||
Ending Balance at Jun. 30, 2020 | $ 6,009 | 61,322,389 | (48,697,113) | 12,631,285 |
Ending Balance (in shares) at Jun. 30, 2020 | 6,009,109 | |||
Beginning Balance at Mar. 31, 2020 | $ 6,010 | 61,190,548 | (47,929,090) | 13,267,468 |
Beginning Balance (in shares) at Mar. 31, 2020 | 6,009,507 | |||
Cancellation of restricted stocks | $ (1) | 472 | 471 | |
Cancellation of restricted stocks (in shares) | (398) | |||
Stock-based compensation | 131,369 | 131,369 | ||
Net gain (loss) | (768,023) | (768,023) | ||
Ending Balance at Jun. 30, 2020 | $ 6,009 | $ 61,322,389 | $ (48,697,113) | $ 12,631,285 |
Ending Balance (in shares) at Jun. 30, 2020 | 6,009,109 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) (USD $) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ (858,350) | $ 131,629 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation | 263,434 | 259,000 |
Depreciation and amortization | 290,498 | 217,664 |
Deferred tax expenses (benefits) | 74,619 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,066,894 | (550,425) |
Inventories | (74,801) | (123,005) |
Prepaid expenses and other current assets | 56,788 | (278,629) |
Accounts payable and accrued expenses | (253,163) | (110,835) |
Accrued payroll and related expenses | (108,172) | 133,808 |
Net deferred revenue on shipments to distributors | (98,493) | 107,166 |
Deferred service revenue | (12,143) | 20,766 |
Net change in operating lease | (28,121) | (19,099) |
Net cash provided by (used in) operating activities | 244,371 | (137,341) |
Investing activities | ||
Purchases of equipment | (256,183) | (187,458) |
Net cash used in investing activities | (256,183) | (187,458) |
Financing activities | ||
Payments on finance leases | (8,291) | (7,680) |
Common stock repurchase and related expenses | (8,025) | |
Proceeds from borrowings under bank line of credit agreement | 4,630,000 | 8,754,000 |
Repayments of borrowings under bank line of credit agreement | (5,592,449) | (8,240,804) |
Repayments of bank term loan | (250,000) | (250,000) |
Proceeds from notes payable | 1,208,700 | |
Net cash (used in) provided by financing activities | (20,065) | 255,516 |
Net decrease in cash and cash equivalents | (31,877) | (69,283) |
Cash and cash equivalents at beginning of period | 958,860 | 1,084,991 |
Cash and cash equivalents at end of period | 926,983 | 1,015,708 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | $ 30,640 | $ 54,528 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Basis of Presentation | NOTE 1 — Basis of Presentation The accompanying unaudited condensed financial statements of Socket Mobile, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Summary of Significant Accounting Policies | NOTE 2 — Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At June 30, 2020 and December 31, 2019, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity. Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 “Revenue from Contracts with Customers” and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At June 30, 2020, the deferred revenue and deferred cost on shipments to distributors were $432,506 and $153,793, respectively, compared to $611,029 and $233,823, respectively, at December 31, 2019. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company’s Statements of Operations. The most significant impact was the recognition of right-of-use assets and liabilities for the office space lease. Recently Issued Financial Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequent amendments to the initial guidance: ASU 2018-19 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, ASU 2019-04 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, ASU 2019-05 “Financial Instruments-Credit Losses”, ASU 2019-11 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (collectively, “Topic 326”) and ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842). The effective date of Topic 326 for public filers that are considered small reporting companies ("SRC") as defined by the Securities and Exchange Commission for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 on the Company's financial statements and disclosures. In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). The ASU provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU is effective as of March 12, 2020 through December 31, 2022. The Company doesn’t expect the ASU will have an impact on its financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. |
Note 3 - Inventories
Note 3 - Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 — Inventories Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at June 30, 2020 and December 31, 2019 were as follows: June 30, December 31, 2020 2019 Raw materials and sub-assemblies $ 3,545,065 $ 3,767,588 Finished goods 356,283 241,681 Inventory reserves (647,639 ) (830,361 ) Inventory, net $ 3,253,709 $ 3,178,908 |
Note 4 - Bank Financing Arrange
