Blueprint
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_______________________________
FORM
10-Q/A
(Amendment No.
1)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended June 30, 2017
or
[
]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the
transition period from ___________________ to
_________________
Commission
File Number: 1-13471
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INSIGNIA SYSTEMS,
INC.
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(Exact
name of registrant as specified in its charter)
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Minnesota
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41-1656308
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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8799 Brooklyn Blvd., Minneapolis, MN 55445
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(Address
of principal executive offices; zip code)
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(763) 392-6200
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(Registrant’s
telephone number, including area code)
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Indicate by check
mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
Yes
☒ No ☐
Indicate by check
mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes
☒ No ☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and "emerging
growth company" in Rule 12b-2 of the Exchange Act. (Check
one):
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☒
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Emerging
growth company
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☐
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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
3, 2017 was 11,834,615.
EXPLANATORY NOTE
We filed our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017 with the Securities and Exchange Commission
(“SEC”) on August 4, 2017 (the “Original
Filing”). We are filing this Amendment No. 1 on Form 10-Q/A
(this “Amendment”) for the sole purpose of including a
corrected Exhibit 32 certification in order to correct an
inadvertent reference to a prior quarterly period.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934,
as amended, and guidance provided by the staff of the SEC, this
amendment contains the complete text of the Original Filing. We
have not modified or updated other disclosures presented in the
Original Filing. This Amendment does not amend, update or change
the financial statements or any other disclosures in the Original
Filing and does not reflect events occurring after the filing of
the Original Filing. This Amendment should be read in conjunction
with our other filings with the SEC subsequent to the filing of the
Original Filing.
Insignia Systems, Inc.
TABLE OF CONTENTS
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PART I.
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FINANCIAL INFORMATION
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Page
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Item 1.
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Financial Statements
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Condensed Balance Sheets – June 30, 2017 (unaudited) and
December 31, 2016
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1
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Statements of Operations and Comprehensive Loss – Three and
six months ended June 30, 2017 and 2016 (unaudited)
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2
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Statements of Cash Flows – Six months ended June 30, 2017 and
2016 (unaudited)
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3
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Notes to Financial Statements – June 30, 2017
(unaudited)
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4
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Item 2.
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Management's Discussion and Analysis of Financial Condition and
Results
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8
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of Operations
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Item 3.
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Quantitative and Qualitative Disclosures about Market
Risk
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13
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Item 4.
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Controls and Procedures
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13
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PART II.
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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14
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Item 1A.
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Risk Factors
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14
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Item 2.
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Unregistered Sales of Equity Securities and Use of
Proceeds
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14
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Item 3.
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Defaults upon Senior Securities
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14
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Item 4.
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Mine Safety Disclosures
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14
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Item 5.
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Other Information
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14
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Item 6.
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Exhibits
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15
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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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$3,200,000
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$12,267,000
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Accounts
receivable, net
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9,839,000
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9,879,000
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Inventories
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345,000
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325,000
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Income
tax receivable
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424,000
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775,000
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Prepaid
expenses and other
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607,000
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689,000
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Total
Current Assets
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14,415,000
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23,935,000
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Other Assets:
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Property
and equipment, net
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2,706,000
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2,430,000
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Other,
net
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1,631,000
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1,863,000
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Total Assets
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$18,752,000
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$28,228,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
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Accounts
payable:
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Cash
dividend declared ($0.70 per share)
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$—
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$8,233,000
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Other
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2,375,000
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2,530,000
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Accrued
liabilities:
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Compensation
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766,000
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762,000
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Other
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450,000
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498,000
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Deferred
revenue
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696,000
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62,000
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Total
Current Liabilities
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4,287,000
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12,085,000
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Long-Term Liabilities:
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Deferred
tax liabilities
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—
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205,000
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Accrued
income taxes
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568,000
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554,000
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Deferred
rent
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247,000
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275,000
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Total
Long-Term Liabilities
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815,000
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1,034,000
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Commitments and Contingencies
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—
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—
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Shareholders' Equity:
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Common
stock, par value $.01:
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Authorized
shares - 40,000,000
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Issued
shares - 11,943,000 at June 30, 2017 and 11,866,000 at December 31,
2016
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Outstanding
shares - 11,746,000 at June 30, 2017 and 11,661,000 at December 31,
2016
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117,000
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117,000
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Additional
paid-in capital
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15,258,000
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14,992,000
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Accumulated
deficit
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( 1,725,000)
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—
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Total
Shareholders' Equity
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13,650,000
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15,109,000
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Total Liabilities and Shareholders' Equity
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$18,752,000
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$28,228,000
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See accompanying notes to financial statements.
