10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

Commission file number 1-2257

TRANS-LUX CORPORATION

(Exact name of registrant as specified in its charter)
Delaware		13-1394750
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
135 East 57th Street, 14th Floor, New York, New York		10022
(Address of principal executive offices)		(Zip code)
	(800) 243-5544
(Registrant's telephone number, including area code)

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     X      No       _

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 file such files).  Yes     X      No         

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “a smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (check one)

Large accelerated filer ___	Accelerated filer ___
Non-accelerated filer ___	Emerging growth company ___	Smaller reporting company      X

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     X                                          

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

   Date                                                               Class                                                  Shares Outstanding

11/8/18                                     Common Stock - $0.001 Par Value                                   3,624,973

TRANS-LUX CORPORATION AND SUBSIDIARIES

	Table of Contents
		Page No.
Part I - Financial Information (unaudited)
Item 1.	Condensed Consolidated Balance Sheets – September 30, 2018 and December 31, 2017 (see Note 1)	1
	Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Comprehensive Loss – Three and Nine Months Ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2018 and 2017	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	27
Part II - Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		30
Exhibits

Part I - Financial Information (unaudited)
Item 1.
TRANS-LUX CORPORATION AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
In thousands, except share data	September 30, 2018		December 31, 2017
			(see Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	296	$	747
Accounts receivable, net		1,975		3,522
Inventories		1,955		2,164
Prepaids and other assets		436		1,539
Total current assets		4,662		7,972
Long-term assets:
Rental equipment, net		1,487		2,016
Property, plant and equipment, net		2,206		2,286
Goodwill		744		744
Restricted cash		950		1,162
Other assets		739		804
Total long-term assets		6,126		7,012
TOTAL ASSETS	$	10,788	$	14,984
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	3,850	$	2,778
Accrued liabilities		6,255		5,781
Current portion of long-term debt		2,060		3,529
Current portion of long-term debt - related party		1,000		500
Customer deposits		667		1,135
Total current liabilities		13,832		13,723
Long-term liabilities:
Long-term debt, less current portion		1,410		1,034
Long-term debt - related party, less current portion		-		500
Deferred pension liability and other		3,287		3,638
Total long-term liabilities		4,697		5,172
Total liabilities		18,529		18,895
Stockholders' deficit:
Preferred Stock Series A - $20 stated value -  416,500 shares authorized;     shares issued and outstanding: 0 in 2018 and 2017		-		-
Preferred Stock Series B - $200 stated value -  51,000 shares authorized;     shares issued and outstanding: 16,512 in 2018 and 2017 (liquidation preference $3,393,000)		3,302		3,302
Common Stock - $0.001 par value -  10,000,000 shares authorized;     shares issued: 2,317,024 in 2018 and 2,190,011 in 2017;     shares outstanding: 2,289,184 in 2018 and 2,162,171 in 2017		2		2
Additional paid-in-capital		28,560		28,273
Accumulated deficit		(30,937)		(26,889)
Accumulated other comprehensive loss		(5,605)		(5,536)
Treasury stock - at cost - 27,840 common shares in 2018 and 2017		(3,063)		(3,063)
Total stockholders' deficit		(7,741)		(3,911)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	10,788	$	14,984
The accompanying notes are an integral part of these condensed consolidated financial statements.

1

TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
	3 Months Ended September 30				9 Months Ended September 30
In thousands, except per share data	2018		2017		2018		2017
Revenues:
Digital product sales	$	2,857	$	9,676	$	9,158	$	15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total revenues		3,450		10,326		11,047		17,381
Cost of revenues:
Cost of digital product sales		2,870		8,291		7,750		13,929
Cost of digital product lease and maintenance		315		376		991		1,123
Total cost of revenues		3,185		8,667		8,741		15,052
Gross profit		265		1,659		2,306		2,329
General and administrative expenses		(3,092)		(1,521)		(5,888)		(4,380)
Operating (loss) income		(2,827)		138		(3,582)		(2,051)
Interest expense, net		(238)		(202)		(652)		(514)
(Loss) gain on foreign currency remeasurement		(48)		(101)		74		(192)
Gain on sale/leaseback transaction		-		33		11		99
Pension benefit		33		9		101		26
Loss before income taxes		(3,080)		(123)		(4,048)		(2,632)
Income tax expense		-		-		-		-
Net loss	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)
Loss per share - basic and diluted	$	(1.37)	$	(0.10)	$	(1.88)	$	(1.63)
The accompanying notes are an integral part of these condensed consolidated financial statements.

TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)
	3 Months Ended September 30				9 Months Ended September 30
In thousands	2018		2017		2018		2017
Net loss	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)
Other comprehensive income (loss):
Unrealized foreign currency translation gain (loss)		45		97		(69)		187
Total other comprehensive income (loss), net of tax		45		97		(69)		187
Comprehensive loss	$	(3,035)	$	(26)	$	(4,117)	$	(2,445)
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
	Nine Months Ended September 30
In thousands	2018		2017
Cash flows from operating activities
Net loss	$	(4,048)	$	(2,632)
Adjustment to reconcile net loss to net cash provided by (used in)     operating activities:
Depreciation and amortization		744		1,007
Amortization of gain on sale/leaseback transaction		(11)		(99)
Amortization of deferred financing fees and debt discount		155		89
(Gain) loss on foreign currency remeasurement		(74)		192
Bad debt expense		1,517		33
Changes in operating assets and liabilities:
Accounts receivable, net		31		427
Inventories		209		(494)
Prepaids and other assets		1,168		(2,132)
Accounts payable		1,072		1,222
Accrued liabilities		339		778
Customer deposits		(468)		1,595
Deferred pension liability and other		(200)		(280)
Net cash provided by (used in) operating activities		434		(294)
Cash flows from investing activities
Purchases of property, plant and equipment		(135)		(210)
Net cash used in investing activities		(135)		(210)
Cash flows from financing activities
Proceeds from long-term debt		1,000		2,100
Proceeds from forgivable loan		-		650
Payments of long-term debt		(1,939)		(1,680)
Payments of dividends on preferred stock		-		(99)
Payments for deferred financing fees		(22)		(30)
Net cash (used in) provided by financing activities		(961)		941
Effect of exchange rate changes		(1)		10
Net (decrease) increase in cash, cash equivalents and restricted cash		(663)		447
Cash, cash equivalents and restricted cash at beginning of year		1,909		1,218
Cash, cash equivalents and restricted cash at end of period	$	1,246	$	1,665
Supplemental disclosure of cash flow information:
Interest paid	$	408	$	355
Income taxes paid		26		23
Supplemental non-cash financing activities:
Warrants issued to SMI and SMII	$	287	$	-
Reconciliation of cash, cash equivalents and restricted cash to amounts     reported in the Condensed Consolidated Balance Sheets at end of period:
Current assets
Cash and cash equivalents	$	296	$	503
Long-term assets
Restricted cash		950		1,162
Cash, cash equivalents and restricted cash at end of period	$	1,246	$	1,665
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

TRANS-LUX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(unaudited)

Note 1 – Basis of Presentation

As used in this report, “Trans-Lux,” the “Company,” “we,” “us,” and “our” refer to Trans-Lux Corporation and its subsidiaries.

Financial information included herein is unaudited, however, such information reflects all adjustments (of a normal and recurring nature), which are, in the opinion of management, necessary for the fair presentation of the Condensed Consolidated Financial Statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year.  The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) and therefore do not include all information and footnote disclosures required under accounting principles generally accepted in the United States of America (“GAAP”).  The Condensed Consolidated Financial Statements included herein should be read in conjunction with the Consolidated Financial Statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.  The Condensed Consolidated Balance Sheet at December 31, 2017 is derived from the December 31, 2017 audited financial statements.

The following new accounting pronouncements were adopted in 2018:

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Compensation – Retirement Benefits (Topic 715).  ASU 2017-07 improves the presentation of net periodic pension cost and net periodic postretirement benefit cost.  Public business entities should apply the amendments in ASU 2017-07 for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years (i.e., January 1, 2018).  Early application is permitted.  The adoption of this standard did not have a material effect on the Company’s consolidated financial position and results of operations.  See Note 8 – Pension Plan for further details on the effect of the change.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.  ASU 2016-18 requires Restricted cash and restricted cash equivalents to be included within beginning and ending total cash amounts reported in the Condensed Consolidated Statements of Cash Flows.  Disclosure of the nature of the restrictions on cash balances is required under the guidance.  This standard is effective for annual and interim reporting periods for fiscal years beginning after December 31, 2017.  We adopted the guidance in 2018 and retrospectively adopted the guidance back to January 1, 2017.  Upon adoption, the $550,000 of changes in Restricted cash in the nine months ended September 30, 2017, which had previously been presented as investing activities, are now included within beginning and ending cash and equivalents balances in our Consolidated Statements of Cash Flows.  Additionally, in August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provided guidance on certain cash flow issues.  ASU 2016-15 is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2017 (i.e., January 1, 2018).  We adopted the guidance retrospectively effective as of January 1, 2018, which did not have a material effect on the Company’s consolidated financial position and results of operations.

4

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This standard represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures.  The Company applied this standard effective January 1, 2018 using the modified retrospective method.  The Company has elected to apply this initial application of the standard only to contracts that are not completed at the date of initial application.  For contracts which were modified before the adoption date, the Company has not restated the contract for those modifications. Instead, the Company reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price, if necessary.  The cumulative effect of initially applying the new revenue standard would be applied as an adjustment to the opening balance of retained earnings.  The Company determined that there was no cumulative effect to be recorded and, except for the required financial statement disclosures included in Note 3 – Revenue Recognition, there was no impact to the Company’s condensed consolidated financial statements.

Other than the foregoing changes, there have been no material changes in our significant accounting policies during the nine months ended September 30, 2018 from the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017.

The following new accounting pronouncements, and related impacts on adoption, are being evaluated by the Company:

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20).  ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.  Public business entities should apply the amendments in ASU 2018-14 for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years (i.e., January 1, 2021).  Early application is permitted.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  ASU 2018-02 provides companies with an option to reclassify stranded tax effects within accumulated other comprehensive income (“AOCI”) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (the “TCJ Act”) (or portion thereof) is recorded.  ASU 2018-02 also requires disclosure of a description of the accounting policy for releasing income tax effects from AOCI and whether an election was made to reclassify the stranded income tax effects from the TCJ Act.  Public business entities should apply the amendments in ASU 2018-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted.  The Company is in the process of evaluating this pronouncement but has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial position and results of operations.

5

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350).  ASU 2017-04 simplifies the test for goodwill impairment.  Public business entities should apply the amendments in ASU 2017-04 for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years (i.e., January 1, 2020).  Early application is permitted.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.  A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.  For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted.  In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided an additional (and optional) transition method to adopt the new leases standard whereby an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.  The Company is in the process of evaluating this pronouncement and believes that our adoption of the standard will likely have a material impact to our Condensed Consolidated Balance Sheets for the recognition of certain operating leases as right-of-use assets of approximately $1.3 million and lease liabilities of $1.3 million.  We are in the process of analyzing our leases, implementing systems, developing processes and internal controls and finalizing our accounting policies to comply with the standard's adoption requirements.

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 eliminates the separate accounting model for nonemployee share-based payment awards and generally requires companies to account for share-based payment transactions with nonemployees in the same way as share-based payment transactions with employees.  The accounting remains different for attribution, which represents how the equity-based payment cost is recognized over the vesting period, and a contractual term election for valuing nonemployee equity share options.  Public business entities should apply the amendments in ASU 2018-07 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted for all entities on a modified retrospective basis.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

6

Note 2 – Going Concern

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business.  This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent.  In accordance with this requirement, the Company has prepared its accompanying Condensed Consolidated Financial Statements assuming the Company will continue as a going concern.

We do not have adequate liquidity, including access to the debt and equity capital markets, to operate our businessover the next 12 months from the date of issuance of this Form 10-Q.  The Company had a working capital deficiency of $9.2 million as of September 30, 2018.  As a result, our short-term business focus continues to be to preserve our liquidity position.  While we received gross proceeds of $1.5 million from the sale of 1,315,789 shares of Common Stock as described in Note 13 – Subsequent Events, unless we are successful in obtaining additional liquidity, we believe that we will not have sufficient cash and liquid assets to fund normal operations and, as such, there is substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of this Form 10-Q.  In addition, the Company’s obligations under its pension plan exceeded plan assets by $4.1 million at September 30, 2018, including $817,000 of minimum required contributions due over the next 12 months.  The Company is in default on its 8¼% Limited convertible senior subordinated notes due 2012 (the “Notes”) and 9½% Subordinated debentures due 2012 (the “Debentures”), which have remaining principal balances of $387,000 and $220,000, respectively.  Also, as of September 30, 2018, the Company was not in compliance with the fixed charge coverage ratio covenant related to its Credit Agreement (hereinafter defined).  The Company and CNH Finance Fund I, L.P. (“CNH”) agreed to a forbearance with respect to the default caused by our non-compliance with the fixed charge coverage ratio covenant as of September 30, 2018.  Such amounts due to CNH mature within the next 12 months.  As a result, if the Company is unable to (i) obtain additional liquidity for working capital, (ii) make the minimum required contributions to the defined benefit pension plan, (iii) make the required principal and interest payments on the Notes and the Debentures and/or (iv) attain and maintain compliance with all debt covenants, there would be a significant adverse impact on the financial position and operating results of the Company.  The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts and classification of liabilities that may result from the outcome of this uncertainty.  See Note 7 – Long-Term Debt for further details.

The Company is seeking additional financing in order to provide enough cash to cover our remaining current fixed cash obligations as well as providing working capital.  However, there can be no assurance as to the amounts, if any, the Company will receive in any additional financings or the terms thereof and the Company has no agreements, commitments or understandings with respect to any such additional financing.  To the extent the Company issues additional equity securities, it could be dilutive to existing shareholders.  In addition, the Company’s current outstanding debt and other obligations could limit its ability to incur more debt.

7

Note 3 – Revenue Recognition

Under the new revenue recognition guidance provided by ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of this standard, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.  The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.  At contract inception, once the contract is determined to be within the scope of this standard, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct.  The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.  Sales tax, value added tax and other taxes collected on behalf of third parties are excluded from revenue.

Contracts with customers may contain multiple performance obligations.  For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation.  The Company determines standalone selling prices based on the price at which the performance obligation is sold separately.  If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component.  Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less.  None of the Company’s contracts contained a significant financing component as of September 30, 2018.

Disaggregated Revenues

The following table represents a disaggregation of revenue from contracts with customers for the three and nine months ended September 30, 2018 and 2017, along with the reportable segment for each category:

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Digital product sales:
Catalog and small customized products	$	2,857	$	5,270	$	8,158	$	11,210
Large customized products		-		4,406		1,000		4,406
Subtotal		2,857		9,676		9,158		15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total	$	3,450	$	10,326	$	11,047	$	17,381

8

Performance Obligations

The Company has two primary revenue streams which are Digital product sales and Digital product lease and maintenance.

Digital Product Sales

The Company recognizes net revenue on digital product sales to its distribution partners and to end users related to digital display solutions, fixed digit scoreboards and LED lighting fixtures and lamps. For the Company’s catalog products, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.  For the Company’s customized products, revenue is either recognized at a point in time or over time depending on the size of the contract.  For those customized product contracts that are smaller in size, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.  For those customized product contracts that are larger in size, revenue is recognized over time based on incurred costs as compared to projected costs using the input method, as this best reflects the Company’s progress in transferring control of the customized product to the customer.  The Company may also contract with a customer to perform installation services of digital display products.  Similar to the larger customized products, the Company recognizes the revenue associated with installation services using the input method, whereby the basis is the total contract costs incurred to date compared to the total expected costs to be incurred.

Revenue on sales to distribution partners are recorded net of prompt-pay discounts, if offered, and other deductions.  To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method to which the Company expects to be entitled.  In the case of prompt-pay discounts, there are only two possible outcomes: either the customer pays on-time or does not.  Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.  Determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.  The Company believes that the estimates it has established are reasonable based upon current facts and circumstances.  Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.  The Company offers an assurance-type warranty that the digital display products will conform to the published specifications.  Returns may only be made subject to this warranty and not for convenience.

9

Digital Product Lease and Maintenance

Lease and maintenance contracts generally run for periods of one month to 10 years.  A contract entered into by the Company with a customer may contain both lease and maintenance services (either or both services may be agreed upon based on the individual customer contract).  Maintenance services may consist of providing labor, parts and software maintenance as may be required to maintain the customer’s equipment in proper operating condition at the customer’s service location.  The Company concluded the lease and maintenance services represent a series of distinct services and the most representative method for measuring progress towards satisfying the performance obligation of these services is the input method.  Additionally, maintenance services require the Company to “stand ready” to provide support to the customer when and if needed.  As there is no discernable pattern of efforts other than evenly over the lease and maintenance terms, the Company will recognize revenue straight-line over the lease and maintenance terms of service.

The Company has an enforceable right to payment for performance completed to date, as evidenced by the requirement that the customer pay upfront for each month of services. Lease and maintenance service amounts billed ahead of revenue recognition are recorded in deferred revenue and are included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

Contract Balances with Customers

Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time.  The contract assets are transferred to the receivables when the rights become unconditional.  As of September 30, 2018 and December 31, 2017, the Company had no contract assets.  The contract liabilities primarily relate to the advance consideration received from customers for contracts prior to the transfer of control to the customer and therefore revenue is recognized on completion of delivery.  Contract liabilities are classified as deferred revenue and included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

The following table presents the balances in the Company’s receivables and contract liabilities with customers:

In thousands	September 30, 2018		December 31, 2017
Gross receivables	$	3,738	$	3,753
Allowance for bad debts		1,763		231
Net receivables		1,975		3,522
Contract liabilities		895		1,209

During the three and nine months ended September 30, 2018, the Company recognized bad debt expense of $1.3 million and $1.5 million, respectively, primarily related to two customers.  During the three and nine months ended September 30, 2017, the Company recognized bad debt recovery of $20,000 and bad debt expense of $33,000, respectively.

