NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
Nature of Operations and Summary of Significant Accounting Policies
Jones Soda Co. develops, produces, markets and distributes premium beverages which
it
sell
s
and distribute
s
primarily in the
United States and Canada
through
its
network of independent distributors and directly to
its
national and regional retail accounts.
We are a Washington corporation and have
two
operating subsidiaries, Jones Soda Co. (USA) Inc. and Jones Soda (Canada) Inc. (together, our “Subsidiaries”).
Basis of presentation and consolidation
The accompanying condensed consolidated balance sheet as of
December 31, 2018
, which has been derived from our audited consolidated financial statements, and unaudited interim condensed consolidated financial statements as of
March 31, 2019
, have been prepared in accordance with accounting principles generally accepted in the United States of America
(
“GAAP”
)
and the Securities and Exchange Commission
(
“SEC”
)
rules and regulations applicable to interim financial reporting. The condensed consolidated financial statements include our accounts and the accounts of our Subsidiaries. All intercompany transactions between us and our Subsidiaries have been eliminated in consolidation.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments, consisting only of those of a normal and recurring nature, considered necessary for a fair presentation of our financial position, results of operations and cash flows at the dates and for the periods presented. Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to such estimates and assumptions include, but are not limited to, inventory valuation, depreciable lives and valuation of capital assets, valuation allowances for receivables, trade promotion liabilities, stock-based compensation expense, valuation allowance for deferred income tax assets, contingencies, and forecasts supporting the going concern assumption and related disclosures. Actual results could differ from those estimates. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
Liquidity
As of
March 31, 2019
, we had cash and cash-equivalents of
$459,000
and working capital of approximately
$
1.
1
million.
Net c
ash used in operations during the
three
months ended
March 31
, 201
9
totaled
approximately $1.
1
million
compared to $
71
,000
used
in
operations
for the same period a year ago. The
net
increase in cash used in operations compared to the same period a year ago is primarily due to
the
timing of the collection of receivables
, the
build-up of inventory
due to the timing of promotional programs
, and the increase in net loss
. We reported a net loss of
$7
96
,000
for the
three
months ended
March 31, 2019
, compared to a net loss of approximately $46
9
,000 for the same period a year ago
.
We have experienced recurring losses from operations and negative cash flows from operating activities. This situation creates uncertainties about our ability to execute our business plan, finance operations, and indicate
s
substantial doubt about the Company’s ability to continue as a going concern.
We continue to experience negative cash flows from operations, as well as an ongoing requirement for additional capital to support working capital needs. Therefore, currently, based upon our near term anticipated level of operations and expenditures, management believes that cash on hand, excluding cash available under our line of credit, is not sufficient to enable us to fund operations for twelve months from the date the financial statements included in this Report are issued. Our line of credit is not included in this assessment due to the ability of the bank to terminate the line of credit upon 120 days’ notice as discussed in Note
4
below. In view of these conditions, our ability to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on our ability to obtain necessary financing to fund ongoing operations. The
condensed
consolidated financial statements included in this Report do not give effect to any adjustments which will be necessary should we be unable to continue as a going concern and therefore be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.
We have a revolving secured credit facility with
CapitalSource
Business Finance
Group
(the “Loan Facility”). The Loan Facility allows us to borrow a maximum aggregate amount of up to
$3.2 million based on eligible accounts receivable and inventory. As of
March 31, 2019
, our accounts receivable and inventory eligible borrowing base was approximately $
1
.
8 million
before adjustments
, of which we had drawn down $
95
2
,000.
See Note
4
below
for further information.
We may require additional financing to support our working capital needs in the future. The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business and the market conditions for available debt or equity financing. Additionally, the amount of capital required will depend on our ability to meet our sales goals and otherwise successfully execute our operating plan. We believe it is imperative that we meet these sales objectives in order to lessen our reliance on external financing in the future. We intend to continually monitor and adjust our
operating
plan as necessary to respond to developments in our business, our markets and the broader economy. Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing arrangements on acceptable terms may not be available to us when needed. Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders. Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements. If necessary, we may explore strategic transactions that we consider to be in the best interest of the Company and our shareholders, which may include, without limitation, public or private offerings of debt or equity securities, a rights offering, and other strategic alternatives; however, these options may not ultimately be available or feasible when needed.
