Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 23, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CREATIVE REALITIES, INC. | ||
Entity Central Index Key | 1,356,093 | ||
Trading Symbol | CREX | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8,645,459 | ||
Entity Common Stock Shares Outstanding | 82,581,866 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,003 | $ 1,352 |
Accounts receivable, net of allowance for doubtful accounts of $40 and $85, respectively | 5,912 | 3,998 |
Unbilled receivables | 77 | 242 |
Work-in-process and inventories | 851 | 585 |
Prepaids and other current assets | 1,030 | 168 |
Total current assets | 8,873 | 6,345 |
Property and equipment, net | 1,136 | 912 |
Intangibles, net | 875 | 2,035 |
Goodwill | 14,989 | 14,989 |
Other assets | 172 | 138 |
TOTAL ASSETS | 26,045 | 24,419 |
CURRENT LIABILITIES | ||
Short-term related party loans payable, net of $0 and $454 discount, respectively | 7,627 | |
Accounts payable | 2,017 | 3,218 |
Accrued expenses | 2,689 | 2,277 |
Deferred revenues | 6,721 | 753 |
Customer deposits | 1,247 | 606 |
Total current liabilities | 12,674 | 14,481 |
Long-term related party loans payable, net of $1,916 and $0 discount, respectively | 5,465 | |
Warrant liability | 858 | 705 |
Deferred tax liabilities | 549 | 610 |
Other liabilities | 220 | 218 |
TOTAL LIABILITIES | 19,766 | 16,014 |
COMMITMENTS AND CONTINGENCIES | ||
Convertible preferred stock, net of discount (liquidation preference of $5,692 and $7,690, respectively) | 1,927 | 3,925 |
SHAREHOLDERS' EQUITY | ||
Common stock, $.01 per value, 200,000 shares authorized; 82,582 and 66,649 shares issued and outstanding, respectively | 826 | 666 |
Additional paid-in capital | 29,757 | 23,095 |
Accumulated deficit | (26,231) | (19,281) |
Total shareholders' equity | 4,352 | 4,480 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 26,045 | $ 24,419 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Net of allowance for doubtful accounts, (Accounts receivable) | $ 40 | $ 85 |
Net of discount, (Short-term related party loans payable) | 0 | 454 |
Net of discount, (Long-term related party loans) | 1,916 | 0 |
Liquidation preference | $ 5,692 | $ 7,690 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 82,582 | 66,649 |
Common stock, shares outstanding | 82,582 | 66,649 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Sales | ||
Hardware | $ 5,412 | $ 3,031 |
Services and other | 12,286 | 10,642 |
Total sales | 17,698 | 13,673 |
Cost of sales | ||
Hardware | 4,434 | 2,544 |
Services and other | 5,875 | 4,271 |
Total cost of sales (exclusive of depreciation and amortization shown separately below) | 10,309 | 6,815 |
Gross profit | 7,389 | 6,858 |
Operating expenses: | ||
Sales and marketing expenses | 2,078 | 1,061 |
Research and development expenses | 991 | 893 |
General and administrative expenses | 6,944 | 6,393 |
Depreciation and amortization expense | 1,505 | 2,003 |
ConeXus acquistion stock issuance expense | 1,971 | |
Impairment loss on intangible assets | 1,065 | |
Total operating expenses | 13,489 | 11,415 |
Operating loss | (6,100) | (4,557) |
Other income (expenses): | ||
Interest expense | (1,610) | (1,636) |
Change in fair value of warrant liability | (153) | (42) |
Gain on settlement of debt and dissolution of Broadcast | 872 | 1,008 |
Other income, net | 2 | 164 |
Total other expense | (889) | (506) |
Net loss before income taxes | (6,989) | (5,063) |
Benefit/(provision) from income taxes | 39 | 365 |
Net loss | (6,950) | (4,698) |
Dividends on preferred stock | 246 | 463 |
Net loss attributable to common shareholders | $ (7,196) | $ (5,161) |
Net loss per common share - basic and diluted | $ (0.10) | $ (0.07) |
Net loss attributable to common shareholders | $ (0.10) | $ (0.08) |
Weighted average shares outstanding - basic and diluted | 72,788 | 65,443 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid in capital | (Accumulated Deficit) |
Balance at Dec. 31, 2015 | $ 8,588 | $ 642 | $ 22,528 | $ (14,582) |
Balance, shares at Dec. 31, 2015 | 64,224,860 | |||
Shares issued upon conversion of preferred stock | 307 | $ 12 | 295 | |
Shares issued upon conversion of preferred stock, shares | 1,205,882 | |||
Shares issued for restructured settlement program | 167 | $ 12 | 155 | |
Shares issued for restructured settlement program, shares | 1,219,189 | |||
Dividends on preferred stock | (463) | (463) | ||
Stock-based compensation | 273 | 273 | ||
Net loss | (4,698) | (5,910) | ||
Adjustment due to adoption of ASU 2017-11 | 1,518 | 307 | 1,211 | |
Balance at Dec. 31, 2016 | 4,480 | $ 666 | 23,095 | (19,281) |
Balance, shares at Dec. 31, 2016 | 66,649,931 | |||
Shares issued upon conversion of preferred stock | 2,246 | $ 88 | 2,158 | |
Shares issued upon conversion of preferred stock, shares | 8,806,906 | |||
Additional shares issued for ConeXus purchase | 1,971 | $ 56 | 1,915 | |
Additional shares issued for ConeXus purchase, shares | 5,631,373 | |||
Shares issued for services | 500 | $ 20 | 480 | |
Shares issued for services, shares | 1,960,784 | |||
Issuance of warrants with promissory notes | 2,216 | 2,216 | ||
Redemption and cancellation of shares under repurchase plan | (149) | $ (11) | (138) | |
Redemption and cancellation of shares under repurchase plan, shares | (1,185,968) | |||
Dividends on preferred stock | (246) | (246) | ||
