Company Quick10K Filing
Emagin
Price0.37 EPS-0
Shares49 P/E-3
MCap18 P/FCF-3
Net Debt-1 EBIT-7
TEV18 TEV/EBIT-3
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-12
10-Q 2020-06-30 Filed 2020-08-13
10-Q 2020-03-31 Filed 2020-05-14
10-K 2019-12-31 Filed 2020-03-11
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-28
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-30
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-11
10-K 2016-12-31 Filed 2017-03-29
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-05-12
10-K 2015-12-31 Filed 2016-03-17
10-Q 2015-09-30 Filed 2015-11-12
10-Q 2015-06-30 Filed 2015-08-13
10-Q 2015-03-31 Filed 2015-05-14
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-13
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-13
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-06
10-Q 2013-03-31 Filed 2013-05-09
10-K 2012-12-31 Filed 2013-03-14
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-15
10-Q 2011-09-30 Filed 2011-11-10
10-Q 2011-06-30 Filed 2011-10-11
10-Q 2011-03-31 Filed 2011-05-12
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-12
10-Q 2010-03-31 Filed 2010-05-18
10-K 2009-12-31 Filed 2010-03-25
8-K 2020-11-12
8-K 2020-08-13
8-K 2020-07-28
8-K 2020-07-21
8-K 2020-07-10
8-K 2020-06-26
8-K 2020-06-12
8-K 2020-06-11
8-K 2020-06-10
8-K 2020-05-14
8-K 2020-03-10
8-K 2020-02-13
8-K 2020-01-28
8-K 2019-12-05
8-K 2019-11-22
8-K 2019-10-18
8-K 2019-05-22
8-K 2019-04-09
8-K 2019-04-04
8-K 2018-11-08
8-K 2018-10-16
8-K 2018-10-04
8-K 2018-08-09
8-K 2018-06-13
8-K 2018-05-10
8-K 2018-03-28
8-K 2018-01-25
8-K 2018-01-19

EMAN 10Q Quarterly Report

Item 1. Financial Statements
Note 1 – Description of The Business and Summary of Significant Accounting Policies
Note 2 – Revenue Recognition
Note 4 – Inventories, Net
Note 5 – Line of Credit / Loan Payable
Note 6 – Stock Compensation
Note 7 – Income Taxes
Note 8 – Commitments and Contingencies
Note 9 – Warrants
Note 10 – Leases
Note 11 – Shareholders’ Equity
Note 12 – Government Funding
Note 13 – Subsequent Events
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
EX-31.1 eman-20200930xex31_1.htm
EX-31.2 eman-20200930xex31_2.htm
EX-32.1 eman-20200930xex32_1.htm
EX-32.2 eman-20200930xex32_2.htm

Emagin Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
45362718902012201420172020
Assets, Equity
10.06.02.0-2.0-6.0-10.02012201420172020
Rev, G Profit, Net Income
10.07.34.51.8-1.0-3.72012201420172020
Ops, Inv, Fin

10-Q 1 eman-20200930x10q.htm 10-Q EMAN 2020 Q3

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



 

Form 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2020

Or



TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



 For the transition period from                        to



Commission file number 001-15751 

 

eMAGIN CORPORATION

(Exact name of registrant as specified in its charter)





 

Delaware

56-1764501

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

700 South Drive,  Suite 201,  Hopewell Junction,  NY 12533

(Address of principal executive offices) (Zip Code)

 

(845)  838-7900

(Registrant’s telephone number, including area code)



 Securities registered pursuant to Section 12(b) of the Act:





 

 

 

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $.001 Par Value Per Share

 

EMAN

 

NYSE American



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No 



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.





 

 

Large accelerated filer  

 

Smaller Reporting Company  

Accelerated filer           

 

Emerging growth company    

Non-accelerated filer    

 

 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes      No 



As of October 31, 2020, there were 67,499,602 common shares at $0.001 par value per share of the registrant outstanding.




 

 



Table of Contents



 

 



Page

PART I - FINANCIAL INFORMATION

Item 1

Condensed Consolidated Financial Statements

 

 

Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019

5

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019 (unaudited)

6

 

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2020 and 2019 (unaudited)

7

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited)

8

 

Notes to Condensed Consolidated Financial Statements (unaudited)

9

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4

Controls and Procedures

30

 

 

PART II - OTHER INFORMATION

Item 1

Legal Proceedings

31

Item 1A

Risk Factors

31

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

33

Item 3

Defaults Upon Senior Securities 

33

Item 4

Mine Safety Disclosures

33

Item 5

Other Information

33

Item 6

Exhibits

34

SIGNATURES

 



 





2

 


 

 

STATEMENT REGARDING FORWARD-LOOKING INFORMATION 



This Quarterly Report on Form 10-Q, or Report, contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.



