UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, ~~2018~~2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to ___________________________

Commission file number 0-8771

EVANS & SUTHERLAND COMPUTER CORPORATION

(Exact name of registrant as specified in its charter)

Utah87-0278175

(State or other jurisdiction of(I.R.S. Employer

incorporation or organization)Identification No.)

770 Komas Drive, Salt Lake City, Utah84108

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: 801-588-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered NONE N/A N/A

Securities registered pursuant to Section 12(g) of the Act:

Title of ~~Each~~ Class

Common Stock, $0.20 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ~~] Yes [x ] No~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.~~ [ ] Yes [x] No

Indicate by check mark ~~whether~~if the registrant ~~(1)~~is ~~has~~not ~~filed all reports~~ required to befile ~~filed~~reports bypursuant to 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~~. ~~[ x ] Yes [ ] 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 submit such files). [ x ] Yes [ x] No

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~(1) ~~filers~~has ~~pursuant~~filed toall ~~Item~~reports ~~405~~required ofto ~~Regulation~~be ~~S-K~~filed isby ~~not~~Section ~~contained~~13 ~~herein,~~or ~~and~~15(d) ~~will~~of ~~not~~the beSecurities ~~contained,~~Exchange toAct ~~the~~of ~~best~~1934 ofduring the ~~registrant’s~~preceding ~~knowledge,~~12 inmonths ~~definitive~~(or ~~proxy~~for orsuch ~~information~~shorter ~~statements~~period ~~incorporated~~that bythe ~~reference~~registrant inwas ~~Part~~required ~~III~~to offile ~~this~~such ~~Form~~reports), ~~10-K~~and or(2) ~~any~~has ~~amendment~~been subject to ~~this~~such ~~Form~~filing ~~10-K~~requirements for the past 90 days. [x] Yes [ ] No

Indicate by check mark whether the registrant ishas asubmitted ~~large~~electronically ~~accelerated~~every ~~filer,~~Interactive anData ~~accelerated~~File ~~filer,~~required ato ~~non-accelerated~~be ~~filer~~submitted orpursuant ato ~~smaller~~Rule ~~reporting~~405 ~~company. See~~of ~~definition~~Regulation S-T (§232.405 of ~~“large~~this ~~accelerated~~chapter) ~~filer”,~~during ~~“accelerated~~the ~~filer”~~preceding ~~and~~12 ~~“smaller~~months ~~reporting~~(or ~~company”~~for insuch ~~Rule~~shorter ~~12b-2~~period ofthat the ~~Exchange~~registrant ~~Act~~was required to submit such files). [x] Yes [ ] No

Indicate ~~Large~~by check mark whether the registrant is a large accelerated filer, ~~[ ] Accelerated~~an accelerated filer, ~~[ ] Non~~a non-accelerated filer, ~~[x] Smaller~~a smaller reporting company ~~[x] Emerging~~or an emerging growth company. See [definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ]

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [x]

Smaller reporting company [x] Emerging growth company [ ]

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 by Rule 12b-2 of the Act). [ ] Yes [x ] No

The aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates of the registrant as of June 2928, ~~2018~~2019 the last business day of the registrant’s most recently completed second fiscal quarter was $4,~~907~~669,~~717~~905 based on the closing sale price of $10.0280 as reported by the Over-the-Counter Market. Shares of common stock held by each executive officer and director and by each person who owns 5% or more of the outstanding common stock, based on Schedule 13D and 13G filings, have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination of affiliate status for other purposes.

The number of shares of the registrant’s Common Stock outstanding as of March 430, ~~2019~~2020 was 11,482,516.

DOCUMENTS INCORPORATED BY REFERENCE:

Certain information from the Registrant’s definitive proxy statement for the ~~2019~~2020 Annual Meeting of Stockholders is incorporated by reference into Part III hereof.

EVANS & SUTHERLAND COMPUTER CORPORATION

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, ~~2018~~2019

PART I	~~PART I~~
ITEM 1.	BUSINESS	3
ITEM 2.	PROPERTIES	6
ITEM 3.	LEGAL PROCEEDINGS	6
ITEM 4.	MINE SAFETY DISCLOSURES	6
PART II	~~PART II~~
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	7
ITEM 6.	~~CONSOLIDATED~~SELECTED FINANCIAL DATA	7
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	7
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	16
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	41
ITEM 9A.	CONTROLS AND PROCEDURES	41
ITEM 9B.	OTHER INFORMATION	42
PART III	~~PART III~~
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	42
ITEM 11.	EXECUTIVE COMPENSATION	4342
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	43
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	43
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	43
PART IV	~~PART IV~~
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	44
SIGNATURES		48

PART I

ITEM 1.BUSINESS

Throughout this document Evans & Sutherland Computer Corporation may be referred to as “Evans & Sutherland,” “E&S,” “we,” “us,” “our” or the “Company.” All dollar amounts are in thousands unless otherwise indicated.

Evans & Sutherland was incorporated in the state of Utah on May 10, 1968. Our principal offices are located at 770 Komas Drive, Salt Lake City, Utah 84108, and our telephone number is (801) 588-1000. Through a link on our website, www.es.com, we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). We make our website content available for informational purposes only. The information provided on our website is not incorporated by reference into this Form 10-K and our website address is not intended to be a hyperlink. The above reports and other information are also available, free of charge, at www.sec.gov.

Recent Developments

As more fully described in Note 14 of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K, on February 9, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Elevate Entertainment Inc., a Delaware corporation (“Elevate”) and Elevate Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Elevate (“Purchaser”). Elevate is owned by Mirasol Capital, LLC, a Delaware limited liability company solely managed by Stephen T. Winn. Pursuant to the Merger Agreement, on February 27, 2020, Elevate and Purchaser commenced a cash tender offer to acquire all of the outstanding shares of common stock of the Company through a cash tender offer at a price of $1.19 per share. The tender offer expired at the end of March 25, 2020. As of the expiration of the tender offer period, approximately 10,576,487 shares of the Company’s common stock (excluding approximately 50,741 shares subject to guaranteed delivery procedures) were properly tendered and not withdrawn in the tender offer, representing approximately 92.1% of the aggregate number of then issued and outstanding shares of the Company’s common stock. Pursuant to the terms of the Merger Agreement, on March 26, 2020, Elevate accepted for purchase the tendered shares of common stock and announced that it intends to complete a second-step merger under Utah law in which Purchaser will merge with and into the Company, with the Company surviving as a subsidiary of Elevate. Because the number of shares accepted in the tender offer exceed 90% of the issued and outstanding shares of common stock of the Company, Elevate and Purchaser intend to complete the merger of the Company and Purchaser as promptly as practicable without a meeting and without the vote of the remaining shareholders of the Company, as permitted by Utah law. The Company filed a Current Report on Form 8-K to report expiration of the tender offer and the resulting change of control on March 26, 2020.

General

Evans & Sutherland focuses on the production of high-quality advanced visual display systems used primarily in full-dome video projection applications, dome projection screens, dome architectural treatments, and unique content for planetariums, schools, science centers, other educational institutions, and entertainment venues. With a 50-year history in computer graphics, we are widely regarded as both a pioneer and a leader in providing the world’s most compelling full-dome digital theater and planetarium systems as well as original full-dome shows. With our subsidiary, Spitz, Inc. (“Spitz”), and its over 70-year history as a leading supplier of planetarium systems, dome projection screens and other dome displays, E&S supplies premier total system solutions for its digital theater markets as well as customized domes and other unique geometric structures in the architectural market.

We continue to maintain a significant share of the overall planetarium market. We estimate that the annual market for our planetarium products ranges from $65 million to $100 million and varies each year depending on the timing of customer projects. We estimate our share of the planetarium market has ranged from 30% to 50% each year. Additionally, we sell related products into tangential markets that are less defined which make up the balance of our revenue.

Description of Products

E&S offers a range of products and services primarily for dome and planetarium theaters in educational institutions, training, and entertainment venues. These products include state of the art planetarium and dome theater systems consisting of proprietary hardware and software, and other unique visual display systems primarily used to project digital video on large curved surfaces. We also produce unique show content both for our own library which we license to customers and for specific customer requirements for planetarium and dome theaters. Additionally, we manufacture and install metal domes with customized optical coatings and acoustical properties that are used for planetarium and dome theaters as well as many other unique custom applications. Our dome engineering and manufacturing resources also design and supply geometrically complex structures for customized architectural treatments, often involving curved metal shapes with unique optical and acoustical properties.

Description of Markets

We are an industry leader in providing full-dome hardware and software to an international customer base in the digital theater, planetarium, entertainment, training and educational markets. In each of these markets, we face highly competitive conditions where we compete on features, performance, and responsiveness to customer needs as well as on price. E&S is unique among its competitors by virtue of its capability as a single source that can directly supply and integrate all of the equipment in the planetarium theater, including the projection system, sound, lighting, computer control system and domed projection screen. We believe our range of visual systems and services at various price and performance levels, our research and development investments and capabilities, our responsiveness to customers, and our ability to design and manufacture value-added visual systems enable us to compete effectively. Our competitive strengths with visual systems and services aid the sale of our dome projection screens as customers often require a new dome projection screen with their visual system. We also believe our capabilities to design and manufacture domes and certain other architectural structures are unique and enable us to compete effectively in all of the markets where these products are sold.

screens as customers often require a new dome projection screen with their visual system. We also believe our capabilities to design and manufacture domes and certain other architectural structures are very unique and enable us to compete effectively in all of the markets where these products are sold.

Digital Theater

In the digital theater market, our products compete with traditional optical-mechanical products and digital display systems offered by GOTO Optical Mfg. Co., Konica-Minolta Planetarium Co. Ltd., Carl Zeiss Inc., and Sky-Skan, Inc. The Company’s digital display systems are configured with standard commercial projectors similar to systems sold by our competitors. Our proprietary Digistar full-dome digital system, along with other customized software tools differentiate our digital theater systems and compete favorably with competitive digital display systems. Our SciDome planetarium system, which uses a dome theater version of a retail desktop astronomy product with curriculum tools for teachers, creates a unique competitive advantage when targeting smaller classroom planetarium theaters. In 2019, we introduced DomeX™, a revolution in full-dome display technology. DomeX incorporates light-emitting diodes, commonly referred to as LED’s, directly into the dome surface, turning it into an active video display that outperforms projector-based solutions in contrast, brightness, reliability, and lifespan. Driven or powered by Digistar, DomeX has been introduced as a product for planetarium and giant screen dome theaters and may also create opportunities in specialty digital theater applications.

Advanced Displays

Our capabilities and products sometimes are used for special advance display applications primarily for wide audiences in specialty theaters and other visitor attractions. This includes the integration of the most advanced video projectors with customized lenses, software and unique application techniques to serve customers who are in search of extraordinary display of visual content. Our competition in these markets includes various specialty audio visual systems integrators and alternative solutions using other technologies.

Giant Screen Cinema

E&S supplies digital display systems for educational and entertaining giant screen cinema experiences, focused on the market commonly defined by established competitors like IMAX. We bring unique capabilities and strengths to this market, including ultra-high resolution projection systems.

Domed Structures

Our Spitz subsidiary is the world's leading producer of domed projection screens. At Spitz we design, manufacture, and install domed projection screens used in digital theater and planetarium theaters and a variety of other applications such as ride simulators, special or large format film theaters, simulation training systems and architectural treatments. We have developed proprietary dome products such as our NanoSeam dome which we believe provides the smoothest, most uniform projection surface available. Our experience with dome projection screens enables us to advise on the architectural integration of domed projection screens and solve complex optical problems involving reflectivity and image distortion on compound curved surfaces. We believe that these skills are important to buyers of domed projection screens. The principal customers of our dome business are entities in the entertainment, educational and commercial and military simulation markets. Customers include major theme parks, casinos, world expositions, museums, schools, and military defense contractors. There is currently one known domestic competitor that manufactures domed projection screens. In addition, construction or metal fabrication contractors occasionally supply domed projection screens, particularly in foreign markets. The structures we design and supply for architectural treatments are sold as complements to our dome screen products or into the architectural market for a wide variety of interesting venues. Competition for our architectural treatment products usually comes from construction or metal fabrication contractors often with an alternative design idea.

architectural treatments. We have developed proprietary dome products such as our NanoSeam dome which we believe provides the smoothest, most uniform projection surface available. Our dome structures include a newly designed structure which will serve as an integrating component for our new DomeX digital theater product. Our experience with dome projection screens enables us to advise on the architectural integration of domed projection screens and solve complex optical problems involving reflectivity and image distortion on compound curved surfaces. We believe that these skills are important to buyers of domed projection screens. The principal customers of our dome business are entities in the entertainment, educational and commercial and military simulation markets. Customers include major theme parks, casinos, world expositions, museums, schools, and military defense contractors. There is currently one known domestic competitor that manufactures domed projection screens. In addition, construction or metal fabrication contractors occasionally supply domed projection screens, particularly in foreign markets. The structures we design and supply for architectural treatments are sold as complements to our dome screen products or into the architectural market for a wide variety of interesting venues. Competition for our architectural treatment products usually comes from construction or metal fabrication contractors often with an alternative design idea.

Intellectual Property

We own a significant number of patents and trademarks and we are a licensee under several others. Our portfolio of patents and trademarks, as a whole, contributes to our business. However, no one piece of intellectual property is critical to our business, thus no individual piece of our intellectual property is separately discussed. In the U.S. and internationally, we hold active patents that cover many aspects of our visualization technology. Several patent applications are presently pending, and routinely other patent applications are in preparation. We actively pursue patents on our new technology, and we intend to vigorously protect our patent rights. We often trademark key product names and brand names to protect our equity in the marketplace. We routinely copyright software and documentation and institute copyright registration when appropriate. Currently we retain a total of 18 active U.S. patents.

Research and Development

We consider the timely development and improvement of our technology to be essential to maintain our competitive position and to capitalize on market opportunities. We continue to fund essentially all research and development (“R&D”) efforts internally.

R&D efforts continue to improve Digistar, our popular full-dome digital system and a key component to our planetarium and dome theater products. We also explore the possibility of other commercial applications for Digistar technology as opportunities arise. We conduct ongoing R&D to improve the functionality of SciDome to keep pace with updated versions of the desktop software it emulates and to take advantage of the latest digital display and theater technology. Some noteworthy specific R&D activities for our advance display and planetarium products include the development of unique techniques to display three -dimensional digital video and the expansion of educational curriculum tools to cover new subject matter in addition to astronomy such as chemistry and earth sciences. We continue to develop improvements to our dome products including optical coatings and ways to make the projection surface more uniform. There are also R&D efforts ongoing to enhance components of the systems we sell, such as improvements to theater lighting.

We continually work with the new digital projection technologies to develop advanced visual display systems primarily to be used by wide audiences in specialty theaters and other visitor attractions. This includes the integration of the most advanced video projectors with customized lenses, software and unique application techniques to serve customers who are in search of extraordinary display of visual content.

Dependence on Suppliers

Most of our current parts and assemblies are readily available through multiple sources in the open market; however, a limited number are available only from a single source. In these cases, we either stock adequate inventory to cover future product demands, obtain the agreement of the vendor to maintain adequate stock for future demands, or develop alternative components or sources where appropriate.

Employees

As of December 31, ~~2018~~2019, Evans & Sutherland and its subsidiaries employed a total of 96 persons of which 95 were employed full time.

Environmental Standards

We believe our facilities and operations are within standards fully acceptable to the Environmental Protection Agency and that all facilities and procedures are operated in accordance with environmental rules and regulations, and international, federal, state and local laws.

Strategic Relationships

In the normal course of business, we develop and maintain various types of relationships with key customers and technology partners. The teaming agreements are with industry partners and are intended to improve our overall competitive position. The product development agreements enhance our products by the cooperative development of new features and capabilities necessary to maintain our industry leading position.

Forward-Looking Statements and Associated Risks

This annual report, including all documents incorporated herein by reference, includes certain “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, those statements preceded by, followed by or including the words “estimates,” “believes,” “expects,” “anticipates,” “plans,” “projects,” “intends,” “predicts,” “may,” “will,” “could,” “would,” “potential” and similar expressions or the negative of such terms. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II of this annual report on Form 10-K for a list of some of the forward-looking statements included in this Form 10-K.

5INFORMATION ABOUT OUR EXECUTIVE OFFICERS

~~EXECUTIVE~~The ~~OFFICERS~~following OFsets ~~THE~~forth ~~REGISTRANT~~certain information regarding the executive officers of E&S as of December 31, 2019.

The following sets forth certain information regarding the executive officers of E&S as of December 31, 2018.

NameAgePosition

Jonathan A. ~~Shaw62Chief~~Shaw63Chief Executive Officer and Director

Paul L. ~~Dailey62Chief~~Dailey63Chief Financial Officer and Corporate Secretary

Kirk D. ~~Johnson57Chief~~Johnson58Chief Operating Officer and President

Jonathan A. Shaw was appointed Chief Executive Officer and Director in September 2016. He previously served as President and Chief Executive Officer of Spitz since November 2001. Prior to his appointment as President and Chief Executive Officer of Spitz, Mr. Shaw held various management positions since 1985.

Paul L. Dailey was appointed Executive Vice President in December 2016. He was appointed Chief Financial Officer and Corporate Secretary in February 2007. He became an executive officer of E&S in August 2006 when he was appointed Acting Chief Financial Officer and Corporate Secretary. Prior to his appointments at E&S, Mr. Dailey served as Executive Vice President, Chief Financial Officer and Corporate Secretary of Spitz, where he started as Controller in 1983. Mr. Dailey is a Certified Public Accountant (inactive).

Kirk D. Johnson was appointed Chief Operating Officer and President in September 2016. He previously served as Vice President and General Manager of Digital Theater since January 2002. He joined E&S in April 1990 and has held various engineering and management positions throughout his service at E&S.

ITEM 2. PROPERTIES

Our principal executive, engineering, manufacturing and operations facilities are ~~located~~ in the University of Utah Research Park in Salt Lake City, Utah, where we lease space in two buildings totaling approximately 6841,000 square feet.

Spitz owns and occupies an approximately 47,000 square-foot building on approximately 15.2 acres in Chadds Ford, Pennsylvania. The property serves as collateral under Spitz’s debt agreements through a mortgage granted to First Keystone Bank which is now The Bryn Mawr Trust Company, a commercial bank. 7

~~ITEM~~Spitz 3owns and occupies an approximately 47,000 square-foot building on approximately 15.2 ~~LEGAL~~acres ~~PROCEEDINGS~~in Chadds Ford, Pennsylvania. The property serves as collateral under Spitz’s debt agreements through a mortgage granted to First Keystone Bank which is now The Bryn Mawr Trust Company, a commercial bank.

InITEM ~~the normal course of business, we may have various legal claims and other contingent matters~~3. WeLEGAL ~~know of no legal claims outstanding that would have a material adverse effect on our consolidated financial position, liquidity or results of operations.~~ PROCEEDINGS

~~ITEM~~In 4the normal course of business, we may have various legal claims and other contingent matters. We ~~MINE~~know ~~SAFETY~~of ~~DISCLOSURES~~no legal claims outstanding that would have a material adverse effect on our consolidated financial position, liquidity or results of operations.

~~Not~~ITEM ~~applicable~~4.MINE SAFETY DISCLOSURES

6Not applicable

~~PART II~~8

~~ITEM~~PART ~~5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~II

WeOur ~~have~~common ~~never~~stock ~~paid~~trades aon ~~cash~~the ~~dividend~~Over-the-Counter onMarkets ~~our~~under ~~common~~the ~~stock~~symbol ~~and~~“ESCC.” On ~~have~~March ~~used~~30, ~~funds~~2020, ~~generated~~there ~~internally~~were toapproximately ~~operate~~415 holders of record of our ~~business~~common stock. ~~For~~Because ~~the~~brokers ~~foreseeable~~and ~~future,~~other weinstitutions ~~intend~~hold tomany ~~follow~~of our ~~policy~~shares on behalf of ~~retaining~~stockholders, ~~any~~we ~~future~~are ~~earnings~~unable to ~~finance~~estimate the ~~development~~total ~~and~~number ~~growth~~ of ~~our~~stockholders ~~business~~represented by these record holders.

~~Additional~~We ~~information~~have ~~required~~never bypaid ~~this~~a ~~item~~cash isdividend ~~incorporated~~on byour ~~reference~~common tostock ~~the~~and ~~table~~have ~~captioned~~used ~~Securities~~funds ~~Authorized~~generated ~~for~~internally ~~Issuance~~to ~~Under~~operate ~~Equity~~our ~~Compensation~~business. For ~~Plans~~the asforeseeable ~~of December 31~~future, ~~2018~~we inintend ~~Item~~to ~~12,~~follow ~~“Security~~our ~~Ownership~~policy of ~~Certain~~retaining ~~Beneficial~~any ~~Owners~~future ~~and~~earnings ~~Management~~to ~~and~~finance ~~Related~~the ~~Stockholder~~development ~~Matters,”~~and ofgrowth ~~Part III~~ of ~~this~~our ~~annual report on Form 10-K~~business.

~~ITEM~~Additional 6.information ~~CONSOLIDATED~~required ~~FINANCIAL~~by ~~DATA~~this item is incorporated by reference to the table captioned Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2019 in Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of Part III of this annual report on Form 10-K.

~~Not~~ITEM ~~applicable~~6. SELECTED FINANCIAL DATA

~~ITEM~~Not ~~7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~applicable

~~The~~ITEM ~~following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition~~7. ~~The~~ discussion should be read in conjunction with our consolidated financial statements and notes included in Item 8, “Financial Statements and Supplementary Data,” of this annual report on Form 10-K. Information set forth in “ManagementMANAGEMENT’sS ~~Discussion~~DISCUSSION ~~and~~AND ~~Analysis~~ANALYSIS ofOF ~~Financial~~FINANCIAL ~~Condition~~CONDITION ~~and~~AND ~~Results~~RESULTS ofOF Operations” includes forward-looking statements that involve risks and uncertainties. Many factors could cause actual results to differ materially from those contained in the forward-looking statements. See “Forward-Looking Statements” below for additional information concerning these items. OPERATIONS

The ~~(All~~following ~~dollar~~discussion ~~amounts~~and ~~are~~analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in ~~thousands~~conjunction ~~unless~~with ~~otherwise~~our ~~indicated~~consolidated financial statements and notes included in Item 8, “Financial Statements and Supplementary Data,” of this annual report on Form 10-K.) Information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements that involve risks and uncertainties. Many factors could cause actual results to differ materially from those contained in the forward-looking statements. See “Forward-Looking Statements” below for additional information concerning these items.

~~Executive~~ ~~Summary~~(All dollar amounts are in thousands unless otherwise indicated.)

~~Sales for 2018 were $37,193 which is 22% higher than the $30,508 of sales reported in 2017. This produced net income of $3,747 in 2018 compared to net income of $1,481 in 2017.~~ The ~~profitable~~Impact ~~results advance the recovery~~ of our stockholders’ equity to $8,004 from a large deficit prior to the settlement of our pension obligations in 2015. The 2018 sales and net income exceeded expectations and are high compared to the Company’s recent history. The high 2018 sales are attributable to an unusually large volume of work performed on customer planetarium projects in the second half of 2018 in order to meet customer schedules. The results of 2018 demonstrate the profit potential of the business as well as the degree of variability in sales that can occur from the timing of customer orders and deliveries. COVID-19

~~The~~ As ~~high~~of ~~volume~~the time of ~~sales~~this ~~from~~filing, ~~work~~certain onof ~~prior~~the ~~customer~~Company’s ~~orders~~operating ~~combined~~activities ~~with~~have abeen ~~decrease~~curtailed inby ~~new~~the ~~orders~~impact ~~for~~of ~~dome~~COVID-19. ~~products~~Government indirectives ~~2018~~have ~~decreased~~suspended ~~the~~manufacturing ~~sales~~and ~~backlog~~limited toworkplace ~~$17,366~~activities asbeginning ofMarch ~~December 31~~23, ~~2018~~2020. ~~This~~The ~~compares~~Company has empowered its employees to awork ~~sales~~remotely ~~backlog~~wherever ofpossible ~~$27,360~~to asminimize ofthe ~~December~~disruption ~~31,~~to ~~2017~~Company operations. ~~New~~The ~~orders~~Company tohas ~~replenish~~received ~~the~~no ~~sales~~communications ~~backlog~~from ~~will~~customers bethat ~~critical~~indicate tocancellations. ~~produce~~We ~~sales~~have atreceived ~~sufficient~~some ~~levels~~requests ~~for~~to ~~profitable~~postpone ~~results~~deliveries inand ~~2019.~~we Weexpect ~~remain~~more ~~encouraged~~which ~~that~~will extend the ~~Company’s~~timing ~~sales~~of ~~prospects~~revenue ~~will~~recognition ~~produce~~and, ~~sufficient~~in ~~orders~~some tocases, ~~sustain~~customer ~~sales~~payments. atPublic ~~profitable~~health ~~levels~~directives ~~over~~from governments around the ~~long~~world ~~term;~~are ~~however,~~advising weor ~~anticipate~~prohibiting ~~that~~large gatherings to inhibit the ~~low~~spread ~~backlog~~of asCOVID-19. This has suspended the use of ~~December~~our ~~31,~~products ~~2018~~for ~~may~~much ~~result~~of inour ~~lower~~installed ~~sales~~customer ~~that~~base. ~~could~~Continued ~~challenge~~restrictions ~~profitability~~and ~~for~~the ~~early~~potential ~~reporting~~behavioral ~~periods~~changes resulting from the impact of ~~2019. The~~COVID-19 ~~Company~~may ~~plans~~continue to ~~use~~influence ~~this~~the asdemand anfor ~~opportunity~~our toproducts ~~redirect~~which ~~staff~~typically ~~and~~attract ~~resources~~a large audience. Also, ~~which~~the ~~would~~ongoing ~~otherwise~~impact beof ~~working~~COVID-19 on ~~customer~~the ~~projects~~world’s economy could ultimately have material adverse consequences to the Company; however, ~~toward~~as ~~research~~of ~~and~~now, ~~development~~the ~~activities~~Company is unable to ~~expand~~determine ~~our~~the ~~products~~likelihood ~~for~~or ~~future~~degree ~~sales~~of ~~growth.~~such adverse consequences.

7Executive Summary

Beyond 2019, we expect variable but reasonably consistent future sales and gross profit from our current product line at annual levels sufficient to cover or exceed operating expenses and meet our obligations. As our recovery progresses from a large stockholders’ deficit eliminated mainly by the 2015 Pension Settlement, we expect to continue to improve our products and explore new opportunities to increase our sales and profits in an effort to grow shareholder value. We believe that our improving financial position could present more opportunities in this effort.9

AsSales ~~described~~for in2019 ~~the~~were ~~notes~~$27,716, toor ~~the~~approximately ~~consolidated~~25% ~~financial~~lower ~~statements,~~than the ~~Company adopted Topic 606~~$37,193 ~~Revenue~~of ~~from~~sales ~~Contracts~~reported ~~with~~in ~~Customers,~~2018. ~~with~~This produced a ~~date~~net loss of ~~the~~$1,599 ~~initial~~in ~~application~~2019 ofcompared ~~January~~to 1net income of $3,308 in 2018. The ~~Company~~net ~~applied~~loss ~~Topic~~reversed ~~606~~some ~~using~~of ~~the~~our ~~cumulative~~recent ~~effect~~gains ~~method~~in ~~and~~stockholders’ ~~accordingly~~equity ~~recognized~~decreasing ~~the~~total ~~cumulative~~stockholders’ ~~effect~~equity to $6,684 as of ~~initially~~December ~~applying~~31, ~~Topic~~2019 ~~606~~compared to $8,373 as anof ~~adjustment~~December 31, 2018. The lower 2019 sales were attributable to ~~the~~a ~~opening~~lower ~~balance~~volume of ~~stockholders’~~new ~~equity~~orders atfrom ~~January~~mid-2018 1,to ~~2018~~mid-2019. AsAlso acontributing ~~result,~~to the ~~Company~~lower ~~used~~2019 ~~different~~sales ~~methods~~were ~~for~~the ~~recognizing~~acceleration of customer deliveries in 2018 which accelerated 2018 revenue that would otherwise have been recorded in ~~each~~2019. The results of 2019 and 2018 demonstrate the ~~years~~degree ~~presented~~of asvariability ~~detailed~~in ~~below~~sales that can occur from the timing of customer orders and deliveries.

