LENDWAY, INC. - Quarter Report: 2017 September (Form 10-Q)
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,
2017
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: 1-13471
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INSIGNIA SYSTEMS,
INC.
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(Exact
name of registrant as specified in its charter)
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Minnesota
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41-1656308
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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8799 Brooklyn Blvd., Minneapolis, MN 55445
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(Address
of principal executive offices; zip code)
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(763) 392-6200
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(Registrant’s
telephone number, including area code)
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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 and posted
on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted 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 and post 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. (Check one):
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☑
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Emerging growth
company
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☐
|
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 ☑
Number
of shares outstanding of Common Stock, $.01 par value, as of
October 31, 2017 was 11,914,676.
Insignia Systems, Inc.
TABLE OF CONTENTS
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Page
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PART I.
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FINANCIAL INFORMATION
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1
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Item 1.
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1
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Condensed Balance Sheets - September 30, 2017
(unaudited) and December 31, 2016
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1
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Statements of Operations and Comhensive Income
(Loss) - Three and nine months ended September 30, 2017 and
2016 (unaudited)
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2
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Statements of Cash Flows - Nine months ended
September 30, 2017 and 2016 (unaudited)
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3
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Notes to Financial Statements - September 30, 2017
(unaudited)
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4
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Item 2.
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8
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Item 3.
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13
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Item 4.
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13
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PART II.
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OTHER INFORMATION
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14
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Item 1.
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14
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Item 1A.
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14
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Item 2.
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14
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Item 3.
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14
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Item 4.
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14
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Item 5.
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14
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Item 6.
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15
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16
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PART
I.
FINANCIAL INFORMATION
Item
1.
Financial Statements
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Insignia Systems, Inc.
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CONDENSED BALANCE
SHEETS
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September 30,
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2017
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December 31,
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(Unaudited)
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2016
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ASSETS
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Current Assets:
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Cash
and cash equivalents
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$3,375,000
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$12,267,000
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Accounts
receivable, net
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11,903,000
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9,879,000
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Inventories
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326,000
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325,000
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Income
tax receivable
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420,000
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775,000
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Prepaid
expenses and other
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497,000
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689,000
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Total
Current Assets
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16,521,000
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23,935,000
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Other Assets:
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Property
and equipment, net
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2,713,000
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2,430,000
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Other,
net
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1,516,000
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1,863,000
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Total Assets
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$20,750,000
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$28,228,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
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Accounts
payable:
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Cash
dividend declared ($0.70 per share)
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$—
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$8,233,000
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Other
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3,478,000
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2,530,000
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Accrued
liabilities:
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Compensation
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1,058,000
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762,000
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Other
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621,000
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498,000
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Deferred
revenue
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648,000
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62,000
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Total
Current Liabilities
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$5,805,000
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$12,085,000
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Long-Term Liabilities:
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Deferred
tax liabilities
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—
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205,000
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Accrued
income taxes
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574,000
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554,000
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Deferred
rent
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233,000
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275,000
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Total
Long-Term Liabilities
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$807,000
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$1,034,000
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Commitments and Contingencies
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—
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—
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Shareholders' Equity:
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Common
stock, par value $.01:
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Authorized
shares - 40,000,000
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Issued
and outstanding shares - 11,903,946 at September 30, 2017 and
11,760,817,000
at
December 31, 2016
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118,000
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117,000
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Additional
paid-in capital
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15,294,000
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14,992,000
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Accumulated
deficit
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( 1,274,000)
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—
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Total
Shareholders' Equity
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14,138,000
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15,109,000
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Total Liabilities and Shareholders' Equity
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$20,750,000
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$28,228,000
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
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STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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September 30
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September 30
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2017
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2016
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2017
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2016
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Services
revenues
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$7,353,000
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$6,050,000
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$17,169,000
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$17,830,000
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Products
revenues
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370,000
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419,000
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1,170,000
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1,334,000
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Total
Net Sales
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7,723,000
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6,469,000
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18,339,000
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19,164,000
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Cost
of services
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4,700,000
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4,171,000
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12,624,000
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12,153,000
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Cost
of goods sold
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280,000
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298,000
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845,000
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928,000
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Total
Cost of Sales
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4,980,000
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4,469,000
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13,469,000
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13,081,000
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Gross
Profit
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2,743,000
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2,000,000
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4,870,000
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6,083,000
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Operating Expenses:
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Selling
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879,000
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917,000
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2,598,000
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3,061,000
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Marketing
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409,000
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242,000
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1,262,000
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769,000
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General
and administrative
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1,004,000
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879,000
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2,871,000
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3,149,000
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Total
Operating Expenses
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2,292,000
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2,038,000
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6,731,000
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6,979,000
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Operating
Income (Loss)
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451,000
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( 38,000)
