Document/ExhibitDescriptionPagesSize 1: 10-Q/A Amendment to Quarterly Report HTML 260K
2: EX-31.1 Certification Pursuant to Rule 13A-14(A)/15D-14(A) HTML 20K
Certifications Section 302 of the Sarbanes-Oxly
Act of 2002
3: EX-31.2 Certification Pursuant to Rule 13A-14(A)/15D-14(A) HTML 20K
Certifications Section 302 of the Sarbanes-Oxly
Act of 2002
4: EX-32 Certificate Pursuant to Section 18 U.S.C. Pursuant HTML 17K
to Section 906 of the Sarbanes-Oxley Act of 2002
11: R1 Document and Entity Information HTML 49K
12: R2 Condensed Balance Sheets HTML 103K
13: R3 Condensed Balance Sheets (Parenthetical) HTML 23K
14: R4 Condensed Statements of Operations HTML 92K
15: R5 Condensed Statements of Shareholders' Equity HTML 47K
16: R6 Condensed Statements of Cash Flows HTML 88K
17: R7 Summary of Significant Accounting Policies HTML 34K
18: R8 Restatement of Previously Issued Financial HTML 85K
Statements
19: R9 Revenue Recognition HTML 33K
20: R10 Selling Arrangement HTML 17K
21: R11 Income Taxes HTML 23K
22: R12 Concentrations HTML 17K
23: R13 Legal Proceedings HTML 18K
24: R14 Loan HTML 18K
25: R15 Subsequent Event HTML 17K
26: R16 Summary of Significant Accounting Policies HTML 50K
(Policies)
27: R17 Summary of Significant Accounting Policies HTML 31K
(Tables)
28: R18 Restatement of Previously Issued Financial HTML 59K
Statements (Tables)
29: R19 Revenue Recognition (Tables) HTML 27K
30: R20 Summary of Significant Accounting Policies HTML 24K
(Details)
31: R21 Summary of Significant Accounting Policies HTML 28K
(Details 1)
32: R22 Summary of Significant Accounting Policies HTML 23K
(Details 2)
33: R23 Summary of Significant Accounting Policies HTML 32K
(Details Narrative)
34: R24 Restatement of Previously Issued Financial HTML 37K
Statements (Details)
35: R25 Restatement of Previously Issued Financial HTML 21K
Statements (Details 1)
36: R26 Restatement of Previously Issued Financial HTML 102K
Statements (Details 2)
37: R27 Restatement of Previously Issued Financial HTML 30K
Statements (Details 3)
38: R28 Revenue Recognition (Details) HTML 28K
39: R29 Revenue Recognition (Details 1) HTML 20K
40: R30 Selling Arrangement (Details Narrative) HTML 20K
41: R31 Income Taxes (Details Narrative) HTML 25K
42: R32 Concentrations (Details Narrative) HTML 23K
44: XML IDEA XML File -- Filing Summary XML 76K
43: EXCEL IDEA Workbook of Financial Reports XLSX 45K
5: EX-101.INS XBRL Instance -- isig-20210331 XML 590K
7: EX-101.CAL XBRL Calculations -- isig-20210331_cal XML 114K
8: EX-101.DEF XBRL Definitions -- isig-20210331_def XML 185K
9: EX-101.LAB XBRL Labels -- isig-20210331_lab XML 390K
10: EX-101.PRE XBRL Presentations -- isig-20210331_pre XML 348K
6: EX-101.SCH XBRL Schema -- isig-20210331 XSD 67K
45: ZIP XBRL Zipped Folder -- 0001654954-21-009348-xbrl Zip 57K
(Former
name, former address and former fiscal year, if changed since last
report)
Securities
registered to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common
Stock, $0.01 par value
ISIG
The
Nasdaq Stock Market LLC
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
☐
Accelerated filer
☐
Non-accelerated
filer
☑
Smaller reporting company
☑
Emerging
growth company
☐
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 May 3,2021 was 1,754,030.
C:
EXPLANATORY NOTE
Insignia Systems, Inc. (“we”, “us”,
“our” and the “Company”) is filing this
Amendment No. 1 on Form 10-Q/A (the “Amendment”) to
amend its Quarterly Report on Form 10-Q for the three months ended
March 31, 2021, originally filed with the U.S. Securities and
Exchange Commission (the “SEC”) on May 7, 2021 (the
“Original Report”). In filing this amendment, the
Company is restating its previously issued unaudited financial
statements for the three months ended March 31, 2021 and 2020 to
account for misstatements related to sales taxes. The previously
issued financial statements should no longer be relied upon. Except
as described below, all other information in, and the exhibits to,
the Original Report remain unchanged. Accordingly, this Amendment
should be read in conjunction with the Original Report and with our
filings with the SEC made after the Original Report. This
Amendment speaks as of the date of the Original Report and the
Company has not updated the Original Report to reflect events
occurring subsequent to the date of the Original
Report.
Background and Effects of the Restatement
As
disclosed in a current report on Form 8-K filed with the SEC on
August 13, 2021, commencing in the second quarter of 2021,
management conducted a review of the Company’s sales tax
positions and related accounting, with the assistance of outside
consultants. As a result of the review, it was determined that
certain non-POPs services/products sales were subject to sales tax
and that the Company had not assessed sales tax on sales of those
services/products to customers. Company management then undertook a
process to obtain documentation from significant customers to
determine if each was exempt from sales tax assessments during the
applicable periods. Based on responses received from these
customers, the Company determined that it did not properly accrue
sales tax and accrued the estimated sales tax incurred. The Company
has identified the misstatements described below, and this
Amendment restates the previously issued financial statements of
the Company (the “Restated Financial Statements”) and
certain other related disclosure, that was included in the Original
Report.