In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect our results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and in this Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Report and the documents that we reference in this Report and have filed with the Securities and Exchange Commission, or the SEC, as exhibits to this Report, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.



In particular, forward-looking statements in this Report include statements about:

·

our ability to generate sufficient cash flows and obtain the additional financing we need in order to continue as a going concern;

·

our ability to generate additional revenue or secure additional external financing when, or if, required, in order to continue our current operations;

·

our ability to manufacture our products on a timely basis and at a competitive cost;

·

our ability to successfully remediate manufacturing issues that have resulted in production delays and successfully integrate new equipment on our manufacturing line;

·

our ability to achieve our yield improvement initiatives;

·

our ability to meet our obligations as they become due over the next twelve months;

·

our needs for additional financing, as well as our ability to obtain such additional financing on reasonable terms and the interest rate and expense we incur on any debt financing;

·

the potential for forgiveness of the Paycheck Protection Program (“PPP”) loan under the terms of the PPP and the possible impact of any audit related to the PPP Note;

·

our anticipated cash needs and our estimates regarding our capital requirements;

·

our ability to maintain our relationships with customers and vendors;

·

our ability to protect our intellectual property;

·

our ability to successfully develop and market our products to customers; 

·

our ability to generate customer demand for our products in our target markets;

·

the development of our target markets and market opportunities, including the consumer market;

·

technological developments in our target markets and the development of alternate, competing technologies in them;

·

the rate of acceptance of AR/VR systems and products in the consumer and commercial marketplace;

·

our potential exposure to product liability claims;

·

our ability to meet customers’ delivery schedules;

·

market pricing for our products and for competing products;

·

the concentration of a significant ownership percentage in our Company in a relatively small number of stockholders and the ability of one or more of such stockholders to exert substantial control over our affairs;

·

changes in demand by original equipment manufacturer (“OEM”) customers for advanced microdisplays, limited availability of suppliers and foundries, high costs of raw materials, pricing pressure brought by the marketplace or governmental customers and other factors that impact the commercial, military and consumer markets in which we operate;

·

increasing competition;

·

our ability to comply with the terms of government awards; provisions in certain of our organizational documents, commercial agreements, government awards, and our military contracts that may prevent or delay an acquisition of, partnership with, or investment in, our Company and our ability to develop original equipment manufacturer and mass production partnerships;

·

our ability to maintain our operations as a result of potential employee, customer and supplier disruptions caused by the Covid-19 pandemic or any resurgences and quarantine restrictions; and

·

our efforts to settle purchase commitments remaining from our consumer night vision business.

3

 


 

 

 

The forward-looking statements in this Report represent our views as of the date of this Report. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this Report.



In this Report, references to “eMagin Corporation,” “eMagin,” “the Company,” “we,” “us,” and “our company” refer to eMagin Corporation and our wholly owned subsidiary, Virtual Vision, Inc. References to “Consumer Night Vision Business” refers to our consumer night vision products business.



eMagin® is a registered trademark of eMagin Corporation. dPdTM is an unregistered trademark of eMagin. All rights reserved. All other trademarks used in this Report are the property of their respective owners.

4

 


 

 



 ITEM 1.  Financial Statements 

eMAGIN CORPORATION 

CONDENSED CONSOLIDATED BALANCE SHEETS 

(In thousands, except share data)

(unaudited) 





 

 

 

 

 

 



 

September 30,

 

December 31,



 

2020

 

2019

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,283 

 

$

3,515 

Restricted cash

 

 

1,800 

 

 

 —

Accounts receivable, net

 

 

3,178 

 

 

3,966 

Unbilled accounts receivable

 

 

31 

 

 

155 

Inventories

 

 

8,133 

 

 

8,832 

Prepaid expenses and other current assets

 

 

1,796 

 

 

1,130 

Total current assets

 

 

25,221 

 

 

17,598 

Equipment, furniture and leasehold improvements, net

 

 

8,147 

 

 

8,100 

Operating lease right - of - use assets

 

 

3,166 

 

 

3,729 

Intangibles and other assets

 

 

128 

 

 

160 

Total assets

 

$

36,662 

 

$

29,587 



 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,009 

 

$

1,302 

Accrued compensation

 

 

1,700 

 

 

1,778 

Paycheck Protection Program loan - current

 

 

735 

 

 

 —

Revolving credit facility, net

 

 

490 

 

 

2,891 

Common stock warrant liability

 

 

3,327 

 

 

23 

Other accrued expenses

 

 

1,604 

 