~~The~~We ~~adoption~~believe ofthat ~~Topic~~the ~~606~~period ~~changed~~of ~~the~~low ~~method~~volume of ~~recognizing~~new ~~revenue~~orders ~~for~~was ~~certain~~not ~~customer~~attributable ~~contracts.~~to ~~More~~work ~~specifically~~lost to competition, ~~for~~rather ~~some~~we ~~contracts,~~believe ~~revenue~~that ~~previously~~it was ~~not~~the ~~recognized~~timing ~~until~~of ~~the~~purchase ~~product~~decisions ~~was~~and ~~accepted~~delayed development of new projects by ~~the~~potential ~~customer~~customers. ~~Under~~We ~~Topic~~saw ~~606,~~an ~~revenue~~increase ~~for~~in ~~these~~new ~~contracts~~orders ~~will~~in bethe ~~recognized~~second ~~over~~half ~~time~~of ~~using~~2019 ~~the~~that ~~percentage~~improved ~~completion~~the ~~method,~~sales ~~which~~backlog isat the ~~method~~end ~~used~~of ~~for~~2019, ~~most~~and ofwe ~~our~~are ~~customer~~hopeful ~~contracts~~that this will continue. ~~The~~We ~~immediate~~believe ~~effect~~that some of the ~~change~~2019 ~~was~~lower tosales ~~accelerate~~were ~~earnings~~attributable onto ~~the~~delayed ~~revenue~~decisions ~~backlog~~paced ~~for~~by ~~the~~new ~~effected~~developing ~~contracts~~technologies. We ~~This~~were ~~acceleration~~optimistic ~~was~~that ~~recorded~~the inimproving abacklog ~~cumulative~~as ~~transition~~of ~~adjustment~~December 31, ~~whereby~~2019 ~~$683~~would oflead ~~gross~~us ~~profit~~back onto ~~$1,606~~profitable of sales ~~was~~levels ~~recorded~~in ~~directly~~2020 toand ~~stockholders’~~that ~~equity. Although~~we ~~the~~would ~~benefit~~be ofable to continue to build on the ~~earnings~~recovery ~~from~~of the ~~transition~~large ~~adjustment~~stockholders’ isdeficit ~~reflected~~prior into the ~~financial~~2015 ~~position~~settlement of ~~the~~our ~~Company~~pension onliabilities; ~~the~~however, ~~balance~~as ~~sheet~~noted above, itthe ~~will~~effects ~~not~~of bethe ~~reported~~COVID-19 inpandemic ~~the~~could ~~statement~~materially ofadversely ~~operations.~~affect ~~Going~~our ~~forward,~~business wein ~~believe~~2020. New ~~Topic~~orders ~~606~~to ~~will~~replenish ~~create~~the asales ~~smoother~~backlog ~~revenue~~will ~~stream~~be bycritical ~~spreading~~to ~~more~~produce ~~revenue~~sales ~~over~~at ~~the~~sufficient ~~period~~levels offor ~~performance~~profitable asresults ~~opposed~~in to2020. ~~previously~~We ~~when~~remain ~~some~~encouraged ~~contract~~that ~~revenue~~the ~~was~~Company’s ~~recorded~~sales inprospects awill ~~lump~~produce ~~sum~~sufficient inorders ~~the~~to ~~period~~sustain ofsales ~~acceptance~~at byprofitable levels over the ~~customer~~long term.

WeThe ~~are~~Company ~~currently~~used ~~pursuing~~2019 ~~new~~as ~~opportunities~~an ~~for~~opportunity ~~our business while we continue~~ to ~~develop~~redirect staff and ~~improve~~resources, ~~the~~which ~~products~~would ~~that~~otherwise ~~serve~~be ~~our~~working ~~traditional~~on ~~markets.~~customer Weprojects, ~~consider~~toward ~~the~~new ~~advancement~~sales ofand ~~innovative~~research ~~products~~and ~~such~~development asactivities ~~Digistar essential~~ to ~~maintaining~~expand our ~~leading share of the planetarium market. We will continue to develop and improve our planetarium~~ products ~~more~~for ~~narrowly~~future ~~focused~~sales ~~on education markets such as our SciDome product~~growth. WeAs ~~intend~~a toresult, ~~also~~operating ~~continue~~expense ~~development~~increased and ~~improvement~~contributed ~~of our dome products used by planetarium theaters and many other varied applications. We intend~~ to ~~continue~~ the ~~production~~net ~~of quality show content for planetarium theaters~~loss. We believe ~~that~~these ~~the~~efforts ~~ability~~will lead to ~~include~~more ~~the~~sales ~~wide~~and ~~range~~growth ofopportunities ~~complementary~~for ~~products in~~ the ~~systems~~business; ~~we sell~~however, ~~along~~the ~~with~~Company’s ~~access~~limited toresources ~~the~~present ~~legacy~~a ~~customer~~challenge ~~base~~to ofdeveloping ~~E&S~~new ~~and~~technologies, ~~our~~such ~~subsidiary,~~as ~~Spitz~~DomeX, ~~provides~~to agrow ~~unique~~the ~~competitive advantage~~business.

~~Results~~Beyond of2020, ~~Operations~~we expect variable but reasonably consistent future sales and gross profit from our current product line at annual levels sufficient to cover or exceed operating expenses and meet our obligations. As our recovery progresses from a large stockholders’ deficit eliminated mainly by the 2015 Pension Settlement, we expect to continue to improve our products and explore new opportunities to increase our sales and profits to grow shareholder value.

~~Consolidated~~We ~~Sales~~are currently pursuing new opportunities for our business while we continue to develop and ~~Backlog~~improve the products that serve our traditional markets. We consider the advancement of innovative products such as Digistar and DomeX essential to maintaining our leading share of the planetarium market. We will continue to develop and improve our planetarium products more narrowly focused on education markets such as our SciDome product. We intend to also continue development and improvement of our dome products used by planetarium theaters and many other varied applications. We intend to continue the production of quality show content for planetarium theaters. We believe that the ability to include the wide range of complementary products in the systems we sell, along with access to the legacy customer base of E&S and our subsidiary, Spitz, provides a unique competitive advantage.

~~The~~Results ~~following~~of ~~table~~Operations ~~summarizes our consolidated sales for the years ended December 31:~~

		2018		2017
Sales		$ 37,193		$ 30,508

Consolidated Sales and Backlog

~~Sales~~The ~~increased~~following ~~22%~~table ~~from~~summarizes ~~2017~~our toconsolidated ~~2018.~~sales ~~Sales~~for ~~of all Company products were higher in 2018 with~~ the ~~most~~years ~~significant~~ended ~~contribution~~December ~~to the increased sales coming from planetarium products.~~ 31:

The volume of new orders in 2018 was less than the sales recorded resulting in a decrease in our sales backlog from $27,360 as of December 31, 2017 to $17,366 as of December 31, 2018. Approximately $1,200 of the decrease in the backlog was due to the adoption of Topic 606, Revenue from Contracts with Customers. Otherwise the decrease was attributable to high 2018 planetarium sales and lower bookings of dome products in 2018. We anticipate that approximately 90% of the 2018 backlog will be converted to sales in 2019.

	2019	2018

Sales	$ 27,716	$ 37,193

8Sales decreased 25% from 2018 to 2019. The lower sales in 2019 were attributable to the acceleration of customer deliveries in 2018 and a low volume of new customer orders from late 2018 through the first half of 2019.

~~Gross~~Revenue ~~Profit~~backlog increased to $19,708 as of December 31, 2019, compared to $17,366 as of December 31, 2018. The increase in the revenue backlog was mainly due to an improving volume of new orders in the second half

~~The following table summarizes our gross profit and the percentage to total sales for the years ended December 31:~~10

	2018	2017
Gross profit	$ 13,724	$ 10,951
Gross profit percentage	37 %	36 %

of 2019 and the low 2019 sales which were replenished by an improving volume of new orders in the third quarter of 2019.

~~Our~~Gross gross profit percentage was slightly higher in 2018 when compared to 2017. There were variations in gross margins among customer projects within the usual range which, when combined, resulted in comparable margins for all of the Company’s products in 2017 and 2018.Profit

~~Operating~~The ~~Expenses~~following table summarizes our gross profit and the percentage to total sales for the years ended December 31:

The following table summarizes our operating expenses during the years ended December 31:

	2019	2018

Gross profit	$ 9,359	$ 13,445
Gross profit percentage	34 %	36 %

	2018	2017
Selling, general and administrative	$ 6,561	$ 6,045
Research and development	2,851	2,908
Pension	217	231
Total operating expense	$ 9,629	$ 9,184

The mix of products delivered and the types of customer contracts that contributed to the revenue in the periods presented causes variability in the gross profit percentage. The lower 2019 gross profit percentage was mainly attributable to the low 2019 sales causing inefficiencies that increase overhead cost of as a percentage of sales. The negative effect of the lower 2019 sales was partially offset by strong gross margins on several projects which were completed at costs lower than estimated as efforts to meet some customized product features and uncertain site conditions were less than anticipated.

~~Selling,~~Operating general and administrative expenses were higher in 2018 compared to 2017. This was attributable to higher 2018 selling expense mostly due to a bi-annual trade show and an increase in sales commissions. Also, 2017 general administrative expenses were low due to a large credit of $143 for bad debt recoveries. Expenses

~~Research~~The ~~and~~following ~~development~~table ~~expenses~~summarizes were slightly lower in 2018 compared to 2017. This was primarily due to redirecting resources from research and development activities to work on customer projects. Research and development activities consisted of exploration of new applications for our ~~products,~~operating ~~improvements~~expenses toduring the ~~software~~years inended ~~our~~December planetarium products, testing hardware to project high definition video on large dome screens, development of various utilities for planetarium theaters, testing of optical coatings for projection surfaces and developing techniques to make dome projection surfaces more uniform. 31:

Pension expense attributable to our Supplemental Executive Retirement Plan (“SERP”) was lower in 2018 compared to 2017 due to changes in the actuarial data affecting the measurement of the pension expense.

	2019	2018

Selling, general and administrative	$ 7,449	$ 6,669
Research and development	3,164	2,903
Pension	226	217
Total operating expense	$ 10,839	$ 9,789

~~Other Expense~~Selling, ~~net~~general and administrative expenses were higher in 2019 compared to 2018. Most of the increase was attributable to a second quarter bad debt charge of $457 for a customer receivable in China. Also contributing to the increase was a higher use of engineering resources working sales proposals.

~~The~~Research ~~following~~and ~~table~~development ~~summarizes~~expenses were higher in 2019 due to the deployment of more engineering resources to R&D activities made possible by lower activities for customer deliveries and show content production. Research and development expenses generally vary with use of engineering resources for product improvement projects and customer delivery activities. Research and development activities consisted of exploration of new applications for our ~~other~~products, ~~expense~~improvements ~~during~~to the ~~years~~software ~~ended~~in ~~December~~our ~~31:~~planetarium products, testing hardware to project high definition video on large dome screens, development of various utilities for planetarium theaters, testing of optical coatings for projection surfaces and developing techniques to make dome projection surfaces more uniform.

	2018	2017
Interest expense	$ (433)	$ (473)
Other income, net	106	76

Pension expense attributable to our Supplemental Executive Retirement Plan (“SERP”) was slightly higher in 2019 compared to 2018 due to changes in the actuarial data and interest rates affecting the measurement of the pension expense.

Interest expense in 2018 and 2017 consisted mostly of imputed interest on the Pension Settlement Obligation. Interest expense also included interest paid on real estate debt in both years presented. Interest expense decreased in 2018 due to the reduction of debt and is expected to continue to decrease at a comparable rate in future years. 11

9Other Expense, net

~~Other~~The ~~income,~~following ~~net~~table ~~increased~~summarizes ~~from~~our ~~$76~~other inexpense ~~2017~~during tothe ~~$106~~years inended ~~2018~~December ~~due primarily to rental income from a sublease for a small portion of our facilities.~~ 31:

Income Taxes

	2019	2018

Interest expense	$ (390)	$ (433)
Other income (expense), net	134	106
Other expense, net	$ (256)	$ (327)

~~The~~Interest ~~income~~expense ~~tax~~in ~~benefit~~2019 ~~(expense)~~and 2018 consisted mostly of ~~federal~~imputed ~~and~~interest ~~state~~on ~~income~~the ~~taxes~~Pension asSettlement ~~follows~~Obligation. ~~for~~Interest ~~the~~expense also included interest paid on real estate debt in both years ~~ended~~presented. ~~December~~Interest ~~31:~~expense decreased in 2019 compared to 2018 due to the reduction of debt and is expected to continue to decrease at a comparable rate in future years.

		2018		2017
Income tax benefit (expense)		$ (21)		$ 111

Other income, net increased from $106 in 2018 to $134 in 2019 due primarily to rental income from a sublease for a small portion of our facilities.

~~The~~Income 2017 tax benefit resulted primarily from state film tax credit for the production of a planetarium show which was recorded at the estimated value realizable through assignment. The 2018 income tax expense was for state income taxes resulting from Spitz’ normal business activity in various jurisdictions.Taxes

~~Other~~The ~~Comprehensive~~income ~~Income~~tax benefit (expense) consisted of federal and state income taxes as follows for the years ended December 31:

The following table summarizes other comprehensive income for the years ended December 31:

	2019	2018

Income tax benefit (expense)	$ 138	$ (21)

	2018	2017
Decrease (increase) to minimum pension liability	$ 200	$ (30)
Other comprehensive income	$ 200	$ (30)

The 2019 tax benefit resulted primarily from state film tax credit for the production of a planetarium show which was recorded at the estimated value realizable through assignment. The 2018 income tax expense was for state income taxes resulting from Spitz’ normal business activity in various jurisdictions.

Other ~~comprehensive~~Comprehensive ~~income consists of accounting for potential changes in the actuarial valuation of the SERP liabilities.~~Income

~~Liquidity~~The ~~and~~following ~~Capital~~table ~~Resources~~summarizes other comprehensive income for the years ended December 31:

Outlook

	2019	2018

Decrease (increase) to minimum pension liability	$ (206)	$ 200
Other comprehensive income	$ (206)	$ 200

WeOther ~~believe~~comprehensive ~~existing~~income ~~liquidity~~consists ~~resources~~of ~~and~~accounting ~~funds~~for ~~generated~~potential ~~from~~changes ~~forecasted revenue will be sufficient to meet our current and long-term obligations. We continue to operate~~ in ~~a rapidly evolving and often unpredictable business environment that may change~~ the ~~timing~~actuarial orvaluation ~~amount~~ of ~~expected~~the ~~future~~SERP ~~cash receipts and expenditures~~liabilities.

~~Cash~~Liquidity ~~Flows~~and Capital Resources

~~The~~Outlook ~~following table summarizes our cash flows for the years ended December 31:~~

	2018	2017
Net cash and cash equivalents provided by (used in):
Operating activities	$ 3,729	$ (1,098)
Investing activities	(101)	(148)
Financing activities	(631)	(592)
Increase (decrease) in cash and cash equivalents	$ 2,997	$ (1,838)

We believe existing liquidity resources and funds generated from forecasted revenue will be sufficient to meet our current and long-term obligations. We continue to operate in a rapidly evolving and often unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures.

~~The fluctuation in the annual increase and decrease in cash and cash equivalents is mainly due to cash provided by or used in operating activities.~~ 12

~~Operating~~Public ~~Activities~~and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of restrictions on business activities, travel restrictions, business closures, and the promotion of social distancing, have affected and could continue to affect our customers’ behavior and impact our operations. Additionally, we cannot predict the impact that any widespread infection by COVID-19, including the potential infection of our workforce would have on our ability to perform our services. We continue to take measures to ensure the health and welfare of our employees. COVID-19 may affect the ability of our suppliers and vendors to provide products and services to us that support our activities. These and other factors may restrict our ability to conduct business and unpredictably increase or decrease demand for our products.

~~The~~Due ~~net~~to ~~cash~~the ~~provided~~speed bywith ~~operating~~which ~~activities~~this insituation ~~2018~~is ~~was~~developing ~~attributable~~and tothe ~~$4,804~~uncertainty ofregarding ~~cash~~its ~~provided~~extent byor ~~the $3~~duration,~~747~~ ~~net~~we ~~income~~are ~~after~~not able to estimate the ~~effect~~impact of $1COVID-19 on our revenues,~~057~~ results of ~~non-cash~~operations, ~~charges~~and ~~which~~liquidity, ~~was~~or ~~partially~~our ~~offset~~outlook byfor athe ~~decrease~~first inor ~~working~~second ~~capital~~quarters of 2020 or beyond, and this impact could be material.

10Cash Flows

~~of $1,075.~~ The ~~non-cash~~following ~~charges~~table ~~consisted~~summarizes ~~primarily~~our ofcash ~~$263~~flows ~~of depreciation and $427 in the provision~~ for ~~excess and obsolete inventory. The changes in working capital which used cash were largely attributable to an increase in inventory and~~ the ~~reduction~~years ofended ~~liabilities.~~December ~~This was partially offset by a decrease in customer accounts receivable. These changes are attributable to the timing of performance on customer projects.~~ 31:

The net cash used in operating activities in 2017 was attributable to an increase in working capital of $2,947 less $1,849 of cash provided by the $1,481 net income after the effect of $368 of non-cash charges. The non-cash charges consisted primarily of $259 of depreciation and $105 in the provision for excess and obsolete inventory. The changes in working capital which used cash were largely attributable to the timing of progress payments on customer projects.

	2019	2018
Net cash and cash equivalents provided by (used in):
Operating activities	$ (1,815)	$ 3,729
Investing activities	(124)	(101)
Financing activities	(653)	(631)
Increase (decrease) in cash and cash equivalents	$ (2,592)	$ 2,997

~~Investing~~The ~~Activities~~fluctuation in the annual increase and decrease in cash and cash equivalents is mainly due to cash provided by or used in operating activities.

~~Investing~~Operating ~~activities used $101 of cash during 2018 consisting of purchases of property and equipment of $136, less proceeds from the sale of property and equipment of $35.~~Activities

~~Investing~~The ~~activities~~net cash used in operating activities in 2019 was attributable to $~~148~~567 of cash ~~during~~absorbed ~~2017~~by ~~consisting~~the ~~entirely~~$1,599 net loss after the effect of ~~purchases~~$1,032 of ~~property~~non-cash charges which was partially offset by a decrease in working capital of $1,248. The non-cash charges consisted primarily of $266 of depreciation, $457 in the allowance for doubtful accounts receivable and ~~equipment~~$420 in noncash lease expense. The changes in working capital which used cash were largely attributable to an increase in accounts receivable and unbilled contract revenue. These changes are attributable to the timing of performance on customer projects.

~~Financing~~The ~~Activities~~net cash provided by operating activities in 2018 was attributable to $4,894 of cash provided by the $3,308 net income after the effect of $1,586 of non-cash charges which was partially offset by a decrease in working capital of $1,165. The non-cash charges consisted primarily of $263 of depreciation, $427 in the provision for excess and obsolete inventory and $529 in noncash lease expense. The changes in working capital which used cash were largely attributable to an increase in inventory and the reduction of liabilities. This was partially offset by a decrease in customer accounts receivable. These changes are attributable to the timing of performance on customer projects.

~~Financing~~Investing ~~activities used $631 of cash during 2018 consisting of $224 for principal payments on debt obligations and $407 for principal payments on the Pension Settlement Obligation.~~Activities

~~Financing~~Investing activities used $~~592~~124 of cash during ~~2017~~2019 consisting of ~~$211~~purchases ~~for~~of ~~principal~~property ~~payments~~and onequipment ~~debt~~of ~~obligations~~$131, ~~and~~less ~~$381~~proceeds ~~for~~from ~~principal~~the ~~payments~~sale onof ~~the~~property ~~Pension~~and ~~Settlement~~equipment ~~Obligation~~of $7.

~~Credit~~Investing ~~Facilities~~activities used $101 of cash during 2018 consisting of purchases of property and equipment of $136, less proceeds from the sale of property and equipment of $35.

The Company is a party to a line-of-credit agreement with a commercial bank which permits borrowings of up to $1,100 to fund Spitz working capital requirements. Under the line-of-credit agreement, interest is charged on amounts borrowed at the lender’s prime rate less 0.25%. Any borrowings under the Credit Agreement are secured by Spitz real and personal property and all the outstanding shares of Spitz common stock. The line-of-credit agreement and mortgage notes (with the same commercial bank) contain cross default provisions whereby a default on either agreement will result in a default on both agreements. There were no borrowings outstanding under the line-of-credit agreement as of December 31, 2018.13

~~The~~Financing ability to issue letters of credit and bank guarantees is an important tool to mitigate credit risk in our business. International sales are increasingly important to our business and, in many countries, letters of credit and bank guarantees serve as performance guarantees for customer contracts. Also, domestic sales sometimes require performance guarantees in the form of surety bonds. We have relationships with licensed surety companies to provide performance bonds subject to certain limitations and collateral which we must provide for security. Letters of credit and bank guarantees are issued to serve as collateral and to ensure our performance for these purposes. Cash deposits or deferral of customer payments for performance guarantees can often be used as an alternative to letters of credit. Activities

~~Under~~Financing ~~the~~activities ~~terms~~used of$653 ~~financing arrangements for letters~~ of ~~credit, the Company is required to maintain a balance in a specific~~ cash ~~account~~during ~~equal~~2019 toconsisting ~~or greater than the outstanding value~~ of ~~all~~$237 ~~letters~~for ofprincipal ~~credit~~payments ~~issued,~~on ~~plus~~debt ~~other amounts necessary to adequately secure~~ obligations ~~with~~and ~~the~~$437 ~~financial~~for ~~institutions~~principal ~~who~~payments ~~issue~~on the ~~letters~~Pension ofSettlement ~~credit. As~~Obligation ofoffset ~~December~~by ~~31, 2018, there were outstanding letters of credit and bank guarantees of~~ $~~220,~~21 ~~which~~from ~~are~~proceeds ~~scheduled~~for toshares ~~expire~~issued ~~during~~upon the ~~year~~exercise ~~ending~~of ~~December~~stock ~~31, 2019~~options.

~~Mortgage~~Financing ~~Notes~~activities used $631 of cash during 2018 consisting of $224 for principal payments on debt obligations and $407 for principal payments on the Pension Settlement Obligation.

~~Debt~~Credit obligations include a first mortgage note payable to a commercial bank which represents the balance on a $3,200 note (“First Mortgage Note”) issued on January 14, 2004 by Spitz. The First Mortgage Note requires repayment in monthly installments of principal and interest over 20 years. On January 14, 2006 and each third anniversary thereof, the interest rate on the First Mortgage Note is adjusted to the greater of 5.75% or 3% over the Three-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“3YCMT”). The monthly installment is recalculated in the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the Facilities

11The Company is a party to a line-of-credit agreement with a commercial bank which permits borrowings of up to $1,100 to fund Spitz working capital requirements. Under the line-of-credit agreement, interest is charged on amounts borrowed at the lender’s prime rate less 0.25%. Any borrowings under the Credit Agreement are secured by Spitz real and personal property and all the outstanding shares of Spitz common stock. The line-of-credit agreement and mortgage notes (with the same commercial bank) contain cross default provisions whereby a default on either agreement will result in a default on both agreements. There were no borrowings outstanding under the line-of-credit agreement as of December 31, 2019.

~~change~~The ability to issue letters of credit and bank guarantees is an important tool to mitigate credit risk in ~~the~~our ~~interest~~business. ~~rate~~International sales are increasingly important to our business and, ~~over~~in ~~the~~many ~~remaining~~countries, ~~portion~~letters of ~~the~~credit ~~original~~and ~~20-year~~bank ~~term.~~guarantees Onserve ~~January~~as ~~14,~~performance ~~2018~~guarantees for customer contracts. Also, domestic sales sometimes require performance guarantees in the ~~3YCMT~~form ~~was~~of 2surety bonds.~~09%~~ We ~~and~~have ~~the~~relationships ~~interest~~with ~~rate~~licensed onsurety ~~the~~companies ~~First~~to ~~Mortgage~~provide ~~Note~~performance ~~remained~~bonds atsubject 5to certain limitations and collateral which we must provide for security.~~75%~~ ~~per~~Letters ~~annum~~of credit and bank guarantees are issued to serve as collateral and to ensure our performance for these purposes. AsCash adeposits ~~result,~~or ~~the~~deferral ~~monthly~~of ~~installment~~customer ~~amount~~payments ~~remained~~for ~~unchanged~~performance atguarantees ~~$23~~can often be used as an alternative to letters of credit.

~~Debt~~Under ~~obligations also include a second mortgage note payable to a commercial bank which represents~~ the ~~balance~~terms onof afinancing ~~$500~~arrangements ~~note~~for ~~(“Second~~letters ~~Mortgage Note”) issued on September 11, 2008 by Spitz. The Second Mortgage Note requires repayment in monthly installments~~ of ~~principal and interest over 20 years. On October 1~~credit, ~~2013 and each fifth anniversary thereof,~~ the ~~interest~~Company ~~rate on the Second Mortgage Note~~ is ~~adjusted~~required to ~~the~~maintain ~~greater~~a ofbalance ~~5.75%~~in ora 3%specific ~~over the~~cash ~~Five-Year~~account ~~Constant~~equal ~~Maturity~~to ~~Treasury~~or ~~Rate~~greater ~~published~~than by the ~~United~~outstanding ~~States~~value ~~Federal~~of ~~Reserve~~all ~~(“5YCMT”). The~~letters ~~monthly~~of ~~installment~~credit isissued, ~~recalculated~~plus onother ~~the~~amounts ~~first~~necessary ~~month following a change in the interest rate. The recalculated monthly installment is equal~~ to ~~the~~adequately ~~monthly~~secure ~~installment~~obligations ~~sufficient~~with ~~to repay~~ the ~~principal~~financial ~~balance,~~institutions aswho ofissue the ~~date~~letters of ~~the~~credit. As ~~change in the interest rate, over the remaining portion~~ of ~~the~~December ~~original 20-year term. On October 1~~31, ~~2018~~2019, ~~the~~there ~~tenth~~was ~~anniversary~~one ofoutstanding ~~the~~letter ~~Second~~of ~~Mortgage~~credit ~~Note,~~and ~~the~~bank ~~5YCMT~~guarantee ~~was~~of ~~2.99%. As a result~~$31, ~~interest~~which ~~was~~is ~~adjusted~~scheduled to ~~5.99%.~~expire ~~The~~during ~~monthly~~the ~~installment~~year ~~remains~~ending atDecember ~~$4.~~31, 2020.

~~The~~ Mortgage Notes are secured by the real property occupied by Spitz pursuant to a Mortgage and Security Agreement. The real property had a carrying value of $3,973 as of December 31, 2018. The Mortgage Notes are guaranteed by E&S.

~~Land~~Debt obligations include a first mortgage note payable to a commercial bank which represents the balance on a $3,200 note (“First Mortgage Note”) issued on January 14, 2004 by Spitz. The First Mortgage Note requires repayment in monthly installments of principal and ~~building~~interest ~~lease~~over 20 years. On January 14, 2006 and each third anniversary thereof, the interest rate on the First Mortgage Note is adjusted to the greater of 5.75% or 3% over the Three-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“3YCMT”). The monthly installment is recalculated in the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term. On January 14, 2018, the 3YCMT was 2.09% and the interest rate on the First Mortgage Note remained at 5.75% per annum. As a result, the monthly installment amount remained unchanged at $23.

InDebt ~~November~~obligations ~~2014,~~also ~~the~~include ~~Company~~a ~~agreed~~second mortgage note payable to ana ~~extension~~commercial bank which represents the balance on a $500 note (“Second Mortgage Note”) issued on September 11, 2008 by Spitz. The Second Mortgage Note requires repayment in monthly installments of ~~its~~principal ~~lease~~and ~~for~~interest ~~its~~over ~~corporate~~20 ~~office~~years. On ~~buildings~~October 1, 2013 and ~~its~~each fifth anniversary thereof, the interest inrate on the ~~lease~~Second ~~for~~Mortgage Note is adjusted to the ~~land~~greater ~~occupied~~of 5.75% or 3% over the Five-Year Constant Maturity Treasury Rate published by the ~~buildings~~United ~~for~~States Federal Reserve (“5YCMT”). The monthly installment is recalculated on the first month following a ~~term~~change ofin 5the ~~years~~interest rate. ~~Base~~The ~~annual~~recalculated ~~rent~~monthly ~~for~~installment is equal to the ~~extended~~monthly 5installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term. isOn October 1, 2018, the tenth anniversary of the Second Mortgage Note, the 5YCMT was 2.99%. As a result, interest was adjusted to 5.99%. The monthly installment remains at $~~549~~4.

The lease obligation is recorded as an operating lease for a term of five years commencing November 1, 2014. The accounting for lease extension resulted in $620 gain on the disposition of leased assets under the prior lease which was deferred and is being amortized over the five-year term of the new operating lease. There was also a $1,526 gain from the extinguishment of a deferred rent credit related to the underlying land lease which is being amortized over the five-year term of the new operating lease. The amortization of the deferred gain and deferred rent credit reduces the rent expense attributable to the cash rent payments. 14

~~Other~~The Mortgage Notes are secured by the real property occupied by Spitz pursuant to a Mortgage and Security Agreement. The real property had a carrying value of $3,863 as of December 31, 2019. The Mortgage Notes are guaranteed by E&S.

InLand ~~2019,~~and webuilding ~~expect~~lease ~~capital expenditures similar to 2018. There were no material capital expenditure commitments as of December 31, 2018, nor do we anticipate any over the next several years.~~

~~Our~~On ~~Board~~April of15, ~~Directors~~2019, ~~has~~the ~~authorized~~Company signed an amendment to the ~~repurchase~~Previous Facility Lease (the “Lease Amendment”). The Lease Amendment effectively terminated, as of April 30, 2019, the Previous Facility Lease, and revised the terms whereby, effective May 1,~~600~~ 2019,~~000~~ ~~shares~~the Company continues to lease 60% of ~~our~~the ~~common~~space, ~~stock~~while the other 40% is leased from the Landlord by a third-party tenant (“New Facility Lease”). AsThe Company continues to pay 100% of ~~March~~the 8,maintenance ~~2019,~~and ~~463~~utility costs for the buildings and grounds,~~500~~ ~~shares~~of ~~remained~~which ~~available~~approximately ~~for~~40% ~~repurchase~~is ~~under~~reimbursed by the ~~plans~~third-party ~~approved~~tenant in accordance with terms set by the ~~Board~~New ofFacility ~~Directors~~Lease. No ~~shares~~The ~~were~~New ~~repurchased~~Facility ~~during~~Lease ~~2018~~has ora ~~2017. Stock~~seven-year ~~may~~term bewith ~~acquired~~two onfive-year ~~the~~renewal ~~open~~options ~~market~~with ormonthly ~~through~~base ~~negotiated~~rent ~~transactions~~of ~~depending~~$35 onduring ~~market~~the ~~conditions,~~first ~~share~~year ~~price~~with ~~and~~a ~~other~~3% ~~factors~~escalation per year.

