Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Summary of Significant Accounting Policies

Description Of Business

Description of Business.Insignia (the “Company”) is a leading provider of in-store solutions to consumer-packaged goods (“CPG”) manufacturers, retailers, shopper marketing agencies and brokerages. The Company operates in a single reportable segment. The Company’s leadership and employees have extensive industry knowledge with direct experience in both CPG manufacturers and retailers. The Company provides marketing solutions to CPG manufacturers spanning from some of the largest multinationals to new and emerging brands. The Company’s primary solutions are merchandising solutions, on-pack solutions and signage.

Basis Of Presentation

Basis of Presentation.The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. They do not include all information and footnotes required by U.S. GAAP for complete financial statements. However, except as described herein, there has been no material change in the information disclosed in the notes to financial statements included in the Company’s financial statements as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2022 (the Form 10-K). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying condensed balance sheet as of December 31, 2021 has been derived from the audited balance sheet as of December 31, 2021 contained in the Form 10-K.

Cash And Cash Equivalents And Restricted Cash

Cash and Cash Equivalents and Restricted Cash.The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows:

	June 30,		December 31,
	2022		2021
Cash and cash equivalents	$	2,302,000	$	3,766,000
Restricted cash		85,000		85,000
Total cash, cash equivalents and restricted cash	$	2,387,000	$	3,851,000

Inventories

Inventories. Inventories are primarily comprised of sign cards and hardware. Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method.

Property And Equipment

Property and Equipment. Property and equipment consisted of the following as of the dates indicated:

	June 30,			December 31,
	2022			2021
Property and Equipment:
Production tooling, machinery and equipment	$	27,000		$	27,000
Office furniture and fixtures		95,000			95,000
Computer equipment and software		756,000			753,000
Leasehold improvements		19,000			19,000
Construction in-progress		16,000			4,000
		913,000			898,000
Accumulated depreciation and amortization		(816,000	)		(785,000	)
Net Property and Equipment	$	97,000		$	113,000

Depreciation expense was approximately $15,000 and $31,000 in the three and six months ended June 30, 2022, respectively, and was $11,000 and $32,000 in the three and six months ended June 30, 2021, respectively.

Stock-based Compensation

Stock-Based Compensation. The Company measures and recognizes compensation expense for all stock-based payments at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock as of the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and employee stock purchase plan rights. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

During the six-month periods ended June 30, 2022 and 2021 no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors in June 2021.

In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Equity Incentive Plan. The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000.  The shares vested on June 1, 2022.

Total stock-based compensation expense recorded for the three and six months ended June 30, 2022 was $29,000 and $59,000, respectively, and for the three and six months ended June 30, 2021 was $86,000 and $142,000, respectively.

Net Loss Per Share

Net Loss per Share. Basic net loss per share is computed by dividing net loss by the weighted average shares outstanding and excludes any potential dilutive effects of stock options and restricted stock units and awards. Diluted net loss per share gives effect to all dilutive potential common shares outstanding during the period.

Due to the net loss incurred during the three and six months ended June 30, 2022 and 2021 all outstanding stock awards were anti-dilutive for those periods. As of June 30, 2022, the Company had 14,086 options and 3,396 restricted units outstanding. As of June 30, 2021, the Company had 21,741 options and 37,879 restricted units outstanding.

Weighted average common shares outstanding for the three and six months ended June 30, 2022 and 2021 were as follows:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2022		2021		2022		2021
Denominator for basic net loss per share - weighted average shares		1,788,000		1,755,000		1,787,000		1,753,000
Effect of dilutive securities:
Stock options and restricted stock units		—		—		—		—
Denominator for diluted net loss per share - weighted average shares		1,788,000		1,755,000		1,787,000		1,753,000