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( 1,861,000)
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( 896,000)
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Other
income
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2,000
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12,000
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7,000
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44,000
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Income
(Loss) Before Income Taxes
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453,000
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( 26,000)
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( 1,854,000)
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( 852,000)
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Income
tax expense (benefit)
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2,000
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141,000
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( 580,000)
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( 276,000)
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Net
Income (Loss)
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$451,000
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$( 167,000)
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$( 1,274,000)
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$( 576,000)
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Other comprehensive income, net of tax:
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Unrealized
gain on available for sale securities
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—
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—
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—
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11,000
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Comprehensive
Income (Loss)
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$451,000
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$( 167,000)
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$( 1,274,000)
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$( 565,000)
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Net
income (loss) per share:
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Basic
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$0.04
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$( 0.01)
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$( 0.10)
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$( 0.05)
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Diluted
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$0.04
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$( 0.01)
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$( 0.10)
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$( 0.05)
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Shares
used in calculation of net
income
(loss) per share:
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Basic
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11,758,000
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11,642,000
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11,698,000
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11,626,000
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Diluted
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11,777,000
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11,642,000
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11,698,000
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11,626,000
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
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STATEMENTS OF CASH
FLOWS
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(Unaudited)
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Nine Months Ended September 30
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2017
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2016
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Operating Activities:
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Net
loss
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$( 1,274,000)
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$( 576,000)
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Adjustments
to reconcile net loss to
net cash provided by (used in) operating activities:
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Depreciation
and amortization
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1,001,000
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1,101,000
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Changes
in allowance for doubtful accounts
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16,000
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41,000
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Deferred
income tax expense
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( 205,000)
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—
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Stock-based
compensation expense
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317,000
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150,000
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Gain
on sale of property and equipment
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—
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( 5,000)
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Changes
in operating assets and liabilities:
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Accounts
receivable
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( 2,040,000)
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338,000
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Inventories
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( 1,000)
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( 184,000)
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Income
tax receivable
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355,000
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( 324,000)
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Prepaid
expenses and other
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192,000
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( 266,000)
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Accounts
payable
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777,000
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( 1,271,000)
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Accrued
liabilities
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377,000
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( 1,098,000)
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Income
tax payable
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20,000
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( 184,000)
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Deferred
revenue
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586,000
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( 128,000)
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Net
cash provided by (used in) operating activities
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121,000
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( 2,406,000)
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Investing Activities:
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Purchases
of property and equipment
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( 822,000)
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( 524,000)
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Proceeds
from sale or maturity of investments
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—
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6,071,000
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Proceeds
received from sale of property and equipment
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—
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5,000
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Net
cash provided by (used in) investing activities
|
( 822,000)
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5,552,000
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Financing Activities:
|
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Cash
dividends paid ($0.70 per share)
|
( 8,177,000)
|
—
|
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Proceeds
from issuance of common stock, net
|
—
|
44,000
|
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Repurchase
of common stock upon vesting of restricted stock
awards
|
( 14,000)
|
—
|
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Repurchase
of common stock, net
|
—
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( 301,000)
|
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Net
cash used in financing activities
|
( 8,191,000)
|
( 257,000)
|
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Increase
(decrease) in cash and cash equivalents
|
( 8,892,000)
|
2,889,000
|
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Cash
and cash equivalents at beginning of period
|
12,267,000
|
8,523,000
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Cash
and cash equivalents at end of period
|
$3,375,000
|
$11,412,000
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Supplemental disclosures for cash flow information:
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Cash
paid during the period for income taxes
|
$2,000
|
$238,000
|
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Non-cash investing and financing activities:
|
|
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Purchases
of property and equipment included in accounts payable
|
$115,000
|
$—
|
|
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
Notes To Financial
Statements
(Unaudited)
1.
Summary of Significant Accounting Policies.
Description
of Business. Insignia Systems,
Inc. (the “Company”) markets in-store advertising
products, programs and services to retailers and consumer packaged
goods manufacturers. The Company operates in a single reportable
segment. The Company’s primary products include the Insignia
Point-of-Purchase Services (POPS®)
in-store marketing program, freshADSsm,
thermal sign card supplies for the Company’s Impulse Retail
System, and laser printable cardstock and label
supplies.
Basis of
Presentation. Financial statements for the interim periods
included herein are unaudited; however, they contain all
adjustments, including normal recurring accruals, which in the
opinion of management, are necessary to present fairly the
financial position of the Company at September 30, 2017, its
results of operations for the three and nine months ended September
30, 2017 and 2016, and its cash flows for the nine months ended
September 30, 2017 and 2016. Results of operations for the periods
presented are not necessarily indicative of the results to be
expected for the full year.
The
financial statements do not include certain footnote disclosures
and financial information normally included in financial statements
prepared in accordance with accounting principles generally
accepted in the United States of America and, therefore, should be
read in conjunction with the financial statements and notes
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2016.
The
Summary of Significant Accounting Policies in the Company’s
2016 Annual Report on Form 10-K describes the Company’s
accounting policies.
Inventories.
Inventories are primarily comprised of sign cards and roll stock.
Inventory is valued at the lower of cost or market using the
first-in, first-out (FIFO) method, and consisted of the following
as of the dates indicated:
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September
30,
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December
31,
|
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2017
|
2016
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Raw
materials
|
$110,000
|
$123,000
|
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Work-in-process
|
18,000
|
27,000
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Finished
goods
|
198,000
|
175,000
|
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$326,000
|
$325,000
|
Property
and Equipment. Property and
equipment consisted of the following as of the dates
indicated:
|
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September
30,
|
December
31,
|
|
|
2017
|
2016
|
|
Property and Equipment:
|
|
|
|
Production
tooling, machinery and equipment
|
$4,001,000
|
$4,000,000
|
|
Office
furniture and fixtures
|
322,000
|
322,000
|
|
Computer
equipment and software
|
2,671,000
|
1,301,000
|
|
Leasehold
improvements
|
577,000
|
577,000
|
|
Construction
in-progress
|
49,000
|
523,000
|
|
|
7,620,000
|
6,723,000
|
|
Accumulated
depreciation and amortization
|
( 4,907,000)
|
( 4,293,000)
|
|
Net
Property and Equipment
|
$2,713,000
|
$2,430,000
|
Depreciation
expense was approximately $220,000 and $653,000 in the three and
nine months ended September 30, 2017, respectively, and $187,000
and $577,000 in the three and nine months ended September 30, 2016,
respectively.
Stock-Based
Compensation. The Company measures and recognizes
compensation expense for all stock-based awards at fair value using
the Black-Scholes option pricing model to determine the weighted
average fair value of options and employee stock purchase plan
rights. The Company recognizes stock-based compensation expense on
a graded-attribution method
over the requisite service period of the award.
In November 2016, our Board of Directors amended
the 2003 Incentive Stock Option Plan (the “2003 Plan”)
and the 2013 Omnibus Stock and Incentive Plan (the “2013
Plan”) to permit equitable adjustments to outstanding awards
in the event of a special dividend. In March 2017, the Board
of Directors approved the modification of all outstanding stock
option awards to provide option holders with substantially
equivalent economic value after the effect of the dividend. The
modification resulted in the issuance of options to purchase up to
150,476 additional shares. Total stock-based compensation expense
for the modifications was approximately $79,000, which was recorded
during the nine months ended September 30, 2017.
During
the nine months ended September 30, 2017, no other stock option
awards were granted by the Company beyond the modification
discussed above. During the nine
months ended September 30, 2016, the Company issued options to
purchase an aggregate of 20,000 shares of common stock under its
2013 Omnibus Stock and Incentive Plan, as amended, with a weighted
average exercise price of $2.90.