The
misstatements that appeared in the previously issued financial
statements of the Company were material. For sales to the
Company’s customers that were not exempt, the Company
recorded a sales tax accrual, plus related estimated interest and
penalties. The Company also determined on which past sales the
Company would bill for sales tax and seek to collect from customers
that were not tax exempt. The Company recorded accounts receivable
deemed probable of collection. A summary of the impact of the
misstatements is as follows:
Management
has reassessed its evaluation of the effectiveness of its
Disclosure Controls and Procedures as of March 31, 2021 as further
described in item 4 of this Amendment and concluded that a material
weakness existed and that disclosure controls and procedures were
not effective. Management’s previously issued report should
no longer be relied upon. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a
material misstatement of a company’s annual or interim
financial reports will not be prevented or detected on a timely
basis. The existence of one or more material weaknesses precludes a
conclusion by management that a company’s disclosure controls
and procedures and internal control over financial reporting are
effective. Management has taken, and is taking additional steps, as
described under “Remediation Plan and Status” in Item 4
of this Amendment, to remediate the material weakness in our
internal control over financial reporting. For more information
regarding the restatement and its impact on our financial
statements, refer to Note 2, Restatement
of Previously Issued Financial Statements) of the Notes
to the Financial Statements included within this
Amendment.
Items Amended in this Filing
This
Amendment amends and restates the following Items 1, 2 and 4
appearing in Part I, and Items 1A and 6 appearing in Part II. In
accordance with applicable SEC rules, this Amendment includes
certifications as required by Rule 12b-15 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
from the Company’s Principal Executive Officer and Principal
Financial Officer dated as of the date of this
Amendment.
Description of Business and
Basis of Presentation. Insignia (the
“Company”) is a leading provider of in-store and
digital advertising solutions to consumer-packaged goods (“CPG”)
manufacturers, retailers, shopper
marketing agencies and brokerages. The Company operates in a single
reportable segment. The Company’s leadership and employees
have extensive industry knowledge with direct experience in both
CPG manufacturers and retailers. The Company provides marketing
solutions to CPG manufacturers spanning from some of the largest
multinationals to new and emerging brands.
As
described in Note 2, “Restatement of Previously Issued
Financial Statements”, the financial statements for the three
months ended March 31, 2021 and 2020, have been restated to reflect
the correction of misstatements to the financial statements. We
have also restated all amounts impacted within the notes to the
financial statements.
Reverse
Stock Split. Effective December31, 2020, the Company implemented a seven-for-one reverse stock
split. All share and per-share information, including for stock
options and restricted stock units, in the financial statements
gives retroactive effect to the reverse stock split for all periods
presented including the value of Common Stock and Additional
Paid-In Capital as of December 31, 2020.
Sale of
Custom Print Business. In
August 2020, the Company sold its custom print business to an
existing strategic partner. This divestiture allowed the Company to
focus on its core business, selling product solutions to CPGs. The
custom print business was not material to operations as a whole and
did not represent a strategic shift and therefore is not presented
as a discontinued operation. The sale price was $300,000 resulting
in a gain on the sale of $195,000. On the date of the sale, the
Company received $200,000 of cash and recorded a short-term
receivable of $75,000 and a long-term receivable of
$25,000.
Basis of
Presentation. The accompanying unaudited financial statements of
the Company have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”) for interim
financial information. They do not include all information and
footnotes required by U.S. GAAP for complete financial statements.
However, except as described herein, there has been no material
change in the information disclosed in the notes to financial
statements included in the Company’s financial statements as
of and for the year ended December 31, 2020 included in
the Company’s Annual Report on Form 10-K/A. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Results of operations for the periods presented
are not necessarily indicative of the results to be expected for
the full year.
Inventories.
Inventories are primarily comprised of sign cards and hardware.
Inventory is valued at the lower of cost or net realizable value
using the first-in, first-out (“FIFO”) method, and
consisted of the following as of the dates indicated:
Depreciation
expense was approximately $21,000 and $85,000 in the three months
ended March 31, 2021 and 2020, respectively.
Stock-Based
Compensation. The Company measures and recognizes
compensation expense for all stock-based payments at fair value.
Restricted stock units and awards are valued at the closing market
price of the Company’s stock as of the date of the grant. The
Company uses the Black-Scholes option pricing model to determine
the weighted average fair value of options and employee stock
purchase plan rights. The determination of the fair value of
share-based payment awards on the date of grant using an
option-pricing model is affected by the Company’s stock price
as well as by assumptions regarding a number of complex and
subjective variables. These variables include, but are not limited
to, the expected stock price volatility over the term of the
awards, and actual and projected employee stock option exercise
behaviors.
The
Company estimated the fair value of stock-based awards granted
during the three months ended March 31, 2021, under the
Company’s employee stock purchase plan using the following
weighted average assumptions: expected life of 1.0 year, expected
volatility of 142.2%, dividend yield of 0% and risk-free interest
rate of 0.1%.
The
Company recorded total stock-based compensation expense of $56,000
and $49,000 for the three months ended March 31, 2021 and 2020,
respectively.
Net Loss
per Share. Basic net loss per share is computed by dividing
net loss by the weighted average shares outstanding and excludes
any potential dilutive effects of stock options and restricted
stock units and awards. Diluted net loss per share gives effect to
all dilutive potential common shares outstanding during the
period.
Due
to the net loss incurred during the three months ended March 31,2021 and 2020 all outstanding stock options were anti-dilutive for
the periods.