We also maintain trade credit arrangements with certain suppliers. The unavailability of a significant portion of, or the loss of, these trade credit arrangements from suppliers would have a material adverse effect on our financial condition and operations.Other

AsIn ~~of December 31~~2020, ~~2018,~~we ~~our~~expect ~~total~~capital ~~indebtedness~~expenditures ~~was~~similar ~~$1,540~~to ~~on the mortgage notes~~2019. ~~Our~~There ~~cash~~were ~~and~~no ~~restricted~~material ~~cash,~~capital ~~subject~~expenditure tocommitments ~~various~~as ~~restrictions~~of ~~set~~December ~~forth in this annual report on Form 10-K~~31, ~~are available for working capital needs~~2019, ~~capital~~nor ~~expenditures,~~do ~~strategic~~we ~~investments,~~anticipate ~~mergers~~any ~~and~~over ~~acquisitions,~~the ~~stock~~next ~~repurchases~~several ~~and other potential cash needs as they may arise~~years.

~~Effects~~Our Board of ~~Inflation~~Directors has authorized the repurchase of 1,600,000 shares of our common stock. As of March 30, 2020, 463,500 shares remained available for repurchase under the plans approved by the Board of Directors. No shares were repurchased during 2019 or 2018. Stock may be acquired on the open market or through negotiated transactions depending on market conditions, share price and other factors.

We also maintain trade credit arrangements with certain suppliers. The ~~effects~~unavailability of ~~inflation~~a ~~were~~significant ~~not~~portion ~~considered~~of, ~~material~~or ~~for~~ the ~~years~~loss ~~2018~~of, ~~and~~these ~~2017~~trade ~~and~~credit ~~are~~arrangements ~~not~~from ~~expected~~suppliers towould behave a material ~~for~~adverse ~~the~~effect ~~year~~on ~~2019~~our financial condition and operations.

12As of December 31, 2019, our total indebtedness was $1,303 on the mortgage notes. Our cash and restricted cash, subject to various restrictions set forth in this annual report on Form 10-K, are available for working capital needs, capital expenditures, strategic investments, mergers and acquisitions, stock repurchases and other potential cash needs as they may arise.

~~Application~~Effects of ~~Critical Accounting Estimates~~Inflation

The ~~application~~effects of ~~the~~inflation ~~accounting~~were ~~estimates~~not ~~discussed below is~~ considered bymaterial management to be critical to an understanding of our consolidated financial statements. Their application places significant demands on management’s judgment, with financial reporting results relying on estimates about the effect of matters that are inherently uncertain. Specific risks for ~~these critical accounting estimates are described in~~ the ~~following~~years ~~paragraphs. A~~2019 ~~summary of significant accounting policies can be found in Note 1, “Nature of Operations~~ and ~~Summary~~2018 ~~of Significant Accounting Policies,” of Item 8, “Financial Statements~~ and ~~Supplementary~~are ~~Data,”~~not inexpected ~~this~~to ~~annual~~be ~~report~~material onfor ~~Form 10-K. For all of these policies, management cautions that future results rarely develop exactly as forecast, and~~ the ~~best~~year ~~estimates routinely require adjustment~~2020.

~~Revenue~~Application ~~Recognition~~of Critical Accounting Estimates

~~Revenue~~The ~~from~~application ~~contracts~~of isthe ~~recorded~~accounting ~~over~~estimates ~~time~~discussed ~~using~~below ~~the~~is ~~percentage-of-completion~~considered ~~method. This~~by ~~method~~management ~~uses~~to ~~the~~be ~~ratio~~critical ~~of costs incurred~~ to ~~management’s~~an ~~estimate~~understanding of ~~total~~our ~~anticipated~~consolidated ~~costs~~financial statements. ~~Our~~Their ~~estimates~~application ofplaces ~~total~~significant ~~costs~~demands ~~include~~on ~~assumptions~~management’s judgment, ~~such~~with asfinancial ~~man-hours~~reporting toresults ~~complete,~~relying ~~estimated~~on ~~materials~~estimates ~~cost,~~about ~~and~~the ~~estimates~~effect of ~~other~~matters ~~direct~~that ~~and~~are ~~indirect~~inherently ~~costs~~uncertain. ~~Actual~~Specific ~~results~~risks ~~may~~for ~~vary~~these ~~significantly~~critical ~~from~~accounting ~~our~~ estimates~~. If~~ ~~the actual costs~~ are ~~higher~~described ~~than~~in ~~management’s~~the ~~anticipated~~following ~~total~~paragraphs. A ~~costs,~~summary ~~then~~of ansignificant ~~adjustment~~accounting ispolicies ~~required~~can tobe ~~reduce~~found ~~the~~in ~~previously~~Note ~~recognized~~1, ~~revenue~~“Nature ~~as the ratio~~ of ~~costs~~Operations ~~incurred~~and toSummary ~~management’s~~of ~~estimate~~Significant ~~was~~Accounting ~~overstated. If~~Policies,” ~~actual~~of ~~costs~~Item ~~are~~8, ~~lower~~“Financial ~~than~~Statements ~~management’s~~and ~~anticipated~~Supplementary ~~total costs~~Data,” ~~then~~in anthis ~~adjustment~~annual isreport ~~required~~on toForm ~~increase~~10-K. For ~~the~~all ~~previously recognized revenue as the ratio~~ of ~~costs~~these ~~incurred~~policies, to management’s ~~estimate~~cautions isthat ~~understated. Adjustments~~future ~~for~~results ~~revisions~~rarely ofdevelop ~~previous~~exactly ~~estimates~~as ~~are~~forecast, ~~made~~and in the ~~period~~best ~~they~~estimates ~~become~~routinely ~~known~~require adjustment.

~~Contract~~ Revenue ~~in Excess of Billings on and Billings in Excess Contract Revenue~~ Recognition

~~Billings~~Revenue onfrom ~~uncompleted~~contracts ~~long~~is recorded over time using the percentage-~~term~~of-completion ~~contracts~~method. This ~~may~~method beuses ~~greater~~the ~~than~~ratio orof ~~less~~costs ~~than~~incurred ~~revenue~~to ~~recognized~~management’s estimate of total anticipated costs. AsOur aestimates ~~result,~~of ~~these~~total ~~differences~~costs ~~are~~include ~~recorded~~assumptions, such as anman-hours ~~asset~~to orcomplete, ~~liability~~estimated onmaterials ~~the~~cost, ~~balance~~and ~~sheet~~estimates of other direct and indirect costs. ~~Since~~Actual ~~revenue~~results ~~recognized~~may onvary ~~these~~significantly ~~long-term~~from ~~contracts~~our ~~includes~~estimates. If the actual costs are higher than management’s ~~estimates~~anticipated of total ~~anticipated~~ costs, then an adjustment is required to reduce the ~~amounts~~previously inrecognized revenue inas ~~excess~~the ratio of ~~billings~~costs ~~and~~incurred ~~billings~~to inmanagement’s ~~excess~~estimate ofwas overstated. If actual costs are lower than management’s anticipated total costs, then an adjustment is required to increase the previously recognized revenue ~~also~~as ~~include~~the ~~these~~ratio ~~estimates.~~of costs incurred

~~Inventories~~15

~~Inventories~~to ~~include~~management’s ~~materials~~estimate atis ~~standard costs, which approximate actual costs, and inventoried costs on programs, including material, labor, subcontracting costs, as well as an allocation of indirect costs~~understated. WeAdjustments ~~periodically review inventories~~ for ~~excess~~revisions supply, obsolescence, and valuations above estimated realizable amounts, and then provide a reserve we consider sufficient to reduce inventories to net realizable values. Reserve adequacy is based on estimates of ~~future~~previous ~~sales, product pricing, and requirements to complete projects. Revisions of these~~ estimates ~~would~~are ~~result~~made in ~~adjustments~~the toperiod ~~our~~they ~~operating~~become ~~results~~known.

~~Allowance~~Contract ~~for~~Revenue ~~Doubtful~~in ~~Accounts~~Excess ~~Receivable~~of Billings on and Billings in Excess Contract Revenue

WeBillings ~~specifically~~on ~~analyze~~uncompleted ~~accounts~~long-term ~~receivable~~contracts ~~and~~may ~~consider~~be ~~historical~~greater ~~experience,~~than ~~customer~~or ~~creditworthiness~~less than revenue recognized. As a result, ~~facts~~these ~~and~~differences ~~circumstances~~are ~~specific~~recorded toas ~~outstanding~~an ~~balances,~~asset ~~current~~or ~~economic~~liability ~~trends,~~on ~~and~~the ~~changes~~balance insheet. Since ~~payment~~revenue ~~terms~~recognized ~~when~~on ~~evaluating~~these ~~the~~long-term ~~adequacy~~contracts ofincludes ~~the~~management’s ~~allowance~~estimates ~~for~~of ~~doubtful~~total ~~accounts~~anticipated ~~receivable. Changes~~costs, the amounts in ~~these~~revenue ~~factors~~in ~~could~~excess ~~result~~of inbillings ~~material~~and ~~adjustments~~billings toin ~~the~~excess ~~expense~~of ~~recognized~~revenue ~~for~~also ~~bad~~include ~~debts.~~these estimates.

~~Income Taxes~~Inventories

AsInventories ~~part~~include ofmaterials ~~the~~at ~~process~~weighted ofaverage ~~preparing our consolidated financial statements, we are required to estimate our~~ actual ~~income taxes in each of the jurisdictions in which we operate~~costs. ~~This~~We ~~involves~~periodically ~~estimating~~review ~~our~~inventories ~~actual~~for ~~current~~excess ~~tax exposure together with assessing temporary differences resulting from differing treatments of items~~supply, ~~such as accrued liabilities~~obsolescence, ~~for tax~~ and ~~accounting~~valuations ~~purposes. These~~above ~~differences~~estimated ~~result~~realizable inamounts, ~~deferred~~and ~~income~~then ~~tax~~provide ~~assets~~a ~~and~~reserve ~~liabilities,~~we ~~which~~consider ~~are~~sufficient ~~included~~to inreduce ~~our~~inventories ~~consolidated~~to ~~balance~~net ~~sheets~~realizable values. WeReserve ~~must~~adequacy ~~then~~is ~~assess~~based ~~the~~on ~~likelihood~~estimates ~~that~~of ~~our deferred income tax assets will be recovered from~~ future ~~taxable income and~~sales, toproduct ~~the extent we believe that recovery is not likely~~pricing, weand ~~must~~requirements ~~establish~~to acomplete ~~valuation allowance~~projects. ToRevisions ~~the~~of ~~extent~~these weestimates ~~establish~~would aresult ~~valuation allowance or increase or decrease this allowance~~ in aadjustments ~~period, we must include a corresponding adjustment within the income tax provision in the statement of comprehensive income. Significant judgment by management is required~~ to ~~determine~~ our ~~provision~~operating ~~for income taxes, our deferred income tax assets and liabilities and any valuation allowance recorded against our net deferred income tax assets~~results.

13Allowance for Doubtful Accounts Receivable

~~Impairment~~We specifically analyze accounts receivable and consider historical experience, customer creditworthiness, facts and circumstances specific to outstanding balances, current economic trends, and changes in payment terms when evaluating the adequacy of ~~Long-~~the ~~Lived~~allowance ~~Assets~~for doubtful accounts receivable. Changes in these factors could result in material adjustments to the expense recognized for bad debts.

~~Long-lived~~Income assets are reviewed for impairment when events or changes in circumstances indicate the carrying values of the assets may not be fully recoverable. When this occurs, we review the value assigned to long-lived assets by analyzing the anticipated, undiscounted cash flows they generate. When the expected future undiscounted cash flows from these assets do not exceed their carrying values, the Company determines the estimated fair value of such assets. Impairment is recognized to the extent the carrying values of the assets exceed their estimated fair values. Assets held for sale are reported at the lower of their carrying values or fair values less costs to sell.Taxes

~~Straight-Line~~As ~~Rent~~part of the process of preparing our consolidated financial statements, we are required to estimate our actual income taxes in each of the jurisdictions in which we operate. This involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatments of items, such as accrued liabilities, for tax and ~~Contingent~~accounting ~~Obligation~~purposes. These differences result in deferred income tax assets and liabilities, which are included in our consolidated balance sheets. We must then assess the likelihood that our deferred income tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase or decrease this allowance in a period, we must include a corresponding adjustment within the income tax provision in the statement of comprehensive income. Significant judgment by management is required to determine our provision for income taxes, our deferred income tax assets and liabilities and any valuation allowance recorded against our net deferred income tax assets.

WeImpairment ~~recognize~~of ~~scheduled rent increases on a straight~~Long-~~line~~ ~~basis~~Lived over the lease term, which may include optional lease renewal terms, and deferred rent income and expense is recognized to reflect the difference between the rent paid or received in the current period and the calculated straight-line amount. Assets

~~Recent~~Long-lived ~~Accounting~~assets ~~Pronouncements~~are reviewed for impairment when events or changes in circumstances indicate the carrying values of the assets may not be fully recoverable. When this occurs, we review the value assigned to long-lived assets by analyzing the anticipated, undiscounted cash flows they generate. When the expected future undiscounted cash flows from these assets do not exceed their carrying values, the Company determines the estimated fair value of such assets. Impairment is recognized to the extent the carrying values of the assets exceed their estimated fair values. Assets held for sale are reported at the lower of their carrying values or fair values less costs to sell.

~~In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016~~Straight-~~02,~~Line ~~Leases~~Rent ~~(Topic 842) (“ASU 2016-02”). ASU 2016-02 changes the accounting for leases. In particular, lessees will recognize lease assets~~ and ~~lease~~Contingent liabilities for operating leases. ASU 2016-02 is effective in the first quarter of fiscal year ending 2019. The Company is currently assessing the impact on its financial reporting of implementing this guidance.Obligation

InWe ~~November~~recognize ~~2016,~~scheduled ~~the~~rent ~~FASB~~increases ~~issued~~on ~~ASU~~a ~~No. 2016~~straight-~~18,~~line ~~Statement~~basis ofover ~~Cash~~the ~~Flows~~lease ~~(Topic~~term, ~~230)~~which ~~Restricted~~may ~~Cash~~include ~~(“ASU~~optional ~~2016-18”). ASU~~lease ~~2016-18~~renewal ~~changes~~terms, ~~the~~and ~~cash~~deferred ~~flow~~rent ~~presentation~~income and ~~disclosures~~expense ofis ~~restricted~~recognized ~~cash. The~~to ~~Company~~reflect ~~implemented~~the ~~this~~difference ~~update~~between the rent paid or received in the ~~presented~~current ~~financial~~period ~~statements~~and the calculated straight-line amount.

~~Forward-Looking~~Recent ~~Statements~~Accounting Pronouncements

~~The~~In ~~foregoing~~February ~~contains~~2016, ~~“forward-looking statements” within~~ the ~~meaning~~Financial ofAccounting ~~that~~Standards ~~term~~Board in(“FASB”) ~~Section~~issued ~~27A~~Accounting ofStandards ~~the~~Update ~~Securities~~(“ASU”) ~~Act~~No. ~~of 1933~~2016-02, asLeases ~~amended,~~(Topic ~~and~~842) ~~Section~~("Topic ~~21E~~842"). ofTopic ~~the~~842 ~~Securities~~changes ~~Exchange~~the ~~Act~~accounting offor ~~1934,~~leases. asIn ~~amended~~particular, ~~including~~lessees ~~among~~will ~~others,~~recognize ~~those~~lease ~~statements~~assets ~~preceded~~and ~~by,~~lease ~~followed~~liabilities byfor oroperating ~~including~~leases. ~~the~~Effective ~~words~~January ~~“estimates~~1,” ~~“believes~~2019,” ~~“expects,”~~the ~~“plans,”~~Company ~~“projects,”~~implemented ~~and~~Topic ~~similar~~842 ~~expressions~~as described in Note 6.

~~These forward~~Forward-~~looking~~Looking ~~statements include, but are not limited to, the following statements:~~Statements

·Our belief that our range of products and services at various price and performance levels, our research and development investments and capabilities, and our ability to design and manufacture products will enable us to compete effectively. 16

~~·Our~~The ~~belief~~foregoing ~~that~~contains ~~our~~“forward-looking ~~facilities~~statements” ~~and~~within ~~operations~~the ~~are~~meaning ~~within~~of ~~standards~~that ~~fully~~term ~~acceptable~~in toSection 27A of the ~~Environmental~~Securities ~~Protection~~Act ~~Agency~~of 1933, as amended, and ~~that~~Section ~~all~~21E ~~facilities~~of ~~and~~the ~~procedures~~Securities ~~are~~Exchange ~~operated~~Act inof ~~accordance~~1934, ~~with~~as ~~environmental~~amended, ~~rules~~including ~~and~~among ~~regulations~~others, ~~and~~those ~~international~~statements preceded by, ~~federal~~followed by or including the words “estimates,” ~~state~~“believes,” “expects,” “plans,” “projects,” and ~~local~~similar ~~laws~~expressions.

~~·Our~~These ~~belief~~forward-looking ~~that~~statements ~~our~~include, ~~existing~~but ~~sources~~are ofnot ~~liquidity~~limited ~~will provide sufficient liquidity~~ to, ~~meet~~the ~~our~~following ~~obligations through 2019 and beyond.~~ statements:

·Our belief that our ~~ability to include the wide~~ range of ~~complementary~~ products ~~offered~~and byservices ~~E&S~~at ~~and~~various ~~Spitz~~price inand ~~the~~performance ~~systems~~levels, weour ~~sell,~~research ~~along~~and ~~with~~development ~~access~~investments toand ~~the~~capabilities, ~~legacy~~and ~~customer~~our ~~base~~ability ofto ~~E&S~~design and ~~Spitz,~~manufacture ~~provides~~products awill ~~unique~~enable ~~competitive~~us ~~advantage~~to compete effectively.

·Our ~~expectations~~belief ~~for~~that ~~variable~~our ~~future~~facilities ~~sales~~and operations are within standards fully acceptable to the Environmental Protection Agency and ~~gross~~that ~~profits~~all ~~from~~facilities ~~our~~and ~~current~~procedures ~~product~~are ~~line~~operated atin ~~annual~~accordance ~~levels~~with ~~sufficient~~environmental torules ~~cover~~and orregulations, ~~exceed~~and ~~operating~~international, ~~expenses~~federal, state and local laws.

·Our belief that anour ~~improved~~existing ~~financial~~sources ~~position~~of ~~may~~liquidity ~~present~~will ~~business~~provide ~~growth~~sufficient ~~opportunities~~liquidity to meet our obligations through 2020 and beyond.

·Our belief that our ability to include the ~~business~~wide ~~cost~~range ~~structure~~of ~~creates~~complementary products offered by E&S and Spitz in the ~~potential~~systems ~~for~~we ~~long-term~~sell, ~~profitability~~along with access to the legacy customer base of E&S and Spitz, provides a unique competitive advantage.

·Our ~~belief~~expectations ~~that~~for ~~capital~~variable ~~expenditures~~future ~~during~~sales ~~2019~~and ~~will~~gross beprofits ~~similar~~from toour ~~the~~current ~~capital~~product ~~expenditures~~line ~~incurred~~at ~~during~~annual ~~2018~~levels sufficient to cover or exceed operating expenses.

14·Our belief that an improved financial position may present business growth opportunities.

·Our belief that the ~~effects~~business ofcost ~~inflation~~structure ~~will~~creates ~~not~~the bepotential ~~material~~ for ~~2019~~long-term profitability.

·Our belief that ~~approximately~~capital ~~90%~~expenditures ofduring ~~our~~2020 ~~backlog~~ will be ~~converted~~similar to ~~sales~~the incapital expenditures incurred during 2019.

·Our belief that wethe ~~will~~effects ~~receive~~of ~~sufficient~~inflation ~~new~~will ~~orders~~not tobe ~~produce~~material ~~total~~for ~~sales in 2019 at sufficient levels to sustain profitable results~~2020.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. ·Our ~~actual~~belief ~~results~~that ~~could~~approximately ~~differ~~90% ~~materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include risks~~ of ~~product~~our ~~demand,~~backlog ~~market~~will ~~acceptance, economic conditions, competitive products and pricing, difficulties in product development, and product delays. In light of these risks and uncertainties, there can~~ be noconverted ~~assurance~~to ~~that~~sales ~~the events contemplated by the forward-looking statements contained~~ in ~~this annual report will, in fact, occur~~2020.

15·Our belief that we will receive sufficient new orders to produce total sales in 2020 at sufficient levels to sustain profitable results.

~~ITEM~~The 8.uncertainty ~~FINANCIAL~~regarding ~~STATEMENTS~~the ~~AND~~impact ~~SUPPLEMENTARY~~or ~~DATA~~duration of the COVID-19 virus pandemic that is rapidly spreading globally and adversely affecting communities and businesses, including ours.

~~Report~~Forward-looking statements are inherently subject to risks and uncertainties, some of ~~Independent~~which ~~Registered~~cannot ~~Public~~be ~~Accounting~~predicted ~~Firm~~or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Our actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include risks of product demand, market acceptance, economic conditions, competitive products and pricing, difficulties in product development, and product delays. In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this annual report will, in fact, occur.

~~To the Board of Directors and StockholdersEvans & Sutherland Computer Corporation~~17

~~Opinion~~ onITEM ~~the~~8.FINANCIAL ~~Consolidated~~STATEMENTS ~~Financial~~AND ~~Statements~~SUPPLEMENTARY DATA

WeReport ~~have audited the accompanying consolidated balance sheets~~ of ~~Evans~~Independent &Registered ~~Sutherland~~Public ~~Computer~~Accounting Corporation (the Company) as of December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material aspects, the consolidated financial position of Evans & Sutherland Computer Corporation as of December 31, 2018 and 2017, and the results of its consolidated operations and its cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles.Firm

~~Basis~~To ~~for~~the ~~Opinion~~Board of Directors and StockholdersEvans & Sutherland Computer Corporation

~~These~~Opinion ~~consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion~~ on ~~these consolidated financial statements based on our audits. We are a public accounting firm registered with~~ the ~~Public~~Consolidated ~~Company~~Financial Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. Statements

We ~~conducted~~have ~~our~~audited ~~audits~~the inaccompanying ~~accordance~~consolidated ~~with~~balance ~~the~~sheets ~~standards~~ of ~~the~~Evans ~~PCAOB.~~& ~~Those~~Sutherland ~~standards~~Computer ~~require~~Corporation ~~that~~(the weCompany) ~~plan~~as of December 31, 2019 and ~~perform~~2018, and the ~~audit~~related toconsolidated ~~obtain~~statements ~~reasonable~~of ~~assurance~~comprehensive ~~about~~income, ~~whether~~stockholders’ ~~the~~equity, ~~consolidated~~and ~~financial~~cash ~~statements~~flows ~~are~~for ~~free~~each of ~~material~~the ~~misstatement~~two ~~whether~~years ~~due~~in tothe ~~error~~period orended ~~fraud.~~December ~~The~~31, ~~Company~~2019, isand ~~not~~the ~~required~~related tonotes ~~have,~~(collectively ~~nor~~referred ~~were~~to weas ~~engaged~~the to“financial ~~perform~~statements”). In our opinion, anthe ~~audit~~financial ofstatements ~~its~~referred ~~internal~~to ~~control~~above ~~over~~present ~~financial~~fairly, ~~reporting.~~in Asall ~~part~~material ofaspects, ~~our~~the ~~audits~~consolidated wefinancial ~~are~~position ~~required~~of toEvans ~~obtain~~& anSutherland ~~understanding~~Computer ofCorporation ~~internal~~as ~~control~~of ~~over~~December ~~financial~~31, ~~reporting~~2019 ~~but~~and ~~not~~2018, ~~for~~and the ~~purpose~~results of ~~expressing~~its anconsolidated ~~opinion~~operations onand ~~the~~its ~~effectiveness~~cash flows for each of the ~~Company’s~~years ~~internal~~then ~~control~~ended, ~~over~~in ~~financial~~conformity ~~reporting~~with U.S. ~~Accordingly,~~generally weaccepted ~~express~~accounting ~~no such opinion~~principles.

~~Our~~Basis audits included performing procedures to assess the risks of material misstatement of the financial statements, due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for ~~our opinion.~~Opinion

WeThese ~~have~~consolidated ~~served~~financial asstatements are the responsibility of the Company’s ~~auditor~~management. ~~since~~Our ~~October~~responsibility 9,is ~~2006~~to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s/ ~~Tanner~~internal ~~LLC~~control over financial reporting. Accordingly, we express no such opinion.

~~Salt~~Our ~~Lake~~audits ~~City~~included performing procedures to assess the risks of material misstatement of the financial statements, ~~Utah~~due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~March~~We 8have served as the Company’s auditor since October 9, ~~2019~~2006.

16/s/ Tanner LLC

~~CONSOLIDATED~~Salt ~~BALANCE~~Lake ~~SHEETS~~City, Utah

~~(In~~March ~~thousands~~30, ~~except share data)~~2020

	December 31,
	2018	2017
ASSETS
Current assets:
Cash and cash equivalents	$ 8,365	$ 5,276
Restricted cash	220	312
Accounts receivable, net	3,250	3,794
Current portion of lease receivable	262	247
Contract revenue in excess of billings	3,484	2,763
Inventories, net	3,072	3,973
Prepaid expenses and deposits	655	712
Total current assets	19,308	17,077
Long-term lease receivable, net of current portion	574	836
Property and equipment, net	4,395	4,527
Goodwill	635	635
Other assets	2,249	1,955
Total assets	$ 27,161	$ 25,030
LIABILITIESANDSTOCKHOLDERS’EQUITY
Current liabilities:
Accounts payable	$ 1,527	$ 1,667
Accrued liabilities	1,059	912
Billings in excess of contract revenue	5,959	7,117
Current portion of retirement obligations	621	500
Current portion of pension settlement obligation	438	409
Current portion of long-term debt	237	224
Total current liabilities	9,841	10,829
Retirement obligations, net of current portion	3,601	4,150
Pension settlement obligation, net of current portion	4,042	4,478
Long-term debt, net of current portion	1,303	1,540
Deferred rent obligation	370	808
Total liabilities	19,157	21,805
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value: 10,000,000 shares authorized;
no shares outstanding	-	-
Common stock, $0.20 par value: 30,000,000 shares authorized;
11,616,866 shares issued	2,323	2,323
Additional paid-in-capital	53,967	53,818
Common stock in treasury, at cost, 264,350 shares	(3,532)	(3,532)
Accumulated deficit	(42,778)	(47,208)
Accumulated other comprehensive loss	(1,976)	(2,176)
Total stockholders’ equity	8,004	3,225
Total liabilities and stockholders’ equity	$ 27,161	$ 25,030

~~See~~CONSOLIDATED ~~notes~~BALANCE ~~to consolidated financial statements.~~SHEETS

17(In thousands, except share data)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	December 31,
	2019		2018
			(As Adjusted)
ASSETS
Current assets:
Cash and cash equivalents	$	5,962	$	8,365
Restricted cash		31		220
Accounts receivable, net		4,957		3,250
Current portion of lease receivable		278		262
Contract revenue in excess of billings		2,655		3,484
Inventories, net		2,516		3,072
Prepaid expenses and deposits		652		655
Total current assets		17,051		19,308
Long-term lease receivable, net of current portion		295		574
Operating lease right-of-use asset		2,509		187
Property and equipment, net		4,260		4,395
Goodwill		635		635
Other assets		1,928		2,249
Total assets	$	26,678	$	27,348

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,243	$	1,527
Accrued liabilities		1,214		1,059
Billings in excess of contract revenue		5,428		5,959
Current portion of operating lease liability		307		188
Current portion of retirement obligations		682		621
Current portion of pension settlement obligation		468		438
Current portion of long-term debt		251		237
Total current liabilities		9,593		10,029
Operating lease liability, net of current portion		2,189		-
Retirement obligations, net of current portion		3,585		3,601
Pension settlement obligation, net of current portion		3,575		4,042
Long-term debt, net of current portion		1,052		1,303
Total liabilities		19,994		18,975
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value: 10,000,000 shares authorized;
no shares outstanding		-		-
Common stock, $0.20 par value: 30,000,000 shares authorized;
11,746,866 shares issued		2,349		2,323
Additional paid-in-capital		54,057		53,967
Common stock in treasury, at cost, 264,350 shares		(3,532)		(3,532)
Accumulated deficit		(44,008)		(42,409)
Accumulated other comprehensive loss		(2,182)		(1,976)
Total stockholders’ equity		6,684		8,373
Total liabilities and stockholders’ equity	$	26,678	$	27,348

~~(In~~See ~~thousands,~~notes ~~except~~to ~~per~~consolidated ~~share~~financial ~~data)~~statements.

	Years Ended December 31,
	2018	2017
Sales	$ 37,193	$ 30,508
Cost of sales	(23,469)	(19,557)
Gross profit	13,724	10,951
Operating expenses:
Selling, general and administrative	(6,561)	(6,045)
Research and development	(2,851)	(2,908)
Pension	(217)	(231)
Total operating expenses	(9,629)	(9,184)
Operating income	4,095	1,767
Interest expense	(433)	(473)
Other income, net	106	76
Income before income tax benefit (expense)	3,768	1,370
Income tax benefit (expense)	(21)	111
Net income	$ 3,747	$ 1,481
Net income per common share – basic	$ 0.33	$ 0.13
Net income per common share – diluted	$ 0.31	$ 0.12
Weighted average common shares outstanding – basic	11,353	11,353
Weighted average common shares outstanding – diluted	11,978	12,014
Comprehensive income, net of tax:
Net income	$ 3,747	$ 1,481
Decrease (increase) in minimum pension liability	200	(30)
Total comprehensive income	$ 3,947	$ 1,451

~~See~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~consolidated~~COMPREHENSIVE ~~financial statements.~~INCOME

18(In thousands, except per share data)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

	Years Ended December 31,
	2019		2018
			(As Adjusted)

Sales	$	27,716	$	37,193
Cost of sales		(18,357)		(23,748)
Gross profit		9,359		13,445
Operating expenses:
Selling, general and administrative		(7,450)		(6,669)
Research and development		(3,164)		(2,903)
Pension		(226)		(217)
Total operating expenses		(10,840)		(9,789)

Operating income (loss)		(1,481)		3,656
Other expense, net		(256)		(327)
Income (loss) before income tax provision		(1,737)		3,329
Income tax benefit (provision)		138		(21)
Net income (loss)	$	(1,599)	$	3,308

Net income (loss) per common share – basic	$	(0.14)	$	0.29
Net income (loss) per common share – diluted	$	(0.14)	$	0.28

Weighted average common shares outstanding – basic		11,464		11,353
Weighted average common shares outstanding – diluted		11,464		12,002


Comprehensive income (loss), net of tax:
Net income (loss)	$	(1,599)	$	3,308
Decrease (increase) in minimum pension liability		(206)		200
Total comprehensive income (loss)	$	(1,805)	$	3,508

~~(In~~See ~~thousands)~~notes to consolidated financial statements.