During
the nine months ended September 30, 2017, the Company issued 60,000
shares of restricted stock under the 2013 Plan. The shares
underlying the award were assigned a value of $1.09 per share,
which was the closing price of our common stock on the date of
grant, and is scheduled to vest over the two years following the
date of grant. During the nine months ended September 30, 2016, the
Company issued 100,000 shares of restricted stock under the 2013
Plan. The shares underlying the award were assigned a value of
$2.33 per share, which was the closing price of our common stock on
the date of grant, and is scheduled to vest over the five years
following the date of grant.
During
the nine months ended September 30, 2017 and 2016, the Company
issued 143,424 and 43,625 restricted stock units, respectively,
under the 2013 Plan. The shares underlying the awards made in 2017
and 2016 were assigned weighted average values of $1.13 and $2.14
per share, respectively, based on the closing price of our common
stock on the applicable dates of grant, and are scheduled to vest
over two years.
During
June 2017, non-employee members of the Board of Directors received
grants totaling 72,115 fully vested shares of common stock pursuant
to the 2013 Plan. The shares were assigned a value of $1.04 per
share, based on the closing price on the grant date, for a total
value of $75,000, which is included in stock-based compensation
expense for the nine months ended September 30, 2017. During May
and June 2016, members of the Board of Directors received grants
totaling 54,036 fully vested shares of common stock pursuant to the
2013 Plan. The shares were assigned a weighted average value of
$2.19 per share, based on the stock prices on the applicable grant
dates, for a total value of $119,000, of which $109,000 is included
in stock-based compensation expense for the nine months ended
September 30, 2016 and $10,000 was accrued for and expensed in
2015.
Total
stock-based compensation expense recorded for the three and nine
months ended September 30, 2017 was $43,000 and $317,000,
respectively, and for the three and nine months ended September 30,
2016 was $42,000 and $150,000, respectively.
During
the three and nine months ended September 30, 2017, there were no
options exercised. During each of the three and nine months ended
September 30, 2016, there were approximately 54,700 shares and
115,700 shares issued pursuant to stock option exercises, for which
the Company received proceeds of $0 and $16,000, respectively. A
portion of the stock option exercises in the three and nine months
ended September 30, 2016 were completed on a cashless
basis.
Net Income
(Loss) per Share. Basic net income (loss) per share is computed by
dividing net income (loss) by the weighted average shares
outstanding and excludes any potential dilutive effects of stock
options and restricted stock units and awards. Diluted net income
(loss) per share gives effect to all diluted potential common
shares outstanding during the period.
Options
to purchase approximately 501,000 shares of common stock with a
weighted average exercise price of $2.33 were outstanding at
September 30, 2017 and were not included in the computation of
common stock equivalents for the three months ended September 30,
2017 because their exercise prices were higher than the average
fair market value of the common shares during the reporting period.
Due to the net loss incurred during the nine months ended September
30, 2017 and the three months and nine months ended September 30,
2016, all stock options were anti-dilutive for those
periods.
Weighted
average common shares outstanding for the three and nine months
ended September 30, 2017 and 2016 were as follows:
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
|
September
30
|
September
30
|
||
|
|
2017
|
2016
|
2017
|
2016
|
|
Denominator
for basic net income (loss) per share -
weighted average shares
|
11,758,000
|
11,642,000
|
11,698,000
|
11,626,000
|
|
Effect
of dilutive securities:
|
|
|
|
|
|
Stock
options and restricted stock units and awards
|
19,000
|
—
|
—
|
—
|
|
Denominator
for diluted net income (loss) per share -
weighted average shares
|
11,777,000
|
11,642,000
|
11,698,000
|
11,626,000
|
Dividends.
On November 28, 2016, the Board
declared a one-time special dividend of $0.70 per share to
shareholders of record as of December 16, 2016 of $8,233,000, of
which $8,163,000 was paid on January 6, 2017, and an additional
$14,000 was paid on May 15, 2017.
2.
Selling Arrangement. In 2011, the
Company paid News America Marketing In-Store, LLC (“News
America”) $4,000,000 in exchange for a 10-year arrangement to
sell signs with price into News America’s network of
retailers as News America’s exclusive agent. The $4,000,000
is being amortized on a straight-line basis over the 10-year term
of the arrangement. Amortization expense, which was $100,000 and
$300,000 in both of the three and nine months ended September 30,
2017 and 2016, respectfully, and is expected to be $400,000 per
year over the next three years and $117,000 in the year ending
December 31, 2021, is recorded within cost of services in the
Company’s statements of operations and comprehensive income
(loss). The net carrying amount of the selling arrangement is
recorded within other assets on the Company’s condensed
balance sheet.
3.
Income
Taxes. For the three and
nine months ended September 30, 2017, the Company recorded income
tax expense (benefit), of $2,000 and $(580,000) or 0.4% and
31.3% of income or loss before taxes. For the
three and nine months ended September 30, 2016, the Company
recorded income tax expense (benefit) of $141,000 and $(276,000),
or (542.3)% and 32.4% of loss before taxes, respectively. The
income tax expense (benefit) for the three and nine months ended
September 30, 2017 and 2016 is comprised of federal and state
income taxes. The primary differences between the Company’s
September 30, 2017 and 2016 effective tax rates and the statutory
federal rate are expenses related to stock-based compensation,
nondeductible meals and entertainment and for the three and nine
months ended September 30, 2017, the impact of a valuation
allowance of $192,000 which was originally recognized during the
six months ended June 30, 2107 as it was determined that it was
more likely than not that the Company would not realize the full
amount of its net deferred tax assets. The Company reassesses its
effective rate each reporting period and adjusts the annual
effective rate if deemed necessary, based on projected annual
taxable income (loss).
Deferred income
taxes are determined based on the estimated future tax effects of
differences between the financial statement and tax basis of assets
and liabilities given the provisions of enacted tax laws. In
providing for deferred taxes, we consider tax regulations of the
jurisdictions in which we operate, estimates of future taxable
income, and available tax planning strategies. If tax
regulations, operating results or the ability to implement
tax-planning strategies vary, adjustment to the carrying value of
deferred tax assets and liabilities may be required. Valuation
allowances are recorded related to deferred tax assets based on the
“more likely than not” criteria.