Note 4 - Bank Financing Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Bank Financing Arrangements | NOTE 4 — Bank Financing Arrangements Sixth Financing Agreement On June 14, 2019, the Company entered into the Sixth Amended and Restated Business Financing Agreement with the Bank. The Bank waived the default which occurred for the month ended April 30, 2019 when the Company’s Asset Coverage Ratio was 1.13 to 1.00, instead of the required 1.25 to 1.00. The Bank also increased the Eligible Receivable threshold for Ingram Micro from 50% to 60% of domestic receivables, and from 35% to 50% of all receivables (including both domestic and foreign receivables). Seventh Financing Agreement On January 8, 2020, the Company entered into the Seventh Amended and Restated Business Financing Agreement with the Bank which extends the maturity date of the Company’s revolving line of credit to January 31, 2022. The Asset Coverage Ratio was 1.5 to 1.0 on June 30, 2020. During the six months ended June 30, 2020, total repayments of the term loan was $250,000. Total amount borrowed under the domestic and international lines was $4,630,000 and the total repayments was $5,592,449. At June 30, 2020, the available borrowing capacity was approximately $687,000. Amounts outstanding under the term loan and bank credit facilities at June 30, 2020 are as follows: June 30, 2020 Long-term portion of term loan — Current-portion of term loan 83,333 Term loan $ 83,333 June 30, 2020 Lines of credit -domestic line 450,000 Lines of credit -EXIM line — Total lines of credit $ 450,000 Interest expense on the term loan for three and six months ended June 30, 2020 was $1,896 and $5,922, respectively. Interest expense on the amounts drawn under the Company’s bank credit lines during the three and six months ended June 30, 2020 was $3,783 and $19,384. Accrued interest payable related to the amounts outstanding under the term loan and bank credit facilities at June 30, 2020 was $9,360. |
Note 5 - Term loans
Note 5 - Term loans | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Term loans | NOTE 5 — Term loans PPP Loan On April 20, 2020, the Company received $1,058,700 of loan proceeds under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid, Relief, and Economic Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account the current business activity and the ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria. The loan has a fixed interest rate of 1% and matures in two years. Payments of principal and interest are deferred for a period of six months from the date on which the PPP loan is distributed. As of June 30, 2020, pursuant to the existing loan agreement, all of the payments expected between July 1, 2020 and June 30, 2021, or $494,926, are classified as the current portion of the note payable and the remaining balance $563,774 is classified as the long-term note payable. The PPP loan was primarily used to cover payroll costs, rent, and utility costs during the 8-week period from April 20 th th Economic Injury Disaster Loan (EIDL) On June 26, 2020, the Company executed the standard loan documents required for a securing loan of $150,000 offered by the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Proceeds of the EIDL are being used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue from the date of inception. Installment payments, including principal and interest, are due monthly beginning June 26, 2021 (twelve months from the date of the EIDL) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the EIDL. The EIDL is secured by a security interest on all of the Company’s assets. An immaterial amount of interest expense related to the loan during the three months ended June 30, 2020 was recognized. On June 23, 2020, the Company received $10,000 from US Small Business Administration as part of Economic Injury Disaster Loan (“EIDL”). This was a grant and does not need to be repaid. The Company recorded it as other income in Q2. |
Note 6 - Segment Information an
Note 6 - Segment Information and Concentrations | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 6 — Segment Information and Concentrations Segment Information The Company operates in the mobile barcode scanning and RFID/NFC data capture market. Mobile scanning typically consists of mobile devices such as smartphones or tablets, with mobile scanning or NFC peripherals for data collection, and third-party vertical applications software. The Company distributes its products in the United States and foreign countries primarily through distributors, resellers, and online. The Company markets its products primarily through application developers whose applications are designed to work with Company’s products. Revenues for the geographic areas for three months ended June 30, 2020 and 2019 were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenues: Americas $ 2,242,225 $ 3,975,771 $ 5,385,634 $ 7,653,571 Europe 200,012 604,931 815,541 1,097,923 Asia Pacific 272,787 479,403 734,535 937,202 Total revenues $ 