Blueprint
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D. C. 20549
_______________________________
FORM 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
for the
quarterly period ended June 30, 2018
or
[
]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the
transition period from ___________________ to
_________________
Commission
File Number: 1-13471
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INSIGNIA SYSTEMS,
INC.
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(Exact
name of registrant as specified in its charter)
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Minnesota
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41-1656308
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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8799 Brooklyn Blvd., Minneapolis, MN 55445
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(Address
of principal executive offices; zip code)
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(763) 392-6200
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(Registrant’s
telephone number, including area code)
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Indicate by check
mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
Yes
☑ No ☐
Indicate by check
mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes
☑ No ☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and "emerging
growth company" in Rule 12b-2 of the Exchange Act. (Check
one):
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☑
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Emerging
growth company
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☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
☐ No ☑
Number
of shares outstanding of Common Stock, $.01 par value, as of August
2, 2018 was 11,831,733.
Insignia Systems, Inc.
TABLE OF CONTENTS
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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1
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2
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3
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4
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Item 2.
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9
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Item 3.
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14
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Item 4.
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14
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PART II.
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OTHER INFORMATION
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Item 1.
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15
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Item 1A.
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15
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Item 2.
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15
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Item 3.
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15
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Item 4.
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15
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Item 5.
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16
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Item 6.
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16
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PART
I. FINANCIAL INFORMATION
Item
1.
Financial Statements
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ASSETS
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Current Assets:
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Cash
and cash equivalents
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$8,041,000
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$4,695,000
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Accounts
receivable, net
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9,604,000
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11,864,000
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Inventories
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364,000
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301,000
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Income
tax receivable
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253,000
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360,000
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Prepaid
expenses and other
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306,000
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415,000
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Total
Current Assets
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18,568,000
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17,635,000
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Other Assets:
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Property
and equipment, net
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2,904,000
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2,670,000
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Other,
net
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1,180,000
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1,383,000
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Total Assets
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$22,652,000
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$21,688,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
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Accounts
payable
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3,174,000
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3,232,000
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Accrued
liabilities:
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Compensation
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1,257,000
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1,531,000
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Other
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975,000
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667,000
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Deferred
revenue
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1,031,000
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372,000
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Total
Current Liabilities
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6,437,000
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5,802,000
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Long-Term Liabilities:
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Deferred
tax liabilities
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245,000
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245,000
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Accrued
income taxes
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596,000
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581,000
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Deferred
rent
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188,000
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219,000
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Total
Long-Term Liabilities
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1,029,000
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1,045,000
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Commitments and Contingencies
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—
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—
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Shareholders' Equity:
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Common
stock, par value $.01:
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Authorized
shares - 40,000,000
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Issued
and outstanding shares - 11,851,000 at June 30, 2018 and 11,914,000
at December 31, 2017
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119,000
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119,000
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Additional
paid-in capital
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15,358,000
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15,361,000
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Accumulated
deficit
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( 291,000)
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( 639,000)
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Total
Shareholders' Equity
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15,186,000
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14,841,000
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Total Liabilities and Shareholders' Equity
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$22,652,000
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$21,688,000
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See accompanying notes to financial statements.
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CONDENSED STATEMENTS OF
OPERATIONS
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Services
revenues
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$7,868,000
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$5,512,000
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$14,894,000
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$9,816,000
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Products
revenues
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377,000
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337,000
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770,000
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800,000
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Total
Net Sales
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8,245,000
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5,849,000
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15,664,000
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10,616,000
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Cost
of services
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4,964,000
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4,105,000
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9,368,000
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7,924,000
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Cost
of goods sold
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276,000
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246,000
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545,000
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565,000
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Total
Cost of Sales
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5,240,000
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4,351,000
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9,913,000
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8,489,000
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Gross
Profit
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3,005,000
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1,498,000
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5,751,000
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2,127,000
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Operating Expenses:
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Selling
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719,000
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831,000
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1,622,000
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1,719,000
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Marketing
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566,000
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427,000
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1,170,000
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853,000
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General
and administrative
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1,467,000
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814,000
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2,474,000
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1,867,000
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Total
Operating Expenses
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2,752,000
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2,072,000
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5,266,000
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4,439,000
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Operating
Income (Loss)
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253,000
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( 574,000)
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485,000
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( 2,312,000)
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Other
income
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7,000
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2,000
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12,000
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5,000
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Income
(Loss) Before Taxes
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260,000
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( 572,000)
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497,000
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( 2,307,000)
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Income
tax expense (benefit)
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76,000
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( 38,000)
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149,000
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( 582,000)
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Net
Income (Loss)
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$184,000
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$( 534,000)
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$348,000
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$( 1,725,000)
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Net
income (loss) per share:
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Basic
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$0.02
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$( 0.05)
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$0.03
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$( 0.15)
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Diluted
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$0.02
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$( 0.05)
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$0.03
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$( 0.15)
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Shares
used in calculation of net income (loss) per
share:
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Basic
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11,804,000
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11,674,000
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11,812,000
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11,667,000
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Diluted
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12,076,000
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11,674,000
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12,040,000
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11,667,000
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See accompanying notes to financial statements.