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STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
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Services
revenues
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$5,512,000
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$6,163,000
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$9,816,000
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$11,780,000
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Products
revenues
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337,000
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454,000
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800,000
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915,000
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Total
Net Sales
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5,849,000
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6,617,000
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10,616,000
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12,695,000
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Cost
of services
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4,105,000
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4,199,000
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7,924,000
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7,982,000
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Cost
of goods sold
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246,000
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302,000
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565,000
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630,000
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Total
Cost of Sales
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4,351,000
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4,501,000
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8,489,000
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8,612,000
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Gross
Profit
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1,498,000
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2,116,000
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2,127,000
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4,083,000
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Operating Expenses:
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Selling
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831,000
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1,036,000
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1,719,000
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2,144,000
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Marketing
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427,000
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257,000
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853,000
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527,000
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General
and administrative
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814,000
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1,110,000
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1,867,000
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2,270,000
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Total
Operating Expenses
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2,072,000
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2,403,000
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4,439,000
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4,941,000
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Operating
Loss
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( 574,000)
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( 287,000)
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( 2,312,000)
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( 858,000)
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Other
income
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2,000
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15,000
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5,000
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32,000
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Loss
Before Taxes
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( 572,000)
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( 272,000)
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( 2,307,000)
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( 826,000)
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Income
tax benefit
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( 38,000)
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( 185,000)
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( 582,000)
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( 417,000)
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Net
Loss
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$( 534,000)
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$( 87,000)
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$( 1,725,000)
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$( 409,000)
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Other comprehensive loss, net of tax:
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Unrealized
gain on available for sale securities
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—
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2,000
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—
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11,000
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Comprehensive
Loss
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$( 534,000)
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$( 85,000)
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$( 1,725,000)
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$( 398,000)
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Net
loss per share:
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Basic
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$( 0.05)
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$( 0.01)
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$( 0.15)
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$( 0.04)
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Diluted
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$( 0.05)
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$( 0.01)
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$( 0.15)
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$( 0.04)
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Shares
used in calculation of net
loss
per share:
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Basic
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11,674,000
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11,612,000
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11,667,000
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11,618,000
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Diluted
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11,674,000
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11,612,000
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11,667,000
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11,618,000
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See accompanying notes to financial statements.
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Six Months Ended June 30
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Operating Activities:
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Net
loss
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$( 1,725,000)
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$( 409,000)
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Adjustments
to reconcile net loss to
net cash used in operating activities:
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Depreciation
and amortization
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665,000
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785,000
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Changes
in allowance for doubtful accounts
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26,000
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19,000
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Deferred
income tax expense
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( 205,000)
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—
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Stock-based
compensation expense
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274,000
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108,000
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Changes
in operating assets and liabilities:
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Accounts
receivable
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14,000
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1,589,000
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Inventories
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( 20,000)
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( 179,000)
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Income
tax receivable
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351,000
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( 464,000)
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Prepaid
expenses and other
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82,000
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( 36,000)
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Accounts
payable
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( 276,000)
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( 973,000)
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Accrued
liabilities
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( 72,000)
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( 947,000)
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Income
tax payable
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14,000
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( 184,000)
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Deferred
revenue
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634,000
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232,000
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Net
cash used in operating activities
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( 238,000)
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( 459,000)
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Investing Activities:
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Purchases
of property and equipment
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( 644,000)
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( 393,000)
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Proceeds
from sale or maturity of investments
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—
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3,288,000
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Net
cash provided by (used in) investing activities
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( 644,000)
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2,895,000
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Financing Activities:
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Cash
dividends paid ($0.70 per share)
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( 8,177,000)
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—
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Proceeds
from issuance of common stock, net
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( 8,000)
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60,000
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Repurchase
of common stock, net
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—
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( 247,000)
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Net
cash used in financing activities
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( 8,185,000)
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( 187,000)
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Increase
(decrease) in cash and cash equivalents
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( 9,067,000)
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2,249,000
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Cash
and cash equivalents at beginning of period
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12,267,000
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8,523,000
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Cash
and cash equivalents at end of period
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$3,200,000
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$10,772,000
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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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$2,000
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$238,000
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Non-cash investing and financing activities:
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Purchases
of property and equipment included in accounts payable
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$65,000
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$—
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See accompanying notes to financial statements.
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Insignia Systems, Inc.
Notes To Financial Statements
(Unaudited)
1.
Summary of Significant Accounting Policies.
Description
of Business. Insignia Systems,
Inc. (the “Company”) markets in-store advertising
products, programs and services to retailers and consumer packaged
goods manufacturers. The Company operates in a single reportable
segment. The Company’s primary products include the Insignia
Point-of-Purchase Services (POPS®)
in-store marketing program, thermal sign card supplies for the
Company’s Impulse Retail System, and laser printable
cardstock and label supplies.
Basis of
Presentation. Financial statements for the interim periods
included herein are unaudited; however, they contain all
adjustments, including normal recurring accruals, which in the
opinion of management, are necessary to present fairly the
financial position of the Company at June 30, 2017, its results of
operations for the three and six months ended June 30, 2017 and
2016, and its cash flows for the six months ended June 30, 2017 and
2016. Results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full
year.
The
financial statements do not include certain footnote disclosures
and financial information normally included in financial statements
prepared in accordance with accounting principles generally
accepted in the United States of America and, therefore, should be
read in conjunction with the financial statements and notes
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2016.
The
Summary of Significant Accounting Policies in the Company’s
2016 Annual Report on Form 10-K describes the Company’s
accounting policies.
Inventories.
Inventories are primarily comprised of sign cards and roll stock.
Inventory is valued at the lower of cost or market using the
first-in, first-out (FIFO) method, and consisted of the following
as of the dates indicated:
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December
31,
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Raw
materials
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$79,000
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$123,000
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Work-in-process
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24,000
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27,000
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Finished
goods
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242,000
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175,000
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$345,000
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$325,000
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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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$4,000,000
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$4,000,000
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Office
furniture and fixtures
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322,000
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322,000
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Computer
equipment and software
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1,316,000
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1,301,000
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Leasehold
improvements
|
577,000
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577,000
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Construction
in-progress
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1,177,000
|
523,000
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7,392,000
|
6,723,000
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|
Accumulated
depreciation and amortization
|
( 4,686,000)
|
( 4,293,000)
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Net
Property and Equipment
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$2,706,000
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$2,430,000
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Depreciation
expense was approximately $214,000 and $433,000 in the three and
six months ended June 30, 2017, respectively, and $196,000 and
$390,000 in the three and six months ended June 30, 2016,
respectively.