10

During the three and nine months ended September 30, 2018, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods:

In thousands	Three months ended September 30, 2018		Nine months ended September 30, 2018
Revenue recognized in the period from:
amounts included in the contract liability at the   beginning of the period	$	218	$	806
Performance obligations satisfied in previous periods   (for example, due to changes in transaction price)		-		-

Transaction Price Allocated to Future Performance Obligations – alternative more qualitative presentation

Remaining performance obligations represents the transaction price of contracts for which work has not been performed (or has been partially performed).  The guidance provides certain practical expedients that limit this requirement and, therefore, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.  As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations for digital product sales was $2.6 million and digital product lease and maintenance was $3.9 million.  The Company expects to recognize revenue on approximately 64%, 22% and 14% of the remaining performance obligations over the next 12 months, 13 to 36 months and 37 or more months, respectively.

Costs to Obtain or Fulfill a Customer Contract

Prior to the adoption of ASU 2014-9, the Company expensed incremental commissions paid to sales representatives for obtaining customer contracts.  Under ASU 2014-9, the Company currently capitalizes these incremental costs of obtaining customer contracts.  Capitalized commissions are amortized based on the transfer of the products or services to which the assets relate.  Applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.  These costs are included in General and administrative expenses.

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.  When shipping and handling costs are incurred after a customer obtains control of the products, the Company also has elected to account for these as costs to fulfill the promise and not as a separate performance obligation.  Shipping and handling costs associated with the distribution of finished products to customers are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer.

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Note 4 – Inventories

Inventories consist of the following:

In thousands	September 30, 2018		December 31, 2017
Raw materials	$	1,200	$	1,204
Work-in-progress		588		704
Finished goods		167		256
	$	1,955	$	2,164

Note 5 – Rental Equipment, net

Rental equipment consists of the following:

In thousands	September 30, 2018		December 31, 2017
Rental equipment	$	10,425	$	10,425
Less accumulated depreciation		8,938		8,409
Net rental equipment	$	1,487	$	2,016

Depreciation expense for rental equipment for the nine months ended September 30, 2018 and 2017 was $529,000 and $827,000, respectively.  Depreciation expense for rental equipment for the three months ended September 30, 2018 and 2017 was $176,000 and $275,000, respectively.

Note 6 – Property, Plant and Equipment, net

Property, plant and equipment consists of the following:

In thousands	September 30, 2018		December 31, 2017
Machinery, fixtures and equipment	$	3,107	$	2,972
Leaseholds and improvements		12		12
		3,119		2,984
Less accumulated depreciation		913		698
Net property, plant and equipment	$	2,206	$	2,286

Machinery, fixtures and equipment having a net book value of $2.2 million and $2.3 million at September 30, 2018 and December 31, 2017, respectively, were pledged as collateral under various financing agreements.

Depreciation expense for property, plant and equipment for the nine months ended September 30, 2018 and 2017 was $215,000 and $180,000, respectively.  Depreciation expense for property, plant and equipment for the three months ended September 30, 2018 and 2017 was $71,000 and $60,000, respectively.

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Note 7 – Long-Term Debt

Long-term debt consists of the following:

In thousands	September 30, 2018		December 31, 2017
8¼% Limited convertible senior subordinated notes due 2012	$	387	$	387
9½% Subordinated debentures due 2012		220		220
Revolving credit line		933		2,722
Term loans		1,640		790
Term loans - related party		1,000		1,000
Forgivable loan		650		650
Total debt		4,830		5,769
Less deferred financing costs and debt discount		360		206
Net debt		4,470		5,563
Less portion due within one year		3,060		4,029
Net long-term debt	$	1,410	$	1,534

On July 12, 2016, the Company and its wholly-owned subsidiaries Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation (the “Borrowers”) entered into a credit and security agreement, as subsequently amended on various dates, the latest being on June 11, 2018 (collectively, the “Credit Agreement”) with CNH as lender, which expires on July 12, 2019.  Under the Credit Agreement, the Company is able to borrow up to an aggregate of $4.0 million, which includes (i) up to $3.0 million of a revolving loan, at an interest rate of prime plus 6.0% (11.25% at September 30, 2018), which was previously prime plus 4.0% (8.5% at December 31, 2017) and (ii) a $1.0 million term loan, at an interest rate of prime plus 6.0% (11.25% at September 30, 2018 and December 31, 2017).  Interest under the agreement is payable monthly in arrears.  The availability under the revolving loan is calculated based on certain percentages of eligible receivables and inventory.

The Credit Agreement contains financial and other covenant requirements, including, but not limited to, financial covenants that require the Borrowers to maintain a fixed charge coverage ratio.  As of September 30, 2018, the Company was not in compliance with the fixed charge coverage ratio covenant, which triggered a default under the Credit Agreement.  Subsequent to September 30, 2018, the Company and CNH agreed to a forbearance agreement which is effective through February 28, 2019, as long as there are no additional defaults under the Credit Agreement.  Under this agreement, CNH will forbear from exercising its rights and remedies under the Credit Agreement for the specified period subject to the agreed terms and conditions, which include an increase in the interest rate and certain other restrictions.

On June 11, 2018, the Company entered into a Subordinated Secured Promissory Note (the “SMI Note”) with SM Investors, L.P. (“SMI”), pursuant to which the Company has borrowed $330,000 from SMI at an initial interest rate of 10.00%.  The maturity date of the note is the earlier of June 11, 2020 or the Company’s completion of an additional financing package of at least $1 million.  The Company also issued SMI a three-year warrant to purchase 82,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $95,000, and is being treated as a debt discount amortized over the two-year term of the loan.

On June 11, 2018, the Company entered into a Subordinated Secured Promissory Note (the “SMII Note”) with SM Investors II, L.P. (“SMII”), pursuant to which the Company has borrowed $670,000 from SMII at an initial interest rate of 10.00%.  The maturity date of the note is the earlier of June 11, 2020 or the Company’s completion of an additional financing package of at least $1 million.  The Company also issued SMII a three-year warrant to purchase 167,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $192,000, and is being treated as a debt discount amortized over the two-year term of the loan.

13

In connection with the financing described in Note 13 – Subsequent Events, SMI and SMII agreed to waive their right of payment with respect to the purchase of 1,315,789 shares for $1.5 million.

In connection with the SMI Note and the SMII Note, the Company and its wholly-owned subsidiaries Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation, as borrowers, entered into a Waiver, Consent and Ninth Amendment to the Credit and Security Agreement (“Ninth Amendment”), dated as of June 11, 2018, with CNH, to provide for certain amendments to that certain Credit and Security Agreement with CNH, dated July 12, 2016, to allow for the Company’s entry into the SMI Note and the SMII Note and the security interests granted to SMI and SMII thereunder.

The Company, SMI, SMII and CNH also entered into a Subordination and Intercreditor Agreement (the “SIA”), dated as of June 11, 2018, setting forth CNH’s senior lien position to all collateral of the Company, and the rights of each of CNH, SMI and SMII with respect to the collateral of the Company.  The SIA allows the Company to make payments to SMI and SMII as long as the Company is not in default on the Credit and Security Agreement with CNH.

The Company has outstanding $387,000 of Notes which are no longer convertible into common shares.  The Notes matured as of March 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $290,000 and $266,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

The Company has outstanding $220,000 of Debentures.  The Debentures matured as of December 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $185,000 and $169,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

On May 23, 2017, the Company received $650,000 structured as a forgivable loan from the City of Hazelwood, Missouri.  The loan will be forgiven on a pro-rata basis if predetermined employment levels are attained and would expire on April 1, 2024.  If the Company attains the employment levels required by the agreement, there is no interest due, otherwise interest accrues at a rate of prime plus 2.0% (7.25% at September 30, 2018).  In February 2018, in accordance with the agreement, the Company requested a 1-year extension of the terms of the agreement, which was approved by the City of Hazelwood in March 2018, so the agreement now terminates on April 1, 2025.

As described in Note 11 – Related Party Transactions, the Company has loans aggregating $1.0 million from an entity affiliated with a director of the Company.

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Note 8 – Pension Plan

As of December 31, 2003, the benefit service under the pension plan had been frozen and, accordingly, there is no service cost.  As of April 30, 2009, the compensation increments had been frozen and, accordingly, no additional benefits are being accrued under the pension plan.

In accordance with the adoption of ASU 2017-07, the Company has retrospectively revised the presentation of the non-service components of periodic pension benefit to Pension benefit in the Condensed Consolidated Statements of Operations.  The following table presents a summary of the effect for periods presented:

	Three months ended September 30, 2017						Nine months ended September 30, 2017
	As reported		As revised		Effect of change		As reported		As revised		Effect of change
In thousands
General and administrative expenses	$	1,512	$	1,521	$	9	$	4,354	$	4,380	$	26
Operating income (loss)		147		138		(9)		(2,025)		(2,051)		(26)
Pension benefit		-		(9)		(9)		-		(26)		(26)
Loss before income taxes	$	(123)	$	(123)	$	-	$	(2,632)	$	(2,632)	$	-

The following table presents the components of net periodic pension benefit:

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Interest cost	$	114	$	117	$	340	$	350
Expected return on plan assets		(203)		(180)		(609)		(539)
Amortization of net actuarial loss		56		54		168		163
Net periodic pension benefit	$	(33)	$	(9)	$	(101)	$	(26)

As of September 30, 2018, the Company had recorded a current pension liability of $817,000, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets, and a long-term pension liability of $3.3 million, which is included in Deferred pension liability and other in the Condensed Consolidated Balance Sheets.  The minimum required contribution in 2018 is expected to be $592,000.  Subsequent to September 30, 2018, the Company contributed $421,000 to the plan, leaving $171,000 that still remains to be paid in 2018.

Note 9 – Loss Per Share

The following table presents the calculation of loss per share for the three and nine months ended September 30, 2018 and 2017:

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2018		2017		2018		2017
Numerator:
Net loss, as reported	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)
Change in dividends accumulated on preferred shares		(50)		(50)		(149)		(149)
Net loss attributable to common shares	$	(3,130)	$	(173)	$	(4,197)	$	(2,781)
Denominator:
Weighted average shares outstanding		2,289		1,711		2,232		1,711
Basic and diluted loss per share	$	(1.37)	$	(0.10)	$	(1.88)	$	(1.63)

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Basic loss per common share is computed by dividing net loss attributable to common shares by the weighted average number of common shares outstanding for the period.  Diluted loss per common share is computed by dividing net loss attributable to common shares, by the weighted average number of common shares outstanding, adjusted for shares that would be assumed outstanding after warrants and stock options vested under the treasury stock method.

At September 30, 2018 and 2017, the Company had accumulated unpaid dividends of $91,000 related to the Series B Convertible Preferred Stock (“Preferred Stock”).

On November 6, 2018, the Company declared a semi-annual dividend of $6.00 per share of Preferred Stock aggregating $99,000, which was paid on November 8, 2018.  On April 26, 2018, the Company declared a semi-annual dividend of 7.6923 shares of Common Stock per share of Preferred Stock aggregating 127,013 shares of Common Stock, which was distributed to the holders of the Preferred Stock on May 4, 2018.

As of September 30, 2018 and 2017, the Company had warrants to purchase 302,000 shares and 52,000 shares, respectively, of Common Stock outstanding, none of which were used in the calculation of diluted loss per share because their inclusion would have been anti-dilutive.  These warrants could be dilutive in the future if the Company records net income instead of net losses and if the average share price increases and is greater than the exercise price of these warrants.

In connection with the SMI Note, the Company issued SMI a three-year warrant to purchase 82,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $95,000, and is being treated as a debt discount amortized over the two-year term of the loan.

In connection with the SMII Note, the Company issued SMII a three-year warrant to purchase 167,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $192,000, and is being treated as a debt discount amortized over the two-year term of the loan.

As of September 30, 2018 and 2017, the Company had 16,512 shares of Preferred Stock outstanding, which is convertible into 330,240 shares of Common Stock, none of which were used in the calculation of diluted loss per share because their conversion price was greater than the average stock price for the period and their inclusion would have been anti-dilutive.  These shares of Preferred Stock could be dilutive in the future if the average share price increases and is greater than the purchase price of these shares of Preferred Stock.

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Note 10 – Contingencies

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business and/or which are covered by insurance.  The Company believes that it has accrued adequate reserves individually and in the aggregate for such legal proceedings.  Should actual litigation results differ from the Company’s estimates, revisions to increase or decrease the accrued reserves may be required.  A vendor has brought a claim against us for $87,000 plus interest and damages.  The Company has accrued for the $87,000 plus interest in Accounts payable and in Accrued liabilities in the Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017.  Potential damages, if any, are not yet determinable.

Note 11 – Related Party Transactions

The Company has the following related party transactions:

The Company received a $500,000 loan from Carlisle Investments Inc. (“Carlisle”) on April 27, 2016, which is included in Long-term debt – related party in the Condensed Consolidated Balance Sheets, and an additional $500,000 loan from Carlisle (“Second Carlisle Agreement”) on November 6, 2017, which is included in Current portion of long-term debt – related party in the Condensed Consolidated Balance Sheets.  The loans are at a fixed interest rate of 12.00% with bullet payments of all principal due upon maturity.  Interest is payable monthly.  Mr. Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle.

Yaozhong Shi, a director of the Company, is the Chairman of Transtech LED Company Limited (“Transtech”), which is one of our primary LED suppliers.  The Company purchased $171,000 and $1.4 million of product from Transtech in the nine months ended September 30, 2018 and 2017, respectively, and $44,000 and $477,000 in the three months ended September 30, 2018 and 2017, respectively.  Amounts payable by the Company to Transtech were $272,000 and $149,000 as of September 30, 2018 and December 31, 2017, respectively.

Note 12 – Business Segment Data

Operating segments are based on the Company’s business components about which separate financial information is available and are evaluated regularly by the Company’s chief operating decision makers in deciding how to allocate resources and in assessing performance of the business.

The Company evaluates segment performance and allocates resources based upon operating income (loss).  The Company’s operations are managed in two reportable business segments: Digital product sales and Digital product lease and maintenance.  Both design and produce large-scale, multi-color, real-time digital displays and LED lighting, which has a line of energy-saving lighting solutions that provide facilities and public infrastructure with “green” lighting solutions that emit less heat, save energy and enable creative designs.  Both operating segments are conducted on a global basis, primarily through operations in the United States.  The Company also has operations in Canada.  The Digital product sales segment sells equipment and the Digital product lease and maintenance segment leases and maintains equipment.  Corporate general and administrative items relate to costs that are not directly identifiable with a segment.  There are no intersegment sales.

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Foreign revenues represent less than 10% of the Company’s revenues in 2018 and 2017.  The Company’s foreign operation does not manufacture its own equipment; the domestic operation provides the equipment that the foreign operation leases or sells.  The foreign operation operates similarly to the domestic operation and has similar profit margins.  Foreign assets are immaterial.

Information about the Company’s operations in its two business segments for the three and nine months ended September 30, 2018 and 2017 is as follows:

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Revenues:
Digital product sales	$	2,857	$	9,676	$	9,158	$	15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total revenues	$	3,450	$	10,326	$	11,047	$	17,381
Operating income (loss):
Digital product sales	$	(1,903)	$	697	$	(1,785)	$	(291)
Digital product lease and maintenance		241		227		789		485
Corporate general and administrative expenses		(1,165)		(786)		(2,586)		(2,245)
Total operating (loss) income		(2,827)		138		(3,582)		(2,051)
Interest expense, net		(238)		(202)		(652)		(514)
(Loss) gain on foreign currency remeasurement		(48)		(101)		74		(192)
Gain on sale leaseback transaction		-		33		11		99
Pension benefit		33		9		101		26
Loss before income taxes		(3,080)		(123)		(4,048)		(2,632)
Income tax expense		-		-		-		-
Net loss	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)

	September 30 2018		December 31 2017
Assets
Digital product sales	$	7,231	$	9,722
Digital product lease and maintenance		3,261		4,515
Total identifiable assets		10,492		14,237
General corporate		296		747
Total assets	$	10,788	$	14,984

Note 13 – Subsequent Events

The Company has evaluated events and transactions subsequent to September 30, 2018 and through the date these Condensed Consolidated Financial Statements were included in this Form 10-Q and filed with the SEC.

On October 5, 2018, the Company issued 20,000 shares of Common Stock to Alberto Shaio in connection with his new employment agreement as President and Chief Executive Officer of the Company.

On November 5, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with Unilumin North America Inc. (“Unilumin”), pursuant to which Unilumin purchased 1,315,789 shares of Common Stock, for a purchase price of $1,500,000 (the “Purchase”), or a per share purchase price of $1.14.  The SPA requires that the proceeds of the Purchase are to be utilized for mutually agreed purposes.  In connection with the SPA, the Company issued warrants (the “Warrants”) to purchase 5,670,103 shares of the Company’s Common Stock to Unilumin at an exercise price of $0.97 per share.  The exercise price of the Warrants is automatically adjusted to $0.75 per share if the Company is unable to complete a financing of $2,500,000 through a rights offering by June 1, 2019 (the “Rights Offering”).  The exercise price of the Warrants will also be decreased to the same price as the exercise price of the rights issued in the Rights Offering if the exercise price of such rights is less than $1.00 per share.  The Warrants are exercisable until November 2, 2020, provided that they are mandatorily exercisable upon completion of the Rights Offering if in excess of 90% of the Company’s currently issued and outstanding Preferred Stock converts into Common Stock.  In connection with any such Preferred Stock conversion, Unilumin acknowledged that the conversion price of the Preferred Stock may be decreased, subject to stockholder approval.  If all or a significant portion of the Warrants are exercised, Unilumin would own in excess of fifty percent of the Company’s outstanding Common Stock on a fully diluted basis, even if the Rights Offering is completed.

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Item 2.             Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Trans-Lux is a leading supplier of LED technology for displays and lighting applications.  The essential elements of these systems are the real-time, programmable digital displays and lighting fixtures that we design, manufacture, distribute and service.  Designed to meet the digital signage solutions for any size venue’s indoor and outdoor needs, these displays are used primarily in applications for the financial, banking, gaming, corporate, advertising, transportation, entertainment and sports markets.  The Company’s LED lighting fixtures offer energy-saving lighting solutions that feature a comprehensive offering of the latest LED lighting technologies that provide facilities and public infrastructure with “green” lighting solutions that emit less heat, save energy and enable creative designs.  The Company operates in two reportable segments: Digital product sales and Digital product lease and maintenance.