As a
result of significant losses in 2016 and through June 2017, as well
as the current market conditions and their impact on the
Company’s future outlook, management reviewed its deferred
tax assets and concluded that the uncertainties related to the
realization of its assets had become unfavorable. As of June 30,
2017, the Company had net deferred tax assets of approximately
$192,000 which were comprised of temporary differences, including
federal and state net operating losses to be carried forward.
Management considered the positive and negative evidence for the
potential utilization of the net deferred tax assets and concluded
that it was more likely than not that the Company would not realize
the full amount of net deferred tax assets. Accordingly, the
Company recorded a valuation allowance of $192,000 against these
deferred tax assets as of June 30, 2017. For the three months ended September
30, 2017, the Company recognized limited income tax expense as the
net income generated during the third quarter was fully offset by
the Company’s valuation allowance recorded against net
deferred assets as of June 30, 2017. The profitability in the third
quarter has substantially reduced the valuation allowance
previously recorded in the second quarter.
As of
September 30, 2017 and December 31, 2016, the Company had
unrecognized tax benefits totaling $574,000 and $554,000,
respectively, including interest, which relates to state nexus
issues. The amount of the unrecognized tax benefits, if recognized,
that would affect the effective income tax rates of future periods
is $574,000. Due to the current statute of limitations regarding
the unrecognized tax benefits, the unrecognized tax benefits and
associated interest are not expected to change significantly in
2017.
4.
Concentrations. During the nine months
ended September 30, 2017 one customer accounted for 27%, of the
Company’s total net sales. During the nine months ended
September 30, 2016, one customer accounted for 33% of the
Company’s total net sales. At September 30, 2017 and December
31, 2016, one customer accounted for 31% and 37% of the
Company’s total accounts receivable,
respectively.
Although there are
a number of customers that the Company sells to, the loss of a
major customer could adversely affect operating results.
Additionally, the loss of a major retailer from the Company’s
retail network could adversely affect operating
results.
5.
Recently Issued Accounting
Pronouncements. In May 2014, the Financial Accounting
Standards Board (FASB) issued guidance creating Accounting
Standards Codification (ASC) Section 606, “Revenue from
Contracts with Customers”, which establishes a comprehensive
new model for the recognition of revenue from contracts with
customers. This model is based on the core principle that revenue
should be recognized to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those
goods or services. The Company has performed a review of the
requirements of the new guidance and has identified which of its
revenue streams will be within the scope of ASC 606. The Company
has applied the five-step model of the new standard to a selection
of contracts within each of its revenue streams and has compared
the results to its current accounting practices. Based on this
analysis, the Company does not currently expect a material impact
on the Company’s consolidated financial statements. The
Company is expecting to utilize the modified retrospective
transition method of adoption. The Company is continuing to work
through the remaining steps of the adoption plan to facilitate
adoption effective January 1, 2018. As part of this, the Company is
assessing changes that might be necessary to information technology
systems, processes, and internal controls to capture new data and
address changes in financial reporting. The Company will be
revising its revenue recognition accounting policy and expanding
revenue disclosures to reflect the requirements of ASC 606, which
include disclosures related to the nature, amount, timing and
uncertainty of revenue and cash flows arising from contracts with
customers. Additionally, qualitative and quantitative disclosures
are required about customer contracts, significant judgements and
assets recognized from the costs to obtain or fulfill a
contract.
In
February 2016, the FASB issued ASU 2016-2, Leases, under which lessees will
recognize most leases on the balance sheet. This will generally
increase reported assets and liabilities. For public entities, this
ASU is effective for annual and interim periods in fiscal years
beginning after December 15, 2018. ASU 2016-2 mandates a modified
retrospective transition method for all entities. The Company is in
the process of determining the impact that the updated accounting
guidance will have on our financial statements.
In March 2016, the FASB issued ASU
2016-9, Compensation – Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, which
simplifies several aspects of the accounting for share-based
payment transactions, including the income tax consequences,
classification of awards as either equity or liabilities, and
classification on the statement of cash flows. For public entities,
this ASU is effective for annual periods beginning after December
15, 2016, and interim periods within those annual periods. The
Company adopted the guidance in the first quarter of 2017. The
adoption of the guidance did not have a material impact on our
financial statements.
Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of
Operations
The
following discussion should be read in conjunction with the
Company’s financial statements and related notes. This
discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from
those anticipated due to various factors discussed under
“Cautionary Statement Regarding Forward-Looking
Statements” and elsewhere in this Quarterly Report on Form
10-Q and the “Risk Factors” described in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31,
2016, our Current Reports on Form 8-K and our other SEC
filings.
Company Overview
Insignia
Systems, Inc. “Insignia,” “we,”
“us,” “our” or the “Company”)
is a developer and marketer of innovative in-store products,
programs and services that help consumer packaged goods
(“CPG”) manufacturers and retail partners drive sales
at the point of purchase. The Company was incorporated in 1990.
Since 1998, the Company has focused on managing a retail network,
made up of approximately 21,000 store locations, for the primary
purpose of providing turn-key at-shelf market access for CPG
manufacturers’ marketing programs. Insignia provides
participating retailers with benefits including incremental
revenue, incremental sales opportunities, increased shopper
engagement in-store, and custom creative development and other
in-kind services.
Insignia’s
primary product has been the Point-Of-Purchase Services
(POPS®) in-store
marketing program. Insignia POPS program is a national,
account-specific, shelf-edge advertising and promotional tactic.
Internal testing has indicated the program delivers incremental
sales for the featured brand. The program allows manufacturers to
deliver vital product information to consumers at the
point-of-purchase, and to leverage the local retailer brand and
store-specific prices to provide a unique “call to
action” that draws attention to the featured brand and
triggers a purchase decision. CPG customers benefit from
Insignia’s nimble operational capabilities, which include
short lead times, in-house graphic design capabilities,
post-program analytics, and micro-marketing capabilities such as
variable or bilingual messaging.
The
Company discontinued the sale of The Like MachineTM upon the expiration
of its distribution agreement on March 31, 2017. The Company did
not receive significant revenue from this offering at the time
sales were discontinued. Restructuring costs incurred and paid in
2017 were not significant.