Stock-Based
Compensation. The Company measures and recognizes
compensation expense for all stock-based awards at fair value using
the Black-Scholes option pricing model to determine the weighted
average fair value of options and employee stock purchase plan
rights. The Company recognizes stock-based compensation expense on
a graded-attribution method
over the requisite service period of the award.
In November 2016, our Board of Directors amended
the 2003 Incentive Stock Option Plan (the “2003 Plan”)
and the 2013 Omnibus Stock and Incentive Plan (the “2013
Plan”) to permit equitable adjustments to outstanding awards
in the event of a special dividend. In March 2017, the Board
of Directors approved the modification of all outstanding stock
option awards to provide option holders with substantially
equivalent economic value after the effect of the dividend. The
modification resulted in the issuance of options to purchase up to
150,476 additional shares. Total stock-based compensation expense
for the modifications was approximately $79,000, of which $78,000
was recorded during the six months ended June 30,
2017.
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, 2016, the Company issued options to purchase an aggregate
of 20,000 shares of common stock under its 2013 Omnibus Stock and
Incentive Plan, as amended, with a weighted average exercise price
of $2.90. The Company estimated the fair value of these awards
using the following weighted average assumptions: expected life of
2.5 years, expected volatility of 41%, dividend yield of 0% and
risk-free interest rate of 1.00%.
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. During
the six months ended June 30, 2016, the Company issued 100,000
shares of restricted stock under the 2013 Plan. The shares
underlying the awards were assigned a value of $2.33 per share,
based on the stock price on the date of the grant, and are
scheduled to vest over five years.
The
Company estimated the fair value of stock-based awards granted
during the six months ended June 30, 2017, under the
Company’s employee stock purchase plan using the following
weighted average assumptions: expected life of 1.0 years, expected
volatility of 51%, dividend yield of 0% and risk-free interest rate
of 0.89%.
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. During May and June
2016, members of the Board of Directors received grants totaling
54,036 fully vested shares of common stock pursuant to the 2013
Plan. The shares were assigned a weighted average value of $2.19
per share, based on the stock prices on the applicable grant dates,
for a total value of $119,000, of which $109,000 is included in
stock-based compensation expense for the six months ended June 30,
2016 and $10,000 was accrued for and expensed in 2015.
Total
stock-based compensation expense recorded for the three and six
months ended June 30, 2017 was $127,000 and $274,000, respectively,
and for the three and six months ended June 30, 2016 was $82,000
and $108,000, respectively.
During
the three and six months ended June 30, 2017, there were no options
exercised. During each of the three and six months ended June 30,
2016, there were approximately 61,000 shares issued pursuant to
stock option exercises, for which the Company received proceeds of
$16,000. A portion of the stock option exercises in the three and
six months ended June 30, 2016 were completed on a cashless
basis.
Net Loss
per Share. Basic net loss per share is computed by dividing
net loss by the weighted average shares outstanding and excludes
any potential dilutive effects of stock options and restricted
stock units and awards. Diluted net loss per share gives effect to
all diluted potential common shares outstanding during the
period.
Due to
the net loss incurred during the three and six months ended June
30, 2017 and 2016, all stock awards were anti-dilutive for both
periods.
Weighted
average common shares outstanding for the three and six months
ended June 30, 2017 and 2016 were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
for basic net loss per share - weighted average shares
|
11,674,000
|
11,612,000
|
11,667,000
|
11,618,000
|
|
Effect
of dilutive securities:
|
|
|
|
|
|
Stock
options and restricted stock units
|
—
|
—
|
—
|
—
|
|
Denominator
for diluted net loss per share - weighted average
shares
|
11,674,000
|
11,612,000
|
11,667,000
|
11,618,000
|
Dividends.
On November 28, 2016, the Board
declared a one-time special dividend of $0.70 per share to
shareholders of record as of December 16, 2016 of $8,233,000, of
which $8,163,000 was paid on January 6, 2017, and an additional
$14,000 was paid on May 15, 2017.
2.
Selling Arrangement. In 2011, the
Company paid News America Marketing In-Store, LLC (“News
America”) $4,000,000 in exchange for a 10-year arrangement to
sell signs with price into News America’s network of
retailers as News America’s exclusive agent. The $4,000,000
is being amortized on a straight-line basis over the 10-year term
of the arrangement. Amortization expense, which was $100,000 and
$200,000 in both of the three and six months ended June 30, 2017
and 2016, respectfully, and is expected to be $400,000 per year
over the next three years and $117,000 in the year ending December
31, 2021, is recorded within cost of services in the
Company’s statements of operations and comprehensive loss.
The net carrying amount of the selling arrangement is recorded
within other assets on the Company’s condensed balance
sheet.
3.
Income Taxes. For the three and 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. For the three and six months ended June 30,
2016, the Company recorded income tax benefit of $185,000 and
$417,000, or 68.0% and 50.5% of loss before taxes, respectively.
