Summary of Significant Accounting Policies
|6 Months Ended|
Jun. 30, 2020
|Accounting Policies [Abstract]|
|Summary of Significant Accounting Policies||
Since the Annual Report for the year ended December 31, 2019, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note.
As of June 30, 2020, the Company had cash, marketable securities, working capital and an accumulated deficit of $3,821,723, $160,748, $2,988,683 and $175,495,594, respectively. During the three and six months ended June 30, 2020, the Company incurred a net loss of $3,029,513 and $5,990,613, respectively. During the six months ended June 30, 2020, the Company used cash in operating activities of $6,520,964.
Since April 17, 2020 and through August 10, 2020, the Company sold 3,403,386 shares of common stock under an “at-the-market” equity offering program for aggregate gross proceeds of approximately $17.8 million. See Note 8 – Stockholders’ Equity.
The Company expects that its cash on hand will fund its operations for a least twelve months after the issuance date of these financial statements.
Since inception, the Company’s operations have primarily been funded through proceeds received in equity and debt financings. The Company believes it has access to capital resources and continues to evaluate additional financing opportunities. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations.
The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings.
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents in the condensed consolidated financial statements. The Company has cash on deposits in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. As of June 30, 2020, the Company had cash balances in excess of FDIC insurance limits of $2,922,949. As of December 31, 2019, the Company had cash balances in excess of FDIC insurance limits of $3,494,360.
Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are deemed to be temporary) reported as a component of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment and it is not adjusted for subsequent recoveries in fair value.
The following summarizes the Company’s investments as of June 30, 2020 and December 31, 2019:
The following is a summary of the unrealized gains, losses, and fair value by investment type as of June 30, 2020 and December 31, 2019:
The Company records stock issuances at the effective date. If the subscription is not funded upon issuance, the Company records a stock subscription receivable as an asset on a balance sheet. When stock subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under FASB ASC 505-10-45-2, the stock subscription receivable is reclassified as a contra account to stockholders’ equity on the balance sheet.
The Company recognizes revenue primarily from four different types of contracts:
The following table summarizes revenue recognized under ASC 606 in the condensed consolidated statements of operations:
The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related goods or services, the Company records deferred revenue until the performance obligations are satisfied.
As of June 30, 2020, the Company had $204,142 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue on the condensed consolidated balance sheet as of June 30, 2020. The Company expects to satisfy its remaining performance obligations for network fees and warranty revenue and recognize the revenue within the next twelve months.
During the three and six months ended June 30, 2020, the Company recognized $76,039 and $139,660, respectively, of revenues related to network fees and warranty contracts, which were included in deferred revenues as of December 31, 2019. During the three and six months ended June 30, 2020, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods.
Grants and rebates which are not within the scope of ASC 606, pertaining to revenues and periodic expenses are recognized as income when the related revenue and/or periodic expense are recorded. Grants and rebates related to EV charging stations and their installation are deferred and amortized in a manner consistent with the related depreciation expense of the related asset over their useful lives over the useful life of the charging station. During the three months ended June 30, 2020 and 2019, the Company recognized $3,912 and $6,525, respectively, related to grant and rebate revenue. During the six months ended June 30, 2020 and 2019, the Company recognized $8,491 and $13,239, respectively, related to grant and rebate revenue. At June 30, 2020 and December 31, 2019, there was $75,179 and $83,670, respectively, of deferred revenues attributable to grants and rebates.
As of June 30, 2020 and December 31, 2019, accounts receivable from a significant customer was 10% and 11% of accounts receivable, respectively. During the three and six months ended June 30, 2020, revenues from one significant customer represented 43% and 38%, respectively, of total revenues. During the three and six months ended June 30, 2020, revenues from another significant customer represented 11% and 10%, respectively, of total revenues. There were no revenue concentrations during the three and six months ended June 30, 2019.
NET LOSS PER COMMON SHARE
Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if the common share equivalents had been issued (computed using the treasury stock or if converted method), if dilutive.
The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive:
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, amongst other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Under ASC 740, the effects of new legislation are recognized upon enactment. Accordingly, the CARES Act is effective beginning in the quarter ended March 31, 2020. The Company does not currently believe that such provisions will have a material impact on the Company’s condensed consolidated financial statements.
Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share.
RECENTLY ISSUED ACCOUNTING STANDARDS
In April 2019, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update (“ASU”) No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”). The new ASU provides narrow-scope amendments to help apply these recent standards. The adoption of this ASU effective January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.
The entire disclosure for all significant accounting policies of the reporting entity.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef