The LGL (LGL) - 2020 Q2 - Quarterly Report

Operations and Business Performance - The Company's operations in India were closed from March 23, 2020, and resumed limited operations on May 7, 2020, with full staffing by the end of June 2020 [23]. - Total consolidated revenues for the three months ended June 30, 2020, were $7,059,000, a decrease of 9.9% compared to $7,838,000 for the same period in 2019 [65]. - Operating income for the three months ended June 30, 2020, was $184,000, down from $856,000 in the same period of 2019, representing a decline of 78.5% [65]. - The Company reported a loss on equity investment in unconsolidated subsidiary of $100,000 for the three months ended June 30, 2020 [65]. - The Company’s electronic components segment generated revenues of $6,769,000 for the three months ended June 30, 2020, down from $7,462,000 in 2019, a decrease of 9.3% [65]. Financial Position and Assets - As of June 30, 2020, total inventories were valued at $6,018,000, slightly up from $6,016,000 as of December 31, 2019 [51]. - The inventory reserve for obsolescence was $1,141,000 as of June 30, 2020, compared to $1,341,000 as of December 31, 2019 [51]. - The net carrying value of amortizable intangible assets was $347,000 as of June 30, 2020, down from $362,000 as of December 31, 2019 [52]. - Goodwill remained unchanged at $40,000 as of both June 30, 2020, and December 31, 2019 [52]. - As of June 30, 2020, the balance with the Fund Manager totaled $18,794,000, including $13,279,000 classified as cash and cash equivalents [41]. - The total lease payments due under operating leases as of June 30, 2020, were $296,000, down from $331,000 as of December 31, 2019 [73]. Revenue Recognition and Taxation - The Company recognizes revenue from product sales upon satisfaction of performance obligations, typically at the time of shipment [30]. - The estimated annualized effective income tax rate for the six months ended June 30, 2020, was 20.3%, compared to 23.1% for the same period in 2019 [63]. Funding and Investments - The Company contributed $3.35 million to the Sponsor, representing 62.2% of the Sponsor's initial risk capital [37]. - The SPAC raised $172.5 million through the sale of 17.25 million shares and was listed on the NASDAQ Capital Market under the ticker symbol 'DFNS' [38]. - The Company generated net proceeds of approximately $3,492,000 from the sale of 263,725 shares at an average price of $13.65 per share under the ATM program [60]. - Fund management fees are anticipated to average less than 0.35% of the asset balances under management on an annual basis [41]. Foreign Revenues - Total foreign revenues for the three months ended June 30, 2020, were $2,007,000, an increase of 11.2% compared to $1,805,000 for the same period in 2019 [66]. Compensation and Expenses - The Company had approximately $464,000 of total unrecognized compensation expense related to unvested share-based compensation arrangements as of June 30, 2020 [56]. - The Company entered into a revolving line of credit agreement for up to $3.5 million, with $103,000 outstanding as of June 30, 2020 [67].