UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2023

☐ 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: 001-35988

Vislink Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware

20-5856795

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

350 Clark Drive, Suite 125,

Mt. Olive, NJ 07828

(Address of Principal Executive Offices)

(908) 852-3700

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock par value $0.00001 per share		VISL		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 a shorter period than the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by a checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~May 15,~~November 8, 2023, the registrant’s common stock shares are ~~2,380,948~~2,387,596.

VISLINK TECHNOLOGIES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the ~~three~~nine months ended ~~March 31,~~September 30, 2023

	Page Number
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2822
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3229
Item 4. Controls and Procedures	3229

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	3330
Item 1A. Risk Factors	3330
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3331
Item 3. Defaults Upon Senior Securities	3331
Item 4. Mine Safety Disclosures	31
Item 5. Other Information	31
Item 6. Exhibits	32
SIGNATURES	33
~~Item 5. Other Information~~	33
~~Item 6. Exhibits~~	34
~~SIGNATURES~~	35

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

Index to Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2023 (unaudited) and December 31, 2022	3
Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss Income for the three and nine months ended ~~March 31,~~September 30, 2023, and 2022	4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended ~~March 31,~~September 30, 2023	5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended ~~March 31,~~September 30, 2022	56
Unaudited Condensed Consolidated Statements of Cash Flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and 2022	67
Notes to Unaudited Condensed Consolidated Financial Statements	79

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) (the “Report”) contains forward-looking statements regarding our business, financial condition, results of operations, and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar words and phrases are intended to identify forward-looking statements. However, this is not an all-inclusive list of words or phrases identifying forward-looking statements in this Report. Also, all information concerning future matters is forward-looking statements.

Although forward-looking statements in this Report reflect our management’s good faith judgment, such information is based on facts and circumstances we currently know. Forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from those discussed in or anticipated by the forward-looking statements. Without limitation, factors that could cause or contribute to such differences in results and outcomes include those discussed in this Report.

We file reports with the Securities and Exchange Commission (“SEC”), and those reports are available free of charge on our website (www.vislinktechnologies.com) under “About/Investor Information/SEC Filings.” The reports available include our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, which are available as soon as reasonably practicable after we electronically file such materials or furnish them to the SEC. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You can obtain additional information about the Public Reference Room’s operation by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site (www.sec.gov) containing reports, proxies, information statements, and other information regarding issuers ~~that~~who file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements to reflect any event or circumstance that may arise after the date of this Report. We urge you to carefully review and consider all the disclosures made in this Report.

REFERENCES TO VISLINK

In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “VISL,” “Vislink,” “the Company,” “we,” “us,” “our,” and similar references refer to Vislink Technologies, Inc., a Delaware corporation.

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

	March, 31			December 31,			September 30,			December 31,
	2023			2022			2023			2022
	(unaudited)						(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	14,044		$	25,627		$	7,240		$	25,627
Accounts receivable, net		6,385			6,007			7,407			6,007
Inventories, net		11,987			12,021			13,537			12,021
Investments held to maturity		10,789			—			10,920			—
Prepaid expenses and other current assets		1,029			1,232			2,033			1,232
Total current assets		44,234			44,887			41,137			44,887
Right of use assets, operating leases		1,008			1,075			716			1,075
Property and equipment, net		1,561			1,434			1,762			1,434
Intangible assets, net		4,156			4,400			4,156			4,400
Total assets	$	50,959		$	51,796		$	47,771		$	51,796
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,674		$	2,626		$	3,131		$	2,626
Accrued expenses		1,659			1,568			1,807			1,568
Notes payable		—			84			199			84
Operating lease obligations, current		433			455			372			455
Customer deposits and deferred revenue		1,291			1,540			2,205			1,540
Total current liabilities		6,057			6,273			7,714			6,273
Operating lease obligations, net of current portion		1,022			1,107			823			1,107
Deferred tax liabilities		708			764			600			764
Total liabilities		7,787			8,144			9,137			8,144
Commitments and contingencies (See Note 9)		-			-
Series A Preferred stock, $0.00001 par value per share: 47,500 shares authorized on March 31, 2023, and December 31, 2022, respectively; -0- and 47,419 shares issued and outstanding on March 31, 2023, and December 31, 2022, respectively.		—			—

Commitments and contingencies (See Note 13)								-			-
Series A Preferred stock, $0.00001 par value per share: -0- shares authorized on September 30, 2023, and December 31, 2022, respectively; -0- and 47,419 shares issued and outstanding on September 30, 2023, and December 31, 2022, respectively.								—			—
Stockholders’ equity
Preferred stock, $0.00001 par value per share: 10,000,000 shares authorized on March 31, 2023, and December 31, 2022, respectively		—			—
Common stock, $0.00001 par value per share, 100,000,000 shares authorized on March 31, 2023, and December 31, 2022, respectively: Common stock, 2,380,966 and 2,370,966 were issued, and 2,380,833 and 2,370,833 were outstanding on March 31, 2023, and December 31, 2022, respectively.		—			—
Preferred stock, $0.00001 par value per share: 10,000,000 shares authorized on September 30, 2023, and December 31, 2022, respectively								—			—
Common stock, $0.00001 par value per share, 100,000,000 shares authorized on September 30, 2023, and December 31, 2022, respectively: Common stock, 2,387,596 and 2,367,362 were issued, and 2,387,463 and 2,367,229 were outstanding on September 30, 2023, and December 31, 2022, respectively.								—			—
Additional paid-in capital		346,486			345,365			347,165			345,365
Accumulated other comprehensive loss		(1,182	)		(1,337	)		(1,401	)		(1,337	)
Treasury stock, at cost – 133 shares as of March 31, 2023, and December 31, 2022, respectively		(277	)		(277	)
Treasury stock, at cost – 133 shares as of September 30, 2023, and December 31, 2022, respectively								(277	)		(277	)
Accumulated deficit		(301,855	)		(300,099	)		(306,853	)		(300,099	)
Total stockholders’ equity		43,172			43,652			38,634			43,652
Total liabilities and stockholders’ equity	$	50,959		$	51,796		$	47,771		$	51,796

The accompanying notes are an integral part of these condensed consolidated financial statements.

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

OTHER COMPREHENSIVE LOSS

(IN THOUSANDS EXCEPT NET LOSS PER SHARE DATA)

							2023			2022			2023			2022
	2023			2022			For the Three Months Ended						For the Nine Months Ended
	For the Three Months Ended						September 30,						September 30,
	March 31,						2023			2022			2023			2022
	2023			2022
Revenue, net	$	7,188		$	6,860		$	7,179		$	7,123		$	19,410		$	20,749
Cost of revenue and operating expenses
Cost of components and personnel		3,314			3,423			3,302			3,616			8,977			10,225
Inventory valuation adjustments		129			96			176			207			480			404
General and administrative expenses		5,028			4,910			4,793			4,624			14,500			13,973
Research and development expenses		767			1,118			805			885			2,480			3,154
Impairment on right-of-use assets								83			88			83			88
Amortization and depreciation		298			457			311			502			913			1,424
Total cost of revenue and operating expenses		9,536			10,004			9,470			9,922			27,433			29,268
Loss from operations		(2,348	)		(3,144	)		(2,291	)		(2,799	)		(8,023	)		(8,519	)
Other income (expense)
Unrealized loss on investments in debt securities		(28	)		—
Unrealized loss on investments held to maturity								(4	)		—			(67	)		—
Gain on settlement of debt								—			17			—			26
Other income		341			326			(36	)		(9	)		294			307
Dividend income		91			—			104			—			323			—
Interest income, net		133			—			202			(3	)		555			(8	)
Total other income (expense)		537			326			266			5			1,105			325
Net loss before income taxes		(1,811	)		(2,818	)		(2,025	)		(2,794	)		(6,918	)		(8,194	)
Income taxes
Deferred tax benefits		55			51			55			54			164			161
Net loss	$	(1,756	)	$	(2,767	)	$	(1,970	)	$	(2,740	)	$	(6,754	)	$	(8,033	)

Basic and diluted loss per share	$	(0.80	)	$	(1.20	)	$	(0.83	)	$	(1.16	)	$	(2.84	)	$	(3.46	)
Weighted average number of shares outstanding:
Basic and diluted		2,375			2,291			2,382			2,370			2,377			2,322
Comprehensive loss:
Net loss	$	(1,756	)	$	(2,767	)	$	(1,970	)	$	(2,740	)	$	(6,754	)	$	(8,033	)
Unrealized gain (loss) on currency translation adjustment		155			(268	)		(364	)		746			(64	)		1,885
Comprehensive loss	$	(1,601	)	$	(3,035	)	$	(2,334	)	$	(1,994	)	$	(6,818	)	$	(6,148	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023 ~~AND 2022~~

(IN THOUSANDS, EXCEPT SHARE DATA)

Shares Amount Shares Amount Capital Income (Loss) Stock Deficit Total
Accumulated
Series A Additional Other
Preferred Stock Common Stock Paid In Comprehensive Treasury Accumulated
Shares Amount Shares Amount Capital Income (Loss) Stock Deficit Total

Three months ending September 30, 2023:

Balance, July 1, 2023 — $ — 2,377,362 $ — $ 346,822 $ (1,037 ) $ (277 ) $ (304,883 ) $ 40,625
Net loss — — — — — — — (1,970 ) (1,970 )
Unrealized loss on currency translation adjustment — — — — — (364 ) — — (364 )
Issuance of common stock in connection with:
Satisfaction with the conversion of restricted stock unit awards — — 10,234 — — — — — —
Stock-based compensation — — — — 343 — — — 343
Balance, September 30, 2023 — $ — 2,387,596 $ — $ 347,165 $ (1,401 ) $ (277 ) $ (306,853 ) $ 38,634

Nine months ending September 30, 2023:

Balance, January 1, 2023* 47,419 $ — 2,367,362 $ — $ 345,365 $ (1,337 ) $ (277 ) $ (300,099 ) $ 43,652
Net loss — — — — — — — (6,754 ) (6,754 )
Unrealized loss on currency translation adjustment — — — — — (64 ) — — (64 )
Elimination of Series A Preferred Stock (47,419 ) — — — — — — — —
Issuance of common stock in connection with:
Compensation awards for services previously accrued — — 10,000 — 200 — — — 200
Satisfaction with the conversion of restricted stock unit awards — — 10,234 — — — — — —
Stock-based compensation — — — — 1,600 — — — 1,600
Balance, September 30, 2023 — $ — 2,387,596 $ — $ 347,165 $ (1,401 ) $ (277 ) $ (306,853 ) $ 38,634
~~Three months ended March 31, 2023:~~

Accumulated
Series A Additional Other
Preferred Stock Common Stock Paid In Comprehensive Treasury Accumulated
Shares Amount Shares Amount Capital Income (Loss) Stock Deficit Total

Balance, January 1, 2023 47,419 $ — 2,370,948 $ — $ 345,365 $ (1,337 ) $ (277 ) $ (300,099 ) $ 43,652
Net loss — — — — — — — (1,756 ) (1,756 )
Unrealized gain on currency translation adjustment — — — — — 155 — — 155
Unrealized gain (loss) on currency translation adjustment - - 155 155
Elimination of Series A Preferred Stock (47,419 ) — — — — — — — —
Issuance of common stock in connection with:
Compensation awards for services previously accrued — — 10,000 — 200 — — — 200
Stock-based compensation — — — — 921 — — — 921
Balance, March 31, 2023 — $ — 2,380,948 $ — $ 346,486 $ (1,182 ) $ (277 ) $ (301,855 ) $ 43,172
~~Three months ended March 31, 2022:~~
Accumulated
Series A Additional Other
Preferred Stock Common Stock Paid In Comprehensive Treasury Accumulated
Shares Amount Shares Amount Capital Income (Loss) Stock Deficit Total

Balance, January 1, 2022 — $ — 2,291,254 $ — $ 343,746 $ (297 ) $ (277 ) $ (286,539 ) $ 56,633
Net loss — — — — — — — (2,767 ) (2,767 )
Unrealized loss on currency translation adjustment — — — — — (268 ) — — (268 )
Stock-based compensation — — — — 747 — — — 747
Balance, March 31, 2022 — $ — 2,291,254 $ — $ 344,493 $ (565 ) $ (277 ) $ (289,306 ) $ 54,345
* In connection with the reverse stock split implemented by the Company on May 1, 2023, the company’s stock transfer agent calculated a de minimus adjustment to the opening quantity of shares issued.

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED ~~CONDENSED~~ CONSOLIDATED ~~STATEMENTS~~STATEMENT OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
(IN ~~THOUSANDS)~~THOUSANDS, EXCEPT SHARE DATA)

2023 2022

Three Months Ended
March 31,

2023 2022
Cash flows used in operating activities
Net loss $ (1,756 ) $ (2,767 )
Adjustments to reconcile net loss to net cash used in operating activities
Deferred tax benefits (55 ) (51 )
Unrealized loss on fair value of investment in bonds held to maturity 28 —
Accretion of bond discount (54 ) —
Stock-based compensation 921 747
Provision for bad debt 27 6
Recovery of bad debt (448 ) (56 )
Inventory valuation adjustments 129 96
Amortization of right of use assets, operating assets 67 52
Depreciation and amortization 298 457
Changes in assets and liabilities
Accounts receivable 128 (408 )
Inventory 137 (2,208 )
Prepaid expenses and other current assets 213 383
Accounts payable (165 ) (184 )
Accrued expenses and interest expense 288 (333 )
Operating lease liabilities (106 ) (127 )
Deferred revenue and customer deposits (254 ) (486 )
Net cash used in operating activities (602 ) (4,879 )
Cash flows used in investing activities
Cash used for investment in securities held to maturity (10,763 ) —
Cash used for property and equipment (177 ) (209 )
Net cash used in investing activities (10,940 ) (209 )
Cash flows provided in financing activities
Principal payments made on notes payable (84 ) (99 )
Net used in financing activities (84 ) (99 )
Effect of exchange rate changes on cash 43 (21 )
Net decrease in cash and cash equivalents (11,583 ) (5,208 )
Cash and cash equivalents, beginning of period 25,627 36,231
Cash and cash equivalents, end of period $ 14,044 $ 31,023
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 33 $ 1
Supplemental disclosure of non-cash information:
Common stock issued in connection with:
Compensation awards previously accrued $ 200 $ —
ROU assets and operating lease obligations recognized (Note 6):
Operating lease assets recognized $ — —
Less: non-cash changes to operating lease assets
amortization (67 ) (52 )
ROU assets and operating lease obligations recognized $ (67 ) $ (52 )
Operating lease liabilities recognized $ — $ —
Less: non-cash changes to operating lease liabilities accretion (106 ) (127 )
Operating lease liabilities recognized $ (106 ) $ (127 )
Accumulated
Additional Other
Preferred Stock Common Stock Paid In Comprehensive Treasury Accumulated
Shares Amount Shares Amount Capital Loss Stock Deficit Total

Three months ending September 30, 2022:

Balance, July 1, 2022* — $ — 2,365,445 $ — $ 344,732 $ (1,436 ) $ (277 ) $ (291,832 ) $ 51,187
Net loss — — — — — — — (2,740 ) (2,740 )
Unrealized loss on currency translation adjustment — — — — — (746 ) — — (746 )
Issuance of common stock in connection with:
Satisfaction of accounts payable vendor balance — — 1,935 — 23 — — — 23
Satisfaction of withholding tax upon conversion of restricted stock units — — — — — — — — —
Satisfaction with the conversion of restricted stock units — — — — — — — — —
Stock-based compensation — — — — 315 — — — 315
Balance, September 30, 2022 — $ — 2,367,380 $ — $ 345,070 $ (2,182 ) $ (277 ) $ (294,572 ) $ 48,039

Nine months ending September 30, 2022:

Balance, January 1, 2022* — $ — 2,287,669 $ — $ 343,746 $ (297 ) $ (277 ) $ (286,539 ) $ 56,633
Balance — $ — 2,287,669 $ — $ 343,746 $ (297 ) $ (277 ) $ (286,539 ) $ 56,633

Net loss — — — — — — — (8,033 ) (8,033 )
Unrealized loss on currency translation adjustment — — — — — (1,885 ) — — (1,885 )
Satisfaction of accounts payable vendor balance — — 3,870 — 54 — — — 54
Satisfaction of withholding tax upon conversion of restricted stock units — — 17,889 — — — — — —
Satisfaction with the conversion of restricted stock units — — 57,952 — — — — — —
Stock-based compensation — — — — 1,270 — — — 1,270
Balance, September 30, 2022 — $ — 2,367,380 $ — $ 345,070 $ (2,182 ) $ (277 ) $ (294,572 ) $ 48,039
Balance — $ — 2,367,380 $ — $ 345,070 $ (2,182 ) $ (277 ) $ (294,572 ) $ 48,039
* In connection with the reverse stock split implemented by the Company on May 1, 2023, the Company’s stock transfer agent calculated a de minimus adjustment to the opening quantity of shares issued.