The Digital product sales segment includes worldwide revenues and related expenses from the sales of both indoor and outdoor digital display signage and LED lighting solutions.  This segment includes the financial, government/private, gaming, scoreboards and outdoor advertising markets.  The Digital product lease and maintenance segment includes worldwide revenues and related expenses from the lease and maintenance of both indoor and outdoor digital display signage.  This segment includes the lease and maintenance of digital display signage across all markets.

Going Concern

We do not have adequate liquidity, including access to the debt and equity capital markets, to operate our businessover the next 12 months from the date of issuance of this Form 10-Q.  The Company had a working capital deficiency of $9.2 million as of September 30, 2018.  As a result, our short-term business focus continues to be to preserve our liquidity position.  While we received gross proceeds of $1.5 million from the sale of 1,315,789 shares of Common Stock as described in Note 13 to the Condensed Consolidated Financial Statements – Subsequent Events, unless we are successful in obtaining additional liquidity, we believe that we will not have sufficient cash and liquid assets to fund normal operations, and as such, there is substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of this Form 10-Q.  Further, the Company’s obligations under its defined benefit pension plan exceeded plan assets by $4.1 million at September 30, 2018, including $817,000 of minimum required contributions due over the next 12 months.  The Company is in default on its Notes and Debentures, which have remaining principal balances of $387,000 and $220,000, respectively.  Also, as of September 30, 2018, the Company was not in compliance with the fixed charge coverage ratio covenant related to its Credit Agreement.  The Company and CNH agreed to a forbearance with respect to the default caused by our non-compliance with the fixed charge coverage ratio covenant as of September 30, 2018.  As a result, if the Company is unable to (i) obtain additional liquidity for working capital, (ii) make the minimum required contributions to the defined benefit pension plan, (iii) make the required principal and interest payments on the Notes and the Debentures and/or (iv) attain and maintain compliance with all debt covenants, there would be a significant adverse impact on the financial position and operating results of the Company.

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Moreover, because of the uncertainty surrounding our ability to obtain additional liquidity and the potential of the noteholders and/or trustees to give notice to the Company of a default on either the Debentures or the Notes, our independent registered public accounting firm has issued an opinion on our December 31, 2017 Consolidated Financial Statements that states that the Consolidated Financial Statements were prepared assuming we will continue as a going concern and further states that the uncertainty regarding the ability to make the required principal and interest payments on the Notes and the Debentures, in addition to the significant amount due to the Company’s defined benefit pension plan over the next 12 months, net losses and working capital deficiencies, raises substantial doubt about our ability to continue as a going concern.  See Note 2 to the Condensed Consolidated Financial Statements – Going Concern.

Results of Operations

Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

The following table presents our Statements of Operations data, expressed as a percentage of revenue for the nine months ended September 30, 2018 and 2017:

	Nine months ended September 30
In thousands, except percentages	2018				2017
Revenues:
Digital product sales	$	9,158	82.9	%	$	15,616	89.8	%
Digital product lease and maintenance		1,889	17.1	%		1,765	10.2	%
Total revenues		11,047	100.0	%		17,381	100.0	%
Cost of revenues:
Cost of digital product sales		7,750	70.1	%		13,929	80.1	%
Cost of digital product lease and maintenance		991	9.0	%		1,123	6.5	%
Total cost of revenues		8,741	79.1	%		15,052	86.6	%
Gross profit		2,306	20.9	%		2,329	13.4	%
General and administrative expenses		(5,888)	(53.3)	%		(4,380)	(25.2)	%
Operating loss		(3,582)	(32.4)	%		(2,051)	(11.8)	%
Interest expense, net		(652)	(5.9)	%		(514)	(2.9)	%
Gain (loss) on foreign currency remeasurement		74	0.7	%		(192)	(1.1)	%
Gain on sale/leaseback transaction		11	0.1	%		99	0.6	%
Pension benefit		101	0.9	%		26	0.1	%
Loss before income taxes		(4,048)	(36.6)	%		(2,632)	(15.1)	%
Income tax expense		-	-	%		-	-	%
Net loss	$	(4,048)	(36.6)	%	$	(2,632)	(15.1)	%

20

Total revenues for the nine months ended September 30, 2018 decreased $6.3 million or 36.4% to $11.0 million from $17.4 million for the nine months ended September 30, 2017, primarily due to a decrease in Digital product sales, partially offset by increases in consulting services and Digital product lease and maintenance.

Digital product sales revenues decreased $6.5 million or 41.4% for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily due to a decrease in single large scoreboard customer sales, partially offset by an increase in consulting services.

Digital product lease and maintenance revenues increased $124,000 or 7.0% for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily due to billing credits recorded in the nine months ended September 30, 2017 that did not recur in the same period in 2018, partially offset by the continued expected revenue decline in the older outdoor display equipment rental and maintenance bases acquired in the early 1990s.  The financial services market continues to be negatively impacted by the current investment climate resulting in consolidation within that industry and the wider use of flat-panel screens for smaller applications.

Total operating loss for the nine months ended September 30, 2018 increased $1.5 million to $3.6 million from $2.1 million for the nine months ended September 30, 2017, principally due to an increase in general and administrative expenses, which was primarily related to an increase in bad debt expense as discussed further below.

Digital product sales operating loss increased $1.5 million to $1.8 million for the nine months ended September 30, 2018 compared to $291,000 for the nine months ended September 30, 2017, primarily due to an increase in general and administrative expenses.  The cost of Digital product sales decreased $6.2 million or 44.4%, primarily due to the decrease in revenues and the low incremental costs related to the consulting revenue.  The cost of Digital product sales represented 84.6% of related revenues for the nine months ended September 30, 2018 compared to 89.2% for the nine months ended September 30, 2017.  This decrease as a percentage of revenues is primarily due to the low incremental costs related to the consulting revenue in the nine months ended September 30, 2018.  Digital product sales general and administrative expenses increased $1.2 million, primarily due to an increase in bad debt expense related to two customers.

Digital product lease and maintenance operating income increased $304,000 to $789,000 for the nine months ended September 30, 2018 as compared $485,000 for the nine months ended September 30, 2017, primarily due to the increase in revenues, as well as a decrease in the cost of Digital product lease and maintenance and a decrease in general and administrative expenses.  The cost of Digital product lease and maintenance decreased $132,000 or 11.8% for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily due to a decrease in depreciation expense.  The cost of Digital product lease and maintenance revenues represented 52.5% of related revenues in for the nine months ended September 30, 2018 compared to 63.6% for the nine months ended September 30, 2017.  The cost of Digital product lease and maintenance includes field service expenses, plant repair costs, maintenance and depreciation.  Digital product lease and maintenance general and administrative expenses decreased $48,000 or 30.6%, primarily due to decreases in consulting expenses and bad debt expense.

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Corporate general and administrative expenses increased $341,000 or 15.2% for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily due to increases in consulting expenses of $354,000 and professional fees of $178,000, partially offset by decreases in rent and office expenses of $74,000, travel and entertainment expenses of $56,000 and payroll and benefits of $30,000.

Net interest expense increased $138,000 or 26.8% for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily due to an increase in the average outstanding long-term debt, primarily due to the Second Carlisle Agreement, the forgivable loan and the SM Investors loans, partially offset by a reduction in the revolving loan balance.

The effective tax rate for the nine months ended September 30, 2018 and 2017 was 0.0%.  Both the 2018 and 2017 tax rates are being affected by the valuation allowance on the Company’s deferred tax assets as a result of reporting pre-tax losses.

Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017

The following table presents our Statements of Operations data, expressed as a percentage of revenue for the three months ended September 30, 2018 and 2017:

	Three months ended September 30
In thousands, except percentages	2018				2017
Revenues:
Digital product sales	$	2,857	82.8	%	$	9,676	93.7	%
Digital product lease and maintenance		593	17.2	%		650	6.3	%
Total revenues		3,450	100.0	%		10,326	100.0	%
Cost of revenues:
Cost of digital product sales		2,870	83.2	%		8,291	80.3	%
Cost of digital product lease and maintenance		315	9.1	%		376	3.6	%
Total cost of revenues		3,185	92.3	%		8,667	83.9	%
Gross profit		265	7.7	%		1,659	16.1	%
General and administrative expenses		(3,092)	(89.6)	%		(1,521)	(14.8)	%
Operating loss		(2,827)	(81.9)	%		138	1.3	%
Interest expense, net		(238)	(6.9)	%		(202)	(1.9)	%
Loss on foreign currency remeasurement		(48)	(1.4)	%		(101)	(1.0)	%
Gain on sale/leaseback transaction		-	-	%		33	0.3	%
Pension benefit		33	0.9	%		9	0.1	%
Loss before income taxes		(3,080)	(89.3)	%		(123)	(1.2)	%
Income tax expense		-	-	%		-	-	%
Net loss	$	(3,080)	(89.3)	%	$	(123)	(1.2)	%

Total revenues for the three months ended September 30, 2018 decreased $6.9 million or 66.6% to $3.4 million from $10.3 million for the three months ended September 30, 2017, primarily due to decreases in Digital product sales.

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Digital product sales revenues decreased $6.8 million or 70.5% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to a decrease in single large scoreboard customer sales.

Digital product lease and maintenance revenues decreased $57,000 or 8.8% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to the continued expected revenue decline in the older outdoor display equipment rental and maintenance bases acquired in the early 1990s.  The financial services market continues to be negatively impacted by the current investment climate resulting in consolidation within that industry and the wider use of flat-panel screens for smaller applications.

Total operating (loss) income for the three months ended September 30, 2018 decreased $3.0 million to a loss of $2.8 million from income of $138,000 for the three months ended September 30, 2017, principally due to the decrease in revenues and an increase in general and administrative expenses, which was primarily related to an increase in bad debt expense as discussed further below.

Digital product sales operating (loss) income decreased $2.6 million to a loss of $1.9 million for the three months ended September 30, 2018 compared to income of $697,000 for the three months ended September 30, 2017, primarily due to the decrease in revenues and an increase in general and administrative expenses.  The cost of Digital product sales decreased $5.4 million or 65.4% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to the decrease in revenues.  The cost of Digital product sales represented 100.5% of related revenues in the three months ended September 30, 2018 compared to 85.7% in the three months ended September 30, 2017.  The increase as a percentage of revenues is primarily due to increases in the reserve for obsolete inventory and warranty charges.  Digital product sales general and administrative expenses increased $1.2 million in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to an increase in bad debt expense, partially offset by decreases in payroll and benefits and marketing expenses.

Digital product lease and maintenance operating income increased $14,000 or 6.2% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily as a result of a reductions in general and administrative expenses and depreciation.  The cost of Digital product lease and maintenance decreased $61,000 or 16.2% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to a reduction in depreciation.  The cost of Digital product lease and maintenance revenues represented 53.1% of related revenues in the three months ended September 30, 2018 compared to 57.8% in the three months ended September 30, 2017.  The cost of Digital product lease and maintenance includes field service expenses, plant repair costs, maintenance and depreciation.  Digital product lease and maintenance general and administrative expenses decreased $10,000 or 21.3% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to a decrease in consulting expenses.

Corporate general and administrative expenses increased $379,000 or 48.2% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to increases in consulting expenses of $352,000 and professional fees of $75,000, partially offset by decreases in travel and entertainment expenses of $27,000, rent expense of $19,000 and payroll and benefits of $12,000.

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Net interest expense increased $36,000 or 17.8% in the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, primarily due to an increase in the average outstanding long-term debt, primarily due to the Second Carlisle Agreement, the forgivable loan and the SM Investors loans, partially offset by a reduction in the revolving loan balance.

The effective tax rate for the three months ended September 30, 2018 and 2017 was 0.0%.  Both the 2018 and 2017 tax rates are being affected by the valuation allowance on the Company’s deferred tax assets as a result of reporting pre-tax losses.

Liquidity and Capital Resources

Current Liquidity

The Company has incurred significant recurring losses and continues to have a significant working capital deficiency.  The Company had a working capital deficiency of $9.2 million as of September 30, 2018.  As of December 31, 2017, the Company had a working capital deficiency of $5.8 million.  The increase in the working capital deficiency is primarily due to decreases in receivables, prepaids and cash and increases in accrued liabilities and accounts payable, partially offset by decreases in the current portion of long-term debt and customer deposits.

On November 5, 2018, the Company entered into an SPA with Unilumin, pursuant to which Unilumin purchased 1,315,789 shares of Common Stock, for a purchase price of $1,500,000, or a per share purchase price of $1.14.  The SPA requires that the proceeds of the Purchase are to be utilized for mutually agreed purposes.  In connection with the SPA, the Company issued the Warrants to purchase 5,670,103 shares of the Company’s Common Stock to Unilumin at an exercise price of $0.97 per share.  The exercise price of the Warrants is automatically adjusted to $0.75 per share if the Company is unable to complete a financing of $2,500,000 through the Rights Offering by June 1, 2019.  The exercise price of the Warrants will also be decreased to the same price as the exercise price of the rights issued in the Rights Offering if the exercise price of such rights is less than $1.00 per share.  The Warrants are exercisable until November 2, 2020, provided that they are mandatorily exercisable upon completion of the Rights Offering if in excess of 90% of the Company’s currently issued and outstanding Preferred Stock converts into Common Stock.  In connection with any such Preferred Stock conversion, Unilumin acknowledged that the conversion price of the Preferred Stock may be decreased, subject to stockholder approval.  If all or a significant portion of the Warrants are exercised, Unilumin would own in excess of fifty percent of the Company’s outstanding Common Stock on a fully diluted basis, even if the Rights Offering is completed.

The Company is dependent on future operating performance in order to generate sufficient cash flows in order to continue to run its businesses.  Future operating performance is dependent on general economic conditions, as well as financial, competitive and other factors beyond our control.  As a result, we have experienced a decline in our lease and maintenance bases.  The cash flows of the Company are constrained and, in order to more effectively manage its cash resources, the Company has, from time to time, increased the timetable of its payment of some of its payables.  There can be no assurance that we will meet our anticipated current and near-term cash requirements.  Management believes that its current cash resources and cash provided by operations would not be sufficient to fund its anticipated current and near-term cash requirements and is seeking additional financing in order to execute our operating plan.  We cannot predict whether future financing, if any, will be in the form of equity, debt or a combination of both.  We may not be able to obtain additional funds on a timely basis, on acceptable terms or at all.  The Company has no agreements, commitments or understandings with respect to any such additional financing.  To the extent the Company issues additional equity securities, it could be dilutive to existing shareholders.  The Company continually evaluates the need and availability of long-term capital in order to meet its cash requirements and fund potential new opportunities.

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The Company generated cash of $434,000 from operating activities for the nine months ended September 30, 2018 and used cash of $294,000 from operating activities for the nine months ended September 30, 2017.  The Company has implemented several initiatives to improve operational results and cash flows over future periods, including reducing head count, reorganizing its sales department, outsourcing certain administrative functions and expanding its sales and marketing efforts in the LED lighting market.  The Company continues to explore ways to reduce operational and overhead costs.  The Company periodically takes steps to reduce the cost to maintain the digital products on lease and maintenance agreements.

Cash, cash equivalents and restricted cash decreased $663,000 in the nine months ended September 30, 2018 to $1.2 million at September 30, 2018 from $1.9 million at December 31, 2017.  The decrease is primarily attributable to payments on the revolving loan of $1.8 million, scheduled payments of long-term debt of $150,000 and investment in property and equipment of $135,000, partially offset by borrowings of long-term debt of $1.0 million and cash provided by operating activities of $434,000.  The current economic environment has increased the Company’s trade receivables collection cycle, and its allowances for uncollectible accounts receivable, but collections continue to be favorable.

Under various agreements, the Company is obligated to make future cash payments in fixed amounts.  These include payments under the Company’s current and long-term debt agreements, pension plan minimum required contributions, employment agreement payments and rent payments required under operating lease agreements.  The Company has both variable and fixed interest rate debt.  Interest payments are projected based on actual interest payments incurred in 2018 until the underlying debts mature.

The following table summarizes the Company’s fixed cash obligations as of September 30, 2018 for the remainder of 2018 and over the next four fiscal years:

In thousands	Remainder of 2018		2019		2020		2021		2022
Long-term debt, including interest	$	2,739	$	1,303	$	1,076	$	-	$	-
Pension plan payments		592		290		312		276		333
Employment agreement obligations		113		450		338		-		-
Estimated warranty liability		38		132		101		73		47
Operating lease payments		177		419		337		342		348
Total	$	3,659	$	2,594	$	2,164	$	691	$	728

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Of the fixed cash obligations for debt for the remainder of 2018, $1.1 million, including interest, of Notes and Debentures remained outstanding as of September 30, 2018.  The Company is seeking additional financing in order to provide enough cash to cover our remaining current fixed cash obligations as well as providing working capital.  However, there can be no assurance as to the amounts, if any, the Company will receive in any such financing or the terms thereof.  To the extent the Company issues additional equity securities, it could be dilutive to existing shareholders.  In addition, the Company’s current outstanding debt and other obligations could limit its ability to incur more debt.

For a further description of the Company’s long-term debt, see Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt.

Pension Plan Contributions

At this time, we expect to make our minimum required contributions in 2018 of $592,000 Subsequent to September 30, 2018, we contributed $421,000 to the plan, leaving $171,000 that still remains to be paid in 2018, however, there is no assurance that we will be able to make any or all of such remaining payments.  See Note 8 to the Condensed Consolidated Financial Statements – Pension Plan for further details.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The Company may, from time to time, provide estimates as to future performance.  These forward-looking statements will be estimates and may or may not be realized by the Company.  The Company undertakes no duty to update such forward-looking statements.  Many factors could cause actual results to differ from these forward-looking statements, including loss of market share through competition, introduction of competing products by others, pressure on prices from competition or purchasers of the Company’s products, interest rate and foreign exchange fluctuations, terrorist acts and war.

