Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Basis of Accounting, Policy [Policy Text Block]

Basis of Accounting.

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and account balances have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. The Company’s significant estimates include its revenue recognition, allowance for doubtful accounts receivable, inventory valuation, valuation of long-lived assets, product performance accrual, income taxes payable, deferred income taxes, its assessment of uncertain tax positions and its valuation of stock-based compensation costs. Actual results could differ materially from these estimates.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Estimates.

Accounting Standards Codification (“ASC”)

820

Fair Value Measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC

820

classifies the inputs used to measure fair value into the following hierarchy:

Level 1:	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2:	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3:	Unobservable inputs for the asset or liability

The carrying values for cash, accounts receivable, income tax receivable, accounts payable, accrued liabilities, income taxes payable and other current assets and liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s money market funds is based on the balance of its money market funds as of

December

31,

2018,

which is a Level

input.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation and Transactions.

The Company’s international operations use the local currency as their functional currency, except for its Malaysian subsidiary whose functional currency is the U.S. dollar. Assets and liabilities of international operations are translated at period-end rates of exchange; revenues and expenses are translated at average rates of exchange. The resulting translation gains or losses are reflected in accumulated other comprehensive loss. Gains or losses resulting from foreign currency transactions are included in net loss.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents.

All highly-liquid investments with a maturity of

three

months or less at the date of purchase are considered to be cash equivalents. The Company deposits its cash balances with a limited number of banks. Cash balances in these accounts generally exceed government insured limits.

Revenue Recognition, Policy [Policy Text Block]

Recognition of Revenue and Accounts Receivable.

The Company recognizes revenue net of any sales returns and allowances when evidence of an arrangement exists, delivery of the product or service has occurred and title and risk of loss have passed to the customer, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured.

The Company recognizes revenue from the manufacture and sale of its encapsulants, which is the only contractual deliverable, either at the time of shipping or at the time the product is received at the customer’s port or dock, depending upon terms of the sale. The Company does

not

offer a general right of return on its products.

On isolated occasions, the Company has offered limited short-term performance warranties relating to its

encapsulants

not

causing module power loss

. The Company’s encapsulants are validated by long-term performance testing during product development prior to launch and during customer certification prior to mass production. The Company has operated its solar business since the

1970s

and over

GW of solar modules incorporating its encapsulants have been installed in the field with

reported module power performance issues caused by its encapsulants and

related warranty claims to-date. Based on this fact pattern, the Company has

not

accrued any warranty liability associated for this potential liability as its occurrence is deemed to be remote. If the Company were to ever receive a warranty claim for such matter, it would assess the need for a warranty accrual at that time.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for Doubtful Accounts.

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis and writes off accounts receivable after reasonable collection efforts have been made and collection is deemed uncollectible.

Inventory, Policy [Policy Text Block]

Inventories.

The Company’s inventories are stated at the lower of cost or market. The Company’s primary raw materials consist of resin, paper, packaging material and chemicals/additives. The Company’s finished goods inventories are typically made-to-order and possess a shelf life of

six

nine

months from the date of manufacture. Cost is determined on a

first

-in,

first

-out basis and includes both the costs of acquisition and the costs of manufacturing. These costs include direct material, direct labor and fixed and variable indirect manufacturing costs, including depreciation expense.

The Company will write down inventory to its net realizable value when it is probable that the inventory carrying cost is

not

fully recoverable through sale or other disposition. The Company’s write-down considers overall market conditions, customer inventory levels, legal or contractual provisions and age of the inventories.

The Company has reserves of

$10

and

$59

as of

December 31, 2018

and

2017,

respectively, a majority of which was related to excess raw material and expired finished goods inventory.

Property, Plant and Equipment, Policy [Policy Text Block]

Long-Lived Assets.

The Company’s long-lived assets consist of property, plant and equipment. Property, plant and equipment are recorded at cost and include expenditures for items that increase the useful lives of existing equipment. Maintenance and repairs are expensed as incurred. Property, plant and equipment accounts are relieved at cost, less related accumulated depreciation, when properties are disposed of or otherwise retired. Gains and losses from disposal of property, plant and equipment are included in net loss.

In accordance with ASC

360

-Property, Plant, and Equipment, the Company reviews the carrying value of its long-lived assets, including property, plant and equipment, for impairment when events or changes in circumstances indicate the carrying value of an asset

may

not

be recoverable. If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s fair value. Fair value is estimated based upon discounted future cash flows, appraisals or other reasonable estimates of fair market value.