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
2023 2022

For the Nine Months Ended
September 30,

2023 2022

Cash flows used in operating activities
Net loss $ (6,754 ) $ (8,033 )
Adjustments to reconcile net loss to net cash used in operating activities
Gain on settlement of debt — (26 )
Deferred tax benefits (164 ) (161 )
Unrealized loss on the fair value of investments in bonds held to maturity 67 —
Accretion of bond discount (224 ) —
Stock-based compensation 1,600 1,270
Stock issuance commitments — 200
Provision for bad debt 64 19
Recovery of bad debt (8 ) (17 )
Inventory valuation adjustments 480 404
Amortization of right-of-use assets, operating assets 276 152
Depreciation and amortization 913 1,424
Impairment on right-of-use assets 83 88
Changes in assets and liabilities
Accounts receivable (1,400 ) (803 )
Inventories (1,598 ) (6,077 )
Prepaid expenses and other current assets (278 ) 1,695
Accounts payable 505 33
Accrued expenses 445 (1,555 )
Accrued Directors Compensation (5 ) —
Operating lease obligations (367 ) (464 )
Customer deposits and deferred revenue 373 84
Net cash used in operating activities (5,992 ) (11,767 )
Cash flows used in investing activities
Cash used for investments held to maturity (10,763 ) —
Cash used in asset acquisition (269 ) —
Cash used for property and equipment (502 ) (352 )
Net cash used in investing activities (11,534 ) (352 )
Cash flows used in financing activities
Principal payments made on notes payable (409 ) (791 )
Net cash used in financing activities (409 ) (791 )
Effect of exchange rate changes on cash (452 ) 1,155
Net decrease in cash and cash equivalents (18,387 ) (11,755 )
Cash and cash equivalents, beginning of the period 25,627 36,231
Cash and cash equivalents, end of the period $ 7,240 $ 24,476
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(IN THOUSANDS)

For the Nine Months Ended
September 30,

2023 2022

Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 11 $ 9
Supplemental disclosure of non-cash information:
Assets acquired in asset acquisition $ 561 $ —

Liabilities assumed in asset acquisition $ 292 $ —

Notes payable $ 523 $ 943
Common stock issued in connection with:
Settlement of accounts payable $ — $ 54
Compensation awards previously accrued $ 200 $ —
ROU assets and operating lease obligations recognized (Note 6):
Operating lease assets recognized $ — $ —
Less: non-cash changes to operating lease assets
amortization (276 ) (152 )
lease termination — (131 )
impairments (83 ) (43 )
loss on lease impairments $ 83 $ 88
ROU assets and operating lease obligations recognized (276 ) (238 )
Operating lease liabilities recognized $ — $ —
Less: non-cash changes to operating lease liabilities
accretion (367 ) (464 )
Operating lease liabilities recognized $ (367 ) $ (464 )
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

~~Vislink, incorporated~~Incorporated in Delaware in 2006, Vislink Technologies, Inc. (“Vislink”) is ~~a global~~an innovative technology ~~business specializing in collecting, delivering,~~company that collects, delivers and ~~managing high-quality, live~~manages real-time video ~~and associated data~~ from the action scene to the viewing screen. The Company designs, develops, and deploys innovative products and turnkey solutions that deliver reliable connectivity across real-time production, military, and government sectors worldwide in the most demanding environments. Vislink is a leader in designing and deploying wireless video solutions, providing customers with reliable and secure video and data transmission. The company is committed to delivering the latest technology and the highest quality products to meet its customers’ needs. Vislink provides solutions for collecting live news, sports, ~~entertainment,~~ and ~~news~~entertainment events for the broadcast markets. ~~Vislink also furnishes~~Our Mobile Viewpoint product line offers live streaming solutions that use bonded cellular, 5G, and AI-driven technologies to automate the ~~surveillance~~production of news and ~~defense markets with~~sports content. In addition to creating real-time video intelligence solutions, ~~using various tailored transmission products. The~~ Vislink ~~team also provides~~assists first responders, law enforcement agencies at all levels of government, and military organizations with increased situational awareness. Besides providing professional and technical services, ~~utilizing~~Vislink employs a ~~staff~~team of technology experts with decades of experience and applied knowledge ~~and real-world experience in the~~of terrestrial ~~microwave, satellite,~~microwaves, satellites, fiber ~~optic,~~optics, surveillance systems, and wireless communications systems ~~delivering~~to offer customers a ~~broad spectrum of customer solutions.~~
~~Live Broadcast:~~
Vislink delivers an extensive portfolio of solutions for live news, sports, and entertainment industries. These solutions include video collection, transmission, management, and distribution via microwave, satellite, cellular, I.P. (Internet Protocol), MESH, and bonded cellular/5G networks. We also provide solutions utilizing A.I. (Artificial Intelligence) technologies to provide automated news and sporting events coverage. With over 50 years in operation, Vislink has the expertise and technology portfolio to deliver fully integrated, seamless, end-to-end solutions.
Industry-wide contributors acknowledge Vislink’s live broadcast solutions. The transmission of most of all outside wireless broadcast video content uses our equipment, with over 200,000 systems installed worldwide. We work closely with the majority of the world’s broadcasters. Vislink wireless cameras and ultra-compact encoders help bring many of the world’s most prestigious sporting and entertainment events to life. Recent examples include globally watched international sporting contests, award shows, racing events, and annual music and cultural events.
~~Military And Government:~~
Vislink has developed high-quality solutions to meet surveillance and defense markets’ operational and industry challenges based on our knowledge of live video delivery. Vislink solutions are specifically designed with interagency cooperation, utilizing the internationally-recognized I.P. platform and a web interface for video delivery. Vislink provides comprehensive video, audio, and data communications solutions to law enforcement and the public safety community, including Airborne, Unmanned Systems, Maritime, and Tactical Mobile Command Posts. These solutions may include:
● ~~integrated suites of airborne downlink transmitters, receivers, and antenna systems~~
● ~~data and video connectivity for airborne, marine, and ground assets~~
● ~~UAV video distribution~~
● ~~flexible support for COFDM and bonded cellular/5G Networks~~
● ~~terrestrial point-to-point~~
● ~~tactical mobile command~~
● ~~IP-based, high-end encryption, full-duplex, real-time connectivity at extended operating ranges~~
● ~~high-throughput air/marine/ground-to-anywhere uplink and downlink systems~~
● ~~secure live streaming platforms for use in mobile and fixed assets~~
● ~~personal portable products~~
Vislink public safety and surveillance solutions are deployed worldwide, including throughout the U.S., Europe, and the Middle East, at the local, regional, and federal levels of operation, criminal investigation, crisis management, mobile command posts, and field operations. These solutions are designed to meet the demands of field operations, command centers, and central receiving sites. Short-range and long-range solutions are available in areas including established infrastructure and exceptionally remote regions, making valuable video intelligence available regardless of location.
~~Satellite Communications~~:
Over 30 years of technical expertise support Vislink’s satellite solutions. These solutions ensure robust, secure communications while delivering low transmission costs for any organization that needs high-quality, reliable satellite transmission. We offer turnkey solutions that begin with state-of-the-art coding, compression, and engine modulation and end with our robust, lightweight antenna systems. Vislink Satellite solutions focus heavily on being the smallest, lightest, and most efficient in their categories, making transportation and ease of use a key driver in the customer experience. Vislink offers an extensivewide range of satellite designs that allow customers to optimize bit rate, size, weight, and total cost. Our satellite systems are used extensively globally, with over 2,000 systems deployed by governments, militaries, and broadcasters. While we continue offering satellite solutions, we no longer invest in the engineering and product development necessary to stay relevant in the sector. We will continue to market and sell our current solutions but do not anticipate introducing further upgrades or features to our satellite product line.services.
7
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Nature of Operations (continues)~~
~~Connected Edge Solutions:~~
Vislink offers the hardware and software solutions needed to acquire, produce, contribute, and deliver video over all private and public networks with the Mobile Viewpoint acquisition. Connected edge solutions aid the video transport concept of ubiquitous IP networks and cloud-scale computing across 5G, WiFi6, Mesh, and COFDM-enabled networks. These solutions include:
● ~~Live video encoding, stream adaptation, decoding, and production solutions~~
● ~~Remote production workflows~~
● ~~Wireless cameras~~
● ~~AI-driven automated production~~
● ~~Ability to contribute video over:~~
○ ~~Bonded cellular (3G and 4G)~~
○ ~~Satellite~~
○ ~~Fiber~~
○ ~~Emerging networks, including 5G and Starlink~~

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements ~~are prepared under the United States generally accepted accounting principles (“US GAAP”) for interim financial information~~ and ~~following Form 10-Q and Regulation S-X instructions. Accordingly,~~ these ~~financial statements do not include all information or~~ notes ~~required by GAAP for annual financial statements. Read these financial statements~~should be viewed in conjunction with ~~the consolidated financial statements filed on the Company’s~~Vislink Technologies, Inc.’s 2022 Annual Report on Form 10-K, ~~for the year ended December 31, 2022,~~as filed with the ~~United States~~ Securities and Exchange Commission ~~(the “SEC”)~~ on March 31, ~~2023.~~2023, which contains the audited consolidated financial statements and notes thereto as of December 31, 2022. As of December 31, 2022, a condensed consolidated balance sheet was prepared based on audited annual financial statements but did not include all of the footnote disclosures from the annual financial statements. In the opinion of ~~management,~~ the Company, the accompanying unaudited condensed consolidated financial statements ~~included herein contain~~include all adjustments, consisting only of routine recurring adjustments, necessary ~~to present the Company’s consolidated~~for a fair statement of its financial position as of ~~March 31,~~September 30, 2023, ~~the results of its operations, and cash flow for the three months ended March 31, 2023, and 2022. Such adjustments are of a routine recurring nature. The~~as well as results of operations for the three months and nine months ended ~~March 31,~~September 30, 2023, ~~may~~and 2022, as well as cash flow for the nine months ended September 30, 2023, and 2022. For the nine months ended September 30, 2023, the results of operations are not ~~indicate~~necessarily indicative of the results for anthe entire year, any other interim period, or any future ~~year~~ period. Effective May 1, 2023, the Company effected a 1-for-20 reverse stock split of the common stock. All per-share numbers reflect the 1-for-20 reverse stock split. We have retroactively applied the reverse split throughout this quarterly report to all periods presented. The accounting policies of Vislink have not materially changed since December 31, 2022. Note 3 of Vislink’s 2022 annual report on Form 10-K provides detailed information about these policies.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America or (“U.S. GAAP”) as found in the Accounting Standards Codification (“ASC”), the Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and the rules and regulations of the USU.S. Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its ~~wholly-owned~~wholly owned subsidiaries. ~~We have~~The Company has eliminated all intercompany accounts and transactions upon consolidating our subsidiaries.

Segment Reporting

The Company identifies operating segments as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision-makers, or decision-making group, in deciding how to allocate resources and assess performance. The Company’s decision-making group is the senior executive management team. The Company and the decision-making group view the Company’s operations and manage its business as one operating segment with different product offerings. All long-lived assets of the Company reside in the ~~U.S., the U.K.,~~United States, United Kingdom, and the Netherlands.
9
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. These estimates also affect the reported revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of property, plant, and equipment, the useful lives of right-of-use assets, the useful lives of intangible assets, impairment of long-lived assets, allowance for accounts receivable doubtful accounts, allowance for inventory obsolescence reserve, allowance for deferred tax assets, valuation of warranty reserves, contingent consideration liabilities, and the accrual of potential liabilities. Actual results could differ from estimates, and any such differences may be material to our unaudited condensed consolidated financial statements.
8
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Risks and Uncertainties~~
Risks and uncertainties include but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions (including recessionary pressures, decreases in consumer spending power or confidence, and significant uncertainty in the global economy and capital markets resulting from rising inflation, volatility in energy and commodity prices, the impact of the Russia-Ukraine war, increasing diplomatic and trade friction between the U.S. and China, and related supply chain issues), risks arising from epidemic diseases or pandemics, potential adverse effects to our and our customers’ liquidity and financial performances from bank failures or other events affecting financial institutions.
To mitigate such possibilities, we may align our product pricing and cost structure with changes in customer demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness, and other developments. We monitor the circumstances mentioned above to assess direct material adverse effects on our business, financial condition, or results of operations. Therefore, these impacts may change accounting estimates and assumptions over time. Interim period results are not necessarily indicative of the expected results for the full fiscal year.
~~Cash and Cash Equivalents~~
The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist of unrestricted funds invested in a money market mutual fund. The following table illustrates the Company’s cash and cash equivalents:
~~SCHEDULE OF CASH AND CASH EQUIVALENTS~~
3/31/23 12/31/22

Cash on hand $ 2,741,000 $ 25,627,000

Federal-backed mutual funds 11,303,000 —

Cash and cash equivalents $ 14,044,000 $ 25,627,000

Allowance for ~~credit losses~~Credit Losses

Change in accounting principles

In June 2016, the FASB established Topic 326, Financial Instruments—Credit Losses, Measurement of Credit Losses on Financial Instruments (ASU) No. 2016-13, which requires a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates, including accounts receivable.

The standard replaces the existing incurred credit loss model with the Current Expected Credit Losses (“CECL”) model. It is required to measure credit losses based on the Company’s estimate of expected losses rather than incurred losses, which generally results in earlier recognition of allowances for credit losses. Under ASC 326, the Company evaluates specific criteria, including aging and historical write-offs, the current economic condition of ~~particular~~ customers, and future economic conditions of countries utilizing a consumption index to determine the appropriate allowance for credit losses. The Company completed its assessment of the new standard and did not adjust the opening balance of retained earnings relating to its trade receivables. The Company writes off receivables once it is determined that they are no longer collectible, as local laws allow.

~~Inventories~~
Inventories consist of raw materials, work-in-process, and finished goods and are recorded at the lower of cost, on a first-in, first-out basis, or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable completion, disposal, and transportation costs. The Company evaluates inventory balances and either writes down obsolete inventory or records a reserve for slow-moving or excess inventory based on net realizable value analysis.
9
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Revenue Recognition~~
We account for the Company’s operating results under ASC Topic 606, adopted on January 1, 2019. It is a comprehensive revenue recognition model that requires recognition when the Company transfers control of the promised goods or services to our customers at an amount that reflects the consideration we expect to receive. The application of ASC Topic 606 requires us to use more judgment and make more estimates than under previously issued guidance.
The Company generates all its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation by transferring control of the promised goods or services to a customer in an amount that reflects the consideration we expect to receive in exchange for those services.
~~The Company determines revenue recognition through the following steps:~~
~~1. Identification of the contract, or contracts, with a customer.~~
~~2. Identification of the performance obligations in the contract.~~
~~3. Determination of the transaction price.~~
~~4. Allocation of the transaction price to the performance obligations in the contract; and~~
~~5. Recognition of revenue when, or as, we satisfy a performance obligation.~~
At contract inception, the Company assesses the goods and services promised in our customer contracts and identifies a performance obligation for each. To determine the performance obligations, the Company considers all the products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. We measure revenue as the consideration we expect to receive in exchange for transferring goods and services. The value-added sales taxes and other charges we collect concurrent with revenue-producing activities are excluded from income.
~~Remaining Performance Obligations:~~
The remaining performance obligations, or backlog, represent the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less.
~~Intangible Assets~~
~~Patents and licenses~~:
Patents and licenses, measured initially at purchase cost, are included in intangible assets on the Company’s balance sheet and are amortized on a straight-line basis over their estimated useful lives of ~~18.5~~ to 20 ~~years.~~
~~Other intangible assets:~~
The Company’s remaining intangible assets include the trade names, technology, and customer lists acquired in IMT, Vislink, and Mobile Viewpoint Corporate B.V., a third-party appraiser, determined the value of these acquired assets for these business combinations. Absent an indication of fair value from a potential buyer or similar specific transactions, we have determined that using the methods employed provided a reasonable estimate in reporting the values assigned.
10
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Leases~~Asset Acquisitions

The Company determines if an arrangement is a lease at inception. The Company recognizes lease expense for lease payments on a straight-line basis over the lease term. The Company includes operating leases as “Rightevaluates acquisitions of use assets, operating leases” (“ROU”) in the consolidated balance sheets. For lease liabilities, operating lease liabilities are included in “Operating lease obligations, current” and “Operating lease liabilities, net of current portion” in the consolidated balance sheets. The Company recognizes operating lease ROU assets and ~~liabilities on~~other similar transactions to assess whether or not the ~~commencement date based on~~transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the ~~present value of lease payments for all leases with a term longer than 12 months. No lease and non-lease components are separated for all our real estate contracts.~~
There were no capital leases, now titled “finance leases” under ASC 842, in the Company’s lease portfolio as of March 31, 2023. The ROU assets and related lease liabilities recorded under ASC 842 are calculated based on the presentfair value of the lease payments using (1) the rate implicit in the lease or (2) the lessee’s incremental borrowing rate (“IBR”), defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease paymentsgross assets acquired is concentrated in a ~~comparable economic environment. As most~~single identifiable asset or group of ~~our leases do~~similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, ~~provide~~further determination is required as to whether or not the Company has acquired inputs and processes that can create outputs that would meet the definition of a business. Significant judgment is required in applying the screen test to determine whether an ~~implicit rate, we generally use our incremental borrowing rates based on~~acquisition is a business combination or an ~~analysis~~acquisition of ~~prior collateralized borrowings over similar terms of the lease payments at the commencement date to estimate the IBR under ASC 842.~~
~~Stock-Based Compensation~~assets.

The ~~Company accounts~~accounting for ~~stock compensation with persons classified as employees for accounting purposes~~asset acquisitions falls under ~~ASC 718 “Compensation-Stock Compensation,” which recognizes awards at~~the guidance of Topic 805, Business Combinations, specifically Subtopic 805-50. For asset acquisitions, a cost accumulation model is used to determine an asset acquisition’s cost. Assets acquired are based on their cost generally allocated to the assets on a relative fair value onbasis. Direct acquisition-related costs are included in the ~~date~~cost of ~~grant and recognition of compensation over~~ the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes Option Pricing Model, and the fair value of common stock issued for services is determined based on the Company’s stock price on the issuance date.acquired assets.