2,715,024 $ 5,060,105 $ 6,935,710 $ 9,688,696 Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations. Major Customers Customers who accounted for at least 10% of the Company’s total revenues for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Ingram Micro Inc. 29 % 41 % 33 % 42 % BlueStar, Inc. 25 % 18 % 20 % 19 % ScanSource, Inc. 14 % * 10 % * Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company invests its cash in demand deposit accounts in banks. To date, the Company has not experienced losses on the investments. The Company’s trade accounts receivables are primarily with distributors. The Company performs ongoing credit evaluations of its customers’ financial condition but generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. Customers who accounted for at least 10% of the Company’s accounts receivable balances at June 30, 2020 and December 31, 2019 were as follows: June 30, December 31, 2020 2019 Ingram Micro Inc. 31 % 49 % BlueStar, Inc. 32 % 26 % ScanSource, Inc. 21 % * *Customer accounted for less than 10% of the Company’s accounts receivable balances Concentration of Suppliers Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to increased demand, or to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. If the Company were unable to procure certain of such materials, it could have a material adverse effect upon its results. At June 30, 2020, 38% of the Company’s accounts payable balances was concentrated in the top supplier. For the three months ended June 30, 2020, the top two suppliers accounted for 54% of the inventory purchases. |
Note 7 - Stock-Based Compensati
Note 7 - Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 7 — Stock-Based Compensation The Company recognizes the compensation cost in the financial statements for all stock-based awards to employees, including grants of stock options and restricted stocks, based on the fair value of the awards as of the date that the awards are issued. Compensation cost for stock-based awards is recognized on a straight-line basis over the vesting period. The fair values of stock options are generally determined using a binomial lattice valuation model which incorporates assumptions about expected volatility, risk-free interest rate, dividend yield, and expected life. There were 37,000 stock options granted for the six months ended June 30, 2020, compared to 165,600 shares granted to executive officers, selected employees and consultants for the six months ended June 30, 2019. The restricted stocks are issued to employees and consultants and are held in escrow by the Company until the shares vest on the schedule of 15% after year one, 20% after year two, 25% after year three and 40% after year four, subject to the employees and consultants being a continuing service provider on the vesting dates. If the service or employment is terminated, unvested shares revert to the Company. Shares are registered at grant, so share owners may vote at the annual stockholder meeting. Restricted stocks are granted at zero cost basis. Compensation cost of the restricted stocks is recognized on a straight-line basis over the 4-year vesting period. For the six months ended June 30, 2020 and 2019, the Company awarded 293,000 and 116,050 shares of restricted stock, respectively, leaving a balance of 394,506 shares of restricted stock as of June 30, 2020. Due to the existence of restrictions on sale or transfer until the stocks vest, the Company does not count the restricted stocks as issued and outstanding shares until they vest. Total stock-based compensation expense for the three and six months ended June 30, 2020 and 2019, was $131,369 and $263,434, respectively. |
Note 8 - Net Income (Loss) Per
Note 8 - Net Income (Loss) Per Share Applicable to Common Stockholders | 6 Months Ended |
Jun. 30, 2020 | |
Income Statement [Abstract] | |
Net Income (Loss) Per Share Applicable to Common Stockholders | NOTE 8 — Net Income (Loss) Per Share Applicable to Common Stockholders The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (768,023 ) $ 119,790 $ (858,350 ) $ 131,629 Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 6,009,383 5,999,159 6,011,670 5,969,666 Effect of dilutive stock options — 272,348 — 234,223 Diluted 6,009,383 6,271,507 6,011,670 6,203,889 Net income (loss) per share applicable to common stockholders: Basic $ (0.13 ) $ 0.02 $ (0.14 ) $ 0.02 Diluted $ (0.13 ) $ 0.02 $ (0.14 ) $ 0.02 In the three and six months ended June 30, 2020, 2,259,937 stock options and 394,506 restricted stocks were excluded in the calculation of diluted net loss per share because their effect would be anti-dilutive. In the three and six months ended June 30, 2019, 2,185,351 and 2,223,476, respectively, stock options were excluded in the calculation of diluted net loss per share because their effect would be anti-dilutive. |
Note 9 - Taxes