Asset Retirement Obligation [Policy Text Block]

Asset Retirement Obligations.

The Company accounts for asset retirement obligations in accordance with ASC

410

-Asset Retirement and Environmental Obligations, which requires a company to recognize a liability for the fair value of obligations to retire tangible long-lived assets when there is a contractual obligation to incur such costs. The Company has recorded its asset retirement obligations relating to the cost of removing improvements from lease facilities at the end of the lease terms. The Company’s conditional asset retirement obligations are

not

material.

Lessee, Leases [Policy Text Block]

Leases.

The Company leases certain facilities and equipment used in its operations. The Company accounts for its leases under the provisions of ASC

840

-Leases, which requires that leases be evaluated and classified as operating or capital leases for financial reporting purposes. Operating lease expense is recorded on a straight-line basis over the lease term.

Income Tax, Policy [Policy Text Block]

Income Taxes.

The Company accounts for income taxes using the asset and liability method in accordance with ASC

740

-Income Taxes. Under this method, the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating loss and tax credit carryforwards. The Company estimates its deferred tax assets and liabilities using the enacted tax laws expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled, and will recognize the effect of a change in tax laws on deferred tax assets and liabilities in the results of its operations during the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets if it determines that it is more likely than

not

that some or all of the deferred tax assets will

not

be realized.

The Company operates in multiple taxing jurisdictions and is subject to the jurisdiction of a number of U.S. and non-U.S. tax authorities and to tax agreements and treaties among those authorities. Operations in these jurisdictions are taxed on various bases in accordance with jurisdictional regulations.

Tax benefits related to uncertain tax positions taken or expected to be taken on a tax return are recorded when such benefits meet a more likely than

not

threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the appropriate taxing authority has completed their examination even though the statute of limitations remains open or the statute of limitation expires. Interest and penalties related to uncertain tax positions are recognized as part of the Company’s provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized. See Note

16.

Factoring Arrangement [Policy Text Block]

Factoring Arrangement.

The Company has entered into a factoring agreement to sell, with recourse, certain European, U.S. and other foreign company-based receivables to Eurofactor Hispania S.A.U, who was later acquired by Credit Agricole Leasing & Factoring sucursal en España during the

first

quarter of

2017.

The Company receives funds from the factor for certain outstanding receivables for which the Company records a liability. Once the customer pays the factor directly for those receivables the Company clears the accounts receivable and the liability. As of

December 31, 2018

the Company has recorded

$374

as due to factoring on the consolidated balance sheets. See Note

13.

Guarantees, Indemnifications and Warranties Policies [Policy Text Block]

Product Performance Accrual.

The Company provides a short-term warranty that it has manufactured its products to the Company’s specifications. On limited occasions, the Company incurs costs to service its products in connection with specific product performance matters that do

not

meet the Company’s specifications. Anticipated future costs are recorded as part of cost of sales and accrued liabilities for specific product performance matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

On isolated occasions, the Company has offered limited short-term performance warranties relating to its

encapsulants

not

causing module power loss

1970s

and over

GW of solar modules incorporating its encapsulants have been installed in the field with

reported module power performance issues caused by its encapsulants and

related warranty claims to date. Based on this fact pattern, the Company has

not

Cost of Sales, Policy [Policy Text Block]

Cost of Sales.

The Company includes the cost of inventory sold and related costs for the distribution of its product in cost of sales. These costs include raw materials and other components, direct labor, product performance matters, manufacturing overhead, salaries and other personnel-related expenses, write-off of inventory, quality control, freight, insurance and depreciation. Shipping and handling costs are classified as a component of cost of sales. Customer payments for shipping and handling costs are recorded as a component of net sales.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

Selling, General and Administrative Expenses.

Selling, general and administrative expenses consist primarily of salaries, travel, commissions and other personnel-related expenses for employees engaged in sales, marketing and support of the Company’s products and services, trade shows and promotions. General and administrative expenses consist of expenses for the Company’s finance, administrative, information technology, compliance and human resource functions.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expense.

The Company’s research and development expense consists primarily of salaries and fringe benefit costs and the cost of materials and outside services used in its pre-commercialization process and development efforts. The Company records depreciation expense for equipment that is used specifically for research and development activities.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation.

In accordance with ASC

718

-Compensation-Stock Compensation, the Company recognizes the grant date fair value of stock-based awards granted to employees as compensation expense over the vesting period of the awards. See Note

16.