Seasonality and other fluctuations
Our sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. We historically have generated a greater percentage of our revenues during the warm weather months of April through September. Sales may fluctuate materially on a quarter to quarter basis or an annual basis when we launch a new product or fill the “pipeline” of a new distribution partner or a large retail partner. Sales results may also fluctuate based on the number of SKUs selected or removed by our distributors and retail partners through the normal course of serving consumers in the dynamic, trend-oriented beverage industry. As a result, management believes that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the fiscal year.
Revenue
r
ecognition
The Company recognizes revenue under
Accounting Standards Update (“ASU”)
No. 2014-09,
“Revenue from Contracts with Customers (Topic 606),”
(“ASU 2014-09”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
See Note
7
, Segment information, for information on revenue disaggregated by geographic area.
Because the Company’s agreements
generally
have an expected duration of one year or less, the Company has elected to not disclose information about its remaining performance obligations.
The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership.
Therefore, the Company’s contracts have a single performance obligation (shipment of product).
The Company primarily receives fixed consideration for sales of product.
Shipping and handling amounts paid by customers are primarily for online orders,
and are
included in
r
evenue, and total
ed
$
32
,000
and
$
39
,000
for the three months ended
March 31
, 201
9
and 201
8
, respectively. Sales tax and other similar taxes are excluded from revenue.
Revenue is recorded net of provisions for discounts, slotting fees
payable by us to retailers to stock our products
and promotion allowances, which are typically agreed to upfront with the customer and do not represent variable consideration.
Discounts, slotting fees and promotional allowan
ces vary the consideration the Company is entitled to in exchange for the sale of products to distributors. The Company estimates these discounts, slotting fees and promotional allowances in the same period that the revenue is recognized for products sales to customers. The amount of revenue recognized represents the amount that will not be subject to a significant future reversal of revenue. The liability for promotional allowances is included in accrued expenses on the consolidated balance sheets. Amounts paid for slotting fees are recorded as prepaid expenses on the consolidated balance sheets and amortized over the corresponding term.
For the quarters ended
March 31
, 201
9
and 201
8
, our revenue was reduced by
$
3
28
,000
and
$
259
,000
respectively, for slotting fees and promotion allowances.
All sales to distributors and customers are generally final. In limited instances the Company may accept returned product due to quality issues or distributor terminations and
in such situations
the Company would have variable consideration.
To date, returns have not been material. The Company’s customers generally pay within
30
days from the receipt of a valid invoice.
The Company offers prompt pay discounts of up to
2%
to certain customers typically for payments made within 15 days. Prompt pay discounts are estimated in the period of sale based on experience with sales to eligible customers. Early pay discounts are recorded as a deduction to the accounts receivable balance presented on the consolidated balance sheets.
The accounts receivable balance primarily includes balances from trades sales to distributors and retail customers. The allowance for doubtful accounts is the best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance for doubtful accounts based primarily on historical write-off experience. Account balances that are deemed
u
ncoll
ectible are charged off against the allowance after all means of collection have been exhausted and the potential for recover
y
is considered remote. Allowances for doubtful accounts of $
69
and $
40
as of
March 31
, 201
9
and December 31, 201
8
, respectively,
were
netted against accounts receivable.
No
impairment losses were recognized as of
March 31
, 201
9
and December 31, 201
8
, respectively.
Changes in accounts receivable are primarily due to the timing and magnitude of orders of products, the timing of when control of products is transferred to distributors and the timing of cash collections.
Deferred financing costs
We defer costs related to the issuance of debt which are included on the accompanying balance sheets as a deduction from the debt liability. Deferred financing costs are amortized over the term of the related loan and are included as a component of interest expense on the accompanying consolidated statements of operations.
Operating leases
At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date.
After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term.
Use of estimates
The preparation of the condensed consolidated financial statements requires management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, inventory valuation, depreciable lives and valuation of capital assets, valuation allowances for receivables, trade promotion liabilities, stock-based compensation expense, valuation allowance for deferred income tax assets, contingencies, and forecasts supporting the going concern assumption and related disclosures. Actual results could differ from those estimates.
Recent accounting pronouncements
In February 2016,
the Financial Accounting Standards Board (“FASB”)
issued ASU No. 2016-02
, Leases: Topic 842
(“ASU 2016-2”), which replaces existing lease guidance. ASU 2016-2 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than twelve months to its balance sheets. ASU 2016-2 also expands the required quantitative and qualitative disclosures surrounding leases. Although ASU 2016-02 is required to be adopted at the earliest period presented using a modified retrospective approach, the FASB issued ASU No. 2018-11,
Leases (Topic 842): Targeted Improvements
(“ASU 2018-11”), which allows for an alternative transition method of adoption by recognizing a cumulative-effect adjustment, if any, to the opening balance of accumulated deficit in the period of adoption.