The income tax benefit for the three and six months ended June 30,
2017 and 2016 is comprised of federal and state taxes. The primary
differences between the Company’s June 30, 2017 and 2016
effective tax rates and the statutory federal rate are expenses
related to stock-based compensation, nondeductible meals and
entertainment and for the three and six months ended June 30, 2017,
a valuation allowance was recognized 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.
As a
result of significant losses in 2016 and through June 2017, as well
as the current market conditions and their impact on the
Company’s future outlook, management has reviewed its
deferred tax assets and concluded that the uncertainties related to
the realization of its assets have become unfavorable. As of June
30, 2017, the Company had net deferred tax assets of approximately
$192,000 which is comprised of temporary differences, including
Federal and state net operating losses to be carried forward.
Management has considered the positive and negative evidence for
the potential utilization of the net deferred tax assets and has
concluded that it is more likely than not that the Company will not
realize the full amount of net deferred tax assets. Accordingly,
the Company has recorded a valuation allowance of $192,000 against
these deferred tax assets as of June 30, 2017.
As of
June 30, 2017 and December 31, 2016, the Company had unrecognized
tax benefits totaling $568,000 and $554,000, respectively,
including interest, which relates to state nexus issues. The amount
of the unrecognized tax benefits, if recognized, that would affect
the effective income tax rates of future periods is $568,000. 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 2017.
4.
Concentrations. During the six months
ended June 30, 2017, two customers accounted for 25% and 9%,
respectively, of the Company’s total net sales. During the
six months ended June 30, 2016, two customers accounted for 36% and
10% respectively, of the Company’s total net sales. At June
30, 2017 and December 31, 2016, two customers accounted for 44% and
45% of the Company’s total accounts receivable,
respectively.
Although there are
a number of customers that the Company sells to, the loss of a
major customer could adversely affect operating results.
Additionally, the loss of a major retailer from the Company’s
retail network could adversely affect operating
results.
5.
Share Repurchases. On October 30,
2015, the Board of Directors authorized the repurchase of up to
$5,000,000 of the Company’s common stock on or before October
30, 2017. The 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 and six months ended June 30, 2017, there was no share
repurchase activity. As of June 30, 2017, the approximate dollar
value of shares that may yet be purchased by the Company under the
plan was $4,676,000.
6.
Recently Issued Accounting
Pronouncements. In May 2014, the Financial Accounting
Standards Board (FASB) issued guidance creating Accounting
Standards Codification (ASC) Section 606, “Revenue from
Contracts with Customers”, which establishes a comprehensive
new model for the recognition of revenue from contracts with
customers. This model is based on the core principle that revenue
should be recognized to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those
goods or services. The Company has performed a review of the
requirements of the new guidance and has identified which of its
revenue streams will be within the scope of ASC 606. The Company is
working through an adoption plan which includes a review of
customer contracts, applying the five-step model of the new
standard to the customer contracts and comparing the results to our
current accounting. As part of this, we are assessing changes that
might be necessary to information technology systems, processes,
and internal controls to capture new data and address changes in
financial reporting. As part of this, we are expecting to utilize
the modified retrospective transition method of
adoption. Effective January 1, 2018, the Company will be revising
its revenue recognition accounting policy and expanding revenue
disclosures to reflect the requirements of ASC 606, which include
disclosures related to the nature, amount, timing and uncertainty
of revenue and cash flows arising from contracts with customers.
Additionally, qualitative and quantitative disclosures are required
about customer contracts,
significant
judgements and assets recognized from the costs to obtain or
fulfill a contract. 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.
In
February 2016, the FASB issued ASU 2016-2, Leases, under which lessees will
recognize most leases on the balance sheet. This will generally
increase reported assets and liabilities. For public entities, this
ASU is effective for annual and interim periods in fiscal years
beginning after December 15, 2018. ASU 2016-2 mandates a modified
retrospective transition method for all entities. The Company is in
the process of determining the impact that the updated accounting
guidance will have on our financial statements.
In March 2016, the FASB issued ASU
2016-9, Compensation – Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, which
simplifies several aspects of the accounting for share-based
payment transactions, including the income tax consequences,
classification of awards as either equity or liabilities, and
classification on the statement of cash flows. For public entities,
this ASU is effective for annual periods beginning after December
15, 2016, and interim periods within those annual periods. The
Company adopted the guidance in the first quarter of 2017. The
adoption of the guidance did not have a material impact on our
financial statements.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
The
following discussion should be read in conjunction with the
Company’s financial statements and related notes. This
discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from
those anticipated due to various factors discussed under
“Cautionary Statement Regarding Forward-Looking
Statements” and elsewhere in this Quarterly Report on Form
10-Q and the "Risk Factors" described in Item 1A of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2016,
our Current Reports on Form 8-K and our other SEC
filings.
Company Overview
Insignia
Systems, Inc. “Insignia,” “we,”
“us,” “our” or the “Company”)
is a developer and marketer of innovative in-store products,
programs and services that help consumer packaged goods
(“CPG”) manufacturers and retail partners drive sales
at the point of purchase. The Company was incorporated in 1990.
Since 1998, the Company has focused on managing a retail network,
made up of approximately 22,000 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 is the Point-Of-Purchase Services (POPS®) in-store
marketing program. Insignia POPS program is a national,
account-specific, shelf-edge advertising and promotional tactic.