Earnings Per Share, Policy [Policy Text Block]

Loss Per Share.

The Company computes basic loss per common share in accordance with ASC

260

-Earnings Per Share. Under the provisions of ASC

260,

basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average common shares outstanding during the period. Diluted net loss per common share adjusts basic net loss per common share for the effects of stock options and restricted stock awards only in periods in which such effect is dilutive. See Note

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Loss.

Comprehensive loss consists of net loss and the effects on the consolidated financial statements of translating the financial statements of the Company’s international subsidiaries. Comprehensive loss is presented in the consolidated statements of comprehensive loss. The Company’s accumulated other comprehensive loss is presented as a component of equity in its consolidated balance sheets and consists of the cumulative amount of the Company’s foreign currency translation adjustments, net of tax.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements:

May

2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2014

09,

“Revenue from Contracts with Customers” (ASC

606

). This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. The provisions of this ASU are ultimately effective for interim and annual periods beginning after

December

15,

2017.

The standard shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. During

2016,

the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, and collectability.

The Company adopted the new revenue recognition standard (“ASC

606”

) on

January 1, 2018.

Results for reporting periods beginning after

January 1, 2018

are presented under ASC

606,

while prior period amounts are

not

adjusted and continue to be reported in accordance with ASC

605,

Revenue Recognition

. The application of the standard had

impact on the Company’s consolidated financial statements for any periods prior to

2018.

The adoption of ASC

606

represents a change in accounting principle to more closely align revenue recognition with the delivery of the Company’s products, licenses and services. ASC

606

requires an entity to evaluate revenue recognition by identifying a contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies a performance obligation.

Revenue is principally derived from the sale and licensing of highly engineered plastic sheet and film products. The Company receives specific purchase orders for the manufacture, sale and delivery of these products that identify the goods and/or services to be transferred, the price for those goods and other commercial terms of the order. The goods are generally purchased under EXW (or EX-Works) terms, meaning that the customer is responsible for arranging the shipping of the goods and title passes when the goods are picked up from the Company’s dock. Revenue is recognized upon the transfer of title, and there are

price concessions, volume discounts, rebates, refunds, credits, incentives, performance bonuses, royalties or other types of variable consideration.

In the specific case of the Equipment Purchase Agreement and a Technology License Agreement (the “Agreements”) signed on

January 16, 2018

for an aggregate transaction price of

$6,000,

the Company will purchase from a

third

party specialized equipment (the “Equipment”) for the production of

one

of the Company’s proprietary encapsulants (the “Encapsulant”), resell the Equipment to the customer, install the Equipment at a facility of the customer and train the customer’s personnel in the Equipment’s use. Under the license agreement, the Company has granted the customer the right to use the formula for the Encapsulant and certain of the Company’s production techniques to make or have made the Encapsulant for use in photovoltaic (PV) modules manufactured by the customer. For revenue recognition purposes, the Company defines the following

three

distinct major performance obligations of the Agreements and the corresponding transaction price allocated to those performance obligations:

•

Obligation

$1,750

- Price Report, Formula and Sample

•

Obligation

2,000

- Equipment, including delivery & installation (incl. training)

•

Obligation

$2,250

- License (perpetual)

Obligation

is considered to be separate and distinct from the other

two

obligations, in that the information provided under this obligation represents significant standalone value to the customer and the Company’s obligation to provide this information is separately identifiable from the other obligations in the agreements. Obligation

and Obligation

were also clearly identifiable, as defined by the Equipment Purchase Agreement (including delivery and installation by an agreed-upon date) and the license (“License”) granted pursuant to the Technology License Agreement (with an effective start date upon the receipt of an acceptance test payment).

The Company is applying a “cost-plus” approach to Obligation

and Obligation

As the Company had never before sold any type of license, had

established specific license pricing and had

knowledge of pricing for similar licenses, the Company is using the residual approach for Obligation

The License is perpetual, distinct and

not

combined with other goods and services, and is a right to use, rather than to access, functional intellectual property.

The Company also assessed whether it was acting in a principal or agent role in each performance obligation of the Agreements. In all obligations, the Company determined it was acting in the role of principal and therefore revenue is recognized on a gross basis.

As a result, the Company recognized

$1,750

in the quarter ended

March 31, 2018

upon the satisfaction of Obligation

its delivery of a price report, formula and sample.

There are

new accounting pronouncements that the Company believes

may

have a material impact on its consolidated financial statements.