Weighted
average common shares outstanding for the three months ended March31, 2021 and 2020 were as follows:
Three months ended March 31
2021
2020
Denominator
for basic net loss per share - weighted average shares
1,751,000
1,724,000
Effect
of dilutive securities:
Stock
options, restricted stock and restricted stock units
—
—
Denominator
for diluted net loss per share - weighted average
shares
1,751,000
1,724,000
6
2.
Restatement of Previously Issued Financial
Statements. The financial statements for the three months
ended March 31, 2021 and 2020 have been restated to reflect the
correction of misstatements. The Company also restated all amounts
impacted within the notes to the financial statements. A
description of the adjustments and their impact on the previously
issued financial statements are included below.
Description of Restatement
Adjustments. Commencing in the second quarter of 2021, the
Company conducted a review of its sales tax positions, and related
accounting, with the assistance of outside consultants. As a result
of the review, it was determined that certain non-POPs
services/products sales were subject to sales tax and that the
Company had not assessed sales tax on sales of those
services/products to customers. Company management then undertook a
process to obtain documentation from significant customers to
determine if each was exempt from sales tax assessments during the
applicable periods. Based on responses received from these
customers, the Company determined that it did not properly accrue
sales tax and accrued the estimated sales tax. The misstatements in
the previously issued financial statements are considered material
and are described below.
In
light of the foregoing, the Company in accordance with ASC 250,
Accounting Changes and Error
Corrections is restating the previously issued financial
statements for the three months ended March 31, 2021 and 2020 to
reflect the effects of misstatements, and to make certain
corresponding disclosures. The balance sheets, statements of
operations, shareholders’ equity and cash flows, and Notes 3,
5 and 6 were updated to reflect the restatement.
A
summary of the impact of the misstatements is as
follows:
The
categories of restatement adjustments and their impact on
previously reported financial statements are described
below:
(a)
Sales Tax and Related
Misstatements –
Sales tax on sales to customers who were subject to sales tax that
was not previously accrued by the Company is corrected by an
increase to accrued liabilities on the balance sheets and a
reduction of net sales on the statements of operations. The Company
also determined on which past sales the Company would bill for
sales tax and corrected by increasing accounts receivable, net of
an allowance for doubtful collectability, on the balance sheets and
increasing net sales on the statements of operations. Estimated
penalties on the related sales tax are corrected by an increase to
accrued liabilities on the balance sheets and an increase to
general and administrative expenses on the statements of
operations. Estimated interest on the related sales tax is
corrected by an increase to accrued liabilities on the balance
sheets and an increase to interest expense within other income on
the statements of operations.
(b)
Related Income Tax
Impact-The impact on income tax
benefit from the impact on loss before taxes due to the correction
in (a) above are reflected as a change in deferred tax asset or
liability on the balance sheet and a change in income tax benefit
on the statements of operations.
The
following is a summary of the impact of the correction of the sales
tax error for the periods previously reported during the quarters
ended March 31, 2021 and 2020.
7
The
following table sets forth the corrections in each of the
individual line items affected in the statements of
operations:
March 31,
March 31,
Three Months Ended
2021
2020
Reduction
of net sales
$33,000
$36,000
Increase
in general and administrative expense for penalities
18,000
11,000
Decrease
in other income (expense) for interest expense
The
Company did not present tables for adjustments within the statement
of cash flows, since all of the foregoing adjustments were within
the operating activities section of the statements of cash flows.
These adjustments did not affect total cash flows from operating
activities, financing activities or investing activities for any
period presented.
3.
Revenue Recognition. Under Accounting
Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers
(“Topic 606”), revenue is
measured based on consideration specified in the contract with a
customer, adjusted for any applicable estimates of variable
consideration and other factors affecting the transaction price,
including noncash consideration, consideration paid or payable to a
customer and significant financing components. Revenue from all
customers is recognized when a performance obligation is satisfied
by transferring control of a distinct good or service to a
customer, as further described below under
“Performance
Obligations.”
Taxes
collected from customers and remitted to governmental authorities
are excluded from revenue on the net basis of
accounting.
The
Company includes shipping and handling fees in revenues. Shipping
and handling costs associated with outbound freight after control
over a product has transferred to a customer are accounted for as a
fulfillment cost and are included in cost of goods
sold.
Performance Obligations
A performance obligation is a promise in a
contract to transfer a distinct good or service to the customer and
is the unit of account under Topic 606. A contract’s
transaction price is allocated to each distinct performance
obligation and recognized as revenue when, or as, the performance
obligation is satisfied. The following is a description of
the Company’s performance
obligations included in its primary revenue streams and the timing
or method of revenue recognition for each:
In-Store
Signage Solution Services. The Company provides a service of displaying promotional signs
in close proximity to the CPG manufacturer’s product in
participating stores, which the Company maintains in two-to-four-week cycle
increments.
Each of the individual activities under the
Company’s services, including
production activities, are inputs to an integrated sign display
service. Customers receive and consume the benefits from the
promotional displays over the duration of the contracted display
cycle. Additionally, the display of the signs does not have an
alternative use to the Company and the Company has an enforceable right to payment for services
performed to date. As a result, the Company recognizes the transaction price for service
performance obligations as revenue over time. Given the nature
of the Company’s performance obligations is to provide a display
service over the duration of a specified period or periods,
the Company recognizes revenue on a
straight-line basis over the display service period as it best
reflects the timing of transfer of its sign
solutions.
Non-POPS
Solutions. The Company also
supplies CPG manufacturers with other retailer approved promotional
services, such as signage, on-pack, merchandising and digital
solutions. These services are more customized than POPS, consisting
of variable durations and variable specifications. Due to the
variable nature of these services, revenue recognition is a mix of
over-time and point-in-time recognition.