The
Company announced the nationwide launch of freshADSsm, an exclusive
advertising vehicle featured in produce, created to inspire
shoppers early in their trip and help navigate them to center
store.
2017 Business Overview
Summary of Financial Results
For the
quarter ended September 30, 2017, the Company generated net sales
of $7,723,000, as compared with net sales of $6,469,000 for the
quarter ended September 30, 2016. For the nine months ended
September 30, 2017, the Company generated net sales of $18,339,000,
as compared with net sales of $19,164,000 in the nine months ended
September 30, 2016. Net income for the quarter ended September 30,
2017 was $451,000, as compared to net loss of $167,000 for the
quarter ended September 30, 2016. Net loss for the nine months
ended September 30, 2017 was $1,274,000, as compared to $576,000
for the nine months ended September 30, 2016.
During
the nine months ended September 30, 2017, cash and cash equivalents
decreased $8,892,000 from $12,267,000 at December 31, 2016, to
$3,375,000 at September 30, 2017. The special dividend
paid/distributed on January 6, 2017 used cash of $8,177,000. The
Company had no long-term debt as of September 30, 2017. The
remaining uses of cash are further explained in the Liquidity and
Capital Resources section below.
Results of Operations
The
following table sets forth, for the periods indicated, certain
items in the Company’s Statements of Operations and
Comprehensive Income (Loss) as a percentage of total net
sales.
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
|
September
30
|
September
30
|
||
|
|
2017
|
2016
|
2017
|
2016
|
|
Net
sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
Cost
of sales
|
64.5
|
69.1
|
73.4
|
68.2
|
|
Gross
profit
|
35.5
|
30.9
|
26.6
|
31.8
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
11.4
|
14.2
|
14.2
|
16.0
|
|
Marketing
|
5.3
|
3.7
|
6.9
|
4.0
|
|
General
and administrative
|
13.0
|
13.6
|
15.6
|
16.5
|
|
Total
operating expenses
|
29.7
|
31.5
|
36.7
|
36.5
|
|
Operating
income (loss)
|
5.8
|
(0.6)
|
(10.1)
|
(4.7)
|
|
Other
income
|
0.0
|
0.2
|
0.0
|
0.3
|
|
Income
(loss) before taxes
|
5.8
|
(0.4)
|
(10.1)
|
(4.4)
|
|
Income
tax expense (benefit)
|
0.0
|
2.2
|
(3.2)
|
(1.4)
|
|
Net
income (loss)
|
5.8%
|
(2.6)%
|
(6.9)%
|
(3.0)%
|
Three Months and Nine Months Ended September 30, 2017 Compared to
Three Months and Nine Months Ended September 30, 2016
Net Sales. Net sales for the three months ended September
30, 2017 increased 19.4% to $7,723,000 compared to $6,469,000 for
the three months ended September 30, 2016. Net sales for the nine
months ended September 30, 2017 decreased 4.3% to $18,339,000,
compared to $19,164,000 for the nine months ended September 30,
2016.
Service
revenues for the three months ended September 30, 2017 increased
21.5% to $7,353,000 compared to $6,050,000 for the three months
ended September 30, 2016. The increase was primarily due to a 30.4%
increase in the number of signs placed, partially due to
programming shifts from second quarter to third quarter to support
CPG new item launches coupled with increased signs placed from new
and existing CPG customers, partially offset by a 6.8% decrease in
average price per sign, which was the result of program and
customer mix. Service revenues for the nine months ended September
30, 2017 decreased 3.7% to $17,169,000 compared to $17,830,000 for
the nine months ended September 30, 2016. This decrease was
primarily due to a 7.9% decrease in average price per sign, which
was a result of program and customer mix. The decrease was
partially offset by a 4.2% increase in the number of signs placed
due to the factors described above, offset by the first quarter
impact from two customers who experienced significant budget cuts
early in their planning cycles and organizational
restructuring.
Product
revenues for the three months ended September 30, 2017 decreased
11.7% to $370,000 compared to $419,000 for the three months ended
September 30, 2016. Product revenues for the nine months ended
September 30, 2017 decreased 12.3% to $1,170,000 compared to
$1,334,000 for the nine months ended September 30, 2016. The
decreases in both periods were primarily due to lower sales of sign
card supplies due to lower customer demand.
Gross Profit. Gross profit for the three months
ended September 30, 2017 increased 37.2% to $2,743,000, or 35.5% as
a percentage of net sales, compared to $2,000,000, or 30.9% as a
percentage of net sales, for the three months ended September 30,
2016. Gross profit for the nine months ended September 30, 2017
decreased 19.9% to $4,870,000, or 26.6% as a percentage of net
sales, compared to $6,083,000, or 31.8% as a percentage of net
sales, for the nine months ended September 30, 2016.
Service revenues:
Gross profit from our service revenues for the three months ended
September 30, 2017 increased 41.2% to $2,653,000 compared to
$1,879,000 for the three months ended September 30, 2016. The
increase was primarily due to an increase in sales, as our gross profit is highly dependent on sales
levels due to the relatively fixed nature of a portion of our
payments to retailers, combined with decreased cost of services due
to the discontinued sale of the The Like Machine, that were
partially offset by a decreased average price per sign. The
Company is continuing its actions during 2017 to reduce the fixed
portion of the cost to place signs in our retailers. Gross profit
from our service revenues for the nine months ended September 30,
2017 decreased 19.9% to $4,545,000 compared to $5,677,000 for the
nine months ended September 30, 2016. The decrease was primarily
due to a decreased average price per sign, partially offset by an
increase in sign volume and decreased cost of services due to the
discontinued sale of The Like Machine.
For the
three months ended September 30, 2017, the Company incurred costs
of approximately $109,000 associated with the development of its
new IT operating infrastructure and ongoing IT support compared to
approximately $105,000 for the three months ended September 30,
2016. For the nine months ended September 30, 2017, the Company
incurred costs of approximately $263,000 associated with the
development of its new IT operating infrastructure compared to
approximately $298,000 for the nine months ended September 30,
2016. The project is expected to be substantially completed during
the first quarter of 2018, with estimated incremental expense of
$282,000.