 

1,401 

Deferred revenue

 

 

393 

 

 

277 

Operating lease liability - current

 

 

826 

 

 

775 

Other current liabilities

 

 

632 

 

 

342 

Total current liabilities

 

 

10,716 

 

 

8,789 

Other liability - long term

 

 

67 

 

 

24 

Paycheck Protection Program loan - long term

 

 

1,228 

 

 

 —

Deferred Income - Government awards - long term

 

 

2,263 

 

 

 —

Operating lease liability - long term

 

 

2,441 

 

 

3,067 

Total liabilities

 

 

16,715 

 

 

11,880 



 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 



 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Preferred stock, $.001 par value: authorized 10,000,000 shares:

 

 

 

 

 

 

Series B Convertible Preferred stock, (liquidation preference of $5,659) stated value $1,000 per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as of September 30, 2020 and December 31, 2019.

 

 

 —

 

 

 —

Common stock, $.001 par value: authorized 200,000,000 shares, issued 67,661,668 shares, outstanding 67,499,602 shares as of September 30, 2020 and issued 50,250,378 shares, outstanding 50,088,312 shares as of December 31, 2019.

 

 

68 

 

 

50 

Additional paid-in capital

 

 

268,720 

 

 

258,767 

Accumulated deficit

 

 

(248,341)

 

 

(240,610)

Treasury stock, 162,066 shares as of September 30, 2020 and December 31, 2019.

 

 

(500)

 

 

(500)

Total shareholders’ equity

 

 

19,947 

 

 

17,707 

Total liabilities and shareholders’ equity

 

$

36,662 

 

$

29,587 



See notes to Condensed Consolidated Financial Statements. 

5

 


 

 

eMAGIN CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

(In thousands, except share and per share data) 

(unaudited) 







 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

6,978 

 

$

7,321 

 

$

18,872 

 

$

17,786 

Contract

 

 

333 

 

 

598 

 

 

2,870 

 

 

1,606 

Total revenues, net

 

 

7,311 

 

 

7,919 

 

 

21,742 

 

 

19,392 



 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

5,385 

 

 

5,112 

 

 

15,153 

 

 

14,436 

Contract

 

 

234 

 

 

316 

 

 

1,487 

 

 

904 

Total cost of revenues

 

 

5,619 

 

 

5,428 

 

 

16,640 

 

 

15,340 



 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

1,692 

 

 

2,491 

 

 

5,102 

 

 

4,052 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

1,734 

 

 

1,046 

 

 

4,313 

 

 

3,943 

Selling, general and administrative

 

 

1,824 

 

 

1,839 

 

 

5,334 

 

 

5,555 

Total operating expenses

 

 

3,558 

 

 

2,885 

 

 

9,647 

 

 

9,498 



 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,866)

 

 

(394)

 

 

(4,545)

 

 

(5,446)



 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of common stock warrant liability

 

 

(1,803)

 

 

120 

 

 

(3,304)

 

 

1,450 

Interest expense, net

 

 

(10)

 

 

(41)

 

 

(45)

 

 

(96)

Other income, net

 

 

148 

 

 

 —

 

 

163 

 

 

 —

Total other (expense) income

 

 

(1,665)

 

 

79 

 

 

(3,186)

 

 

1,354 

Loss before provision for income taxes

 

 

(3,531)

 

 

(315)

 

 

(7,731)

 

 

(4,092)

Income taxes

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Net loss

 

$

(3,531)

 

$

(315)

 

$

(7,731)

 

$

(4,092)



 

 

 

 

 

 

 

 

 

 

 

 

Loss per share, basic and diluted

 

$

(0.06)

 

$

(0.01)

 

$

(0.14)

 

$

(0.09)



 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

57,735,846 

 

 

49,173,773 

 

 

54,450,815 

 

 

47,718,965 

 

See notes to Condensed Consolidated Financial Statements.

 

6

 


 

 

eMAGIN CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

(In thousands, except share data) 

(unaudited) 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Preferred Shares

 

Preferred Stock

 

Common Shares

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Deficit

 

Treasury Stock

 

Total Shareholders’ Equity

Balance, December 31, 2019

 

 

5,659 

 

$

 —

 

 

50,250,378 

 

$

50 

 

$

258,767 

 

$

(240,610)

 

$

(500)

 

$

17,707 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

43 

 

 

 —

 

 

 —

 

 

43 

Public offering of common shares, net of offering costs

 

 

 —

 

 

 —

 

 

3,730,540 

 

 

 

 

1,548 

 

 

 —

 

 

 —

 

 

1,552 

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,369)

 

 

 —

 

 

(1,369)

Balance, March 31, 2020

 

 

5,659 

 

$

 —

 

 

53,980,918 

 

$

54 

 

$

260,358 

 

$

(241,979)

 

$

(500)

 

$

17,933 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

44 

 

 

 —

 

 

 —

 

 

44 

Public offering of common shares, net of offering costs

 

 

 —

 

 

 —

 

 

3,408,913 

 

 

 

 

1,756 

 

 

 —

 

 

 —

 

 

1,759 

Exercise of common stock warrants

 

 

 —

 

 

 —

 

 

4,017,500 

 

 

 

 

36 

 

 

 —

 

 

 —

 

 

40 

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,831)

 

 

 —

 

 

(2,831)

Balance, June 30, 2020

 

 

5,659 

 

$

 —

 

 

61,407,331 

 

$

61 

 

$

262,194 

 

$

(244,810)

 

$

(500)

 

$

16,945 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

60 

 

 

 —

 

 

 —

 

 

60 

Public offering of common shares, net of offering costs

 

 

 —

 

 

 —

 

 

6,135,991 

 

 

 

 

6,466 

 

 

 —

 

 

 —

 

 

6,473 

Exercise of common stock warrants

 

 

 —

 

 

 —

 

 

118,346 

 

 

 

 

(0)

 

 

 —

 

 

 —

 

 

 -

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3,531)

 

 

 —

 

 

(3,531)

Balance, September 30, 2020

 

 

5,659 

 

$

 —

 

 

67,661,668 

 

$

68 

 

$

268,720 

 

$

(248,341)

 

$

(500)

 

$

19,947 

 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Preferred Shares

 

Preferred Stock

 

Common Shares

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Deficit

 

Treasury Stock

 

Total Shareholders’ Equity

Balance, December 31, 2018

 

 

5,659 

 

$

 —

 

 

45,323,339 

 

$

45 

 

$

254,736 

 

$

(236,312)

 

$

(500)

 

$

17,969 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

193 

 

 

 —

 

 

 —

 

 

193 

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,439)

 

 

 —

 

 

(1,439)

Balance, March 31, 2019

 

 

5,659 

 

$

 —

 

 

45,323,339 

 

$

45 

 

$

254,929 

 

$

(237,751)

 

$

(500)

 

$

16,723 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

97 

 

 

 —

 

 

 —

 

 

97 

Public offering of common shares, net of offering costs

 

 

 —

 

 

 —

 

 

4,000,000 

 

 

 

 

3,299 

 

 

 —

 

 

 —

 

 

3,303 

Exercise of common stock options

 

 

 —

 

 

 —

 

 

12,500 

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,337)

 

 

 —

 

 

(2,337)

Balance, June 30, 2019

 

 

5,659 

 

$

 —

 

 

49,335,839 

 

$

49 

 

$

258,333 

 

$

(240,088)

 

$

(500)

 

$

17,794 

Stock based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

164 

 

 

 —

 

 

 —

 

 

164 

Net loss

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(315)

 

 

 —

 

 

(315)

Balance, September 30, 2019

 

 

5,659 

 

$

 —

 

 

49,335,839 

 

$

49 

 

$

258,497 

 

$

(240,403)

 

$

(500)

 

$

17,643 



See notes to Condensed Consolidated Financial Statements

 

7

 


 

 

eMAGIN CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands

(unaudited)







 

 

 

 

 

 



 

Nine Months Ended



 

September 30,



 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(7,731)

 

$

(4,092)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,487 

 

 

1,542 

Change in fair value of common stock warrant liability

 

 

3,304 

 

 

(1,450)

Stock-based compensation

 

 

147 

 

 

455 

Amortization of operating lease right-of-use assets

 

 

563 

 

 

477 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

788 

 

 

(770)

Unbilled accounts receivable

 

 

124 

 

 

(55)

Inventories

 

 

699 

 

 

135 

Prepaid expenses and other current assets

 

 

(666)

 

 

(384)

Deferred revenues

 

 

116 

 

 

290 

Operating lease liabilities

 

 

(588)

 

 

(446)

Accounts payable, accrued expenses, and other current liabilities

 

 

63 

 

 

(955)

Net cash used in operating activities

 

 

(1,694)

 

 

(5,253)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of equipment

 

 

(946)

 

 

(878)

Purchase of equipment Government grant

 

 

(582)

 

 

 —

Net cash used in investing activities

 

 

(1,528)

 

 

(878)

Cash flows from financing activities:

 

 

 

 

 

 

(Repayments) borrowings under revolving line of credit, net

 

 

(2,401)

 

 

2,024 

Proceeds from public offering, net

 

 

9,784 

 