Products.
Prior to the August 2020 sale of the
Company’s custom print business, the Company
also sold custom print solutions
directly to its customers. Each such product was a distinct
performance obligation. Revenue was recognized at a point-in-time
upon shipment when control of the goods transferred to the
customer.
9
Disaggregation of Revenue
In the
following table, revenue is disaggregated by major revenue stream
and timing of revenue recognition.
Sales
commissions that are paid to internal or external sales
representatives are eligible for capitalization as they are
incremental costs that would not have been incurred without
entering into a specific sales arrangement and are recoverable
through the expected margin on the transaction. The Company is
applying the practical expedient in Accounting Standards
Codification 340-40-25-4 that allows the incremental costs of
obtaining a contract to be recorded as an expense when incurred
when the amortization period of the asset that would have otherwise
been recognized is one year or less. These costs are included in
selling expenses.
Deferred Revenue
Significant changes
in deferred revenue during the period are as follows:
Transaction Price Allocated to Remaining Performance
Obligations
The
Company applies the practical expedient in paragraph 606-10-50-14
and does not disclose information about remaining performance
obligations that have original expected durations of one year or
less, which reflect the majority of its performance obligations.
This practical expedient is being applied to arrangements for
certain incomplete services and unshipped custom signage materials.
Among our contracts with an expected duration of greater than one
year, we estimate that revenue of $38,000, $116,000 and $60,000
related to performance obligations that are unsatisfied (or
partially unsatisfied) as of March 31, 2021 will be recognized
during the remainder of fiscal 2021, 2022 and 2023,
respectively.
4.
Selling Arrangement.
In 2011, the Company paid to News
America Marketing In-Store, L.L.C. (“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 was being amortized
over the 10-year term of the arrangement. In 2019, the Company
accelerated the amortization based on the anticipated recovery
period over the remaining term of the contract due to the loss of a
significant retailer. During the three months ended March 31, 2020,
the impact of COVID-19 was determined to be a triggering event
requiring an impairment review of long-lived assets. As of March31, 2020, the Company determined the asset was impaired based upon
continued revenue declines driven by changes in market conditions
due to COVID-19 within the stores covered by the agreement. As a
result, an impairment of $159,000 was recognized as of March 31,2020. The Company also shortened the remaining useful life of the
underlying asset from March 31, 2021 to December 31, 2020 and
recorded remaining amortization expense on a straight-line basis
over the remainder of 2020. Amortization expense without the
impairment was $61,000 in the three months ended March 31, 2020.
The selling arrangement was fully amortized as of March 31, 2021
and December 31, 2020.
5.
Income Taxes. For the three months ended March 31, 2021, the Company
recorded income tax expense of $13,000, or (1.8%) of loss before
taxes. For the three months ended March 31, 2020, the Company
recorded income tax benefit of $222,000, or 19.4% of loss before
taxes. The income tax expense (benefit) for the three months ended
March 31, 2021 and 2020 is comprised of federal and state taxes.
The primary differences between the Company’s March 31, 2021
and 2020 effective tax rates and the statutory federal rate are
nondeductible stock-based compensation, nondeductible meals and
entertainment and increases in the Company’s valuation
allowance against its deferred tax assets. For the three months
ended March 31, 2020, the Company recognized a decrease in its
valuation allowance against certain federal net operating losses
(“NOLs”), which the Company was able to carry back to
prior periods. 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 statements and tax basis of assets and liabilities given
the provisions of enacted tax laws. In providing for deferred
taxes, the Company considers tax regulations of the jurisdictions
in which it operates, 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. At March 31, 2021 and December 31, 2020, the
Company had a valuation allowance of approximately $2,116,000 and
$1,946,000, respectively, against its entire deferred tax asset
because the Company does not believe it is more likely than not
that it will realize its deferred tax asset.
As
of March 31, 2021, and December 31,2020, the Company had unrecognized tax benefits totaling $685,000
and $677,000, 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 $685,000. 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 2021.
In March 2020, Congress passed the Coronavirus
Aid, Relief and Economic Security (“CARES”) Act. The
CARES Act, among other provisions, allows for companies to carry
back federal NOLs generated in 2018, 2019 and 2020 for up to five
years for refunds of federal taxes paid. This provision created an
opportunity for the Company to utilize NOLs not previously expected
to be utilized. Thus, in 2020 the Company reversed approximately
$215,000 of its valuation allowance against the NOLs in its
deferred tax assets which the Company carried back to claim a refund of
federal taxes paid. As the Company expects to receive the tax
refund from the ability to carry back the NOLs within the next 12
months, this discrete benefit has been recorded within income taxes
receivable on the balance sheet. In addition to the $215,000
recognized, $17,000 was included as a discrete tax benefit for 2020
and included in income taxes receivable related to the NOL carry
back due to differences in the federal tax rate utilized for the
deferred tax asset compared to the rates in effect for the years in
which the NOL is being carried back.
6.
Concentrations. During the three months
ended March 31, 2021, two customers accounted for 17% and 14%,
respectively of the Company’s total net sales. During the
three months ended March 31, 2020, one customer accounted for 16%
of the Company’s total net sales. At March 31, 2021, two
customers accounted for 19% and 10%, respectively of the
Company’s total accounts receivable. At December 31, 2020,
two customers represented 17% and 10%, respectively of the
Company’s total accounts receivable.
7.
Legal Proceedings. In July 2019,
the Company brought suit against News America in the U.S. District
Court in Minnesota, alleging violations of federal and state
antitrust and tort laws by News America. The complaint alleges that
News America has monopolized the national market for third-party
in-store advertising and promotion products and services through
various wrongful acts designed to harm the Company, its last
significant competitor. The suit seeks, among other relief, an
injunction sufficient to prevent further antitrust injury and an
award of treble damages to be determined at trial for the harm
caused to our Company.