Internal testing has indicated the program delivers incremental
sales for the featured brand. The program allows manufacturers to
deliver vital product information to consumers at the
point-of-purchase, and to leverage the local retailer brand and
store-specific prices to provide a unique “call to
action” that draws attention to the featured brand and
triggers a purchase decision. CPG customers benefit from
Insignia’s nimble operational capabilities, which include
short lead times, in-house graphic design capabilities,
post-program analytics, and micro-marketing capabilities such as
variable or bilingual messaging.
The
Company discontinued the sale of The Like MachineTM upon the expiration
of its distribution agreement on March 31, 2017. The Company did
not have significant sales of this offering. As part of its
strategic plan, the Company has several new products in development
and test markets.
2017 Business Overview
Summary of Financial Results
For the
quarter ended June 30, 2017, the Company generated revenues of
$5,849,000, as compared with revenues of $6,617,000 for the quarter
ended June 30, 2016. For the six months ended June 30, 2017, the
Company generated net sales of $10,616,000, as compared with net
sales of $12,695,000 in the six months ended June 30, 2016. Net
loss for the quarter ended June 30, 2017 was $534,000, as compared
to $87,000 for the quarter ended June 30, 2016. Net loss for the
six months ended June 30, 2017 was $1,725,000, as compared to
$409,000 for the six months ended June 30, 2016. 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, 2017, cash and cash equivalents
decreased $9,067,000 from $12,267,000 at December 31, 2016, to
$3,200,000 at June 30, 2017. The special dividend paid/distributed
on January 6, 2017 used cash of $8,177,000. The Company had no debt
as of June 30, 2017. The remaining uses of cash are further
explained in the Liquidity and Capital Resources section
below.
Results of Operations
The
following table sets forth, for the periods indicated, certain
items in the Company’s Statements of Operations and
Comprehensive Loss as a percentage of total net sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
Cost
of sales
|
74.4
|
68.0
|
80.0
|
67.8
|
|
Gross
profit
|
25.6
|
32.0
|
20.0
|
32.2
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
14.2
|
15.6
|
16.2
|
16.9
|
|
Marketing
|
7.3
|
3.9
|
8.0
|
4.2
|
|
General
and administrative
|
13.9
|
16.8
|
17.6
|
17.9
|
|
Total
operating expenses
|
35.4
|
36.3
|
41.8
|
39.0
|
|
Operating
loss
|
(9.8)
|
(4.3)
|
(21.8)
|
(6.8)
|
|
Other
income
|
0.0
|
0.2
|
0.0
|
0.3
|
|
Loss
before taxes
|
(9.8)
|
(4.1)
|
(21.8)
|
(6.5)
|
|
Income
tax benefit
|
(0.6)
|
(2.8)
|
(5.5)
|
(3.3)
|
|
Net
loss
|
(9.2) %
|
(1.3)%
|
(16.3)%
|
(3.2)%
|
Three Months and Six Months Ended June 30, 2017
Compared to Three Months and Six Months Ended June 30,
2016
Net Sales. Net sales for the three months ended June 30,
2017 decreased 11.6% to $5,849,000 compared to $6,617,000 for the
three months ended June 30, 2016. Net sales for the six months
ended June 30, 2017 decreased 16.4% to $10,616,000, compared to
$12,695,000 for the six months ended June 30, 2016.
Service
revenues for the three months ended June 30, 2017 decreased 10.6%
to $5,512,000 compared to $6,163,000 for the three months ended
June 30, 2016. The decrease was primarily due to a 7.6% decrease in
the number of signs placed, partially due to programming shifts
from second quarter to third quarter to support CPG new item
launches, and a 4.5% decrease in average price per sign, which was
the result of program and customer mix. Service revenues for the
six months ended June 30, 2017 decreased 16.7% to 9,816,000
compared to $11,780,000 for the six months ended June 30, 2016.
This decrease was primarily due to a 10.5% decrease in the number
of signs placed, the decrease was primarily due to the factors
described above in addition to the first quarter impact from two
customers who experienced significant budget cuts early in their
planning cycles and organizational structuring, and a 7.3% decrease
in average price per sign, which was a result of program and
customer mix.
Product
revenues for the three months ended June 30, 2017 decreased 25.8%
to $337,000 compared to $454,000 for the three months ended June
30, 2016. Product revenues for the six months ended June 30, 2017
decreased 12.6% to $800,000 compared to $915,000 for the six months
ended June 30, 2016. The decreases in
both periods were primarily due to lower sales of sign card
supplies due to lower customer demand.
Gross Profit. Gross profit for the three months
ended June 30, 2017 decreased 29.2% to $1,498,000, or 25.6% as a
percentage of net sales, compared to $2,116,000, or 32.0% as a
percentage of net sales, for the three months ended June 30, 2016.
Gross profit for the six months ended June 30, 2017 decreased 47.9%
to $2,127,000, or 20.0% as a percentage of net sales, compared to
$4,083,000, or 32.2% as a percentage of net sales, for the six
months ended June 30, 2016.