The Company adopted ASU 2016-02 and related ASUs, collectively
“
ASC Topic 842,
”
on January 1, 2019, utilizing the alternative transition method allowed for under ASU 2018-11. As a result, the Company recorded a lease liability and right-of-use asset of $124,000 and $116,000, respectively, on the condensed consolidated balance sheet as of January 1, 2019. The adoption of ASC Topic 842 did not have a material impact on either the condensed consolidated statement of operations or condensed consolidated statement of cash flows for the three months ended March 31, 2019.
In June 2016, the FASB issued ASU 2016-13,
Financial Instruments: Credit Losse
s
(“ASU 2016-13”),
which changes the impairment model for most financial instruments, including trade receivables from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU is effective for us in the first quarter of 2020 and must be adopted using a modified retrospective transition approach.
We are
currently evaluating the potential impact
that
the adoption of ASU 2016-13 will have on
our
consolidated financial statements.
2.
Inventory
Inventory consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
Finished goods
|
|
$
|
1,242
|
|
$
|
948
|
Raw materials
|
|
|
609
|
|
|
401
|
|
|
$
|
1,851
|
|
$
|
1,349
|
Finished goods primarily include product ready for shipment, as well as promotional merchandise held for sale. Raw materials primarily include ingredients, concentrate and packaging.
3.
Operating l
ease
We currently lease approximately 6,500 square feet of retail/office space in Seattle, Washington for our principal executive and administrative offices. The term of the lease is five years expiring February 2020 with an option to extend for additional one-year terms, indefinitely. In the normal course of business, it is expected that this lease will be renewed or replaced by leases on another property. The
C
ompany has not included these options to extend in its calculation of right-of-use assets or lease liabilities as it is not reasonably certain to exercise these options. The lease agreement does not contain any residual value guarantees, material restrictions or covenants.
Upon adoption, the Company elected the package of practical expedients permitted in ASC Topic 842. Accordingly, the Company accounted for its existing operating lease as an operating lease under the new guidance, without reassessing (a) whether the contract contains a lease under ASC Topic 842, (b) whether classification of the operating lease would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before the transition adjustments would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2019, a lease liability of $124,000 which represents the remaining lease payments and a right-of-use-asset of $116,000. The difference between the right-of-use asset and lease liability relates to the deferred rent liability of $8,000 that was included on the Company’s condensed consolidated balance sheets prior to adoption of ASC Topic 842. This amount was eliminated at the time of adoption and is included in the lease liability balance. The discount on the lease liability was not material and was not recognized.
As of March 31, 2019, we have $80,000 in lease payments remaining in 2019 and $16,000 lease payments remaining in 2020.
Operating lease cost for the three months ended March 31, 2019 was $25,000.
Cash paid for amounts included in the measurement of operating lease liabilities for the three months ended March 31, 2019 was $
26,000.
The Company has elected the practical expedient for short-term leases. Operating lease cost for the Company’s short-term leases for the three months ended March 31, 2019, was immaterial.
4. Line of Credit
We have an amended and restated revolving secured credit facility (the “Loan Facility”) with CapitalSource Business Finance Group (previously known as BFI Business Finance). The current term of the Loan Facility expires on December 27, 2019, unless renewed.
Under this
Loan Facility, we may periodically request advances equal to the lesser of: (a) $3.2 million, or (b) the borrowing base which is, in the following priority, the sum of: (i) 85% of eligible U.S. accounts receivable, plus (ii) 50% of eligible Canadian accounts receivable not to exceed $300,000 (subject to any reserve amount established by CapitalSource), plus (iii) 35% of finished goods inventory not to exceed $475,000, or 50% of eligible accounts receivable collateral
. The Loan Facility currently allows us to borrow a maximum aggregate amount of up to $3.2 million based on eligible accounts receivable and inventory.
As of March 31, 2019, our accounts receivable and inventory eligible borrowing base was approximately $1.8 million before adjustments, of which we had drawn down approximately $952,000.
Advances under the Loan Facility bear interest at the prime rate plus 0.75%, where prime may not be less than 0% (resulting in an interest rate of 6.25% as of March 31,2019), and a loan fee of 0.10% on the daily loan balance is payable monthly. The Loan Facility provides for a minimum cumulative amount of interest of $30,000 per year to be paid to CapitalSource, regardless of whether or not we draw on the Loan Facility.