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CONDENSED STATEMENTS OF CASH
FLOWS
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Operating Activities:
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Net
income (loss)
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$348,000
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$( 1,725,000)
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Adjustments
to reconcile net income (loss) to
net cash provided by (used in) operating activities:
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Depreciation
and amortization
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570,000
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665,000
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Changes
in allowance for doubtful accounts
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( 36,000)
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26,000
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Deferred
income tax expense
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—
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( 205,000)
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Stock-based
compensation expense
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149,000
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274,000
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Changes
in operating assets and liabilities:
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Accounts
receivable
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2,296,000
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14,000
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Inventories
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( 63,000)
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( 20,000)
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Income
tax receivable
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107,000
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351,000
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Prepaid
expenses and other
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109,000
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82,000
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Accounts
payable
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( 131,000)
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( 276,000)
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Accrued
liabilities
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17,000
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( 72,000)
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Income
tax payable
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—
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14,000
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Accrued
income taxes
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15,000
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—
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Deferred
revenue
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659,000
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634,000
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Net
cash provided by (used in) operating activities
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4,040,000
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( 238,000)
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Investing Activities:
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Purchases
of property and equipment
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( 528,000)
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( 644,000)
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Net
cash used in investing activities
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( 528,000)
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( 644,000)
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Financing Activities:
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Cash
dividends paid ($0.70 per share)
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( 14,000)
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( 8,177,000)
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Proceeds
from issuance of common stock
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49,000
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( 8,000)
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Repurchase
of common stock upon vesting of restricted stock
awards
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( 14,000)
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—
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Repurchase
of common stock, net
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( 187,000)
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—
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Net
cash used in financing activities
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( 166,000)
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( 8,185,000)
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Increase
(decrease) in cash and cash equivalents
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3,346,000
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( 9,067,000)
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Cash
and cash equivalents at beginning of period
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4,695,000
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12,267,000
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Cash
and cash equivalents at end of period
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$8,041,000
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$3,200,000
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Supplemental disclosures for cash flow information:
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Cash
paid during the period for income taxes
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$—
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$2,000
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Non-cash investing and financing activities:
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Purchases
of property and equipment included in accounts payable
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$111,000
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$65,000
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
Notes To Financial
Statements
(Unaudited)
1.
Summary of Significant Accounting Policies.
Description
of Business. Insignia Systems,
Inc. (the “Company”) markets in-store advertising
products, programs and services to retailers and consumer packaged
goods manufacturers. The Company operates in a single reportable
segment. The Company’s primary products include the Insignia
Point-of-Purchase Services (POPS®),
freshADSsm
and other retailer approved
promotional services, in-store marketing programs, and custom
adhesive and non-adhesive signage materials directly to our retail
customers.
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 our financial statements as of and for the
year ended December 31, 2017 included in the
Company’s Annual Report on Form 10-K. 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.
Recently Adopted Accounting Pronouncements.
Effective January 1,
2018, the Company adopted Financial Accounting Standards Board
Accounting Standards Update (“ASU”) 2014-09
“Revenue from Contracts with Customers” (“Topic
606”). Topic 606 supersedes the revenue recognition
requirements in Topic 605 “Revenue
Recognition,” and requires entities to
recognize revenue when control of the promised goods or services is
transferred to customers at an amount that reflects the
consideration to which the entity expects to be entitled to in
exchange for those goods or services. The adoption of ASU 2014-09,
using the modified retrospective approach, had no significant
impact on our results of operations, cash flows, or financial
position. Revenue continues to be recognized for POPSigns ratably
over the period of service, which is typically a two-week display
cycle, and for sign card sales, at the time the products are
shipped to customers. Additional information and
disclosures required by this new standard are contained in Note
2, “Revenue.”
Inventories.
Inventories are primarily comprised of sign cards and roll stock.
Inventory is valued at the lower of cost or market using the
first-in, first-out (FIFO) method, and consisted of the following
as of the dates indicated:
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Raw
materials
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$62,000
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$68,000
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Work-in-process
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14,000
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10,000
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Finished
goods
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288,000
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223,000
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$364,000
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$301,000
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Property
and Equipment. Property and
equipment consisted of the following as of the dates
indicated:
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Property and Equipment:
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Production
tooling, machinery and equipment
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$4,005,000
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$4,003,000
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Office
furniture and fixtures
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327,000
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325,000
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Computer
equipment and software
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2,690,000
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2,680,000
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Leasehold
improvements
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577,000
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577,000
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Construction
in-progress
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793,000
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206,000
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8,392,000
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7,791,000
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Accumulated
depreciation and amortization
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( 5,488,000)
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( 5,121,000)
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Net
Property and Equipment
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$2,904,000
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$2,670,000
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Depreciation
expense was approximately $181,000 and $367,000 in the three and
six months ended June 30, 2018, respectively, and $214,000 and
$433,000 in the three and six months ended June 30, 2017,
respectively.
Stock-Based
Compensation. We measure and
recognize 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 date of the grant. We use
the Black-Scholes option pricing model to determine the weighted
average fair value of options and employee stock purchase plan
rights. The determination of fair value of share-based payment
awards on the date of grant using an option-pricing model is
affected by our 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.
On November 28, 2016, our Board of Directors
amended the 2003 Incentive Stock Option Plan (the “2003
Plan”) and the 2013 Omnibus Stock and Incentive Plan (the
“2013 Plan”) to permit equitable adjustments to
outstanding awards in the event of an extraordinary cash
dividend. On March 28, 2017, the Board of Directors approved
the modification of all outstanding stock option awards to provide
option holders with substantially equivalent economic value after
the effect of the dividend. The modification resulted in the
issuance of options to purchase 150,476 additional shares. Total
stock-based compensation expense for the modifications was
approximately $79,000, which was recorded during the six months
ended June 30, 2017.
During
the six months ended June 30, 2018, no stock option awards were
granted by the Company. During the six
months ended June 30, 2017, no other stock option awards were
granted by the Company beyond the modification discussed
above.
During
the six months ended June 30, 2018, the Company issued 178,000
restricted stock units under the 2013 Plan. The shares underlying
the awards were assigned a value of $1.77 per share, which was the
closing price of our common stock on the date of grant, and are
scheduled to vest over three years.
During
the six months ended June 30, 2017, the Company issued 8,424
restricted stock units under the 2013 Plan. The shares underlying the awards were assigned a
value of $1.51 per share, which was the closing price of our common
stock on the date of grant, and are scheduled to vest over a
weighted average of 1.5 years following the date of
grant.