Common stock issued as dividend | $ 7 | (7) | ||
Common stock issued as dividend, shares | 718,840 | |||
Stock-based compensation | 284 | 284 | ||
Net loss | (6,950) | (6,950) | ||
Balance at Dec. 31, 2017 | $ 4,352 | $ 826 | $ 29,757 | $ (26,231) |
Balance, shares at Dec. 31, 2017 | 82,581,866 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | ||
Net loss | $ (6,950) | $ (4,698) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,505 | 2,003 |
Amortization of debt discount | 756 | 852 |
Stock-based compensation | 284 | 273 |
Change in warrant liability | 153 | 42 |
Allowance for doubtful accounts | 85 | |
Warrants issued for services | 36 | |
ConeXus acquisition stock issuance expense | 1,971 | |
Increase in notes due to in-kind interest | 86 | 102 |
Deferred tax provision (benefit) | (61) | (365) |
Impairment of intangible assets | 1,065 | |
Gain on debt settlement | (872) | (1,008) |
Changes to operating assets and liabilities: | ||
Accounts receivable and unbilled revenues | (1,749) | (3,360) |
Inventories | (266) | (503) |
Prepaid expenses and other current assets | (862) | 180 |
Other non-current assets | (34) | 65 |
Accounts payable | (390) | 858 |
Deferred revenue | 5,968 | (460) |
Accrued expenses | 473 | 17 |
Customer deposits | 641 | 606 |
Other non-current liabilities | 2 | 104 |
Net cash provided by (used in) operating activities | 655 | (4,106) |
Investing activities | ||
Purchases of property and equipment | (569) | (292) |
Net cash used in investing activities | (569) | (292) |
Financing activities | ||
Issuance of common stock | 500 | 167 |
Issuance of loans payable and warrants, net of discount | 4,510 | |
Share repurchase and cancellation | (149) | |
Payments on debts | (786) | (288) |
Net cash (used in) provided by financing activities | (435) | 4,389 |
(Decrease)/increase in Cash and Cash Equivalents | (349) | (9) |
Cash and Cash Equivalents, beginning of year | 1,352 | 1,361 |
Cash and Cash Equivalents, end of year | $ 1,003 | $ 1,352 |
Nature of Operations and Liquid
Nature of Operations and Liquidity | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations and Liquidity [Abstract] | |
NATURE OF OPERATIONS AND LIQUIDITY | NOTE 1: NATURE OF OPERATIONS AND LIQUIDITY Nature of the Company’s Business Creative Realities, Inc. is a Minnesota corporation that provides innovative digital marketing technology and solutions to retail companies, individual retail brands, enterprises and organizations throughout the United States and in certain international markets. We have expertise in a broad range of existing and emerging digital marketing technologies, as well as the related media management and distribution software platforms and networks, device management, product management, customized software service layers, systems, experiences, workflows, and integrated solutions. Our technology and solutions include: digital merchandising systems and omni-channel customer engagement systems, interactive digital shopping assistants, advisors and kiosks, and other interactive marketing technologies such as mobile, social media, point-of-sale transactions, beaconing and web-based media that enable our customers to transform how they engage with consumers. We have expertise in a broad range of existing and emerging digital marketing technologies, as well as the following related aspects of our business: content, network management, and connected device software and firmware platforms; customized software service layers; hardware platforms; digital media workflows; and proprietary processes and automation tools. We believe we are one of the world’s leading interactive marketing technology companies that focuses on the retail shopper experience by helping retailers and brands use the latest technologies to create better shopping experiences. Our main operations are conducted directly through Creative Realities, Inc., and under our wholly owned subsidiaries Creative Realities, LLC, a Delaware limited liability company, Wireless Ronin Technologies Canada, Inc., and ConeXus World Global, LLC, a Kentucky limited liability company. Liquidity We have incurred net losses and negative cash flows from operating activities for the years ended December 31, 2017 and 2016. As of December 31, 2017, we had cash and cash equivalents of $1,003 and a working capital deficit of $(3,801). On November 13, 2017, Slipstream Communications, LLC, a related party, extended the maturity date of our term loan to August 17, 2019 and extended the maturity date of our promissory notes on a rolling quarter addition basis which is now April 15, 2019. While management believes that due to the extension of our debt maturity date, our current cash balance and our operational forecast for 2018, we can continue as a going concern through at least March 31, 2019, given our net losses and working capital deficit, we obtained a continued support letter from Slipstream Communications, LLC through March 31, 2019. We can provide no assurance that our ongoing operational efforts will be successful which could have a material adverse effect on our results of operations and cash flows. The consolidated financial statements do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of the above uncertainty. Major Acquisitions Acquisition of ConeXus World Global There were no acquisitions