CapitalSource has the right to terminate the Loan Facility at any time upon 120 days’ prior written notice. All present and future obligations of our Subsidiaries under the Loan Facility are guaranteed by us and are secured by a first priority security interest in all of our assets. The Loan Facility contains customary representations and warranties as well as affirmative and negative covenants. As of March 31, 2019, we were in compliance with all covenants under the Loan Facility. During 2019, the draws on the Loan Facility were used to fulfill working capital needs. We will continue to utilize the Loan Facility, as needed, for working capital needs in the future.
5.
Convertible Subordinated Notes Payable
The Company issued certain convertible subordinated promissory notes with an aggregate principal amount of $2,920,000 at issuance (the “Convertible Notes”) during the first half of 2018 to certain institutional investors, our management team, and other individual accredited investors.
The Convertible Notes have a four-year term and bear interest at 6%. The holders can convert the Convertible Notes at any time into the number of shares of our common stock equal to the quotient obtained by dividing (i) the amount of the unpaid principal and interest on such Convertible Note by (ii) $0.32 (the “Conversion Price”). The Conversion Price is subject to a down round adjustment if we issue shares or equity-linked instruments at a conversion price below $0.32 per share. No payments of principal or interest are due until the maturity.
The Convertible Notes are subordinated in right of payment to the prior payment in full of all of our Senior Indebtedness, which is defined as amounts due in connection with our indebtedness for borrowed money to banks, commercial finance lenders (including CapitalSource), or other lending institutions regularly engaged in the business of lending money, with certain restrictions.
During the period from January 1, 2019 through March 31, 2019, Convertible Notes in the aggregate principal amount of $125,000 and related accrued interest were converted into 438,013 shares of common stock in accordance with the original terms of the Convertible Notes. As a result, the carrying amount of the converted principal amount of such Convertible Notes, along with the converted accrued interest, in an aggregate amount of $14
1
,000, was credited to common stock and additional paid-in capital and unamortized discounts in an amount equal to $34,000 were recognized as interest expense for the first quarter.
The principal balance of Convertible Notes outstanding was equal to $2,795,000 and $2,920,000 at March 31, 2019 and December 31, 2018, respectively. The balance of Convertible Notes is presented net of unamortized discounts in an amount equal to $
359,000
and $392,000 at March 31, 2019 and December 31, 2018, respectively. The principal balance of Convertible Notes payable to related parties was equal to $120,000 at both March 31, 2019 and December 31, 2018.
Subsequent to March 31, 2019, Convertible Notes
in the aggregate
princip
al
amount
of $
62
,
5
00 and related accrued interest were converted into 197,
111
shares
of common stock in accordance with the original terms of the Convertible Note
s
.
6.
Shareholders’ Equity
Under the terms of our 2011 Incentive Plan (the “Plan”), the number of shares authorized under the Plan may be increased each January 1st by an amount equal to the
lesser
of (a)
1,300,000
shares, (b)
4.0
%
of our outstanding common stock as of the end of our immediately preceding fiscal year, and (c) a lesser amount determined by the Board of Directors (the “Board”), provided that the number of shares that may be granted pursuant to awards in a single year may not exceed
10
%
of our outstanding shares of common stock on a fully diluted basis as of the end of the immediately preceding fiscal year.
As of March 31
,
2019
, the total number of shares of common stock authorized under the Plan
was
10,784,032
shares.
Under the terms of the Plan, the Board may grant awards to employees, officers, directors, consultants, agents, advisors and independent contractors. Awards may consist of stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards or other stock or cash-based awards. Stock options are granted
with an exercise price equal to
the closing price of our stock on the date of grant, and generally have a
ten
-year term and vest over a period of
48
months
with the first
25
%
of the shares subject to the option
vesting
one
year
from the grant date and
the remaining
75%
of the shares subject to the option
vesting in equal
monthly
increments
over the subsequent
36
months
.
Restricted stock awards generally vest over
one
year.
As of
March 31, 2019
, there were
4,376,901
shares of unissued common stock authorized and available for future awards under the Plan.