The expansion of Topic 718 fell under ASU 2018-07 to include share-based payment transactions for acquiring goods and services from non-employees. The measurement date for equity-classified non-employee share-based payment awards is no longer at the earlier date at which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. Instead, the grant date is now considered the measurement date. Under today’s guidance, the measurement of non-employee share-based payment awards with performance conditions is at the lowest aggregate fair value, often resulting in a zero value. The new ASU aligns the accounting for nonemployee share-based payment awards with performance conditions with accounting for employee share-based payment awards under Topic 718 by requiring entities to consider the probability of satisfying performance conditions. Current guidance requires entities to use the contractual term to measure the non-employee share-based payment awards. The new ASU allows entities to make an award-by-award election to use the expected duration (consistent with employee share-based payment awards) or the contractual term for non-employee awards.
~~Stock-Option Awards — Time-based and performance-based:~~
Under ASC Topic 718, the compensation cost is measured based on an award’s fair value at the grant’s date for the time vested option award using the Black Scholes-Merton formula as a valuation technique. The Company used the U.S. Treasury note’s rate over the expected option term for the risk-free rate. Employees’ expected term represents the period that options granted are expected to be outstanding using the simplified method. The Company’s historical share option exercise experience does not provide a reasonable basis for estimating the expected term. For non-employee options, the expected term is the entire term. Expected volatility is based on the average weekly share price changes over the shorter expected term or the period from the Nasdaq Capital Markets Exchange placement to the grant’s date. The Company estimates forfeiture and volatility using historical information. The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues over the options’ equivalent lives.
The Company has not paid dividends on its common stock, and no assumption of dividend payment(s) is made in the model. For employee equity-classified awards, compensation cost is recognized over the employee’s requisite service period with a corresponding credit to additional paid-in capital. The employee’s requisite service period begins at the service inception date and ends when the requisite service has been provided.
~~Restricted Stock Unit Awards (“RSUs”) — Time-Based:~~
Under ASC 718, the exercise price for RSUs is determined using the fair market value of the Company’s common stock on the grant date. For an award with graded vesting subject only to a service condition (e.g., time-based vesting), ASC 718-10-35-8 provides an accounting policy choice between graded vesting attribution or straight-line attribution. The Company elects the graded vesting method, recognizing compensation expense for only the portion of awards expected to vest. Forfeitures of time-based units and awards are recognized as they occur. Stock-based compensation costs are calculated using the closing stock price on the grant date to estimate the fair value of time-based restricted stock units.
11
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Stock-Based Compensation (continued)~~
~~Restricted Stock Unit Awards (“RSUs”) — Performance-Based:~~
The accruals of compensation cost for an award with a performance condition are related to that performance condition’s probable outcome. Under ASC 718, a “performance condition” is the achievement of a specified target that is defined by referring to the employer’s operations or activities, such as an option that vests if the employer’s growth rate increases by a certain amount or there are the attainments of regulatory approval for a product. There is an accrual of compensation cost upon the likely achievement of the performance condition, and there is no accrual if the accomplishment of the performance condition is not probable. The exercise price for RSUs is determined using the fair market value of the Company’s common stock on the grant date. Stock-based compensation costs are calculated using the closing stock price on the grant date to estimate performance-based restricted stock units’ fair value.
~~Loss Per Share~~
The Company reports loss per share under ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. The basic loss per share calculation divides the net loss allocable to common stockholders by the weighted-average shares of common stock outstanding during the period without considering common stock equivalents. The diluted loss per share calculation is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants, outstanding for the period determined using the treasury stock method. For the diluted net loss per share calculation, common stock equivalents are excluded from the calculation because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common stockholders is the same for periods with a net loss.
~~The following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of loss per share (in thousands):~~
~~SCHEDULE OF ANTI-DILIUTIVE POTENTIAL COMMON STOCK EQUIVALENTS EXCLUDE FROM THE CALCULATION OF LOSS PER SHARE~~
2023 2022
Three Months Ended
March 31,
2023 2022
Anti-dilutive potential common stock equivalents are excluded from the calculation of loss per share:
Stock options 78 26
Warrants 459 459
Total 537 485
~~Fair Value of Financial Instruments~~
The authoritative guidance for fair value measurements under topic ASC 820, “Fair Value Measurements and Disclosures,” establishes a three-tier fair value hierarchy, prioritizing the inputs used in measuring fair value. These tiers include:
● ~~Level 1 is observable inputs such as quoted prices in active markets.~~
● ~~Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and~~
● ~~Level 3 is defined as unobservable inputs with little or no market data, requiring an entity to develop its assumptions.~~
Our financial instruments include cash equivalents, accounts receivable, investments, prepaid expenses and other assets, accounts payable, accrued expenses, and short-term debt. Fair value estimates of these instruments are made at a specific point in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The carrying amount of cash equivalents, accounts receivable, investments, prepaid expenses, and other assets, accounts payable, and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments.
12
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
~~Fair Value of Financial Instruments (continued)~~
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Effective January 1, 2020, the Company adopted the provisions of ASU 2018-13. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures. As of March 31, 2023, the Company had level 2 fair value assets (see Note 3).
~~Foreign Currency and Other Comprehensive (Gains) Loss~~
We record gains or losses resulting from foreign currency transactions in foreign currency income or loss except for the effect of exchange rates on long-term inter-company transactions that are considered long-term investments that are accumulated and credited or charged to other comprehensive income. We have two foreign subsidiaries, one in the United Kingdom and the other in the Netherlands, and their functional currencies are British Pounds and Euros, respectively. The translation from the respective foreign currency to United States Dollars (“US Dollars”) is performed for balance sheet accounts using current exchange rates at the balance sheet date and for income statement accounts using an average exchange rate for the three months ending March 31, 2023, and 2022, respectively. We included gains or losses from such translation as a separate component of accumulated other comprehensive (loss) income.
Transaction gains and losses are recognized in our operations’ results based on the difference between the foreign exchange rates on the transaction date and the reporting date. The foreign currency exchange gains and losses are a component of general and administrative expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations.
~~The Company has recognized foreign exchange gains and losses and changes in accumulated comprehensive income approximately as follows:~~
~~SCHEDULE OF FOREIGN EXCHANGE AND CHANGE IN ACCUMULATED COMPREHENSIVE INCOME~~
2023 2022
Three months ended
March 31,
2023 2022
Net foreign exchange transactions:
(Gains) Losses $ (44,000 ) $ 16,000
Net foreign exchange transactions: Losses $ (44,000 ) $ 16,000

Accumulated comprehensive income:
Unrealized (gains) losses on currency translation adjustment $ (155,000 ) $ 268,000
The exchange rates adopted for the foreign exchange transactions are quoted on OANDA, a Canadian-based foreign exchange company, and an internet website providing currency conversion, online retail foreign exchange trading, foreign currency transfers, and forex information. The Company translated amounts from British Pounds into United States Dollars and Euros to British Pounds at the following exchange rates for the respective periods:
● ~~As of March 31, 2023 – £~~ ~~1.236707~~ ~~to $1.00; €~~ ~~1.0877060~~ $~~1.00~~
● ~~The average exchange rate for the three months ended March 31, 2023 – £~~ ~~1.2147249~~ ~~to $1.00; €~~ ~~1.0727193~~ ~~to $1.00~~
● ~~As of March 31, 2022 – £1.3132500~~ ~~to $1.00; €0.8462040~~ ~~to £1.00~~
● ~~The average exchange rate for the three months ended March 31, 2022 – £1.3413086~~ ~~to $1.00; €0.8361689~~ ~~to £1.00~~
~~Subsequent Events~~
Management has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein except as disclosed.
On March 31, 2023, the Company entered into an agreed separation with Michael Bond, the former Chief Financial Officer. Effective April 1, 2023, Paul Norridge became the Company’s new Chief Financial Officer.
13
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~
Recently Issued Accounting Principles

Recent Accounting Pronouncements

Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

10
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 2 — LIQUIDITY AND FINANCIAL CONDITION

~~The~~For the nine months ended September 30, 2023, the Company incurred an approximate loss of $~~2.3~~8.0 million ~~loss~~ from operations and used $~~0.6~~6.0 million of cash ~~used in operating activities~~ for operational purposes. On September 30, 2023, the ~~three months ended March 31, 2023. The~~ Company had $~~38.2~~33.4 million in working capital, $~~301.9~~306.9 million in accumulated deficits, and $~~14.0~~7.2 million ~~of cash and cash equivalents as of March 31, 2023.~~in cash.

During the first quarter of 2023, the Company invested ~~a portion~~approximately $10.8 million of its cash reserves ~~of approximately $10.8~~ ~~million~~ in Federal bonds ~~intended to be held to maturity,~~ and $11.3 million in Federally ~~backed~~insured money market mutual funds, ~~with the primary purpose of seeking~~primarily to increase investment ~~income.~~income (Note 6). In the third quarter of 2023, the Company entered into an asset purchase agreement with BMS, LLC, acquiring inventory and assuming certain liabilities in exchange for $200,000 in cash consideration paid at the transaction’s closing on October 2, 2023 (See Note 7).

~~Many factors may impact the~~The Company’s liquidity ~~requirements.~~requirements may be affected by a variety of factors. These ~~may~~factors include ~~but are not limited to economic conditions, including~~ inflation, foreign exchange fluctuations, ~~and the markets in which we compete or wish to enter,~~market conditions, strategic acquisitions, ~~our~~ market strategy, ~~our~~ research and development activities, regulatory matters, and ~~technology~~product and ~~product~~technology innovations. The Company believes it will have sufficient funds to continue ~~its~~ operations for at least twelve months from the filing date of these unaudited condensed consolidated financial statements.
NOTE 3 — LOSS PER SHARE
The following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of loss per share (in thousands):
SCHEDULE OF ANTI-DILIUTIVE POTENTIAL COMMON STOCK EQUIVALENTS EXCLUDE FROM THE CALCULATION OF LOSS PER SHARE
2023 2022
Nine months ended
September 30
2023 2022
Anti-dilutive potential common stock equivalents excluded from the calculation of loss per share:
Stock options 76 35
Warrants 456 459
Total 532 494
NOTE 4 — FOREIGN CURRENCY AND OTHER COMPREHENSIVE (GAINS) LOSSES
The Company has recognized foreign exchange gains and losses and changes in accumulated comprehensive income approximately as follows:
SCHEDULE OF FOREIGN EXCHANGE AND CHANGE IN ACCUMULATED COMPREHENSIVE INCOME
2023 2022 2023 2022
Three months ended Nine months ended
September 30, September 30,
2023 2022 2023 2022
Net foreign exchange transactions:
(Gains) Losses $ 58,000 $ 52,000 $ 55,000 $ 47,000
Net foreign exchange transactions: (Gains) Losses $ 58,000 $ 52,000 $ 55,000 $ 47,000
Accumulated comprehensive income:
Unrealized (gains) losses on currency translation adjustment $ 364,000 $ (746,000 ) $ 64,000 $ (1,885,000 )
OANDA, a Canadian company that offers foreign exchange services, provides exchange rates for foreign exchange transactions. Its website includes currency conversion, online retail foreign exchange trading, foreign exchange transfers, and currency information. Amounts were converted from British Pounds to US Dollars and Euros to British Pounds using the following exchange rates:
● As of September 30, 2023 – £1.221980 to $1.00; €1.058230 to $1.00
● The average exchange rate for the nine months ended September 30, 2023 – £1.244390 to $1.00; €1.083310 to $1.00
● As of September 30, 2022 – £1.113291 to $1.00; €0.979744 to $1.00
● The average exchange rate for the nine months ended September 30, 2022 – £1.257858 to $1.00; €1.062845 to $1.00
11
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 — CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist of unrestricted funds invested in a money market mutual fund. The following table illustrates the Company’s cash and cash equivalents:
SCHEDULE OF CASH AND CASH EQUIVALENTS
September 30, December 31,
2023 2022

Cash on hand $ 2,706,000 $ 25,627,000
Federally insured money market mutual funds 4,534,000 —
Total cash and cash equivalents $ 7,240,000 $ 25,627,000

NOTE 36 — INVESTMENTS
~~During the first quarter of the fiscal year 2023, the Company’s~~The Company used cash to purchase the following debt ~~instruments :~~instruments:

● On January 23, 2023, the Company purchased a bond, “HSBC USA INC CP,” with a face value of $5,065,789, a par value of $5,000,000, maturing October 24, 2023, a 5.1948% interest rate, at a discount of $253,289 totaling $4,812,500. The value on September 30, 2023, was $4,982,000.

● On February 1, 2023, the Company purchased a bond, “Federal Home Loan Banks,” with a face value of $4,999,750 and accrued interest of $25,729, a par value of $5,000,000, maturing December 22, 2023, at an interest rate of 4.750%, totaling $5,025,479. The value on September 30, 2023, was $4,991,000

● On February 28, 2023, the Company purchased a bond, “Federal National Mortgage Association,” with a face and par value of $950,000, maturing February 28, 2024, at an interest rate of 5.07%, totaling $950,000. The value on September 30, 2023, was $947,000.

The Company identified these transactions as investments in debt ~~security and~~security. It will apply the guidance under ASC Topic 320, “Investments in debt securities,” and for interest income guidance under ASC Topic 310-20, “Receivables.” As of ~~March 31,~~September 30, 2023, the ~~foregoing~~abovementioned investments have a stated maturity of one year or less. Management intends to treat these investments as held to maturity.

The Company has determined the fair value of its investments held to maturity based on Level 2 input as of September 30, 2023:
SCHEDULE OF FAIR VALUE OF ITS INVESTMENTS
Level 1 Level 2 Level 3 Total

Federal Bonds $ — $ 10,920,000 $ — $ 10,920,000

$ — $ 10,920,000 $ — $ 10,920,000
The Company’s investments held to maturity are as follows as of September 30, 2023:
SCHEDULE OF INVESTMENTS HELD TO MATURITY

Amortized
Cost

Unrealized
Gains
Unrealized Losses Fair Value

Federal Bonds $ 10,987,000 — $ 67,000 $ 10,920,000

$ 10,987,000 $ — $ 67,000 $ 10,920,000
12
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 — ASSET ACQUISITION
On September 14, 2023, Vislink Poway, LLC (“Poway”), a wholly owned subsidiary of the Parent Company formed on September 13, 2023, entered into an asset purchase agreement with BMS, LLC (“BMS”), acquiring working in process inventory consisting of microwave technology systems involving long-range data transmission and assuming certain liabilities in exchange for $200,000 in cash consideration paid at together with a commitment to acquire additional inventory in the amount of $230,000 October 2, 2023 with title to the inventory passing to Poway on October 2, 2023. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the acquisition cost was allocated on a relative fair value basis, and transaction costs were capitalized as a component of the cost of the assets acquired.
We recorded the purchase of this agreement under purchase price accounting, recording the fair value of the assets acquired and the liabilities assumed, as summarized in the table below:
SCHEDULE OF IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

Assets acquired:
Work-in-process inventory $ 66,042
Intangible assets - customer relationships 495,372
total assets 561,414

Liabilities assumed:
Deferred revenue 292,014
total liabilities 292,014

Total cash used for asset acquisition $ 269,400

Cash used in acquisition:
Acquisition price $ 200,000
Transaction costs 69,400
Total cash used for asset acquisition $ 269,400
NOTE 8 — INTANGIBLE ASSETS
The following table illustrates finite intangible assets as of September 30, 2023:
SCHEDULE OF INTANGIBLE ASSETS
Proprietary Technology Patents and Licenses Trade Names & Technology Customer Relationships
Accumulated Accumulated Accumulated Accumulated
Cost Amortization Cost Amortization Cost Amortization Cost Amortization Net
Balance, December 31, 2022 $ 2,132,000 $ (815,000 ) $ 12,378,000 $ (12,378,000 ) $ 2,251,000 $ (1,189,000 ) $ 5,095,000 $ (3,074,000 ) $ 4,400,000

Additions — — — — — — 496,000 — 496,000

Amortization — (443,000 ) — — — (104,000 ) — (193,000 ) (740,000 )
Balance, September 30, 2023 $ 2,132,000 $ (1,258,000 ) $ 12,378,000 $ (12,378,000 ) $ 2,251,000 $ (1,293,000 ) $ 5,591,000 $ (3,267,000 ) $ 4,156,000
The Company continuously monitors intangible assets for potential impairments based on operating results, events, and circumstances. As of September 30, 2023, management identified no triggering events.
The Company’s groups of intangible assets consist primarily of:
Proprietary Technology:
Generally, the Company amortizes proprietary technology over 3 to 5 years. Wireless multiplex transmitters and artificial intelligence are the proprietary technologies that MVP uses internally to produce and sell products and services to customers.
Patents and Licenses:
Patents and licenses filed by the Company are amortized for 18.5 to 20 years. The amortization of the costs associated with provisional patents and pending applications begins after successful review and filing.
13
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8 — INTANGIBLE ASSETS (continued)
Trade Name, Technology, and Customer Relationships:
Other intangible assets are amortized for 3 to 15 years. IMT, Vislink, MVP, and Poway acquisitions contributed to developing these intangible assets, including trade names, technology, and customer lists.
The Company has recognized net capitalized intangible costs as follows:
SCHEDULE OF CAPITALIZED INTANGIBLE COSTS
September 30, December 31,
2023 2022
Proprietary Technology $ 875,000 $ 1,319,000
Trade Names and Technology 957,000 1,060,000
Customer Relationships 2,324,000 2,021,000
$ 4,156,000 $ 4,400,000
The Company has recognized the amortization of intangible assets as follows:
SCHEDULE OF AMORTIZATION OF INTANGIBLE ASSETS
2023 2022 2023 2022
Three Months Ended Nine Months Ended
September 30, September 30,
2023 2022 2023 2022

Proprietary Technology $ 149,000 $ 149,000 $ 443,000 $ 442,000

Patents and Licenses — 204,000 — 535,000

Trade Names and Technology 35,000 35,000 104,000 104,000

Customer Relationships 66,000 65,000 193,000 192,000

Amortization of intangible assets $ 250,000 $ 453,000 $ 740,000 $ 1,273,000
The weighted average remaining life of the amortization of the Company’s intangible assets is approximately 4.9 years as of September 30, 2023. The following table represents the estimated amortization expense for total intangible assets for the succeeding five years:
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS
Period ending September 30,
2024 $ 793,000
2025 791,000
2026 726,000
2027 467,000
2028 289,000
Thereafter 1,090,000
Finite-Lived Intangible Assets, Net, Total $ 4,156,000
14

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 — NOTES PAYABLE
The table below represents the Company’s notes payable as of September 30, 2023, and December 31, 2022:
SCHEDULE OF NOTES PAYABLE
Principal
September 30,
2023 December 31,
2022
The Company renewed its D&O insurance policy on April 5, 2022, reducing the premium to approximately $1,037,000, less a down payment of $194,000, with the remaining balance financed. The loan’s terms are for nine months at a 2.09% annual interest rate and a monthly principal and interest payment of approximately $84,000. Accordingly, the Company recorded interest expenses of $-0- and $150 for the three and nine months ended September 30, 2023, and $4,000 and $6,000 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, the note has been fully repaid. $ — $ 84,000
The Company renewed its D&O insurance policy on April 5, 2022, reducing the premium to approximately $1,037,000, less a down payment of $194,000, with the remaining balance financed. The loan’s terms are for nine months at a 2.09% annual interest rate and a monthly principal and interest payment of approximately $84,000. Accordingly, the Company recorded interest expenses of $-0- and $150 for the three and nine months ended September 30, 2023, and $4,000 and $6,000 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, the note has been fully repaid. $ — $ 84,000