Note 9 - Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Taxes | NOTE 9 — Taxes The Company recorded no deferred tax benefit for the losses in the three and six months ended June 30, 2020. In the three and six months ended June 30, 2019, the Company recorded deferred tax expenses of $68,749 and $75,419, respectively. |
Note 10 - Commitments and Conti
Note 10 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 — Commitments and Contingencies Operating Leases The Company adopted ASU 2016-02, Leases (Topic 842) effective January 1, 2019 and restated its reported results in January 2018, including the recognition of additional operating lease right-of-use assets and liabilities. On January 1, 2018, the Company recorded operating lease right-of-use assets and operating lease liabilities in the amount of approximately $1.57 million and $1.85 million, respectively. The Company leases office space under a non-cancelable operating lease that provides the Company approximately 37,100 square feet in Newark, California. The lease agreement expires on June 30, 2022. Monthly base rent increases four percent per year annually on July 1 st In June 2020, the Company signed a new two-year equipment lease agreement. The Company will pay $1,519 in monthly installments starting in September of 2020 through June 2022. On June 30, 2020, the balances of right-of-use assets and liabilities for the operating leases were approximately $0.79 million and $0.96 million, respectively, compared to approximately $0.94 million, and $1.13 million, respectively, at December 31, 2019. Cash payments included in the measurement of our operating lease liabilities were $117,268 and $234,537 for the three- and six-month periods ended June 30, 2020, respectively, compared to $112,758 and $225,516, respectively, for the same periods a year ago. Future minimum lease payments under the operating leases of the office and copier at June 30, 2020 are shown below: Annual minimum payments: Amount 2020 (July 1, 2020 to December 31, 2020) $ 249,994 2021 515,822 2022 262,789 Total minimum payments 1,028,605 Less: Present value factor (64,349 ) Total operating lease liabilities 964,256 Less: Current portion of operating lease (455,928 ) Long-term portion of operating lease $ 508,328 Finance Leases The new standard, ASU 2016-02 classifies lessee leases into two types, operating and finance. The Company leases certain of its equipment under finance leases. The leases are collateralized by the underlying assets. At June 30, 2020, the Company has no equipment subject to financing arrangement, compared to equipment with a cost of $100,584 at December 31, 2019. The accumulated depreciation of the assets associated with the finance leases as of June 30, 2020 and December 31, 2019, amounted to zero and $92,571 respectively. Purchase Commitments As of June 30, 2020, the Company has non-cancelable purchase commitments for inventory to be used in the ordinary course of business of approximately $3,651,000. Legal Matters The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. The Company is currently not a party to any material legal proceedings. |
Note 11 - Subsequent Events
Note 11 - Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 — Subsequent Events As of August 7, 2020, 5,000 restricted stocks at the price of $1.49 per share have been granted from the 2004 Equity Incentive Plan subsequent to June 30, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. |
Cash Equivalents and Fair Value of Financial Instruments | Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At June 30, 2020 and December 31, 2019, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 “Revenue from Contracts with Customers” and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At June 30, 2020, the deferred revenue and deferred cost on shipments to distributors were $432,506 and $153,793, respectively, compared to $611,029 and $233,823, respectively, at December 31, 2019. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company’s Statements of Operations. The most significant impact was the recognition of right-of-use assets and liabilities for the office space lease. |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequent amendments to the initial guidance: ASU 2018-19 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, ASU 2019-04 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, ASU 2019-05 “Financial Instruments-Credit Losses”, ASU 2019-11 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (collectively, “Topic 326”) and ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842). The effective date of Topic 326 for public filers that are considered small reporting companies ("SRC") as defined by the Securities and Exchange Commission for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 on the Company's financial statements and disclosures. In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). The ASU provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU is effective as of March 12, 2020 through December 31, 2022. The Company doesn’t expect the ASU will have an impact on its financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory components | Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at March 31, 2020 and December 31, 2019 were as follows: March 31, December 31, 2020 2019 Raw materials and sub-assemblies $ 3,706,834 $ 3,767,588 Finished goods 235,524 241,681 Inventory reserves (647,639 ) (830,361 ) Inventory, net $ 3,294,719 $ 3,178,908 |