completed during the years-ended December 31, 2017 and 2016. On October 15, 2015, we completed the acquisition of ConeXus World Global, LLC for 2,080,000 shares of Series A-1 Convertible Preferred Stock, and the conversion of $823 of ConeXus World Global debt into (i) 2,639,258 shares of our common stock, and (ii) $150 in principal amount of our convertible debt. In accordance with the terms of the agreement and plan of merger and reorganization, an additional 416,000 shares of Series A-1 Convertible Preferred Stock and 4,000,000 shares of common stock were to be issued upon the reorganization of the capital structure of a Belgian affiliate of ConeXus (the “Holdback Shares”). Since the passage of the March 31, 2016 date targeted for the completion of the reorganization of the Belgian affiliate, the parties have determined that the value of the Belgian affiliate was de minimis. An agreement was reached on September 1, 2017 by Creative Realities, Inc. and the prior shareholders of ConeXus to recognize the value obtained by Creative Realities, Inc. as a result of the merger and to settle the Holdback Shares to the prior shareholders of ConeXus. Creative Realities, Inc. has waived the contingency relating to the issuance of the Holdback Shares and issued to the shareholders 5,631,373 shares of common stock. 3,198,054 of these shares were issued to Rick Mills, a majority shareholder of ConeXus, a related party, and the CEO of Creative Realities, Inc. Since the measurement period for the business combination has expired, the issuance of the shares is recognized as a charge to operations during the year ended December 31, 2017 of $1.9 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: 1. Principles of Consolidation The consolidated financial statements include the accounts of Creative Realities, Inc., our wholly owned subsidiaries ConeXus World Global LLC, Creative Realities, LLC and Wireless Ronin Technologies Canada, Inc. All inter-company balances and transactions have been eliminated in consolidation, as applicable. 2. Foreign Currency For the Company’s Canadian operations, the local currency has been determined to be the functional currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transaction. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded as general and administrative expenses in the consolidated statements of operations. Translation adjustments which were considered immaterial to date, have been recorded as general and administrative expenses in the consolidated statements of operations. 3. Revenue Recognition We recognize revenue primarily from these sources: ● Hardware: System hardware sales ● Services and Other: Professional and implementation services Software design and development services Software and software license sales Maintenance and support services We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 910, Contractors-Construction, ASC 605, Revenue Recognition Accounting for Revenue Arrangements with Multiple Deliverables Software (v) persuasive evidence of an arrangement exists; (vi) delivery has occurred, which is when product title transfers to the customer, or services have been rendered; (vii) customer payments are fixed or determinable and free of contingencies and significant uncertainties; and (viii) collection is reasonably assured. If it is determined that collection of a fee is not reasonably assured, we defer the revenue and recognize it at the time collection becomes reasonably assured, which is generally upon receipt of cash payment. Revenues are reported on a gross basis. We enter into arrangements with customers that may include a combination of software products, system hardware, maintenance and support, or installation and training services. We allocate the total arrangement fee among the various elements of the arrangement based on the relative fair value of each of the undelivered elements determined by vendor-specific objective evidence (VSOE). In software arrangements for which we do not have VSOE of fair value for all elements, revenue is deferred until the earlier of when VSOE is determined for the undelivered elements (residual method) or when all elements for which we do not have VSOE of fair value have been delivered. We have determined VSOE of fair value for each of our products and services. The VSOE for maintenance and support services is based upon the renewal rate for continued service arrangements. The VSOE for installation and training services is established based upon pricing for the services. The VSOE for software and licenses is based on the normal pricing and discounting for the product when sold separately. Each element of our multiple-element arrangements qualifies for separate accounting. Nevertheless, when a sale includes both software and maintenance, we defer revenue under the residual method of accounting. Under this method, the undelivered maintenance and support fees included in the price of software is amortized ratably over the period the services are provided. We defer maintenance and support fees based upon the customer’s renewal rate for these services. System hardware sales Included in “hardware” are system hardware sales whereby revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer. Shipping charges billed to customers are included in sales and the related