						Accumulated
			Additional			Other
	Common Stock		Paid-in	Treasury	Accumulated	Comprehensive
	Shares	Amount	Capital	Stock	Deficit	Loss	Total
Balance, December 31, 2016	11,617	$ 2,323	$ 53,641	$ (3,532)	$ (48,689)	$ (2,146)	$ 1,597
Net income	-	-	-	-	1,481	-	1,481
Other comprehensive loss	-	-	-	-	-	(30)	(30)
Stock-based compensation	-	-	177	-	-	-	177
Balance, December 31, 2017	11,617	$ 2,323	$ 53,818	$ (3,532)	$ (47,208)	$ (2,176)	$ 3,225
Balance at January 1, 2018, as previously reported	11,617	2,323	53,818	(3,532)	(47,208)	(2,176)	3,225
Impact of change in accounting policy	-	-	-	-	683	-	683
Adjusted balance at January 1, 2018	11,617	2,323	53,818	(3,532)	(46,525)	(2,176)	3,908
Net income	-	-	-	-	3,747	-	3,747
Other comprehensive loss	-	-	-	-	-	200	200
Stock-based compensation	-	-	149	-	-	-	149
Balance, December 31, 2018	11,617	$ 2,323	$ 53,967	$ (3,532)	$ (42,778)	$ (1,976)	$ 8,004

~~See~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~consolidated~~STOCKHOLDERS’ ~~financial~~EQUITY ~~statements.~~(DEFICIT)

19(In thousands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Accumulated
			Additional			Other
	Common Stock		Paid-in	Treasury	Accumulated	Comprehensive
	Shares	Amount	Capital	Stock	Deficit	Loss	Total
Balance, December 31, 2017	11,617	$ 2,323	$ 53,818	$ (3,532)	$ (47,208)	$ (2,176)	$ 3,225
Balance at January 1, 2018, as
previously reported	11,617	2,323	53,818	(3,532)	(47,208)	(2,176)	3,225
Impact of change in accounting
policy Topic 606	-	-	-	-	683	-	683
Impact of change in accounting
policy Topic 842	-	-	-	-	808	-	808
Adjusted balance at January 1, 2018	11,617	2,323	53,818	(3,532)	(45,717)	(2,176)	4,716
Net income	-	-	-	-	3,308	-	3,308
Other comprehensive loss	-	-	-	-	-	200	200
Stock-based compensation	-	-	149	-	-	-	149
Balance, December 31, 2018 (as adjusted)	11,617	2,323	53,967	(3,532)	(42,409)	(1,976)	$ 8,373
Net loss	-	-	-	-	(1,599)	-	(1,599)
Exercise of stock options	130	26	(5)	-	-	-	21
Other comprehensive loss	-	-	-	-	-	(206)	(206)
Stock-based compensation	-	-	95	-	-	-	95
Balance, December 31, 2019	11,747	$ 2,349	$ 54,057	$ (3,532)	$ (44,008)	$ (2,182)	$ 6,684

~~(In~~See ~~thousands)~~notes to consolidated financial statements.

	Years Ended December 31,
	2018	2017
Cash flows from operating activities:
Net income	$ 3,747	$ 1,481
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization	263	259
Deferred pension costs	200	(30)
Provision for excess and obsolete inventory	427	105
Other	167	34
Changes in operating assets and liabilities:
Accounts receivable	496	(380)
Lease receivable	247	252
Inventories	(449)	(327)
Contract revenue in excess of billings	33	(1,651)
Prepaid expenses and other assets	(237)	(543)
Accounts payable	(140)	509
Accrued liabilities	147	(488)
Accrued pension and retirement liabilities	(428)	(201)
Billings in excess of contract revenue	(306)	305
Deferred rent obligation	(438)	(423)
Net cash provided by (used in) operating activities	3,729	(1,098)
Cash flows from investing activities:
Purchases of property and equipment	(136)	(148)
Proceeds from sale of property and equipment	35	-
Net cash used in investing activities	(101)	(148)
Cash flows from financing activities:
Principal payments on long-term debt	(224)	(211)
Principal payments on pension settlement obligation	(407)	(381)
Net cash used in financing activities	(631)	(592)
Net increase (decrease) in cash, cash equivalents, and restricted cash	2,997	(1,838)
Cash, cash equivalents, and restricted cash as of beginning of the year	5,588	7,426
Cash, cash equivalents, and restricted cash as of end of the year	$ 8,585	$ 5,588
Supplemental disclosures of non-cash investing and financing activities
ASC 606 transition adjustment	$ 683	$ -
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest	$ 439	$ 478
Income taxes	133	141

~~See~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~consolidated~~CASH ~~financial statements.~~FLOWS

20(In thousands)

All dollar amounts are in thousands except share and per share information or unless otherwise indicated.

	Years Ended December 31,
	2019		2018
			(As Adjusted)

Cash flows from operating activities:
Net income (loss)	$	(1,599)	$	3,308
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization		266		263
Deferred pension costs		(206)		200
Bad debt expense		457		-
Provision for excess and obsolete inventory		-		427
Noncash lease expense		420		529
Other		95		167
Changes in operating assets (increases in parenthesis)
and liabilities (decreases in parenthesis):
Accounts receivable		(2,171)		496
Lease receivable		263		247
Inventories		556		(449)
Operating lease right-of-use asset		(44)		-
Contract revenue in excess of billings		829		33
Prepaid expenses and other assets		324		(237)
Accounts payable		(284)		(140)
Accrued liabilities		155		147
Accrued pension and retirement liabilities		45		(428)
Billings in excess of contract revenue		(531)		(306)
Operating lease liability		(390)		(528)
Net cash provided by (used in) operating activities		(1,815)		3,729
				-
Cash flows from investing activities:
Purchases of property and equipment		(131)		(136)
Proceeds from sale of property and equipment		7		35
Net cash used in investing activities		(124)		(101)

Cash flows from financing activities:
Proceeds for shares issued on exercise of options		21		-
Principal payments on long-term debt		(674)		(631)
Net cash used in financing activities		(653)		(631)

Net increase (decrease) in cash, cash equivalents, and restricted cash		(2,592)		2,997
Cash, cash equivalents, and restricted cash as of beginning of the year		8,585		5,588
Cash, cash equivalents, and restricted cash as of end of the year	$	5,993	$	8,585

Supplemental disclosures of non-cash investing and financing activities
New operating lease	$	2,698	$	-

Supplemental disclosures of cash flow information
Cash paid (received) during the period for (from):
Interest	$	398	$	74
Income taxes		(165)		103

~~Note~~See 1notes -to ~~Nature~~consolidated offinancial ~~Operations and Summary of Significant Accounting Policies~~statements.

~~Nature of Operations~~22

~~Evans~~All &dollar ~~Sutherland~~amounts ~~Computer~~are ~~Corporation, referred to~~ in ~~these~~thousands ~~notes~~except asshare ~~“Evans~~and &per ~~Sutherland,”~~share ~~“E&S,”~~information or ~~the~~unless ~~“Company,”~~otherwise ~~produces high-quality advanced visual display systems used primarily in full-dome video projection applications, dome projection screens and dome architectural treatments~~indicated. E&S also produces unique content for planetariums, schools, science centers and other educational institutions and entertainment venues. The Company’s products include state of the art planetarium and dome theater systems consisting of proprietary hardware and software, and other unique visual display systems primarily used to project digital video on large curved surfaces. Additionally, E&S manufactures and installs metal domes with customized optical coatings and acoustical properties that are used for planetarium and dome theaters as well as many other unique custom applications. The Company operates in one business segment, which is the visual simulation market.

~~Basis~~Note 1 - Nature of ~~Presentation~~Operations and Summary of Significant Accounting Policies

~~The~~Nature ~~consolidated financial statements include the accounts~~ of Evans & Sutherland and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.Operations

~~Use~~Evans & Sutherland Computer Corporation, referred to in these notes as “Evans & Sutherland,” “E&S,” or the “Company,” produces high-quality advanced visual display systems used primarily in full-dome video projection applications, dome projection screens and dome architectural treatments. E&S also produces unique content for planetariums, schools, science centers and other educational institutions and entertainment venues. The Company’s products include state of ~~Estimates~~the art planetarium and dome theater systems consisting of proprietary hardware and software, and other unique visual display systems primarily used to project digital video on large curved surfaces. Additionally, E&S manufactures and installs metal domes with customized optical coatings and acoustical properties that are used for planetarium and dome theaters as well as many other unique custom applications. The Company operates in one business segment, which is the visual simulation market.

~~The~~Basis ~~preparation~~ of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s most difficult and subjective judgments include revenue recognition based on the percentage-of-completion method, inventory reserves, allowance for doubtful accounts receivable, allowance for deferred income tax assets, impairment of long-lived assets, pension and retirement obligations and useful lives of depreciable assets. Actual results could differ from those estimates.Presentation

~~Cash~~The consolidated financial statements include the accounts of Evans & Sutherland and ~~Cash~~its ~~Equivalents~~wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.

~~The~~Use ~~Company considers all highly liquid investments with original maturities~~ of ~~three~~Estimates or fewer months to be cash equivalents. The Company maintains cash balances in bank accounts that, at times, exceed federally insured limits. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant risk with respect to cash. As of December 31, 2018, cash deposits as reported by the banks, including restricted cash, exceeded the federally insured limits by approximately $8,095.

~~Restricted~~The ~~Cash~~preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s most difficult and subjective judgments include revenue recognition based on the percentage-of-completion method, inventory reserves, allowance for doubtful accounts receivable, allowance for deferred income tax assets, impairment of long-lived assets, pension and retirement obligations and useful lives of depreciable assets. Actual results could differ from those estimates.

~~The~~Cash ~~following table provides a reconciliation of cash, cash equivalents,~~ and ~~restricted~~Cash ~~cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows.~~Equivalents

	2018	2017
Cash and cash equivalents	$ 8,365	$ 5,276
Restricted cash	220	312
Total cash, cash equivalents, and restricted cash
shown in the statements of cash flows	$ 8,585	$ 5,588

The Company considers all highly liquid investments with original maturities of three or fewer months to be cash equivalents. The Company maintains cash balances in bank accounts that, at times, exceed federally insured limits. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant risk with respect to cash. As of December 31, 2019, cash deposits as reported by the banks, including restricted cash, exceeded the federally insured limits by approximately $5,702.

~~Amounts included in restricted cash represent those required to be set aside by a contractual agreement.~~ Restricted ~~cash~~Cash that guarantees letters of credit that mature or expire within one year is reported as a current asset. Restricted cash that guarantees letters of credit that mature or expire after more than one year is reported as a long-term asset.

~~Trade~~The ~~Accounts~~following ~~Receivable~~table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows.

In the normal course of business, E&S provides unsecured credit terms to its customers. Accordingly, the Company maintains an allowance for doubtful accounts for possible losses on uncollectible accounts receivable. The

	2019	2018

Cash and cash equivalents	$ 5,962	$ 8,365
Restricted cash	31	220
Total cash, cash equivalents, and restricted cash
shown in the statements of cash flows	$ 5,993	$ 8,585

21Amounts included in restricted cash represent those required to be set aside by a contractual agreement. Restricted cash that guarantees letters of credit that mature or expire within one year is reported as a current asset. Restricted cash that guarantees letters of credit that mature or expire after more than one year is reported as a long-term asset.

~~Company~~Trade ~~routinely~~Accounts analyzes accounts receivable and costs and estimated earnings in excess of billings, and considers history, customer creditworthiness, facts and circumstances specific to outstanding balances, current economic trends, and changes in payment terms when evaluating the adequacy of the allowance for doubtful accounts receivable. Changes in these factors could result in material differences to bad debt expense. Past due balances are determined based on contractual terms and are reviewed individually for collectability. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when management determines the probability of collection is remote. Receivable

~~The~~In ~~table~~the ~~below~~normal ~~represents~~course ~~changes~~of inbusiness, E&S’s provides unsecured credit terms to its customers. Accordingly, the Company maintains an allowance for doubtful accounts for possible losses on uncollectible accounts receivable. The ~~for~~Company ~~the~~routinely ~~years~~analyzes ~~ended~~accounts ~~December~~receivable ~~31:~~and costs and estimated earnings in excess of billings, and

	2018	2017
Beginning balance	$ 109	$ 259
Write-off of accounts receivable	-	(7)
Increase (decrease) in estimated losses on accounts receivable	48	(143)
Ending balance	$ 157	$ 109

~~Inventories~~considers history, customer creditworthiness, facts and circumstances specific to outstanding balances, current economic trends, and changes in payment terms when evaluating the adequacy of the allowance for doubtful accounts receivable. Changes in these factors could result in material differences to bad debt expense. Past due balances are determined based on contractual terms and are reviewed individually for collectability. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when management determines the probability of collection is remote.

~~Inventories~~The ~~include~~table ~~materials~~below atrepresents ~~standard~~changes costs, which approximate actual costs, as well as inventoried costs on programs and long-term contracts. Inventoried costs include material, direct engineering and production costs, and applicable overhead, not in ~~excess of estimated market value. Spare parts and general stock materials are stated at cost not in excess of market value.~~ E&S’s ~~periodically~~allowance ~~reviews inventories~~ for ~~excess~~doubtful ~~supply,~~accounts ~~obsolescence,~~receivable ~~and~~for ~~valuations~~the ~~above~~years ~~estimated~~ended ~~realizable~~December ~~amounts, and provides a reserve sufficient to reduce inventories to net realizable values. Revisions of these estimates could impact net loss.~~ 31:

During the years ended December 31, 2018 and 2017, E&S recognized impairment losses on inventory of $427 and $105, respectively.

	2019	2018

Beginning balance	$ 157	$ 109
Increase in estimated losses on accounts receivable	464	48
Ending balance	$ 621	$ 157

Inventories ~~as of December 31, were as follows:~~

	2018	2017
Raw materials	$ 5,979	$ 5,458
Work in process	116	1,011
Finished goods	323	423
Reserve for obsolete inventory	(3,346)	(2,919)
Inventories, net	$ 3,072	$ 3,973

Inventories include materials at weighted average actual costs. Inventoried costs include material, direct engineering and production costs, and applicable overhead, not in excess of estimated market value. E&S periodically reviews inventories for excess supply, obsolescence, and valuations above estimated realizable amounts, and provides a reserve sufficient to reduce inventories to net realizable values. Revisions of these estimates could impact net loss.

~~Property~~During the years ended December 31, 2019 and ~~Equipment~~2018, E&S recognized impairment losses on inventory of $0 and $427, respectively.

~~Property~~Inventories ~~and~~as ~~equipment are stated at cost. Depreciation and amortization are computed using the straight-line method based on the estimated useful lives~~ of ~~the~~December related assets. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Leasehold improvements are assigned useful lives based on the shorter of their useful lives or the term of the related leases31, ~~including~~were ~~renewal options likely to be exercised. Routine maintenance, repairs and renewal costs are expensed~~ as incurred. When property is retired or otherwise disposed of, the carrying values are removed from the property and equipment and related accumulated depreciation and amortization accounts. Depreciation and amortization are included in cost of sales, research and development or selling, general and administrative expenses depending on the nature of the asset. follows:

Depreciation expense was $263 and $259 for the years ended December 31, 2018 and 2017, respectively. The cost and estimated useful lives of property and equipment and the total accumulated depreciation were as follows as of December 31:

	2019	2018

Raw materials	$ 5,215	$ 5,979
Work in process	182	116
Finished goods	465	323
Reserve for obsolete inventory	(3,346)	(3,346)
Inventories, net	$ 2,516	$ 3,072

22Property and Equipment

	Estimated
	Useful Lives	2018	2017
Land	n/a	$ 2,250	$ 2,250
Buildings and improvements	5 - 40 years	3,065	3,065
Manufacturing machinery and equipment	3 - 8 years	4,554	5,582
Office furniture and equipment	3 - 8 years	630	779
Total		10,499	11,676
Less accumulated depreciation		(6,104)	(7,149)
Net property and equipment		$ 4,395	$ 4,527

Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the related assets. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Leasehold improvements are assigned useful lives based on the shorter of their useful lives or the term of the related leases, including renewal options likely to be exercised. Routine maintenance, repairs and renewal costs are expensed as incurred. When property is retired or otherwise disposed of, the carrying values are removed from the property and equipment and related accumulated depreciation and amortization accounts. Depreciation and amortization are included in cost of sales, research and development or selling, general and administrative expenses depending on the nature of the asset.

~~Goodwill~~ 24

~~The~~Depreciation ~~Company~~expense ~~tests~~was ~~its~~$266 ~~recorded~~and ~~goodwill~~$263 for ~~impairment~~the onyears anended ~~annual~~December ~~basis during the fourth quarter~~31, or2019 ~~more~~and ~~often if indicators of potential impairment exist~~2018, byrespectively. The ~~determining~~cost ifand ~~the carrying value of each reporting unit exceeds its~~ estimated ~~fair~~useful ~~value.~~lives ~~Factors that could trigger impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner~~ of ~~use~~property ~~of the acquired assets or the Company’s overall business~~ and ~~significant~~equipment ~~negative industry or economic trends. Future impairment reviews may require write-downs in the Company’s goodwill~~ and ~~could have a material adverse impact on~~ the ~~Company’s~~total ~~operating~~accumulated ~~results~~depreciation ~~for~~were ~~the~~as ~~periods~~follows inas ~~which~~of ~~such~~December ~~write-downs occur.~~31:

Impairment of Long-Lived Assets

	Estimated
	Useful Lives	2019	2018

Land	n/a	$ 2,250	$ 2,250
Buildings and improvements	5 - 40 years	3,065	3,065
Manufacturing machinery and equipment	3 - 8 years	4,685	4,554
Office furniture and equipment	3 - 8 years	630	630
Total		10,630	10,499
Less accumulated depreciation		(6,370)	(6,104)
Net property and equipment		$ 4,260	$ 4,395

~~Long-lived~~Goodwill assets are reviewed for impairment when events or changes in circumstances indicate the carrying values of the assets may not be fully recoverable. When this occurs, the Company reviews the values assigned to long-lived assets by analyzing the anticipated, undiscounted cash flows they generate. When the expected future undiscounted cash flows from these assets do not exceed their carrying values, the Company estimates the fair values of such assets. Impairment is recognized to the extent the carrying values of the assets exceed their estimated fair values. Assets held for sale are reported at the lower of their carrying values or fair values less costs to sell.

~~Warranty~~The ~~Reserve~~Company tests its recorded goodwill for impairment on an annual basis during the fourth quarter, or more often if indicators of potential impairment exist, by determining if the carrying value of each reporting unit exceeds its estimated fair value. Factors that could trigger impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the Company’s overall business and significant negative industry or economic trends. Future impairment reviews may require write-downs in the Company’s goodwill and could have a material adverse impact on the Company’s operating results for the periods in which such write-downs occur.

~~E&S~~Impairment ~~provides a warranty reserve for estimated future costs~~ of servicing products under warranty agreements extending for periods from 90 days to one year. Anticipated costs for product warranties are based upon estimates derived from experience factors and are recorded at the time of sale or over the period revenues are recognized for longLong-~~term~~Lived ~~contracts. Warranty reserves are classified as accrued liabilities in the accompanying consolidated balance sheets.~~Assets

~~The~~Long-lived ~~table~~assets ~~below~~are ~~represents~~reviewed for impairment when events or changes in ~~E&S’s~~circumstances ~~warranty~~indicate ~~reserve~~the carrying values of the assets may not be fully recoverable. When this occurs, the Company reviews the values assigned to long-lived assets by analyzing the anticipated, undiscounted cash flows they generate. When the expected future undiscounted cash flows from these assets do not exceed their carrying values, the Company estimates the fair values of such assets. Impairment is recognized to the extent the carrying values of the assets exceed their estimated fair values. Assets held for sale are reported at the ~~years~~lower ~~ended~~of ~~December~~their ~~31:~~carrying values or fair values less costs to sell.

	2018	2017
Beginning balance	$ 139	$ 123
Additions to warranty reserve	166	249
Warranty costs	(134)	(233)
Ending balance	$ 171	$ 139

Warranty Reserve

~~Stock~~E&S provides a warranty reserve for estimated future costs of servicing products under warranty agreements extending for periods from 90 days to one year. Anticipated costs for product warranties are based upon estimates derived from experience factors and are recorded at the time of sale or over the period revenues are recognized for long-~~Based~~term ~~Compensation~~contracts. Warranty reserves are classified as accrued liabilities in the accompanying consolidated balance sheets.

The ~~Company~~table ~~records~~below ~~compensation~~represents ~~expense~~changes in ~~the~~E&S’s ~~financial~~warranty ~~statements~~reserve for ~~stock-based awards based on~~ the ~~grant~~years ~~date~~ended ~~fair~~December value of those awards that are ultimately expected to vest. As such, the value of the award is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized over the requisite service periods of the 31:

	2019	2018

Beginning balance	$ 171	$ 139
Additions to warranty reserve	139	166
Warranty costs	(139)	(134)
Ending balance	$ 171	$ 171

~~awards~~Stock-Based ~~on a ratable basis, which recognizes expense for each vesting tranche of each grant starting on the grant date and finishing on the vest date for that tranche.~~Compensation

~~Net~~The ~~Income~~Company ~~per~~records ~~Common~~compensation ~~Share~~expense in the financial statements for stock-based awards based on the grant date fair value of those awards that are ultimately expected to vest. As such, the value of the award is reduced for the

Basic net income per common share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income per common share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares include shares that may be issued by the Company for outstanding stock options determined using the treasury stock method. In periods resulting in a net loss, potential common shares are anti-dilutive and therefore are not included. Net income per common share has been computed based on the following:25

	2018	2017
Numerator
Net Income	$ 3,747	$ 1,481
Denominator
Weighted-average number of common shares outstanding - basic	11,353	11,353
Incremental shares assumed for stock options	625	661
Weighted-average number of common shares outstanding - dilutive	11,978	12,014
Basic net income per common share	$ 0.33	$ 0.13
Diluted net income per common share	$ 0.31	$ 0.12

estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized over the requisite service periods of the awards on a ratable basis, which recognizes expense for each vesting tranche of each grant starting on the grant date and finishing on the vest date for that tranche.

Net Income ~~Taxes~~(Loss) per Common Share

~~The~~Basic ~~Company~~net ~~uses the asset and liability method of accounting for~~ income ~~taxes. Under~~(loss) ~~the~~per ~~asset~~common ~~and~~share ~~liability~~represents ~~method, deferred~~ income ~~tax~~available ~~assets~~to ~~and~~common ~~liabilities~~shareholders ~~are~~divided ~~recognized~~by ~~for~~ the ~~future~~weighted-average ~~income~~number ~~tax~~of ~~consequences~~common ~~attributable~~shares tooutstanding ~~differences~~during ~~between~~ the ~~financial~~period. ~~statement~~Diluted ~~carrying~~net ~~amounts~~income of(loss) ~~existing~~per ~~assets~~common ~~and~~share ~~liabilities~~reflects ~~and~~additional ~~their~~common ~~respective~~shares ~~income~~that ~~tax~~would ~~bases~~have ~~and~~been ~~operating~~outstanding ~~loss~~if ~~and~~dilutive ~~income~~potential ~~tax~~common ~~credit~~shares ~~carry-forwards~~had been issued. ~~Deferred~~ ~~income~~Potential ~~tax~~common ~~assets~~shares ~~and~~include ~~liabilities~~shares ~~are~~that ~~measured~~may ~~using~~be ~~enacted~~issued ~~tax~~by ~~rates~~the ~~expected~~Company tofor ~~apply~~outstanding tostock ~~taxable~~options ~~income~~determined inusing the ~~years~~treasury instock ~~which~~method. ~~those~~In ~~temporary~~periods ~~differences~~resulting ~~are~~in ~~expected~~a tonet beloss, ~~recovered~~potential orcommon ~~settled.~~shares ~~The~~are ~~effect~~anti-dilutive ~~on deferred income tax assets~~ and ~~liabilities~~therefore ofare anot ~~change~~included. Net in income ~~tax~~(loss) ~~rates~~per iscommon ~~recognized~~share inhas ~~the~~been ~~period~~computed ~~that~~based ~~includes~~on the ~~enactment date.~~following:

Other Comprehensive Income

	2019	2018

Numerator
Net Income (Loss)	$ (1,599)	$ 3,308

Denominator
Weighted-average number of common shares outstanding - basic	11,464	11,353
Incremental shares assumed for stock options	-	625
Weighted-average number of common shares outstanding - dilutive	11,464	11,978
Basic net income (loss) per common share	$ (0.14)	$ 0.29
Diluted net income (loss) per common share	$ (0.14)	$ 0.28

OnIncome a net basis for 2018 and 2017, there were deferred income tax assets resulting from items reflected in comprehensive income. However, E&S has determined that it is more likely than not that it will not realize such net deferred income tax assets and has therefore established a valuation allowance against the full amount of the net deferred income tax assets. Accordingly, the net income tax effect of the items included in other comprehensive income is zero. Therefore, the Company has included no income tax expense or benefit in relation to items reflected in other comprehensive income. The accumulated other comprehensive loss at the end of 2017 and 2018 consists of minimum pension liability attributable to the Supplemental Executive Retirement Plan (“SERP”) (see Note 7).Taxes

24The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases and operating loss and income tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in income tax rates is recognized in the period that includes the enactment date.

~~Recent~~Other ~~Accounting~~Comprehensive ~~Pronouncements~~Income

InOn ~~February~~a ~~2016,~~net ~~the~~basis ~~Financial~~for ~~Accounting~~2019 ~~Standards~~and ~~Board~~2018, ~~(“FASB”)~~there ~~issued~~were ~~ASU~~deferred ~~No.~~income ~~2016-02,~~tax ~~Leases~~assets ~~(Topic~~resulting ~~842)~~from ~~("ASU~~items ~~2016-02")~~reflected in comprehensive income. However, ~~ASU~~E&S ~~2016-02~~has ~~changes~~determined ~~the~~that ~~accounting~~it ~~for~~is ~~leases.~~more Inlikely ~~particular,~~than ~~lessees~~not that it will ~~recognize~~not ~~lease~~realize such net deferred income tax assets and ~~lease~~has ~~liabilities~~therefore ~~for~~established ~~operating~~a ~~leases.~~valuation ~~This~~allowance ~~update~~against ~~will~~the ~~have~~full aamount ~~minimal~~of ~~effect~~the onnet ~~lessor~~deferred ~~accounting~~income tax assets. Accordingly, ~~ASU~~the ~~2016-02~~net isincome ~~effective~~tax ineffect of the ~~first~~items ~~quarter~~included ofin ~~the~~other ~~fiscal~~comprehensive ~~year~~income ~~ending~~is ~~2019~~zero. Therefore, ~~The~~the Company ishas ~~currently~~included ~~assessing~~no income tax expense or benefit in relation to items reflected in other comprehensive income. The accumulated other comprehensive loss at the ~~impact~~end onof ~~its~~2018 ~~financial~~and ~~reporting~~2019 consists of ~~implementing~~minimum ~~this~~pension ~~guidance~~liability attributable to the Supplemental Executive Retirement Plan (“SERP”) (see Note 7).

InRecent ~~November~~Accounting ~~2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash~~Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-~~18”~~02, Leases (Topic 842) ("Topic 842"). ~~ASU~~Topic ~~2016-18~~842 changes the ~~cash~~accounting ~~flow~~for ~~presentation~~leases. In particular, lessees will recognize lease assets and ~~disclosures~~lease ofliabilities ~~restricted~~for ~~cash~~operating leases. ~~The~~Effective January 1, 2019, the Company implemented Topic 842 as described in Note 6.

~~Company implemented this update in the presented financial statements.~~26

Note 2 – Revenue

The Company adopted Topic 606, Revenue from Contracts with Customers, with a date of the initial application of January 1, 2018. The Company applied Topic 606 using the cumulative effect method, and accordingly recognized the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of stockholders’ equity at January 1, 2018. As a result, the Company used different methods for recognizing revenue in each of the periods presented as detailed below.

Products and services

The Company generates its revenue through manufacturing, integrating, distributing, and servicing its various products consisting of: Audio-Visual Systems, Domes, Show Content, and Maintenance and Service contracts. All of the Company’s products are sold worldwide.

Audio-Visual Systems consist of standard and customized hardware components integrated with proprietary software. The Audio-Visual Systems are most often used as the primary equipment for planetarium theaters operated by educational institutions. Occasionally, Audio-Visual Systems are sold for other special purposes at various visitor attractions. Audio-Visual System sales include upgrades of existing systems and sub-systems. Sales of typical Audio-Visual Systems range from $200 to $2,000.

Domes are hemispheric or curved metal structures fabricated from mostly aluminum metal tubing and sheets at the Company’s factory. Some Dome components have a special optical coating applied by a partner vendor. The Dome components are shipped to a customer site and are assembled and installed in or on the customer’s building by Company employees or subcontractors. Domes are often sold with an Audio-Visual System to serve as projection screens but can also be sold separately. Most often a Dome sold separately is used as a projection screen but occasionally they are used as architectural treatments. Dome projection screens sold separately can be used for existing planetarium theaters or other special visitor attractions such as theme park rides. A typical Dome is a hemispheric structure ranging from 40 to 70 feet in diameter, but Domes are also produced in various curved shapes and sizes to accommodate a special purpose. Dome sales typically range from $200 to $1,000 but occasionally exceed this range for sales of multiple complex structures priced at several million dollars.