Service revenues:
Gross profit from our service revenues for the three months ended
June 30, 2017 decreased 28.4% to $1,407,000 compared to $1,964,000
for the three months ended June 30, 2016. The decrease was
primarily due to a decrease in sales, as our gross profit is highly dependent on sales
levels due to the relatively fixed nature of a portion of our
payments to retailers, combined with a decreased average
price per sign, and partially offset by decreased expense due to
the discontinued sale of The Like Machine. The Company is currently
undertaking actions to reduce the fixed portion of the cost to
place signs in our retailers. For the three months ended June
30, 2017, the Company incurred costs of approximately $50,000
associated with the development of its new IT operating
infrastructure compared to approximately $80,000 for the three
months ended June 30, 2016. For the six months ended June 30, 2017,
the Company incurred costs of approximately $150,000 associated
with the development of its new IT operating infrastructure
compared to approximately $175,000 for the six months ended June
30, 2016. The project is expected to be substantially completed
during the fourth quarter of 2017, with estimated incremental
expense of $150,000 in the remainder of 2017. Gross profit from our
service revenues for the six months ended June 30, 2017 decreased
50.2% to $1,892,000 compared to $3,798,000 for the six months ended
June 30, 2016. The decrease was primarily due to the factors
described above.
Gross
profit as a percentage of service revenues for the three months
ended June 30, 2017 decreased to 25.5% compared to 31.9% for the
three months ended June 30, 2016. The decrease was primarily due to
the factors described above. Gross profit as a percentage of
service revenues for the six months ended June 30, 2017 decreased
to 19.3% compared to 32.2% for the six months ended June 30, 2016.
The decrease was primarily due to the factors described
above.
Product revenues:
Gross profit from our product revenues for the three months ended
June 30, 2017 decreased 40.1% to $91,000 compared to $152,000 for
the three months ended June 30, 2016. The decrease was primarily
due to a decrease in
sales, partially offset by decreased facilities, production, and
tooling costs. Gross profit from our product revenues for the six
months ended June 30, 2017 decreased 17.5% to $235,000 compared to
$285,000 for the six months ended June 30, 2016. The decrease was
primarily due to a decrease in sales, partially offset by decreased
facilities, production, and tooling costs.
Gross
profit as a percentage of product revenues was 27.0% for the three
months ended June 30, 2017 compared to 33.5% for the three months
ended June 30, 2016. The decrease was primarily due to the factors
described above. Gross profit as a percentage of product revenues
was 29.4% for the six months ended June 30, 2017 compared to 31.1%
for the six months ended June 30, 2016. The decrease was primarily
due to the factors described above.
Operating Expenses
Selling. Selling expenses for the three months ended June
30, 2017 decreased 19.8% to $831,000 compared to $1,036,000 for the
three months ended June 30, 2016. The decrease was primarily due to
lower variable compensation related to lower sales, fewer sales
personnel and decreased staff related
expenses. Selling expenses for the six months ended June 30,
2017 decreased 19.8% to $1,719,000 compared to $2,144,000 for the
six months ended June 30, 2016. The decrease was primarily due to
lower variable compensation related to lower sales, fewer sales
personnel and decreased staff related
expenses.
Selling
expenses as a percentage of net sales decreased to 14.2% for the
three months ended June 30, 2017 compared to 15.6% for the three
months ended June 30, 2016. The decrease was primarily due to the
factors described above, partially offset by decreased sales.
Selling expenses as a percentage of net sales decreased to 16.2%
for the six months ended June 30, 2017 compared to 16.9% for the
six months ended June 30, 2016. The decrease was primarily due to
the factors described above.
Marketing. Marketing expense for the three months ended June
30, 2017 increased 66.1% to $427,000 compared to $257,000 for the
three months ended June 30, 2016. Increased marketing expenses were
primarily due to increased staffing and staff related costs,
partially due to the filling of previously open positions.
Marketing expense for the six months ended June 30, 2017 increased
61.9% to $853,000 compared to $527,000 for the six months ended
June 30, 2016. The increase was primarily due to the factors
described above.
Marketing
expense as a percentage of net sales increased to 7.3% for the
three months ended June 30, 2017 compared to 3.9% for the three
months ended June 30, 2016. The increase was primarily due to the
factors described above, combined with decreased sales. Marketing
expense as a percentage of net sales increased to 8.0% for the six
months ended June 30, 2017 compared to 4.2% for the six months
ended June 30, 2016. The increase was primarily due to the factors
described above, combined with decreased sales.
General and administrative. General and administrative
expenses for the three months ended June 30, 2017 decreased 26.7%
to $814,000 compared to $1,110,000 for the three months ended June
30, 2016. The decrease was primarily due to decreased legal fees,
and other consulting fees. General and administrative expenses for
the six months ended June 30, 2017 decreased 17.8% to $1,867,000
compared to $2,270,000 for the six months ended June 30, 2016. The
decrease was primarily due to the factors described above, as well
as, decreases in executive recruiting and onboarding costs,
partially offset by increased employee compensation
costs.
General
and administrative expenses as a percentage of net sales decreased
to 13.9% for the three months ended June 30, 2017 compared to 16.8%
for the three months ended June 30, 2016. The decrease was
primarily due to the factors described above, partially offset by
decreased sales. General and administrative expenses as a
percentage of net sales decreased to 17.6% for the six months ended
June 30, 2017 compared to 17.9% for the six months ended June 30,
2016. The decrease was primarily due to the factors described
above, partially offset by decreased sales.