Bank Financing Arrangements (Ta
Bank Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Term loan and bank credit line balances | Amounts outstanding under the term loan and bank credit facilities at June 30, 2020 are as follows: June 30, 2020 Long-term portion of term loan — Current-portion of term loan 83,333 Term loan $ 83,333 June 30, 2020 Lines of credit -domestic line 450,000 Lines of credit -EXIM line — Total lines of credit $ 450,000 |
Segment Information and Concent
Segment Information and Concentrations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Revenue by geographic areas | Revenues for the geographic areas for three months ended June 30, 2020 and 2019 were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenues: Americas $ 2,242,225 $ 3,975,771 $ 5,385,634 $ 7,653,571 Europe 200,012 604,931 815,541 1,097,923 Asia Pacific 272,787 479,403 734,535 937,202 Total revenues $ 2,715,024 $ 5,060,105 $ 6,935,710 $ 9,688,696 |
Major customers accounted for at least 10% of total revenues | Customers who accounted for at least 10% of the Company’s total revenues for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Ingram Micro Inc. 29 % 41 % 33 % 42 % BlueStar, Inc. 25 % 18 % 20 % 19 % ScanSource, Inc. 14 % * 10 % * |
Major customers accounted for at least 10% of net accounts receivable balances | Customers who accounted for at least 10% of the Company’s accounts receivable balances at June 30, 2020 and December 31, 2019 were as follows: June 30, December 31, 2020 2019 Ingram Micro Inc. 31 % 49 % BlueStar, Inc. 32 % 26 % ScanSource, Inc. 21 % * *Customer accounted for less than 10% of the Company’s accounts receivable balances |
Net Income (Loss) Per Share App
Net Income (Loss) Per Share Applicable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Net income (loss) per share: | |
Net Income (Loss) Per Shares Applicable To Common Stockholders | The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (768,023 ) $ 119,790 $ (858,350 ) $ 131,629 Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 6,009,383 5,999,159 6,011,670 5,969,666 Effect of dilutive stock options — 272,348 — 234,223 Diluted 6,009,383 6,271,507 6,011,670 6,203,889 Net income (loss) per share applicable to common stockholders: Basic $ (0.13 ) $ 0.02 $ (0.14 ) $ 0.02 Diluted $ (0.13 ) $ 0.02 $ (0.14 ) $ 0.02 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum payments for operating leases | Future minimum lease payments under the operating leases of the office and copier at June 30, 2020 are shown below: Annual minimum payments: Amount 2020 (July 1, 2020 to December 31, 2020) $ 249,994 2021 515,822 2022 262,789 Total minimum payments 1,028,605 Less: Present value factor (64,349 ) Total operating lease liabilities 964,256 Less: Current portion of operating lease (455,928 ) Long-term portion of operating lease $ 508,328 |
Inventory Components (Details)
Inventory Components (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Raw materials and sub-assemblies | $ 3,545,065 | $ 3,767,588 |
Finished goods | 356,283 | 241,681 |
Inventory reserves | (647,639) | (830,361) |
Inventories, net | $ 3,253,709 | $ 3,178,908 |
Bank Financing Arrangements (De
Bank Financing Arrangements (Details Narrative) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Term Loan for Stock Repurchase | ||
Amount repaid | $ 250,000 | |
Interest expense | $ 1,896 | 5,922 |
Accrued interest payable | 9,236 | 9,236 |
Domestic Line of Credit | ||
Amount borrowed | 3,865,000 | |
Amount repaid | 4,619,915 | |
Interest expense | 3,148 | 16,832 |
Accrued interest payable | 62 | 62 |
Remaining borrowing capacity | 549,856 | 549,856 |
Foreign Line of Credit | ||
Amount borrowed | 765,000 | |
Amount repaid | 972,534 | |
Interest expense | 635 | 2,552 |
Remaining borrowing capacity | $ 137,426 | $ 137,426 |
Amounts Outstanding under Bank
Amounts Outstanding under Bank Term Loan (Detail) | Jun. 30, 2020USD ($) |
Notes to Financial Statements | |
Long-term portion of term loan | |
Current-portion of term loan | 83,333 |
Term loan balance | $ 83,333 |
Amounts Outstanding under Ban_2
Amounts Outstanding under Bank Lines of Credit (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Lines of credit - domestic line | $ 450,000 | |
Lines of credit - EXIM line | ||
Total lines of credit | $ 450,000 | $ 1,412,449 |
Term loans (Details)
Term loans (Details) - USD ($) | Jun. 26, 2021 | Jun. 26, 2020 | Jun. 23, 2020 | Apr. 20, 2020 | Jun. 30, 2020 |
Paycheck Protection Program Loan | |||||