Show Content is sold under a license agreement. Show Content can also be sold with or without an Audio-Visual System. Most Show Content is sold to planetarium theaters which historically have been used as astronomical simulators; however, digital technologies have expanded capabilities to display a wider variety of content. The Company’s Show Content products include a variety of mostly educational topics including but not limited to astronomy, earth sciences, history, and biology. The Company sells Show Content it produces as well as content produced by other entities under distribution arrangements. Show Content sales typically range from $2 to $80.

Maintenance and Service is sold in the form of spare parts or service agreements that sometimes include an extended warranty feature. Maintenance and Service is sold predominantly for Audio-Visual Systems. Dome products require less maintenance but can benefit from an occasional cleaning. Part sales typically range from $1 to $100. Maintenance and Service contract sales typically range from $3 to $200.

25The Company sells and markets its products through its employee sales team. For many foreign sales, the employee team is assisted by commissioned agents based in the locale of the customer. The Company markets its products through a network of industry associations and by messaging to the designers of planetarium theaters and visitor attractions. For Dome sales other than for planetarium projects, the Company relies on relationships developed with many satisfied customers in the architectural, visitor attraction, and theme park community. Customer decisions are based on price, product features and the experience of the supplier.

~~The~~Most of the Company’s ~~sells~~revenue ~~and~~comes ~~markets~~from ~~its~~sales ~~products~~of ~~through~~Audio-Visual ~~its~~Systems ~~employee~~and ~~sales~~Domes ~~team.~~for ~~For~~planetarium ~~many~~theaters ~~foreign~~or ~~sales,~~other ~~the~~visitor ~~employee~~attractions. ~~team~~Sales iscan ~~assisted~~be byto ~~commissioned~~existing ~~agents~~theaters ~~based~~interested in ~~the~~upgrading ~~locale~~or ofto ~~the~~a ~~customer~~new theater. ~~The~~Service ~~Company~~Support ~~markets~~and ~~its~~Show ~~products~~Content ~~through~~provide a ~~network~~reasonably steady stream of ~~industry~~repeat ~~associations~~revenue ~~and~~from byexisting ~~messaging~~customers towhich supplements the ~~designers~~revenue offrom ~~planetarium~~Audio-Visual ~~theaters~~Systems and ~~visitor attractions~~Domes. ~~For~~As ~~Dome sales other than for planetarium projects~~such, the Company relies on ~~relationships~~Audio-Visual ~~developed~~Systems ~~with~~and ~~many~~Domes ~~satisfied~~sales ~~customers~~to innew projects to generate the ~~architectural,~~volume ~~visitor~~of ~~attraction,~~revenue ~~and~~necessary ~~theme~~sustain ~~park~~the ~~community~~business. Customer ~~decisions~~sales ~~are~~sometimes ~~based~~can ontake ~~price,~~years ~~product~~to ~~features~~consummate ~~and~~from the ~~experience~~initial planning stage to the award of the ~~supplier~~contract. Often there is a competitive bid process with multiple suppliers involved.

~~Most~~Customer ofcontracts ~~the~~generally ~~Company’s~~provide ~~revenue comes from sales of Audio-Visual Systems and Domes~~ for ~~planetarium~~progress ~~theaters~~payments orwhich ~~other visitor attractions. Sales can be to existing theaters interested~~ in ~~upgrading~~many orcases toprovides aadvance ~~new~~funding ~~theater.~~for ~~Service Support and Show Content provide a reasonably steady stream of repeat revenue from existing customers which supplements~~ the ~~revenue~~cost ~~from Audio-Visual Systems and Domes. As such, the Company relies on Audio-Visual Systems and Domes sales to new projects to generate the volume~~ of ~~revenue necessary sustain the business~~performance. ~~Customer~~In ~~sales~~some ~~sometimes~~cases, ~~can~~customers ~~take~~hold ~~years~~a tosmall ~~consummate~~portion ~~from the initial planning stage to the award~~ of the contract. ~~Often~~payment ~~there~~for isperformance asecurity ~~competitive bid process with multiple suppliers involved.~~

Customer contracts generally provide for progress payments which in many cases provides advance funding for the cost of performance. In some cases, customers hold a small portion of the contract payment for performance security through the warranty. The Company may also be required to provide performance security in the form of a surety bond or international standby letter of credit. Most customers are large public institutions, government or quasi-government entities, and large theme park entities, which carry little credit risk. 27

~~Multiple~~through ~~Performance~~the ~~Obligations~~warranty. The Company may also be required to provide performance security in the form of a surety bond or international standby letter of credit. Most customers are large public institutions, government or quasi-government entities, and large theme park entities, which carry little credit risk.

~~Some~~Multiple ~~contracts~~Performance ~~include multiple performance obligations. Significant performance obligations commonly include the supply of Audio-Visual Systems, Domes, Show Content and various Service deliverables.~~Obligations Revenue earned on performance obligations are allocated to each deliverable based on the relative fair values. Relative fair values of performance obligations are generally determined based on actual and estimated selling price. Completion times of such contract obligations vary but typically occur within a three to twelve-month time period.

Some contracts include multiple performance obligations. Significant performance obligations commonly include the supply of Audio-Visual Systems, Domes, Show Content and various Service deliverables. Revenue ~~Recognition~~earned ~~Methods~~on ~~for~~performance ~~2017~~obligations are allocated to each deliverable based on the relative fair values. Relative fair values of performance obligations are generally determined based on actual and estimated selling price. Completion times of such contract obligations vary but typically occur within a three to twelve-month time period.

~~Percentage~~Revenue ofRecognition Completion. In arrangements that are longer in term and require significant production, modification or customization, revenue is recognized using the percentage-of-completion method. In applying this method, the Company utilizes cost-to-cost methodology whereby it estimates the percent complete by calculating the ratio of costs incurred (consisting of material, labor and subcontracting costs, as well as an allocation of indirect costs) for each contract to its total anticipated costs for that contract. This ratio is then utilized to determine the amount of gross profit earned based on the Company’s estimate of total gross profit at completion for each contract. The Company routinely reviews estimates related to percentage-of-completion contracts and adjusts for changes in the period the revisions are made. Billings on uncompleted percentage-of-completion contracts may be greater than or less than revenue recognized and are recorded as an asset or liability in the accompanying condensed consolidated balance sheets.Methods

~~Completed~~Following ~~Contract.~~the ~~Contract~~adoption ~~arrangements which typically require a relatively short period~~ of ~~time~~Topic ~~to complete the production~~606, ~~modification, and customization of products are accounted for using~~ the ~~completed~~Company ~~contract~~recognizes ~~method. Accordingly,~~ revenue iswhen ~~recognized~~it ~~upon~~satisfies ~~delivery~~a ofperformance ~~the~~obligation ~~completed~~by ~~product,~~transferring ~~provided~~control ~~persuasive~~over ~~evidence~~a ofproduct anor ~~arrangement~~service ~~exists,~~to ~~title~~a ~~and~~customer. ~~risk~~The offollowing ~~loss~~describes ~~have transferred to~~ the ~~customer,~~methods ~~the~~used ~~fee~~to isrecognize ~~fixed~~revenue orunder ~~determinable,~~the ~~and~~application ~~collection~~of isTopic ~~reasonably assured~~606.

~~Other~~Audio-Visual Systems. ~~Other~~ ~~revenue~~The ~~consists~~Company’s ~~primarily~~Audio-Visual ofSystems ~~amounts~~are ~~earned~~sold for a fixed price under ~~maintenance~~non-cancelable contracts. ~~that~~Because systems are ~~generally~~often ~~sold~~designed aswith unique features and constantly changing technology components, there is no practical alternative use for a ~~single~~system ~~element~~after it is sold. ~~Revenue~~ ~~from~~Under ~~product~~Topic ~~maintenance~~606, ~~contracts~~if an entity’s performance does not create an asset with an alternative use to the entity, ~~including~~and ~~separately~~the ~~priced~~entity ~~extended~~has ~~warranty~~an ~~contracts~~enforceable right to payment for the performance completed to date, then its performance obligation is ~~deferred~~satisfied and ~~recognized~~control of the product transfers over time. If control transfers over time, an entity selects a method to measure progress that is consistent with the ~~period~~objective of depicting its performance ~~under~~and recognizes revenue accordingly. The Company has determined the ~~contract~~percentage-of-completion method utilizing cost-to-cost methodology best depicts the measure of progress because it tracks the utilization of total resources to fulfill the obligation. This same method has been used prior to the adoption of Topic 606 for recognizing revenue on certain Audio-Visual System sales and most Dome sales. With the adoption of Topic 606, essentially all Audio-Visual Systems and subsystem sales will use the percentage-of-completion method for revenue recognition.

~~Revenue~~Domes. ~~Recognition~~The ~~Methods~~Company’s Domes are sold for ~~2018~~a fixed price under non-cancelable contracts. Because Domes have custom design and interface features, there is no practical alternative use for a Dome after it is sold. As discussed above under Audio-Visual Systems, when there is no alternative use for the product and there is an enforceable right to payment, Topic 606 requires revenue to be recognized over the time of performance. Accordingly, the Company continues to use the percentage-of-completion method utilizing cost-to-cost methodology for the recognition of revenue for the sale of Domes, as it has prior to the adoption of Topic 606.

InShow ~~2018~~Content. Show Content is sold under various license agreements, ~~upon~~most ~~adoption~~often offor ~~Topic~~a ~~606~~fixed price, but occasionally for a variable share of the customer’s theater revenue. Sales of Show Content require no future obligations by the Company after delivery. The Company recognizes the revenue ~~when~~for itfixed ~~satisfies~~price aShow ~~performance~~Content ~~obligation~~licenses byupon ~~transferring~~the execution of the license agreement and delivery of media since that is the time control ~~over~~and abenefit ~~product~~of orthe ~~service~~Show Content is transferred. Under Topic 606, an entity does not recognize revenue for the variable amounts related to a royalty until a customer’s subsequent sales or usage occurs. ~~The~~Accordingly, ~~following~~revenue ~~describes~~from the ~~methods~~variable share of the customer’s theater revenue is recognized when realized. The method used toby ~~recognize~~the Company for recognizing Show Content revenue ~~under~~has not changed with the ~~application~~adoption of Topic 606.

26Maintenance and Service. Maintenance and Service revenue consists of parts sales and service contracts. Parts sales are recognized upon shipment which is when the control and benefit transfers to the customer. Service contracts are sold for a fixed price and provide the customer with various levels of preventive service, support and limited warranty protection. Under Topic 606, the revenue for service contracts is recognized ratably over the term of the contract or upon delivery of a service specified in the contract. The method used by the Company for recognizing Maintenance and Service revenue has not changed with the adoption of Topic 606.

~~Audio-Visual~~Contract ~~Systems.~~Acquisition The Company’s Audio-Visual Systems are sold for a fixed price under non-cancelable contracts. Because systems are often designed with unique features and constantly changing technology components, there is no practical alternative use for a system after it is sold. Under Topic 606, if an entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for the performance completed to date, then its performance obligation is satisfied and control of the product transfers over time. If control transfers over time, an entity selects a method to measure progress that is consistent with the objective of depicting its performance and recognizes revenue accordingly. The Company has determined the percentage-of-completion method utilizing cost-to-cost methodology best depicts the measure of progress because it tracks the utilization of total resources to fulfill the obligation. This same method has been used prior to the adoption of Topic 606 for recognizing revenue on certain Audio-Visual System sales and most Dome sales. With the adoption of Topic 606, essentially all Audio-Visual Systems and subsystem sales will use the percentage-of-completion method for revenue recognition. Costs

~~Domes.~~Contract ~~The~~acquisition ~~Company’s~~costs ~~Domes~~consist ~~are~~of ~~sold~~expenditures ~~for~~of aCompany ~~fixed~~employee ~~price~~and ~~under~~other ~~non-cancelable~~resources ~~contracts. Because Domes have custom design~~ and ~~interface features~~, ~~there~~in issome ~~no practical alternative use for a Dome after it is sold. As discussed above under Audio-Visual Systems~~cases, ~~when there is no alternative use for~~ the ~~product and there is an enforceable right to~~ payment, ~~Topic~~of ~~606~~sales ~~requires~~commissions ~~revenue~~ to benon-employee ~~recognized~~agents. ~~over~~Expenditures ~~the time~~ of ~~performance. Accordingly, the~~ Company ~~continues~~employee toand ~~use~~other ~~the~~resources ~~percentage-of-completion~~are ~~method~~costs ~~utilizing~~that ~~cost-to-cost~~would ~~methodology~~be ~~for~~incurred ~~the~~regardless ~~recognition~~ of ~~revenue~~whether ~~for~~ the ~~sale~~contract ofis ~~Domes~~obtained, asare itnot ~~has~~recoverable, ~~prior~~and totherefore ~~the~~are ~~adoption of Topic 606.~~

Show Content. Show Content is sold under various license agreements, most often for a fixed price, but occasionally for a variable share of the customer’s theater revenue. Sales of Show Content require no future obligations by the Company after delivery. The Company recognizes the revenue for fixed price Show Content licenses upon the execution of the license agreement and delivery of media since that is the time control and benefit of the Show Content is transferred. Under Topic 606, an entity does not recognize revenue for the variable amounts related to a royalty until a customer’s subsequent sales or usage occurs. Accordingly, revenue from the variable share of the customer’s theater revenue is recognized when realized. The method used by the Company for recognizing Show Content revenue has not changed with the adoption of Topic 606.28

~~Maintenance~~expensed ~~and~~as ~~Service. Maintenance~~they ~~and~~are ~~Service~~incurred ~~revenue~~under ~~consists~~Topic of606. ~~parts~~Sales ~~sales~~commissions ~~and~~paid ~~service~~to ~~contracts.~~agents ~~Parts sales~~ are ~~recognized~~incurred ~~upon~~only ~~shipment~~if ~~which~~the contract is ~~when~~obtained ~~the~~and ~~control~~therefore ~~and~~are ~~benefit~~incremental ~~transfers~~costs toof acquiring the ~~customer~~contract. ~~Service~~Rather ~~contracts~~than ~~are~~capitalize ~~sold~~the ~~for~~cost aof ~~fixed~~sales ~~price~~commissions, ~~and~~the ~~provide~~Company ~~the~~has ~~customer~~elected ~~with~~to ~~various~~expense ~~levels~~sales ofcommissions ~~preventive~~as ~~service,~~incurred ~~support~~under ~~and~~the ~~limited~~practical ~~warranty~~expedient ~~protection.~~permitted ~~Under~~by Topic 606, ~~the~~whereby ~~revenue~~expensing ~~for service contracts~~ is ~~recognized~~permitted ~~ratably~~when ~~over~~ the ~~term~~amortization ofperiod ~~the contract or upon delivery~~ of ~~a service specified in~~ the ~~contract.~~asset ~~The~~that ~~method used by~~ the ~~Company~~entity ~~for~~otherwise ~~recognizing~~would ~~Maintenance~~have ~~and~~recognized ~~Service~~is ~~revenue~~one ~~has~~year ~~not~~or ~~changed with the adoption of Topic 606~~less.

~~Contract~~Disaggregation ~~Acquisition~~of ~~Costs~~Revenue

~~Contract~~In ~~acquisition~~the ~~costs~~following ~~consist of expenditures of Company employee and other resources and~~tables, inrevenue ~~some~~reported ~~cases,~~for the ~~payment~~years ofended ~~sales~~December ~~commissions to non-employee agents. Expenditures of Company employee and other resources are costs that would be incurred regardless of whether the contract is obtained~~31, ~~are~~2019 ~~not recoverable,~~ and ~~therefore~~2018 ~~are expensed as they are incurred~~ under Topic 606. ~~Sales commissions paid to agents are incurred only if the contract~~ is ~~obtained~~disaggregated ~~and~~by ~~therefore~~primary ~~are~~geographical ~~incremental costs of acquiring the contract. Rather than capitalize the cost of sales commissions~~market, ~~the~~major ~~Company~~product ~~has elected to expense sales commissions as incurred under the practical expedient permitted by Topic 606~~line, ~~whereby~~timing ~~expensing is permitted when the amortization period~~ of ~~the~~revenue ~~asset~~recognition ~~that~~and ~~the~~product ~~entity otherwise would have recognized is one year or less~~application.

~~Disaggregation~~Revenue offor ~~Revenue~~the year ended December 31, 2019:

In the following table, revenue reported for the year ended December 31, 2018 under Topic 606 is disaggregated by primary geographical market, major product line, timing of revenue recognition and product application.

Product Application	Planetarium Theaters		Other Visitor Attractions		Architectural Treatments		Total

Primary Geographic Area:
North America	$	13,376	$	1,188	$	125	$	14,689
Europe		4,519		1,245		-		5,764
Asia		3,798		977		-		4,775
Other		2,458		30		-		2,488
	$	24,151	$	3,440	$	125	$	27,716

Products:
Audio-Visual Systems	$	14,802	$	1,249	$	-	$	16,051
Domes		4,726		2,112		125		6,963
Show Content		2,340		76		-		2,416
Maintenance and Service		2,283		3		-		2,286
	$	24,151	$	3,440	$	125	$	27,716

Timing of revenue recognition:
Goods transferred at point in time	$	3,138	$	103	$	-	$	3,241
Goods and services transferred over time		21,013		3,337		125		24,475
	$	24,151	$	3,440	$	125	$	27,716

2729

Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary Geographic Area:
North America	$ 23,443	$ 1,452	$ 1,022	$ 25,917
Europe	2,607	1,175	-	3,782
Asia	4,077	1,911	-	5,988
Other	1,506	-	-	1,506
	$ 31,633	$ 4,538	$ 1,022	$ 37,193
Products:
Audio-Visual Systems	$ 21,315	$ 1,646	$ -	$ 22,961
Domes	5,686	2,892	1,022	9,600
Show Content	2,225	-	-	2,225
Maintenance and Service	2,407	-	-	2,407
	$ 31,633	$ 4,538	$ 1,022	$ 37,193
Timing of revenue recognition:
Goods transferred at point in time	$ 2,935	$ -	$ -	$ 2,935
Goods and services transferred over time	28,698	4,538	1,022	34,258
	$ 31,633	$ 4,538	$ 1,022	$ 37,193

Revenue for the year ended December 31, 2018:

Contract Balances

Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total

Primary Geographic Area:

North America	$ 23,443	$ 1,452	$ 1,022	$ 25,917
Europe	2,607	1,175	-	3,782
Asia	4,077	1,911	-	5,988
Other	1,506	-	-	1,506
	$ 31,633	$ 4,538	$ 1,022	$ 37,193

Products:

Audio-Visual Systems	$ 21,315	$ 1,646	$ -	$ 22,961
Domes	5,686	2,892	1,022	9,600
Show Content	2,225	-	-	2,225
Maintenance and Service	2,407	-	-	2,407
	$ 31,633	$ 4,538	$ 1,022	$ 37,193

Timing of revenue recognition:

Goods transferred at point in time	$ 2,935	$ -	$ -	$ 2,935
Goods and services transferred over time	28,698	4,538	1,022	34,258
	$ 31,633	$ 4,538	$ 1,022	$ 37,193

~~The~~Contract ~~following table provides information about receivables, contract assets, and contract liabilities from contracts with customers as of December 31, 2018 and January 1, 2018:~~Balances

	December 31, 2018	January 1, 2018
Receivables reported as accounts receivable, net	$ 3,250	$ 3,794
Contract revenue in excess of billings	3,484	3,517
Billings in excess of contract revenue	5,959	6,265

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers as of December 31, 2019 and 2018:

	December 31, 2019	December 31, 2018

Receivables reported as accounts receivable, net	$ 4,957	$ 3,250
Contract revenue in excess of billings	2,655	3,484
Billings in excess of contract revenue	5,428	5,959

~~Significant changes in the contract assets and the contract liabilities balances during the year are as follows:~~ 30

	Contract Assets	Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the year		$ (4,697)
Increases due to amounts billed to customers, excluding amounts recognized as revenue during the year		$ 4,391
Transferred to receivables from contract assets recognized at the beginning of the year	$ (3,404)
Increases as a result of revenue recognized, excluding amounts transferred to receivables during the year	$ 3,371

Significant changes in the contract assets and the contract liabilities balances during the year are as follows:

Contract revenue in excess of billings are contract assets that arise when revenue recognized on a contract exceeds the cumulative progress billings. Contracts generally provide for an enforceable right to payment for performance completed to date but do not necessarily have a present right to consideration payment for performance completed until the event that triggers the progress billing. The contract assets are transferred to receivables when the rights to payment occur and amounts are billed. Billings in excess of contract revenue are contract liabilities that arise when progress billings on a contract exceed the revenue recognized. Contract liabilities are relieved as the performance obligation is completed and revenue is recognized. Progress billings vary among contracts and can be triggered by chronological milestones, performance events or other various measurements of performance.

	Contract Assets	Contract Liabilities

Revenue recognized that was included in the contract liability balance at the beginning of the period		$ (4,478)

Increases due to amounts billed to customers, excluding amounts recognized as revenue during the period		$ 3,947

Transferred to receivables from contract assets recognized at the beginning of the period	$ (2,994)

Increases as a result of revenue recognized, excluding amounts transferred to receivables during the period	$ 2,165

~~Backlog~~Contract revenue in excess of ~~Remaining~~billings ~~Customer~~are ~~Performance~~contract ~~Obligations~~assets that arise when revenue recognized on a contract exceeds the cumulative progress billings. Contracts generally provide for an enforceable right to payment for performance completed to date but do not necessarily have a present right to consideration payment for performance completed until the event that triggers the progress billing. The contract assets are transferred to receivables when the rights to payment occur and amounts are billed. Billings in excess of contract revenue are contract liabilities that arise when progress billings on a contract exceed the revenue recognized. Contract liabilities are relieved as the performance obligation is completed and revenue is recognized. Progress billings vary among contracts and can be triggered by chronological milestones, performance events or other various measurements of performance.

~~The~~Backlog ~~following table includes estimated revenue expected to be recognized and recorded as sales in the future from the backlog~~ of ~~performance~~Remaining ~~obligations~~Customer ~~that~~Performance ~~are unsatisfied (or partially unsatisfied) at the end of the reporting period.~~Obligations

	2019	2020	2021	2022	2023
Sales	$15,881	$678	$546	$170	$91

The following table includes estimated revenue expected to be recognized and recorded as sales in the future from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

Note 3 – Changes in Accounting Policies

	2020	2021	2022	2023	2024

Sales	$16,018	$3,381	$202	$22	$85

~~Except for the changes disclosed in~~ Note 13 ~~under~~– Changes ~~revenue recognition, the Company has consistently applied the accounting policies to both periods presented~~ in ~~these~~Accounting condensed consolidated financial statements. The Company adopted Topic 606, Revenue from Contracts with Customers, with a date of initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below. The Company applied Topic 606 using the cumulative effect method and accordingly recognized the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative information has not been adjusted and continues to be reported under prior accounting rules. Principal

29As described in Note 6, the Company adopted Topic 842 Leases, effective January 1, 2019 resulting in the retrospective adjustment of the comparative 2018 periods presented. Prior to the application of Topic 842, the rent expense was recorded in the amount of the lease payments, adjusted on straight-line basis over the lease term, less the amortization of a deferred gain from a 2014 sale leaseback transaction. Under Topic 842, this gain would be recognized at the time of the transaction and not deferred. As a result, there was an adjustment to eliminate the unamortized balance of the deferred gain for cumulative effect of the initial application which increased the opening balance of stockholders’ equity in the amount of $808 at January 1, 2018. The presented consolidated statement of operations and consolidated statement of cash flows for the year ended December 31, 2018 is adjusted to reflect an increase in rent expense in the amount of $439. The consolidated balance sheet presented as of December 31, 2018 is adjusted to reflect the right-of-use (“ROU”) asset and operating lease liability described in Note 6 along with an increase in stockholders’ equity of $369.

~~The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for year ended December~~ 31~~, 2018:~~

CONDENSED CONSOLIDATED BALANCE SHEETS
Impact of changes in accounting policies
			Balances
			without
			adoption of
December 31, 2018	As reported	Adjustments	Topic 606
Cash and cash equivalents	$ 8,365	$ -	$ 8,365
Restricted cash	220	-	220
Contract revenue in excess of billings	3,484	(1,130)	2,354
Inventories, net	3,072	712	3,784
Others	12,020	-	12,020
Total assets	27,161	(418)	26,743
Billings in excess of contract revenue	5,959	44	6,003
Others	13,198	-	13,198
Total liabilities	19,157	44	19,201
Accumulated deficit	(42,778)	(462)	(43,240)
Others	50,782		50,782
Total stockholders’ equity	8,004	(462)	7,542
Total liabilities and stockholders’ equity	$ 27,161	$ (418)	$ 26,743

Note 4 – Goodwill

			Balances
			without
			adoption of
For the year ended December 31, 2018	As reported	Adjustments	Topic 606
Sales	$ 37,193	$ 432	$ 37,625
Cost of sales	(23,469)	(211)	(23,680)
Selling, general and administrative	(6,561)	-	(6,561)
Income tax expense	(21)	-	(21)
Others	(3,395)	-	(3,395)
Net income	$ 3,747	$ 221	$ 3,968

Goodwill of $635 resulted from the acquisition of the Company’s wholly owned subsidiary, Spitz, and was measured as the excess of the $2,884 purchase consideration paid over the fair value of the net assets acquired. The Company has made its annual assessment of impairment of goodwill and has concluded that goodwill is not impaired as of December 31, 2019.

30Note 5 – Lease Receivable

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Impact of changes in accounting policies
			Balances
			without
			adoption of
For the year ended December 31, 2018	As reported	Adjustments	Topic 606
Net income	$ 3,747	$ 221	$ 3,968
Adjustments to reconcile net income to
net cash used in operating activities:
Other	1,057	-	1,057
Changes in:
Inventories	(449)	211	(238)
Contract revenue in excess of billings	33	1,130	1,163
Billings in excess of contract revenue	(306)	(1,562)	(1,868)
Other	(353)	-	(353)
Net cash from operating activities	3,729	-	3,729
Net cash from investing activities	(101)	-	(101)
Net cash from financing activities	$ (631)	$ -	$ (631)

In 2016, the Company entered into a lease agreement with a customer whereby the Company will be the Lessor and the customer will be the lessee of a Planetarium System produced, delivered and installed by the Company. The lease term is 5 years and requires the customer to make rent payments to the Company over the lease term in accordance with the fixed schedule in the agreement. The equipment will be returned to the Company at the end of the lease term at which time the Company estimates that the system will have no residual value. The customer obtained control of the leased assets upon delivery and acceptance of the system on December 7, 2016. The lease is accounted for as a sales-type lease since the lease term is for substantially all of the economic life of the system, the present value of the lease payments amounts to substantially all of the fair value of the underlying assets, and the customer will retain the control with substantially all of the risks and awards of ownership of the system. The discounted present value of the payments to be made under the lease agreement, using an annual rate of 6%, amounts to $1,754. This amount represents the fair value of the equipment of $1,678 and the maintenance services E&S is to provide over the terms of the lease valued at $76. In 2018, the Company collected $307 in lease payments of which $60 was recorded as interest income and $247 as principal reduction of the lease receivable. In 2019, the Company collected $307 in lease payments of which $44 was recorded as interest income and $263 as principal reduction of the lease receivable.

~~Note~~The 4balance –of ~~Goodwill~~lease receivable as of December 31, 2019 and 2018 is recorded as follows:

	2019	2018

Lease receivable	$ 278	$ 262
Lease receivable long term	295	574
Total	$ 573	$ 836

Note 56 – ~~Lease~~ ~~Receivable~~Operating Lease

InThe ~~2016, the~~ Company ~~entered~~leases ~~into~~its aoffice, ~~lease~~shop ~~agreement with a customer whereby the Company will be the Lessor~~ and ~~the~~warehouse ~~customer~~space ~~will~~in beSalt ~~the~~Lake ~~lessee of a Planetarium System produced~~City, ~~delivered~~Utah ~~and~~under ~~installed~~a bynon-cancellable ~~the~~operating ~~Company~~lease agreement. The lease ~~term~~agreement ishad 5an ~~years~~amended ~~and~~term ~~requires~~set ~~the customer~~ to ~~make~~expire ~~rent~~October ~~payments~~2019 to (the ~~Company~~“Previous ~~over~~Facility ~~the lease term in accordance with the fixed schedule in the agreement~~Lease”). ~~The~~ ~~equipment~~On ~~will~~April be15, ~~returned~~2019, to the Company atsigned ~~the~~an ~~end~~amendment ofto the ~~lease~~Previous ~~term~~Facility atLease ~~which time~~ (the ~~Company~~“Lease ~~estimates that the system will have no residual value~~Amendment”). The ~~customer~~Lease ~~obtained~~Amendment ~~control~~effectively ofterminated, ~~the~~as ~~leased assets upon delivery and acceptance~~ of ~~the~~April ~~system~~30, ~~on December 7~~2019, ~~2016. The lease is accounted for as a sales-type lease since~~ the ~~lease~~Previous ~~term~~Facility isLease, ~~for~~and ~~substantially~~revised ~~all of~~ the ~~economic~~terms ~~life~~whereby, ofeffective ~~the~~May ~~system~~1, ~~the~~2019, ~~present value of~~ the ~~lease~~Company ~~payments~~continues ~~amounts~~ to ~~substantially~~lease ~~all~~60% of the ~~fair value of the underlying assets~~space, ~~and~~while the ~~customer~~other ~~will~~40% ~~retain~~is ~~the~~leased ~~control~~from ~~with substantially all of~~ the ~~risks~~Landlord ~~and~~by ~~awards~~a ofthird-party ~~ownership~~tenant of(“New ~~the~~Facility ~~system~~Lease”). The ~~discounted~~Company ~~present~~continues ~~value of the payments~~ to bepay ~~made under the lease agreement, using an annual rate of 6~~100%, ~~amounts to $1,754. This amount represents the fair value~~ of the ~~equipment~~maintenance ~~of $1,678~~ and ~~the~~utility ~~maintenance~~costs ~~services~~for ~~E&S is to provide over~~ the ~~terms~~buildings ofand ~~the lease valued at $76. In 2016~~grounds, ~~the Company recorded the sale~~ of ~~the~~which ~~system~~approximately of40% ~~$1,678~~is ~~and~~reimbursed ~~$76~~by ~~of deferred revenue representing~~ the ~~value~~third-party oftenant ~~the maintenance services. In 2017, the Company collected $307~~ in ~~lease~~accordance ~~payments~~with ofterms ~~which~~set ~~$55~~by ~~was~~the ~~recorded~~New asFacility ~~interest~~Lease. ~~income~~The ~~and~~New ~~$252~~Facility asLease ~~principal~~has ~~reduction~~a ofseven-year ~~the~~term ~~lease~~with ~~receivable.~~two Infive-year ~~2018,~~renewal ~~the~~options ~~Company~~with ~~collected~~monthly ~~$307~~base inrent ~~lease payments~~ of ~~which~~ $6035 ~~was~~during ~~recorded~~the asfirst ~~interest~~year ~~income~~with ~~and~~a ~~$247~~3% asescalation ~~principal~~per ~~reduction of the lease receivable~~year.