Item 3.             Quantitative and Qualitative Disclosures about Market Risk

The Company is subject to interest rate risk on its long-term debt.  The Company manages its exposure to changes in interest rates by the use of variable and fixed interest rate debt.  The fair value of the Company’s fixed rate long-term debt is disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt.  Every 1-percentage-point change in interest rates would result in an annual interest expense fluctuation of approximately $22,000.  In addition, the Company is exposed to foreign currency exchange rate risk mainly as a result of its investment in its Canadian subsidiary. A 10% change in the Canadian dollar relative to the U.S. dollar would result in a currency remeasurement expense fluctuation of approximately $273,000, based on dealer quotes, considering current exchange rates.  The Company does not enter into derivatives for trading or speculative purposes and did not hold any derivative financial instruments at September 30, 2018.

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Item 4.             Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Accounting Officer (our principal executive officer and principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures.  Our Chief Executive Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the 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 that such information is accumulated and communicated to our management (including our Chief Executive Officer and Chief Accounting Officer) to allow timely decisions regarding required disclosures.  Based on such evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that these disclosure controls are effective as of September 30, 2018.

Changes in Internal Control over Financial Reporting.  Other than the changes discussed in relation to the new revenue recognition standards in Note 3 to the Condensed Consolidated Financial Statements – Revenue Recognition, there has been no change in the Company’s internal control over financial reporting that occurred in the quarter ended September 30, 2018 and that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II – Other Information

Item 1.             Legal Proceedings

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business and/or which are covered by insurance.  The Company has accrued reserves individually and in the aggregate for such legal proceedings.  Should actual litigation results differ from the Company’s estimates, revisions to increase or decrease the accrued reserves may be required.  A vendor has brought a claim against us for $87,000 plus interest and damages.  The Company has accrued for the $87,000 plus interest in Accounts payable and in Accrued liabilities in the Consolidated Balance Sheet at September 30, 2018.  Potential damages, if any, are not yet determinable.

Item 1A.          Risk Factors

The Company is subject to a number of risks including general business and financial risk factors.  Any or all of such factors could have a material adverse effect on the business, financial condition or results of operations of the Company.  You should carefully consider the risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2017.  There have been no material changes to those previously disclosed risk factors.

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Item 2.             Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.             Defaults upon Senior Securities

As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company has outstanding $387,000 of Notes which are no longer convertible into common shares.  The Notes matured as of March 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $290,000 and $266,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.  The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Notes outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company has outstanding $220,000 of Debentures.  The Debentures matured as of December 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $185,000 and $169,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.  The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Debentures outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company had outstanding $933,000 and $640,000 under the Credit Agreement as of September 30, 2018.  The Company and CNH agreed to a forbearance with respect to the default caused by our non-compliance with the fixed charge coverage ratio covenant as of September 30, 2018.

Item 4.             Mine Safety Disclosures

Not applicable.

Item 5.             Other Information

On November 6, 2018, the Company declared a semi-annual dividend of $6.00 per share of Preferred Stock aggregating $99,000, which was paid on November 8, 2018.

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Item 6.             Exhibits

10.1     Employment agreement with Alberto Shaio dated September 28, 2018, (incorporated by reference to Exhibit 10.1 of Form 8-K dated October 4, 2018).

10.2     Employment agreement with Todd Dupee dated October 22, 2018, (incorporated by reference to Exhibit 10.1 of Form 8-K dated October 26, 2018).

10.3     Separation agreement and general release with Jean-Marc Allain dated effective July 13, 2018, filed herewith.

10.4     Forbearance Agreement to Credit and Security Agreement, dated as of November 7, 2018, by and among CNH Finance Fund I, L.P., Trans-Lux Corporation, Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation, filed herewith.

10.5     Securities Purchase Agreement dated as of November 2, 2018 by and between the Company and Unilumin (incorporated by reference to Exhibit 10.1 of Form 8-K filed November 8, 2018).

10.6     Warrant, dated as of November 2, 2018, issued to Unilumin (incorporated by reference to Exhibit 10.2 of Form 8-K filed November 8, 2018).

31.1     Certification of Alberto Shaio, President and Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2     Certification of Todd Dupee, Vice President and Chief Accounting Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1     Certification of Alberto Shaio, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2     Certification of Todd Dupee, Vice President and Chief Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRANS-LUX CORPORATION
	(Registrant)
	by	/s/  Alberto Shaio
		Alberto Shaio
		President and Chief Executive Officer
	by	/s/  Todd Dupee
		Todd Dupee
		Senior Vice President and Chief Accounting Officer
Date:  November 9, 2018

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EX-10.3

Exhibit 10.3

AGREEMENT AND RELEASE

This Separation Agreement and General Release (this “Agreement”) dated as of July 31, 2018 (the “Effective Date”) is entered into by and between Trans-Lux Corporation, a Delaware corporation (the “Company”) and Jean-Marc Allain (“Employee,” and, together with the Company, the “Parties”).

RECITALS

WHEREAS, the Parties are subject to an employment agreement dated March 30, 2015 (the “Employment Agreement”), whereby the Employee would serve as Chief Executive Officer (“CEO”) of the Company;

WHEREAS, the Employee has not been acting CEO or serving in his other capacities since April 24, 2018;

WHEREAS, the Parties desire to amicably terminate the employment relationship and settle all issues between them, including any issues under the Employment Agreement;

NOW THEREFORE, in consideration of the foregoing and in consideration of the covenants, warranties and promises set forth below, receipt of which is hereby acknowledged, the Parties agree as follows:

AGREEMENT

1.The Parties acknowledge and agree that Employee voluntarily resigned as President and Chief Executive Officer and Chief Accounting Officer as well as a Director of  the Company as of  July 16, 2018 (“Separation Date”). Except as required or permitted by this Agreement, as of the date of execution of this Agreement, the Employee shall not hold himself out as an employee, agent, or representative of the Company or any of its affiliates. 

2.In consideration for the promises under this Agreement, the Company shall: (i) provide Employee severance equal to Employee’s Base Salary under the Employment Agreement for a period of ten weeks from July 20, 2018 (until September 30, 2018) aggregating $ 57,692.30 less accrued vacation pay of $12,882.69 (89.32 hours) for a net severance amount of $44,909.61, less applicable taxes and withholdings, to be paid in installments in accordance with the Company’s standard payroll practices, and (ii) reimburse Employee for $5,179.03 in business expenses made on the Company’s behalf, and (iii) reimburse Employee for the Company’s portion of the COBRA premiums associated with health insurance continuation coverage until the earliest of (A) three (3) months from the Separation Date or (B) the first date on which Employee becomes eligible for coverage under another group health insurance plan; provided that Employee timely elects and is eligible for COBRA coverage.  The Company shall reimburse Employee within ten (10) business days of its receipt of documentation from Employee showing proof of payment of such COBRA premiums.  Employee agrees to immediately notify the Company should Employee become eligible for health care benefits under another group health insurance plan at any time prior to the end of the three (3) month reimbursement period. All payments under (i) of this Paragraph above shall begin to be made within seven (7) days following the Release Effective Date, defined below. The Company and the Employee acknowledge that Insperity PEO Services, L.P. (“Insperity”) has no obligation to pay the Employee the compensation set forth in this Section  2.

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3.The Employee acknowledges that all terms of the Employment Agreement intended to survive termination of the Employment Agreement, remain in effect, including but not limited to the Restrictive Covenants in Sections 6.1-6.4 of the Employment Agreement. The Employee acknowledges that he is not entitled to payment of any monies owed up to and including the Separation Date and that he is not entitled to the benefits listed in Section 2 of this Agreement.

4.(a) As a material inducement to the Employee entering into this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Employee, on behalf of himself and his heirs, executors, administrators, trustees, legal representatives, agents and assigns (collectively the “Employee Releasors”) forever releases and discharges (i) the Company and Insperity and their respective past, present and future parent entities, subsidiaries, divisions, affiliates and related business entities, successors and assigns, and their respective past, present and future directors, officers, shareholders, members, partners, fiduciaries, agents, trustees, administrators, employees and assigns, whether acting on behalf of the Company or in their individual capacities, collectively, (the “Company Releasees”) from any and all claims, Claims which any of the Employee Releasors ever had, now have, or may have against any of the Company Releasees from the beginning of the world through the Effective Date; provided however that this release does not release or waive any representations, covenants, duties or obligations of the Company Releasees under this Agreement.

  (b)Without limiting the generality of the foregoing subsection (a), this Agreement is intended to and shall release the Company Releasees from any and all claims arising out of Employee’s employment with the Company and/or the termination of Employee’s employment, including but not limited to any claim(s) under or arising out of (i) the Employment Agreement, (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) the Americans with Disabilities Act, as amended; (iv) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding claims for accrued, vested benefits under any employee benefit plan of the Company in accordance with the terms of such plan and applicable law); (v) the Age Discrimination in Employment Act of 1967; (vi) the Older Workers Benefits Protection Act; (vii) the Sarbanes-Oxley Act of 2002; (viii) the Dodd-Frank Act; (ix) the Internal Revenue Code of 1986; (x) the New York Labor Law; (xi) the New York Wage Theft Prevention Act, (xii) the New York State or City Human Rights Laws; (xiii) the New York City Earned Sick Time Act; (xiv) alleged discrimination or retaliation in employment (whether based on federal, state or local law, statutory or decisional); (xv) the terms and conditions of Employee’s employment with the Company, the separation of such employment, and/or any of the events relating directly or indirectly to or surrounding that separation; and (xvi) any law (statutory or decisional) providing for attorneys’ fees, costs, disbursements and/or the like.

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  (c)Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent Employee from filing a charge with or participating in an investigation conducted by any governmental agency, including, without limitation, the United States Equal Employment Opportunity Commission (“EEOC”) or applicable state or city fair employment agency or the Securities and Exchange Commission (“SEC”), to the extent required or permitted by law. Nevertheless, Employee understands and agrees that he is waiving any relief available (including, for example, monetary damages or reinstatement), under any of the claims and/or causes of action waived in Sections 4(a) and (b), including but not limited to financial benefit or monetary recovery from any lawsuit filed or settlement reached by the EEOC or anyone else with respect to any claims released and waived in this Agreement. Notwithstanding the foregoing, nothing in this Agreement limits Employee’s right to receive an award for information provided to the SEC or other similar government agency or commission.

5.The Employee shall have up to twenty-one (21) days from the date of their receipt of this Agreement, to consider the terms and conditions of the Agreement. They may accept this Agreement at any time by executing it and returning it to Sal Zizza no later than 5:00 p.m. on the twenty-first (21st) day after their receipt of this Agreement.  Thereafter, the Employee will have seven (7) days to revoke this Agreement by stating his desire to do so in writing to Sal Zizza. The effective date of this Agreement shall be the eighth (8th) day following the Employee signing of this Agreement (the “Release Effective Date”), provided the Employee does not revoke the Agreement during the revocation period.  In the event the Employee does not accept this Agreement as set forth above, or in the event the Employee revokes this Agreement during the revocation period, this Agreement, including but not limited to the obligation of the Company and its subsidiaries and affiliates to provide the payments and/or benefits referred to in Paragraph 2 above, shall automatically be deemed null and void.  

6.(a)  The Employee acknowledges that he has not and will not engage in any conduct, make any comment, or act in any manner, which is derogatory towards the Company, their operations, their Affiliates, or licensees, and has not or will not engage in conduct that is injurious to the Company’s or the Company Releasees’ reputation or interest, or any conduct that would reasonably be expected to lead to unwanted or unfavorable publicity to the Company, including but not limited to (i) divulging, communicating, or in any way making use of any Confidential Information (defined below) acquired in the performance of his duties at the Company or (ii) publicly disparaging (or inducing or encouraging others to publicly disparage) the Company, its employees, or the Company Releasees. 

             (b)  Employee represents that he has not filed any grievance, suit, action or claim against any of the Company Releasees and, to the extent in compliance with applicable law, that he will not do so at any time hereafter with respect to the matters set forth herein, other than to enforce the terms of this Agreement. 

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             (c)  The Employee acknowledges that the terms of the Company’s policies regarding confidentiality and non-disclosure, including the Company’s policies as defined in Section 6.2 of the Employment Agreement, are (other than as set forth herein) incorporated herein by reference, and Employee agrees and acknowledges that he is bound by their terms. Specifically, Employee may not disclose any trade secrets, confidential or proprietary information, knowledge, or know-how pertaining to the past or present business of the Company or any confidential or proprietary information concerning any past or present assets or liabilities of the Company (collectively, the “Confidential Information”), including, without limitation, its financial statements, business plans, marketing ideas and plans, internal memoranda, reports, audits, patient surveys, employee surveys, operating policies, quality assurance materials, fees, and other materials or records of a proprietary nature.  Employee further agrees not to disclose or use any Confidential Information for any purpose, including without limitation any competitive purpose, unless authorized to do so by the Company in writing.  Employee’s obligations will continue with respect to Confidential Information until such information becomes generally available from public sources through no fault of Employee or any representative of Employee. Employee will promptly deliver to the Company the laptop computer in his possession. The Company will return the laptop to Employee once it has removed proprietary information. The Parties agree that Employee may keep his cell phone number and cell phone. Upon the Company’s request, Employee will promptly (at his option but at the Company’s expense) deliver to the Company or destroy all documents, records, files, notebooks, manuals, letters, notes, reports, patient and supplier lists, cost and profit data, e-mail, apparatus, hardware, software, drawings, blueprints, and any other material of the Company or any of its Affiliated Entities or licensees, including all materials pertaining to Confidential Information developed by the Company, and all copies of such materials, whether of a technical, business or fiscal nature, whether on the hard drive of a laptop or desktop computer, in hard copy, disk or any other format, which are in his possession, custody or control.

7.          The Employee (at the cost of the Company) will reasonably cooperate with the Company and/or its subsidiaries and affiliates and its/their counsel in connection with any investigation, administrative proceeding or litigation relating to any matter in which Employee was involved or of which Employee has knowledge.

8.The terms and conditions of this Agreement are and shall be deemed to be confidential, and shall not be disclosed by Employee or by the Company to any person or entity without the prior written consent of the other party, except if required by law, and to Employee’s or the Company’s accountants, attorneys, and spouse, provided that they agree to maintain the confidentiality of this Agreement.  Employee and the Company further represent that each has not disclosed the terms and conditions of this Agreement to anyone other than their attorneys, accountants and spouse. 

9.The making of this Agreement is not intended, and shall not be construed, as an admission that any of the parties hereto have violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract, or committed any wrong whatsoever.

10.The Parties agree that this Agreement may not be used as evidence in a subsequent proceeding except in a proceeding to enforce the terms of this Agreement.

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11.The Employee acknowledges that: (a) he has carefully read this Agreement in its entirety; (b) he has had an opportunity to consider fully the terms of this Agreement; (c) he has been given twenty-one (21) days from the day he received a copy of this Agreement and understands and agrees that he is specifically releasing the Company from any and all claims; (d) he has been advised by the Company to consult with an attorney of his choosing in connection with this Agreement; (e) he fully understands the significance of all of the terms and conditions of this Agreement and he has discussed it with his independent legal counsel, or has had a reasonable opportunity to do so; and (f) he is signing this Agreement voluntarily and of his own free will and assents to all the terms and conditions contained herein.

Each person signing this Agreement in his or her representative capacity represents and warrants by signing this Agreement that it is his or her intent to bind his or her principal to the terms contained herein, that the person signing in his or her representative capacity has been authorized to bind the respective principal to such terms, and that it is the principal's intent to be so bound. Each party represents and warrants that no other person or entity has had any interest in the claims, demands, obligations, or causes of action referred to in this Agreement except as otherwise set forth herein and that each party has the sole right and exclusive authority to execute this Agreement either in his/her individual capacity or as a representative of the company for which he/she signs.  This Agreement upon each party’s execution and delivery will be, valid and binding obligations of such party, enforceable against him/her/it in accordance with the terms hereof and thereof, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally and by equitable principles.  Each party represents that it/he/she has received independent legal and tax advice in connection with this Agreement and fully understands the legal and tax ramifications of this Agreement and the transactions set forth herein. The parties acknowledge that this Agreement is fair and equitable, and it is not the result of any fraud, duress or undue influence exercised by either of the parties.

12.This Agreement is binding upon, and shall inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns.  Each of parties shall take any and all steps, and execute any and all documents, reasonably requested by the other party to effectuate the purposes set forth in this Agreement.

13.If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force and effect.  However, the illegality or unenforceability of such provision shall have no effect upon, and shall not impair the enforceability of, any other provision of this Agreement; provided, however, that, upon any finding by a court of competent jurisdiction that any of the releases or covenants provided for by Sections 3, 4, and/or 6 above are illegal, void, or unenforceable, the parties agree to execute releases, waivers and/or covenants with substantially similar provisions that are legal and enforceable.  Finally, any breach of any of the terms of Sections 3, 4, 6, and/or 8 above shall constitute a material breach of this Agreement as to which any party may seek appropriate relief in a court of competent jurisdiction.

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14.This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York without regard to the conflict of laws provisions thereof.  Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of any appropriate state or federal court of record in New York, NY over any action or proceeding arising out of or relating to this Agreement and each of the parties hereto hereby irrevocably agrees that all claims in respect of such action or proceeding shall be heard and determined in such New York state or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent legally possible, the defense of an inconvenient forum to the maintenance of such action or proceeding.

15.This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.  Facsimile or .pdf signatures shall have the same force and effect as original signatures.  The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as thereafter waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.  The drafting and negotiation of this Agreement have been participated in by each of the Parties, and for all purposes this Agreement shall be deemed to have been drafted jointly by each of the Parties.

16.All notices under this Agreement shall be in writing, and shall be deemed given when personally delivered, or delivered by overnight courier, or three days after being sent by prepaid certified or registered U.S. mail to the address of the party as set forth at the beginning of this Agreement or such other address as such party last provided to the other by written notice.  

17.This Agreement constitutes the complete understanding between the parties with respect to the termination of Employee’s employment at the Company and supersedes any and all agreements, understandings, and discussions, whether written or oral, between the parties regarding the subject herein.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the parties hereto. The Company and the Employee acknowledge that Insperity is a third party beneficiary of Sections 2 and 4 of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered on the date above.