In
August 2019, News America filed an answer and
counterclaim. In October 2019, News America moved for a
judgment on the pleadings. Management believes that the
counterclaim is without merit, and the Company filed a response
brief on November 11, 2019. The Company also moved to dismiss the
counterclaim against it. The court heard oral arguments from both
parties on January 14, 2020, and subsequently denied both motions.
On July 10, 2020 the parties cross-moved for summary judgment on
the counterclaim. On December 7, 2020, the Court granted News
America’s motion for summary judgment on the counterclaim in
part, requiring Insignia to strike certain allegations from its
complaint and finding News America’s request for
attorneys’ fees and costs premature.
Discovery is
underway and trial has been scheduled for December 2021. At this
stage of the proceedings, the Company is unable to determine the
likelihood of an unfavorable outcome or estimate any potential
resulting liability.
11
8.
Loan. In April 2020, the Company
entered into a promissory note (the “Note”) with Alerus
Financial, N.A. The Note evidenced a loan to the Company in the
amount of $1,054,000 pursuant to the Paycheck Protection Program
(the “PPP”) of the CARES Act administered by the U.S.
Small Business Administration (the “SBA”).
In
accordance with the requirements of the CARES Act, the Company used
the proceeds from the loan exclusively for qualified expenses under
the PPP, including payroll costs, rent and utility costs, as
further detailed in the CARES Act and applicable guidance issued by
the SBA. Interest was accrued on the outstanding balance of the
Note at a rate of 1.00% per annum. The Note was scheduled to mature
on April 22, 2022 and required 18 equal monthly payments of
principal and interest.
The
Company’s application for forgiveness of the entire principal
amount and all accrued interest under the Note was approved by the
SBA on January 29, 2021. Accordingly, for the quarter ended March31, 2021 the debt of $1,054,000, plus accrued interest of $8,000,
was eliminated with a gain on debt forgiveness and accrued interest
included in other income.
9.
Subsequent Event. In April 2021, the
Company signed a lease for its headquarters space in Minneapolis
for a three-year term commencing in July 2021 with monthly payments
of approximately $8,300, inclusive of common area maintenance
costs. A right-of-use asset and lease liability of approximately
$183,000 will be recorded during the second quarter of
2021.
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, including Part II, Item 1A, in
this Quarterly Report on Form 10-Q and the “Risk
Factors” described in Part I, Item 1A, of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2020, our
Current Reports on Form 8-K and our other SEC filings.
Restatement
The
accompanying Management’s Discussion and Analysis
(“MD&A”) gives effect to certain adjustments made
to the previously reported financial statements for the three
months ended March 31, 2021 and 2020. Due to the restatement of the
unaudited financial statements for these periods, the data set
forth in the accompanying MD&A may not be comparable to
discussions and data in our Original Report.
Refer
to “Explanatory Note” immediately preceding Item 1 of
this Amendment No. 1 to the Quarterly Report on Form 10-Q/A and
Note 2, “Restatement of Previously Issued Financial
Statements” in the accompanying financial statements for
further details related to the restatement and impact on our
financial statements.
Company Overview
Insignia
Systems, Inc. (“Insignia,”“we,”“us,”“our” and the “Company”)
is a leading provider of in-store and digital advertising solutions
to consumer-packaged goods
(“CPG”) manufacturers,
retailers, shopper marketing agencies and brokerages
(“clients”). We believe our products and services are
attractive to our clients because of our speed to market, ability
to customize our solutions down to store level and the results our
solutions deliver. Our leadership and employees have extensive
industry knowledge, including direct experience through former
positions at CPG manufacturers and retailers. We provide marketing
solutions to CPG manufacturers spanning from some of the largest
multinationals to new and emerging brands.
For retailers and CPG manufacturers working in an environment that
is tighter, more competitive, and more complex every day, Insignia
positions itself as the shopper marketing ally that combines
best-in-class execution with imagination, responsiveness, and
hunger to help move business forward. We focus on relationships
with our clients and installation and print production vendors
(“execution partners”) as we believe they are our
future. These relationships are built with our brand-led, retailer
centric mindset, our ability to be nimble and flexible to the
ever-changing industry landscape and by delivering superior
customer service that our clients deserve. Our in-store solutions
execute in retailers spanning from some of the largest national
retailers to regional US wholesalers and independents who are
leaders in their respective channels and geographies.
We have
faced increasingly intense competition for the marketing
expenditures of CPG manufacturers for in-store signage. We have
observed increased competition in growing and maintaining our
network of retailers into which we are authorized to sell solutions
as competitors continue to purchase new or extend exclusive
arrangements with retailers for that purpose. New product
investments by large and emerging CPG manufacturers give us
optimism that our product portfolio is relevant to our
clients.
Over
the past several years, we have diversified our portfolio through a
significant expansion of our offered solutions and development of a
portfolio designed to more holistically meet the needs of our
clients and execution partners. This diversification has resulted
in non-POPS solutions revenue growing 99% for the three months
ended March 31, 2021 compared to the three months ended March 31,2020. Our non-POPS revenue has grown year over year since we began
the expansion of our offered solutions in 2017. We remain committed
to further refining and enhancing our solutions and broadening our
retailer relationships.
12
Impacts and Potential Future Impacts of COVID-19 on Our
Business
The
COVID-19 pandemic has adversely impacted our operations and the
operations of our CPG customers and retailers as a result of
quarantines, illnesses, and travel and logistics restrictions and
it may continue to adversely affect our business indefinitely.
While we have continued to operate and maintain our continuity with
our clients by working remotely, the retail landscape in which CPG
manufacturers and retailers operate has changed substantially, as
has our ability to execute programs due to both limited access to
our retailers and reduced levels of staffing with our execution
partners. The financial impact of COVID-19 for the three months
ended March 31, 2021 was not as significant as it had been in 2020
which is reflected in the increased revenue for the quarter ended
March 31, 2021 compared to the quarter ended March 31, 2020. Our
future bookings may be negatively impacted due to ongoing changes
in the retail landscape and evolution of shoppers’ behavior
in response to COVID-19. The permanence of these changes is
unknown. Factors deriving from the COVID-19 response that have
impacted or we believe are likely to negatively impact sales and
operating results in the future include, but are not limited to:
reduced levels of CPG spending; reduced levels of staffing with our
execution partners; limitations on the ability of our employees to
perform their work due to illness caused by the pandemic or local,
state, or federal orders requiring employees to remain at home; and
limitations on the ability of our customers to pay us on a timely
basis. Even after the COVID-19 pandemic has subsided, we may
continue to experience adverse impacts on our business as a result
of any economic recession or depression that has occurred or may
occur in the future. Therefore, we cannot reasonably estimate the
full extent of the impact on our results of operation and financial
condition, but it could be material and last for an extended period
of time. We continue to monitor our liquidity, including frequent
cost and spending assessments and reductions across our
organization.
We will
continue to actively monitor the situation and may take further
actions that alter our business operations as may be required by
federal, state or local authorities or that we determine are in the
best interests of our employees, customers, suppliers and
shareholders. While we are unable to determine or predict the
nature, duration or scope of the overall impact the COVID-19
pandemic will have on our business, results of operations,
liquidity or capital resources. However, we believe that it is
important to share where our company stands today, how our response
to COVID-19 is progressing and how our operations and financial
condition may change as the fight against COVID-19
progresses.
Business Overview
Summary of Financial Results
For the
quarter ended March 31, 2021, the Company generated revenues of
$5,386,000, as compared with revenues of $4,646,000 for the quarter
ended March 31, 2020. Net loss for the quarter ended March 31, 2021
was $737,000, as compared to a net loss of $925,000 for the quarter
ended March 31, 2020, while the operating loss was $1,759,000 for
the quarter ended March 31, 2021 compared to $1,156,000 for the
comparable quarter in the prior year. Revenue from our non-POPS
solutions has increased significantly for the three months ended
March 31, 2021 compared to the three months ended March 31, 2020,
partially offset by continued declines in our signage business due
to competitive pressure. We continue to pursue a variety of efforts
designed to drive innovation, client acquisitions and retailer
expansions. During the first quarter of 2021, litigation expenses
increased significantly compared to prior quarters. We also
recognized a gain of $1,062,000 on the forgiveness of our PPP loan
during the first quarter.
During
the quarter ended March 31, 2021, cash and cash equivalents
decreased $290,000 from $7,128,000 at December 31, 2020 to
$6,838,000 at March 31, 2021. The decrease was primarily driven by
the net loss for the quarter ended March 31, 2021. We have no debt
other than our lease obligations at March 31, 2021.
13
Results of Operations
The
following table sets forth, for the periods indicated, certain
items in our Condensed Statements of Operations as a percentage of
total net sales.
Net Sales. Net sales for the three months ended March 31,2021 increased 15.9% to $5,386,000 compared to $4,646,000 for the
three months ended March 31, 2020.
Service
revenues. Service
revenues for the three months ended March 31, 2021 increased 22.4%
to $5,386,000 compared to $4,400,000 for the three months ended
March 31, 2020. The
increase was due to 98.7% increase in non-POPS revenue, partially
offset by a 40.7% decrease in POPS solutions revenue. For the three
months ended March 31, 2021, non-POPS revenue has increased due to
both sales to new CPGs and an increase in sales to existing CPGs.
Competitive pressures have resulted in decreased POPS solutions
revenue for three months ended March 31, 2021 versus the three
months ended March 31, 2020. We will continue to have increased
pressure on our POPS business in 2021, including the expiration in
April 2021 of our 10-year selling agreement with News America
Marketing In-Store (“News America”). While the negative
impact from COVID-19 has lessened compared to 2020, future impacts
are unknown as CPG manufacturers and retailers react to changes in
shoppers’ behavior.
Product revenues.
Due to the August 2020 sale of the custom print business, there
were no product sales for the three months ended March 31, 2021
compared to $246,000 for the three months ended March 31,2020.
Gross Profit. Gross profit for the three months
ended March 31, 2021 decreased 0.4% to $929,000 compared to
$933,000, inclusive of a $159,000 impairment charge for the three
months ended March 31, 2020. Gross profit as a percentage of total
net sales decreased to 17.2% for the three months ended March 31,2021, compared to 20.1% for the three months ended March 31,2020.
14
Service revenues.
Gross profit from our service revenues for the three months ended
March 31, 2021 decreased 8.7% to $929,000 compared to $1,018,000
for the three months ended March 31, 2020. The decrease in gross
profit was primarily due to the decrease in POPS solution sales in
addition to the Company’s decision to make an investment in
the execution of a large non-POPS program.
Gross
profit as a percentage of service revenues for the three months
ended March 31, 2021 decreased to 17.2% compared to 23.1% for the
three months ended March 31, 2020. The decrease was primarily due
to mix of revenue as our non-POPS solutions typically have lower
margins due to competitive pressures, partially offset by increased
gross profit rates from our POPS solutions as the Company reduced
guaranteed payment obligations by renegotiating several fixed or
store-based retail payment contracts to sign placement-based
payment contracts during 2020.