As a result of the adoption of ASC 842, the Company recognized an operating lease liability with a corresponding ROU asset of the same amount based on the present value of the minimum rental payments of the Previous Facility Lease as of January 1, 2018. The discount rate used to compute the present value of the minimum rental payments of the Previous Facility Lease is the Company’s estimated borrowing rate of 7.5% as of the inception of the term of the Previous Facility Lease. The operating lease expense was computed on the straight-line basis which amounted to $573 reported as rent expense for the year ended December 31, 2018 and $183 for the first four months of 2019 through the April 30, 2019 termination of the Previous Facility Lease.

~~The~~For ~~balance~~the ofNew ~~lease~~Facility ~~receivable~~Lease, asthe ofCompany ~~December~~recognized ~~31,~~an ~~2018~~operating ~~and~~lease ~~2017~~liability isin ~~recorded~~the asamount ~~follows:~~of $2,698 and a ROU

	2018	2017
Lease receivable	$ 262	$ 247
Lease receivable long term	574	836
Total	$ 836	$ 1,083

~~Note~~asset 6–in ~~Leases~~the amount of $2,742 as of May 1, 2019. The operating lease liability consists of the present value of the minimum rental payments of the New Facility Lease. The discount rate used to compute the present value of the minimum rental payments of the New Facility Lease is the Company’s estimated borrowing rate of 5.25% as of May 1, 2019. The ROU asset consists of the lease liability plus an indirect cost of $44 attributable to negotiating and ~~deferred~~arranging ~~gain~~the lease. The operating lease expense is computed on ~~disposal~~the ofstraight-line ~~building~~basis ~~assets~~which amounts to $312 reported as rent expense for the eight-month period ended December 31, 2019.

~~The~~Balance ~~Company~~sheet ~~occupies~~information ~~real~~related ~~property~~to ~~and~~Previous ~~uses~~Facility ~~certain~~Lease ~~equipment~~and ~~under~~New ~~lease~~Facility ~~arrangements~~Lease ~~that~~ are ~~accounted for~~ as ~~operating leases. The Company’s real property leases contain escalation clauses. Rental expense for all operating leases for 2018 and 2017 was $151 and $148, respectively.~~ follows:

In November 2014, the Company agreed to an extension of its lease for its corporate office buildings and its interest in the lease for the land occupied by the buildings for a term of 5 years. Base annual rent was $549 until April 1, 2018 when the base annual rent increased to $570. The annual rent expense on a straight-line basis is $555. The new lease obligation is recorded as an operating lease for a term of five years which commenced November 1, 2014. The accounting for the lease extension resulted in a $620 gain on the disposition of leased assets under the prior lease which was deferred and is being amortized over the five-year term of the new operating lease. There was also a $1,526 gain from the extinguishment of a deferred rent credit related to the underlying land lease which is being amortized over the five-year term of the new operating lease. The amortization of the deferred gain and deferred rent credit reduces the rent expense attributable to the cash rent payments.

	December 31,		December 31,
	2019		2018

Operating lease right-of-use asset	$	2,509	$	187
Operating lease liability, current portion		307		188
Operating lease liability, net of current portion		2,189		-

~~Future~~The ~~minimum~~components ~~rent~~of ~~expense payments under the new operating~~ lease ~~and~~expense ~~the remaining deferred gain from the disposal of the building assets and deferred rent credit to be recognized~~ are as follows:

Years Ending	Minimum Lease		Gain on	Deferred		Net Rent
		December 31,		December 31,
December 31,	Payments		Building	Rent Credit		Expense
		2019		2018
2019	475		(106)	(264)		105
Amortization of right-of-use asset recorded as rent expense		$	413	$	540
Total	$ 475		$ (106)	$ (264)		$ 105
Interest on lease liability included in other expense			82		33
Total lease cost		$	495	$	573

~~There~~Maturities ~~are~~of nothe ~~other~~ lease ~~obligations~~liability ~~that~~are ~~have~~as ~~initial or remaining non-cancelable lease terms in excess of one year.~~follows:

Note 7 - Employee Retirement Benefit Plans

Future Minimum Lease Payments

2020	$	431
2021		444
2022		457
2023		471
2024		485
Thereafter		666
Total future minimum lease payments		2,954
Less: amount representing interest		(458)
Present value of future payments		2,496
Current portion		307
Long-term portion	$	2,189

~~Settlement of Pension Plan Liabilities~~33

OnOther ~~April~~information ~~21,~~related ~~2015,~~to the Company, as the administrator of its qualified defined benefit pension plan (“Pension Plan”), and the Pension Benefit Guaranty Corporation (“PBGC”) entered into an Agreement for Appointment of Trustee and Termination of Plan (the “Termination Agreement”) (a) terminating the Pension Plan, (b) establishing March 9, 2013 as the Plan’s termination date and (c) appointing the PBGC as statutory trustee of the Pension Plan.lease:

InFor ~~connection with~~ the ~~Termination~~years Agreement, on April 21, 2015, the Company entered into the Pension Settlement Agreement with the PBGC to settle all liabilities of the Pension Plan including any termination premium resulting from the Pension Plan termination (the “Settled ERISA Liabilities”). Pursuant to the Pension Settlement Agreement, the Company agreed to (a) pay to the PBGC a total of $10,500, with $1,500 due within ten days following the effective date of the Pension Settlement Agreement and the remainder paid in twelve annual installments of $750 beginning on October 31, 2015 (the “Pension Settlement Obligation”) and (b) issue within ten days following the effective date of the Pension Settlement Agreement 88,117 shares of the Company’s treasury stock in the name of the PBGC. The Pension Settlement Agreement further provides that the PBGC will be deemed to have released the Company from all Settled ERISA Liabilities upon payment of the Pension Settlement Obligation. In the event of a ended:

	December 31,		December 31,
	2019		2018

Operating cashflows
Cash paid related to operating lease obligation	$	460	$	566
Remaining lease term (in years)
Operating lease		6.3		0.3

~~default~~Note by7 ~~the~~- ~~Company~~Employee ofRetirement ~~its~~Benefit obligations under the Pension Settlement Agreement or the underlying agreements which secure the Pension Settlement Obligation, the PBGC may enforce payment of the Settled ERISA Liabilities, which would accrue interest at various rates until payment is made and be reduced by any payments made by the Company pursuant to the Pension Settlement Agreement. The estimated total Settled ERISA Liabilities as of the settlement date is $46,000.Plans

~~To secure the Company’s obligations under the Pension~~ Settlement ~~Agreement, on April 21, 2015, the Company also entered into a Security Agreement with the PBGC (the “Security Agreement”), and executed an Open-End Mortgage in favor~~ of ~~the~~Pension ~~PBGC~~Plan (the “Mortgage”) on certain real property owned by the Company’s subsidiary, Spitz, Inc. (“Spitz”). The Security Agreement and Mortgage grant to the PBGC a security interest on all of the Company’s presently owned and after-acquired property and proceeds thereof, free and clear of all liens and other encumbrances, except those described therein (the “Senior Liens”). The PBGC’s security interest in the Company’s property is subordinate to the Company’s two senior lenders pursuant to the Security Agreement and agreements between the PBGC and the lenders (the “Intercreditor Agreements”). The Intercreditor Agreements provide for the lenders to extend credit to the Company, secured by the Senior Liens, up to specified limits. The Intercreditor Agreement between the lender of the mortgage notes and line of credit (see Note 8) and the PBGC provides for total aggregate loans of up to $6,500 secured by Senior Liens on Spitz assets. The second Intercreditor Agreement between another lender and the PBGC provides for up to $3,000 of letter of credit indebtedness secured by Senior Liens on cash deposits. Liabilities

~~The~~On ~~balance~~April 21, 2015, the Company, as the administrator of its qualified defined benefit pension plan (“Pension Plan”), and the Pension ~~Settlement~~Benefit ~~Obligation~~Guaranty isCorporation ~~recorded~~(“PBGC”) onentered ~~the~~into ~~balance~~an ~~sheet~~Agreement asfor Appointment of ~~December~~Trustee 31and Termination of Plan (the “Termination Agreement”) (a) terminating the Pension Plan, ~~2018~~(b) establishing March 9, 2013 as the Plan’s termination date and ~~2017~~(c) appointing the PBGC as ~~follows:~~ statutory trustee of the Pension Plan.

	2018	2017
Current portion of pension settlement obligation	$ 438	$ 409
Pension settlement obligation, net of current portion	4,042	4,478
Total Pension Settlement Obligation	$ 4,480	$ 4,887

In connection with the Termination Agreement, on April 21, 2015, the Company entered into the Pension Settlement Agreement with the PBGC to settle all liabilities of the Pension Plan including any termination premium resulting from the Pension Plan termination (the “Settled ERISA Liabilities”). Pursuant to the Pension Settlement Agreement, the Company agreed to (a) pay to the PBGC a total of $10,500, with $1,500 due within ten days following the effective date of the Pension Settlement Agreement and the remainder paid in twelve annual installments of $750 beginning on October 31, 2015 (the “Pension Settlement Obligation”) and (b) issue within ten days following the effective date of the Pension Settlement Agreement 88,117 shares of the Company’s treasury stock in the name of the PBGC. The Pension Settlement Agreement further provides that the PBGC will be deemed to have released the Company from all Settled ERISA Liabilities upon payment of the Pension Settlement Obligation. In the event of a default by the Company of its obligations under the Pension Settlement Agreement or the underlying agreements which secure the Pension Settlement Obligation, the PBGC may enforce payment of the Settled ERISA Liabilities, which would accrue interest at various rates until payment is made and be reduced by any payments made by the Company pursuant to the Pension Settlement Agreement. The estimated total Settled ERISA Liabilities as of the settlement date is $46,000.

~~Supplemental~~To ~~Executive~~secure ~~Retirement~~the ~~Plan~~Company’s obligations under the Pension Settlement Agreement, on April 21, 2015, the Company also entered into a Security Agreement with the PBGC (~~SERP~~the “Security Agreement”), and executed an Open-End Mortgage in favor of the PBGC (the “Mortgage”) on certain real property owned by the Company’s subsidiary, Spitz, Inc. (“Spitz”). The Security Agreement and Mortgage grant to the PBGC a security interest on all the Company’s presently owned and after-acquired property and proceeds thereof, free and clear of all liens and other encumbrances, except those described therein (the “Senior Liens”). The PBGC’s security interest in the Company’s property is subordinate to the Company’s two senior lenders pursuant to the Security Agreement and agreements between the PBGC and the lenders (the “Intercreditor Agreements”). The Intercreditor Agreements provide for the lenders to extend credit to the Company, secured by the Senior Liens, up to specified limits. The Intercreditor Agreement between the lender of the mortgage notes and line of credit (see Note 8) and the PBGC provides for total aggregate loans of up to $6,500 secured by Senior Liens on Spitz assets. The second Intercreditor Agreement between another lender and the PBGC provides for up to $3,000 of letter of credit indebtedness secured by Senior Liens on cash deposits.

The SERP provides eligible former executives, employed by the Company prior to 2002, defined pension benefits based on average salary, years of service and age at retirement. The SERP was amended in 2002 to discontinue further SERP gains from future salary increases and close the SERP to new participants.34

~~Obligations~~The ~~and~~balance ~~Funded~~of ~~Status~~the ~~for~~Pension ~~SERP~~Settlement Obligation is recorded on the balance sheet as of December 31, 2019 and 2018 as follows:

E&S uses a December 31 measurement date for the SERP.

	2019	2018
Current portion of pension settlement obligation	$ 468	$ 438
Pension settlement obligation, net of current portion	3,575	4,042
Total Pension Settlement Obligation	$ 4,043	$ 4,480

~~Information~~Supplemental ~~concerning~~Executive ~~the~~Retirement ~~obligations,~~Plan ~~plan assets and funded status of employee retirement defined benefit plans are provided below:~~(SERP)

33The SERP provides eligible former executives, employed by the Company prior to 2002, defined pension benefits based on average salary, years of service and age at retirement. The SERP was amended in 2002 to discontinue further SERP gains from future salary increases and close the SERP to new participants.

Changes in benefit obligation	2018	2017
Projected benefit obligation - beginning of year	$ 4,650	$ 4,851
Interest cost	136	156
Actuarial loss (gain)	(119)	103
Benefits paid	(445)	(460)
Projected benefit obligation - end of year	$ 4,222	$ 4,650
Changes in plan assets	2018	2017
Contributions	$ 445	$ 460
Benefits paid	(445)	(460)
Fair value of plan assets - end of year	$ -	$ -
Net amount recognized	2018	2017
Unfunded status	$ (4,222)	$ (4,650)
Unrecognized net actuarial loss	1,976	2,176
Net amount recognized	$ (2,246)	$ (2,474)

Obligations and Funded Status for SERP

~~Amounts~~E&S ~~recognized~~uses ina ~~the~~December ~~consolidated~~31 ~~balance~~measurement ~~sheets~~date ~~consisted~~for ~~of:~~the SERP.

	2018	2017
Accrued liability	$ (4,222)	$ (4,650)
Accumulated other comprehensive loss	1,976	2,176
Net amount recognized	$ (2,246)	$ (2,474)

Information concerning the obligations, plan assets and funded status of employee retirement defined benefit plans are provided below:

Components of net periodic benefit cost:

Changes in benefit obligation	2019	2018

Projected benefit obligation - beginning of year	$ 4,222	$ 4,650
Interest cost	148	136
Actuarial loss (gain)	284	(119)
Benefits paid	(387)	(445)
Projected benefit obligation - end of year	$ 4,267	$ 4,222

Changes in plan assets	2019	2018

Contributions	$ 386	$ 445
Benefits paid	(386)	(445)
Fair value of plan assets - end of year	$ -	$ -

Net amount recognized	2019	2018

Unfunded status	$ (4,267)	$ (4,222)
Unrecognized net actuarial loss	2,182	1,976
Net amount recognized	$ (2,085)	$ (2,246)

	2018	2017
Interest cost	$ 136	$ 156
Amortization of actuarial loss	81	75
Amortization of prior year service cost	-	-
Net periodic benefit expense	$ 217	$ 231

Amounts recognized in the consolidated balance sheets consisted of:

Additional information

	2019	2018

Accrued liability	$ (4,267)	$ (4,222)
Accumulated other comprehensive loss	2,182	1,976
Net amount recognized	$ (2,085)	$ (2,246)

~~Pension expense was $217 and $231 for the years ended December 31, 2018 and 2017, respectively, which consisted of net periodic benefit expense for the SERP.~~ 35

~~The~~Components ~~SERP minimum liability recorded in other comprehensive loss decreased $200 in 2018 compared to an increase~~ of ~~$30~~net inperiodic ~~2017. The~~benefit decrease in 2018 was primarily due to an increase in the discount rate and change to the mortality table offset by an increase due to the change to payout assumption. The increase in 2017 was caused by a decrease in the discount rate, partly offset by a change to the mortality table. cost:

Assumptions

	2019	2018

Interest cost	$ 148	$ 136
Amortization of actuarial loss	78	81
Amortization of prior year service cost	-	-
Net periodic benefit expense	$ 226	$ 217

~~The~~Additional weighted average assumptions used to remeasure benefit obligations as of December 31, 2018 and 2017 included a discount rate of 3.8% and 3.1%, respectively, for the SERP. The weighted average assumptions used to information

34Pension expense was $226 and $217 for the years ended December 31, 2019 and 2018, respectively, which consisted of net periodic benefit expense for the SERP.

~~determine~~The ~~net~~SERP ~~periodic~~minimum ~~cost~~liability ~~for~~recorded ~~the~~in ~~years~~other ~~ended~~comprehensive ~~December~~loss ~~31,~~increased $206 in 2019 compared to a decrease of $200 in 2018. The ~~and~~increase ~~2017~~in ~~included~~2019 was primarily due to a decrease in the discount rate. ofThe ~~3.8%~~decrease ~~and~~in ~~3.1%,~~2018 ~~respectively,~~was primarily due to an increase in ~~each~~the ~~year~~discount ~~for~~rate and change to the ~~SERP~~mortality table offset by an increase due to the change to payout assumption.

In prior years, for persons who have not yet commenced benefits, it was assumed that installment payments would commence on the valuation date and continue for 10 years. That assumption was changed such that if an individual has not yet commenced benefit payments, the first payment would be a one-time lump sum equal to installments in arrears plus future installments commencing on the valuation date and continuing through the original end date assuming payments had commenced on the expected start date.Assumptions

~~Cash~~The ~~Flows~~weighted average assumptions used to remeasure benefit obligations as of December 31, 2019 and 2018 included a discount rate of 2.6% and 3.8%, respectively, for the SERP. The weighted average assumptions used to determine net periodic cost for the years ended December 31, 2019 and 2018 included a discount rate of 2.6% and 3.8%, respectively, in each year for the SERP.

~~Employer~~In ~~contributions~~prior years, for persons who have not yet commenced benefits, it was assumed that installment payments would commence on the valuation date and continue for 10 years. That assumption was changed such that if an individual has not yet commenced benefit payments, the first payment would be a one-time lump sum equal to installments in arrears plus future installments commencing on the valuation date and continuing through the original end date assuming payments had commenced on the expected start date.

~~The~~Cash Company is not currently required to fund the SERP. All benefit payments are made by E&S directly to those who receive benefits from the SERP. As such, these payments are treated as both contributions and benefits paid for reporting purposes.Flows

~~The~~Employer ~~Company expects to contribute and pay benefits of approximately $621 related to the SERP in 2019.~~ contributions

~~Estimated~~The ~~future~~Company is not currently required to fund the SERP. All benefit payments are made by E&S directly to those who receive benefits from the SERP. As such, these payments are treated as both contributions and benefits paid for reporting purposes.

AsThe ofCompany ~~December~~expects ~~31,~~to ~~2018,~~contribute ~~the~~and ~~following~~pay benefits ~~are~~of ~~expected~~approximately to$682 berelated ~~paid~~to ~~based~~the onSERP ~~actuarial~~in ~~estimates and prior experience:~~2020.

Years Ending December 31,		SERP
2019		$ 621
2020		$ 426
2021		$ 414
2022		$ 407
2023		$ 392
2024-2028		$ 1,527

~~401(k)~~Estimated ~~Deferred~~future ~~Savings~~benefit ~~Plan~~payments

~~The~~As ~~Company has a deferred savings plan that qualifies under Section 401(k)~~ of ~~the~~December ~~Internal~~31, ~~Revenue~~2019, ~~Code. The 401(k) plan covers all employees of~~ the ~~Company~~following ~~who~~benefits ~~have at least one year of service and who~~ are ~~age~~expected 18to ~~or older. Matching contributions of 50% are made on the first 6% of employee contributions after the employee has achieved one year of service. Extra matching contributions can~~ be ~~made~~paid based on ~~profitability~~actuarial ~~and~~estimates ~~other financial~~ and ~~operational~~prior considerations. Effective January 1, 2017, the Company started making a 3% contribution in addition to the matching contribution. Contributions to the 401(k) plan for 2018 and 2017 were $444 and $451, respectively.experience:

Years Ending
December 31,		SERP
2020		$ 682
2021		$ 419
2022		$ 412
2023		$ 396
2024		$ 387
2025-2029		$ 1,336

~~Note~~401(k) 8Deferred ~~–Debt~~Savings Plan

~~Long-term~~The ~~debt~~Company ~~consisted~~has a deferred savings plan that qualifies under Section 401(k) of the ~~following~~Internal asRevenue Code. The 401(k) plan covers all employees of ~~December~~the ~~31,~~Company who have at least one year of service and who are age 18 or older. Matching contributions of 50% are made on the first 6% of employee contributions after the employee has achieved one year of service. Extra matching contributions can be made based on profitability and other financial and operational considerations. The Company makes a 3% contribution in addition to the matching contribution. Contributions to the 401(k) plan for 2019 and 2018 were $482 and ~~2017:~~$444, respectively.

	2018	2017
First mortgage note payable due in monthly installments of $23 (interest at 5.75%) through January 1, 2024; payment and rate subject to adjustment every 3 years, next adjustment January 14, 2021	$ 1,221	$ 1,422
Second mortgage note payable due in monthly installments of $4 (interest at 5.99%) through October 1, 2028; payment and rate subject to adjustment every 5 years, next adjustment October 1, 2023	319	342
Total debt	1,540	1,764
Current portion of long-term debt	(237)	(224)
Long-term debt, net of current portion	$ 1,303	$ 1,540

Note 8 –Debt

~~Principal~~Long-term ~~maturities~~debt onconsisted ~~total~~of ~~debt~~the ~~are~~following as ~~follows~~of December 31, 2019 and 2018:

Years Ending December 31,
	2019		2018
2019		$ 237
First mortgage note payable due in monthly installments of $23 (interest at 5.75%) through January 1, 2024; payment and rate subject to adjustment every 3 years, next adjustment January 14, 2021	$ 1,008		$ 1,221
2020		251
Second mortgage note payable due in monthly installments of $4 (interest at 5.99%) through October 1, 2028; payment and rate subject to adjustment every 5 years, next adjustment October 1, 2023	295		319
2021		267
Total debt	1,303		1,540
2022		283
Current portion of long-term debt	(251)		(237)
2023		299
Long-term debt, net of current portion	$ 1,052		$ 1,303
Thereafter		203
Total debt		$ 1,540

3637

~~Mortgage~~Principal ~~Notes~~maturities on total debt are as follows:

The first mortgage note payable represents the balance on a $3,200 note (“First Mortgage Note”) issued on January 14, 2004 by Spitz. The First Mortgage Note requires repayment in monthly installments of principal and interest over 20 years. On January 14, 2006 and each third anniversary thereof, the interest rate on the First Mortgage Note is adjusted to the greater of 5.75% or 3% over the Three-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“3YCMT”). The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term. On January 14, 2018, the 3YCMT was 2.09% and the interest rate on the First Mortgage Note remained at 5.75% per annum. As a result, the monthly installment amount remained at $23.

Years Ending
December 31,
2020			$ 251
2021			266
2022			282
2023			299
2024			56
Thereafter			149
Total debt			$ 1,303

~~The second mortgage note payable represents the balance on a $500 note (“Second~~ Mortgage Note”) issued on September 11, 2008 by Spitz. The Second Mortgage Note requires repayment in monthly installments of principal and interest over 20 years. On October 1, 2013 and each fifth anniversary thereof, the interest rate on the Second Mortgage Note is adjusted to the greater of 5.75% or 3% over the Five-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“5YCMT”). The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term. On October 1, 2018, the fifth anniversary of the Second Mortgage Note, the 5YCMT was 2.99%. As a result, interest was adjusted to 5.99%. The monthly installment remains at $4.Notes

The ~~Mortgage~~first ~~Notes~~mortgage ~~are~~note ~~secured~~payable byrepresents the ~~real~~balance ~~property~~on ~~occupied~~a $3,200 note (“First Mortgage Note”) issued on January 14, 2004 by Spitz. ~~pursuant~~The toFirst a Mortgage Note requires repayment in monthly installments of principal and ~~Security~~interest ~~Agreement~~over 20 years. ~~The~~On ~~real~~January ~~property~~14, ~~had~~2006 aand ~~carrying~~each ~~value~~third anniversary thereof, the interest rate on the First Mortgage Note is adjusted to the greater of $5.75% or 3% over the Three-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“3YCMT”). The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance,~~973~~ as of ~~December~~the 31date of the change in the interest rate, over the remaining portion of the original 20-year term. On January 14, 2018, the 3YCMT was 2.09% ~~The~~and the interest rate on the First Mortgage ~~Notes~~Note ~~are~~remained ~~guaranteed~~at by5.75% ~~E&S~~per annum. As a result, the monthly installment amount remained at $23.

~~Line~~The second mortgage note payable represents the balance on a $500 note (“Second Mortgage Note”) issued on September 11, 2008 by Spitz. The Second Mortgage Note requires repayment in monthly installments of ~~Credit~~principal and interest over 20 years. On October 1, 2013 and each fifth anniversary thereof, the interest rate on the Second Mortgage Note is adjusted to the greater of 5.75% or 3% over the Five-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“5YCMT”). The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term. On October 1, 2018, the fifth anniversary of the Second Mortgage Note, the 5YCMT was 2.99%. As a result, interest was adjusted to 5.99%. The monthly installment remains at $4.

The ~~Company~~Mortgage isNotes a party to a line-of-credit agreement with a commercial bank which permits borrowings of up to $1,100 to fund Spitz working capital requirements. Under the line of credit agreement, interest is charged on amounts borrowed at the lender’s prime rate less 0.25%. Any borrowings under the Credit Agreement are secured by ~~Spitz~~the real ~~and personal~~ property ~~and~~occupied ~~all~~by ofSpitz ~~the~~pursuant ~~outstanding~~to ~~shares~~a ofMortgage ~~Spitz~~and ~~common~~Security ~~stock~~Agreement. The ~~line-of-credit~~real ~~agreement~~property ~~and~~had ~~mortgage notes (with the same commercial bank) contain cross default provisions whereby~~ a ~~default~~carrying onvalue ~~either~~of ~~agreement~~$3,863 ~~will~~as ~~result~~of inDecember a31, ~~default on both agreements~~2019. ~~There~~The ~~were~~Mortgage noNotes ~~borrowings~~are ~~outstanding~~guaranteed ~~under~~by ~~the line-of-credit agreement as of December 31, 2018~~E&S.

~~Note~~Line 9of ~~- Income Taxes~~Credit

~~Income~~The ~~tax~~Company ~~for~~is ~~2018~~a ~~and~~party ~~2017~~to ~~consisted~~a line-of-credit anagreement ~~expense~~with ofa ~~$21~~commercial ~~and~~bank awhich ~~benefit~~permits borrowings of up to $~~(111)~~1,100 ~~respectively,~~to offund ~~federal~~Spitz ~~and~~working ~~state~~capital ~~income taxes~~requirements. ~~The~~Under ~~actual~~the ~~expense~~line ~~differs~~of ~~from~~credit agreement, interest is charged on amounts borrowed at the ~~expected~~lender’s ~~tax~~prime ~~expense~~rate ~~(benefit)~~less as0.25%. Any ~~computed~~borrowings under the Credit Agreement are secured by ~~applying~~Spitz real and personal property and all of the ~~U.S.~~outstanding ~~federal~~shares ~~statutory~~of ~~income~~Spitz ~~tax~~common ~~rate~~stock. The line-of-credit 21agreement and 34mortgage ~~percent~~notes ~~for~~(with ~~2018~~the ~~and~~same ~~2017,~~commercial ~~respectively,~~bank) contain cross default provisions whereby a default on either agreement will result in a default on both agreements. There were no borrowings outstanding under the line-of-credit agreement as ~~follows:~~of December 31, 2019.