shipping costs are included in cost of sales. Total hardware sales were $5,400 and $3,031 for the years ended December 31, 2017 and 2016, respectively. Services and Other Included in “services and other” revenue is professional and implementation services, software design and development services, software and software license sales and maintenance and support services revenue. Total services and other revenue was $12,298 and $10,642 for the years ended December 31, 2017 and 2016, respectively. Professional and implementation services Professional services revenue is derived primarily from consulting services related to the design and development of various marketing experiences, and content development and management. The majority of professional services and accompanying agreements qualify for separate accounting. Implementation services revenue is derived from implementation, maintenance and support contracts, content development, software development and training. These services are bid either on a fixed-fee basis, time-and-materials basis or both. For time-and-materials contracts, we recognize revenue as services are performed. For fixed-fee contracts, we recognize revenue upon completion of specific contractual milestones, by using the percentage-of-completion method. Software design and development services Software design and development services includes revenue from contracts for technology integration consulting services where we design/redesign, build and implement new or enhanced systems applications and related processes for clients recognized on the percentage-of-completion method. The percentage-of-completion accounting involves calculating the percentage of services provided during the reporting period compared to the total estimated services to be provided over the duration of the contract. Estimated revenues from applying the percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed probable. Contract costs include all direct material, labor, subcontractors, certain indirect costs, such as indirect labor, equipment costs, supplies, tools and depreciation costs. Selling, general and administrative costs are charged to expense as incurred. This method is followed where reasonably dependable estimates of revenues and costs can be made. We measure progress for completion based on either the hours worked as a percentage of the total number of hours of the project or by delivery and customer acceptance of specific milestones as outlined per the terms of the agreement with the customer. Estimates of total contract revenue and costs are continuously monitored during the term of the contract, and recorded revenue and costs are subject to revision as the contract progresses. Such revisions may result in increases or decreases to revenue and income and are reflected in the financial statements in the periods in which they are first identified. If estimates indicate that a contract loss will occur, a loss provision is recorded in the period in which the loss first becomes probable and reasonably estimable. Contract losses are determined to be the amount by which the estimated direct and indirect costs of the contract exceed the estimated total revenue that will be generated by the contract and are included in cost of sales and classified in accrued expenses in the balance sheet. Our presentation of revenue recognized on a contract completion basis has been consistently applied for all periods presented. Software and software license sales Software and software license sales are revenue when a fixed fee order has been received and delivery has occurred to the customer. We assess whether the fee is fixed or determinable and free of contingencies based upon signed agreements received from the customer confirming terms of the transaction. Software is delivered to customers electronically or on a CD-ROM, and license files are delivered electronically. Maintenance and support services Maintenance and support services revenue consists of software updates and various forms of support services. Software updates provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period. Support includes access to technical support personnel for software and hardware issues. We also offer a hosting service through our network operations center, or NOC, allowing the ability to monitor and support its customers’ networks 7 days a week, 24 hours a day. This revenue is recognized ratably over the term of the contract, which is typically one to three years. Maintenance and support is renewable by the customer. Rates for maintenance and support, including subsequent renewal rates, are typically established based upon a fee per location, per device, or a specified percentage of net software license fees as set forth in the arrangement. Support agreement fees are based on the level of service provided to its customers, which can range from monitoring the health of a customer’s network to supporting a sophisticated web-portal to managing the end-to-end hardware and software of a digital marketing system. Costs and estimated earnings recognized in excess of billings on uncompleted contracts are recorded as unbilled services and are included in work-in-process on the balance sheet. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as deferred revenues until revenue recognition criteria are met. Unbilled receivables are a normal part of our business as some receivables are invoiced in the month following shipment or completion of services. Our policy is to present any taxes imposed on revenue-producing transactions on a net basis. 4. Cash and Cash Equivalents Cash equivalents consist of liquid investments with original maturities of three months or less when purchased. As of December 31, 2017, the Company had substantially all cash deposited with commercial banks. The balances are insured by the Federal Deposit Insurance Corporation up to $250. 5. Accounts Receivable and Allowance for Doubtful Accounts Our unsecured accounts receivable are customer obligations due under normal trade terms, carried at their face value less an allowance for doubtful accounts. Approximately 51% or $3,017 of our accounts receivable at December 31, 2017 is from a related party (see Note 8). We entered into a factoring arrangement with Allied Affiliated Funding for our accounts receivable with recourse on October 15, 2015 which concluded on August 17, 2016. During that period, the majority of our receivables were factored. We determine our allowance for doubtful accounts based on the evaluation of the aging of our accounts receivable and on a customer-by-customer analysis of our high-risk customers. Our reserves contemplate our historical loss rate on receivables, specific customer situations and the economic environments in which we operate. We determine past-due accounts receivable on a customer-by-customer basis. Accounts receivable are written off after all reasonable collection efforts have failed. 6. Work-In-Process and Inventories Our work-in-process and inventories are recorded using the lower of cost or market on a first-in, first-out (FIFO) method. Inventory is net of an allowance for obsolescence of $10 and $10 as of December 31, 2017 and 2016, respectively. 7. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. FASB ASC 820-10, Fair Value Measurements and Disclosures 8. Impairment of Long-Lived Assets We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with FASB ASC 360-10-05-4, Accounting for the Impairment or Disposal of Long-Lived Assets If the impairment tests indicate that the carrying value of the asset is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized. The impairment loss is determined by the amount by which the carrying value of such asset exceeds its fair value. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate. Assets to be disposed of are carried at the lower of their carrying value or fair value less costs to sell. Considerable management judgment is necessary to estimate the fair value of assets, and accordingly, actual results could vary significantly from such estimates. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2017 and 2016. 9. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives, principally using straight-line methods. Leasehold improvements are amortized over the shorter of the life of the improvement or the lease term, using the straight-line method. Property and equipment consists of the following at December 31, 2017 and 2016: December 31, 2017 2016 Equipment $ 1,700 $ 1,644 Leasehold improvements 680 673 Purchased and developed software 1,516 1,007 Furniture and fixtures 439 438 Other depreciable assets 27 27 Total property and equipment 4,362 3,789 Less: accumulated depreciation and amortization (3,226 ) (2,877 ) Net property and equipment $ 1,136 $ 912 The estimated useful lives used to compute depreciation and amortization are as follows: Equipment 3 – 5 years Furniture and fixtures 5 years Purchased and developed software 5 years Leasehold improvements Shorter of 5 years or term of lease Depreciation expense was $345 and $272 for the years ended December 31, 2017 and 2016, respectively. 10. Research and Development and Software Development Costs Research and development expenses consist primarily of development personnel and non-employee contractor costs related to the development of new products and services, enhancement of existing products and services, quality assurance and testing. Effective April 2015, the Company began capitalizing its costs for additional functionality to its internal software. We capitalized approximately $524 and $270 for the years ended December 31, 2017 and 2016, respectively. These software development costs include both enhancements and upgrades of our client based systems including functionality of our internal information systems to aid in our productivity, profitability and customer relationship management. We are amortizing these costs over 5 years once the new projects are finished and placed in service. These costs are included in property and equipment, net on the consolidated balance sheets. 11. Basic and Diluted Loss per Common Share Basic and diluted loss per common share for all periods presented is computed using the weighted average number of common shares outstanding. Basic weighted average shares outstanding include only outstanding common shares. Diluted net loss per common share is computed by dividing net loss by the weighted average common and potential dilutive common shares outstanding computed in accordance with the treasury stock method. Shares reserved for outstanding stock options and warrants totaling approximately 46.7 and 36.0 million at December 31, 2017 and 2016, respectively, were excluded from the computation of loss per share as well as the potential common shares issuable upon conversion of convertible preferred stock and convertible promissory notes as their effect was antidilutive due to our net loss. Net loss attributable to common shareholders for the year ended December 31, 2017 and December 31, 2016 is after dividends on convertible preferred stock of $246 and $463, respectively. 