Gross
profit as a percentage of service revenues for the three months
ended September 30, 2017 increased to 36.1% compared to 31.1% for
the three months ended September 30, 2016. The increase was
primarily due to the factors described above. Gross profit as a
percentage of service revenues for the nine months ended September
30, 2017 decreased to 26.5% compared to 31.8% for the nine months
ended September 30, 2016. The decrease was primarily due to the
factors described above.
Product revenues:
Gross profit from our product revenues for the three months ended
September 30, 2017 decreased 25.6% to $90,000 compared to $121,000
for the three months ended September 30, 2016. The decrease was
primarily due to a
decrease in sales, partially offset by decreased facilities,
production, and tooling costs. Gross profit from our product
revenues for the nine months ended September 30, 2017 decreased
20.0% to $325,000 compared to $406,000 for the nine months ended
September 30, 2016. The decrease was primarily due to the factors
described above.
Gross
profit as a percentage of product revenues was 24.3% for the three
months ended September 30, 2017 compared to 28.9% for the three
months ended September 30, 2016. The decrease was primarily due to
the factors described above. Gross profit as a percentage of
product revenues was 27.8% for the nine months ended September 30,
2017 compared to 30.4% for the nine months ended September 30,
2016. The decrease was primarily due to the factors described
above.
Operating Expenses
Selling. Selling expenses for the three months ended
September 30, 2017 decreased 4.1% to $879,000 compared to $917,000
for the three months ended September 30, 2016. The decrease was
primarily due to decreased staff
related expenses, partially offset by higher variable
compensation. Selling expenses for the nine months ended
September 30, 2017 decreased 15.1% to $2,598,000 compared to
$3,061,000 for the nine months ended September 30, 2016. The
decrease was primarily due to lower variable compensation related
to lower sales, fewer sales personnel and decreased staff related expenses.
Selling
expenses as a percentage of net sales decreased to 11.4% for the
three months ended September 30, 2017 compared to 14.2% for the
three months ended September 30, 2016. The decrease was primarily
due to the factors described above, combined with increased sales.
Selling expenses as a percentage of net sales decreased to 14.2%
for the nine months ended September 30, 2017 compared to 16.0% for
the nine months ended September 30, 2016. The decrease was
primarily due to the factors described above, partially offset by
decreased sales.
Marketing. Marketing expenses for the three months ended
September 30, 2017 increased 69.0% to $409,000 compared to $242,000
for the three months ended September 30, 2016. Increased marketing
expenses were primarily due to increased staffing and staff related
costs, primarily due to the filling of previously open positions.
Marketing expenses for the nine months ended September 30, 2017
increased 64.1% to $1,262,000 compared to $769,000 for the nine
months ended September 30, 2016. The increase was primarily due to
the factors described above.
Marketing
expenses as a percentage of net sales increased to 5.3% for the
three months ended September 30, 2017 compared to 3.7% for the
three months ended September 30, 2016. The increase was primarily
due to the factors described above, partially offset by increased
sales. Marketing expenses as a percentage of net sales increased to
6.9% for the nine months ended September 30, 2017 compared to 4.0%
for the nine months ended September 30, 2016. The increase was
primarily due to the factors described above, combined with
decreased sales.
General and administrative. General and administrative
expenses for the three months ended September 30, 2017 increased
14.2% to $1,004,000 compared to $879,000 for the three months ended
September 30, 2016. The increase was primarily due to increased
staffing and staff related costs, primarily due to personnel and
staff related expenses. General and administrative expenses for the
nine months ended September 30, 2017 decreased 8.8% to $2,871,000
compared to $3,149,000 for the nine months ended September 30,
2016. The decrease was primarily due to decreases in legal costs,
consulting costs and onboarding costs, partially offset by
increased employee compensation costs.
General
and administrative expenses as a percentage of net sales decreased
to 13.0% for the three months ended September 30, 2017 compared to
13.6% for the three months ended September 30, 2016. The decrease
was primarily due to increased sales, partially offset by the
factors described above. General and administrative expenses as a
percentage of net sales decreased to 15.6% for the nine months
ended September 30, 2017 compared to 16.5% for the nine months
ended September 30, 2016. The decrease was primarily due to the
factors described above, partially offset by decreased
sales.
Other Income. Other income for the three months ended
September 30, 2017 was $2,000 compared to $12,000 for the three
months ended September 30, 2016. Other income for the nine months
ended September 30, 2017 was $7,000 compared to $44,000 for the
nine months ended September 30, 2016. The decrease was primarily
due to lower average cash, cash equivalent, and available-for-sale
investment balances due to the payment of the special dividend in
2017. Other income is comprised of interest earned on cash, cash
equivalents, and previously for available-for-sale investment
balances.
Income Taxes. For
the three and nine months ended September 30, 2017, the Company
recorded income tax expense (benefit), of $2,000 and $(580,000) or
0.4% and 31.3% of income or loss before taxes. For the three and
nine months ended September 30, 2016, the Company recorded income
tax expense (benefit) of $141,000 and $(276,000), or (542.3)% and
32.4% of loss before taxes, respectively. The income tax expense
(benefit) for the three and nine months ended September 30, 2017
and 2016 is comprised of federal and state income taxes. The
primary differences between the Company’s September 30, 2017
and 2016 effective tax rates and the statutory federal rate are
expenses related to stock-based compensation, nondeductible meals
and entertainment and for the three and nine months ended September
30, 2017, the impact of a valuation allowance of $192,000 which was
originally recognized during the six months ended June 30, 2107 as
it was determined that it was more likely than not that the Company
would not realize the full amount of its net deferred tax assets.
The Company reassesses its effective rate each reporting period and
adjusts the annual effective rate if deemed necessary, based on
projected annual taxable income (loss).
Deferred
income taxes are determined based on the estimated future tax
effects of differences between the financial statement and tax
basis of assets and liabilities given the provisions of enacted tax
laws. In providing for deferred taxes, we consider tax regulations
of the jurisdictions in which we operate, estimates of future
taxable income, and available tax planning strategies. If tax
regulations, operating results or the ability to implement
tax-planning strategies vary, adjustment to the carrying value of
deferred tax assets and liabilities may be required.