	2018	2017
Income tax provision at U.S. federal statutory rate	$ 791	$ 466
State tax provision, net of federal income tax	116	48
Change in valuation allowance attributable to operations	(3,114)	(25,093)
Change in effective tax rate	111	22,311
Stock compensation	30	570
True-up adjustments and expiration of tax carryforwards and credits	2,105	1,568
Other, net	(18)	19
Income tax expense (benefit)	$ 21	$ (111)

Note 9 - Income Taxes

37Income tax for 2019 and 2018 consisted of a benefit of $(138) and an expense of $21, respectively, of federal and state income taxes. The actual expense (benefit) differs from the expected tax expense (benefit) as computed by applying the U.S. federal statutory income tax rate of 21 percent for 2019 and 2018, respectively, as follows:

~~The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and liabilities as of December 31, 2018 and 2017 are as follows:~~38

	2018	2017
	2019	2018
Property and equipment, principally due to differences in depreciation	$ 68	$ 71
Income tax provision (benefit) at U.S. federal statutory rate	$ (365)	$ 791
Inventory reserves and other inventory-related temporary basis differences	437	361
State tax provision (benefit), net of federal income tax	(155)	116
Warranty, vacation, deferred rent and other liabilities	251	371
Change in valuation allowance attributable to operations	(298)	(3,114)
Retirement liabilities	543	645
Change in effective tax rate	-	111
Net operating loss carryforwards	35,532	38,536
Stock compensation	9	30
Credit carryforwards	28	27
True-up adjustments and expiration of tax carryforwards and credits	685	2,105
Other	181	143
Other, net	(14)	(18)
Total deferred income tax	37,040	40,154
Income tax expense (benefit)	$ (138)	$ 21
Less valuation allowance	(37,040)	(40,154)
Net deferred income tax	$ -	$ -

~~Worldwide~~The ~~income~~tax ~~before~~effects ~~income~~of ~~taxes~~temporary ~~consisted~~differences that give rise to significant portions of the ~~following~~deferred income tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

	2018	2017
	2019	2018
United States	$ 3,768	$ 1,370
Property and equipment, principally due to differences in depreciation	$ 85	$ 68
International	-	-
Inventory reserves and other inventory-related temporary basis differences	437	437
Total	$ 3,768	$ 1,370
Warranty, vacation, deferred rent and other liabilities	(446)	251
Retirement liabilities	504	543
Net operating loss carryforwards	35,205	35,532
Credit carryforwards	-	28
Other	956	181
Total deferred income tax	36,741	37,040
Less valuation allowance	(36,741)	(37,040)
Net deferred income tax	$ -	$ -

~~Income~~Worldwide ~~tax~~income ~~expense~~before ~~(benefit)~~income taxes consisted of the following:

	2018	2017
	2019	2018
Current
United States	$ (1,738)	$ 3,768
U.S. federal	$ (1)	$ (8)
International	-	-
State	22	(103)
Total	$ (1,738)	$ 3,768
Total current expense (benefit)	$ 21	$ (111)
Deferred
U.S. federal	$ 1,477	$ 23,012
State	1,637	2,081
Total	3,114	25,093
Valuation allowance increase	(3,114)	(25,093)
Total deferred expense (benefit)	-	-
Total income tax expense (benefit)	$ 21	$ (111)

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. 39

~~E&S~~Income ~~has total federal net operating loss carryforwards of approximately $161,541 which expire from 2020 through 2036. The Company has federal minimum~~ tax ~~credit~~expense carryforwards of approximately $28 which do not expire. The Company has $3,400 of federal research credits that begin to expire in 2019 and $1,100 of state research credits that begin to expire in 2019. The Company has not recorded a (benefit) ~~for~~consisted ~~these research credits in the financial statements because it does not meet the more-likely-than-not position recognition threshold. E&S also has state net operating loss carryforwards~~ of ~~approximately $34,500 that expire at various dates depending on~~ the ~~rules of the states to which the loss or credit is allocated.~~following:

	2019	2018
Current
U.S. federal	$ (28)	$ (1)
State	(110)	22
Total current expense (benefit)	$ (138)	$ 21
Deferred
U.S. federal	$ (297)	$ 1,477
State	595	1,637
Total	298	3,114
Valuation allowance increase	(298)	(3,114)
Total deferred expense (benefit)	-	-

Total income tax expense (benefit)	$ (138)	$ 21

The Company ~~evaluates~~recognizes ~~its~~the ~~deferred~~financial ~~tax~~statement ~~assets~~benefit ~~for realizability based on all~~ of ~~the~~a ~~available~~tax ~~positive~~position ~~and~~only ~~negative~~after ~~evidence.~~determining ~~Due~~that ~~to cumulative losses and~~ the ~~significance~~relevant oftax ~~the~~authority ~~carryforwards,~~would ~~the Company determined that it is~~ more likely than not ~~that~~sustain the ~~deferred~~position ~~tax~~following ~~assets~~an ~~will~~audit. ~~not~~For betax ~~realized.~~positions ~~Accordingly,~~meeting athe ~~valuation~~more-likely-than-not ~~allowance~~threshold, ~~has~~the ~~been~~amount ~~established~~recognized toin ~~offset~~ the ~~net~~financial ~~deferred~~statements ~~tax~~is ~~assets. During~~ the ~~years~~largest ~~ended~~benefit ~~December~~that ~~31,~~has ~~2018~~a ~~and~~greater ~~2017,~~than ~~the~~50 ~~valuation~~percent ~~allowance~~likelihood onof ~~deferred~~being ~~tax~~realized ~~assets~~upon ~~decreased~~ultimate bysettlement ~~$3,114~~with ~~and~~the ~~$25,093,~~relevant ~~respectively~~tax authority.

~~The~~E&S ~~Company~~has istotal ~~subject~~federal net operating loss carryforwards of approximately $162,300 which begin to ~~audit~~expire byin ~~the~~2020. ~~IRS~~The ~~and~~Company ~~various~~has ~~states~~federal ~~for~~minimum tax ~~years~~credit ~~dating~~carryforwards ~~back~~of toapproximately ~~2015~~$0 which do not expire. No The Company has $1,600 of federal orresearch credits that begin to expire in 2020 and $800 of state ~~tax~~research ~~returns~~credits ~~are~~that ~~currently~~begin ~~under~~to ~~audit~~expire in 2020. The Company ~~recognizes~~has ~~interest~~not ~~and~~recorded ~~penalties,~~a ifbenefit ~~any~~for these research credits in the financial statements because it does not meet the more-likely-than-not position recognition threshold. E&S also has state net operating loss carryforwards of approximately $23,900 ~~related~~that expire at various dates depending on the rules of the states to ~~unrecognized~~which ~~tax~~the ~~benefits~~loss inor ~~income~~credit ~~tax~~is ~~expense~~allocated.

~~Note~~The 10Company -evaluates ~~Commitments~~its deferred tax assets for realizability based on the available positive and ~~Contingencies~~negative evidence. Due to cumulative losses and the significance of the carryforwards, the Company determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a valuation allowance has been established to offset the net deferred tax assets. During the years ended December 31, 2019 and 2018, the valuation allowance on deferred tax assets decreased by $298 and $3,114, respectively.

~~Letters~~The ofCompany ~~Credit~~is subject to audit by the IRS and various states for tax years dating back to 2016. No federal or state tax returns are currently under audit. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

~~Under~~Note ~~the~~10 ~~terms~~- ofCommitments financing arrangements for letters of credit, E&S is required to maintain a balance in a specific cash account equal to or greater than the outstanding value of all letters of credit or bank guarantees issued, plus other amounts necessary to adequately secure obligations with the financial institution. As of December 31, 2017, there were outstanding letters of credit and ~~bank guarantees of $312 which expired in 2018. As of December 31, 2018, there were outstanding letters of credit and bank guarantees of $220 which are scheduled to expire in 2019.~~ Contingencies

~~Note~~Letters 11of ~~- Stock Option Plan~~Credit

InUnder ~~2014, stockholders approved~~ the ~~adoption~~terms of ~~the~~financing ~~Evans~~arrangements &for ~~Sutherland~~letters ~~Computer Corporation 2014 Stock Incentive Plan (“2014 Plan”) which replaced the expired 2004 Stock Incentive Plan~~ of ~~Evans~~credit, E&S ~~Sutherland~~is ~~Computer~~required ~~Corporation~~to ~~(“2004~~maintain ~~Plan”). The~~a ~~2014~~balance ~~Plan~~in is a ~~stock~~specific ~~incentive~~cash ~~plan~~account ~~that~~equal ~~provides for the grant of options and restricted stock awards~~ to ~~employees~~or ~~and~~greater ~~for~~than the ~~grant~~outstanding value of ~~options~~all toletters ~~non-employee~~of ~~directors~~credit ~~essentially~~or ~~the~~bank ~~same~~guarantees ~~as the 2004 Plan. Under the 2014 Plan~~issued, ~~non-employee~~plus ~~directors~~other ~~may~~amounts ~~continue~~necessary to ~~receive~~adequately ansecure ~~annual~~obligations ~~option~~with ~~grant~~the ~~for~~financial ~~no more than 10,000 shares~~institution. ~~New~~As ~~non-employee~~of ~~directors~~December ~~may~~31, ~~also continue to receive an option grant for no more than 10~~2018,~~000~~ ~~shares~~there ~~upon~~were ~~their~~outstanding ~~appointment~~letters ~~or election. With the adoption~~ of ~~the~~credit ~~2014 Plan, no additional options can be issued under the 2004 Plan. Options granted under the 2004 Plan are still held by recipients~~ and ~~will~~bank ~~continue~~guarantees ~~to be subject to the terms and conditions~~ of ~~the~~$220 ~~2004 plan~~ which are ~~essentially~~scheduled ~~the~~to ~~same~~expire asin ~~the 2014 Plan~~2019. ~~The~~As ~~2014 Plan continues a minimum exercise price for options~~ of ~~110%~~December of31, ~~fair~~2019, ~~market~~there ~~value~~was onan ~~the~~outstanding ~~date~~letter of ~~grant. Restricted~~credit ~~stock~~and ~~awards~~bank ~~may~~guarantee ~~be qualified as a performance-based award that conditions a participant’s award upon achievement by the Company or its subsidiaries~~ of ~~performance~~$31 ~~goals~~which ~~established~~is byscheduled ~~the~~to ~~Board~~expire ofin ~~Directors’~~January ~~Compensation Committee~~2021.

~~The~~Note ~~number~~11 ~~of shares, terms, and exercise periods of option grants are determined by the Board of Directors on an option~~-~~by-option~~ ~~basis.~~Stock ~~Options~~Option generally vest ratably over three years and expire ten years from the date of grant. As of December 31, 2018, options to purchase 1,001,781 shares of common stock were authorized and reserved for future grant. Plan

39In 2014, stockholders approved the adoption of the Evans & Sutherland Computer Corporation 2014 Stock Incentive Plan (“2014 Plan”) which replaced the expired 2004 Stock Incentive Plan of Evans & Sutherland Computer

~~A summary of activity follows (shares in thousands):~~40

	2018		2017
		Weighted-		Weighted-
		Average		Average
	Number	Exercise	Number	Exercise
	of Shares	Price	of Shares	Price
Outstanding as of beginning of the year	1,610	$ 0.66	1,625	$ 0.88
Granted	150	1.12	141	1.39
Exercised	-	-	-	-
Forfeited or expired	(163)	1.21	(156)	3.61
Outstanding as of end of the year	1,597	0.65	1,610	0.66
Exercisable as of end of the year	1,131	0.48	1,089	0.51

Corporation (“2004 Plan”). The 2014 Plan is a stock incentive plan that provides for the grant of options and restricted stock awards to employees and for the grant of options to non-employee directors essentially the same as the 2004 Plan. Under the 2014 Plan, non-employee directors may continue to receive an annual option grant for no more than 10,000 shares. New non-employee directors may also continue to receive an option grant for no more than 10,000 shares upon their appointment or election. With the adoption of the 2014 Plan, no additional options can be issued under the 2004 Plan. Options granted under the 2004 Plan are still held by recipients and will continue to be subject to the terms and conditions of the 2004 plan which are essentially the same as the 2014 Plan. The 2014 Plan continues a minimum exercise price for options of 110% of fair market value on the date of grant. Restricted stock awards may be qualified as a performance-based award that conditions a participant’s award upon achievement by the Company or its subsidiaries of performance goals established by the Board of Directors’ Compensation Committee.

The ~~weighted~~number ~~average fair value~~ of ~~options~~shares, ~~granted~~terms, ~~during 2018~~ and ~~2017~~exercise ~~was~~periods ~~$0.77~~of ~~and~~option ~~$1.14,~~grants ~~respectively. As~~are ofdetermined ~~December~~by ~~31,~~the ~~2018,~~Board ~~options~~of ~~exercisable~~Directors ~~and~~on ~~options~~an ~~outstanding~~option-by-option ~~had~~basis. aOptions ~~weighted~~generally ~~average~~vest ~~remaining~~ratably ~~contractual~~over ~~term~~three ofyears ~~4.7~~ and ~~5.7~~expire ten years ~~with~~from ~~aggregate~~the ~~intrinsic~~date ~~value~~ of ~~$385 and $385, respectively~~grant. As of December 31, ~~2017~~2019, options ~~exercisable~~to ~~and~~purchase ~~options~~876,981 ~~outstanding~~shares ~~had~~of acommon ~~weighted~~stock ~~average~~were ~~remaining~~authorized ~~contractual term of 4.4~~ and ~~5.8~~reserved ~~years~~for ~~with~~future ~~aggregate intrinsic value of $566 and $637, respectively~~grant.

~~The~~A ~~fair~~summary ~~value~~ of ~~each~~activity ~~option~~follows ~~grant~~(shares ~~is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for the grants made~~ in ~~2018 and 2017~~thousands):

	2018	2017
	2019		2018
Expected life (in years)	3.5	3.5
		Weighted-		Weighted-
Risk free interest rate	2.04%	1.47%
		Average		Average
Expected volatility	125%	175%
	Number	Exercise	Number	Exercise
	of Shares	Price	of Shares	Price
Outstanding as of beginning of the year	1,597	$ 0.65	1,610	$ 0.66
Granted	166	0.80	150	1.12
Exercised	(130)	0.17	-	-
Forfeited or expired	(41)	0.66	(163)	1.21
Outstanding as of end of the year	1,592	0.71	1,597	0.65
Exercisable as of end of the year	1,523	0.61	1,131	0.48

~~Expected~~The ~~option~~weighted ~~lives~~average ~~and~~fair ~~volatilities~~value ~~are~~of ~~based~~options ongranted ~~historical~~during ~~data~~2019 ofand ~~the~~2018 ~~Company~~was $0.40 and $0.77, respectively. ~~The~~As ~~risk~~of ~~free~~December ~~interest~~31, ~~rate~~2019, isoptions ~~calculated~~exercisable asand ~~the~~options outstanding had a weighted average USremaining ~~Treasury~~contractual ~~bill~~term ~~rate~~of ~~that~~4.7 ~~corresponds~~and 5.8 years with ~~the~~aggregate ~~option~~intrinsic ~~life~~value of $276 and $276, respectively. ~~Historically~~ As of December 31, ~~the~~2018, ~~Company~~options ~~has~~exercisable ~~not~~and ~~declared~~options ~~dividends~~outstanding had a weighted average remaining contractual term of 4.7 and ~~there~~5.7 ~~are~~years nowith ~~plans~~aggregate tointrinsic dovalue soof $385 and $385, respectively.

AsThe offair ~~December~~value ~~31, 2018, there was approximately $90~~ of ~~total~~each ~~unrecognized~~option ~~share-based~~grant ~~compensation~~is ~~cost~~estimated ~~related~~on tothe ~~grants~~date ~~collectively~~of ~~under~~ the ~~2004~~grant ~~Plan~~using ~~and~~the ~~2014~~Black-Scholes ~~Plan~~option-pricing ~~that~~model ~~will~~with bethe ~~recognized~~following ~~over a~~ weighted-average ~~period~~assumptions ofused ~~1.9~~for ~~years. As~~the ~~of December 31, 2017, there was approximately $140 of total unrecognized share-based compensation cost related to~~ grants ~~collectively~~made ~~under~~in ~~the~~2019 ~~2004 Plan~~ and ~~2014 Plan that will be recognized over a weighted-average period of 2.4 years.~~ 2018:

Share-based compensation expense, from awards collectively under the 2004 Plan and 2014 Plan for the years ended December 31, 2018 and 2017 amounted to $149 and $177, respectively, and was included in general and administrative expense on the statements of comprehensive income.

	2019	2018
Expected life (in years)	3.5	3.5
Risk free interest rate	2.6%	2.0%
Expected volatility	81.2%	125.0%
Dividend yield	-	-

~~Note~~Expected 12option lives and volatilities are based on historical data of the Company. The risk-free ~~Preferred~~interest ~~Stock~~rate is calculated as the average US Treasury bill rate that corresponds with the option life. Historically, the Company has not declared dividends and there are no plans to do so.

~~Class A Preferred Stock~~41

~~The~~As ~~Company~~of ~~has~~December 531,~~000~~ 2019,~~000~~ ~~authorized~~there ~~shares~~was approximately $76 of ~~Class~~total Aunrecognized ~~Preferred~~share-based ~~stock~~compensation cost related to grants collectively under the 2004 Plan and 2014 Plan that will be recognized over a weighted-average period of 1.9 years. As of December 31, 2018, there was approximately $90 of total unrecognized share-based compensation cost related to grants collectively under the 2004 Plan and ~~2017,~~2014 ~~there~~Plan ~~were~~that nowill ~~Class~~be Arecognized ~~Preferred~~over ~~shares~~a ~~outstanding~~weighted-average period of 1. 9 years.

40Share-based compensation expense, from awards collectively under the 2004 Plan and 2014 Plan for the years ended December 31, 2019 and 2018 amounted to $95 and $149, respectively, and was included in general and administrative expense on the statements of comprehensive income.

~~Class~~Note B12 - Preferred Stock

~~The Company has 5,000,000 authorized shares of~~ Class BA Preferred ~~stock. As of December 31, 2018 and 2017, there were no Class B Preferred shares outstanding.~~Stock

~~Note~~The 13Company -has ~~Significant~~5,000,000 ~~Customers~~authorized shares of Class A Preferred stock. As of December 31, 2019 and 2018, there were no Class A Preferred shares outstanding.

AsClass ofB ~~December~~Preferred ~~31, 2018, Customer D represented 24% of accounts receivable, and Customer E represented 10% of contract revenue in excess of billings.~~Stock

AsThe ofCompany ~~December~~has 315, ~~2017~~000,000 ~~Customers~~authorized Ashares ~~and~~of Class B ~~each~~Preferred ~~represented~~stock. As ~~10%~~ of ~~accounts~~December ~~receivable~~31, 2019 and ~~Customer~~2018, Cthere ~~represented~~were ~~30%~~no ofClass ~~contract~~B ~~revenue~~Preferred inshares ~~excess of billings~~outstanding.

~~For~~Note ~~the~~13 ~~year~~- ~~ended~~Significant ~~December~~Customers ~~31, 2018, no customers represented 10% or more of total sales. For the year ended December 31, 2017, Customer C represented 11% of total sales.~~

~~ITEM~~As 9.of ~~CHANGES~~December IN31, ~~AND~~2019, ~~DISAGREEMENTS~~Customer ~~WITH~~A ~~ACCOUNTANTS~~represented ON32% ~~ACCOUNTING~~and ~~AND~~Customer ~~FINANCIAL~~B ~~DISCLOSURE~~represented 10% of accounts receivable, and Customer C represented 16%, Customer D 17%, Customer E 13%, and Customer F 11% of contract revenue in excess of billings.

~~None~~As of December 31, 2018, Customer G represented 24% of accounts receivable, and Customer H represented 10% of contract revenue in excess of billings.

~~ITEM~~For ~~9A.~~the ~~CONTROLS~~years ~~AND~~ended ~~PROCEDURES~~December 31, 2019 and 2018, no customers represented 10% or more of total sales.

~~Evaluation~~Note of14 ~~Disclosure~~– Subsequent ~~Controls~~Events ~~and Procedures.~~

~~Under~~Merger ~~the~~Agreement ~~supervision~~ and ~~with~~Tender the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective at the reasonable assurance level such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any control system cannot provide absolute assurance, however, that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.Offer

~~Management~~On February 9, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Elevate Entertainment Inc., a Delaware corporation (“Elevate”), and Elevate Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Elevate (“Purchaser”). On February 27, 2020, Purchaser commenced a cash tender offer (the “Offer”) to purchase all of the outstanding shares (the “Shares”) of common stock of the Company at a price of $1.19 per Share, net to the seller in cash, without interest, and subject to applicable withholding taxes. The Offer expired at midnight (Eastern Time) at the end of the day March 25, 2020. As of the expiration of the tender offer period, approximately 10,576,487 Shares (excluding approximately 50,741 Shares subject to guaranteed delivery procedures) were properly tendered and not withdrawn in the Offer, representing approximately 92.1% of the aggregate number of the Company’s ~~Annual~~issued ~~Report~~and onoutstanding ~~Internal~~Shares. ~~Control~~On ~~over~~March ~~Financial~~26, ~~Reporting~~2020, Purchaser announced that it had accepted for purchase the tendered Shares and the termination of the Offer.

~~Our~~Pursuant ~~management~~to isthe ~~responsible~~terms ~~for~~of ~~establishing~~the ~~and~~Merger ~~maintaining~~Agreement ~~adequate~~and ~~internal~~in ~~control~~accordance ~~over~~with ~~financial~~applicable ~~reporting~~Utah ~~(as~~law, ~~defined~~Elevate inwill ~~Rule~~complete ~~13a~~a second-~~15(f)~~step ~~under~~merger ~~the~~that ~~Exchange~~will ~~Act).~~result ~~Our~~in ~~internal~~the ~~control~~Company ~~over~~becoming ~~financial~~a ~~reporting~~subsidiary isof aElevate. ~~process~~Elevate ~~designed~~and toits ~~provide~~subsidiary ~~reasonable~~intend ~~assurance~~to ~~regarding~~complete the ~~reliability~~merger ofand ~~financial~~acquisition ~~reporting~~of ~~and~~ the ~~preparation~~Company ofas ~~consolidated~~promptly ~~financial~~as ~~statements~~practicable ~~for~~without ~~external~~a ~~purposes~~meeting of UCompany shareholders.S. ~~generally~~In ~~accepted~~the ~~accounting~~merger, ~~principles. Because~~each of ~~its~~the ~~inherent~~remaining ~~limitations,~~Shares ~~internal~~will ~~control~~be ~~over~~converted ~~financial~~into ~~reporting~~the ~~may~~right ~~not~~to ~~prevent~~receive ~~or detect misstatements~~$1.19 ~~Therefore~~per Share, ~~even~~net ~~those systems determined~~ to bethe ~~effective~~shareholder ~~can~~in ~~provide~~cash, ~~only~~without ~~reasonable~~interest ~~assurance~~thereon ofand ~~achieving~~subject ~~their~~to ~~control~~any ~~objectives.~~applicable ~~Further~~tax withholding, ~~because~~which ofis ~~changes~~the insame ~~conditions,~~amount ~~the~~per ~~effectiveness~~Share ofthat ~~internal~~was ~~control~~paid ~~may~~in ~~vary~~the ~~over time~~Offer.

~~Our~~The ~~management,~~Impact ~~with the participation~~ of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (1992). Based on this evaluation, our COVID-19

4142

~~management,~~As ~~with~~of the ~~participation~~time of this filing the ~~Chief~~Company’s ~~Executive~~operating ~~Officer~~activities have been curtailed by the impact of COVID-19. Government directives have suspended manufacturing and ~~Chief~~limited ~~Financial~~workplace ~~Officer~~activities beginning March 23, ~~concluded~~2020. The Company has empowered its employees to work remotely wherever possible to minimize the disruption to Company operations. The Company has received no communications from customers that, asindicate cancellations. We have received some requests to postpone deliveries and we expect more which will extend the timing of ~~December~~revenue 31recognition and, ~~2018~~in some cases, customer payments. Public health directives from governments around the world are advising or prohibiting large gatherings to inhibit the spread of COVID-19. This has suspended the use of our ~~internal~~products ~~control~~for ~~over~~much ~~financial~~of ~~reporting~~our ~~was~~installed ~~effective~~customer ~~based~~base. Continued restrictions and the potential behavioral changes resulting from the impact of COVID-19 may continue to influence the demand for our products which typically attract a large audience. Also, the ongoing impact of COVID-19 on ~~those~~the ~~criteria~~world’s economy could ultimately have material adverse consequences to the Company; however, as of now, the Company is unable to determine the likelihood or degree of such adverse consequences.

~~This~~ITEM ~~annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting~~9. ~~Management’s~~CHANGES ~~report~~IN ~~was~~AND ~~not~~DISAGREEMENTS ~~subject~~WITH toACCOUNTANTS ~~attestation~~ON byACCOUNTING ~~the~~AND ~~Company’s~~FINANCIAL ~~independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.~~DISCLOSURE

~~Changes in Internal Control Over Financial Reporting~~None.

OnITEM ~~January 1, 2018, the Company’s subsidiary began processing inventory transactions on the integrated accounting software system it uses for all other transactions~~9A.CONTROLS ~~Prior~~AND to 2018 the subsidiary’s inventory and product bills of material were accounted for using a legacy system. This change was made to improve the efficiency of the accounting function through improved integration of all transactions. Also, transitioning off the legacy system provides better security and assurance of system support. The Company has made changes to its internal control over financial reporting in connection with this transition from the legacy system. PROCEDURES

~~Other~~Evaluation ~~than the improvements noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation~~ of ~~disclosure~~Disclosure ~~controls~~Controls and procedures discussed above that occurred during the year ended December 31, 2018, or subsequent to that date, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reportingProcedures. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

~~ITEM~~Under 9Bthe supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based ~~OTHER~~upon ~~INFORMATION~~that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective at the reasonable assurance level such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any control system cannot provide absolute assurance, however, that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

~~None~~Management’s Annual Report on Internal Control over Financial Reporting.

~~PART~~Our ~~III~~management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes of U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

~~ITEM~~Our 10management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019. In ~~DIRECTORS~~making this assessment, ~~EXECUTIVE~~our ~~OFFICERS~~management ~~AND~~used ~~cORPORATE~~the ~~gOVERNANCE~~criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (1992). Based on this evaluation, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2019, our internal control over financial reporting was effective based on those criteria.

~~Certain~~This ~~information~~annual ~~required~~report bydoes ~~Item~~not ~~401~~include ofan ~~Regulation~~attestation ~~S-K~~report ~~will be included under the caption “Election~~ of ~~Directors” in~~ the ~~Proxy~~Company’s ~~Statement~~independent ~~for~~registered ~~our~~public ~~2019~~accounting ~~Annual~~firm ~~Meeting~~regarding ofinternal ~~Stockholders~~control ~~and~~over ~~that~~financial ~~information is incorporated herein by reference~~reporting. ~~Information~~Management’s ~~required~~report bywas ~~Item~~not ~~405~~subject ofto Regulation S-K will be included under the caption “Compliance with Section 16(a) of the Securities Exchange Act of 1934” in the Proxy Statement for our 2019 Annual Meeting of Stockholders and that information is incorporated herein by reference. Certain information required by Item 401 of Regulation S-K is included in Part I of this Form 10-K under the caption “Executive Officers of the Registrant.” The information required by Item 407(c)(3), 407(d)(4) and 407(d)(5) of Regulation S-K will be included under the caption “Election of Directors” in the Proxy Statement for our 2019 Annual Meeting of Stockholders and that information is herein incorporated by reference.

~~Code of Ethics~~43

~~Evans~~attestation &by ~~Sutherland~~the ~~maintains~~Company’s ~~a Code of Ethics and Business Conduct which is applicable to all employees, including all officers, and including our~~ independent ~~non-employee~~registered ~~directors~~public ~~with~~accounting ~~regard~~firm topursuant ~~Evans & Sutherland related activities. The Code of Ethics and Business Conduct incorporates our guidelines designed~~ to ~~deter~~rules ~~wrongdoing and to promote honest and ethical conduct and compliance with applicable laws and regulations. It also incorporates our expectations~~ of ~~our employees that enable us to provide accurate and timely disclosure in our filings with~~ the Securities and Exchange Commission ~~and~~that ~~other~~permit ~~public~~the ~~communications. In~~Company ~~addition,~~to ~~they~~provide ~~incorporate~~only ~~our~~management’s ~~expectations~~report ofin ~~our~~this ~~employees~~annual ~~concerning prompt internal reporting of violations of our Code of Ethics and Business Conduct~~report.

~~The~~Changes ~~full~~in ~~text~~Internal ofControl ~~the~~Over ~~Evans~~Financial ~~& Sutherland Code of Ethics and Business Conduct is published on our Investors Relations website at www~~Reporting.~~es.com. We~~ intend to disclose future amendments to certain provisions of our Code of Ethics and Business Conduct or waivers of such provisions granted to executive officers and directors on this website within four business days following the date of such amendment or waiver.

42 There have been no changes in our internal control over financial reporting identified in connection with the evaluation of disclosure controls and procedures discussed above that occurred during the year ended December 31, 2019, or subsequent to that date, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

ITEM 119B.OTHER ~~EXECUTIVE COMPENSATION~~INFORMATION

The information required by this item will be included under the captions, “Executive Compensation,” and, “Election of Directors,” in the Proxy Statement for our 2019 Annual Meeting of Stockholders and that information is herein incorporated by reference.None

~~ITEM~~PART ~~12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~III

~~The~~ITEM ~~information required by Item 403 of Regulation S-K will be included under the caption~~10.DIRECTORS, ~~“Security~~EXECUTIVE ~~Ownership~~OFFICERS ofAND ~~Certain~~cORPORATE ~~Beneficial Owners and Management,” in the Proxy Statement for our 2019 Annual Meeting of Stockholders and that information is herein incorporated by reference.~~gOVERNANCE

Certain information required by Item 401 of Regulation S-K will be included under the caption “Election of Directors” in the Proxy Statement for our 2020 Annual Meeting of Stockholders and that information is incorporated herein by reference. Information required by Item 405 of Regulation S-K will be included under the caption “Compliance with Section 16(a) of the Securities ~~Authorized~~Exchange Act of 1934” in the Proxy Statement for ~~Issuance~~our ~~Under~~2020 ~~Equity~~Annual ~~Compensation~~Meeting ~~Plans~~of asStockholders and that information is incorporated herein by reference. Certain information required by Item 401 of ~~December~~Regulation 31S-K is included in Part I of this Form 10-K under the caption “Executive Officers of the Registrant.” The information required by Item 407(c)(3), ~~2018:~~407(d)(4) and 407(d)(5) of Regulation S-K will be included under the caption “Election of Directors” in the Proxy Statement for our 2020 Annual Meeting of Stockholders and that information is herein incorporated by reference.

			Number of securities
	Number of securities		remaining available for
	to be issued upon	Weighted average	future issuance
	exercise of	exercise price of	under equity compensation
	outstanding options,	outstanding options,	plans (excluding securities
	warrants and rights	warrants and rights	reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by
security holders	1,596,700	$ 0.65	1,001,781
Equity compensation plans not approved by
security holders	-	-	-
Total	1,596,700	$ 0.65	1,001,781

Code of Ethics

~~ITEM~~Evans 13& Sutherland maintains a Code of Ethics and Business Conduct which is applicable to all employees, including all officers, and including our independent non-employee directors with regard to Evans & Sutherland related activities. The ~~CERTAIN~~Code ~~RELATIONSHIPS~~of ~~AND~~Ethics ~~RELATED~~and ~~TRANSACTIONS~~Business Conduct incorporates our guidelines designed to deter wrongdoing and to promote honest and ethical conduct and compliance with applicable laws and regulations. It also incorporates our expectations of our employees that enable us to provide accurate and timely disclosure in our filings with the Securities and Exchange Commission and other public communications. In addition, ~~AND~~they ~~DIRECTOR~~incorporate ~~INDEPENDENCE~~our expectations of our employees concerning prompt internal reporting of violations of our Code of Ethics and Business Conduct.