Product revenues.
Due to the August 2020 sale of the custom print business, there was
no gross profit for the three months ended March 31, 2021 compared
to $74,000 for the three months ended March 31, 2020. Gross profit
as a percentage of product revenues for the three months ended
March 31, 2020 was 30.1%.
Impairment Loss.
Impairment loss for the three months ended March 31, 2020 was
$159,000 as a result of the impairment during the first quarter of
the Company’s selling agreement with News America, a
long-lived asset. The impairment charge is described further in
Note 3 of our accompanying unaudited financial statements. There
was no impairment loss during the three months ended March 31,2021.
Operating Expenses
Selling. Selling expenses for the three months ended March31, 2021 decreased 28.3% to $516,000 compared to $720,000 for the
three months ended March 31, 2020. Decreased selling expense was
primarily the result of decreased staff related expenses in
addition to a software investment in the three months ended March31, 2020. Selling expenses as a percentage of total net sales
decreased to 9.6% for the three months ended March 31, 2021
compared to 15.5% for the three months ended March 31, 2020. The
decrease was primarily due to the factors described above, in
addition to increased sales.
Marketing. Marketing expenses for the three months ended
March 31, 2021 decreased 35.6% to $235,000 compared to $365,000 for
the three months ended March 31, 2020. Decreased marketing expense
was primarily the result of decreased consulting and staffing
expenses. Marketing expenses as a percentage of total net sales
decreased to 4.4% for the three months ended March 31, 2021
compared to 7.9% for the three months ended March 31, 2020. The
decrease was primarily due to the factors described above, in
addition to increased sales.
General and administrative. General and administrative
expenses for the three months ended March 31, 2021 increased 92.9%
to $1,937,000 compared to $1,004,000 for the three months ended
March 31, 2020. The increase was primarily due to expenses incurred
as a result of the litigation with News America. General and
administrative expenses as a percentage of total net sales
increased to 36.0% for the three months ended March 31, 2021
compared to 21.6% for the three months ended March 31, 2020. The
increase was primarily due to the factors described above,
partially offset by increased sales.
Other Income. Other income for the three months ended March31, 2021 was $1,035,000 compared to $9,000 for the three months
ended March 31, 2020. The increase was due to the gain on debt
extinguishment of $1,062,000 from the SBA forgiving the Company of
its Note entered into pursuant to the PPP of the Coronavirus Aid,
Relief and Economic Security (“CARES”)
Act.
Income Taxes. For
the three months ended March 31, 2021, the Company recorded income
tax expense of $13,000, or (1.8%) of loss before taxes. For the
three months ended March 31, 2020, the Company recorded income tax
benefit of $222,000, or 19.4% of loss before taxes. The income tax
expense (benefit) for the three months ended March 31, 2021 and
2020 is comprised of federal and state taxes. The primary
differences between the Company’s March 31, 2021 and 2020
effective tax rates and the statutory federal rate are
nondeductible stock-based compensation, nondeductible meals and
entertainment as well as an increase in the Company’s
valuation allowance against its deferred tax assets. In addition,
for the three months ended March 31, 2020, the Company recognized a
decrease in its valuation allowance against certain net operating
losses (NOLs) carried forward for federal income tax purposes,
which the Company was able to carry back to prior years and request
a refund of federal taxes paid.
The
Company reassesses its effective tax 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 statements 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.
15
As a
result of the Company’s future outlook, management has
reviewed its deferred tax assets and concluded that the
uncertainties related to the realization of its deferred tax assets
have become unfavorable. Management has considered positive and
negative evidence for the potential utilization of the deferred tax
assets and has concluded that it is more likely than not that
Company will not realize the full amount of its net deferred tax
assets. At March 31, 2021 and December 31, 2020, the Company had a
valuation allowance of approximately $2,116,000 and $1,946,000,
respectively, against its entire deferred tax asset because the
Company does not believe it is more likely than not that it will
realize its deferred tax asset.
In March 2020, Congress passed the Coronavirus Aid, Relief and
Economic Security (“CARES”) Act. The CARES Act, among
other provisions, allows for companies to carry back federal NOLs
generated in 2018, 2019 and 2020 for up to five years for refunds
of federal taxes paid. This provision created an opportunity for
the Company to utilize NOLs not previously expected to be utilized.
Thus, the Company has reversed approximately $215,000 of its
valuation allowance against the NOLs in its deferred tax assets
which the Company carried back to claim a refund of
federal taxes paid. As the Company expects to receive the tax
refund from the ability to carry back the NOLs within the next 12
months, this discrete benefit has been recorded within income taxes
receivable on the balance sheet. In addition to the $215,000
recognized, $17,000 was included as a discrete tax benefit for the
year and included in income taxes receivable related to the NOL
carry back due to differences in the federal tax rate utilized for
the deferred tax asset compared to the rates in effect for the
years in which the NOL is being carried back.
Net Loss. For the reasons stated above, net loss for the
three months ended March 31, 2021 was $737,000, compared to a net
loss of $925,000 for the three months ending March 31,2020.
Liquidity and Capital Resources
The
Company has financed its operations with proceeds from stock sales
and sales of its services and products. At March 31, 2021, working
capital was $6,478,000 (defined as current assets less current
liabilities) compared to $7,668,000 at December 31, 2020. During
the three months ended March 31, 2021, cash and cash equivalents
decreased $290,000 from $7,128,000 at December 31, 2020 to
$6,838,000 at March 31, 2021.