Valuation allowances are recorded related to deferred tax assets
based on the “more likely than not”
criteria.
As a
result of significant losses in 2016 and through June 2017, as well
as the current market conditions and their impact on the
Company’s future outlook, management reviewed its deferred
tax assets and concluded that the uncertainties related to the
realization of its assets had become unfavorable. As of June 30,
2017, the Company had net deferred tax assets of approximately
$192,000 which were comprised of temporary differences, including
federal and state net operating losses to be carried forward.
Management considered the positive and negative evidence for the
potential utilization of the net deferred tax assets and concluded
that it was more likely than not that the Company would not realize
the full amount of net deferred tax assets. Accordingly, the
Company recorded a valuation allowance of $192,000 against these
deferred tax assets as of June 30, 2017. For the three months
ended September 30, 2017, the Company recognized limited income tax
expense as the net income generated during the third quarter was
fully offset by the Company’s valuation allowance recorded
against net deferred assets as of June 30, 2017. The profitability
in the third quarter has substantially reduced the valuation
allowance previously recorded in the second quarter.
Net Income (Loss). Net income for the three months ended
September 30, 2017 was $451,000 and net loss for the nine months
ended September 30, 2017 was $1,274,000 compared to net losses of
$167,000 and $576,000, respectively, for the three and nine months
ended September 30, 2016, for the reasons stated
above.
Other Comprehensive Income. Other comprehensive income is
composed of unrealized gains, net of tax, from available-for-sale
investments which were sold by the Company during the fourth
quarter of 2016.
Liquidity and Capital Resources
The
Company has financed its operations with proceeds from stock sales
and sales of its services and products. At September 30, 2017,
working capital was $10,716,000 compared to $11,850,000 at December
31, 2016. During the nine months ended September 30, 2017, cash and
cash equivalents decreased $8,892,000 from $12,267,000 at December
31, 2016, to $3,375,000 at September 30, 2017. On November 28,
2016, the Board declared a one-time special dividend of $0.70 per
share to shareholders of record as of December 16, 2016, of
$8,233,000, of which $8,163,000 was paid on January 6,
2017, and an additional $14,000 was
paid on May 15, 2017.
Operating Activities: Net cash
provided by operating activities during the nine months ended
September 30, 2017, was $121,000. Net loss of $1,274,000, plus
non-cash adjustments of $1,129,000 and changes in operating assets
and liabilities of $266,000 resulted in the $121,000 of cash
provided by operating activities. The largest component of the
change in operating assets and liabilities was accounts receivable
which increased $2,040,000, which will fluctuate based on normal
business conditions. The non-cash adjustments consisted of
depreciation and amortization expense, changes in allowance for
doubtful accounts, deferred income tax benefits, and stock-based
compensation expense. In the normal course of business, our
accounts receivable, accounts payable, accrued liabilities and
deferred revenue will fluctuate depending on the level of revenues
and related business activity, as well as billing arrangements with
customers and payment terms with retailers.
Investing Activities: Net cash
used in investing activities during the nine months ended September
30, 2017 was $822,000, which was related to the purchase of
property and equipment. These expenditures related primarily to the
IT operating infrastructure project, and were for hardware,
purchased software and capitalization of costs for internally
developed software. Additional capital costs for this project are
expected to be approximately $210,000 in total for the last three
months of 2017 and first three months of 2018.
Financing Activities: Net cash
used in financing activities during the nine months ended September
30, 2017 was $8,191,000, which mainly related to the January 6,
2017 payment of the one-time special dividend of $0.70 per share
declared by the Board on November 28, 2016.
The
Company believes that based upon current business conditions and
plans, its existing cash balance and future cash generated from
operations will be sufficient for its cash requirements for at
least the next twelve months.
Critical Accounting Policies
The
discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments
that affect the reported amounts of assets and liabilities,
revenues and expenses, and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual
results may differ from these estimates under different assumptions
or conditions.
Our
significant accounting policies are described in Note 1 to the
annual financial statements as of and for the year ended December
31, 2016, included in our Form 10-K filed with the Securities and
Exchange Commission on March 7, 2017. The Company believes our most
critical accounting policies and estimates include the
following:
●
revenue
recognition;
●
allowance for
doubtful accounts;
●
impairment of
long-lived assets;
●
income taxes;
and
●
stock-based
compensation.
Cautionary Statement Regarding Forward-Looking
Statements
Certain
statements made in this Quarterly Report on Form 10-Q that are not
statements of historical or current facts, are
“forward-looking statements.” Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results or performance of the
Company to be materially different from the results or performance
expressed or implied by such forward-looking statements. The words
“anticipates,” “believes,”
“expects,” “seeks” and similar expressions
identify forward-looking statements. Forward-looking statements
include statements expressing the intent, belief or current
expectations of the Company and members of our management team
regarding, for instance: (i) our belief that our cash balance and
cash generated by operations will provide adequate liquidity and
capital resources for at least the next twelve months; and (ii)
that we expect fluctuations in accounts receivable and payable,
accrued liabilities, and deferred revenue. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this statement was made. These
forward-looking statements are based on current information, which
we have assessed and which by its nature is dynamic and subject to
rapid and even abrupt changes.
Factors
that could cause our estimates and assumptions as to future
performance, and our actual results, to differ materially include
the following: (i) the risk that management may be unable to fully
or successfully implement its business plan to achieve and maintain
increased sales and resultant profitability in the future; (ii) the
risk that the Company will not be able to develop and implement new
product offerings, including mobile, digital or other new
offerings, in a successful manner; (iii) prevailing market
conditions, including pricing and other competitive pressures, in
the in-store advertising industry and, intense competition for
agreements with retailers and consumer packaged goods
manufacturers; (iv) potentially incorrect assumptions by management
with respect to the financial effect of current strategic
decisions, the effect of current sales trends on fiscal year 2017
results and the benefit of our relationship with News America; (v)
termination of all or a major portion of, or a significant change
in terms and conditions of, a material agreement with a consumer
packaged goods manufacturer, retailer, or News America; (vi) other
economic, business, market, financial, competitive and/or
regulatory factors affecting the Company’s business
generally; (vii) the cancellation or deferral of certain bookings
for future periods; (viii) our ability to successfully implement
our new IT operating infrastructure; and (viiii) our ability to
attract and retain highly qualified managerial, operational and
sales personnel. Our risks and uncertainties also include, but are
not limited to, the risks presented in
our Annual Report on Form 10-K for the year ended December 31,
2016, any additional risks presented in our Quarterly Reports on
Form 10-Q and our Current Reports on Form 8-K. We undertake no
obligation (and expressly disclaim any such obligation) to update
forward-looking statements made in this Form 10-Q to reflect events
or circumstances after the date of this Form 10-Q or to update
reasons why actual results would differ from those anticipated in
any such forward-looking statements, other than as required by
law.