The ~~information~~full ~~required~~text ~~by Item 404~~ of ~~Regulation~~the ~~S-K~~Evans ~~will~~& beSutherland ~~included~~Code ~~under~~of ~~the~~Ethics ~~caption, “Certain Relationships~~ and ~~Related~~Business ~~Party~~Conduct ~~Transactions,”~~is inpublished ~~the~~on ~~Proxy Statement for~~ our ~~2019~~Investors ~~Annual~~Relations ~~Meeting~~website ofat ~~Stockholders~~www.es.com. We ~~and~~intend ~~that~~to ~~information~~disclose isfuture ~~herein~~amendments ~~incorporated~~to bycertain ~~reference. The~~provisions ~~information~~of ~~required~~our byCode ~~Item 407(a)~~ of ~~Regulation~~Ethics ~~S-K~~and ~~will~~Business beConduct ~~included~~or ~~under~~waivers ~~the~~of ~~caption,~~such ~~“Election~~provisions ofgranted ~~Directors,”~~to inexecutive ~~the~~officers ~~Proxy~~and ~~Statement~~directors ~~for~~on ~~our~~this ~~2019~~website ~~Annual~~within ~~Meeting~~four ofbusiness ~~Stockholders~~days ~~and~~following ~~that~~the ~~information~~date isof ~~herein~~such ~~incorporated~~amendment byor ~~reference~~waiver.

ITEM 1411.EXECUTIVE ~~PRINCIPAL ACCOUNTANT FEES AND SERVICES~~COMPENSATION

The information required by this item will be included under the ~~caption~~captions, “~~Report~~Executive ofCompensation,” ~~the~~and, ~~Audit~~“Election ~~Committee~~ of ~~the Board of~~ Directors,” in the Proxy Statement for our ~~2019~~2020 Annual Meeting of Stockholders and that information is herein incorporated by reference.

4344

~~PART~~ITEM IV12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

~~ITEM~~The ~~15.~~information ~~EXHIBITS~~required ~~AND~~by ~~FINANCIAL~~Item ~~STATEMENT~~403 ~~SCHEDULES~~of Regulation S-K will be included under the caption, “Security Ownership of Certain Beneficial Owners and Management,” in the Proxy Statement for our 2020 Annual Meeting of Stockholders and that information is herein incorporated by reference.

~~(a)List~~Securities ofAuthorized ~~documents~~for ~~filed~~Issuance asUnder ~~part~~Equity Compensation Plans as of ~~this~~December ~~report~~ 31, 2019:

1.Financial Statements

			Number of securities
	Number of securities		remaining available for
	to be issued upon	Weighted average	future issuance
	exercise of	exercise price of	under equity compensation
	outstanding options,	outstanding options,	plans (excluding securities
	warrants and rights	warrants and rights	reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by
security holders	1,591,500	$ 0.71	876,981
Equity compensation plans not approved by
security holders	-	-	-
Total	1,591,500	$ 0.71	876,981

~~The~~ITEM ~~following~~13.CERTAIN ~~consolidated~~RELATIONSHIPS ~~financial~~AND ~~statements~~RELATED ~~are included in Part II~~TRANSACTIONS, ~~Item~~AND 8DIRECTOR ~~of this report on Form 10-K.~~INDEPENDENCE

~~·Consolidated~~The ~~Balance~~information ~~Sheets~~required asby Item 404 of ~~December~~Regulation 31S-K will be included under the caption, ~~2018~~“Certain Relationships and ~~2017~~ Related Party Transactions,” in the Proxy Statement for our 2020 Annual Meeting of Stockholders and that information is herein incorporated by reference. The information required by Item 407(a) of Regulation S-K will be included under the caption, “Election of Directors,” in the Proxy Statement for our 2020 Annual Meeting of Stockholders and that information is herein incorporated by reference.

~~·Consolidated~~ITEM ~~Statements~~14. PRINCIPAL ofACCOUNTANT ~~Comprehensive~~FEES ~~Income~~AND ~~for the Years Ended December 31, 2018 and 2017~~ SERVICES

~~·Consolidated~~The ~~Statements~~information ofrequired ~~Stockholders’~~by ~~Equity~~this ~~(Deficit)~~item ~~for~~will be included under the ~~Years~~caption, ~~Ended~~“Report ~~December~~of 31the Audit Committee of the Board of Directors,” ~~2018~~in the Proxy Statement for our 2020 Annual Meeting of Stockholders and ~~2017~~ that information is herein incorporated by reference.

~~·Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017~~ 45

~~·Notes~~PART ~~to Consolidated Financial Statements~~ IV

2ITEM 15.~~Financial~~EXHIBITS ~~Statement~~AND ~~Schedules~~ FINANCIAL STATEMENT SCHEDULES

~~There~~(a)List ~~are~~of nodocuments ~~schedules~~ filed ~~because~~as ofpart ~~the absence~~ of ~~conditions~~this ~~under which they are required or because the required information is presented in the consolidated financial statements or the notes thereto.~~report

31.~~Exhibits~~Financial Statements

~~Articles~~The following consolidated financial statements are included in Part II, Item 8 of ~~Incorporation~~this ~~and~~report ~~Bylaws~~on Form 10-K.

~~3.1.1Articles~~·Consolidated ofBalance ~~Incorporation,~~Sheets as ~~amended,~~of ~~filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 10-K, SEC File No. 000-08771, for the fiscal year ended~~ December 2531, ~~1987,~~2019 and ~~incorporated herein by reference.~~2018

~~3.1.2Amendments~~·Consolidated toStatements ~~Articles~~ of ~~Incorporation~~Comprehensive ~~filed~~Income ~~as Exhibit 3.1.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 10-K, SEC File No. 000-08771,~~ for the ~~fiscal~~Years ~~year~~Ended ~~ended~~ December 3031, ~~1988,~~2019 and ~~incorporated herein by reference.~~2018

~~3.1.3Certificate~~·Consolidated ofStatements ~~Designation, Preferences and Other Rights~~ of ~~the Class B-1 Preferred Stock of Evans & Sutherland Computer Corporation, filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation~~Stockholders’s ~~Form~~Equity ~~10-Q,~~(Deficit) ~~SEC File No. 000-08771,~~ for the ~~quarter~~Years ~~ended~~Ended ~~September~~December 2531, ~~1998,~~2019 and ~~incorporated herein by reference.~~2018

~~3.2.1Amended~~·Consolidated ~~and~~Statements ~~Restated Bylaws~~ of ~~Evans~~Cash &Flows ~~Sutherland Computer Corporation, filed as Exhibit 3.2 to Evans & Sutherland Computer Corporation’s Form 10-K~~ for the ~~year~~Years ~~ended~~Ended December 31, ~~2000,~~2019 and ~~incorporated herein by reference.~~2018

~~3.2.2Amendment~~·Notes ~~No. 1~~ to ~~the~~Consolidated ~~Amended~~Financial and Restated Bylaws of Evans & Sutherland Computer Corporation, filed as Exhibit 3.3 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2000, and incorporated herein by reference. Statements

3.2.~~3Amendment~~Financial ~~No.~~Statement 2 to the Amended and Restated Bylaws of Evans & Sutherland Computer Corporation, filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on November 31, 2015, and incorporated herein by reference.Schedules

~~Material~~There ~~contracts~~are no schedules filed because of the absence of conditions under which they are required or because the required information is presented in the consolidated financial statements or the notes thereto.

~~Management contracts and compensatory plans~~3.Exhibits

~~10.1Amended~~Articles ~~and~~of ~~Restated~~Incorporation Evans & Sutherland Computer Corporation’s Supplemental Executive Retirement Plan (SERP), dated May 16, 2002, filed as Exhibit 10.38 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2002, and ~~incorporated herein by reference.~~ Bylaws

443.1.1Articles of Incorporation, as amended, filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 10-K, SEC File No. 000-08771, for the fiscal year ended December 25, 1987, and incorporated herein by reference.

103.~~2Evans~~1.2Amendments &to ~~Sutherland~~Articles ~~Computer~~of ~~Corporation~~Incorporation ~~2014 Stock Incentive Plan,~~ filed as Exhibit 103.1.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 810-K, ~~filed~~SEC ~~with~~File No. 000-08771, for the ~~Commission~~fiscal onyear ~~May~~ended 16December 30, ~~2014~~1988, and incorporated herein by reference.

103.~~3Form~~1.3Certificate of ~~Incentive~~Designation, ~~Stock~~Preferences ~~Option~~and ~~Award~~Other ~~Agreement~~Rights ~~under~~of the Class B-1 Preferred Stock of Evans & Sutherland Computer Corporation ~~2014 Stock Incentive Plan~~, filed as Exhibit 103.21 to Evans & Sutherland Computer Corporation’s Form 810-KQ, ~~filed~~SEC ~~with~~File No. 000-08771, for the ~~Commission~~quarter onended ~~May 16~~September 25, ~~2014~~1998, and incorporated herein by reference.

103.~~4Form~~2.1Amended ofand ~~Non-Qualified~~Restated ~~Stock~~Bylaws ~~Option~~of ~~Award Agreement under the~~ Evans & Sutherland Computer Corporation ~~2014 Stock Incentive Plan~~, filed as Exhibit ~~10.~~3.2 to Evans & Sutherland Computer Corporation’s Form 810-K ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~May 16~~December 31, ~~2014~~2000, and incorporated herein by reference.

103.~~5Form~~2.2Amendment No. 1 to the Amended and Restated Bylaws of ~~Indemnification~~Evans ~~Agreement~~& Sutherland Computer Corporation, filed as Exhibit 103.13 to Evans & Sutherland Computer Corporation’s Form 810-K ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~September~~December 231, ~~2016~~2000, and incorporated herein by reference.

103.~~6Employment~~2.3Amendment ~~Agreement~~No. by2 to the Amended and ~~between~~Restated Bylaws of Evans & Sutherland Computer Corporation ~~and Jonathan Shaw~~, ~~dated September 2, 2016,~~ filed as Exhibit ~~10.~~3.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on ~~September~~November 231, ~~2016~~2015, and incorporated herein by reference.

103.~~7Employment~~2.4Amendment ~~Agreement~~No. by3 to Amended and ~~between~~Restated Bylaws of Evans & Sutherland Computer Corporation ~~and Kirk Johnson~~, ~~dated September 2, 2016,~~ filed as Exhibit 103.41 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on ~~September~~February 213, ~~2016,~~2020 and incorporated herein by reference.

~~10.8Employment~~Instruments ~~Agreement,~~defining ~~by and between Evans & Sutherland Computer Corporation and Paul Dailey, dated December 15, 2016, filed as Exhibit 10.9 to Evans & Sutherland Computer Corporation’s Form 10-K for~~ the ~~year~~rights ~~ended~~of ~~December~~security ~~31, 2016, and incorporated herein by reference.~~ holders

104.~~9First~~1Description ~~Amendment~~of tothe ~~Employment~~Registrant’s ~~Agreement,~~Securities byRegistered ~~and~~Pursuant ~~between Evans & Sutherland Computer Corporation and Jonathan Shaw, dated January 9, 2017 filed as Exhibit 10.10~~ to ~~Evans~~Section &12 ~~Sutherland~~of ~~Computer Corporation’s Form 10-K for~~ the ~~year~~Securities ~~ended December 31, 2016,~~ and ~~incorporated~~Exchange ~~herein~~Act byof ~~reference~~1934.

~~10.10First~~Material Amendment to Employment Agreement, by and between Evans & Sutherland Computer Corporation and Kirk Johnson, dated January 9, 2017, filed as Exhibit 10.11 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2016, and incorporated herein by reference. contracts

~~Other~~Management ~~material~~ contracts and compensatory plans

10.11Guaranty, dated April 28, 2006, by Evans and Sutherland Computer Corporation, filed as Exhibit 10.7 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference. 46

10.~~12Pledge~~1Amended ~~Agreement, dated April 28, 2006, by~~ and ~~between~~Restated Evans & Sutherland Computer Corporation,’s ~~Spitz,~~Supplemental ~~Inc.~~Executive ~~and~~Retirement ~~First~~Plan ~~Keystone~~(SERP), ~~Bank~~dated May 16, 2002, filed as Exhibit 10.838 to Evans & Sutherland Computer Corporation’s Form 10-QK for the ~~quarter~~year ended ~~June~~December 3031, ~~2006~~2002, and incorporated herein by reference.

10.~~13Security~~2Evans ~~Agreement,~~& ~~dated~~Sutherland ~~April~~Computer ~~28,~~Corporation ~~2006,~~2014 byStock ~~and~~Incentive ~~between Spitz~~Plan, ~~Inc. and First Keystone Bank,~~ filed as Exhibit 10.91 to Evans & Sutherland Computer Corporation’s Form 108-QK ~~for~~filed with the ~~quarter~~Commission ~~ended~~on ~~June~~May 3016, ~~2006~~2014, and incorporated herein by reference.

10.~~14Open-end~~3Form ~~Mortgage~~of ~~and~~Incentive ~~Security~~Stock ~~Agreement,~~Option ~~dated~~Award ~~April~~Agreement ~~28,~~under ~~2006,~~the byEvans ~~and~~& ~~between~~Sutherland ~~Spitz,~~Computer ~~Inc.~~Corporation ~~and~~2014 ~~First~~Stock ~~Keystone~~Incentive ~~Bank~~Plan, filed as Exhibit 10.102 to Evans & Sutherland Computer Corporation’s Form 108-QK ~~for~~filed with the ~~quarter~~Commission ~~ended~~on ~~June 30~~May 16, ~~2006~~2014, and incorporated herein by reference.

4510.4Form of Non-Qualified Stock Option Award Agreement under the Evans & Sutherland Computer Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.3 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on May 16, 2014, and incorporated herein by reference.

10.~~15Mortgage~~5Form ~~Note dated January 14, 2004,~~ of ~~Transnational~~Indemnification ~~Industries~~Agreement, ~~Inc. and Spitz, Inc. to First Keystone Bank~~ filed as Exhibit 10.251 to Evans & Sutherland Computer Corporation’s Form 108-K ~~for~~filed with the ~~year~~Commission ~~ended~~on ~~December~~September 312, ~~2006~~2016, and incorporated herein by reference.

10.~~16Open-End~~6Employment ~~Mortgage~~Agreement by and ~~Security~~between ~~Agreement~~Evans ~~dated~~& ~~January~~Sutherland ~~14,~~Computer ~~2004,~~Corporation ~~between~~and ~~Spitz~~Jonathan Shaw, ~~Inc.~~dated ~~and~~September ~~First~~2, ~~Keystone~~2016, ~~Bank~~ filed as Exhibit 10.263 to Evans & Sutherland Computer Corporation’s Form 108-K ~~for~~filed with the ~~year~~Commission ~~ended~~on ~~December~~September 312, ~~2006~~2016, and incorporated herein by reference.

10.~~17Loan~~7Employment Agreement ~~dated~~by asand ~~January~~between ~~14,~~Evans ~~2004,~~& ~~between~~Sutherland ~~First~~Computer ~~Keystone~~Corporation ~~Bank,~~and ~~Transnational~~Kirk ~~Industries~~Johnson, ~~Inc.~~dated ~~and~~September ~~Spitz~~2, ~~Inc~~2016, filed as Exhibit 10.274 to Evans & Sutherland Computer Corporation’s Form 108-K ~~for~~filed with the ~~year~~Commission ~~ended~~on ~~December~~September 312, ~~2006~~2016, and incorporated herein by reference.

10.~~18First~~8Employment ~~Modification~~ Agreement ~~to Mortgage Loan Agreements~~, ~~dated March 30 2007,~~ by and between Evans & Sutherland Computer Corporation, ~~Spitz,~~and ~~Inc.~~Paul ~~and~~Dailey, ~~First~~dated ~~Keystone~~December ~~Bank~~15, 2016, filed as Exhibit 10.289 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, ~~2006~~2016, and incorporated herein by reference.

10.~~19Guaranty,~~9First ~~dated~~Amendment ~~March~~to 30Employment Agreement, ~~2007~~ by and between Evans ~~and~~& Sutherland Computer Corporation and Jonathan Shaw, dated January 9, 2017 filed as Exhibit 10.3010 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, ~~2006~~2016, and incorporated herein by reference.

10.~~20First~~10First Amendment to ~~Sublease~~Employment Agreement ~~dated November 4~~, ~~2014,~~ by and between Evans & Sutherland Computer Corporation and ~~Wasatch~~Kirk ~~Research~~Johnson, ~~Park~~dated IJanuary 9, ~~LLC~~2017, filed as Exhibit 10.111 to Evans & Sutherland Computer Corporation’s Form 10-QK for the ~~quarter~~year ended ~~September~~December 2631, ~~2014~~2016, and incorporated herein by reference.

10.~~21 Line~~11Second ofAmendment ~~Credit~~to Employment Agreement, by and between ~~Spitz,~~Evans ~~Inc.~~& ~~and~~Sutherland ~~Bryn~~Computer ~~Mawr~~Corporation ~~Trust~~and ~~Company~~Jonathan Shaw, dated ~~March~~February 159, ~~2012~~2020, filed as Exhibit ~~10.2~~(e)(6) to Evans & Sutherland Computer Corporation’s ~~Form~~Schedule 1014D-Q9 ~~for~~filed with the ~~quarter~~Commission ~~ended~~on ~~September~~February 2627, ~~2014~~2020, and incorporated herein by reference.

10.~~22Settlement~~12First ~~Agreement,~~Amendment ~~dated~~to ~~April~~Employment 21Agreement, ~~2015,~~by and between ~~Pension Benefit Guaranty Corporation,~~ Evans & Sutherland Computer Corporation and ~~Spitz~~Paul Dailey, ~~Inc.~~dated February 9, 2020, filed as Exhibit ~~10.1~~(e)(7) to Evans & Sutherland Computer Corporation’s ~~Form~~Schedule 814D-K9 filed with the Commission on ~~April~~February 2427, ~~2015~~2020, and incorporated herein by reference.

10.~~23Agreement~~13Second ~~for~~Amendment ~~Appointment~~to ofEmployment ~~Trustee and Termination of Plan~~Agreement, ~~dated~~by ~~April~~and ~~21, 2015,~~ between ~~Pension~~Evans ~~Benefit~~& ~~Guaranty~~Sutherland Computer Corporation and ~~Evans~~Kirk &Johnson, ~~Sutherland~~dated ~~Computer~~February ~~Corporation~~9, 2020, filed as Exhibit ~~10.1~~(e)(8) to Evans & Sutherland Computer Corporation’s ~~Form~~Schedule 814D-K9 filed with the Commission on ~~April~~February 2427, ~~2015~~2020, and incorporated herein by reference.

10.24Security Agreement, dated April 21, 2015, between Pension Benefit Guaranty Corporation, Evans & Sutherland Computer Corporation and Spitz, Inc., filed as Exhibit 10.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on April 24, 2015, and incorporated herein by reference. 47

10.~~25Open-End~~14Transaction ~~Mortgage,~~Bonus ~~Security~~ Agreement, ~~Assignment~~by ofand ~~Leases~~between ~~and~~Evans ~~Rents~~& ~~and~~Sutherland ~~Fixture~~Computer ~~Filing,~~Corporation ~~dated~~and ~~April~~Jonathan 21Shaw, ~~2015,~~dated ~~executed~~February ~~by Spitz~~9, ~~Inc. in favor of Pension Benefit Guaranty Corporation~~2020, filed as Exhibit ~~10.1~~(e)(9) to Evans & Sutherland Computer Corporation’s ~~Form~~Schedule 814D-K9 filed with the Commission on ~~April~~February 2427, ~~2015~~2020, and incorporated herein by reference.

~~Subsidiaries~~10.15Transaction ofBonus Agreement, by and between Evans & Sutherland Computer Corporation and Paul Dailey, dated February 9, 2020, filed as Exhibit (e)(10) to Evans & Sutherland Computer Corporation’s Schedule 14D-9 filed with the ~~registrant~~Commission on February 27, 2020, and incorporated herein by reference.

2110.~~1Subsidiaries~~16Transaction ofBonus ~~Registrant~~Agreement, by and between Evans & Sutherland Computer Corporation and Kirk Johnson, dated February 9, 2020, filed as Exhibit ~~21.1~~(e)(11) to Evans & Sutherland Computer Corporation’s ~~Form~~Schedule 1014D-K9 ~~for~~filed with the ~~year~~Commission ~~ended~~on ~~December~~February 3127, ~~2016~~2020, and incorporated herein by reference.

~~Consent~~Other ofmaterial ~~experts and counsel~~contracts

2310.~~1Consent~~17Guaranty, ofdated ~~Independent~~April ~~Registered~~28, ~~Public~~2006, ~~Accounting~~by ~~Firm~~Evans and Sutherland Computer Corporation, filed as Exhibit 10.7 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference.

4610.18Pledge Agreement, dated April 28, 2006, by and between Evans & Sutherland Computer Corporation, Spitz, Inc. and First Keystone Bank, filed as Exhibit 10.8 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference.

~~Rule~~10.19Security ~~13a~~Agreement, dated April 28, 2006, by and between Spitz, Inc. and First Keystone Bank, filed as Exhibit 10.9 to Evans & Sutherland Computer Corporation’s Form 10-~~14(a)/15d-14(a)~~Q ~~Certifications~~for the quarter ended June 30, 2006, and incorporated herein by reference.

3110.~~1Certification~~20Open-end ofMortgage ~~Chief~~and ~~Executive~~Security ~~Officer~~Agreement, ~~pursuant~~dated toApril ~~Rule 13a-14(a)~~28, 2006, by and ~~Rule 15d-14(a)~~between ofSpitz, ~~the~~Inc. ~~Securities~~and ~~Exchange~~First ~~Act~~Keystone Bank, filed as ~~amended~~Exhibit 10.10 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended June 30, ~~filed~~2006, and incorporated herein by reference.

3110.~~2Certification~~21Mortgage Note dated January 14, 2004, of ~~Chief~~Transnational ~~Financial~~Industries, ~~Officer~~Inc. ~~pursuant~~and Spitz, Inc. to ~~Rule 13a-14(a)~~First ~~and~~Keystone ~~Rule 15d~~Bank filed as Exhibit 10.25 to Evans & Sutherland Computer Corporation’s Form 10-~~14(a)~~K offor the ~~Securities~~year ~~Exchange~~ended ~~Act~~December 31, ~~as amended~~2006, ~~filed~~and incorporated herein by reference.

~~Section~~10.22Open-End ~~1350~~Mortgage ~~Certifications~~and Security Agreement dated January 14, 2004, between Spitz, Inc. and First Keystone Bank filed as Exhibit 10.26 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2006, and incorporated herein by reference.

3210.~~1Certification~~23Loan ofAgreement ~~Chief~~dated ~~Executive~~as ~~Officer~~January ~~and~~14, ~~Chief~~2004, ~~Financial~~between ~~Officer~~First ~~Pursuant~~Keystone toBank, ~~18 U~~Transnational Industries, Inc.~~S.C.~~ ~~1350~~and Spitz, Inc filed as ~~adopted~~Exhibit ~~pursuant~~10.27 to ~~Section 906~~Evans of& ~~the~~Sutherland ~~Sarbanes~~Computer Corporation’s Form 10-~~Oxley~~K ~~Act~~for ofthe ~~2002~~year ended December 31, ~~filed~~2006, and incorporated herein by reference.

~~TRADEMARKS~~10.24First ~~USED~~Modification INAgreement ~~THIS~~to ~~FORM~~Mortgage Loan Agreements, dated March 30 2007, by and between Evans & Sutherland Computer Corporation, Spitz, Inc. and First Keystone Bank, filed as Exhibit 10.28 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2006, and incorporated herein by reference.

~~E&S~~10.25Guaranty, ~~Digistar~~dated March 30, ~~SciDome~~2007 by Evans and ~~NanoSeam~~Sutherland ~~are~~Computer ~~trademarks~~Corporation, orfiled ~~registered~~as ~~trademarks~~Exhibit of10.30 to Evans & Sutherland Computer Corporation’s orForm ~~Spitz. All~~10-K ~~other~~for ~~product,~~the ~~service,~~year orended ~~trade~~December ~~names~~31, or2006, ~~marks~~and ~~are~~incorporated ~~the~~herein ~~properties~~by ~~of their respective owners~~reference.

4710.26First Amendment to Sublease Agreement dated November 4, 2014, by and between Evans & Sutherland Computer Corporation and Wasatch Research Park I, LLC, filed as Exhibit 10.1 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended September 26, 2014 and incorporated herein by reference.

~~SIGNATURES~~48

~~Pursuant~~10.27Line toof ~~the~~Credit ~~requirements~~Agreement ofbetween ~~Section~~Spitz, 13Inc. orand ~~15(d)~~Bryn ofMawr ~~the~~Trust ~~Securities~~Company ~~Exchange~~dated ~~Act~~March ~~of 1934~~15, ~~the~~2012 ~~Registrant~~filed ~~has~~as ~~duly~~Exhibit ~~caused~~10.2 ~~this~~to ~~report~~Evans to& beSutherland ~~signed~~Computer onCorporation’s ~~its~~Form ~~behalf~~10-Q byfor the ~~undersigned~~quarter ended September 26, ~~thereunto~~2014 ~~duly~~and ~~authorized~~incorporated herein by reference.

~~EVANS~~10.28Settlement Agreement, dated April 21, 2015, between Pension Benefit Guaranty Corporation, Evans & ~~SUTHERLAND~~Sutherland ~~COMPUTER~~Computer ~~CORPORATION~~Corporation Byand /Spitz, Inc., filed as Exhibit 10.1 to Evans & Sutherland Computer Corporation’s/ ~~JONATHAN~~Form ~~SHAW~~8-K ~~Jonathan~~filed ~~Shaw~~with ~~Chief~~the ~~Executive~~Commission ~~Officer~~on April 24, 2015, and ~~Director~~incorporated herein by reference.

~~March~~10.29Agreement for Appointment of Trustee and Termination of Plan, dated April 21, 2015, between Pension Benefit Guaranty Corporation and Evans & Sutherland Computer Corporation, filed as Exhibit 10.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on April 24, ~~2019~~2015, and incorporated herein by reference.

~~Pursuant~~10.30Security toAgreement, ~~the~~dated ~~requirements~~April of21, ~~the~~2015, ~~Securities~~between ~~Exchange~~Pension ~~Act~~Benefit ofGuaranty ~~1934~~Corporation, ~~this~~Evans ~~report~~& ~~has~~Sutherland ~~been~~Computer ~~signed~~Corporation ~~below~~and bySpitz, ~~the~~Inc., ~~following~~filed ~~persons~~as onExhibit ~~behalf~~10.1 ofto ~~the~~Evans ~~Registrant~~& ~~and~~Sutherland inComputer Corporation’s Form 8-K filed with the ~~capacities~~Commission on April 24, 2015, and onincorporated ~~the~~herein ~~dates~~by ~~indicated.~~reference

Signature	Title	Date
/s/ Jonathan Shaw	Chief Executive Officer	March 8, 2019
Jonathan Shaw	and Director
	(Principal Executive Officer)
/s/ Paul L. Dailey	Chief Financial Officer	March 8, 2019
Paul L. Dailey	(Principal Financial Officer and Principal Accounting Officer)
/s/ L. Tim Pierce	Director	March 8, 2019
L. Tim Pierce
/s/ William Schneider, Jr.	Director	March 8, 2019
William Schneider, Jr.
/s/ James P. McCarthy	Director	March 8, 2019
James P. McCarthy
/s/ E. Michael Campbell	Director	March 8, 2019
E. Michael Campbell
/s/ William E. Stringham	Director	March 8, 2019
William E. Stringham

10.31Open-End Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing, dated April 21, 2015, executed by Spitz, Inc. in favor of Pension Benefit Guaranty Corporation, filed as Exhibit 10.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on April 24, 2015, and incorporated herein by reference.

4810.32Agreement and Plan of Merger, dated February 9, 2020, between Elevate Entertainment Inc., Elevate Acquisition Corporation, and Evans & Sutherland Computer Corporation, filed as Exhibit 2.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed with the Commission on February 13, 2020, and incorporated herein by reference.

Subsidiaries of the registrant

21.1Subsidiaries of Registrant, filed as Exhibit 21.1 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2016, and incorporated herein by reference.

Consent of experts and counsel

23.1Consent of Independent Registered Public Accounting Firm, filed herein.

Rule 13a-14(a)/15d-14(a) Certifications

31.1Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, filed herein.

31.2Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, filed herein.

Section 1350 Certifications

32.1Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein.

TRADEMARKS USED IN THIS FORM 10-K

E&S, Digistar, SciDome and NanoSeam are trademarks or registered trademarks of Evans & Sutherland Computer Corporation or Spitz. All other product, service, or trade names or marks are the properties of their respective owners.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

EVANS & SUTHERLAND COMPUTER CORPORATION

By /s/ JONATHAN SHAW

Jonathan Shaw

Chief Executive Officer and Director

March 30, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ JONATHAN SHAW
Jonathan Shaw

Chief Executive Officer
and Director
(Principal Executive Officer)

March 30, 2020

/s/ PAUL L. DAILEY

Paul L. Dailey

Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

March 30, 2020

/s/ L TIM PIERCE

L Tim Pierce

Director

March 30, 2020

/s/ WILLIAM SCHNEIDER, JR

William Schneider, Jr.

Director

March 30, 2020

/s/ E. MICHAEL CAMPBELL

E. Michael Campbell

Director

March 30, 2020

/s/ WILLIAM E. STRINGHAM

William E. Stringham

Director

March 30, 2020

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