Operating
Activities. Net cash used in operating activities during the
three months ended March 31, 2021 was $303,000. Net loss of
$737,000, less non-cash adjustments of $968,000, plus changes in
operating assets and liabilities of $1,402,000 resulted in the
$303,000 of cash used in operating activities. The largest
component of the change in operating assets and liabilities was
accounts receivable, which decreased $758,000 from December 31,2020, as a result of normal fluctuations based on business and
market conditions. The non-cash adjustments consisted of
depreciation and amortization expense, gain on sale of property and
equipment, changes in allowance for doubtful accounts, gain on
forgiveness of PPP loan and accrued interest 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
three months ended March 31, 2021 was $13,000. This was related to
purchases of property and equipment, partially offset by proceeds
from the sale of property and equipment.
Financing
Activities. Net cash provided by financing activities during
the three months ended March 31, 2021 was $26,000, which related to
proceeds received from issuance of common stock under the employee
stock purchase plan.
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 December31, 2020, included in our Form 10-K/A filed with the Securities and
Exchange Commission on August 23, 2021. We believe our most
critical accounting policies and estimates include the
following:
Certain
statements made in this Amendment No,1 to the Quarterly Report on
Form 10-Q/A, in the Company’s other SEC filings, in press
releases and in oral statements to shareholders and securities
analysts 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 that 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,”“estimates,”“expects,”“future,”“likely,”“may,”“projects,”“seeks,”“will” 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 revenue deferrals.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the
statement was made. These statements are subject to the risks and
uncertainties that could cause actual results to differ materially
and adversely from the forward-looking statements. 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 impacts of the COVID-19 pandemic including
the duration, spread, severity, and any recurrence of the COVID-19
pandemic, the duration and scope of related government orders and
restrictions, the impact on our employees, and the extent of the
impact of the COVID-19 pandemic on overall demand for our products
and services; (ii) local, regional, national, and
international economic conditions that have deteriorated as a
result of the COVID-19 pandemic including the risks of a global
recession or a recession in one or more of our key markets, and the
impact they may have on us and our customers and our assessment of
that impact; (iii) management’s ability to fully or
successfully implement its business plan to achieve and maintain
increased sales and resultant profitability in the future; (iv) the
Company’s success in developing and implementing new product
offerings, including mobile, digital or other new offerings, in a
successful manner; (v) prevailing market conditions, including
pricing and other competitive pressures, in the in-store
advertising industry and, intense competition for agreements with
CPG retailers and manufacturers; (vi) potentially incorrect
assumptions by management with respect to the financial effect of
current strategic decisions and the effect of current sales trends
on fiscal year 2021 results; (vii) termination of all or a major
portion of, or a significant change in terms and conditions of, a
material agreement with a CPG manufacturer or retailer, ; (viii)
other economic, business, market, financial, competitive and/or
regulatory factors affecting the Company’s business
generally; (ix) our ability to successfully manage our new IT
operating infrastructure outsourcing arrangement; (x) our ability
to attract and retain highly qualified managerial, operational and
sales personnel; and (xi) the final outcome of our litigation
with News America. 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, 2020, our
Amendment No. 1 to the Annual Report on Form 10-K/A for the year
ended December 31, 2020, and this Amendment No. 1 to
the Quarterly Report on Form 10-Q/A,
and 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/A to reflect
events or circumstances after the date of this Form 10-Q/A or to
update reasons why actual results would differ from those
anticipated in any such forward-looking statements, other than as
required by law.
The
Company maintains 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) that are designed to ensure that
information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods
specified in SEC rules and forms and (ii) accumulated and
communicated to the Company’s management, including its
principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required
disclosure.
The
Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s
principal executive officer and interim principal financial officer
and its interim principal accounting 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, pursuant to
Exchange Act Rule 13a-15. Based upon that evaluation, the
Company’s principal executive officer and the interim
principal accounting officer concluded that the Company’s
disclosure controls and procedures as of March 31, 2021 were
effective. However, subsequent to that assessment, management identified a material weakness in our
internal controls as further described in Item 9A in our Form
10K/A. Management re-evaluated the effectiveness of our
disclosure controls and procedures as of March 31, 2021 and has
concluded that our disclosure controls and procedures were not
effective as of that date because of such material
weakness.
Remediation Plan and Status for Material Weakness
In response to the identified material weakness, our management,
with the oversight of the Audit Committee of our Board of
Directors, has dedicated significant resources, including the
involvement of outside advisors, and efforts to improve our
internal control over financial reporting and has taken immediate
action to remediate the material weakness identified. Certain
remedial actions have been completed including ongoing involvement
of outside advisors, review of taxability of new products and
services and obtaining of appropriate documentation of exempt
status from customers. The Company will further enhance these
controls over the remainder of 2021.
Changes in Internal Control Over Financial Reporting
Except as noted above, no changes in the Company’s internal
control over financial reporting occurred during the first quarter
of 2021 that have materially affected, or are reasonable likely to
materially affect, the Company’s internal control over
financial reporting.
There
have been no material changes in our risk factors from those
previously disclosed in Item 1A of Part 1 of our Amendment No.1 to
the Annual Report on Form 10-K/A for the year ended December 31,2020.
The
following materials from Insignia Systems, Inc.’s Quarterly
Report on Form 10-Q/A Amendment No. 1 to for the quarter ended
March 31, 2021, formatted in XBRL (extensible Business Reporting
Language): (i) Condensed Balance Sheets; (ii) Condensed Statements
of Operations; (iii) Condensed Statements of Shareholders’
Equity; (iv) Condensed Statements of Cash Flows; and (v) Notes to
Financial Statements.
Filed
Electronically
19
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 to be signed on its
behalf by the undersigned thereunto duly authorized.