 

3,303 

Proceeds from Government grant

 

 

2,404 

 

 

 —

Proceeds from Paycheck Protection Program loan

 

 

1,963 

 

 

 —

Proceeds from warrant exercise, net

 

 

40 

 

 

 —

Proceeds from exercise of stock options

 

 

 —

 

 

Net cash provided by financing activities

 

 

11,790 

 

 

5,335 

Net increase in cash, cash equivalents, and restricted cash

 

 

8,568 

 

 

(796)

Cash, cash equivalents, and restricted cash, beginning of period

 

 

3,515 

 

 

3,359 

Cash, cash equivalents, and restricted cash, end of period

 

$

12,083 

 

$

2,563 

Cash, cash equivalents, end of period

 

 

10,283 

 

 

2,563 

Restricted cash, end of period

 

 

1,800 

 

 

 —



 

 

 

 

 

 

Supplementary Cash Flow Information

 

 

 

 

 

 

Cash paid for interest

 

$

52 

 

$

96 

Cash paid for income taxes

 

$

 —

 

$

 —

 

See notes to Condensed Consolidated Financial Statements.

 

8

 


 

 

eMAGIN CORPORATION 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

 

 

Note 1 – Description of the Business and Summary of Significant Accounting Policies 



The Business 



eMagin Corporation (the “Company”) designs, develops, manufactures and markets Active Matrix OLED (organic light emitting diode) -on-silicon microdisplays used in military and commercial AR/VR devices and other near-eye imaging products which utilize OLED microdisplays. The Company’s products are sold mainly in North America, Asia, and Europe.



Basis of Presentation 



In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements of eMagin Corporation and its subsidiary reflect all adjustments, including normal recurring accruals, necessary for a fair presentation. All significant intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the SEC. These unaudited consolidated financial statements, and related disclosures, should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the periods ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements as of December 31, 2019 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.



Use of estimates



In accordance with accounting principles generally accepted in the United States of America (“GAAP”), management utilizes certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments related to, among others, allowance for doubtful accounts, warranty reserves, inventory reserves, stock-based compensation expense, deferred tax asset valuation allowances, litigation and other loss contingencies. Management bases its estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. 



Intangible Assets – Patents



Acquired patents are recorded at purchase price as of the date acquired and amortized over the expected useful life which is generally the remaining life of the patent.



The total intangible amortization expense was $2 thousand and $6 thousand for the three and nine months ended September 30, 2020 and $9 thousand and $24 thousand for the comparable 2019 periods, respectively.



Product warranty



The Company generally offers a one-year product replacement warranty. The standard policy is to repair or replace the defective products. The Company accrues for estimated returns of defective products at the time revenue is recognized based on historical activity as well as for specific known product issues. The determination of these accruals requires the Company to make estimates of the frequency and extent of warranty activity and estimate future costs to replace the products under warranty. If the actual warranty activity and/or repair and replacement costs differ significantly from these estimates, adjustments to cost of revenue may be required in future periods.



9

 


 

 

The following table provides a summary of the activity related to the Company's warranty liability included in other current liabilities, (in thousands):







 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2020

 

2019

 

2020

 

2019

Beginning balance

 

$

351 

 

$

317 

 

$

300 

 

$

423 

Warranty accruals and adjustments

 

 

142 

 

 

152 

 

 

201 

 

 

113 

Warranty claims

 

 

(4)

 

 

(88)

 

 

(12)

 

 

(155)

Ending balance

 

$

489 

 

$

381 

 

$

489 

 

$

381 





Net Loss per Common Share



Basic loss per share is computed using the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of common stock equivalent shares such as stock options, warrants, and convertible preferred stock. Diluted loss per share is computed using the weighted average number of common shares outstanding and potentially dilutive common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive. 



The Company’s Series B Convertible Preferred stock (“Preferred Stock – Series B”) is considered a participating security as the preferred stock participates in dividends with the common stock, which requires the use of the two-class method when computing basic and diluted earnings per share. The Preferred Stock – Series B is not required to absorb any net loss. Although the Company paid a one-time special dividend in 2012, the Company does not expect to pay dividends on its common or preferred stock in the near future.



For the three and nine months ended September 30, 2020 and 2019, the Company reported a net loss and as a result, basic and diluted loss per common share are the same. Therefore, in calculating net loss per share amounts, shares underlying the potentially dilutive common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive.