The
Company estimated the fair value of stock-based awards granted
during the six months ended June 30, 2018, under the
Company’s employee stock purchase plan using the following
weighted average assumptions: expected life of 1.0 years, expected
volatility of 66%, dividend yield of 0% and risk-free interest rate
of 1.83%.
During
June 2017, non-employee members of the Board of Directors received
grants totaling 72,115 fully vested shares of common stock pursuant
to the 2013 Plan. The shares were assigned a value of $1.04 per
share, based on the closing price on the grant date, for a total
value of $75,000, which is included in stock-based compensation
expense for the six months ended June 30, 2017.
Total
stock-based compensation expense recorded for the three and six
months ended June 30, 2018 was $82,000 and $149,000, respectively,
and for the three and six months ended June 30, 2017 was $127,000
and $274,000, respectively.
During
the three and six months ended June 30, 2018 and 2017, there were
no options exercised.
Net Income
(Loss) per Share. Basic net income (loss) per share is computed by
dividing net income (loss) by the weighted average shares
outstanding and excludes any potential dilutive effects of stock
options and restricted stock units and awards. Diluted net income
(loss) per share gives effect to all diluted potential common
shares outstanding during the period.
Options to purchase approximately 245,000 shares
of common stock with a weighted average exercise price of $4.41
were outstanding at June 30, 2018 and were not included in the
computation of common stock equivalents for the three and
six months ended June 30, 2018 because
their exercise prices were higher than the average fair market
value of the common shares during the reporting period. Due
to the net loss incurred during the three and six months ended June
30, 2017, all stock awards were anti-dilutive for both
periods.
Weighted
average common shares outstanding for the three and six months
ended June 30, 2018 and 2017 were as follows:
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Denominator
for basic net income (loss) per share - weighted average
shares
|
11,804,000
|
11,674,000
|
11,812,000
|
11,667,000
|
|
Effect
of dilutive securities:
|
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|
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|
Stock
options and restricted stock units
|
272,000
|
—
|
228,000
|
—
|
|
Denominator
for diluted net income (loss) per share - weighted average
shares
|
12,076,000
|
11,674,000
|
12,040,000
|
11,667,000
|
Dividends.
On November 28, 2016, the Board
declared a one-time special dividend of $0.70 per share to
shareholders of record as of December 16, 2016 of $8,233,000, of
which $8,163,000 was paid on January 6, 2017, an additional $14,000
was paid on May 15, 2017 and $14,000 was paid on May 15,
2018.
2.
Revenue Recognition. Under 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.
The
majority of the Company’s accounts receivable is due from
companies in the consumer-packaged goods industry. Credit is
extended based on evaluation of a customer’s financial
condition and, generally, collateral is not required. Accounts
receivable are due within 30-150 days and are stated at amounts due
from customers, net of an allowance for doubtful
accounts.
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 our performance obligations included in our
primary revenue streams and the timing or method of revenue
recognition for each:
POPSign
Services. Our primary source of
revenue is from marketing in-store advertising programs and
services primarily to consumer-packaged goods (“CPG”)
manufacturers. We provide a service of displaying promotional signs
in close proximity to the manufacturer’s product in
participating stores, which we maintain in two-to-four-week cycle
increments. Our in-store marketing programs include POPSigns and
freshADS (together referred to herein as “POPSign
services”).
Each of the individual activities under our
POPSign services, including production activities, are inputs to an
integrated sign display service. As such, each POPSign service
represents a single performance obligation. 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 us and we have an
enforceable right to payment for services performed to date. As a
result, we recognize the transaction price for our POPSign service
performance obligations as revenue over time. Given the nature of
our performance obligations is to provide a display service over
the duration of a specified period or periods, we recognize revenue
on a straight-line basis over the display service period as it best
reflects the timing of transfer of our POPSign
services.
Other
Service Revenues. The Company
also supplies CPG manufactures with other miscellaneous retailer
approved promotional services and sign solutions. These services
are more customized than the POPSign program, 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.
We also sell custom adhesive and
non-adhesive signage materials directly to our customers. Each such
product is a distinct performance obligation. Revenue is recognized
at a point in time upon shipment, when control of the goods
transfers to the customer.
Disaggregation of Revenue
In the
following table, revenue is disaggregated by major revenue stream
and timing of revenue recognition.
|
|
Three
months ended June 30, 2018
|
Six
months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timing of revenue recognition:
|
|
|
|
|
|
|
|
Products
and servcies transferred over time
|
$7,868,000
|
—
|
$7,868,000
|
$14,894,000
|
—
|
$14,894,000
|
|
Products
and services transferred at a point in time
|
—
|
$377,000
|
$377,000
|
—
|
$770,000
|
$770,000
|
|
Total
|
$7,868,000
|
$377,000
|
$8,245,000
|
$14,894,000
|
$770,000
|
$15,664,000
|
Contract Costs
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:
|
Balance
at December 31, 2017
|
$372,000
|
|
Reclassification
of beginning deferred revenue to revenue, as a result of
performance obligations satisfied
|
(122,000)
|
|
Cash
received in advance and not recognized as revenue
|
781,000
|
|
Cumulative
catch-up from a change in the timeframe for recognition of revenue
arising from deferred revenue
|
—
|
|
Balance
at June 30, 2018
|
$1,031,000
|
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 our performance obligations.
This practical expedient is being applied to arrangements for
certain uncompleted POPSign services and unshipped custom signage
materials. Of those contracts with an expected duration of greater
than one year, we estimate that revenue of $11,000 and $3,989,000
related to performance obligations that are unsatisfied (or
partially unsatisfied) as of June 30, 2018 will be recognized
during the remainder of fiscal 2018 and in fiscal 2019 or beyond,
respectively.
3.