	Trans-Lux Corporation
	By:	/s/ Alberto Shaio
		Title: CEO
		Date: August 20, 2018
Agreed to and Accepted:
Date:
/s/ Jean-Marc Allain
Jean-Marc Allain

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EX-10.4

Exhibit 10.4

FORBEARANCE AGREEMENT

TO CREDIT AND SECURITY AGREEMENT

THIS FORBEARANCE AGREEMENT TO CREDIT AND SECURITY AGREEMENT (this “Agreement”), dated as of November 6, 2018, is made and entered into by and among CNH FINANCE FUND I, L.P., a Delaware limited partnership (formerly known as SCM Specialty Finance Opportunities Fund, L.P.) (“Lender”), and TRANS-LUX CORPORATION, a Delaware corporation (“Trans-Lux Corp.”), TRANS-LUX DISPLAY CORPORATION, a Delaware corporation, TRANS-LUX MIDWEST CORPORATION, an Iowa corporation, TRANS-LUX ENERGY CORPORATION, a Connecticut corporation (collectively, “Borrowers”).

WHEREAS, Borrowers and Lender are parties to that certain Credit and Security Agreement dated, as of July 12, 2016 (as amended to date, and as the same may from time to time be further amended, restated, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which, subject to the terms and conditions set forth therein, Lender has made certain credit facilities available to Borrowers; 

WHEREAS, an Event of Default under the Credit Agreement has occurred and is continuing by reason of Borrowers’ failure to comply with the Fixed Charge Coverage Ratio covenant as of the calendar month ending September 30, 2018, as required pursuant to Section 7.1 of the Credit Agreement (the “Subject Event of Default”);

WHEREAS, by reason of the occurrence and continuance of the Subject Event of Default, Lender is entitled to immediately exercise its rights and remedies under the Credit Agreement and the other Loan Documents, and Borrowers have no defenses, offsets or counterclaims to the exercise of such rights and remedies;

WHEREAS, Borrowers have advised Lender that on or about the date hereof Trans-Lux Corp. will be issuing and selling up to 1,315,789 shares of Trans-Lux Corp.’s common stock and certain warrants to Unilumin North America Inc., a Delaware corporation (the “Investor”), in exchange for cash consideration of not less than $1,500,000.00 (the “First Equity Raise”);

WHEREAS, Borrowers have advised Lender that on or before February 28, 2019, Trans-Lux Corp. will be issuing and selling additional shares of Trans-Lux Corp.’s common stock in connection with the exercise of warrants by Investor in exchange for cash consideration of not less than $8,000,000.00 (the “Second Equity Raise” and together with the First Equity Raise, the “Equity Raises”); and

WHEREAS, Borrowers have requested and Lender has agreed, for the period from the date hereof through the end of the Forbearance Period (as defined below), to forbear from exercising its rights and remedies under the Loan Documents with respect to the Subject Event of Default subject to the terms and conditions set forth herein.

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NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Defined Terms.  Capitalized terms used but not defined herein that are defined in the Credit Agreement shall have the meanings assigned to them in the Credit Agreement.

2.Agreement to Forbear.  During the period commencing on the date hereof and ending on the earlier to occur of (i) February 28, 2019 and (ii) the occurrence of any Additional Default (as defined below) (the “Forbearance Period”), and subject to the specific terms and conditions set forth, Lender agrees that it will forbear from exercising its rights and remedies under the Loan Documents due to the Subject Event of Default.  Notwithstanding any provision of this Agreement, the Forbearance Period shall terminate, and nothing contained herein shall limit any rights or remedies of Lender under the Credit Agreement or any other Loan Document, upon a Default or Event of Default which is not a Subject Event of Default (each, an “Additional Default”).  For purposes of this Agreement, any failure by Borrowers during the Forbearance Period to comply with the Fixed Charge Coverage Ratio covenant as required pursuant to Section 7.1 of the Credit Agreement shall not constitute an Additional Default and the requirement of compliance with the Fixed Charge Coverage Ratio covenant under the Credit Agreement is suspended during the Forbearance Period.  A default or failure to comply with this Agreement shall constitute an Additional Default.  Upon the expiration or termination of the Forbearance Period, Lender’s forbearance shall automatically terminate and Lender shall be entitled to exercise any and all of its rights and remedies under this Agreement, the Credit Agreement and the Loan Documents without further notice.  Borrowers hereby agree that Lender shall have no obligation to extend the Forbearance Period; provided, however, that Borrowers and Lender may extend such Forbearance Period by express written agreement.

3.Default Interest.  During the Forbearance Period and while any Event of Default remains ongoing and uncured, in accordance with Section 3.6 of the Credit Agreement, the Applicable Rate of interest with respect to the Obligations shall accrue at the Default Rate.

4.Borrowing Base Reserve.  During the Forbearance Period (and thereafter in Lender’s sole discretion), the Lender shall maintain a Borrowing Base reserve of not less than $300,000.00, which reserve shall not be reduced as a result of the consummation or closing of either or both of the Equity Raises notwithstanding that any portion of such reserve may constitute the Equity Raise Reserve.

5.No Payments of Subordinated Debt.  Borrowers shall be permitted to make a one-time payment of interest due and owing for the period ending September 30, 2018, to SM Investors L.P. or SM Investors II, L.P. in an amount not to exceed $26,000.  Borrowers shall not otherwise make any payment of principal, interest or any amount or obligation to SM Investors L.P. or SM Investors II, L.P. or any other subordinated creditor until all of the Obligations owing to Lender have been fully and indefeasibly paid and satisfied.

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6.No Waiver.  Nothing contained in this Agreement or any other communication between Lender, Borrowers or any other loan party shall be a waiver of any past, present or future violation, Default or Event of Default of Borrowers under the Credit Agreement or any Loan Document.  Lender hereby expressly reserves any rights, privileges and remedies under the Credit Agreement and each Loan Document that Lender may have with respect to any violation, Default or Event of Default, and any failure by Lender to exercise any right, privilege or remedy as a result of the violations set forth above shall not directly or indirectly in any way whatsoever either (i) impair, prejudice or otherwise adversely affect the rights of Lender, except as set forth herein, at any time to exercise any right, privilege or remedy in connection with the Credit Agreement or any Loan Document, (ii) amend or alter any provision of the Credit Agreement or any Loan Document or any other contract or instrument or (iii) constitute any course of dealing or other basis for altering any obligation of Borrowers or any rights, privilege or remedy of Lender under the Credit Agreement or any Loan Document or any other contract or instrument.  Nothing in this Agreement shall be construed to be a consent by Lender to any prior, existing or future violations of the Credit Agreement or any Loan Document.

7.Future Compliance.  Borrowers are hereby notified that irrespective of (i) any waivers or consents previously granted by Lender regarding the Credit Agreement and the Loan Documents, (ii) any previous failures or delays of Lender in exercising any right, power or privilege under the Credit Agreement or the Loan Documents or (iii) any previous failures or delays of Lender in the monitoring or in the requiring of compliance by Borrowers with the duties, obligations and agreements of Borrowers in the Credit Agreement and the Loan Documents, Borrowers will be expected to and required to comply strictly with their duties, obligations and agreements under the Credit Agreement and the Loan Documents.

8.Representations and Warranties.  Each Borrower represents and warrants to Lender that, before and after giving effect to this Agreement:

(a)All warranties and representations made to Lender under the Credit Agreement and the Loan Documents are true and correct on and as of the date hereof and on and as of the date of execution hereof as though made on and as of each such date (except to the extent such representations and warranties expressly relate to an earlier date).

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(b)The execution, delivery and performance by each Credit Party of this Agreement and any assignment, instrument, document, or agreement executed and delivered in connection herewith and the consummation of the transactions contemplated hereby and thereby (i) have been duly authorized by all requisite action of the appropriate Credit Party and have been duly executed and delivered by or on behalf of such Credit Party; (ii) do not violate any provisions of (A) applicable law, statute, rule, regulation, ordinance or tariff, (B) any order of any Governmental Authority binding on any Credit Party or any of the Credit Parties’ respective properties the effect of which would reasonably be expected to have a Material Adverse Effect, or (C) the certificate of incorporation or bylaws (or any other equivalent governing agreement or document) of each Credit Party, or any agreement between any Credit Party and its shareholders, members, partners or equity owners or among any such shareholders, members, partners or equity owners; (iii) are not in conflict with, and do not result in a breach or default of or constitute an Event of Default, or an event, fact, condition, breach, Default or Event of Default under, any indenture, agreement or other instrument to which any Credit Party is a party, or by which the properties or assets of any Credit Party are bound, the effect of which would reasonably be expected to have a Material Adverse Effect; (iv) except as set forth herein, will not result in the creation or imposition of any Lien of any nature upon any of the properties or assets of any Credit Party, and (v) do not require the consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority or Credit Party unless otherwise obtained.

(c)This Agreement and any assignment, instrument, document, or agreement executed and delivered in connection herewith constitutes the legal, valid and binding obligation of each respective Credit Party, enforceable against such Credit Party in accordance with its respective terms.

(d)Except for the Subject Event of Default, no Default or Event of Default has occurred and is continuing or would exist under the Credit Agreement or any of the Loan Documents, before and after giving effect to this Agreement.

9.Conditions Precedent.  The forbearance set forth in Section 2 hereof shall be effective on the date hereof upon completion of the following conditions precedent (with all documents to be in form and substance satisfactory to Lender and Lender’s counsel):

(a)Lender shall have received this Agreement duly executed by Borrowers;

(b)Payment of all fees, charges and expenses payable to Lender on or prior to the date hereof, if any, and a forbearance fee which Borrowers hereby agree Lender has fully earned as of the date hereof in an amount equal to Twenty Two Thousand Five Hundred Dollars ($22,500.00);

(c)The First Equity Raise shall have been consummated and shall have closed;

(d)All corporate, limited partnership and limited liability company proceedings taken in connection with the transactions contemplated by this Agreement and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender; and

(e)Borrowers shall have executed and/or delivered such additional documents, instruments and agreements as requested by Lender.

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10.Post-Closing Obligations. Borrowers shall comply with each of the following additional covenants and requirements at all times prior to the payment in full of the Obligations, the failure of which would constitute an immediate Event of Default and termination of the forbearance provided for in Section 2 of this Agreement:

(a)On or before January 31, 2019, the Board of Directors of Trans-Lux Corp. shall have approved an amendment to the Certificate of Incorporation of Trans-Lux Corp. and otherwise authorized sufficient additional shares of common stock to permit the Second Equity Raise to be consummated, and shall have provided Lender with evidence of same.

11.  Miscellaneous. 

(a)Ratification.  Borrowers hereby restate, ratify and reaffirm each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof.

(b)Release.  By execution of this Agreement, Borrowers acknowledge and confirm that Borrowers do not have any actions, causes of action, damages, claims, obligations, liabilities, costs, expenses and/or demands of any kind whatsoever, at law or in equity, matured or unmatured, vested or contingent arising out of or relating to this Agreement, the Credit Agreement or the other Loan Documents against any Released Party (as defined below), whether asserted or unasserted.  Notwithstanding any other provision of any Loan Document, to the extent that such actions, causes of action, damages, claims, obligations, liabilities, costs, expenses and/or demands may exist, Borrowers voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself, its managers, members, directors, officers, employees, stockholders, Affiliates, agents, representatives, accountants, attorneys, successors and assigns and their respective Affiliates (collectively, the “Releasing Parties”), hereby fully and completely release and forever discharge Lender, its Affiliates and its and their respective managers, members, officers, employees, Affiliates, agents, representatives, successors, assigns, accountants and attorneys (collectively, the “Indemnified Persons”) and any other Person or insurer which may be responsible or liable for the acts or omissions of any of the Indemnified Persons, or who may be liable for the injury or damage resulting therefrom (collectively, with the Indemnified Persons, the “Released Parties”), of and from any and all actions, causes of action, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, matured or unmatured, vested or contingent, that any of the Releasing Parties has against any of the Released Parties, arising out of or relating to this Agreement, the Credit Agreement, the other Loan Documents, or any Transaction, which Releasing Parties ever had or now have against any Released Party, including, without limitation, any presently existing claim or defense whether or not presently suspected, contemplated or anticipated.

(c)Security Interest.  Borrowers hereby confirm and agree that all security interests and liens granted to Lender continue in full force and effect and shall continue to secure the Obligations.  All Collateral remains free and clear of any liens other than liens in favor of Lender and Permitted Liens.  Nothing herein contained is intended to in any way impair or limit the validity, priority and extent of Lender’s existing security interest in and liens upon the Collateral.

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(d)Costs and Expenses.  Borrowers agree to pay on demand all costs and expenses of Lender and/or its Affiliates in connection with the preparation, execution, delivery and enforcement of this Agreement and all other agreements and instruments executed in connection herewith, including, without limitation, reasonable attorneys’ fees and expenses of Lender’s counsel.

(e)GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PROVISIONS.

(f)Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same respective agreement.  Signatures sent by facsimile or electronic mail shall be deemed originals for all purposes and shall bind the parties hereto.

(g)Loan Document.  This Agreement and any assignment, instrument, document, or agreement executed and delivered in connection with or pursuant to this Agreement shall be deemed to be a “Loan Document” under and as defined in the Credit Agreement for all purposes.

[Signature Pages Follow.]

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first hereinabove written.

BORROWER:		TRANS-LUX CORPORATION, a Delaware corporation
		TRANS-LUX DISPLAY CORPORATION, a Delaware corporation
		TRANS-LUX MIDWEST CORPORATION, an Iowa corporation
		TRANS-LUX ENERGY CORPORATION, a Connecticut corporation
	By:	/s/ Todd Dupee
		Name:  Todd Dupee
		Title: Senior Vice President and Chief Accounting Officer
		As Senior Vice President and Chief Accounting Officer of each of the above entities and, in such capacity, intending by this signature to legally bind each of the above entities

Signature Page to Forbearance Agreement to Credit and Security Agreement

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LENDER:		CNH FINANCE FUND I, L.P.,
		a Delaware limited partnership
	By:	/s/ Timothy Peters
		Name: Timothy Peters
		Title:  Authorized Signatory

Signature Page to Forbearance Agreement to Credit and Security Agreement

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EX-31.1

EXHIBIT 31.1

TRANS-LUX CORPORATION

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Alberto Shaio, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Trans-Lux Corporation for the quarter ended September 30, 2018;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4.         I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)         evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Alberto Shaio
Date: November 9, 2018	Alberto Shaio
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

TRANS-LUX CORPORATION

CERTIFICATION OF THE CHIEF ACCOUNTING OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Todd Dupee, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Trans-Lux Corporation for the quarter ended September 30, 2018;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4.         I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)         evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Todd Dupee
Date: November 9, 2018	Todd Dupee
	Senior Vice President and Chief Accounting Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Alberto Shaio, President and Chief Executive Officer of Trans-Lux Corporation (the “Registrant”), do hereby certify, to the best of my knowledge that:

(1) The Registrant’s Annual Report on Form 10-Q for the quarter ended September 30, 2018 being filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Registrant or the certifying officer.

	/s/ Alberto Shaio
Date: November 9, 2018	Alberto Shaio
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Todd Dupee, Senior Vice President and Chief Accounting Officer of Trans-Lux Corporation (the “Registrant”), do hereby certify, to the best of my knowledge that:

(1) The Registrant’s Annual Report on Form 10-Q for the quarter ended September 30, 2018 being filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Registrant or the certifying officer.

	/s/ Todd Dupee
Date: November 9, 2018	Todd Dupee
	Senior Vice President and Chief Accounting Officer
	(Principal Financial Officer)

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 08, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	TRANS LUX CORP
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		3,624,973
Amendment Flag	false
Entity Central Index Key	0000099106
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 296	$ 747
Accounts receivable, net	1,975	3,522
Inventories	1,955	2,164
Prepaids and other assets	436	1,539
Total current assets	4,662	7,972
Long-term assets:
Rental equipment, net	1,487	2,016
Property, plant and equipment, net	2,206	2,286
Goodwill	744	744
Restricted cash	950	1,162
Other assets	739	804
Total long-term assets	6,126	7,012
TOTAL ASSETS	10,788	14,984
Current liabilities:
Accounts payable	3,850	2,778
Accrued liabilities	6,255	5,781
Current portion of long-term debt	2,060	3,529
Current portion of long-term debt - related party	1,000	500
Customer deposits	667	1,135
Total current liabilities	13,832	13,723
Long-term liabilities:
Long-term debt, less current portion	1,410	1,034
Long-term debt - related party, less current portion		500
Deferred pension liability and other	3,287	3,638
Total long-term liabilities	4,697	5,172
Total liabilities	18,529	18,895
Stockholders' deficit:
Preferred Stock Series A - $20 stated value - 416,500 shares authorized; shares issued and outstanding: 0 in 2018 and 2017 and Preferred Stock Series B - $200 stated value - 51,000 shares authorized; shares issued and outstanding: 16,512 in 2018 and 2017 (liquidation preference $3,393,000)	3,302	3,302
Common Stock - $0.001 par value - 10,000,000 shares authorized; shares issued: 2,317,024 in 2018 and 2,190,011 in 2017; shares outstanding: 2,289,184 in 2018 and 2,162,171 in 2017	2	2
Additional paid-in-capital	28,560	28,273
Accumulated deficit	(30,937)	(26,889)
Accumulated other comprehensive loss	(5,605)	(5,536)
Treasury stock - at cost - 27,840 common shares in 2018 and 2017	(3,063)	(3,063)
Total stockholders' deficit	(7,741)	(3,911)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	10,788	14,984
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Stockholders' deficit:
Preferred Stock Series A - $20 stated value - 416,500 shares authorized; shares issued and outstanding: 0 in 2018 and 2017 and Preferred Stock Series B - $200 stated value - 51,000 shares authorized; shares issued and outstanding: 16,512 in 2018 and 2017 (liquidation preference $3,393,000)
Convertible Preferred Stock [Member] | Series B Preferred Stock [Member]
Stockholders' deficit:
Preferred Stock Series A - $20 stated value - 416,500 shares authorized; shares issued and outstanding: 0 in 2018 and 2017 and Preferred Stock Series B - $200 stated value - 51,000 shares authorized; shares issued and outstanding: 16,512 in 2018 and 2017 (liquidation preference $3,393,000)	$ 3,302	$ 3,302