Loan proceeds | $ 1,058,700 | ||||
Current portion of notes payable | $ 494,926 | ||||
Long-term portion of notes payable | $ 563,774 | ||||
Economic Injury Disaster Loan | |||||
Loan proceeds | $ 150,000 | ||||
Monthly installment amounts due | $ 731 | ||||
Grant proceeds | $ 10,000 |
Revenues By Geographic Areas (D
Revenues By Geographic Areas (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | $ 2,715,024 | $ 5,060,105 | $ 6,935,710 | $ 9,688,696 |
United States | ||||
Revenues | 2,242,225 | 3,975,771 | 5,385,634 | 7,653,571 |
Europe | ||||
Revenues | 200,012 | 604,931 | 815,541 | 1,097,923 |
Asia Pacific | ||||
Revenues | $ 272,787 | $ 479,403 | $ 734,535 | $ 937,202 |
Major customers accounted for a
Major customers accounted for at least 10% of total revenues (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Ingram Micro Inc. | ||||
Percent of total revenues | 29.00% | 41.00% | 33.00% | 42.00% |
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
BlueStar, Inc. | ||||
Percent of total revenues | 25.00% | 18.00% | 20.00% | 19.00% |
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
ScanSource, Inc. | ||||
Percent of total revenues | 14.00% | 10.00% | ||
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
Major Customers as a Percentage
Major Customers as a Percentage of Net Accounts Receivable Balances (Details) | Jun. 30, 2020 | Dec. 31, 2019 |
Ingram Micro Inc. | ||
Percent of net accounts receivable balances | 31.00% | 49.00% |
Threshold percentage for disclosure | 10.00% | 10.00% |
BlueStar, Inc. | ||
Percent of net accounts receivable balances | 32.00% | 26.00% |
Threshold percentage for disclosure | 10.00% | 10.00% |
ScanSource, Inc. | ||
Percent of net accounts receivable balances | 21.00% | |
Threshold percentage for disclosure | 10.00% | 10.00% |
Concentration of Suppliers (Det
Concentration of Suppliers (Details Narrative) | 3 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Accounts payable balances with a single supplier | 38.00% |
Percentage of inventory purchases from top two suppliers | 54.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Notes to Financial Statements | |||||
Stock-based compensation expenses | $ 131,369 | $ 132,065 | $ 121,965 | $ 263,434 | |
Stock options granted | 37,000 | 165,600 | |||
Restricted stock granted | 293,000 | 116,050 | |||
Restricted stock remaining | 394,506 |
Net Income (Loss) per Share A_2
Net Income (Loss) per Share Applicable to Common Stockholders (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net income (loss) | $ (768,023) | $ (90,327) | $ 119,790 | $ 11,839 | $ (858,350) | $ 131,629 |
Denominator: Weighted average common shares outstanding used in computing net income (loss) per share: | ||||||
Basic | 6,009,383 | 5,999,159 | 6,011,670 | 5,969,666 | ||
Effect of dilutive stock options | 272,348 | 234,223 | ||||
Diluted | 6,009,383 | 6,271,507 | 6,011,670 | 6,203,889 | ||
Net income (loss) per share applicable to common stockholders: | ||||||
Basic | $ (0.13) | $ 0.02 | $ (0.14) | $ 0.02 | ||
Diluted | $ (0.13) | $ 0.02 | $ (0.14) | $ 0.02 |
Stock Options Excluded from Cal
Stock Options Excluded from Calculation of Diluted Net Loss Per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Stock Options | ||||
Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share | 2,259,937 | 2,185,351 | 2,259,937 | 2,223,476 |
Number of Restricted Stock | ||||
Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share | 394,506 | 394,506 |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (68,749) | $ (75,419) |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jan. 01, 2018 | |
Notes to Financial Statements | ||||||
Rental expense for operating lease | $ 103,208 | $ 206,416 | $ 103,208 | $ 206,416 | ||
Operating lease cash payments | 117,268 | $ 112,758 | 234,537 | $ 225,516 | ||
Non-cancelable purchase commitments for inventory | 3,651,000 | 3,651,000 | ||||
Original cost of equipment under finance leases | $ 100,584 | |||||
Finance lease accumulated depreciation | 92,571 | |||||
Operating lease right-of-use asset | 794,735 | 794,735 | 936,708 | $ 1,570,000 | ||
Operating lease right-of-use liabilities | $ 964,256 | $ 964,256 | $ 1,134,350 | $ 1,850,000 |
Future Minimum Payments For Ope
Future Minimum Payments For Operating Leases (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2018 |
Annual minimum payments: | |||
2020 (July 1, 2020 to December 31, 2020) | $ 249,994 | ||
2021 | 515,822 | ||
2022 | 262,789 | ||
Total minimum payments | 1,028,605 | ||
Less: Present value factor | (64,349) | ||
Total operating lease liabilities | 964,256 | $ 1,134,350 | $ 1,850,000 |
Less: Current portion of operating lease | (455,928) | (419,288) | |
Long term portion of operating lease | $ 508,328 | $ 715,062 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | As of August 7, 2020, 5,000 restricted stocks at the price of $1.49 per share have been granted from the 2004 Equity Incentive Plan subsequent to June 30, 2020. |