Other Income. Other income for the three months ended June
30, 2017 was $2,000 compared to $15,000 for the three months ended
June 30, 2016. Other income for the six months ended June 30, 2017
was $5,000 compared to $32,000 for the six months ended June 30,
2016. The decrease was primarily due to lower average cash, cash
equivalent, and available-for-sale investment balances due to the
payment of the special dividend 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, 2017, the Company recorded
income tax benefit of $38,000 and $582,000, or 6.6% and 25.2% of
loss before taxes, respectively. For the three and six months ended
June 30, 2016, the Company recorded income tax benefit of $185,000
and $417,000, or 68.0% and 50.5% of loss before taxes,
respectively. The income tax benefit for the three and six months
ended June 30, 2017 and 2016 is comprised of federal and state
taxes. The primary differences between the Company’s June 30,
2017 and 2016 effective tax rates and the statutory federal rate
are expenses related to stock-based compensation, nondeductible
meals and entertainment and for the three and six months ended June
30, 2017, a valuation allowance was recognized 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.
As a
result of significant losses in 2016 and through June 2017, as well
as the current market conditions and their impact on the
Company’s future outlook, management has reviewed its
deferred tax assets and concluded that the uncertainties related to
the realization of its assets have become unfavorable. As of June
30, 2017, the Company had net deferred tax assets of approximately
$192,000 which is comprised of temporary differences, including
Federal and state net operating losses to be carried forward.
Management has considered the positive and negative evidence for
the potential utilization of the net deferred tax assets and has
concluded that it is more likely than not that the Company will not
realize the full amount of net deferred tax assets. Accordingly,
the Company has recorded a valuation allowance of $192,000 against
these deferred tax assets as of June 30, 2017.
Net Loss. For the reasons stated above, net loss for the
three and six months ended June 30, 2017 was $534,000 and
$1,725,000, respectively, compared to $87,000 and $409,000,
respectively, for the three and six months ended June 30,
2016.
Other Comprehensive Income. Other comprehensive loss is
composed of unrealized gains, net of tax, from available-for-sale
investments.
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, 2017, working
capital was $10,128,000 compared to $11,850,000 at December 31,
2016. During the six months ended June 30, 2017, cash and cash
equivalents decreased $9,067,000 from $12,267,000 at December 31,
2016, to $3,200,000 at June 30, 2017. On November 28, 2016, the
Board declared a one-time special dividend of $0.70 per share to
shareholders of record as of December 16, 2016, of $8,233,000, of
which $8,163,000 was paid on January 6, 2017, and an additional $14,000 was paid on May 15,
2017.
Operating Activities: Net cash
used in operating activities during the six months ended June 30,
2017, was $238,000. Net loss of $1,725,000, plus non-cash
adjustments of $760,000 and changes in operating assets and
liabilities of $727,000 resulted in the $238,000 of cash used in
operating activities. The largest component of the change in
operating assets and liabilities was deferred revenue which
increased $634,000, which will fluctuate based on normal business
conditions. The non-cash adjustments consisted of depreciation and
amortization expense, changes in allowance for doubtful accounts,
deferred income tax benefits, and stock-based compensation expense.
In the normal course of business, our accounts receivable, accounts
payable, accrued liabilities and deferred revenue will fluctuate
depending on the level of revenues and related business activity,
as well as billing arrangements with customers and payment terms
with retailers.
Investing Activities: Net cash
used in investing activities during the six months ended June 30,
2017 was $644,000, which was related to the purchase of property
and equipment. These expenditures related primarily to the IT
operating infrastructure project, and were for hardware, purchased
software and capitalization of costs for internally developed
software. Additional capital costs for this project are expected to
be approximately $300,000 for the last six months of
2017.
Financing Activities: Net cash
used in financing activities during the six months ended June 30,
2017 was $8,185,000, which mainly related to the January 6, 2017
payment of the one-time special dividend of $0.70 per share
declared by the Board on November 28, 2016.
The
Company believes that based upon current business conditions and
plans, its existing cash balance and future cash generated from
operations will be sufficient for its cash requirements for at
least the next twelve months.
Critical Accounting Policies
The
discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments
that affect the reported amounts of assets and liabilities,
revenues and expenses, and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual
results may differ from these estimates under different assumptions
or conditions.
Our
significant accounting policies are described in Note 1 to the
annual financial statements as of and for the year ended December
31, 2016, included in our Form 10-K filed with the Securities and
Exchange Commission on March 7, 2017. The Company believes our most
critical accounting policies and estimates include the
following:
●
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 2017
results and the benefit of our relationship with News America; (v)
termination of all or a major portion of, or a significant change
in terms and conditions of, a material agreement with a consumer
packaged goods manufacturer, retailer, or News America; (vi) other
economic, business, market, financial, competitive and/or
regulatory factors affecting the Company’s business
generally; (vii) 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,
2016, any additional risks presented in our Quarterly Reports on
Form 10-Q and our Current Reports on Form 8-K. We undertake no
obligation (and expressly disclaim any such obligation) to update
forward-looking statements made in this Form 10-Q to reflect events
or circumstances after the date of this Form 10-Q or to update
reasons why actual results would differ from those anticipated in
any such forward-looking statements, other than as required by
law.
Item 3. Quantitative and
Qualitative Disclosures about Market Risk
Not
applicable.
Item 4. Controls and
Procedures
(a)
Evaluation of Disclosure Controls and Procedures
The
Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s
principal executive officer and principal financial officer, of the
effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this
report, pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Company’s principal executive officer and
principal financial officer concluded that the Company’s
disclosure controls and procedures were effective as of the end of
the period covered by this report. Disclosure controls and
procedures ensure that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and are
designed to ensure that information required to be disclosed by us
in these reports is accumulated and communicated to our management,
including our principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding
disclosures.