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Common Stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized	10,000,000	10,000,000
Common Stock, shares issued	2,317,024	2,190,011
Common Stock, shares outstanding	2,289,184	2,162,171
Treasury Stock, shares	27,840	27,840
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 20	$ 20
Preferred stock, shares authorized	416,500	416,500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Convertible Preferred Stock [Member] | Series B Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 200	$ 200
Preferred stock, shares authorized	51,000	51,000
Preferred stock, shares issued	16,512	16,512
Preferred stock, shares outstanding	16,512	16,512
Preferred stock, liquidation preference (in Dollars)	$ 3,393,000	$ 3,393,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Revenues	$ 3,450	$ 10,326	$ 11,047	$ 17,381
Cost of revenues:
Cost of revenues	3,185	8,667	8,741	15,052
Gross profit	265	1,659	2,306	2,329
General and administrative expenses	(3,092)	(1,521)	(5,888)	(4,380)
Operating (loss) income	(2,827)	138	(3,582)	(2,051)
Interest expense, net	(238)	(202)	(652)	(514)
(Loss) gain on foreign currency remeasurement	(48)	(101)	74	(192)
Gain on sale/leaseback transaction		33	11	99
Pension benefit	33	9	101	26
Loss before income taxes	(3,080)	(123)	(4,048)	(2,632)
Income tax expense
Net loss	$ (3,080)	$ (123)	$ (4,048)	$ (2,632)
Loss per share - basic and diluted (in Dollars per share)	$ (1.37)	$ (0.10)	$ (1.88)	$ (1.63)
Digital Product Sales [Member]
Revenues:
Revenues	$ 2,857	$ 9,676	$ 9,158	$ 15,616
Cost of revenues:
Cost of revenues	2,870	8,291	7,750	13,929
Digital Product Lease And Maintenance [Member]
Revenues:
Revenues	593	650	1,889	1,765
Cost of revenues:
Cost of revenues	$ 315	$ 376	$ 991	$ 1,123

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net loss	$ (3,080)	$ (123)	$ (4,048)	$ (2,632)
Other comprehensive income (loss):
Unrealized foreign currency translation gain (loss)	45	97	(69)	187
Total other comprehensive income (loss), net of tax	45	97	(69)	187
Comprehensive loss	$ (3,035)	$ (26)	$ (4,117)	$ (2,445)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities
Net loss	$ (4,048,000)	$ (2,632,000)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	744,000	1,007,000
Amortization of gain on sale/leaseback transaction	(11,000)	(99,000)
Amortization of deferred financing fees and debt discount	155,000	89,000
(Gain) loss on foreign currency remeasurement	(74,000)	192,000
Bad debt expense	1,517,000	33,000
Changes in operating assets and liabilities:
Accounts receivable, net	31,000	427,000
Inventories	209,000	(494,000)
Prepaids and other assets	1,168,000	(2,132,000)
Accounts payable	1,072,000	1,222,000
Accrued liabilities	339,000	778,000
Customer deposits	(468,000)	1,595,000
Deferred pension liability and other	(200,000)	(280,000)
Net cash provided by (used in) operating activities	434,000	(294,000)
Cash flows from investing activities
Purchases of property, plant and equipment	(135,000)	(210,000)
Net cash used in investing activities	(135,000)	(210,000)
Cash flows from financing activities
Proceeds from long-term debt	1,000,000	2,100,000
Proceeds from forgivable loan		650,000
Payments of long-term debt	(1,939,000)	(1,680,000)
Payments of dividends on preferred stock		(99,000)
Payments for deferred financing fees	(22,000)	(30,000)
Net cash (used in) provided by financing activities	(961,000)	941,000
Effect of exchange rate changes	(1,000)	10,000
Net (decrease) increase in cash, cash equivalents and restricted cash	(663,000)	447,000
Cash, cash equivalents and restricted cash at beginning of year	1,909,000	1,218,000
Cash, cash equivalents and restricted cash at end of period	1,246,000	1,665,000
Supplemental disclosure of cash flow information:
Interest paid	408,000	355,000
Income taxes paid	26,000	23,000
Supplemental non-cash financing activities:
Warrants issued to SMI and SMII	287,000
Current assets
Cash and cash equivalents	296,000	503,000
Long-term assets
Restricted cash	950,000	1,162,000
Cash, cash equivalents and restricted cash at end of period	$ 1,246,000	$ 1,665,000

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Basis of Presentation

9 Months Ended

Sep. 30, 2018

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 – Basis of Presentation

As used in this report, “Trans-Lux,” the “Company,” “we,” “us,” and “our” refer to Trans-Lux Corporation and its subsidiaries.

Financial information included herein is unaudited, however, such information reflects all adjustments (of a normal and recurring nature), which are, in the opinion of management, necessary for the fair presentation of the Condensed Consolidated Financial Statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year.  The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) and therefore do not include all information and footnote disclosures required under accounting principles generally accepted in the United States of America (“GAAP”).  The Condensed Consolidated Financial Statements included herein should be read in conjunction with the Consolidated Financial Statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.  The Condensed Consolidated Balance Sheet at December 31, 2017 is derived from the December 31, 2017 audited financial statements.

The following new accounting pronouncements were adopted in 2018:

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Compensation – Retirement Benefits (Topic 715).  ASU 2017-07 improves the presentation of net periodic pension cost and net periodic postretirement benefit cost.  Public business entities should apply the amendments in ASU 2017-07 for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years (i.e., January 1, 2018).  Early application is permitted.  The adoption of this standard did not have a material effect on the Company’s consolidated financial position and results of operations.  See Note 8 – Pension Plan for further details on the effect of the change.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.  ASU 2016-18 requires Restricted cash and restricted cash equivalents to be included within beginning and ending total cash amounts reported in the Condensed Consolidated Statements of Cash Flows.  Disclosure of the nature of the restrictions on cash balances is required under the guidance.  This standard is effective for annual and interim reporting periods for fiscal years beginning after December 31, 2017.  We adopted the guidance in 2018 and retrospectively adopted the guidance back to January 1, 2017.  Upon adoption, the $550,000 of changes in Restricted cash in the nine months ended September 30, 2017, which had previously been presented as investing activities, are now included within beginning and ending cash and equivalents balances in our Consolidated Statements of Cash Flows.  Additionally, in August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provided guidance on certain cash flow issues.  ASU 2016-15 is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2017 (i.e., January 1, 2018).  We adopted the guidance retrospectively effective as of January 1, 2018, which did not have a material effect on the Company’s consolidated financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This standard represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures.  The Company applied this standard effective January 1, 2018 using the modified retrospective method.  The Company has elected to apply this initial application of the standard only to contracts that are not completed at the date of initial application.  For contracts which were modified before the adoption date, the Company has not restated the contract for those modifications. Instead, the Company reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price, if necessary.  The cumulative effect of initially applying the new revenue standard would be applied as an adjustment to the opening balance of retained earnings.  The Company determined that there was no cumulative effect to be recorded and, except for the required financial statement disclosures included in Note 3 – Revenue Recognition, there was no impact to the Company’s condensed consolidated financial statements.

Other than the foregoing changes, there have been no material changes in our significant accounting policies during the nine months ended September 30, 2018 from the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017.

The following new accounting pronouncements, and related impacts on adoption, are being evaluated by the Company:

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20).  ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.  Public business entities should apply the amendments in ASU 2018-14 for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years (i.e., January 1, 2021).  Early application is permitted.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  ASU 2018-02 provides companies with an option to reclassify stranded tax effects within accumulated other comprehensive income (“AOCI”) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (the “TCJ Act”) (or portion thereof) is recorded.  ASU 2018-02 also requires disclosure of a description of the accounting policy for releasing income tax effects from AOCI and whether an election was made to reclassify the stranded income tax effects from the TCJ Act.  Public business entities should apply the amendments in ASU 2018-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted.  The Company is in the process of evaluating this pronouncement but has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial position and results of operations.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350).  ASU 2017-04 simplifies the test for goodwill impairment.  Public business entities should apply the amendments in ASU 2017-04 for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years (i.e., January 1, 2020).  Early application is permitted.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.  A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.  For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted.  In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided an additional (and optional) transition method to adopt the new leases standard whereby an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.  The Company is in the process of evaluating this pronouncement and believes that our adoption of the standard will likely have a material impact to our Condensed Consolidated Balance Sheets for the recognition of certain operating leases as right-of-use assets of approximately $1.3 million and lease liabilities of $1.3 million.  We are in the process of analyzing our leases, implementing systems, developing processes and internal controls and finalizing our accounting policies to comply with the standard's adoption requirements.

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 eliminates the separate accounting model for nonemployee share-based payment awards and generally requires companies to account for share-based payment transactions with nonemployees in the same way as share-based payment transactions with employees.  The accounting remains different for attribution, which represents how the equity-based payment cost is recognized over the vesting period, and a contractual term election for valuing nonemployee equity share options.  Public business entities should apply the amendments in ASU 2018-07 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019).  Early application is permitted for all entities on a modified retrospective basis.  The Company does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial position and results of operations.

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Going Concern

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

Note 2 – Going Concern

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business.  This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent.  In accordance with this requirement, the Company has prepared its accompanying Condensed Consolidated Financial Statements assuming the Company will continue as a going concern.

We do not have adequate liquidity, including access to the debt and equity capital markets, to operate our business over the next 12 months from the date of issuance of this Form 10-Q. The Company had a working capital deficiency of $9.2 million as of September 30, 2018. As a result, our short-term business focus continues to be to preserve our liquidity position. While we received gross proceeds of $1.5 million from the sale of 1,315,789 shares of Common Stock as described in Note 13 – Subsequent Events, unless we are successful in obtaining additional liquidity, we believe that we will not have sufficient cash and liquid assets to fund normal operations and, as such, there is substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of this Form 10-Q. In addition, the Company’s obligations under its pension plan exceeded plan assets by $4.1 million at September 30, 2018, including $817,000 of minimum required contributions due over the next 12 months. The Company is in default on its 8¼% Limited convertible senior subordinated notes due 2012 (the “Notes”) and 9½% Subordinated debentures due 2012 (the “Debentures”), which have remaining principal balances of $387,000 and $220,000, respectively. Also, as of September 30, 2018, the Company was not in compliance with the fixed charge coverage ratio covenant related to its Credit Agreement (hereinafter defined). The Company and CNH Finance Fund I, L.P. (“CNH”) agreed to a forbearance with respect to the default caused by our non-compliance with the fixed charge coverage ratio covenant as of September 30, 2018. Such amounts due to CNH mature within the next 12 months. As a result, if the Company is unable to (i) obtain additional liquidity for working capital, (ii) make the minimum required contributions to the defined benefit pension plan, (iii) make the required principal and interest payments on the Notes and the Debentures and/or (iv) attain and maintain compliance with all debt covenants, there would be a significant adverse impact on the financial position and operating results of the Company. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts and classification of liabilities that may result from the outcome of this uncertainty. See Note 7 – Long-Term Debt for further details.

The Company is seeking additional financing in order to provide enough cash to cover our remaining current fixed cash obligations as well as providing working capital.  However, there can be no assurance as to the amounts, if any, the Company will receive in any additional financings or the terms thereof and the Company has no agreements, commitments or understandings with respect to any such additional financing.  To the extent the Company issues additional equity securities, it could be dilutive to existing shareholders.  In addition, the Company’s current outstanding debt and other obligations could limit its ability to incur more debt.

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Revenue Recognition

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 3 – Revenue Recognition

Under the new revenue recognition guidance provided by ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that an entity determines are within the scope of this standard, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.  The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.  At contract inception, once the contract is determined to be within the scope of this standard, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct.  The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.  Sales tax, value added tax and other taxes collected on behalf of third parties are excluded from revenue.

Contracts with customers may contain multiple performance obligations.  For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation.  The Company determines standalone selling prices based on the price at which the performance obligation is sold separately.  If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component.  Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less.  None of the Company’s contracts contained a significant financing component as of September 30, 2018.

Disaggregated Revenues

The following table represents a disaggregation of revenue from contracts with customers for the three and nine months ended September 30, 2018 and 2017, along with the reportable segment for each category:

	Three months ended September 30,				Nine months ended September 30,
In thousands	2018		2017		2018		2017
Digital product sales:
Catalog and small customized products	$	2,857	$	5,270	$	8,158	$	11,210
Large customized products		-		4,406		1,000		4,406
Subtotal		2,857		9,676		9,158		15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total	$	3,450	$	10,326	$	11,047	$	17,381

Performance Obligations

The Company has two primary revenue streams which are Digital product sales and Digital product lease and maintenance.

Digital Product Sales

The Company recognizes net revenue on digital product sales to its distribution partners and to end users related to digital display solutions, fixed digit scoreboards and LED lighting fixtures and lamps. For the Company’s catalog products, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.  For the Company’s customized products, revenue is either recognized at a point in time or over time depending on the size of the contract.  For those customized product contracts that are smaller in size, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.  For those customized product contracts that are larger in size, revenue is recognized over time based on incurred costs as compared to projected costs using the input method, as this best reflects the Company’s progress in transferring control of the customized product to the customer.  The Company may also contract with a customer to perform installation services of digital display products.  Similar to the larger customized products, the Company recognizes the revenue associated with installation services using the input method, whereby the basis is the total contract costs incurred to date compared to the total expected costs to be incurred.

Revenue on sales to distribution partners are recorded net of prompt-pay discounts, if offered, and other deductions.  To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method to which the Company expects to be entitled.  In the case of prompt-pay discounts, there are only two possible outcomes: either the customer pays on-time or does not.  Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.  Determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.  The Company believes that the estimates it has established are reasonable based upon current facts and circumstances.  Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.  The Company offers an assurance-type warranty that the digital display products will conform to the published specifications.  Returns may only be made subject to this warranty and not for convenience.

Digital Product Lease and Maintenance

Lease and maintenance contracts generally run for periods of one month to 10 years.  A contract entered into by the Company with a customer may contain both lease and maintenance services (either or both services may be agreed upon based on the individual customer contract).  Maintenance services may consist of providing labor, parts and software maintenance as may be required to maintain the customer’s equipment in proper operating condition at the customer’s service location.  The Company concluded the lease and maintenance services represent a series of distinct services and the most representative method for measuring progress towards satisfying the performance obligation of these services is the input method.  Additionally, maintenance services require the Company to “stand ready” to provide support to the customer when and if needed.  As there is no discernable pattern of efforts other than evenly over the lease and maintenance terms, the Company will recognize revenue straight-line over the lease and maintenance terms of service.

The Company has an enforceable right to payment for performance completed to date, as evidenced by the requirement that the customer pay upfront for each month of services. Lease and maintenance service amounts billed ahead of revenue recognition are recorded in deferred revenue and are included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

Contract Balances with Customers

Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time. The contract assets are transferred to the receivables when the rights become unconditional. As of September 30, 2018 and December 31, 2017, the Company had no contract assets. The contract liabilities primarily relate to the advance consideration received from customers for contracts prior to the transfer of control to the customer and therefore revenue is recognized on completion of delivery. Contract liabilities are classified as deferred revenue and included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

The following table presents the balances in the Company’s receivables and contract liabilities with customers:

In thousands	September 30, 2018		December 31, 2017
Gross receivables	$	3,738	$	3,753
Allowance for bad debts		1,763		231
Net receivables		1,975		3,522
Contract liabilities		895		1,209

During the three and nine months ended September 30, 2018, the Company recognized bad debt expense of $1.3 million and $1.5 million, respectively, primarily related to two customers.  During the three and nine months ended September 30, 2017, the Company recognized bad debt recovery of $20,000 and bad debt expense of $33,000, respectively.

During the three and nine months ended September 30, 2018, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods:

In thousands	Three months ended September 30, 2018		Nine months ended September 30, 2018
Revenue recognized in the period from:
amounts included in the contract liability at the   beginning of the period	$	218	$	806
Performance obligations satisfied in previous periods   (for example, due to changes in transaction price)		-		-

Transaction Price Allocated to Future Performance Obligations – alternative more qualitative presentation

Remaining performance obligations represents the transaction price of contracts for which work has not been performed (or has been partially performed).  The guidance provides certain practical expedients that limit this requirement and, therefore, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.  As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations for digital product sales was $2.6 million and digital product lease and maintenance was $3.9 million.  The Company expects to recognize revenue on approximately 64%, 22% and 14% of the remaining performance obligations over the next 12 months, 13 to 36 months and 37 or more months, respectively.

Costs to Obtain or Fulfill a Customer Contract

Prior to the adoption of ASU 2014-9, the Company expensed incremental commissions paid to sales representatives for obtaining customer contracts.  Under ASU 2014-9, the Company currently capitalizes these incremental costs of obtaining customer contracts.  Capitalized commissions are amortized based on the transfer of the products or services to which the assets relate.  Applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.  These costs are included in General and administrative expenses.

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.  When shipping and handling costs are incurred after a customer obtains control of the products, the Company also has elected to account for these as costs to fulfill the promise and not as a separate performance obligation.  Shipping and handling costs associated with the distribution of finished products to customers are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer.

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Inventories

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 4 – Inventories

Inventories consist of the following:

In thousands	September 30 2018		December 31 2017
Raw materials	$	1,200	$	1,204
Work-in-progress		588		704
Finished goods		167		256
	$	1,955	$	2,164

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Rental Equipment, net

9 Months Ended

Sep. 30, 2018

Rental Equipment [Abstract]

Rental Equipment [Text Block]

Note 5 – Rental Equipment, net

Rental equipment consists of the following:

In thousands	September 30 2018		December 31 2017
Rental equipment	$	10,425	$	10,425
Less accumulated depreciation		8,938		8,409
Net rental equipment	$	1,487	$	2,016

Depreciation expense for rental equipment for the nine months ended September 30, 2018 and 2017 was $529,000 and $827,000, respectively.  Depreciation expense for rental equipment for the three months ended September 30, 2018 and 2017 was $176,000 and $275,000, respectively.

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Property, Plant and Equipment, net

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 6 – Property, Plant and Equipment, net

Property, plant and equipment consists of the following:

In thousands	September 30 2018		December 31 2017
Machinery, fixtures and equipment	$	3,107	$	2,972
Leaseholds and improvements		12		12
		3,119		2,984
Less accumulated depreciation		913		698
Net property, plant and equipment	$	2,206	$	2,286

Machinery, fixtures and equipment having a net book value of $2.2 million and $2.3 million at September 30, 2018 and December 31, 2017, respectively, were pledged as collateral under various financing agreements.