The Company renewed its D & O insurance policy on April 5, 2023, reducing the premium to approximately $811,000, less a down payment of $288,000, financing the remaining balance of approximately $523,000. The loan’s terms are for nine months at a 6.14% annual interest rate and a monthly principal and interest payment of approximately $67,000. Accordingly, the Company recorded interest expenses of $5,000 and $10,000 for the three and nine months ended September 30, 2023, and $-0- for the three and nine months ended September 30, 2022. 199,000
$ 199,000 $ 84,000
NOTE 10 — LEASES
In addition to leasing office space, deployment sites, and storage warehouses, the Company also leases warehouse space internationally and domestically. Operating leases have various terms and provisions as of September 30, 2023, with lease terms remaining between one and four years. In certain individual leases, rent escalation clauses and lease concessions require additional rental payments in the later years of the lease term. These types of contracts are recognized on a straight-line basis over the minimum lease term.
The Company recorded $0.7 million in ROU assets on September 30, 2023, net of $1.5 million in accumulated amortization. Moreover, the Company recorded an operating lease liability of approximately $1.2 million, of which $0.4 million was current and $0.8 million was non-current. The weighted average remaining term of lease contracts on September 30, 2023, was 3.0 years, with maturity dates ranging between October 2023 and May 2027, in addition to a weighted average discount rate of 9.5%.
There were no material adjustments to straight-line rental expenses for those periods. Most of the costs recognized for each period were reflected in cash used in operating activities. This expense primarily consisted of payments for office and warehouse base rent. In addition, we have the right to renew individual leases at various renewal terms, although we are not obligated to do so. Short-term lease costs, taxes, and variable service charges were immaterial.
A one-year lease for 600 square feet of administrative office space in Lutton, UK, was signed on September 1, 2023, and will run through May 31, 2024, at approximately $2,100 per month. The Company renewed its lease for 976 square feet of administrative office space commencing on July 3, 2023, and terminating on July 2, 2024, in Dubai Studio City, UAE, for approximately $1,632 monthly.
Included in part of the September 14, 2023, acquisition of assets from BMS is a sub-lease of 11,715 square feet of general office use facilities previously held by BMS, LLC, with lease responsibilities, conveyed to Poway, LLC under a six-month agreement for approximately $22,300 per month.
Right-of-use operating lease abandonment
Approximately 2,700 square feet of manufacturing space at the Colchester, UK facility were abandoned as part of the Company’s strategic decision to relocate its UK manufacturing division to the United States commencing in September 2023. Impracticable conditions made subletting the unused space unachievable, and the Company considered it abandoned. According to ASC 360, leased space abandonment is an impairment indicator, and the Company assessed whether the lease ROU assets were impaired. It was determined that approximately $83,000 of the Company’s right-of-use operating assets were impaired.
15

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 310 — ~~INVESTMENTS~~LEASES (continued)
~~The Company has determined the fair value of its investments held to maturity based on Level 2 inputs as of March 31, 2023:~~
~~SCHEDULE OF FAIR VALUE OF ITS INVESTMENTS~~
Level 1 Level 2 Level 3 Total

Federal Bonds — $ 10,789,000 — $ 10,789,000

$ — $ 10,789,000 $ — $ 10,789,000
~~The Company’s investments held to maturity are as follows as of March 31, 2023:~~
~~SCHEDULE OF INVESTMENTS HELD TO MATURITY~~
Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Federal Bonds $ 10,817,000 — $ 28,000 $ 10,789,000

$ 10,817,000 $ — $ 28,000 $ 10,789,000

~~NOTE 4 —~~ ~~INTANGIBLE ASSETS~~
The Company continuously monitors operating results, events, and circumstances that may indicate potential impairment of intangible assets. Management concluded that no triggering events occurred during the three months ended on March 31, 2023.
The following table illustrates ~~finite intangible assets as of March 31, 2023:~~operating lease data for the three and nine months ending September 30, 2023, and 2022:
SCHEDULE OF OPERATING LEASE DATA
2023 2022 2023 2022
Three Months Ended Nine Months Ended
September 30, September 30,
2023 2022 2023 2022
Lease cost:
Operating lease cost $ 97,000 $ 105,000 $ 303,000 $ 338,000
Short-term lease cost 5,000 10,000 25,000 84,000
Total lease cost $ 102,000 $ 115,000 $ 328,000 $ 422,000
Cash paid for lease liabilities:
Cash flows from operating leases $ 473,000 $ 380,000
Weighted-average remaining lease term—operating leases 3.0 years 3.7 years
Weighted-average discount rate—operating leases 9.5 % 9.4 %

Maturities of operating lease liabilities were as follows as of September 30, 2023:
SCHEDULE OF ~~INTANGIBLE ASSETS~~FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES
Proprietary Technology Patents and Licenses Trade Names & Technology Customer Relationships
Accumulated Accumulated Accumulated Accumulated
Cost Amortization Cost Amortization Cost Amortization Cost Amortization �� Net

Balance, December 31, 2022 $ 2,132,000 $ (815,000 ) $ 12,378,000 $ (12,378,000 ) $ 2,251,000 $ (1,189,000 ) $ 5,095,000 $ (3,074,000 ) $ 4,400,000

Amortization — (146,000 ) — — — (35,000 ) — (63,000 ) (244,000 )

Balance, March 31, 2023 $ 2,132,000 $ (961,000 ) $ 12,378,000 $ (12,378,000 ) $ 2,251,000 $ (1,224,000 ) $ 5,095,000 $ (3,137,000 ) $ 4,156,000
~~Proprietary Technology:~~
Amount

2024 $ 471,000
2025 508,000
2026 278,000
2027 122,000
2028 —
Thereafter —
Total lease payments 1,379,000
Less: imputed interest 184,000
Present value of lease liabilities 1,195,000
Less: Current lease liabilities 372,000
Non-current lease liabilities $ 823,000

The ~~Company amortizes proprietary technology over~~ 3 to 5 ~~years of their useful lives. The proprietary technology consists of wireless multiplex transmitters~~table below lists the location and ~~artificial intelligence developed and used by MVP internally to produce and sell products or services to the end-user or customer.~~
~~Patents and Licenses:~~
~~The Company amortizes filed patents and licenses over their useful lives, ranging~~lease expiration date from ~~18.5~~ to 20 ~~years. The amortization of the costs incurred by processing provisional patents and pending applications begins after successful review and filing.~~
~~Trade Name, Technology, and Customer Relationships:~~
~~The Company amortizes these other intangible assets over their estimated useful lives of~~ 3 to 15 ~~years. Prior acquisitions of the Company’s subsidiaries, IMT, Vislink, and MVP, created these intangible assets of trade names, technology, and customer lists.~~
~~The Company has recognized net capitalized intangible costs as follows:~~
2023 through 2027:
SCHEDULE OF ~~CAPITALIZED INTANGIBLE COSTS~~LEASE OBLIGATION ASSUMED
March 31, December 31,
2023 2022
Proprietary Technology $ 1,173,000 $ 1,319,000
Trade Names and Technology 1,025,000 1,060,000
Customer Relationships 1,958,000 2,021,000
$ 4,156,000 $ 4,400,000
Location Square Footage Lease-End Date Approximate Future Payments
Colchester, U.K. – Waterside House 13,223 Dec 2025 $ 535,000
Billerica, MA 2,000 Dec 2026 342,000
Mount Olive, NJ 7,979 Jan 2027 502,000
1516

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
~~NOTE 4 — INTANGIBLE ASSETS (continued)~~
~~The Company has recognized the amortization of intangible assets as follows:~~
~~SCHEDULE OF AMORTIZATION OF INTANGIBLE ASSETS~~
Three Months Ended
March 31,
2023 2022

Proprietary Technology $ 146,000 $ 145,000

Patents and Licenses — 164,000

Trade Names and Technology 35,000 35,000

Customer Relationships 63,000 63,000

$ 244,000 $ 407,000
~~The weighted average remaining life of the amortization of the Company’s intangible assets is approximately~~ ~~5.3~~ ~~years as of March 31, 2023. The following table represents the estimated amortization expense for total intangible assets for the succeeding five years:~~
~~SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS~~
Period ending March 31,
2024 $ 642,000
2025 640,000
2026 624,000
2027 540,000
2028 476,000
Thereafter 1,234,000
$ 4,156,000
~~NOTE 5 —~~ ~~NOTES PAYABLE~~
~~The table below represents the Company’s notes payable as of March 31, 2023, and December 31, 2022:~~
~~SCHEDULE OF NOTES PAYABLE~~
Principal
3/31/23 12/31/22

On April 5, 2022, the Company renewed its D & O insurance policy at a cost of approximately $1,037,000, with a down payment of $194,000, financing the remaining balance of approximately $943,000 pursuant to a loan for nine months at a 2.09% annual interest rate and a monthly principal and interest payment of approximately $84,000. The Company recorded interest expense of $150 and $-0- for the three months ended March 31, 2023, and 2022, respectively. As of March 31, 2023, the loan is paid in full. $ — $ 84,000
$ — $ 84,000
~~NOTE 6 —~~ ~~LEASES~~
The Company’s leasing arrangements include office space, deployment sites, and storage warehouses, both domestically and internationally. The operating leases contain various terms and provisions, with lease terms of approximately one to four years remaining as of March 31, 2023. Certain individual leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. We recognize rent expense for these types of contracts on a straight-line basis over the minimum lease term.
~~On March 31, 2023, the Company recorded approximately $1.0~~ ~~million of ROU assets net of $1.2~~ ~~million accumulated amortization on the balance sheet. Additionally, the Company recorded relatively $1.4~~ ~~million of operating lease liabilities, of which $0.4~~ ~~million is current, and $1.0~~ ~~million is non-current, as reported on the balance sheet. The weighted-average remaining term for lease contracts was~~ ~~3.2~~ ~~years on March 31, 2023, with maturity dates from July 2023 to May 2027 and a weighted-average discount rate of~~ ~~9.4% on March 31, 2023.~~
16
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 6 — LEASES (continued)~~
Adjustments for straight-line rental expense for the respective periods was not material. Most costs recognized are reflected in cash used in operating activities for the respective periods. This expense consisted primarily of payments for base rent on office and warehouse leases. Amounts related to short-term lease costs, taxes, and variable service charges on leased properties were immaterial. Besides, we have the right to renew individual leases for various renewal terms but no obligation. There were no new leases during the three months ending March 31, 2023.
~~The following table illustrates operating lease data for the three months ending March 31, 2023, and 2022:~~
~~SCHEDULE OF OPERATING LEASE DATA~~

Three Months Ended
March 31,
2023 2022
Lease cost:
Operating lease cost $ 103,000 $ 119,000
Short-term lease cost 70,000 149,000

Total lease cost $ 173,000 $ 268,000

Cash paid for lease liabilities:
Cash flows from operating leases $ 160,000 $ 127,000

Weighted-average remaining lease term—operating leases 3.2 years 4.0 years

Weighted-average discount rate—operating leases 9.4 % 9.3 %
~~Maturities of operating lease liabilities were as follows as of March 31, 2023:~~
~~SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES~~

Amount

2024 $ 549,000
2025 461,000
2026 393,000
2027 224,000
2028 25,000
Thereafter —
Total lease payments 1,652,000
Less: imputed interest 197,000
Present value of lease liabilities 1,455,000
Less: Current lease liabilities 433,000
Non-current lease liabilities $ 1,022,000
~~The table below lists the location and lease expiration date from 2023 through 2027:~~
~~SCHEDULE OF LEASE OBLIGATION ASSUMED~~
Location Square Footage Lease-End Date Approximate Future Payments
Colchester, U.K. – Waterside House 16,000 Dec 2025 $ 598,000
Singapore 950 July 2023 11,000
Billerica, MA 2,000 Dec 2026 391,000
Hemel, UK 12,870 Oct 2023 84,000
Mount Olive, NJ 7,979 Jan 2027 568,000
17

~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
NOTE 7—11— STOCKHOLDERS’ EQUITY

Preferred ~~stock~~Stock
On March 22, 2023, the Board of Directors of the ~~Corporation~~Company (the “Board”) approved a resolution to eliminate the ~~Corporation’s~~Company’s Certificate of Designation, Preferences, and Rights (the “Certificate of Elimination”) of the Series A Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”), that was filed with the Secretary of State of the State of Delaware on November 9, 2022.

Upon the effective filing of this Certificate of Elimination, the shares previously designated under the certificate of designation as Series A Preferred Stock shall resume the status of authorized but unissued shares of the Company’s preferred ~~stock of the Corporation.~~stock. As of ~~March 31,~~September 30, 2023, -~~47,500~~0- shares are authorized, and no Series A Preferred Stock was issued or outstanding.
Common ~~stock~~Stock

~~During the three months that ended March 31, 2023, the Company:~~
● ~~Issued~~ ~~10,000~~ ~~shares of common stock to specific board members under a commitment agreement valued at $200,000. The common stock’s value was determined on the agreement’s original date.~~
● ~~Recognized approximately $921,000~~ ~~of stock-based compensation costs associated with outstanding stock options recorded in general and administrative expenses offsetting additional paid-in capital.~~
18
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 —~~ ~~STOCK-BASED COMPENSATION~~
~~Equity Incentive Plans:~~
~~The following table illustrates various plan data under the amended Long-Term Stock Incentive Plan (the “Plan”) as of March 31, 2023,~~Nasdaq compliance and ~~2022:~~
~~SCHEDULE OF STOCK OPTION PLANS~~
Three months ended
March 31,
2023 2022
Stock-based compensation expense $ — $ 1,000

Remaining expense of stock-based compensation $ — $ —

Remaining amortization period 0.0 years 0.0 years

Weighted average remaining contractual life – options outstanding and exercisable 4.3 years 5.3 years

Intrinsic value per share $ — $ —

Range of exercise prices $ 139.20 to $1,944.00 $ 139.20 to $23,472.00

Quantity:

Beginning balance-January 1^st, outstanding options 2,250 2,496

Stock options forfeited (46 ) (13 )

Ending balance-March 31^st, outstanding options 2,204 2,483

Ending balance-March 31^st, exercisable options 2,204 2,462

Weighted Averages:

Beginning balance-January 1^st, outstanding options $ 1,756.00 $ 1,795.80

Stock options forfeited (954.00 ) (1,944.00 )

Ending balance-March 31^st, outstanding options $ 1,772.00 $ 1,764.40

Ending balance-March 31^st, exercisable options $ 1,772.00 $ 1,798.20
~~Time-vested~~reverse stock ~~options:~~split
In connection with their employment agreement(s), the Company granted the following ten-year, non-statutory time-vested option inducement awards under the NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans (all subject to continued employment):
~~SCHEDULE OF STOCK OPTION PLANS FOR VESTED OPTION~~
Recipient Date of Grant Options Granted Exercise Price Vesting Commencement Date Expiration Date 25% Vesting 75% Remaining Vesting

● Carleton M. Miller — CEO 1/22/20 17,962 $ 34.20 1/22/20 1/22/30 1/22/21 36 equal monthly periods

● Michael Bond — CFO 2/27/20 6,758 $ 19.20 4/1/20 4/1/30 4/1/21 36 equal monthly periods
19
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Time-vested stock option (continued):~~
~~In determining the time-vested options award’s grant-date fair value, the following assumptions were used:~~
~~SCHEDULE OF SHARE-BASED PAYMENT AWARD STOCK OPTION~~
Expected term (years) Expected dividend yield Risk-free interest rate Volatility Exercise Price

● Carleton M. Miller — CEO 6.5 — 1.57 % 153.0 % $ 34.20

● Michael Bond — CFO 6.3 — 0.62 % 155.0 % $ 19.20
Note: no time-vested option awards were granted during the three months ending March 31, 2023. Effective March 31, 2023, the Company entered a separation agreement with Michael Bond, including the acceleration of vested options.
~~The following table illustrates various plan data under time-based stock option awards:~~
~~SCHEDULE OF STOCK OPTION PLANS~~

Three months ended
March 31,
2023 2022
Stock-based compensation expense $ 70,000 $ 28,000

Remaining expense of stock-based compensation $ 249,000 $ 470,000

Remaining amortization period 0.8 years 1.9 years

Weighted average remaining contractual life – options outstanding and exercisable 6.9 years 7.9 years

Intrinsic value per share $ — $ 2.20

Range of exercise prices $ 19.20 to $34.20 $ 19.20 to $34.20

Quantity:

Beginning balance-January 1^st, outstanding 24,721 24,721

Granted, canceled, expired — —

Ending balance-March 31^st, outstanding 24,721 24,721

Ending balance-March 31^st, exercisable 24,721 13,391

Weighted Averages:

Beginning balance-January 1^st, outstanding $ 13.00 $ 20.20

Granted, canceled, expired — $ —

Ending balance-March 31^st, outstanding $ 10.00 $ 19.00

Ending balance-March 31^st, exercisable $ 18.00 $ 35.00
20
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Performance-based stock options:~~
In connection with their employment agreement, the Company granted the following ten-year, non-statutory performance-based stock option inducement award under the NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans that will vest in three equal tranches upon attainment of applicable performance conditions for each tranche (all subject to continued employment):
~~SCHEDULE OF STOCK OPTION PLANS FOR VESTED OPTION~~
Options Vesting Dates Options Vesting Schedule
Recipient Date of Grant Options Granted Exercise Price Commencement Expiration Tranche 1 Tranche 2 Tranche 3

Carleton M. Miller — CEO 1/22/20 12,500 $ 34.20 1/22/20 1/22/30 *4,167 **4,167 ***4,166
~~Applicable performance conditions:~~
* Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $6,000,000 accumulated over four consecutive fiscal quarters.
** Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $15,000,000 accumulated over four consecutive fiscal quarters.
~~***~~ Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $23,000,000 accumulated over four consecutive fiscal quarters.
~~In determining the time-vested options award’s grant-date fair value, the following assumptions were used:~~
~~SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTION, VALUATION ASSUMPTION~~
Expected term (years) Expected dividend yield Risk-free interest rate Volatility Exercise Price
● Carleton M. Miller — CEO 6.5 — 1.57 % 153.0 % $ 34.20
~~Note: no performance-based stock option awards were granted during the three months ended March 31, 2023.~~
~~The following table illustrates various plan data under performance-based stock option awards:~~
~~SCHEDULE OF STOCK OPTION PLANS~~

Three months ended
March 31,
2023 2022
Stock-based compensation expense $ — $ —

Remaining expense of stock-based compensation $ 414,000 $ 414,000

Remaining amortization period 1.8 years 2.8 years

Weighted average remaining contractual life – options outstanding and exercisable 6.8 years 7.8 years

Intrinsic value per share $ — $ —

Range of exercise prices $ 34.20 $ 34.20

Quantity:

Beginning balance-January 1^st, outstanding 12,500 12,500

Granted, canceled, expired — —

Ending balance-March 31^st, outstanding 12,500 12,500

Ending balance-March 31^st, exercisable — —
21
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Performance-based stock options (continued):~~
~~The following table illustrates various plan data under performance-based stock option awards (continued):~~
Three months ended
March 31,
2023 2022
Weighted Averages:

Beginning balance-January 1^st, outstanding $ 33.00 $ 33.00

Granted, canceled, expired — —

Ending balance-March 31^st, outstanding $ 33.00 $ 33.00

Ending balance-March 31^st, exercisable $ — $ —
The probability of achieving any required metrics for vesting is inconclusive, and no options are exercisable as of March 31, 2023. When the Company determines that the remaining performance metrics’ achievement becomes probable, the Company will record a cumulative catch-up stock-based compensation amount. We will record any unrecognized costs over the remaining requisite service period of the awards.
~~Restricted Stock Units~~
~~Restricted stock awards — time-based:~~
~~The Company granted the following awards under the amended Plan for restricted stock units (“RSUs”) subject to continued employment:~~
~~SCHEDULE OF STOCK OPTION PLANS FOR VESTED OPTION~~
Grant Initial RSUs Vesting Remaining RSUs Vesting
Recipient Date Units Exercise Price Date Units Units Terms

Carleton M. Miller — CEO 3/3/21 29,933 $ 72.00 3/3/22 9,978 19,956 24 equal monthly periods

Michel Bais — Managing Director 8/17/21 10,000 $ 37.80 8/17/22 2,500 7,500 36 equal monthly periods

Group of 22 Employees 2/17/22 25,750 $ 19.60 2/17/23 8,498 17,253 24 equal monthly periods

Carleton M. Miller — CEO 2/16/22 51,654 $ 21.00 2/16/23 12,913 38,740 36 equal monthly periods

Michael Bond — CFO 2/16/22 19,649 $ 21.00 2/16/23 4,913 14,737 36 equal monthly periods

Group of 6 Employees 2/17/23 11,250 $ 11.40 2/17/24 3,713 7,538 24 equal monthly periods

Group of 11 Employees 3/17/23 30,000 $ 8.00 3/16/24 9,900 20,100 24 equal monthly periods
~~Note: Effective March 31, 2023, the Company entered a separation agreement with Michael Bond, including accelerating time-based restricted stock awards.~~
22
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Restricted Stock Units (continued)~~
~~Restricted stock awards — time-based (continued):~~
~~The following table illustrates various plan data under time-based restricted stock awards:~~
~~SCHEDULE OF STOCK OPTION PLANS~~

Three months ended
March 31,
2023 2022
Stock-based compensation expense $ 851,000 $ 718,000

Remaining expense of stock-based compensation $ 3,199,000 $ 4,037,000

Remaining amortization period 2.0 years 3.2 years

Weighted average remaining contractual life – options outstanding 2.4 years 3.2 years

Weighted average remaining contractual life – options exercisable 2.0 years 5.8 years

Intrinsic value per share $ — $ —

Range of exercise prices $ 8.00 to $72.00 $ 19.60 to $72.00

Quantity:

Beginning balance-January 1^st, outstanding 140,736 39,933

Granted 41,250 107,053

Forfeited (19,415 ) —

Ending balance-March 31^st, outstanding 162,571 146,986

Ending balance-March 31^st, exercisable 55,117 9,978

Weighted Averages:

Beginning balance-January 1^st, outstanding $ 24.00 $ 63.40

Granted 9.00 20.80

Forfeited (21.40 ) —

Ending balance-March 31^st, outstanding $ 20.00 $ 27.40

Ending balance-March 31^st, exercisable $ 40.00 $ 144.00
23
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Restricted Stock Units (continued)~~
~~Restricted stock awards — performance-based:~~
~~The Company granted the following awards under the amended Plan for restricted stock units (“RSUs”) subject to performance vesting conditions and continued employment:~~
~~SCHEDULE OF STOCK OPTION PLANS FOR VESTED OPTION~~
Grant Units Vesting Schedule
Recipient Date Units Exercise Price Tranche 1 Tranche 2 Tranche 3
Carleton M. Miller — CEO 3/3/21 44,833 $ 72.00 14,945 14,944 14,944

Michael Bond — CFO 12/31/20 18,436 $ 26.40 6,146 6,145 6,145
Note: The above performance-based restricted stock units met all three revenue thresholds in the last quarter of 2021, and the Company recognized stock-based compensation expense accordingly for the year ending December 31, 2021.
~~The Company granted the following awards under the amended Plan for restricted stock units (“RSUs”) subject to performance vesting conditions and continued employment:~~
Grant Units Vesting Schedule
Recipient Date Units Exercise Price Tranche 1 Tranche 2 Tranche 3
Carleton M. Miller — CEO 2/16/22 51,654 $ 21.00 *17,218 **17,218 ***17,218

Michael Bond — CFO 2/16/22 19,649 $ 21.00 *6,550 **6,550 ***6,549
* ~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $35,575,000 accumulated over four consecutive fiscal quarters~~.
** ~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $37,353,000 accumulated over four consecutive fiscal quarters~~.
~~***~~ ~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $39,220,000 accumulated over four consecutive fiscal quarters~~.
Note: no performance-based restricted stock awards were granted during the three months ended March 31, 2023. Effective March 31, 2023, the Company entered a separation agreement with Michael Bond, resulting in the forfeiture of units held under his employment agreement.
~~The following table illustrates various plan data under performance-based restricted stock awards:~~
~~SCHEDULE OF STOCK OPTION PLANS~~

Three months ended
March 31,
2023 2022
Stock-based compensation expense $ — $ —

Remaining expense of stock-based compensation $ 1,085,000 $ 1,498,000

Remaining amortization period 2.8 years 1.9 years

Weighted average remaining contractual life – options outstanding 2.8 years 3.6 years

Weighted average remaining contractual life – options exercisable
0.0 years 3.8 years

Intrinsic value per share $ — $ —

Range of exercise prices $ 21.00 $21.00 to $72.00
24
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 8 — STOCK-BASED COMPENSATION (continued)~~
~~Restricted Stock Units (continued)~~
~~Restricted stock awards — performance-based (continued):~~
~~The following table illustrates various plan data under performance-based restricted stock awards (continued):~~
Three months ended
March 31,
2023 2022
Quantity:

Beginning balance-January 1^st, outstanding 71,303 63,369

Granted — 71,303

Forfeited (19,649 ) —

Ending balance-March 31^st, outstanding 51,654 134,672

Ending balance-March 31^st, exercisable — 63,369

Weighted Averages:

Beginning balance-January 1^st, outstanding $ 58.00 $ 58.80

Granted — 21.00

Forfeited (21.00 ) —

Ending balance-March 31^st, outstanding $ 22.00 $ 38.80

Ending balance-March 31^st, exercisable $ — $ 82.40
Note: the determination of revenue for any fiscal period shall be made based on the Company’s revenues on a consolidated basis for each such fiscal period if the employee remains in continuous employment with the Company through the date the Compensation Committee certifies the revenue for such fiscal period and authorizes the issuance of the underlying shares of common stock to the employee according to his award agreement. Except as provided in each employment agreement, if an individual ceases to be an employee of the Company before any vesting date, the remaining portion of the total number of shares unvested is forfeited. The probability of achieving any required metrics for vesting is inconclusive, and no awards are exercisable as of March 31, 2023. When the Company determines that the remaining performance metrics’ achievement becomes probable, the Company will record a cumulative catch-up stock-based compensation amount. We will record any unrecognized costs over the remaining requisite service period of the awards.
~~NOTE 9 —~~ ~~COMMITMENTS AND CONTINGENCIES~~
~~Pension:~~
The Company may make a matching contribution to its employees’ 401(k) plan. Vislink also has a Group Personal Plan in our U.K. Subsidiary, investing funds with Royal London. U.K. employees are entitled to join the Plan to which the Company contributes varying amounts subject to status. Additionally, the Company operates a stakeholder pension scheme in the U.K.
~~The table below represents the Company’s matching contributions as follows:~~
~~SCHEDULE OF MATCHING CONTRIBUTIONS~~
Three Months Ended
March 31,
2022 2022
Company matching contributions - Group Personal Pension Plan, U.K. $ 33,000 $ 49,000
25
~~VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES~~
~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~(Unaudited)~~
~~NOTE 9 — COMMITMENTS AND CONTINGENCIES (continued)~~
~~Nasdaq Compliance:~~

On May 20, 2022, we received notice from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company of its noncompliance with ~~Bid Price Rule~~the bid price rule by failing to maintain a minimum bid price for its common Stock on the Nasdaq Capital Market of at least $1.00 per share for 30 consecutive business ~~days.~~days (the “Bid Price Rule”). The Company received a grace period of 180 days, or until November 16, 2022, to regain compliance with the minimum bid price requirement.

On November 10, 2022, the Company submitted a request to Nasdaq for an additional 180-day grace period to regain compliance with the minimum bid price requirement. On November 17, 2022, the Company received a letter from Nasdaq advising that the Company had been granted an additional 180-day grace period extension until May 15, 2023, to regain compliance with the minimum bid price requirement and all other applicable requirements for initial listing on the Nasdaq Capital Market except for the minimum bid price requirement. On May 15, 2023, the Company received a letter from the Nasdaq informing it of its return to compliance with the Bid Price Rule. Therefore, the common stock continues to be traded on the Nasdaq Capital Market. If the Company fails to comply with the continued listing requirements of Nasdaq, such as its corporate governance requirements or the Bid Price Rule, Nasdaq may delist the common stock.

On January 11, 2023, the Company held a special meeting of stockholders (the “Special Meeting”) whereby stockholders approved a proposal to authorize the Board, ~~of Directors of the Company (the “Board”),~~ in its discretion but before the one-year anniversary of the date of the Special Meeting, to implement an amendment to the Company’s certificate of incorporation to effect a reverse stock split ~~(the “Reverse Stock Split”)~~ of all of the outstanding shares of ~~Common Stock,~~common stock, of the Company, at a ratio in the range of 1-for-2 to 1-for-50.

On May 1, 2023, the Company effected a 1-for-20 reverse stock ~~split.~~split (the “Reverse Stock Split”). Upon effectiveness of the ~~reverse stock split,~~Reverse Stock Split, every twenty shares of an outstanding common stock decreased to one share of common stock. We have retroactively applied the ~~reverse split~~Reverse Stock Split throughout this quarterly report to all periods presented.
~~NOTE 10 —~~ ~~CONCENTRATIONS~~Other common stock activity
~~Customer concentration risk~~

During the ~~three~~nine months ~~ending March 31,~~that ended September 30, 2023, ~~approximately~~ 10~~% of~~ the ~~Company’s revenue came from a single customer exceeding 10% of the Company’s total consolidated sales for approximately $~~Company:
~~733,000. During the three months ending March 31, 2022, approximately~~ 21~~% of the Company’s revenue came from a single customer, exceeding 10% of the Company’s total consolidated sales for approximately $1,515,000~~
● has issued 10,000 shares of common stock to specific board members as part of a commitment agreement valued at $200,000. The common stock’s value was determined on the agreement’s original date.
● has issued 10,234 shares of common stock in satisfaction with the conversion of restricted stock unit awards.
● recognized approximately $1,600,000 of stock-based compensation costs associated with outstanding stock options in general and administrative expenses offsetting additional capital investments.
Common Stock Warrants

~~On March 31, 2023, approximately~~ 18~~% of~~In the ~~Company’s consolidated net accounts receivable was due from one customer for approximately $1,164,000. On March 31, 2022, approximately~~ 45~~% of the Company’s consolidated net accounts receivable was due from one customer for approximately $4,204,000~~.
~~Vendor concentration risk~~
~~During the three~~nine months ending ~~March 31,~~September 30, 2023, ~~no vendor met~~2,667 warrants expired. On September 30, 2023, 456,080 warrants were outstanding and exercisable; the ~~criteria in excess~~weighted average exercise price of ~~10%~~warrants outstanding is $66.00, with a weighted average remaining contractual life of ~~the Company’s consolidated inventory purchases. During the three months ending March 31, 2022, no vendor met the criteria in excess~~2.4 years. These outstanding warrants did not have an intrinsic value as of ~~10% of the Company’s consolidated purchases.~~
~~On March 31, 2023, two vendors represented approximately $368,000~~ (14~~%) and $346,000~~ (13~~%) of the Company’s consolidated accounts payable. On March 31, 2022, approximately 15% of the Company’s consolidated accounts payable was due from one customer for approximately $438,000~~.September 30, 2023.

2617

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 12 — STOCK-BASED COMPENSATION
Long-Term Stock Incentive Plan Awards:
The Company’s stock option plans provide options to purchase shares of common stock to officers, directors, other key employees, and consultants. The purchase price may be paid in cash or “net settled” in the Company’s common stock shares. In a net settlement of an option, the Company does not require payment of the exercise price from the holder but reduces the number of shares of common stock issued upon the exercise of the stock option by the smallest amount of whole shares that have an aggregate fair market value equal to or over the aggregate exercise price for the option shares covered by the option exercised. Options generally vest over three years from the grant date and expire ten years from the grant date.
Inducement Awards:
Time-vested options
The Company granted time-vested stock options to various employees in connection with their employment agreements. The Company granted the ten-year, non-statutory time-vested option inducement awards under the NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans (all subject to continued employment).
Performance-based stock options
The Company granted performance-based stock options to various employees in connection with their employment agreements. The Company granted the ten-year, non-statutory performance-based stock option inducement award under the NASDAQ Listing Rule 5653(c)(4) outside of the Company’s existing equity compensation plans that will vest in three equal tranches upon achievement of applicable performance conditions for each tranche (all subject to continued employment).
Restricted Stock Units (“RSUs”):
Time-based awards
The Company granted awards under the amended plan for time-based restricted stock units (“RSUs”) to various employees subject to continued employment. The RSUs have an initial vesting between 25% and 33% on their one-year anniversary dates and will vest between 24 and 36 equal monthly periods thereafter.
Performance-based awards
The Company granted awards under the amended plan for performance-based restricted stock units subject to performance vesting conditions and continued employment. The RSUs will vest in three equal tranches upon reaching performance conditions for each tranche.
2023 Omnibus Equity Incentive Plan:
We received stockholder approval on August 23, 2023, to adopt the 2023 Omnibus Equity Incentive Plan (the “2023 Plan”), which will enable us to continue to grant equity-based compensation awards to our employees (including officers), non-employee consultants, non-employee directors, and our affiliates. The 2023 Plan replaces our 2015 Incentive Compensation Plan, 2016 Incentive Compensation Plan, and 2017 Incentive Compensation Plan. The Company has ceased granting awards under the 2015 Incentive Compensation Plan, 2016 Incentive Compensation Plan, and 2017 Incentive Compensation Plan. The Company has been authorized to reserve 166,415 shares of its common stock for delivery under the 2023 Plan. The 2023 Plan is designed to reward eligible participants for contributing to the Company’s success and encourage retaining and recruiting qualified personnel. The Company’s Board of Directors and Compensation Committee will administer the 2023 Plan.
The 2023 Plan generally grants awards without consideration other than prior and future service. The Company’s compensation committee may grant awards under the 2023 Plan either alone or in addition to, in tandem with, or as a substitute for any other award granted under the 2023 Plan or other company plans. It is important to note, however, that if a SAR is granted in conjunction with an ISO, the grant date and term of the SAR and ISO must be the same, and the exercise price of the SAR cannot be lower than the exercise price of the ISO. A written award agreement between us and the grantee will outline the material terms of the award.
18

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 12 — STOCK-BASED COMPENSATION (continued)
As shown in the following table, stock-based compensation expense is included in general and administrative expenses under the following plans:
SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE
Equity-based plans: 2023 2022 2023 2022
Three months ended Nine months ended
September 30, September 30,
Equity-based plans: 2023 2022 2023 2022

Long-term stock incentive plan awards $ — $ — $ — $ 1,000
Time-vested option inducement awards 37,000 33,000 144,000 89,000
Performance-based stock option inducement award - - — -
Time-based restricted stock awards
306,000 282,000 1,456,000 1,180,000
Performance-based restricted stock awards — — — —
Stock-based compensation expense $ 343,000 $ 315,000 $ 1,600,000 $ 1,270,000
NOTE 13 — COMMITMENTS AND CONTINGENCIES
Pension:
The Company may make a matching contribution to its employees’ 401(k) plan. Furthermore, Vislink operates a Group Personal Plan through its UK subsidiary, investing funds with Royal London. Employees of the Company in the United Kingdom are entitled to participate in the Company’s employee benefit plan, to which varying amounts are contributed according to their status. Additionally, the Company operates a stakeholder pension plan in the United Kingdom.
The table below represents the Company’s matching contributions as follows:
SCHEDULE OF MATCHING CONTRIBUTIONS
Three months ended Nine months ended
September 30, September 30,
2023 2022 2023 2022
Company matching contributions - Group Personal Pension Plan $ 42,000 $ 51,000 $ 110,000 $ 148,000
19
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 14 — CONCENTRATIONS
Customer concentration risk
During the three months ending September 30, 2023, one customer accounted for approximately $782,000 of the Company’s consolidated sales, which represents 11% of the Company’s overall sales. During the nine months ended September 30, 2023, no customer contributed more than 10 percent to the company’s consolidated sales.
One customer owed the Company approximately $893,000, representing approximately 12% of its consolidated net receivables on September 30, 2023. One customer owed the Company approximately $4,204,000 on September 30, 2022, representing 33% of the Company’s consolidated net accounts receivable.
Vendor concentration risk
In the three months ending September 30, 2023, two vendors exceeded 10% of the Company’s consolidated purchases with approximately $898,000 and $468,000, representing 26% and 13% of the Company’s consolidated inventory purchases. During the nine months ended September 30, 2023, two vendors exceeded 10% of the Company’s consolidated purchases by purchasing approximately $1,458,000 and $1,055,000, representing 16% and 11% of the Company’s consolidated inventory purchases.
A vendor accounted for approximately $500,000 of the Company’s total consolidated purchases during the three months ended September 30, 2022. In the nine months ended September 30, 2022, no purchases were made by individual vendors exceeding 10% of the total consolidated purchases of the Company.
Approximately $378,000 was owed to one vendor, representing 12% of the company’s consolidated accounts payable on September 30, 2023. No vendor represented more than 10% of the Company’s accounts payable on September 30, 2022.
20
VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 15 – REVENUE

The Company has one operating segment, ~~and the decision-making group is~~with the senior executive management ~~team. The~~team acting as the decision-making group. In the following table, the Company has disaggregated revenue by the Company’s primary geographical markets and revenue ~~sources in the following tables:~~sources:
SCHEDULE OF DISAGGREGATION OF REVENUE
Three Months Ended Three months Ended Nine months Ended
March 31, September 30, September 30,
2023 2022 2023 2022 2023 2022
Primary geographical markets:
North America $ 3,167,000 $ 2,428,000 $ 4,120,000 $ 4,394,000 $ 9,008,000 $ 10,294,000
South America 189,000 50,000 137,000 70,000 364,000 169,000
Europe 1,843,000 2,189,000 1,347,000 2,061,000 4,783,000 6,355,000
Asia 719,000 542,000 1,191,000 64,000 3,215,000 1,436,000
Rest of World 1,270,000 1,651,000 384,000 534,000 2,040,000 2,495,000
$ 7,188,000 $ 6,860,000 $ 7,179,000 $ 7,123,000 $ 19,410,000 $ 20,749,000
Primary revenue source:
Equipment sales $ 6,394,000 $ 6,278,000 $ 6,234,000 $ 6,061,000 $ 16,907,000 $ 18,533,000
Installation, integration, and repairs 486,000 243,000 348,000 687,000 1,097,000 1,260,000
Warranties 308,000 339,000 597,000 375,000 1,406,000 956,000
$ 7,188,000 $ 6,860,000 $ 7,179,000 $ 7,123,000 $ 19,410,000 $ 20,749,000
Long-Lived Assets:
United States $ 2,075,000 $ 2,382,000 $ 2,683,000 $ 1,922,000
Netherlands 26,000 — 18,000 20,000
United Kingdom 4,624,000 5,780,000 3,933,000 5,191,000
$ 6,725,000 $ 8,162,000 $ 6,634,000 $ 7,133,000

NOTE ~~12 –~~16 — OTHER INCOME (REBATES)

The ~~Company included approximately $324,000~~ ~~and $294,000~~ ~~for the three months ending March 31, 2023, and 2022, respectively, in other income from~~following table represents tax rebates ~~due to the Company’s filing appropriate governmental forms~~ related to the research costs incurred by our U.K. subsidiary included in ~~prior fiscal years. The~~other income.
SCHEDULE OF TAX REBATES
Three months Ended Nine months Ended
September 30, September 30,
2023 2022 2023 2022
Total tax rebates $ 3,000 $ *(10,000 ) $ 332,000 $ 284,000
* As a result of a weakening in the translation rate from British Pounds to U.S. dollars, this $10,000 decrease represents a loss compared to the initially recognized $294,000 in fiscal 2022.
While the Company ~~expects~~plans to continue filing ~~applicable~~ rebate forms for the 2023 fiscal year, ~~but~~it cannot guarantee that ~~such~~ rebates will be available at a similar level or at all in future ~~financial periods at similar levels or at all.~~years.