(b)
Changes in Internal Control Over Financial Reporting
There
was no change in our internal control over financial reporting that
occurred during the fiscal quarter covered by this report that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
PART II. OTHER INFORMATION
Item
1. Legal
Proceedings
None.
Item
1A. Risk Factors
We
described the most significant risk factors applicable to the
Company in Part I, Item 1A “Risk Factors” of our Annual
Report on Form 10-K for the year ended December 31, 2016. We
believe there have been no material changes from the risk factors
disclosed in that Form 10-K.
Item
2. Unregistered Sales of
Equity Securities and Use of Proceeds
On
October 30, 2015, the Board of Directors authorized the repurchase
of up to $5,000,000 of the Company’s common stock on or
before October 30, 2017. The 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. As of June 30, 2017, the approximate dollar value of
shares that may yet be purchased under the plan was
$4,676,049.
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 shares that may yet be
purchased under the plans or programs
|
|
April 1–30,
2017
|
–
|
–
|
–
|
$4,676,049
|
|
May 1–31,
2017
|
6,554(a)
|
$1.05
|
–
|
$4,676,049
|
|
June 1–30,
2017
|
–
|
–
|
–
|
$4,676,049
|
|
Total
|
6,554
|
$1.05
|
–
|
$4,676,049
|
(a)
Represents 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.
Item
6. Exhibits
Unless
otherwise indicated, all documents incorporated herein by reference
to a document filed with the SEC pursuant to the Exchange Act are
located under SEC file number 001-13471.
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
3.1
|
|
Composite
Articles of Incorporation of Registrant, as amended through
July 31, 2008 (incorporated by reference to Exhibit 3.1
to annual report on Form 10-K for the year ended December 31,
2015)
|
|
|
|
|
|
3.2
|
|
Composite
Bylaws of Registrant, as amended through December 5, 2015
(incorporated by reference to Exhibit 3.2 to annual report on
Form 10-K for the year ended December 31, 2015)
|
|
|
|
|
|
10.1*
|
|
Employment
Agreement with Jeff Jagerson, dated June 30, 2017 (incorporated by
reference to Exhibit 10.1 to current report on Form 8-K
filed June 30, 2017)
|
|
10.2*
|
|
Change
in Control Agreement with Jeff Jagerson, dated June 30, 2017
(incorporated by reference to Exhibit 10.2 to current report
on Form 8-K filed June 30, 2017)
|
|
31.1
|
|
Certification
of Principal Executive Officer
|
|
|
|
|
|
31.2
|
|
Certification
of Principal Financial and Accounting Officer
|
|
|
|
|
|
32
|
|
Section
1350 Certification
|
|
|
|
|
|
|
101
|
|
The
following materials from Insignia Systems, Inc.’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017, formatted
in XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Statements of Operations and Comprehensive
Loss; (iii) Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
|
*Management
compensatory contract or arrangement required to be included as an
exhibit to this quarterly report on Form 10-Q.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment to be signed on its
behalf by the undersigned thereunto duly authorized.
|
|
INSIGNIA
SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
|
|
Dated: August
14, 2017
|
/s/
Kristine A. Glancy
|
|
|
|
Kristine
A. Glancy
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
(on
behalf of registrant)
|
|
|
|
|
|
|
Dated: August
14, 2017
|
/s/
Jeffrey A. Jagerson
|
|
|
|
Jeffrey
A. Jagerson
|
|
|
|
Chief
Financial Officer and Treasurer
|
|
|
|
(principal
financial and accounting officer)
|
|
EXHIBIT INDEX
|
Exhibit
Number
|
|
Description
|
|
Method
of Filing
|
|
|
|
|
|
|
|
3.1
|
|
Composite
Articles of Incorporation of Registrant, as amended through
July 31, 2008
|
|
Incorporated
by Reference
|
|
|
|
|
|
|
|
3.2
|
|
Composite
Bylaws of Registrant, as amended through December 5,
2015
|
|
Incorporated
by Reference
|
|
10.1
|
|
Employment
Agreement with Jeff Jagerson, dated June 30, 2017 (incorporated by
reference to Exhibit 10.1 to current report on Form 8-K
filed June 30, 2017)
|
|
Incorporated
by Reference
|
|
10.2
|
|
Change
in Control Agreement with Jeff Jagerson, dated June 30, 2017
(incorporated by reference to Exhibit 10.2 to current report
on Form 8-K filed June 30, 2017)
|
|
Incorporated
by Reference
|
|
|
|
|
|
|
|
31.1
|
|
Certification
of Principal Executive Officer
|
|
Filed
Electronically
|
|
|
|
|
|
|
|
31.2
|
|
Certification
of Principal Financial and Accounting Officer
|
|
Filed
Electronically
|
|
|
|
|
|
|
|
32
|
|
Section
1350 Certification
|
|
Furnished
Electronically
|
|
|
|
|
|
|
|
101
|
|
The
following materials from Insignia Systems, Inc.’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017, formatted
in XBRL (eXtensible Business Reporting Language): (i) Condensed
Balance Sheets; (ii) Statements of Operations and Comprehensive
Loss; (iii) Statements of Cash Flows; and (iv) Notes to Financial
Statements.
|
|
Filed
Electronically
|