Depreciation expense for property, plant and equipment for the nine months ended September 30, 2018 and 2017 was $215,000 and $180,000, respectively.  Depreciation expense for property, plant and equipment for the three months ended September 30, 2018 and 2017 was $71,000 and $60,000, respectively.

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Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 7 – Long-Term Debt

Long-term debt consists of the following:

In thousands	September 30 2018		December 31 2017
8¼% Limited convertible senior subordinated notes due 2012	$	387	$	387
9½% Subordinated debentures due 2012		220		220
Revolving credit line		933		2,722
Term loans		1,640		790
Term loans - related party		1,000		1,000
Forgivable loan		650		650
Total debt		4,830		5,769
Less deferred financing costs and debt discount		360		206
Net debt		4,470		5,563
Less portion due within one year		3,060		4,029
Net long-term debt	$	1,410	$	1,534

On July 12, 2016, the Company and its wholly-owned subsidiaries Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation (the “Borrowers”) entered into a credit and security agreement, as subsequently amended on various dates, the latest being on June 11, 2018 (collectively, the “Credit Agreement”) with CNH as lender, which expires on July 12, 2019.  Under the Credit Agreement, the Company is able to borrow up to an aggregate of $4.0 million, which includes (i) up to $3.0 million of a revolving loan, at an interest rate of prime plus 6.0% (11.25% at September 30, 2018), which was previously prime plus 4.0% (8.5% at December 31, 2017) and (ii) a $1.0 million term loan, at an interest rate of prime plus 6.0% (11.25% at September 30, 2018 and December 31, 2017).  Interest under the agreement is payable monthly in arrears.  The availability under the revolving loan is calculated based on certain percentages of eligible receivables and inventory.

The Credit Agreement contains financial and other covenant requirements, including, but not limited to, financial covenants that require the Borrowers to maintain a fixed charge coverage ratio. As of September 30, 2018, the Company was not in compliance with the fixed charge coverage ratio covenant, which triggered a default under the Credit Agreement. Subsequent to September 30, 2018, the Company and CNH agreed to a forbearance agreement which is effective through February 28, 2019, as long as there are no additional defaults under the Credit Agreement. Under this agreement, CNH will forbear from exercising its rights and remedies under the Credit Agreement for the specified period subject to the agreed terms and conditions, which include an increase in the interest rate and certain other restrictions.

On June 11, 2018, the Company entered into a Subordinated Secured Promissory Note (the “SMI Note”) with SM Investors, L.P. (“SMI”), pursuant to which the Company has borrowed $330,000 from SMI at an initial interest rate of 10.00%.  The maturity date of the note is the earlier of June 11, 2020 or the Company’s completion of an additional financing package of at least $1 million.  The Company also issued SMI a three-year warrant to purchase 82,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $95,000, and is being treated as a debt discount amortized over the two-year term of the loan.

On June 11, 2018, the Company entered into a Subordinated Secured Promissory Note (the “SMII Note”) with SM Investors II, L.P. (“SMII”), pursuant to which the Company has borrowed $670,000 from SMII at an initial interest rate of 10.00%.  The maturity date of the note is the earlier of June 11, 2020 or the Company’s completion of an additional financing package of at least $1 million.  The Company also issued SMII a three-year warrant to purchase 167,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $192,000, and is being treated as a debt discount amortized over the two-year term of the loan.

In connection with the financing described in Note 13 – Subsequent Events, SMI and SMII agreed to waive their right of payment with respect to the purchase of 1,315,789 shares for $1.5 million.

In connection with the SMI Note and the SMII Note, the Company and its wholly-owned subsidiaries Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation, as borrowers, entered into a Waiver, Consent and Ninth Amendment to the Credit and Security Agreement (“Ninth Amendment”), dated as of June 11, 2018, with CNH, to provide for certain amendments to that certain Credit and Security Agreement with CNH, dated July 12, 2016, to allow for the Company’s entry into the SMI Note and the SMII Note and the security interests granted to SMI and SMII thereunder.

The Company, SMI, SMII and CNH also entered into a Subordination and Intercreditor Agreement (the “SIA”), dated as of June 11, 2018, setting forth CNH’s senior lien position to all collateral of the Company, and the rights of each of CNH, SMI and SMII with respect to the collateral of the Company.  The SIA allows the Company to make payments to SMI and SMII as long as the Company is not in default on the Credit and Security Agreement with CNH.

The Company has outstanding $387,000 of Notes which are no longer convertible into common shares.  The Notes matured as of March 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $290,000 and $266,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

The Company has outstanding $220,000 of Debentures.  The Debentures matured as of December 1, 2012 and are currently in default.  As of September 30, 2018 and December 31, 2017, the Company had accrued $185,000 and $169,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

On May 23, 2017, the Company received $650,000 structured as a forgivable loan from the City of Hazelwood, Missouri.  The loan will be forgiven on a pro-rata basis if predetermined employment levels are attained and would expire on April 1, 2024.  If the Company attains the employment levels required by the agreement, there is no interest due, otherwise interest accrues at a rate of prime plus 2.0% (7.25% at September 30, 2018).  In February 2018, in accordance with the agreement, the Company requested a 1-year extension of the terms of the agreement, which was approved by the City of Hazelwood in March 2018, so the agreement now terminates on April 1, 2025.

As described in Note 11 – Related Party Transactions, the Company has loans aggregating $1.0 million from an entity affiliated with a director of the Company.

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Pension Plan

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 8 – Pension Plan

As of December 31, 2003, the benefit service under the pension plan had been frozen and, accordingly, there is no service cost.  As of April 30, 2009, the compensation increments had been frozen and, accordingly, no additional benefits are being accrued under the pension plan.

In accordance with the adoption of ASU 2017-07, the Company has retrospectively revised the presentation of the non-service components of periodic pension benefit to Pension benefit in the Condensed Consolidated Statements of Operations.  The following table presents a summary of the effect for periods presented:

	Three months ended September 30, 2017						Nine months ended September 30, 2017
	As reported		As revised		Effect of change		As reported		As revised		Effect of change
In thousands
General and administrative expenses	$	1,512	$	1,521	$	9	$	4,354	$	4,380	$	26
Operating income (loss)		147		138		(9)		(2,025)		(2,051)		(26)
Pension benefit		-		(9)		(9)		-		(26)		(26)
Loss before income taxes	$	(123)	$	(123)		-	$	(2,632)	$	(2,632)	$	-

The following table presents the components of net periodic pension benefit:

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Interest cost	$	114	$	117	$	340	$	350
Expected return on plan assets		(203)		(180)		(609)		(539)
Amortization of net actuarial loss		56		54		168		163
Net periodic pension benefit	$	(33)	$	(9)	$	(101)	$	(26)

As of September 30, 2018, the Company had recorded a current pension liability of $817,000, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets, and a long-term pension liability of $3.3 million, which is included in Deferred pension liability and other in the Condensed Consolidated Balance Sheets.  The minimum required contribution in 2018 is expected to be $592,000.  Subsequent to September 30, 2018, the Company contributed $421,000 to the plan, leaving $171,000 that still remains to be paid in 2018.

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Loss Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 9 – Loss Per Share

The following table presents the calculation of loss per share for the three and nine months ended September 30, 2018 and 2017:

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2018		2017		2018		2017
Numerator:
Net loss, as reported	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)
Change in dividends accumulated on preferred shares		(50)		(50)		(149)		(149)
Net loss attributable to common shares	$	(3,130)	$	(173)	$	(4,197)	$	(2,781)
Denominator:
Weighted average shares outstanding		2,289		1,711		2,232		1,711
Basic and diluted loss per share	$	(1.37)	$	(0.10)	$	(1.88)	$	(1.63)

Basic loss per common share is computed by dividing net loss attributable to common shares by the weighted average number of common shares outstanding for the period.  Diluted loss per common share is computed by dividing net loss attributable to common shares, by the weighted average number of common shares outstanding, adjusted for shares that would be assumed outstanding after warrants and stock options vested under the treasury stock method.

At September 30, 2018 and 2017, the Company had accumulated unpaid dividends of $91,000 related to the Series B Convertible Preferred Stock (“Preferred Stock”).

On November 6, 2018, the Company declared a semi-annual dividend of $6.00 per share of Preferred Stock aggregating $99,000, which was paid on November 8, 2018.  On April 26, 2018, the Company declared a semi-annual dividend of 7.6923 shares of Common Stock per share of Preferred Stock aggregating 127,013 shares of Common Stock, which was distributed to the holders of the Preferred Stock on May 4, 2018.

As of September 30, 2018 and 2017, the Company had warrants to purchase 302,000 shares and 52,000 shares, respectively, of Common Stock outstanding, none of which were used in the calculation of diluted loss per share because their inclusion would have been anti-dilutive.  These warrants could be dilutive in the future if the Company records net income instead of net losses and if the average share price increases and is greater than the exercise price of these warrants.

In connection with the SMI Note, the Company issued SMI a three-year warrant to purchase 82,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $95,000, and is being treated as a debt discount amortized over the two-year term of the loan.

In connection with the SMII Note, the Company issued SMII a three-year warrant to purchase 167,500 shares of the Company at an exercise price of $0.01 per share.  The Company utilized the Black-Scholes method to calculate the fair value of this warrant at the time of issuance, which was $192,000, and is being treated as a debt discount amortized over the two-year term of the loan.

As of September 30, 2018 and 2017, the Company had 16,512 shares of Preferred Stock outstanding, which is convertible into 330,240 shares of Common Stock, none of which were used in the calculation of diluted loss per share because their conversion price was greater than the average stock price for the period and their inclusion would have been anti-dilutive.  These shares of Preferred Stock could be dilutive in the future if the average share price increases and is greater than the purchase price of these shares of Preferred Stock.

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Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 10 – Contingencies

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business and/or which are covered by insurance.  The Company believes that it has accrued adequate reserves individually and in the aggregate for such legal proceedings.  Should actual litigation results differ from the Company’s estimates, revisions to increase or decrease the accrued reserves may be required.  A vendor has brought a claim against us for $87,000 plus interest and damages.  The Company has accrued for the $87,000 plus interest in Accounts payable and in Accrued liabilities in the Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017.  Potential damages, if any, are not yet determinable.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 11 – Related Party Transactions

The Company has the following related party transactions:

The Company received a $500,000 loan from Carlisle Investments Inc. (“Carlisle”) on April 27, 2016, which is included in Long-term debt – related party in the Condensed Consolidated Balance Sheets, and an additional $500,000 loan from Carlisle (“Second Carlisle Agreement”) on November 6, 2017, which is included in Current portion of long-term debt – related party in the Condensed Consolidated Balance Sheets.  The loans are at a fixed interest rate of 12.00% with bullet payments of all principal due upon maturity.  Interest is payable monthly.  Mr. Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle.

Yaozhong Shi, a director of the Company, is the Chairman of Transtech LED Company Limited (“Transtech”), which is one of our primary LED suppliers.  The Company purchased $171,000 and $1.4 million of product from Transtech in the nine months ended September 30, 2018 and 2017, respectively, and $44,000 and $477,000 in the three months ended September 30, 2018 and 2017, respectively.  Amounts payable by the Company to Transtech were $272,000 and $149,000 as of September 30, 2018 and December 31, 2017, respectively.

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Business Segment Data

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 12 – Business Segment Data

Operating segments are based on the Company’s business components about which separate financial information is available and are evaluated regularly by the Company’s chief operating decision makers in deciding how to allocate resources and in assessing performance of the business.

The Company evaluates segment performance and allocates resources based upon operating income (loss).  The Company’s operations are managed in two reportable business segments: Digital product sales and Digital product lease and maintenance.  Both design and produce large-scale, multi-color, real-time digital displays and LED lighting, which has a line of energy-saving lighting solutions that provide facilities and public infrastructure with “green” lighting solutions that emit less heat, save energy and enable creative designs.  Both operating segments are conducted on a global basis, primarily through operations in the United States.  The Company also has operations in Canada.  The Digital product sales segment sells equipment and the Digital product lease and maintenance segment leases and maintains equipment.  Corporate general and administrative items relate to costs that are not directly identifiable with a segment.  There are no intersegment sales.

Foreign revenues represent less than 10% of the Company’s revenues in 2018 and 2017.  The Company’s foreign operation does not manufacture its own equipment; the domestic operation provides the equipment that the foreign operation leases or sells.  The foreign operation operates similarly to the domestic operation and has similar profit margins.  Foreign assets are immaterial.

Information about the Company’s operations in its two business segments for the three and nine months ended September 30, 2018 and 2017 is as follows:

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Revenues:
Digital product sales	$	2,857	$	9,676	$	9,158	$	15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total revenues	$	3,450	$	10,326	$	11,047	$	17,381
Operating income (loss):
Digital product sales	$	(1,903)	$	697	$	(1,785)	$	(291)
Digital product lease and maintenance		241		227		789		485
Corporate general and administrative expenses		(1,165)		(786)		(2,586)		(2,245)
Total operating (loss) income		(2,827)		138		(3,582)		(2,051)
Interest expense, net		(238)		(202)		(652)		(514)
(Loss) gain on foreign currency remeasurement		(48)		(101)		74		(192)
Gain on sale leaseback transaction		-		33		11		99
Pension benefit		33		9		101		26
Loss before income taxes		(3,080)		(123)		(4,048)		(2,632)
Income tax expense		-		-		-		-
Net loss	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)

	September 30 2018		December 31 2017
Assets
Digital product sales	$	7,231	$	9,722
Digital product lease and maintenance		3,261		4,515
Total identifiable assets		10,492		14,237
General corporate		296		747
Total assets	$	10,788	$	14,984

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 13 – Subsequent Events

The Company has evaluated events and transactions subsequent to September 30, 2018 and through the date these Condensed Consolidated Financial Statements were included in this Form 10-Q and filed with the SEC.

On October 5, 2018, the Company issued 20,000 shares of Common Stock to Alberto Shaio in connection with his new employment agreement as President and Chief Executive Officer of the Company.

On November 5, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with Unilumin North America Inc. (“Unilumin”), pursuant to which Unilumin purchased 1,315,789 shares of Common Stock, for a purchase price of $1,500,000 (the “Purchase”), or a per share purchase price of $1.14. The SPA requires that the proceeds of the Purchase are to be utilized for mutually agreed purposes. In connection with the SPA, the Company issued warrants (the “Warrants”) to purchase 5,670,103 shares of the Company’s Common Stock to Unilumin at an exercise price of $0.97 per share. The exercise price of the Warrants is automatically adjusted to $0.75 per share if the Company is unable to complete a financing of $2,500,000 through a rights offering by June 1, 2019 (the “Rights Offering”). The exercise price of the Warrants will also be decreased to the same price as the exercise price of the rights issued in the Rights Offering if the exercise price of such rights is less than $1.00 per share. The Warrants are exercisable until November 2, 2020, provided that they are mandatorily exercisable upon completion of the Rights Offering if in excess of 90% of the Company’s currently issued and outstanding Preferred Stock converts into Common Stock. In connection with any such Preferred Stock conversion, Unilumin acknowledged that the conversion price of the Preferred Stock may be decreased, subject to stockholder approval. If all or a significant portion of the Warrants are exercised, Unilumin would own in excess of fifty percent of the Company’s outstanding Common Stock on a fully diluted basis, even if the Rights Offering is completed.