NOTE 1317 — RECLASSIFICATION OF PRIOR YEAR PRESENTATION

~~Specific~~We reclassified other income amounts from the prior year ~~amounts have been reclassified for~~to ensure consistency with the presentation of the current year’s ~~presentation. An adjustment has~~condensed consolidated statement of operations. For the three and Nine months ended September 30, 2022, adjustments have been made to the ~~Consolidated Statements~~condensed consolidated statements of ~~Operations~~operations and ~~Comprehensive Loss for the three months ended March 31, 2022. We separated tax~~comprehensive loss. Tax rebates related to research costs incurred by our ~~U.K.~~UK subsidiary were separated from other revenue to other ~~income from revenue.~~income. The reclassification did not affect the reported ~~results of operations.~~operating results.
NOTE 1418 — SUBSEQUENT EVENTS

On March 31, 2023, the Company entered into an agreed separation with Michael Bond, the former Chief Financial Officer. Effective April 1, 2023, Paul Norridge became the Company’s new Chief Financial Officer.
~~Reverse Stock Split~~Post Asset Acquisition Commitment

~~Effective May 1, 2023,~~A cash payment of $230,000 was made by the Company ~~effected a one-for-20 reverse stock split~~to BMS on October 2, 2023, in accordance with the asset acquisition agreement to acquire additional inventory on October 2, 2023, being held by BMS. The Company did not hold the remaining inventory title of ~~the common stock. All per-share numbers reflect the one-for-20 reverse stock split. We have retroactively applied the reverse split throughout this quarterly report to all periods presented.~~BMS as of September 14, 2023, or September 30, 2023. (See Note 7)
2721

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

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, the audited consolidated financial statements and the notes thereto, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission on March 31, 2023.

Effective May 1, 2023, the Company effected a one-for-20 reverse stock split of the common stock. All per-share numbers reflect the one-for-20 reverse stock split. We have retroactively applied the reverse split throughout this quarterly report to all periods presented.
Cautionary Note About Forward-Looking Statements

This report includes forward-looking statements that, although based on assumptions that we consider reasonable, are subject to risks and uncertainties, which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. You should read this report and the documents we reference in this report and have filed as exhibits to this report entirely and understand that our actual future results may materially differ from what we expect. You should also review the factors and risks we describe in reports we will file or submit from time to time with the SEC after this report’s date. We qualify all of our forward-looking statements by these cautionary statements.

Overview of COVID-19 Effects

~~The COVID-19 pandemic has caused~~Covid-19 remains a significant influence on the conduct of business. These challenging times have necessitated adopting remote work, hybrid models, employee well-being initiatives, supply chain resilience, digital transformation, and ~~may continue~~enhanced health and safety measures. By adapting to ~~cause us~~these changes, businesses can survive and thrive despite ongoing uncertainties resulting from the pandemic. It is not possible to ~~modify our business practices (including employee travel and employee work locations), and we may take further actions as may be required by government authorities or that we determine are in~~guarantee the ~~best interests~~effectiveness of ~~our employees, customers, and business partners. There is no certainty that~~ such ~~measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.~~measures.

The COVID-19 pandemic and mitigation measures have ~~caused and may continue to drive adverse impacts on~~adversely impacted global supply chains and economic ~~conditions.~~conditions and may continue to do so in the future. These impacts ~~could~~may affect ~~the~~our products and services’ development, deployment, maintenance, and ~~demand for our products and services.~~demand.

~~The~~It is impossible to predict the extent to which the COVID-19 pandemic ~~impacts~~will impact our business, ~~results of~~ operations, cash ~~flows,~~flow, and financial condition ~~will depend on future highly uncertain developments that cannot be predicted, including new information that may emerge concerning other strains of~~in the ~~virus and~~future. As a result, the ~~actions to contain its impact. The~~ Company will continue to closely monitor ~~the effect of COVID-19~~COVID-19’s impact on all aspects of ~~our~~its business and ~~geographies.~~geographical operations. It includes reviewing updated information concerning other virus strains and their impact.

Ukraine/Russian Conflict

The war increasingly affects economic and global financial markets and exacerbates ongoing economic challenges, including rising inflation and global supply-chain disruption. The degree to which entities are or will be mainly affected dependsUkraine-Russian conflict has had a significant impact on ~~the nature and duration of uncertain and unpredictable events, such as further military action, additional sanctions, and reactions to ongoing developments by~~ global financial markets. ~~Because~~Stock markets have experienced volatility, currency markets have seen fluctuations, commodity markets have faced supply chain concerns, bond markets have witnessed changes in demand and yields, and geopolitical risks have risen. The impact of ~~its broader impact~~the war on these macroeconomic conditions may necessitate many companies ~~globally may need~~worldwide to consider the ~~war’s effect~~effects of the war on their specific accounting and financial reporting ~~matters.~~practices. As the conflict unfolds, investors and market participants must monitor the situation and adapt their strategies closely.

~~The~~Neither the Company ~~does not generate revenue from Russia, the Russian-controlled territories,~~nor its employees or ~~Ukraine, nor do we~~contractors have a physical presence ~~employees,~~in Russia, Russian-controlled territories, or ~~contractors in these areas. The Russian government’s~~Ukraine. Due to Russia’s invasion of Ukraine and ~~the resultant~~ sanctions imposed by the U.S. and other governments—designed to ~~inflict severe consequences on~~exacerbate the Russian economy—~~are impacting~~ business continuity, liquidity, and asset values are being affected in Ukraine and Russia, agitating ~~markets worldwide. It~~global markets. In addition to increased inflation and higher energy and transportation costs, it is difficult to estimate the impact of the ongoing invasion on the global ~~economy, including increased inflation and higher energy and transportation costs;~~economy; the invasion of Ukraine could ~~adversely impact~~negatively affect our financial results. ~~Although we do~~The Company does not ~~presently foresee~~anticipate any risks ~~that may affect our Company’s~~affecting its liquidity, operating results, ~~and~~or financial ~~reporting,~~reporting. Still, we monitor developments in Ukraine to ~~assess direct material adverse effects on~~determine whether they will harm our business, financial condition, or results of operations.

~~Climate Change-Related Effects~~Israel/Hamas Conflict

~~Climate change is an important global issue that presents opportunities~~In the wake of the Israeli-Hamas war, there have been and ~~challenges for our Company, partners, and communities. Climate change matters for our Company are likely~~will continue to be ~~driven by changes~~uncertainties and disruptions in ~~physical climate parameters, regulations and/or public policy,~~the global economy and ~~changes in technology~~financial markets. Our team is also monitoring and ~~product demand.~~responding to the conflict between Israel and Hamas. As of the date of this report, there have been no material impacts on our business operations and financial performance. The future impact of the conflicts on our business operations and financial performance is still uncertain. It will depend on future developments, including the severity and duration of the conflict, as well as its impact on regional and global economic conditions. We will continue to monitor the conflict, assess their related restrictions, and make prudent decisions for team members, customers, and the company.

~~While~~Relocation of United Kingdom manufacturing division
We are relocating our manufacturing division from the United Kingdom to the United States. The relocation process is anticipated to be completed by the end of 2023.
The relocation to the United States is estimated to result in approximately $1.0 million in annual savings. Over the next nine months, we ~~seek~~will incur approximately $0.2 million in severance costs due to ~~mitigate~~ the ~~risks associated with climate change, we recognize inherent climate-related risks regardless of where we conduct our businesses. Any~~relocation of our ~~locations may be vulnerable~~manufacturing division to the adverse effects of climate change. Climate-related events can disrupt our business, including our customers, and cause us to experience higher attrition, losses, and additional costs to resume operations. Access to clean water and reliable energy in the communities where we operate our Company is a priority.United States.

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Climate Change-Related Effects
Our Company, partners, and communities face both opportunities and challenges related to climate change. Physical climate parameters, regulations, public policy, technology, and product demand changes will likely influence our Company’s climate change strategy. We are responsible for responding to climate change and will continue to focus on reducing our environmental impact. We will also focus on developing innovative solutions to mitigate climate change risks. We are committed to working collaboratively with our partners to achieve a sustainable future.
Despite our efforts to mitigate climate change risks, we recognize that climate-related risks are inherent wherever we conduct our business. There is a possibility that any of our locations will be affected by climate change. Climate-related events can disrupt our industry and customers, increasing attrition, losses, and extra costs. It is important to us that our company’s communities have access to clean water and reliable energy. For this reason, we are committed to developing and implementing strategies to reduce our carbon footprint and ensure sustainability. We partner with organizations and governments to promote renewable energy sources and create resilient communities.
The increase in temperature causes natural disasters to become more frequent and severe, disrupting the operation of our business. Wildfires, floods, droughts, hurricanes, and hurricanes are natural disasters. We can also become less productive, lose customers, and incur additional costs if we have limited access to clean water and reliable energy. We must take proactive steps to mitigate the effects of climate change. We need to develop strategies to reduce our carbon footprint and find ways to make our operations more resilient to climate-related disruptions. Additionally, we must invest in technology that can help us better prepare for and respond to extreme weather events.
Asset Acquisition
Poway, LLC, a newly formed wholly owned subsidiary of Vislink Technologies, Inc., entered into an asset purchase agreement from BMS, LLC on September 14, 2023. BMS is known for its cutting-edge video microwave systems used by broadcasters, law enforcement, and defense contractors. As a result of this acquisition, Vislink can leverage BMS’ extensive customer base and global reach. Due to the growing demand for real-time video transmission in various applications, the airborne video downlink systems market is experiencing significant growth. Ground stations can receive live video feeds from airborne platforms like helicopters and drones. Aerial surveillance, emergency response, news gathering, and other critical operations use them. Vislink will be well-positioned to capture this growing market by acquiring BMS assets. By acquiring Broadcast Microwave Services (BMS) assets, Vislink extends its position in airborne video downlink systems. A strategic move like this enhances Vislink’s product offerings, customer relationships, and market leadership. This dynamic market offers opportunities for Vislink with the growing demand for real-time video transmission.
It was agreed that Vislink would pay BMS $200,000 on September 14, 2023, for inventory and assume certain liabilities. The Company agreed to pay $230,000 to BMS on October 2, 2023, in exchange for BMS’s remaining inventory. As of September 14, 2023, or September 30, 2023, the Company did not hold the remaining inventory title of BMS.
Overview

Vislink was incorporated in Delaware in 2006, and it is a global technology ~~business specializing in~~company dedicated to collecting, delivering, and managing high-quality, live video and ~~associated~~related data from the action scene to the viewing screen. Vislink provides solutions for collecting live news, sports, entertainment, and news events for ~~the~~ broadcast markets. ~~Vislink also furnishes~~The company offers real-time video intelligence solutions through customized transmission products to the surveillance and defense ~~markets with real-time video intelligence solutions using various tailored transmission products. The Vislink team~~markets. We also ~~provides~~provide professional and technical services ~~utilizing a staff of~~through our technology experts. These experts ~~with~~have decades of practical experience and applied knowledge ~~and real-world experience~~ in the terrestrial microwave, satellite, fiber optic, ~~surveillance,~~ and ~~wireless communications~~surveillance systems, delivering a broad ~~spectrum~~range of ~~customer solutions.~~solutions to our customers.

Live Broadcast:

Vislink ~~delivers an extensive~~offers a broad portfolio of ~~solutions~~products and services for the live news, sports, and entertainment industries. ~~These~~The solutions include video collection, transmission, management, and distribution via microwave, satellite, cellular, ~~I.P.~~IP (Internet Protocol), MESH, and bonded cellular/5G networks. ~~We also~~Furthermore, we provide solutions utilizing ~~A.I. (Artificial Intelligence)~~artificial intelligence technologies to ~~provide automated~~automate news and sporting events coverage. ~~With over 50 years in operation, Vislink has the~~The expertise and technology portfolio of Vislink, which has been in operation for more than 50 years, enable it to deliver ~~fully~~ integrated, seamless, end-to-end solutions. Vislink’s solutions are designed to provide high-quality content and maximize operational efficiency. The Company is committed to providing its clients with the best possible service and technology. Vislink’s solutions are tailored to meet the specific needs of each customer.
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~~Industry-wide~~Several industry contributors acknowledge the value of Vislink’s live broadcast solutions. ~~The transmission of~~With over 200,000 systems installed worldwide, most ~~of all~~ outside wireless broadcast video content ~~uses~~is transmitted using our ~~equipment, with over 200,000 systems installed worldwide. We~~equipment. It is our pleasure to work closely with the majority of broadcasters around the ~~world’s broadcasters. Vislink wireless cameras and ultra-compact encoders help bring many~~world. Many of the world’s most prestigious sporting and entertainment events ~~to life.~~are broadcast live using Vislink wireless cameras and ultra-compact encoders. Recent examples include ~~globally watched~~ international sporting contests, award shows, racing events, and ~~annual~~cultural and music festivals. Our equipment is reliable and ~~cultural events.~~easy to use, making it the ideal choice for broadcast professionals. We pride ourselves on providing quality products and excellent customer service. We are dedicated to helping our customers produce the best broadcast content possible.

Military And Government:

Using our expertise in live video delivery, Vislink has developed high-quality solutions to meet ~~surveillance and defense markets’~~the operational and industry challenges ~~based on our knowledge~~ of ~~live video delivery.~~surveillance and defense markets. The Vislink solutions are ~~specifically~~ designed ~~with~~to facilitate interagency ~~cooperation,~~collaboration, utilizing ~~the internationally-recognized I.P.~~an internationally recognized IP platform and a ~~web interface for~~web-based video ~~delivery. Vislink provides~~delivery interface. As a provider of comprehensive video, audio, and data communications solutions to the law enforcement community and the public safety community, ~~including Airborne, Unmanned Systems, Maritime,~~Vislink can provide airborne, unmanned systems, maritime, and ~~Tactical Mobile Command Posts.~~ tactical mobile command posts. Vislink solutions are designed to provide reliable and secure communications in extreme conditions, with the ability to adapt quickly to changing environments. They also offer a range of cost-effective products and services tailored to customers’ needs.
These solutions may include:

● integrated suites of airborne downlink transmitters, receivers, and antenna systems
● data and video connectivity for airborne, marine, and ground assets
● UAV video distribution
● flexible support for COFDM and bonded cellular/5G Networks
● terrestrial point-to-point
● tactical mobile command
● IP-based, high-end encryption, full-duplex, real-time connectivity at extended operating ranges
● high-throughput air/marine/ground-to-anywhere uplink and downlink systems
● secure live streaming platforms for use in mobile and fixed assets
● personal portable products

Vislink public safety and surveillance solutions are deployed worldwide, including ~~throughout~~in the ~~U.S.,~~United States, Europe, and the Middle East, at ~~the~~ local, regional, and federal ~~levels of operation,~~level operations, criminal investigation, crisis management, and mobile command ~~posts, and field operations.~~posts. These solutions are designed to meet the ~~demands~~needs of field operations, command centers, and central receiving ~~sites. Short-range~~centers. Short- and long-range solutions are available in ~~areas including~~ established infrastructure areas and ~~exceptionally~~highly remote regions, making valuable video intelligence ~~available~~accessible regardless of location. Solutions can be tailored to meet specific customer requirements and are backed by knowledgeable and responsive support teams. Additionally, these solutions are flexible and scalable, so they can be adapted to meet changing business needs.