Selling Arrangement. In 2011, the
Company paid News America Marketing In-Store, LLC (“News
America”) $4,000,000 in exchange for a 10-year arrangement to
sell signs with price into News America’s network of
retailers as News America’s exclusive agent. The $4,000,000
is being amortized on a straight-line basis over the 10-year term
of the arrangement. Amortization expense, which was $100,000 and
$200,000 in both of the three and six months ended June 30, 2018
and 2017, respectfully, and is expected to be $400,000 per year
over the next three years and $117,000 in the year ending December
31, 2021, is recorded within cost of services in the
Company’s condensed statements of operations. The net
carrying amount of the selling arrangement is recorded within other
assets on the Company’s condensed balance sheet.
4.
Income Taxes. For the three and six
months ended June 30, 2018, the Company recorded income tax expense
of $76,000 and $149,000, or 29.2% and 30.0% of income before taxes,
respectively. For the three and six months ended June 30, 2017, the
Company recorded an income tax benefit of $38,000 and $582,000, or
6.6% and 25.2% of loss before taxes, respectively. The income tax
expense or benefit for the three and six months ended June 30, 2018
and 2017 is comprised of federal and state taxes. The primary
differences between the Company’s June 30, 2018 and 2017
effective tax rates and the statutory federal rate are expenses
related to stock-based compensation, nondeductible meals and
entertainment and for the three and six months ended June 30, 2017,
a valuation allowance was recognized as it was determined that it
is more likely than not that the Company will not realize the full
amount of its net deferred tax assets. The Company reassesses its
effective rate each reporting period and adjusts the annual
effective rate if deemed necessary, based on projected annual
taxable income (loss).
Deferred income
taxes are determined based on the estimated future tax effects of
differences between the financial statement and tax basis of assets
and liabilities given the provisions of enacted tax laws. In
providing for deferred taxes, we consider tax regulations of the
jurisdictions in which we operate, estimates of future taxable
income, and available tax planning strategies. If tax regulations,
operating results or the ability to implement tax-planning
strategies vary, adjustment to the carrying value of deferred tax
assets and liabilities may be required. Valuation allowances are
recorded related to deferred tax assets based on the “more
likely than not” criteria. At both December 31, 2017 and June
30, 2018, the Company had a valuation allowance of approximately
$108,000 as a result of certain capital losses and state net
operating losses carried forward which the Company does not believe
are more likely than not to be realized.
As of
June 30, 2018 and December 31, 2017, the Company had unrecognized
tax benefits totaling $596,000 and $581,000, 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 $596,000. Due
to the current statute of limitations regarding the unrecognized
tax benefits, the unrecognized tax benefits and associated interest
is not expected to change significantly in 2018.
5.
Concentrations. During the six months
ended June 30, 2018, two customers accounted for 25% and 24%,
respectively, of the Company’s total net sales. During the
six months ended June 30, 2017, two customers accounted for 25% and
9% respectively, of the Company’s total net sales. At June
30, 2018, three customers accounted for 32%, 18% and 10% of the
Company’s total accounts receivable, respectively. At
December 31, 2017, three customers represented 29%, 12% and 11% of
the Company’s total accounts receivable.
Although there are
a number of customers that the Company sells to, the loss of a
major customer could adversely affect operating results.
Additionally, the loss of a major retailer from the Company’s
retail network could adversely affect operating
results.
6.
Share Repurchases. On April 5,
2018, the Board of Directors authorized the repurchase of up to
$3,000,000 of the Company’s common stock on or before March
31, 2020. The plan allows the repurchases to be made in open market
or privately negotiated transactions. The plan does not obligate
the Company to repurchase any particular number of shares, and may
be suspended at any time at the Company’s discretion. During
the three months ended June 30, 2018, the Company repurchased and
retired approximately 103,000 shares, at a total cost of $187,000.
As of June 30, 2018, the approximate dollar value of shares that
may yet be purchased by the Company under the plan was
$2,816,000.
7.
Recently Issued Accounting
Pronouncements. In February 2016, the FASB issued Accounting
Standards Update (“ASU”) 2016-02, Leases, under which lessees will
recognize most leases on the balance sheet. This will generally
increase reported assets and liabilities. For public entities, this
ASU is effective for annual and interim periods in fiscal years
beginning after December 15, 2018. ASU 2016-02 mandates a modified
retrospective transition method for all entities. The Company has
performed a review of the requirements of the new guidance and has
identified which of its leases will be within the scope of ASU
2016-02. The Company is working through an adoption plan which
includes a review of lease contracts, applying the new standard to
the lease contracts and comparing the results to our current
accounting. As part of this, we are assessing changes that might be
necessary to processes, and internal controls to capture new data
and address changes in financial reporting. Effective January 1,
2019, the Company will be revising its lease accounting policy and
expanding revenue disclosures to reflect the requirements of ASU
2016-02. Because of the nature of the work that remains, at this
time the Company is unable to reasonably estimate the impact of
adoption on its financial statements.
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
The
following discussion should be read in conjunction with the
Company’s financial statements and related notes. This
discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from
those anticipated due to various factors discussed under
“Cautionary Statement Regarding Forward-Looking
Statements” and elsewhere in this Quarterly Report on Form
10-Q and the “Risk Factors” described in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31,
2017, our Current Reports on Form 8-K and our other SEC
filings.
Company Overview
Insignia
Systems, Inc. (referred to in this Quarterly Report on Form 10-Q as
“Insignia,” “we,” “us,”
“our” or the “Company”) markets in-store
advertising products, programs and services to retailers and
consumer packaged goods (“CPG”) manufacturers. The
Company was incorporated in 1990. Since 1998, the Company has
focused on managing a retail network, made up of approximately
21,000 store locations, for the primary purpose of providing
turn-key at-shelf market access for CPG manufacturers’
marketing programs. Insignia provides participating retailers with
benefits including incremental revenue, incremental sales
opportunities, increased shopper engagement in-store, and custom
creative development and other in-kind services.