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
In thousands	2018		2017		2018		2017
Digital product sales:
Catalog and small customized products	$	2,857	$	5,270	$	8,158	$	11,210
Large customized products		-		4,406		1,000		4,406
Subtotal		2,857		9,676		9,158		15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total	$	3,450	$	10,326	$	11,047	$	17,381

Contract with Customer, Asset and Liability [Table Text Block]

In thousands	September 30, 2018		December 31, 2017
Gross receivables	$	3,738	$	3,753
Allowance for bad debts		1,763		231
Net receivables		1,975		3,522
Contract liabilities		895		1,209

Schedule of Changes in Contract Asset and Contract Liability [Table Text Block]

In thousands	Three months ended September 30, 2018		Nine months ended September 30, 2018
Revenue recognized in the period from:
amounts included in the contract liability at the   beginning of the period	$	218	$	806
Performance obligations satisfied in previous periods   (for example, due to changes in transaction price)		-		-

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Inventories (Tables)

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

In thousands	September 30 2018		December 31 2017
Raw materials	$	1,200	$	1,204
Work-in-progress		588		704
Finished goods		167		256
	$	1,955	$	2,164

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Rental Equipment, net (Tables)

9 Months Ended

Sep. 30, 2018

Rental Equipment [Abstract]

Rental Equipment [Table Text Block]

In thousands	September 30 2018		December 31 2017
Rental equipment	$	10,425	$	10,425
Less accumulated depreciation		8,938		8,409
Net rental equipment	$	1,487	$	2,016

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Property, Plant and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

In thousands	September 30 2018		December 31 2017
Machinery, fixtures and equipment	$	3,107	$	2,972
Leaseholds and improvements		12		12
		3,119		2,984
Less accumulated depreciation		913		698
Net property, plant and equipment	$	2,206	$	2,286

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

In thousands	September 30 2018		December 31 2017
8¼% Limited convertible senior subordinated notes due 2012	$	387	$	387
9½% Subordinated debentures due 2012		220		220
Revolving credit line		933		2,722
Term loans		1,640		790
Term loans - related party		1,000		1,000
Forgivable loan		650		650
Total debt		4,830		5,769
Less deferred financing costs and debt discount		360		206
Net debt		4,470		5,563
Less portion due within one year		3,060		4,029
Net long-term debt	$	1,410	$	1,534

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Pension Plan (Tables)

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	Three months ended September 30, 2017						Nine months ended September 30, 2017
	As reported		As revised		Effect of change		As reported		As revised		Effect of change
In thousands
General and administrative expenses	$	1,512	$	1,521	$	9	$	4,354	$	4,380	$	26
Operating income (loss)		147		138		(9)		(2,025)		(2,051)		(26)
Pension benefit		-		(9)		(9)		-		(26)		(26)
Loss before income taxes	$	(123)	$	(123)		-	$	(2,632)	$	(2,632)	$	-

Schedule of Net Benefit Costs [Table Text Block]

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Interest cost	$	114	$	117	$	340	$	350
Expected return on plan assets		(203)		(180)		(609)		(539)
Amortization of net actuarial loss		56		54		168		163
Net periodic pension benefit	$	(33)	$	(9)	$	(101)	$	(26)

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Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2018		2017		2018		2017
Numerator:
Net loss, as reported	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)
Change in dividends accumulated on preferred shares		(50)		(50)		(149)		(149)
Net loss attributable to common shares	$	(3,130)	$	(173)	$	(4,197)	$	(2,781)
Denominator:
Weighted average shares outstanding		2,289		1,711		2,232		1,711
Basic and diluted loss per share	$	(1.37)	$	(0.10)	$	(1.88)	$	(1.63)

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Business Segment Data (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three months ended September 30				Nine months ended September 30
In thousands	2018		2017		2018		2017
Revenues:
Digital product sales	$	2,857	$	9,676	$	9,158	$	15,616
Digital product lease and maintenance		593		650		1,889		1,765
Total revenues	$	3,450	$	10,326	$	11,047	$	17,381
Operating income (loss):
Digital product sales	$	(1,903)	$	697	$	(1,785)	$	(291)
Digital product lease and maintenance		241		227		789		485
Corporate general and administrative expenses		(1,165)		(786)		(2,586)		(2,245)
Total operating (loss) income		(2,827)		138		(3,582)		(2,051)
Interest expense, net		(238)		(202)		(652)		(514)
(Loss) gain on foreign currency remeasurement		(48)		(101)		74		(192)
Gain on sale leaseback transaction		-		33		11		99
Pension benefit		33		9		101		26
Loss before income taxes		(3,080)		(123)		(4,048)		(2,632)
Income tax expense		-		-		-		-
Net loss	$	(3,080)	$	(123)	$	(4,048)	$	(2,632)

	September 30 2018		December 31 2017
Assets
Digital product sales	$	7,231	$	9,722
Digital product lease and maintenance		3,261		4,515
Total identifiable assets		10,492		14,237
General corporate		296		747
Total assets	$	10,788	$	14,984

XML

Basis of Presentation (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018
Disclosure Text Block [Abstract]
Increase (Decrease) in Restricted Cash	$ 550,000
Operating Lease, Right-of-Use Asset		$ 1,300,000
Operating Lease, Liability		$ 1,300,000

XML

Going Concern (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) shares
Going Concern (Details) [Line Items]
Working Capital Deficit	$ 9,200,000
Proceeds from Issuance of Common Stock	$ 1,500,000
Stock Issued During Period, Shares, New Issues (in Shares) | shares	1,315,789
Defined Benefit Plan, Funded (Unfunded) Status of Plan	$ (4,100,000)
Liability, Defined Benefit Pension Plan, Current	817,000
8¼% Limited Convertible Senior Subordinated Notes Due 2012 [Member]
Going Concern (Details) [Line Items]
Debt Instrument, Debt Default, Amount	387,000
9½% Subordinated Debentures Due 2012 [Member]
Going Concern (Details) [Line Items]
Debt Instrument, Debt Default, Amount	$ 220,000

XML

Revenue Recognition (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue Recognition (Details) [Line Items]
Segment Reporting Information, Description of Products and Services			The Company has two primary revenue streams which are Digital product sales and Digital product lease and maintenance
Provision for Doubtful Accounts	$ 1,300,000		$ 1,517,000	$ 33,000
Allowance for Doubtful Accounts Receivable, Recoveries		$ 20,000
2018-10-01 [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Percentage	64.00%		64.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months		12 months
2019-10-01 [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Percentage	22.00%		22.00%
2021-10-01 [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Percentage	14.00%		14.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	37 months		37 months
Minimum [Member]
Revenue Recognition (Details) [Line Items]
Lease and Maintenance, Term of Contract			1 month
Minimum [Member] | 2019-10-01 [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	13 months		13 months
Maximum [Member]
Revenue Recognition (Details) [Line Items]
Lease and Maintenance, Term of Contract			10 years
Maximum [Member] | 2019-10-01 [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	36 months		36 months
Digital Product Sales [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 2,600,000		$ 2,600,000
Digital Product Lease And Maintenance [Member]
Revenue Recognition (Details) [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 3,900,000		$ 3,900,000

XML

Revenue Recognition (Details) - Disaggregation of revenue from contracts with customers - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 3,450	$ 10,326	$ 11,047	$ 17,381
Digital Product Lease And Maintenance [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	593	650	1,889	1,765
Catalog And Small Customized Products [Member] | Digital Product Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	2,857	5,270	8,158	11,210
Large Customized Products [Member] | Digital Product Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers		4,406	1,000	4,406
Digital Product Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 2,857	$ 9,676	$ 9,158	$ 15,616

XML

Revenue Recognition (Details) - Company`s receivables and contract liabilities with customers - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Company`s receivables and contract liabilities with customers [Abstract]
Gross receivables	$ 3,738	$ 3,753
Allowance for bad debts	1,763	231
Net receivables	1,975	3,522
Contract liabilities	$ 895	$ 1,209

XML

Revenue Recognition (Details) - Revenues as a result of changes in the contract asset and the contract liability - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Revenues as a result of changes in the contract asset and the contract liability [Abstract]
amounts included in the contract liability at the beginning of the period	$ 218	$ 806
Performance obligations satisfied in previous periods (for example, due to changes in transaction price)

XML

Inventories (Details) - Inventories - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventories [Abstract]
Raw materials	$ 1,200	$ 1,204
Work-in-progress	588	704
Finished goods	167	256
Total Inventory	$ 1,955	$ 2,164

XML

Rental Equipment, net (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Rental Equipment [Member]
Rental Equipment, net (Details) [Line Items]
Depreciation	$ 176,000	$ 275,000	$ 529,000	$ 827,000

XML

Rental Equipment, net (Details) - Schedule Of Rental Equipment - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Schedule Of Rental Equipment [Abstract]
Rental equipment	$ 10,425	$ 10,425
Less accumulated depreciation	8,938	8,409
Net rental equipment	$ 1,487	$ 2,016

XML

Property, Plant and Equipment, net (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment, net (Details) [Line Items]
Depreciation	$ 71,000	$ 60,000	$ 215,000	$ 180,000
Machinery Fixture And Equipment [Member]
Property, Plant and Equipment, net (Details) [Line Items]
Pledged Assets, Other, Not Separately Reported on Statement of Financial Position	$ 2,200,000		$ 2,200,000		$ 2,300,000

XML

Property, Plant and Equipment, net (Details) - Property, plant and equipment - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	$ 3,119	$ 2,984
Less accumulated depreciation	913	698
Net property, plant and equipment	2,206	2,286
Machinery Fixture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	3,107	2,972
Leaseholds and Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	$ 12	$ 12

XML

Long-Term Debt (Details) - USD ($)				9 Months Ended	12 Months Ended
	Nov. 05, 2018	Jun. 11, 2018	May 23, 2017	Sep. 30, 2018	Dec. 31, 2017
Long-Term Debt (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				12.00%
Unilumin North America Inc. [Member]
Long-Term Debt (Details) [Line Items]
Securities Purchase agreement, Shares Purchased (in Shares)	1,315,789
Securities Purchase Agreement Purchase Price	$ 1,500,000
Director [Member]
Long-Term Debt (Details) [Line Items]
Due to Related Parties				$ 1,000,000
Line of Credit [Member]
Long-Term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				4,000,000
Revolving Credit Facility [Member]
Long-Term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 3,000,000
Debt Instrument, Basis Spread on Variable Rate				6.00%	4.00%
Debt Instrument, Interest Rate, Effective Percentage				11.25%	8.50%
Debt Instrument, Description of Variable Rate Basis				prime plus 6.0%	prime plus 4.0%
Term Loan [Member]
Long-Term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 1,000,000
Debt Instrument, Basis Spread on Variable Rate				6.00%
Debt Instrument, Interest Rate, Effective Percentage				11.25%	11.25%
Debt Instrument, Description of Variable Rate Basis				prime plus 6.0%
SMI Note [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Face Amount		$ 330,000
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)		82,500		82,500
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.01		$ 0.01
Proceeds from Issuance of Warrants		$ 95,000		$ 95,000
SMII Note [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Face Amount		$ 670,000
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)		167,500		167,500
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.01		$ 0.01
Proceeds from Issuance of Warrants		$ 192,000		$ 192,000
8¼% Limited Convertible Senior Subordinated Notes Due 2012 [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Maturity Date				Mar. 01, 2012
Notes Payable				$ 387,000
Interest Payable, Current				290,000	$ 266,000
9½% Subordinated Debentures Due 2012 [Member]
Long-Term Debt (Details) [Line Items]
Notes Payable				220,000
Interest Payable, Current				$ 185,000	$ 169,000
Debentures, Matured Date				Dec. 01, 2012
Forgivable Loan [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate			2.00%
Debt Instrument, Interest Rate, Effective Percentage			7.25%
Debt Instrument, Description of Variable Rate Basis			prime plus 2.0%
Proceeds from Loans			$ 650,000
Line of Credit Facility, Expiration Date			Apr. 01, 2024	Apr. 01, 2025
Line of Credit Facility, Expiration Period				1 year
Minimum [Member] | SMI Note [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount		$ 1,000,000
Debt Instrument, Maturity Date		Jun. 11, 2020
Minimum [Member] | SMII Note [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount		$ 1,000,000
Maximum [Member] | SMII Note [Member]
Long-Term Debt (Details) [Line Items]
Debt Instrument, Maturity Date		Jun. 11, 2020

XML

Long-Term Debt (Details) - Long-term debt - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 4,470	$ 5,563
Less portion due within one year	3,060	4,029
Net long-term debt	1,410	1,534
Total debt	4,830	5,769
Less deferred financing costs and debt discount	360	206
8¼% Limited Convertible Senior Subordinated Notes Due 2012 [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	387	387
9½% Subordinated Debentures Due 2012 [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	220	220
Revolving Credit Line [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	933	2,722
Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	1,640	790
Related Party Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	1,000	1,000
Forgivable Loan [Member]
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 650	$ 650

XML

Pension Plan (Details) - USD ($)	1 Months Ended
	Nov. 08, 2018	Sep. 30, 2018
Pension Plan (Details) [Line Items]
Liability, Defined Benefit Pension Plan, Current		$ 817,000
Liability, Defined Benefit Pension Plan, Noncurrent		3,300,000
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year		$ 592,000
Subsequent Event [Member]
Pension Plan (Details) [Line Items]
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 421,000
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year	$ 171,000

XML

Pension Plan (Details) - Presentation of the non-service components of periodic pension cost to Pension benefit - Accounting Standards Update 2017-07 [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
General and administrative expenses	$ 1,521	$ 4,380
Operating income (loss)	138	(2,051)
Pension benefit	(9)	(26)
Loss before income taxes	(123)	(2,632)
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
General and administrative expenses	1,512	4,354
Operating income (loss)	147	(2,025)
Pension benefit
Loss before income taxes	(123)	(2,632)
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
General and administrative expenses	9	26
Operating income (loss)	(9)	(26)
Pension benefit	(9)	(26)
Loss before income taxes

XML

Pension Plan (Details) - Components of net periodic pension cost - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Components of net periodic pension cost [Abstract]
Interest cost	$ 114	$ 117	$ 340	$ 350
Expected return on plan assets	(203)	(180)	(609)	(539)
Amortization of net actuarial loss	56	54	168	163
Net periodic pension benefit	$ (33)	$ (9)	$ (101)	$ (26)

XML

Loss Per Share (Details) - USD ($)				9 Months Ended
	Nov. 06, 2018	Jun. 11, 2018	Apr. 26, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
SMI Note [Member]
Loss Per Share (Details) [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		82,500		82,500
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.01		$ 0.01
Proceeds from Issuance of Warrants (in Dollars)		$ 95,000		$ 95,000
SMII Note [Member]
Loss Per Share (Details) [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		167,500		167,500
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.01		$ 0.01
Proceeds from Issuance of Warrants (in Dollars)		$ 192,000		$ 192,000
Convertible Preferred Stock [Member] | Series B Preferred Stock [Member]
Loss Per Share (Details) [Line Items]
Preferred Stock, Amount of Preferred Dividends in Arrears (in Dollars)				$ 91,000	$ 91,000
Preferred Stock, Shares Outstanding				16,512	16,512	16,512
Warrant [Member]
Loss Per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				302,000	52,000
Common Stock [Member] | Convertible Preferred Stock [Member]
Loss Per Share (Details) [Line Items]
Dividends Payable, Date Declared	Nov. 06, 2018		Apr. 26, 2018
Dividends Payable, Nature	semi-annual
Dividends Payable, Date to be Paid	Nov. 08, 2018
Dividends Payable Common Stock, Per Share	7.6923
Common Stock Dividends, Shares	127,013
Common Stock [Member] | Convertible Preferred Stock [Member] | Series B Preferred Stock [Member]
Loss Per Share (Details) [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion				330,240	330,240
Preferred Stock [Member] | Convertible Preferred Stock [Member]
Loss Per Share (Details) [Line Items]
Dividends Payable, Amount Per Share (in Dollars per share)	$ 6.00
Preferred Stock [Member] | Convertible Preferred Stock [Member]
Loss Per Share (Details) [Line Items]
Dividends, Preferred Stock (in Dollars)	$ 99,000

XML

Loss Per Share (Details) - Calculation of loss per share - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Numerator:
Net loss, as reported	$ (3,080)	$ (123)	$ (4,048)	$ (2,632)
Change in dividends accumulated on preferred shares	(50)	(50)	(149)	(149)
Net loss attributable to common shares	$ (3,130)	$ (173)	$ (4,197)	$ (2,781)
Denominator:
Weighted average shares outstanding (in Shares)	2,289	1,711	2,232	1,711
Basic and diluted loss per share (in Dollars per share)	$ (1.37)	$ (0.10)	$ (1.88)	$ (1.63)

XML

Contingencies (Details) - Vendor [Member] - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Contingencies (Details) [Line Items]
Loss Contingency, Damages Sought, Value	$ 87,000
Accounts Payable and Accrued Liabilities, Current	$ 87,000	$ 87,000

XML

Related Party Transactions (Details) - USD ($)			3 Months Ended		9 Months Ended
	Nov. 06, 2017	Apr. 27, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transactions (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			12.00%		12.00%
Transtech [Member]
Related Party Transactions (Details) [Line Items]
Related Party Transaction, Purchases from Related Party			$ 44,000	$ 477,000	$ 171,000	$ 1,400,000
Due to Related Parties, Current			$ 272,000		$ 272,000		$ 149,000
First Carlisle Agreement [Member]
Related Party Transactions (Details) [Line Items]
Proceeds from Related Party Debt		$ 500,000
Second Carlisle Agreement [Member]
Related Party Transactions (Details) [Line Items]
Proceeds from Related Party Debt	$ 500,000

XML

Business Segment Data (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Business Segment Data (Details) [Line Items]
Number of Reportable Segments	2
Sales Revenue, Net [Member] | Foreign [Member]
Business Segment Data (Details) [Line Items]
Concentration Risk, Percentage	10.00%	10.00%

XML

Business Segment Data (Details) - Business Segment Data - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Revenues:
Revenues	$ 3,450	$ 10,326	$ 11,047	$ 17,381
Operating income (loss):
Operating income (loss)	(2,827)	138	(3,582)	(2,051)
Interest expense, net	(238)	(202)	(652)	(514)
(Loss) gain on foreign currency remeasurement	(48)	(101)	74	(192)
Gain on sale leaseback transaction		33	11	99
Pension benefit	33	9	101	26
Loss before income taxes	(3,080)	(123)	(4,048)	(2,632)
Income tax expense
Net loss	(3,080)	(123)	(4,048)	(2,632)
Assets
Assets	10,788	10,788	10,788	10,788	$ 14,984
Digital Product Sales [Member]
Revenues:
Revenues	2,857	9,676	9,158	15,616
Digital Product Lease And Maintenance [Member]
Revenues:
Revenues	593	650	1,889	1,765
Operating Segments [Member]
Assets
Assets		10,492		10,492	14,237
Operating Segments [Member] | Digital Product Sales [Member]
Revenues:
Revenues	2,857	9,676	9,158	15,616
Operating income (loss):
Operating income (loss)	(1,903)	697	(1,785)	(291)
Assets
Assets		7,231		7,231	9,722
Operating Segments [Member] | Digital Product Lease And Maintenance [Member]
Revenues:
Revenues	593	650	1,889	1,765
Operating income (loss):
Operating income (loss)	241	227	789	485
Assets
Assets		3,261		3,261	4,515
Corporate, Non-Segment [Member]
Operating income (loss):
Operating income (loss)	$ (1,165)	(786)	$ (2,586)	(2,245)
Assets
Assets		$ 296		$ 296	$ 747

XML

Subsequent Events (Details) - Subsequent Event [Member] - USD ($)	Nov. 05, 2018	Oct. 05, 2018
Unilumin North America Inc. [Member]
Subsequent Events (Details) [Line Items]
Securities Purchase agreement, Shares Purchased (in Shares)	1,315,789
Securities Purchase Agreement Purchase Price (in Dollars)	$ 1,500,000
Securities Purchase agreement, Shares Purchased, Par Value Per Share	$ 1.14
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	5,670,103
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.97
Class of Warrant or Right, Adjusted Exercise Price of Warrants or Rights	$ 0.75
Class Of Warrant Or Right Adjusted Exercise Price Of Warrants Or Rights, Reason	if the Company is unable to complete a financing of $2,500,000 through a rights offering by June 1, 2019
Warrants Mandatorily Exercisable, Reason	The Warrants are exercisable until November 2, 2020, provided that they are mandatorily exercisable upon completion of the Rights Offering if in excess of 90% of the Company’s currently issued and outstanding Preferred Stock converts into Common Stock.
Maximum [Member] | Unilumin North America Inc. [Member]
Subsequent Events (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.00
Common Stock [Member] | Alberto Shaio [Member]
Subsequent Events (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)		20,000