Satellite Communications:

~~Over~~Vislink’s satellite solutions are supported by over 30 years of technical ~~expertise support Vislink’s satellite solutions.~~expertise. These solutions ensure robust, secure communications while ~~delivering~~offering low transmission costs for ~~any organization~~organizations that ~~needs~~require high-quality, reliable satellite transmission. ~~We offer~~In addition to providing turnkey solutions, ~~that begin with~~we offer state-of-the-art coding, compression, ~~and~~ engine modulation, and ~~end with our~~ robust, lightweight antenna systems. To ensure the best possible customer experience, Vislink Satellite ~~solutions~~Solutions focus heavily on being the smallest, lightest, and most efficient in their ~~categories, making transportation and ease of use~~category. Vislink lets customers choose from a ~~key driver in the customer experience. Vislink offers an extensive~~wide range of satellite designs ~~that allow customers to optimize~~optimized for bit rate, size, weight, and total cost. ~~Our~~Over 2,000 satellite systems ~~are used extensively globally, with over 2,000 systems~~have been deployed by governments, militaries, and ~~broadcasters. While~~broadcasters worldwide. Although we continue offering satellite solutions, we no longer invest in the engineering and product development necessary to ~~stay relevant in the sector. We~~remain competitive. Although we will continue to market and sell our current ~~solutions but~~satellite products, we do not anticipate introducing any further upgrades or ~~features~~enhancements. Instead, we will focus our resources on other technologies and solutions to better serve our ~~satellite product line.~~customers.
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Connected Edge Solutions:

Our Mobile Viewpoint [operations/products] provides Vislink ~~offers~~with the hardware and software solutions ~~needed to acquire, produce, contribute,~~necessary for acquiring, producing, contributing, and ~~deliver~~delivering video over ~~all~~ private ~~and~~or public ~~networks with the Mobile Viewpoint acquisition. Connected~~networks. The use of connected edge solutions ~~aid~~facilitates the video transport concept of ubiquitous IP networks and cloud-scale computing across 5G, WiFi6, Mesh, and COFDM-enabled networks. These solutions include:

● Live video encoding, stream adaptation, decoding, and production solutions
● Remote production workflows
● Wireless cameras
● AI-driven automated production
● Ability to contribute video over:
○○ Bonded cellular (3G and 4G)
○○ Satellite
○○ Fiber
○○ Emerging networks, including 5G and Starlink
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Results of Operations

Comparison for the three and nine months ended ~~March 31,~~September 30, 2023, and 2022

Revenues

~~Revenues for~~In the three months ~~ending March 31,~~ended September 30, 2023, the revenue was $7.2 million compared to ~~$6.9~~$7.1 million for the three months ~~ending March 31,~~ended September 30, 2022, representing an increase of ~~$0.3~~$0.1 million or 4%1%. ~~During~~In the nine months ended September 30, 2023, the revenue was $19.4 million compared to $20.8 million for the nine months ended September 30, 2022, representing a decrease of $1.4 million or 7%.
As a result of the poor performance of several product lines and an inability to meet customer expectations, the Company discontinued several product lines during the third and fourth quarters of ~~2022, the Company discontinued several product lines due to their lack of performance expectations~~2022. To address economic fluctuations, changing customer demands, and ~~appeal to~~competitive pressures, we have altered our ~~customer base. The Company altered its~~ product marketing for ~~its~~our customer base in the last quarter of 2022 by ~~providing a simplified approach to~~simplifying the process of accessing products and solutions. ~~The~~Moreover, the Company ~~contends~~has decided to consolidate its UK manufacturing division and relocate its activities to the United States beginning in September 2023. With this move, management expects to improve operational efficiency, increase productivity, and strengthen our position in the global market. Currently, we are focusing on ~~track to meet~~developing successful products, and we will invest in their further development. Additionally, we will be exploring new avenues for expanding our ~~long-term revenue growth goals.~~product offering.

Cost of Revenue and Operating Expenses

Cost of Components and Personnel

~~The~~In the three months ended September 30, 2023, the cost of components and personnel ~~for the three months ended March 31, 2023,~~ was $3.3 million compared to ~~$3.4~~$3.6 million for the three months ended ~~March 31,~~September 30, 2022, representing a decrease of ~~$0.1~~$0.3 million or 3%8%. ~~The reduction is indicative~~In the nine months ended September 30, 2023, the cost of ~~management’s~~components and personnel was $9.0 million compared to $10.2 million for the nine months ended September 30, 2022, representing a decrease of $1.2 million or 12%.
Management’s decision to discontinue several product lines in the third and fourth quarters of ~~2022.~~2022 can be attributed to reduced components and personnel costs. This cost-cutting measure, together with the relocation of our U.K. manufacturing division to the U.S., will enable the Company to focus on what it believes are the more profitable product lines and increase the efficiency and productivity of its operations.

General and Administrative Expenses

General and administrative expenses are costs incurred during the ~~expenses~~day-to-day operation of ~~operating~~ the business, ~~daily and include salary and benefit expenses,~~ including salaries, benefits, stock-based compensation, ~~and~~ payroll taxes, ~~as well as the costs of~~ trade shows, marketing programs, promotional materials, professional services, ~~facilities,~~facility upkeep, general liability insurance, travel, and other operating expenses associated with ~~being a~~an established public ~~company.~~entity.

~~General and administrative expenses for~~In the three months ended ~~March 31,~~September 30, 2023, the general and administrative expenses were ~~$5.0~~$4.8 million compared to ~~$4.9~~$4.7 million for the three months ended ~~March 31,~~September 30, 2022, representing an increase of $0.1 million or 2%. ~~The increase is mainly attributable~~In the nine months ended September 30, 2023, the general and administrative expenses were $14.5 million compared to $14.0 million for the nine months ended September 30, 2022, representing an increase of $0.5 million or 4%.
The nine-month increase of $0.1 million is predominantly due to $0.2 million each in insurance, taxes and licenses, and miscellaneous expenses offset by a decrease of $0.4 million in salaries and benefits. The nine-month increase of $0.5 million is primarily attributable to $0.3 million each in stock-based compensation, rent and utilities, and miscellaneous expenses offset by a decrease of ~~$0.2~~$0.4 million ~~each~~ in salaries and ~~benefits, freight and postage. Other changes in the administration of a public company are de minimis.~~benefits.

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Research and Development Expenses

Research and development expenses ~~consist~~are primarily ~~of salary~~associated with salaries and ~~benefit expenses,~~benefits, including payroll taxes, prototypes, facilities, and travel ~~costs.~~expenses.

~~Research and development expenses for~~In the three months ended ~~March 31,~~September 30, 2023, research and development expenses were $0.8 million compared to ~~$1.1~~$0.9 million for the three months ended ~~March 31,~~September 30, 2022, representing a decrease of ~~$0.3~~$0.1 million or ~~27%~~11%. In the nine months ended September 30, 2023, research and development expenses were $2.5 million compared to $3.2 million for the nine months ended September 30, 2022, representing a decrease of $0.7 million or 22%.
The three-month decrease of $0.1 million is primarily attributable to the reduction of $1.0 million in salaries and benefits offset by an increase of $0.8 million in consulting. The nine-month decline of $0.7 million is mainly attributable to ~~a reduction of $0.3~~$1.2 million in ~~miscellaneous research costs.~~salaries and benefits offset by an increase of $0.7 million in consulting.

Amortization and Depreciation

~~Amortization and depreciation expenses for~~In the three months ended ~~March 31,~~September 30, 2023, amortization and depreciation expenses were $0.3 million compared to $0.5 million for the three months ended ~~March 31,~~September 30, 2022, representing a decrease of $0.2 million or 40%. ~~The decline is attributable~~In the nine months ended September 30, 2023, amortization and depreciation expenses were $0.9 million compared to $1.4 million for the nine months ended September 30, 2022, representing a ~~lower~~decrease of $0.5 million or 36%. A decrease in the net book value of intangible assets ~~costs subject~~is attributed to ~~amortization.~~the decreased amortization of intangible asset costs.

Other

Dividend and Interest Income

~~Dividend and interest income increased by approximately $0.2 million for~~In the three months ended ~~March 31,~~September 30, 2023, dividend and interest income was $0.3 million, compared to $0.0 million for the three months ended ~~March 31,~~September 30, 2022, representing an increase of ~~$0.2~~$0.3 million or 100%. In the nine months ended September 30, 2023, dividend and interest income were $0.9 million compared to $0.0 million for the nine months ended September 30, 2022, representing an increase of $0.9 million or 100%. The ~~increase~~growth is due to the Company’s investment in government-backed bonds held to maturity and money market funds.

Net Loss

~~For~~In the three months ended ~~March 31,~~September 30, 2023, the Company had a net loss of ~~$1.8~~$1.9 million compared to a net loss of $2.8 million in the three months ended September 30, 2022, or a decrease in net loss of $0.9 million or 32%. The Company’s net loss for the nine months ending September 30, 2023, was $6.8 million, compared to $8.0 million for the nine months ending September 30, 2022, or a decrease in net loss of $1.2 million or 15%.
The decrease in the net loss of $1.9 million for the three months ended ~~March 31, 2022, or~~September 30, 2023, was primarily the result of a decrease of ~~$1.0~~$0.3 million ~~or 36%.~~ in cost of components and personal, $0.2 million in amortization and depreciation, $0.1 million in research and development costs coupled with the benefit of $0.3 million in interest and dividend income.
The ~~reduction~~decrease in the net loss isof $1.2 million for the nine months ended September 30, 2023, was primarily ~~attributable to recognizing additional stock-based compensation,~~the result of a decrease of $1.2 million in cost of components and personal, $0.7 million each in salaries and benefits and research, and development expenses, $0.4 million in amortization and depreciation offset by ~~a decrease~~an increase of $0.7 million in ~~miscellaneous research costs~~rent and ~~amortization~~utilities, $0.4 million in professional fees, and ~~depreciation. Additionally, the Company invested available funds~~$0.9 million in ~~securities, increasing investment~~dividend and interest income.

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Liquidity and Capital Resources

~~The~~For the nine months ended September 30, 2023, the Company incurred an approximate ~~$2.3~~loss of $8.0 million ~~loss~~ from operations and ~~$0.6~~used $6.0 million of cash ~~used in operating activities~~ for operational purposes. On September 30, 2023, the ~~three months ended March 31, 2023. The~~ Company had ~~$38.2~~$33.4 million in working capital, ~~$301.9~~$306.9 million in accumulated deficits, and ~~$14.0~~$7.2 million ~~of cash and cash equivalents as of March 31, 2023.~~in cash.

During the first quarter of 2023, the Company invested ~~a portion~~approximately $10.8 million of its cash reserves ~~of approximately $10.8 million~~ in Federal bonds ~~intended to be held to maturity,~~ and $11.3 million in ~~Federally backed~~federally insured money market mutual funds, ~~with the primary purpose of seeking~~primarily to increase investment ~~income.~~ income (Note 6). In the third quarter of 2023, the Company entered into an asset purchase agreement with BMS, LLC, acquiring inventory and assuming certain liabilities in exchange for $200,000 in cash consideration paid at the closing of the transaction on October 2, 2023, (See Note 7).

~~Many factors may impact the~~The Company’s liquidity ~~requirements.~~requirements may be affected by a variety of factors. These ~~may~~factors include ~~but are not limited to economic conditions, including~~ inflation, foreign exchange fluctuations, ~~and the markets in which we compete or wish to enter,~~market conditions, strategic acquisitions, ~~our~~ market strategy, ~~our~~ research and development activities, regulatory matters, and ~~technology~~product and ~~product~~technology innovations. The Company believes it will have sufficient funds to continue ~~its~~ operations for at least twelve months from the filing date of these unaudited condensed consolidated financial ~~statements.~~statements in this Quarterly Report on Form 10-Q.

Critical Accounting Policies

As of the date of the filing of this ~~quarterly report,~~Quarterly Report on Form 10-Qt, we believe there have been no material changes to our critical accounting policies during the three months ended ~~March 31,~~September 30, 2023, compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 31, 2023. The location of additional information about these critical accounting policies is in the “Management’s Discussion & Analysis of Financial Condition and Results of Operations” section included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2022.

Cash Flows

The following table sets forth the significant components of our cash ~~flows~~flow data statements for the periods presented.

For the ~~three months ended~~Nine Months Ended
(In Thousands)

September 30,
March 31, 2023 March 31, 2022 2023 2022
Net cash used in operating activities $ (602 ) $ (4,879 ) $ (5,992 ) $ (11,767 )
Net cash used in investing activities (10,940 ) (209 ) (11,534 ) (352 )
Net cash used in financing activities (84 ) (99 ) (409 ) (791 )
Effect of exchange rate changes on cash 42 (21 ) (452 ) 1,155
Net decrease in cash and cash equivalents $ (11,584 ) $ (5,208 )
Net decrease in cash $ (18,387 ) $ (11,755 )

Operating Activities
Net cash used in operating activities of approximately $6.0 million during the nine months ended September 30, 2023, was principally attributable to a net loss of $6.8 million, $1.6 million of stock-based compensation, $0.9 million of depreciation and amortization, an increase of $1.6 million in inventory, an increase of $1.4 million in accounts receivable, an increase of $0.5 million of accounts payable, offset by decreases of $0.4 million in operating lease liabilities, together with $0.4 million of deferred revenue and customer deposits, $0.2 million each in deferred tax benefits, and accretion of bond discount.

Net cash used in operating activities of approximately ~~$1.0~~$11.8 million during the ~~three~~nine months ended ~~March 31, 2023,~~September 30, 2022, was principally attributable to a net loss of ~~$1.8~~$8.0 million and ~~$0.9~~an increase in $6.0 million in inventory, $0.8 million in accounts receivable, and $1.3 million in stock-based compensation. Other changes in the net cash used in public company administration are de minimis. Net cash used in operating activities of approximately $4.9 million during the three months ended March 31, 2022, was principally attributable to an increase in — a net loss of $2.8 million, $2.2 million in inventory, $0.7 million in stock-based compensation,compensation; a decrease in ~~— $0.5 million in deferred revenue and customer deposits, $0.4~~$1.7 million in prepaid expenses and other current assets, and ~~$0.3~~$1.6 million of accrued expenses and interest expense.

Investing Activities
Net cash used by investing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and 2022 were ~~$10.9~~$11.2 million and ~~$0.2~~$0.3 million, respectively, and principally related to the Company’s investment in government-backed securities and money market funds and capital expenditures for furniture and computer ~~equipment.~~equipment and an asset acquisition.

Financing Activities
Net cash used in financing activities ~~of approximately $0.1 million during~~for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and 2022 were $0.4 million and $ 0.8 million, was principally attributable to principal payments made towards D & O policy premiums.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As of ~~March 31,~~September 30, 2023, there have been no material changes to the information related to quantitative and qualitative disclosures about the market risk provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the ~~time~~ periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer ~~(our principal executive officer)~~ and Chief Financial Officer, ~~(our principal financial and accounting officer),~~ we ~~conducted an evaluation of~~evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended ~~March 31,~~September 30, 2023, as such term is defined in Rules ~~13a-15(e)~~13a-15I and ~~15d-15(e)~~15d-15I under the Exchange Act. In their assessment of the effectiveness of internal control over financial reporting as of ~~March 31,~~September 30, 2023, management concluded that such control was ineffective and that there were control deficiencies that constituted material weaknesses because (i) we currently do not employ the appropriate number of accounting personnel to ensure (a) we maintain proper segregation of duties, and (b) conduct a tolerable risk assessment, and (ii) we have not adequately documented a complete assessment of the effectiveness of the design and operation of our internal control over financial reporting. Considering these material weaknesses, we performed additional procedures and analyses as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles.

Management has engaged a third-party consultant to identify and document our internal control deficiencies and assess current controls and recommendations regarding remediation efforts to eliminate or mitigate the control deficiencies.

Notwithstanding the material weakness as of ~~March 31,~~September 30, 2023, management, including the Certifying Officers, ~~believe~~believes that the condensed consolidated financial statements contained in this Annual Report filing fairly present, in all material ~~respect,~~respects, our financial condition, results of operations, and cash flows for the fiscal period presented in conformity with GAAP.

Changes to Internal Control Over Financial Reporting
Although we have continued our remediation efforts in connection with identified material weaknesses, the material weakness, as discussed in our Annual Report on Form 10-K for the period ended December 31, 2022, has not been fully remediated. As we continue to remediate the material weakness in our internal controls, we have made changes during our most recently completed fiscal quarter to our internal controls, including changes to enhance the supervisory review of our accounting procedures. Notwithstanding the continuing and un-remediated material weakness, management, including the Certifying Officers, believes that the condensed consolidated financial statements contained in this Quarterly Report ~~fairly~~ present, in all material respects, our financial condition, results of operations, and cash flows for the fiscal periods presented in this Quarterly Report in conformity with GAAP.

3229

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

~~None~~In the ordinary course of business, we may become involved in various lawsuits and legal proceedings. We cannot predict the impact or outcome of litigation, if any, and we may experience a negative outcome from time to time that may harm our business. We are not a party to, and our properties are not currently the subject of any material pending legal proceedings, which, individually or in the aggregate, would adversely affect our financial position or the results of operations.

Item 1A. Risk Factors.

~~There have been no material changes from the risk factors disclosed~~The risks described in ~~Item 1A of~~“Risk Factors” within our 2022 Annual Report and in our Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~quarter ended ~~December 31,~~June 30, 2023, could materially and adversely affect our business, financial condition, and results of operations, and the trading price of our common stock could decline. The Risk Factors section in the 2022 ~~filed with~~Annual Report, as updated in the ~~SEC~~Quarterly Report on ~~March 31, 2023.~~Form 10-Q for the quarter ended June 30, 2023, remains current in all material respects. These risk factors do not identify all the risks that we face. Our operations could also be affected by factors not presently known to us or that we consider immaterial. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Refer also to the other information outlined in this Form 10-Q, including the Forward-Looking Statements, MD&A, and Unaudited Condensed Consolidated Financial Statements sections.
30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.

None.

~~Item 3. Defaults Upon Senior Securities.~~
~~None.~~
Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.
(a) Not applicable.

~~None~~(b) Not applicable.

(c) Trading Plans
During the quarter that ended September 30, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
3331

Item 6. Exhibits. To be updated by outside attorneys

Exhibit
Number
Description of Exhibit
~~3.1(i)(a)~~ ~~Certificate of Elimination for Series A Preferred Stock of the Company, dated March 24, 2023~~⁽¹²⁾
~~3.1(i)(b)~~ ~~Certificate of Amendment to the Certificate of Incorporation, dated April 27, 2023~~⁽¹⁾
~~3.1(ii)~~ ~~Third Amended & Restated Bylaws~~ ⁽²⁾
~~4.1~~ ~~Form of Common Stock Certificate of the Registrant~~ ⁽³⁾
~~4.2~~ ~~Form of Warrant Agreement by and between the Registrant and Continental Stock Transfer & Trust Company and Form of Warrant Certificate for the offering closed July 24, 2013 and August 19, 2013~~ ⁽⁴⁾
~~4.3~~ ~~Form of Warrant~~ ⁽⁵⁾
~~4.4~~ ~~Form of Vislink Promissory Note~~ ⁽⁶⁾
~~4.5~~ ~~Form of Underwriters’ Warrant for February 2017 Offering~~ ⁽⁷⁾
~~4.6~~ ~~Form of Warrant for August 2017 Offering~~ ⁽⁸⁾
~~4.7~~ ~~Form of 6% Senior Secured Convertible Debenture~~⁽⁹⁾
~~4.8~~ ~~Form of Common Stock Purchase Warrant~~⁽⁹⁾
~~4.9~~ ~~Form of Amended and Restated 6% Senior Secured Debenture~~⁽¹⁰⁾
~~4.10~~ ~~Warrant Agreement, including Form of Common Warrant and Form of Pre-Funded Warrant from July 2019 Offering~~⁽¹¹⁾
~~10.1~~ ~~Separation Agreement by and between the Company and Michael Bond, dated as of March 31, 2023~~⁽¹³⁾
31.1* Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1* Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2* Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Schema
101.CAL Inline XBRL Taxonomy Calculation Linkbase
101.DEF Inline XBRL Taxonomy Definition Linkbase
101.LAB Inline XBRL Taxonomy Label Linkbase
101.PRE Inline XBRL Taxonomy Presentation Linkbase
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

In accordance with SEC Release 33-8238, Exhibits 31.1, 31.2, 32.1 and 32.2 are being furnished and not filed.