Insignia’s
primary product has been the Point-Of-Purchase Services
(POPS®) in-store
marketing program. Insignia POPS® program is a
national, account-specific, shelf-edge advertising and promotional
tactic. Internal testing has indicated the program delivers
incremental sales for the featured brand. The program allows
manufacturers to deliver vital product information to consumers at
the point-of-purchase, and to leverage the local retailer brand and
store-specific prices to provide a unique “call to
action” that draws attention to the featured brand and
triggers a purchase decision. CPG customers benefit from
Insignia’s nimble operational capabilities, which include
short lead
times,
in-house graphic design capabilities, post-program analytics, and
micro-marketing capabilities such as variable or bilingual
messaging.
In
October 2017, the Company announced the nationwide launch of
freshADSsm, an exclusive
advertising vehicle featured in produce, created to inspire
shoppers early in their trip and help navigate them to center
store.
2018 Business Overview
Summary of Financial Results
For the
quarter ended June 30, 2018, the Company generated net sales of
$8,245,000, as compared with net sales of $5,849,000 for the
quarter ended June 30, 2017. For the six months ended June 30,
2018, the Company generated net sales of $15,664,000, as compared
with net sales of $10,616,000 in the six months ended June 30,
2017. Net income for the quarter ended June 30, 2018 was $184,000,
as compared to a net loss of $534,000 for the quarter ended June
30, 2017. Net income for the six months ended June 30, 2018 was
$348,000, as compared to a net loss of $1,725,000 for the six
months ended June 30, 2017. The net loss for the three-month and
the six-month periods ended June 30, 2017 are inclusive of a
$192,000 tax valuation allowance.
During
the six months ended June 30, 2018, cash and cash equivalents
increased $3,346,000 from $4,695,000 at December 31, 2017, to
$8,041,000 at June 30, 2018. The Company had no long-term debt as
of June 30, 2018 and 2017.
Results of Operations
The
following table sets forth, for the periods indicated, certain
items in the Company’s Statements of Operations as a
percentage of total net sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
Cost
of sales
|
63.6
|
74.4
|
63.3
|
80.0
|
|
Gross
profit
|
36.4
|
25.6
|
36.7
|
20.0
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
8.7
|
14.2
|
10.3
|
16.2
|
|
Marketing
|
6.9
|
7.3
|
7.5
|
8.0
|
|
General
and administrative
|
17.7
|
13.9
|
15.8
|
17.6
|
|
Total
operating expenses
|
33.3
|
35.4
|
33.6
|
41.8
|
|
Operating
income (loss)
|
3.1
|
(9.8)
|
3.1
|
(21.8)
|
|
Other
income
|
0.1
|
0.0
|
0.1
|
0.0
|
|
Income
(loss) before taxes
|
3.2
|
(9.8)
|
3.2
|
(21.8)
|
|
Income
tax expense (benefit)
|
1.0
|
(0.6)
|
1.0
|
(5.5)
|
|
Net
income (loss)
|
2.2%
|
(9.2)%
|
2.2%
|
(16.3)%
|
Three Months and Six Months Ended June 30, 2018
Compared to Three Months and Six Months Ended June 30,
2017
Net Sales. Net sales for the three months ended June 30,
2018 increased 41.0% to $8,245,000 compared to $5,849,000 for the
three months ended June 30, 2017. Net sales for the six months
ended June 30, 2018 increased 47.6% to $15,664,000, compared to
$10,616,000 for the six months ended June 30, 2017.
Service
revenues for the three months ended June 30, 2018 increased 42.7%
to $7,868,000 compared to $5,512,000 for the three months ended
June 30, 2017. Service revenues for the six months ended June 30,
2018 increased 51.7% to $14,894,000 compared to $9,816,000 for the
six months ended June 30, 2017.
2017 service revenues were weak during both the three months ended
and six months ended June 30, 2017, down 10.6% from the three
months ended June 30, 2016, and down 16.7% from the six months
ended June 30, 2016.
Accordingly, we do not expect a
similar increase in the percentage of service revenues (or in the
gross profit as a percentage of net sales) during the remainder of
2018 as compared to the comparable periods in
2017.
The
increase in sales for the three months ended June 30, 2018 was due
to increases in both POPS program revenue and innovation
initiatives. POPS program revenue increased primarily due to the
number of signs placed, from new and existing CPG customers and an
increase in average price per sign, which was the result of a
favorable mix of CPG clients and contracts. The increase in sales
for the six months ended June 30, 2018 was due to an increase in
average price per sign, which was the result of a favorable mix of
CPG clients and contracts, and an increase in the number of signs
placed, mostly due to increased signs placed from new and existing
CPG customers and also due to innovation initiatives
Product
revenues for the three months ended June 30, 2018 increased 11.9%
to $377,000 compared to $337,000 for the three months ended June
30, 2017. Product revenues for the six months ended June 30, 2018
decreased 3.8% to $770,000 compared to $800,000 for the six months
ended June 30, 2017. The increase in the three month period was
primarily due to higher sales of sign card supplies due to sales to
new and existing customers. The decrease in the six month period
was primarily due to lower sales of sign card supplies due to lower
customer demand.
Gross Profit. Gross profit for the three months
ended June 30, 2018 increased 100.6% to $3,005,000, or 36.4% as a
percentage of net sales, compared to $1,498,000, or 25.6% as a
percentage of net sales, for the three months ended June 30, 2017.
Gross profit for the six months ended June 30, 2018 increased
170.4% to $5,751,000, or 36.7% as a percentage of net sales,
compared to $2,127,000, or 20.0% as a percentage of net sales, for
the six months ended June 30, 2017.