The following table sets forth the potentially dilutive common stock equivalents for the three and nine months ended September 30, 2020 and 2019 that were not included in diluted EPS as their effect would be anti-dilutive:







 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2020

 

2019

 

2020

 

2019

Options

 

4,872,834 

 

5,416,606 

 

4,872,834 

 

5,416,606 

Warrants

 

15,055,773 

 

19,295,773 

 

15,055,773 

 

19,295,773 

Convertible preferred stock

 

7,545,333 

 

7,545,333 

 

7,545,333 

 

7,545,333 

Total potentially dilutive common stock equivalents

 

27,473,940 

 

32,257,712 

 

27,473,940 

 

32,257,712 



Government Funding



The Company accounts for awards received from the U.S. Government for procurement of capital equipment after analysis of the terms of the underlying award contract, and in accordance with contract and equipment purchase milestones and accounting principles for grant accounting. For awards in which the Company will hold title to the underlying equipment, the Company initially records amounts invoiced to the U.S. Government for equipment progress payments on the accompanying Consolidated Balance Sheets as Deferred Income – Government Awards – long term and Accounts Receivable. The Company records said progress payments made to capital equipment vendors in Equipment, Furniture and Leasehold improvements. Amounts recorded in Deferred Income – Government Awards – long term will be recognized as Other Income on the accompanying Consolidated Statement of Operations on a systematic basis as depreciation and other expenses are incurred over the useful life of the capital equipment. There was no government receivable in accounts receivable for the three months ended September 30, 2020 or for the year ended December 31, 2019.



10

 


 

 

Restricted Cash



The Company accounts for cash received pursuant to U.S. Government funding, that is legally restricted for procurement of capital equipment, as Restricted Cash on the accompanying Consolidated Balance Sheets. Restricted Cash amounts are received from the U.S. Government in advance of progress payments required for various program related capital equipment purchases and are disbursed by the Company to related equipment vendors.



Fair Value of Financial Instruments



Cash, cash equivalents, accounts receivable, short-term investments and accounts payable are stated at cost, which approximates fair value, due to the short-term nature of these instruments. The asset based lending facility (the “ABL Facility”) is also stated at cost, which approximates fair value because the interest rate is based on a market based rate plus a margin. The PPP loan is presented on the balance sheet, at cost which equals fair market value due to the loan’s short – term maturity, as the current portion of long-term debt, and long-term payables based upon the schedule of repayments and excluding any possible forgiveness of the loans.



We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

 

Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:

 

Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Unobservable inputs for the asset or liability.



The common stock warrant liability is currently the only financial asset or liability recorded at fair value on a recurring basis, and is considered a Level 3 liability. The fair value of the common stock warrant liability is included in current liabilities on the Condensed Consolidated Balance Sheets, as the warrants are currently exercisable.



The following table shows the reconciliation of the Level 3 warrant liability measured and recorded at fair value on a recurring basis, using significant unobservable inputs (in thousands):







 

 

 

 

 

Estimated Fair Value

Balance as of January 1, 2020

 

$

23 

Fair value of warrants issuance during period

 

 

 -

Change in fair value of warrant liability, net

 

 

3,304 

Balance as of September 30, 2020

 

$

3,327 



The fair value of the liability for common stock purchase warrants at issuance and at September 30, 2020 was estimated using the Black Scholes option pricing model based on the market value of the underlying common stock at the measurement date. Inputs to the model at September 30, 2020 included remaining contractual terms of the warrants ranging from 1.7 to 2.3 years, at risk-free interest rates of 0.3%, with no expected dividends, and expected volatility of the price of the underlying common stock of 105.9%.



Concentrations



The Company purchases principally all of its silicon wafers, which are a key ingredient in its OLED production process, from two suppliers located in Taiwan and Korea.



For the three months ended September 30, 2020,  two customers accounted for 22% and 16% of revenue, respectively. For the nine months ended September 30, 2020, three customers accounted for 17%,  12%, and 12% of revenue, respectively. For the three and nine months ended September 30, 2019, one customer accounted for 12% and no single customer was over 10% of net revenues, respectively. As of September 30, 2020, two customers accounted for 31% and 17%, respectively of the Company’s consolidated accounts receivable balance. As of September 30, 2019, two customers accounted for 12% and 10%,  respectively of the Company’s consolidated accounts receivable balance.

 

11

 


 

 

Liquidity and Going Concern



The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. For the nine months ended September 30, 2020, the Company incurred a net loss $7.7 million and used cash in operating activities of $1.7 million. As of September 30, 2020, the Company had $10.3 million of cash, $0.5 million of outstanding indebtedness and borrowing availability of $2.3 million under its ABL Facility. In addition, the Company has $1.96 million outstanding under a PPP Loan, which may be forgiven if the loan is used for eligible expenses and meets PPP criteria for forgiveness.