* Filed herewith
~~(1)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on April 28, 2023.~~
~~(2)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 20, 2021.~~
~~(3))~~ ~~Filed as an Exhibit on Form S-1/A with the SEC on May 21, 2013.~~
~~(4)~~ ~~Filed as an Exhibit on Current Report to Form 8-K with the SEC on August 19, 2013.~~
~~(5)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 13, 2016.~~
~~(6)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 6, 2017.~~
~~(7)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 10, 2017.~~
~~(8)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 16, 2017.~~
~~(9)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 29, 2018.~~
~~(10)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on October 11, 2018.~~
~~(11)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on July 16, 2019.~~
~~(12)~~ ~~Filed as an Exhibit on Current Report on Form 8-K with the SEC on March 27, 2023.~~
~~(13)~~ ~~Filed as an Exhibit on Current Report on Form 10-K/A with the SEC on May 1, 2023.~~

3432

SIGNATURES

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

VISLINK TECHNOLOGIES, INC.

Date: ~~May 15,~~November 8, 2023 By: /s/ Carleton Miller
Carleton Miller
Chief Executive Officer
(Duly Authorized Officer and Principal Executive Officer)

Date: ~~May 15,~~November 8, 2023 By: /s/ Paul Norridge
Paul Norridge
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

3533

	Shares			Amount		Shares		Amount		Capital		Income (Loss)			Stock			Deficit			Total
												Accumulated
	Series A									Additional		Other
	Preferred Stock					Common Stock				Paid In		Comprehensive			Treasury			Accumulated
	Shares			Amount		Shares		Amount		Capital		Income (Loss)			Stock			Deficit			Total

Three months ending September 30, 2023:

Balance, July 1, 2023		—		$	—		2,377,362	$	—	$	346,822	$	(1,037	)	$	(277	)	$	(304,883	)	$	40,625
Net loss		—			—		—		—		—		—			—			(1,970	)		(1,970	)
Unrealized loss on currency translation adjustment		—			—		—		—		—		(364	)		—			—			(364	)
Issuance of common stock in connection with:
Satisfaction with the conversion of restricted stock unit awards		—			—		10,234		—		—		—			—			—			—
Stock-based compensation		—			—		—		—		343		—			—			—			343
Balance, September 30, 2023		—		$	—		2,387,596	$	—	$	347,165	$	(1,401	)	$	(277	)	$	(306,853	)	$	38,634

Nine months ending September 30, 2023:

Balance, January 1, 2023*		47,419		$	—		2,367,362	$	—	$	345,365	$	(1,337	)	$	(277	)	$	(300,099	)	$	43,652
Net loss		—			—		—		—		—		—			—			(6,754	)		(6,754	)
Unrealized loss on currency translation adjustment		—			—		—		—		—		(64	)		—			—			(64	)
Elimination of Series A Preferred Stock		(47,419	)		—		—		—		—		—			—			—			—
Issuance of common stock in connection with:
Compensation awards for services previously accrued		—			—		10,000		—		200		—			—			—			200
Satisfaction with the conversion of restricted stock unit awards		—			—		10,234		—		—		—			—			—			—
Stock-based compensation		—			—		—		—		1,600		—			—			—			1,600
Balance, September 30, 2023		—		$	—		2,387,596	$	—	$	347,165	$	(1,401	)	$	(277	)	$	(306,853	)	$	38,634

	2023			2022
	Three Months Ended March 31,
	2023			2022
Cash flows used in operating activities
Net loss	$	(1,756	)	$	(2,767	)
Adjustments to reconcile net loss to net cash used in operating activities
Deferred tax benefits		(55	)		(51	)
Unrealized loss on fair value of investment in bonds held to maturity		28			—
Accretion of bond discount		(54	)		—
Stock-based compensation		921			747
Provision for bad debt		27			6
Recovery of bad debt		(448	)		(56	)
Inventory valuation adjustments		129			96
Amortization of right of use assets, operating assets		67			52
Depreciation and amortization		298			457
Changes in assets and liabilities
Accounts receivable		128			(408	)
Inventory		137			(2,208	)
Prepaid expenses and other current assets		213			383
Accounts payable		(165	)		(184	)
Accrued expenses and interest expense		288			(333	)
Operating lease liabilities		(106	)		(127	)
Deferred revenue and customer deposits		(254	)		(486	)
Net cash used in operating activities		(602	)		(4,879	)
Cash flows used in investing activities
Cash used for investment in securities held to maturity		(10,763	)		—
Cash used for property and equipment		(177	)		(209	)
Net cash used in investing activities		(10,940	)		(209	)
Cash flows provided in financing activities
Principal payments made on notes payable		(84	)		(99	)
Net used in financing activities		(84	)		(99	)
Effect of exchange rate changes on cash		43			(21	)
Net decrease in cash and cash equivalents		(11,583	)		(5,208	)
Cash and cash equivalents, beginning of period		25,627			36,231
Cash and cash equivalents, end of period	$	14,044		$	31,023
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	33		$	1
Supplemental disclosure of non-cash information:
Common stock issued in connection with:
Compensation awards previously accrued	$	200		$	—
ROU assets and operating lease obligations recognized (Note 6):
Operating lease assets recognized	$	—			—
Less: non-cash changes to operating lease assets
amortization		(67	)		(52	)
ROU assets and operating lease obligations recognized	$	(67	)	$	(52	)
Operating lease liabilities recognized	$	—		$	—
Less: non-cash changes to operating lease liabilities accretion		(106	)		(127	)
Operating lease liabilities recognized	$	(106	)	$	(127	)

	2023			2022
	For the Nine Months Ended September 30,
	2023			2022

Cash flows used in operating activities
Net loss	$	(6,754	)	$	(8,033	)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on settlement of debt		—			(26	)
Deferred tax benefits		(164	)		(161	)
Unrealized loss on the fair value of investments in bonds held to maturity		67			—
Accretion of bond discount		(224	)		—
Stock-based compensation		1,600			1,270
Stock issuance commitments		—			200
Provision for bad debt		64			19
Recovery of bad debt		(8	)		(17	)
Inventory valuation adjustments		480			404
Amortization of right-of-use assets, operating assets		276			152
Depreciation and amortization		913			1,424
Impairment on right-of-use assets		83			88
Changes in assets and liabilities
Accounts receivable		(1,400	)		(803	)
Inventories		(1,598	)		(6,077	)
Prepaid expenses and other current assets		(278	)		1,695
Accounts payable		505			33
Accrued expenses		445			(1,555	)
Accrued Directors Compensation		(5	)		—
Operating lease obligations		(367	)		(464	)
Customer deposits and deferred revenue		373			84
Net cash used in operating activities		(5,992	)		(11,767	)
Cash flows used in investing activities
Cash used for investments held to maturity		(10,763	)		—
Cash used in asset acquisition		(269	)		—
Cash used for property and equipment		(502	)		(352	)
Net cash used in investing activities		(11,534	)		(352	)
Cash flows used in financing activities
Principal payments made on notes payable		(409	)		(791	)
Net cash used in financing activities		(409	)		(791	)
Effect of exchange rate changes on cash		(452	)		1,155
Net decrease in cash and cash equivalents		(18,387	)		(11,755	)
Cash and cash equivalents, beginning of the period		25,627			36,231
Cash and cash equivalents, end of the period	$	7,240		$	24,476

	●	~~integrated suites of airborne downlink transmitters, receivers, and antenna systems~~
	●	~~data and video connectivity for airborne, marine, and ground assets~~
	●	~~UAV video distribution~~
	●	~~flexible support for COFDM and bonded cellular/5G Networks~~
	●	~~terrestrial point-to-point~~
	●	~~tactical mobile command~~
	●	~~IP-based, high-end encryption, full-duplex, real-time connectivity at extended operating ranges~~
	●	~~high-throughput air/marine/ground-to-anywhere uplink and downlink systems~~
	●	~~secure live streaming platforms for use in mobile and fixed assets~~
	●	~~personal portable products~~

●	~~Live video encoding, stream adaptation, decoding, and production solutions~~
●	~~Remote production workflows~~
●	~~Wireless cameras~~
●	~~AI-driven automated production~~
●	~~Ability to contribute video over:~~
	○	~~Bonded cellular (3G and 4G)~~
	○	~~Satellite~~
	○	~~Fiber~~
	○	~~Emerging networks, including 5G and Starlink~~

	3/31/23		12/31/22

Cash on hand	$	2,741,000	$	25,627,000

Federal-backed mutual funds		11,303,000		—

Cash and cash equivalents	$	14,044,000	$	25,627,000

	2023		2022
	Three Months Ended
	March 31,
	2023		2022
Anti-dilutive potential common stock equivalents are excluded from the calculation of loss per share:
Stock options		78		26
Warrants		459		459
Total		537		485

	●	~~As of March 31, 2023 – £~~ ~~1.236707~~ ~~to $1.00; €~~ ~~1.0877060~~ $~~1.00~~

	●	~~The average exchange rate for the three months ended March 31, 2023 – £~~ ~~1.2147249~~ ~~to $1.00; €~~ ~~1.0727193~~ ~~to $1.00~~

	●	~~As of March 31, 2022 – £1.3132500~~ ~~to $1.00; €0.8462040~~ ~~to £1.00~~

	●	~~The average exchange rate for the three months ended March 31, 2022 – £1.3413086~~ ~~to $1.00; €0.8361689~~ ~~to £1.00~~

	2023		2022
	Nine months ended
	September 30
	2023		2022
Anti-dilutive potential common stock equivalents excluded from the calculation of loss per share:
Stock options		76		35
Warrants		456		459
Total		532		494

	●	As of September 30, 2023 – £1.221980 to $1.00; €1.058230 to $1.00
	●	The average exchange rate for the nine months ended September 30, 2023 – £1.244390 to $1.00; €1.083310 to $1.00
	●	As of September 30, 2022 – £1.113291 to $1.00; €0.979744 to $1.00
	●	The average exchange rate for the nine months ended September 30, 2022 – £1.257858 to $1.00; €1.062845 to $1.00

	September 30,		December 31,
	2023		2022

Cash on hand	$	2,706,000	$	25,627,000
Federally insured money market mutual funds		4,534,000		—
Total cash and cash equivalents	$	7,240,000	$	25,627,000

	●	On January 23, 2023, the Company purchased a bond, “HSBC USA INC CP,” with a face value of $5,065,789, a par value of $5,000,000, maturing October 24, 2023, a 5.1948% interest rate, at a discount of $253,289 totaling $4,812,500. The value on September 30, 2023, was $4,982,000.

	●	On February 1, 2023, the Company purchased a bond, “Federal Home Loan Banks,” with a face value of $4,999,750 and accrued interest of $25,729, a par value of $5,000,000, maturing December 22, 2023, at an interest rate of 4.750%, totaling $5,025,479. The value on September 30, 2023, was $4,991,000

	●	On February 28, 2023, the Company purchased a bond, “Federal National Mortgage Association,” with a face and par value of $950,000, maturing February 28, 2024, at an interest rate of 5.07%, totaling $950,000. The value on September 30, 2023, was $947,000.

	Level 1		Level 2		Level 3		Total

Federal Bonds	$	—	$	10,920,000	$	—	$	10,920,000

	$	—	$	10,920,000	$	—	$	10,920,000

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

Federal Bonds	$	10,987,000		—	$	67,000	$	10,920,000

	$	10,987,000	$	—	$	67,000	$	10,920,000


Assets acquired:
Work-in-process inventory	$	66,042
Intangible assets - customer relationships		495,372
total assets		561,414

Liabilities assumed:
Deferred revenue		292,014
total liabilities		292,014

Total cash used for asset acquisition	$	269,400

Cash used in acquisition:
Acquisition price	$	200,000
Transaction costs		69,400
Total cash used for asset acquisition	$	269,400

	Proprietary Technology					Patents and Licenses					Trade Names & Technology					Customer Relationships
			Accumulated					Accumulated					Accumulated					Accumulated
	Cost		Amortization			Cost		Amortization			Cost		Amortization			Cost		Amortization			Net
Balance, December 31, 2022	$	2,132,000	$	(815,000	)	$	12,378,000	$	(12,378,000	)	$	2,251,000	$	(1,189,000	)	$	5,095,000	$	(3,074,000	)	$	4,400,000

Additions		—		—			—		—			—		—			496,000		—			496,000

Amortization		—		(443,000	)		—		—			—		(104,000	)		—		(193,000	)		(740,000	)
Balance, September 30, 2023	$	2,132,000	$	(1,258,000	)	$	12,378,000	$	(12,378,000	)	$	2,251,000	$	(1,293,000	)	$	5,591,000	$	(3,267,000	)	$	4,156,000

Period ending September 30,
2024	$	793,000
2025		791,000
2026		726,000
2027		467,000
2028		289,000
Thereafter		1,090,000
Finite-Lived Intangible Assets, Net, Total	$	4,156,000

	Principal
	September 30, 2023		December 31, 2022
The Company renewed its D&O insurance policy on April 5, 2022, reducing the premium to approximately $1,037,000, less a down payment of $194,000, with the remaining balance financed. The loan’s terms are for nine months at a 2.09% annual interest rate and a monthly principal and interest payment of approximately $84,000. Accordingly, the Company recorded interest expenses of $-0- and $150 for the three and nine months ended September 30, 2023, and $4,000 and $6,000 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, the note has been fully repaid.	$	—	$	84,000
The Company renewed its D&O insurance policy on April 5, 2022, reducing the premium to approximately $1,037,000, less a down payment of $194,000, with the remaining balance financed. The loan’s terms are for nine months at a 2.09% annual interest rate and a monthly principal and interest payment of approximately $84,000. Accordingly, the Company recorded interest expenses of $-0- and $150 for the three and nine months ended September 30, 2023, and $4,000 and $6,000 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, the note has been fully repaid.	$	—	$	84,000

The Company renewed its D & O insurance policy on April 5, 2023, reducing the premium to approximately $811,000, less a down payment of $288,000, financing the remaining balance of approximately $523,000. The loan’s terms are for nine months at a 6.14% annual interest rate and a monthly principal and interest payment of approximately $67,000. Accordingly, the Company recorded interest expenses of $5,000 and $10,000 for the three and nine months ended September 30, 2023, and $-0- for the three and nine months ended September 30, 2022.		199,000
	$	199,000	$	84,000

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

Federal Bonds	$	10,817,000		—	$	28,000	$	10,789,000

	$	10,817,000	$	—	$	28,000	$	10,789,000

	Amount

2024	$	471,000
2025		508,000
2026		278,000
2027		122,000
2028		—
Thereafter		—
Total lease payments		1,379,000
Less: imputed interest		184,000
Present value of lease liabilities		1,195,000
Less: Current lease liabilities		372,000
Non-current lease liabilities	$	823,000

Location	Square Footage		Lease-End Date		Approximate Future Payments
Colchester, U.K. – Waterside House		13,223	Dec	2025	$	535,000
Billerica, MA		2,000	Dec	2026		342,000
Mount Olive, NJ		7,979	Jan	2027		502,000

Period ending March 31,
2024	$	642,000
2025		640,000
2026		624,000
2027		540,000
2028		476,000
Thereafter		1,234,000
	$	4,156,000


	Amount

2024	$	549,000
2025		461,000
2026		393,000
2027		224,000
2028		25,000
Thereafter		—
Total lease payments		1,652,000
Less: imputed interest		197,000
Present value of lease liabilities		1,455,000
Less: Current lease liabilities		433,000
Non-current lease liabilities	$	1,022,000

	●	~~Issued~~ ~~10,000~~ ~~shares of common stock to specific board members under a commitment agreement valued at $200,000. The common stock’s value was determined on the agreement’s original date.~~

	●	~~Recognized approximately $921,000~~ ~~of stock-based compensation costs associated with outstanding stock options recorded in general and administrative expenses offsetting additional paid-in capital.~~

	Expected term (years)		Expected dividend yield		Risk-free interest rate			Volatility			Exercise Price

● Carleton M. Miller — CEO		6.5		—		1.57	%		153.0	%	$	34.20

● Michael Bond — CFO		6.3		—		0.62	%		155.0	%	$	19.20

*	Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $6,000,000 accumulated over four consecutive fiscal quarters.

**	Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $15,000,000 accumulated over four consecutive fiscal quarters.

~~***~~	Shares will vest upon the Company’s attainment, on or before the fifth (5th) anniversary of the Vesting Commencement Date, of Cumulative EBITDA of more than $23,000,000 accumulated over four consecutive fiscal quarters.

	Grant						Initial RSUs Vesting			Remaining RSUs Vesting
Recipient	Date		Units		Exercise Price		Date	Units		Units		Terms

Carleton M. Miller — CEO		3/3/21		29,933	$	72.00	3/3/22		9,978		19,956	24 equal monthly periods

Michel Bais — Managing Director		8/17/21		10,000	$	37.80	8/17/22		2,500		7,500	36 equal monthly periods

Group of 22 Employees		2/17/22		25,750	$	19.60	2/17/23		8,498		17,253	24 equal monthly periods

Carleton M. Miller — CEO		2/16/22		51,654	$	21.00	2/16/23		12,913		38,740	36 equal monthly periods

Michael Bond — CFO		2/16/22		19,649	$	21.00	2/16/23		4,913		14,737	36 equal monthly periods

Group of 6 Employees		2/17/23		11,250	$	11.40	2/17/24		3,713		7,538	24 equal monthly periods

Group of 11 Employees		3/17/23		30,000	$	8.00	3/16/24		9,900		20,100	24 equal monthly periods

	Grant					Units Vesting Schedule
Recipient	Date	Units		Exercise Price		Tranche 1		Tranche 2		Tranche 3
Carleton M. Miller — CEO	3/3/21		44,833	$	72.00		14,945		14,944		14,944

Michael Bond — CFO	12/31/20		18,436	$	26.40		6,146		6,145		6,145

*	~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $35,575,000 accumulated over four consecutive fiscal quarters~~.

**	~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $37,353,000 accumulated over four consecutive fiscal quarters~~.

~~***~~	~~RSUs will vest upon the Company’s attainment, on or before December 31, 2026, of revenue of more than $39,220,000 accumulated over four consecutive fiscal quarters~~.

	●	has issued 10,000 shares of common stock to specific board members as part of a commitment agreement valued at $200,000. The common stock’s value was determined on the agreement’s original date.

	●	has issued 10,234 shares of common stock in satisfaction with the conversion of restricted stock unit awards.

	●	recognized approximately $1,600,000 of stock-based compensation costs associated with outstanding stock options in general and administrative expenses offsetting additional capital investments.