Service revenues:
Gross profit from our service revenues for the three months ended
June 30, 2018 increased 106.4% to $2,904,000 compared to $1,407,000
for the three months ended June 30, 2017. The higher gross profit
was primarily the result of increased sales and product mix
combined with an increased average price per sign from a favorable
mix of CPG clients, and an increase in revenue from innovation
initiatives. The Company incurred costs of approximately $155,000
associated with the implementation of its new IT operating
infrastructure during the three months ended June 30, 2018 compared
to approximately $50,000 for the three months ended June 30, 2017.
For the six months ended June 30, 2018, the Company incurred costs
of approximately $270,000 associated with the development of its
new IT operating infrastructure compared to approximately $150,000
for the six months ended June 30, 2017. The project is expected to
be substantially completed in the fourth quarter of 2018, with
estimated additional expense of $300,000 in 2018. Gross profit as a
percentage of service revenues for the six months ended June 30,
2018 increased 192.1% to $5,526,000 compared to $1,892,000 for the
six months ended June 30, 2017. The increase was primarily due to
the factors described above.
Gross
profit as a percentage of service revenues for the three months
ended June 30, 2018 increased to 36.9% compared to 25.5% for the
three months ended June 30, 2017. The increase was primarily due to
the factors described above. Gross profit as a percentage of
service revenues for the six months ended June 30, 2018 increased
to 37.1% compared to 19.3% for the six months ended June 30, 2017.
The increase was primarily due to the factors described
above.
Product revenues:
Gross profit from our product revenues for the three months ended
June 30, 2018 increased 11.0% to $101,000 compared to $91,000 for
the three months ended June 30, 2017. The increase was primarily
due to an increase in
sales, partially offset by higher production and tooling costs.
Gross profit from our product revenues for the six months ended
June 30, 2018 decreased 4.3% to $225,000 compared to $235,000 for
the six months ended June 30, 2017. The decrease was primarily due
to a decrease in sales.
Gross
profit as a percentage of product revenues was 26.8% for the three
months ended June 30, 2018 was relatively flat compared to 27.0%
for the three months ended June 30, 2017. Gross profit as a
percentage of product revenues was 29.2% for the six months ended
June 30, 2018 compared to 29.4% for the six months ended June 30,
2017.
Operating Expenses
Selling. Selling expenses for the three months ended June
30, 2018 decreased 13.5% to $719,000 compared to $831,000 for the
three months ended June 30, 2017. The decrease was primarily due to
decreased staff related
expenses. Selling expenses for the six months ended June 30,
2018 decreased 5.6% to $1,622,000 compared to $1,719,000 for the
six months ended June 30, 2017. The decrease was primarily due
decreased staff related
expenses.
Selling
expenses as a percentage of net sales decreased to 8.7% for the
three months ended June 30, 2018 compared to 14.2% for the three
months ended June 30, 2017. The decrease was primarily due to
increased net sales, in addition to the factors described above.
Selling expenses as a percentage of net sales decreased to 10.3%
for the six months ended June 30, 2018 compared to 16.2% for the
six months ended June 30, 2017. The decrease was primarily due to
increased net sales, in addition to the factors described
above.
Marketing. Marketing expense for the three months ended June
30, 2018 increased 32.6% to $566,000 compared to $427,000 for the
three months ended June 30, 2017. Increased marketing expenses were
primarily due to increased staffing and staff related costs,
partially due to the filling of previously open positions, and an
increase in new product development activities. Marketing expense
for the six months ended June 30, 2018 increased 37.2% to
$1,170,000 compared to $853,000 for the six months ended June 30,
2017. The increase was primarily due to the factors described
above.
Marketing
expense as a percentage of net sales decreased to 6.9% for the
three months ended June 30, 2018 compared to 7.3% for the three
months ended June 30, 2017. The decrease was primarily due to
increased sales, partially offset by the factors described above.
Marketing expense as a percentage of net sales decreased to 7.5%
for the six months ended June 30, 2018 compared to 8.0% for the six
months ended June 30, 2017. The decrease was primarily due to
increased sales, partially offset by the factors described
above.
General and administrative. General and administrative
expenses for the three months ended June 30, 2018 increased 80.2%
to $1,467,000 compared to $814,000 for the three months ended June
30, 2017. The increase of $653,000 includes $460,000 of expenses
related to the negotiation and satisfaction of obligations under
the Cooperation Agreement that was announced on May 18, 2018, and
is in effect into 2020.
General
and administrative expenses for the six months ended June 30, 2018
increased 32.5% to $2,474,000 compared to $1,867,000 for the six
months ended June 30, 2017. The increase was primarily due to the
factors described above.
General
and administrative expenses as a percentage of net sales increased
to 17.7% for the three months ended June 30, 2018 compared to 13.9%
for the three months ended June 30, 2017. The increase was
primarily due to the factors described above. General and
administrative expenses as a percentage of net sales decreased to
15.8% for the six months ended June 30, 2018 compared to 17.6% for
the six months ended June 30, 2017. The decrease was primarily due
increased sales, partially offset by the factors described
above.
Other Income. Other income for the three months ended June
30, 2018 was $7,000 compared to $2,000 for the three months ended
June 30, 2017. Other income for the six months ended June 30, 2018
was $12,000 compared to $5,000 for the six months ended June 30,
2017. The increase was primarily due to higher average cash and
cash equivalent balances due to the payment of the special dividend
on January 6, 2017. Other income is comprised of interest earned on
cash, cash equivalents, and previously for available-for-sale
investment balances.