The COVID-19 pandemic has significantly increased economic and demand uncertainty. It is likely that the current outbreak and continued spread of COVID-19 will cause the economic slowdown to continue, and it is possible that it could cause a global recession. There is a significant degree of uncertainty and lack of visibility as to the extent and duration of the current slowdown or any recession. If either were prolonged, demand for the Company’s products will be significantly harmed. The Company has experienced delays in product shipments and is expecting slowing economic conditions may adversely affect its business in the last quarter of 2020 and extending into 2021. Given the significant economic uncertainty and volatility created by the pandemic, it is difficult to predict the nature and extent of the impact on demand for the Company’s products. These expectations are subject to change without warning and investors are cautioned not to place undue reliance on them. Unanticipated consequences of the pandemic and resulting economic uncertainty could adversely affect the Company’s liquidity and capital resources in the future as well as its ability to continue as a going concern.



Due to continuing losses, the COVID-19 pandemic, uncertainty regarding the Company’s need or ability to borrow under its ABL Facility, and the expiration of the Company’s At The Market (“ATM”) facility in July 2020 when the remaining amount available under the facility was used, the Company may not be able to meet its financial obligations as they become due without additional financing or sources of capital. Therefore, in accordance with applicable accounting guidance, and based on the Company’s current financial condition and availability of funds, there is substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these financial statements were issued.



The Company has taken actions to increase revenues and to reduce expenses and is considering financing alternatives. In addition during the nine months ended September 30, 2020, the Company borrowed $1.96 million under the PPP loan program and raised $9.8 million of funds under its ATM Facility which represented the remaining amount available under the facility. The Company’s plans with regard to these matters include the following actions: 1) focus production and engineering resources on improving manufacturing yields and increasing production volumes, 2) continuing a Work Status Reduction program that began in October 2019 wherein senior management work status was reduced by approximately 20%, 3) reduce headcount and not replace departed employees, subject to PPP loan restrictions, 4) reduce discretionary and other expenses 5) hire a new head of Business Development, and 6) considering additional financing and/or strategic alternatives.



The Company is reassessing its business plans and forecasts over the next two years. Based on its known cash needs as of November 2020, and the anticipated availability of its ABL facility, the Company has developed plans to extend its liquidity to support its working capital requirements through the fourth quarter of 2021. However, there can be no assurance the Company’s plans will be achieved, or that the Company will be able to continue to borrow under its ABL Facility, mitigate the impacts of COVID-19, secure additional financing, and/or pursue strategic alternatives on terms acceptable to the Company, or at all.



Recently adopted accounting pronouncements



The Company's accounting policies are the same as those described in Note 1 to the Company's consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019.



In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) a guidance that adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the guidance on January 1, 2020, on a prospective basis and such adoption did not have a material impact on our financial statements.



12

 


 

 

Recently issued accounting pronouncements



In August 2020, the FASB issued ASU 2020-06,  Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This guidance changes how entities account for convertible instruments and contracts in an entity's own equity and simplifies the accounting for convertible instruments by removing certain separation models for convertible instruments. This guidance also modifies the guidance on diluted earnings per share calculations. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU on the consolidated financial statements.



In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) as part of its initiative to reduce complexity in accounting standards. This standard simplify the accounting for income taxes. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. This standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements.



In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) and subsequently issued amendments. The guidance affects the Company's accounts receivable, and it requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Based on the composition of the Company's receivables, current market conditions and historical credit loss activity, the Company is still evaluating the impact of this ASU on the consolidated financial statements.





Note 2 – Revenue Recognition



All of the Company’s revenues are earned from contracts with customers and are classified as either Product or Contract revenues. Contracts include R&D activities performed pursuant to written agreements and purchase orders, as well as arrangements that are implied by customary practices or law.



Product revenue is generated primarily from contracts to produce, ship and deliver OLED microdisplays. eMagin’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time when control transfers to our customer for product shipped. Our customary terms are FOB our factory and control is deemed to transfer upon shipment. The Company has elected to treat shipping and other transportation costs charged to customers as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. As customers are invoiced at the time control transfers and the right to consideration is unconditional at that time, the Company does not maintain contract asset balances for product revenue. Additionally, the Company does not maintain contract liability balances for product revenues, as performance obligations are satisfied prior to customer payment for product. The Company generally offers a one-year product warranty, for replacement of product only, and does not allow returns. The Company offers industry standard payment terms that typically require payment from our customers from 30 to 60 days after title transfers.