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
Not
applicable.
Item
4. Controls and Procedures
(a)
Evaluation of Disclosure Controls and Procedures
The
Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s
principal executive officer and principal financial officer, of the
effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this
report, pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Company’s principal executive officer and
principal financial officer concluded that the Company’s
disclosure controls and procedures were effective as of the end of
the period covered by this report. Disclosure controls and
procedures ensure that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and are
designed to ensure that information required to be disclosed by us
in these reports is accumulated and communicated to our management,
including our principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding
disclosures.
(b)
Changes in Internal Control Over Financial Reporting
There
was no change in our internal control over financial reporting that
occurred during the fiscal quarter covered by this report that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
PART II. OTHER INFORMATION
Item
1. Legal Proceedings
None.
Item
1A. Risk
Factors
We
described the most significant risk factors applicable to the
Company in Part I, Item 1A “Risk Factors” of our Annual
Report on Form 10-K for the year ended December 31, 2016. We
believe there have been no material changes from the risk factors
disclosed in that Form 10-K.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
On
October 30, 2015, the Board of Directors authorized the repurchase
of up to $5,000,000 of the Company’s common stock on or
before October 30, 2017. The expired plan allowed repurchases to be
made in open market or privately negotiated transactions. The plan
did not obligate the Company to repurchase any particular number of
shares.
Issuer Purchases of Equity Securities
|
Period
|
Total
number of shares purchased (a)
|
Average
price paid per share
|
Total
number of shares purchased as part of publicly announced plans or
programs
|
Maximum
number (or approximate dollar value) of shares that may yet be
purchased under the plans or programs
|
|
July 1–31,
2017
|
3,573
|
$1.02
|
–
|
$4,676,049
|
|
August 1–31,
2017
|
1,651
|
$1.02
|
–
|
$4,676,049
|
|
September
1–30, 2017
|
1,458
|
$1.10
|
–
|
$4,676,049
|
|
Total
|
6,682
|
$1.05
|
–
|
$4,676,049
|
(a)
Represents shares
surrendered to the Company to satisfy statutory federal, state, and
local tax withholding obligations arising from the vesting of a
restricted stock awards. The shares were forfeit pursuant to the
participant’s instructions in accordance with the terms of
the applicable award agreement and the 2013 Plan and are not part
of any publicly announced stock repurchase program.
Item
3. Defaults upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
Item
5. Other Information
None.
Item
6. Exhibits
Unless
otherwise indicated, all documents incorporated herein by reference
to a document filed with the SEC pursuant to the Exchange Act are
located under SEC file number 001-13471.
|
Exhibit
Number
|
Description
|
Method of
Filing
|
|
|
|
|
|
Composite Articles
of Incorporation of Registrant, as amended through July 31,
2008 (incorporated by reference to Exhibit 3.1 to annual
report on Form 10-K for the year ended December 31,
2015)
|
Incorporated by
Reference
|
|
|
|
||
|
Composite Bylaws of
Registrant, as amended through December 5, 2015 (incorporated
by reference to Exhibit 3.2 to annual report on Form 10-K
for the year ended December 31, 2015)
|
Incorporated by
Reference
|
|
|
|
|
|
|
10.1*
|
Form of Restricted
Stock Award Agreement under 2013 Omnibus Stock and Incentive Plan
for awards on or after May 13, 2016
|
Filed
Electronically
|
|
|
||
|
Certification of
Principal Executive Officer
|
Filed
Electronically
|
|
|
|
||
|
Certification of
Principal Financial and Accounting Officer
|
Filed
Electronically
|
|
|
|
||
|
Section 1350
Certification
|
Furnished
Electronically
|
|
|
|
||
|
101
|
The following
materials from Insignia Systems, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2017, formatted in
XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Statements of Operations and Comprehensive
Loss; (iii) Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
Filed
Electronically
|
*Management
compensatory contract or arrangement required to be included as an
exhibit to this quarterly report on Form 10-Q.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
|
INSIGNIA
SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
|
|
Dated: November
6, 2017
|
/s/
Kristine A. Glancy
|
|
|
|
Kristine
A. Glancy
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
(on
behalf of registrant)
|
|
|
|
|
|
|
Dated: November
6, 2017
|
/s/
Jeffrey A. Jagerson
|
|
|
|
Jeffrey
A. Jagerson
|
|
|
|
Chief
Financial Officer and Treasurer
|
|
|
|
(principal
financial and accounting officer)
|
|
16
EXHIBIT INDEX
|
Exhibit
Number
|
Description
|
Method of
Filing
|
|
|
|
|
|
Composite Articles
of Incorporation of Registrant, as amended through July 31,
2008
|
Incorporated by
Reference
|
|
|
|
||
|
Composite Bylaws of
Registrant, as amended through December 5, 2015
|
Incorporated by
Reference
|
|
|
|
|
|
|
Form of Restricted
Stock Award Agreement under 2013 Omnibus Stock and Incentive Plan
for awards on or after May 13, 2016
|
Filed
Electronically
|
|
|
|
|
|
|
Certification of
Principal Executive Officer
|
Filed
Electronically
|
|
|
|
||
|
Certification of
Principal Financial and Accounting Officer
|
Filed
Electronically
|
|
|
|
||
|
Section 1350
Certification
|
Furnished
Electronically
|
|
|
|
||
|
101
|
The following
materials from Insignia Systems, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2017, formatted in
XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Statements of Operations and Comprehensive
Income (Loss); (iii) Statements of Cash Flows; and (iv) Notes to
Financial Statements.
|
Filed
Electronically
|