Income Taxes. For
the three and six months ended June 30, 2018, the Company recorded
income tax expense of $76,000 and $149,000, or 29.2% and 30.0% of
income before taxes, respectively. For the three and six months
ended June 30, 2017, the Company recorded an income tax benefit of
$38,000 and $582,000, or 6.6% and 25.2% of loss before taxes,
respectively. The income tax expense or benefit for the three and
six months ended June 30, 2018 and 2017 is comprised of federal and
state taxes. The primary differences between the Company’s
June 30, 2018 and 2017 effective tax rates and the statutory
federal rate are expenses related to stock-based compensation,
nondeductible meals and entertainment and for the three and six
months ended June 30, 2017, a valuation allowance was recognized in
the amount of $192,000 as it was determined that it is more likely
than not that the Company will not realize the full amount of its
net deferred tax assets. The Company reassesses its effective rate
each reporting period and adjusts the annual effective rate if
deemed necessary, based on projected annual taxable income
(loss).
Deferred income
taxes are determined based on the estimated future tax effects of
differences between the financial statement and tax basis of assets
and liabilities given the provisions of enacted tax laws. In
providing for deferred taxes, we consider tax regulations of the
jurisdictions in which we operate, estimates of future taxable
income, and available tax planning strategies. If tax regulations,
operating results or the ability to implement tax-planning
strategies vary, adjustment to the carrying value of deferred tax
assets and liabilities may be required. Valuation allowances are
recorded related to deferred tax assets based on the “more
likely than not” criteria. At both December 31, 2017 and June
30, 2018, the Company had a valuation allowance of approximately
$108,000 as a result of certain capital losses and state net
operating losses carried forward which the Company does not believe
are more likely than not to be realized. Net Income (Loss).
For the reasons stated above, net income for the three and six
months ended June 30, 2018 was $184,000 and $348,000, respectively,
compared to a net loss of $534,000 and $1,725,000, respectively,
for the three and six months ended June 30, 2017.
Liquidity and Capital Resources
The
Company has financed its operations with proceeds from stock sales
and sales of its services and products. At June 30, 2018, working
capital (current assets less current liabilities) was $12,131,000
compared to $11,833,000 at December 31, 2017. During the six months
ended June 30, 2018, cash and cash equivalents increased $3,346,000
from $4,695,000 at December 31, 2017 to $8,041,000 at June 30,
2018.
Operating Activities: Net cash
provided by operating activities during the six months ended June
30, 2018, was $4,040,000. Net income of $348,000, plus non-cash
adjustments of $683,000 and changes in operating assets and
liabilities of $3,009,000 resulted in the $4,040,000 of cash
provided by operating activities. The largest component of the
change in operating assets and liabilities was accounts receivable,
which decreased $2,296,000, which was primarily driven by improved
day sales outstanding. The non-cash adjustments consisted of
depreciation and amortization expense, changes in the allowance for
doubtful accounts, 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 six months ended June 30,
2018 was $528,000, which was related primarily to the IT operating
infrastructure project, and consisted of hardware, purchased
software and capitalization of costs for internally developed
software.
Financing Activities: Net cash
used in financing activities during the six months ended June 30,
2018 was $166,000, which was primarily related to stock
repurchases.
The
Company believes that based upon current business conditions and
plans, its existing cash balance and future cash generated from
operations will be sufficient for its cash requirements for at
least the next twelve months.
Critical Accounting Policies
The
discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments
that affect the reported amounts of assets and liabilities,
revenues and expenses, and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual
results may differ from these estimates under different assumptions
or conditions.
Our
significant accounting policies are described in Note 1 to the
annual financial statements as of and for the year ended December
31, 2017, included in our Form 10-K filed with the Securities and
Exchange Commission on March 15, 2018. Our policy related to the
adoption of Topic 606 on January 1, 2018, the accounting policies
for revenue recognition, is included in Note 2 within this Form
10-Q. We believe our most critical accounting policies and
estimates include the following:
●
allowance for
doubtful accounts;
●
impairment of
long-lived assets;
●
stock-based
compensation.
Cautionary Statement Regarding Forward-Looking
Statements
Certain
statements made in this Quarterly Report on Form 10-Q that are not
statements of historical or current facts, are
“forward-looking statements.” Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results or performance of the
Company to be materially different from the results or performance
expressed or implied by such forward-looking statements. The words
“anticipates,” “believes,”
“expects,” “seeks” and similar expressions
identify forward-looking statements. Forward-looking statements
include statements expressing the intent, belief or current
expectations of the Company and members of our management team
regarding, for instance: (i) our belief that our cash balance and
cash generated by operations will provide adequate liquidity and
capital resources for at least the next twelve months; (ii) that we
expect fluctuations in accounts receivable and payable, accrued
liabilities, and deferred revenue; and (iii) plans to repurchase
Company stock. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this statement was made. These forward-looking statements are
based on current information, which we have assessed and which by
its nature is dynamic and subject to rapid and even abrupt
changes.
Factors
that could cause our estimates and assumptions as to future
performance, and our actual results, to differ materially include
the following: (i) the risk that management may be unable to fully
or successfully implement its business plan to achieve and maintain
increased sales and resultant profitability in the future; (ii) the
risk that the Company will not be able to develop and implement new
product offerings, including mobile, digital or other new
offerings, in a successful manner; (iii) prevailing market
conditions, including pricing and other competitive pressures, in
the in-store advertising industry and, intense competition for
agreements with retailers and consumer packaged goods
manufacturers; (iv) potentially incorrect assumptions by management
with respect to the financial effect of current strategic
decisions, the effect of current sales trends on fiscal year 2018
results and the benefit of our relationship with News America; (v)
termination of all or a major portion of, or a significant change
in terms and conditions of, a material agreement with a consumer
packaged goods manufacturer, retailer, or News America; (vi) other
economic, business, market, financial, competitive and/or
regulatory factors affecting the Company’s business
generally; (vii) our ability to successfully implement our new IT
operating infrastructure; and (viii) our ability to attract and
retain highly qualified managerial, operational and sales
personnel. Our risks and uncertainties also include, but are not
limited to, the risks presented in our
Annual Report on Form 10-K for the year ended December 31,
2017, any additional risks presented in our Quarterly Reports on
Form 10-Q and our Current Reports on Form 8-K. We undertake no
obligation (and expressly disclaim any such obligation) to update
forward-looking statements made in this Form 10-Q to reflect events
or circumstances after the date of this Form 10-Q or to update
reasons why actual results would differ from those anticipated in
any such forward-looking statements, other than as required by
law.