The Company also recognizes revenues under the over time method from certain research and development (“R&D”) activities (contract revenues) under both firm fixed-price contracts and cost-type contracts. Progress and revenues from research and development activities relating to firm fixed-price contracts and cost-type contracts are generally recognized on an input method of accounting as costs are incurred. Under the input method, revenue is recognized based on efforts expended to date (e.g., the costs of resources consumed or labor hours worked, or machine hours used) relative to total efforts intended to be expended. Contract costs include all direct material, labor and subcontractor costs and an allocation of allowable indirect costs as defined by each contract, as periodically adjusted to reflect revised agreed upon rates. These rates are subject to audit by the other party. Any changes in estimate related to contract accounting are accounted for prospectively over the remaining life of the contract. Under the over time method, billings may not correlate directly to the revenue recognized. Based upon the terms of the specific contract, billings may be in excess of the revenue recognized, in which case the amounts are included in deferred revenues as a liability on the Condensed Consolidated Balance Sheets. Likewise, revenue recognized may exceed customer billings in which case the amounts are reported as unbilled receivables. Unbilled revenues are expected to be billed and collected within one year.



Costs to Obtain and Fulfill a Contract



The incidental costs related to obtaining product sales contracts are non-recoverable from customer and, accordingly, are expenses as incurred. The Company capitalizes costs incurred to fulfil its R&D contracts that i) relate directly to a contract or anticipated contract ii) are expected to satisfy the Company’s performance obligation under the contract and iii) are expected to be recovered through

13

 


 

 

revenue generated under the contract. Contact fulfillment costs are expense to cost of revenue as the related performance obligations are satisfied. Capitalized fulfilment costs are classified in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheet. Capitalized contract fulfillment costs were $165 thousand and $0 dollars as of September 30, 2020 and December 31, 2019, respectively.



Disaggregation of Revenue



The Company sells products directly to military contractors and OEM’s and they use our displays in a diverse range of applications encompassing the military and commercial, including medical and industrial, market sectors. Revenues are classified as either military, commercial, consumer or multiple based on management’s knowledge of the customer’s products and markets served by displays or the R&D contract work. Revenues classified as multiple are for sales to customers that incorporate the Company’s displays in products that could be used for either military or commercial applications. R&D activities are performed for both military customers and U.S. Government defense related agencies and consumer companies. Product and contract revenues are disclosed on the Consolidated Statements of Operations.



Additional disaggregated revenue information for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

 

Nine Months Ended



 

September 30,

 

 

September 30,



 

2020

 

 

2019

 

 

2020

 

 

2019

North and South America

 

$

4,246 

 

 

$

4,355 

 

 

$

11,963 

 

 

$

10,608 

Europe, Middle East, and Africa

 

 

2,408 

 

 

 

3,359 

 

 

 

7,330 

 

 

 

7,838 

Asia Pacific

 

 

657 

 

 

 

205 

 

 

 

2,449 

 

 

 

946 

Total

 

$

7,311 

 

 

$

7,919 

 

 

$

21,742 

 

 

$

19,392 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

 

Nine Months Ended



 

September 30,

 

 

September 30,



 

2020

 

 

2019

 

 

 

2020

 

 

 

2019

Military

 

$

5,836 

 

 

$

5,118 

 

 

$

16,363 

 

 

$

13,398 

Commercial, including industrial and medical

 

 

491 

 

 

 

1,388 

 

 

 

1,213 

 

 

 

2,500 

Consumer

 

 

 

 

 

206 

 

 

 

2,023 

 

 

 

952 

Multiple

 

 

984 

 

 

 

1,207 

 

 

 

2,143 

 

 

 

2,542 

Total

 

$

7,311 

 

 

$

7,919 

 

 

$

21,742 

 

 

$

19,392 



Accounts Receivable from Customers



Accounts receivable, net of allowances, were $3.2 million and $4.0 million as of September 30, 2020 and December 31, 2019, respectively.



Contract Assets and Liabilities



Unbilled Accounts Receivables (Contract Assets) - Pursuant to the over time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled accounts receivable is recorded to reflect revenue that is recognized when the cost based input method is applied and such revenue exceeds the amount invoiced to the customer. Unbilled receivables are disclosed on the Condensed Consolidated Balance Sheet.



Customer Advances and Deposits (Contract Liabilities) - The Company recognizes a contract liability when it has billed and received consideration from the customer pursuant to the terms of a contract but has not yet recognized the related revenue. These billings in excess of revenue are classified as deferred revenue on the Condensed Consolidated Statements of Operations.



14

 


 

 

Total contract assets and liabilities consisted of the following amounts (in thousands):





 

 

 

 

 

 

 



21 

September 30,

 

 

December 31,



 

2020

 

 

2019



 

 

 

 

 

 

 

Unbilled Receivables (contract assets)

 

$

31 

 

 

$

155