A summary of our stock option activity is as follows:
|
|
|
|
|
|
|
|
Outstanding Options
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
Balance at January 1, 2019
|
|
3,825,083
|
|
$
|
0.48
|
Options granted
|
|
205,000
|
|
|
0.28
|
Options cancelled/expired
|
|
(139,899)
|
|
|
0.64
|
Balance at March 31, 2019
|
|
3,890,184
|
|
$
|
0.46
|
Exercisable, March 31, 2019
|
|
3,161,973
|
|
$
|
0.47
|
Vested and expected to vest
|
|
3,703,458
|
|
$
|
0.46
|
|
(b)
|
|
Restricted
s
tock
aw
ards:
|
Effective as of January 1, 2018, equity compensation for non-employee director service is an annual restricted stock unit award that vests over one year, the number of shares underlying such award is determined by dividing
$15,000
by the closing share price on the date of grant (which shall be the first business day in January in each calendar year); when joining the Board each non-employee director shall receive an initial restricted stock unit award that vests over one year, the number of shares underlying such award be determined by dividing $15,000 by the Company’s closing stock price on the date of grant (which shall be the first trading day following the date on which such director is appointed), prorated based on the date on which such director is appointed.
A summary of our restricted stock activity is as follows:
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Weighted-Average Contractual Life
|
Non-vested restricted stock at January 1, 2019
|
|
253,363
|
$
|
0.31
|
|
9.4
|
Granted
|
|
358,560
|
|
0.25
|
|
—
|
Vested
|
|
(121,623)
|
|
0.37
|
|
—
|
Cancelled/expired
|
|
—
|
|
—
|
|
—
|
Non-vested restricted stock at March 31, 2019
|
|
490,300
|
$
|
0.26
|
|
9.7
|
We withheld a total of
10,135
shares as payment for withholding taxes due in connection with the vesting of restricted stock awards
d
u
ring
the three months ended March 31, 2019, and the average price paid per share of
$0.25
reflects the average market value per share of the shares withheld for tax purposes.
(
c
)
Stock-based compensation expense:
Stock-based compensation expense is recognized using the straight-line attribution method over the employees’ requisite service period. We recognize compensation expense for only the portion of stock options or restricted stock expected to vest.
Therefore, we apply estimated forfeiture rates that are derived from historical employee
attrition
. If the actual number of forfeitures differs from those estimated by management, additional adjustments to stock-based compensation expense may be required in future periods.
At
March 31, 2019
, we had unrecognized compensation expense related to stock options
and non-vested restricted stock
of
$
212,
000
to be recognized over a weighted-average period of
2.1
y
ears.
The following table summarizes the stock-based compensation expense (in thousands):
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
2019
|
|
2018
|
Type of awards:
|
|
|
|
|
|
|
Stock options
|
|
$
|
32
|
|
$
|
31
|
Restricted stock
|
|
|
31
|
|
|
18
|
|
|
$
|
63
|
|
$
|
49
|
|
|
|
|
|
|
|
Income statement account:
|
|
|
|
|
|
|
Selling and marketing
|
|
$
|
15
|
|
$
|
15
|
General and administrative
|
|
|
48
|
|
|
34
|
|
|
$
|
63
|
|
$
|
49
|
We employ the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of “plain vanilla” options:
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
2019
|
|
2018
|
Expected dividend yield
|
|
|
—
|
|
|
|
—
|
|
Expected stock price volatility
|
|
|
65.4
|
%
|
|
|
67.0
|
%
|
Risk-free interest rate
|
|
|
2.6
|
%
|
|
|
2.6
|
%
|
Expected term (in years)
|
|
|
6.0
|
years
|
|
|
5.6
|
years
|
Weighted-average grant date fair-value
|
|
$
|
0.17
|
|
|
$
|
0.23
|
|
The aggregate intrinsic value of stock options outstanding at
March 31, 2019
and
2018
was
approximately
$
1.2
m
illion
and
$48,000
, respectively,
and for options exercisable was
$
941,000
and
$
46,000
, respectively. The intrinsic value of outstanding and exercisable stock options is calculated as the quoted market price of the stock at the balance sheet date less the exercise price of the option. There were
no
o
ptions exercised
during the
three
months ended
March 31
,
201
9
and
201
8
, respectively
.
7.
Segment Information
We have
one
operating segment with operations primarily in the United States and Canada. Sales are assigned to geographic locations based on the location of customers. Sales by geographic location are as follows (in thousands):
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
2019
|
|
2018
|
Revenue:
|
|
|
|
|
|
|
United States
|
|
$
|
2,234
|
|
$
|
2,237
|
Canada
|
|
|
565
|
|
|
583
|
Other countries
|
|
|
25
|
|
|
17
|
Total revenue
|
|
$
|
2,824
|
|
$
|
2,837
|
During
each of
the
three
months ended
March 31
,
201
9
and
201
8
,
three and
two
of our customers represented
an aggregate of
approximately
36
%
and
45
%,
of our revenue,
respectively
.