Item 3. Quantitative and Qualitative
Disclosures about Market Risk
Not
applicable.
Item 4. Controls and
Procedures
(a)
Evaluation of Disclosure Controls and Procedures
The
Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s
principal executive officer and principal financial officer, of the
effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this
report, pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Company’s principal executive officer and
principal financial officer concluded that the Company’s
disclosure controls and procedures were effective as of the end of
the period covered by this report. Disclosure controls and
procedures ensure that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and are
designed to ensure that information required to be disclosed by us
in these reports is accumulated and communicated to our management,
including our principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding
disclosures.
(b)
Changes in Internal Control Over Financial Reporting
Effective January 1, 2018, we implemented ASU
2014-09 Revenue from Contracts with
Customers (Topic 606). Although
the adoption of the new revenue standard had no significant impact
on our results of operations, cash flows, or financial position, we
did implement changes to our controls related to revenue. These
included the development of new policies based on the five-step
model provided in the new revenue standard, enhanced contract
review requirements, and other ongoing monitoring activities. These
controls were designed to provide assurance at a reasonable level
of the fair presentation of our financial statements and related
disclosures. There was no other change in our internal control over
financial reporting during our most recently completed fiscal
quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting.
PART II. OTHER INFORMATION
Item
1.
Legal Proceedings
None.
We
described the most significant risk factors applicable to the
Company in Part I, Item 1A “Risk Factors” of our Annual
Report on Form 10-K for the year ended December 31, 2017. We
believe there have been no material changes from the risk factors
disclosed in that Form 10-K.
Item
2.
Unregistered Sales of Equity Securities and Use of
Proceeds
On
April 5, 2018, the Board of Directors authorized the repurchase of
up to $3,000,000 of the Company’s common stock on or before
March 31, 2020. The plan allows the repurchases to be made in open
market or privately negotiated transactions. The plan does not
obligate the Company to repurchase any particular number of shares,
and may be suspended at any time at the Company’s
discretion.
Our
share repurchase activity for the three months ended June 30, 2018,
was as follows:
Issuer Purchases of Equity Securities
|
|
|
|
|
|
|
Period
|
Total number of shares
purchased
|
Average price paid per
share
|
Total number of shares purchased as
part of publicly announced plans or
programs
|
Maximum number (or approximate
dollar value) of shars that may yet be purchased under the plans or
programs
|
|
April
1–30, 2018
|
–
|
–
|
–
|
$3,000,000
|
|
May
1–31, 2018
|
33,466(a)
|
$1.84
|
24,576
|
$2,954,451
|
|
June
1–30, 2018
|
78,187
|
1.77
|
102,763
|
$2,816,261
|
|
Total
|
111,653
|
$1.81
|
|
|
|
|
|
|
|
|
(a)
Includes 8,890
shares surrendered to the Company to satisfy minimum statutory
federal, state, and local tax withholding obligations arising from
the vesting of a restricted stock award. The shares were forfeit
pursuant to the participant’s instructions in accordance with
the terms of the applicable award agreement and the 2013 Plan and
are not part of any publicly announced stock repurchase
program.
Item
3.
Defaults upon Senior Securities
None.
Item
4.
Mine Safety Disclosures
Not
applicable.
Item
5.
Other Information
None.
Unless
otherwise indicated, all documents incorporated herein by reference
to a document filed with the SEC pursuant to the Exchange Act are
located under SEC file number 001-13471.
|
|
Description
|
Method of
Filing
|
|
|
|
|
|
3.1
|
|
Incorporated by
Reference
|
|
|
|
3.2
|
|
Incorporated by
Reference
|
|
|
|
10.1
|
|
Incorporated by
Reference
|
|
|
|
31.1
|
|
Filed
Electronically
|
|
|
|
31.2
|
|
Filed
Electronically
|
|
|
|
32
|
|
Furnished
Electronically
|
|
|
|
101
|
The following
materials from Insignia Systems, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL
(eXtensible Business Reporting Language): (i) Condensed Balance
Sheets; (ii) Condensed Statements of Operations; (iii) Condensed
Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
Filed
Electronically
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
|
INSIGNIA
SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
|
|
Dated: August
7, 2018
|
/s/
Kristine A. Glancy
|
|
|
|
Kristine
A. Glancy
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
(on
behalf of registrant)
|
|
|
|
|
|
|
Dated: August
7, 2018
|
/s/
Jeffrey A. Jagerson
|
|
|
|
Jeffrey
A. Jagerson
|
|
|
|
Chief
Financial Officer and Treasurer
|
|
|
|
(principal
financial and accounting officer)
|
|
EXHIBIT INDEX
|
|
Description
|
Method of
Filing
|
|
|
|
|
|
3.1
|
|
Incorporated by
Reference
|
|
|
|
3.2
|
|
Incorporated by
Reference
|
|
|
|
10.1
|
|
Incorporated by
Reference
|
|
|
|
31.1
|
|
Filed
Electronically
|
|
|
|
31.2
|
|
Filed
Electronically
|
|
|
|
32
|
|
Furnished
Electronically
|
|
|
|
101
|
The following
materials from Insignia Systems, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL
(eXtensible Business Reporting Language): (i) Condensed Balance
Sheets; (ii) Condensed Statements of Operations; (iii) Condensed
Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
Filed
Electronically
|