12. Deferred Income Taxes The calculation of our income tax provision involves dealing with uncertainties in the application of complex tax regulations. We recognize tax liabilities for uncertain income tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. We had no uncertain tax positions as of December 31, 2017 and 2016. Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in basis of intangibles (other than goodwill), stock-based compensation, reserves for uncollectible accounts receivable and inventory, differences in depreciation methods, and accrued expenses. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense on our statement of operations. 13. Accounting for Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10 that requires the measurement and recognition of compensation expense for all stock-based payments including warrants, stock options, restricted stock grants and stock bonuses based on estimated fair value. For purposes of determining estimated fair value under FASB ASC 718-10-30, the Company computes the estimated fair values of stock options using the Black-Scholes option pricing model. Stock-based compensation expense to employees of $284 and $273 was charged to expense during the years ended December 31, 2017 and 2016, respectively. 14. Goodwill and Definite-Lived Intangible Assets We follow the provisions of FASB ASC 350, Goodwill and Other Intangible Assets 15. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our significant estimates include; the allowance for doubtful accounts, recognition of revenue under fixed price contracts, deferred tax assets, deferred revenue, depreciable lives and methods for property and equipment and definite lived intangible assets, valuation of warrants and other stock-based compensation, as well as valuations and purchase price allocations related to business combinations, expected future cash flows including growth rates, discount rates and terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, goodwill and other intangible assets and the related amortization methods and periods. Actual results could differ from those estimates. 16. Change in authorized shares On February 11, 2016, the Company filed an S-1 Registration Statement registering 20,268,959 shares of common stock issuable upon conversion of its secured notes and upon exercise of the warrants. This S-1 was effective June 1, 2016. 17. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers (Topic 606), The Company adopted the new revenue guidance effective January 1, 2018 using the modified retrospective method of adoption. Based on the Company’s initial assessment any adjustments for transition are not expected to be material. The Company conducted a risk assessment and had developed a transition plan that enabled the Company to meet the implementation requirement. Revenue streams and performance obligations evaluated include those outlined in the Revenue In July 2017, the FASB issued Accounting Standards Update No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic 480), Derivatives and Hedging (Topic 815) Part I. Accounting for Certain Financial Instruments With Down Round Features, Part II Replacement of the Indefinite Deferral for Mandatorily Redeemable Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Year ended December 31, 2016 As previously reported As adjusted Operating income/(loss) (4,557 ) (4,557 ) Other income (expenses): Interest expense (1,908 ) (1,636 ) Change in fair value of warrant liability (982 ) (42 ) Gain on settlement of debt 1,008 1,008 Other income/(expense) 164 164 Total other income/(expense) (1,718 ) (506 ) Income/(loss) before income taxes (6,275 ) (5,063 ) Benefit/(provision) from income taxes 365 365 Net loss (5,910 ) (4,698 ) Dividends on preferred stock 463 463 Net loss attributable to common shareholders (6,373 ) (5,161 ) Net loss per common share - basic and diluted (0.09 ) (0.07 ) Net loss attributable to common shareholders (0.10 ) (0.08 ) Weighted average shares outstanding - basic and diluted 65,443 65,443 December 31, 2016 As previously reported As adjusted LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Loans payable, net $ 7,635 $ 7,627 Total current liabilities 14,374 14,481 Warrant liability 3,316 705 TOTAL LIABILITIES 18,518 16,014 SHAREHOLDERS’ EQUITY Additional paid-in capital 21,834 23,095 Accumulated deficit (20,524 ) (19,281 ) Total shareholders’ equity 1,976 4,480 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 24,419 $ 24,419 In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU No. 2016-02, Leases 18. Reclassification: Certain prior year amounts have been reclassified to conform to the current year presentation. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 3: FAIR VALUE MEASUREMENT We measure certain financial assets, including cash equivalents, at fair value on a recurring basis. In accordance with FASB ASC 820-10-30, fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, FASB ASC 820-10-35 establishes a three-level hierarchy that prioritizes the inputs used in measuring fair value. The three hierarchy levels are defined as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets. Level 2 — Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3 — Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing. The following table presents information about the Company’s warrant liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability: Quote Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description Fair Value (Level 1) (Level 2) (Level 3) Warrant liability at December 31, 2016 $ 3,316 - - $ 3,316 Reclassification of warrants from liabilities to equity per ASU 2017-11 $ (2,611 ) - - $ (2,611 ) Revised warrant liability at December 31, 2016 $ 705 - - $ 705 Warrant liability at December 31, 2017 $ 858 - - $ 858 The change in level 3 fair value is as follows: Warrant liability December 31, 2016 $ 705 New warrant liabilities - Increase in fair value of warrant liability 153 Ending warrant liability as of December 31, 2017 $ 858 |
Other Financial Statement Infor
Other Financial Statement Information | 12 Months Ended |
Dec. 31, 2017 | |
Other Financial Statement Information [Abstract] | |
OTHER FINANCIAL STATEMENT INFORMATION | NOTE 4: OTHER FINANCIAL STATEMENT INFORMATION The following table provides details of selected financial statement items: Inventories December 31, December 31, 2017 2016 Finished goods $ 719 $ 138 Work-in-process 132 447 Total inventories $ 851 $ 585 Supplemental Cash Flow Information: 2017 2016 Cash paid for interest $ 640 $ 363 Cash paid for taxes $ 5 $ 11 Non-cash Investing and Financing Activities Noncash preferred stock dividends $ 246 $ 463 Issuance of notes in exchange for accounts payable $ - $ 288 Issuance of stock upon conversion of preferred stock $ 2,246 $ 307 Issuance of warrants with term loan extensions $ 2,218 361 Issuance of stock in exchange for accounts payable $ - $ 86 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Other Intangible Assets [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS Other intangible assets consisted of the following at December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform 2,865 2,568 4,190 2,433 Customer relationships 2,460 2,093 2,460 1,404 Trademarks and trade names 680 469 680 393 6,005 5,130 7,330 4,230 Accumulated amortization 5,130 4,230 Impairment loss on technology platform - 1,065 Net book value of amortizable intangible assets 875 2,035 For the years ended December 31, 2017 and 2016, amortization of intangible assets charged to operations was $1,160 and $1,731, respectively. For the years ended December 31, 2017 and 2016 we wrote-off fully amortized intangible assets of $260 and $0, respectively. Estimated amortization is as follows: Year ending December 31, 2017 2018 $ 739 2019 76 2020 60 The Company has made comprehensive upgrades to its technology platform. Due to these upgrades, the Company evaluated the recoverability of the carrying amount of the original technology platform intangible asset at September 30, 2016. Based upon this evaluation, the Company determined that the technology platform intangible asset was impaired as its value was not recoverable and exceeded its fair value. The Company recognized an impairment loss of $1,065 in 2016. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is subject to an impairment review at a reporting unit level, on an annual basis as of the end of September of each fiscal year, or when an event occurs or circumstances change that would indicate potential impairment. The Company has only one reporting unit, and therefore the entire goodwill is allocated to that reporting unit. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The Company performed its annual goodwill impairment test at September 30, 2017. Utilizing the two-step impairment test, the Company first assessed the carrying value of goodwill at the reporting unit level based on an estimate of the fair value of the respective reporting unit. Fair value of the reporting unit was estimated using a discounted cash flow analyses consisting of various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business prospects and economic or market trends that may occur, specifically, the Company gave significant consideration for purchase orders expected to be completed in the fourth quarter of 2017 and orders already received or actively being negotiated for fiscal 2018. We also used these same expectations in a number of valuation models in addition to discounted cash flows, including, leveraged buy-out, trading comps and market capitalization, and ultimately determined an estimated fair value of our reporting unit based on weighted average calculations from these models. Based on the Company’s assessment, we determined that the fair value of our reporting unit exceeds its carrying value, and accordingly, the goodwill associated with the reporting unit is not considered to be impaired at September 30, 2017. The Company updated its goodwill analysis as of December 31, 2017 using our actual fourth quarter 2017 results and updated projected 2018 results noting no impairment exists. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity. Should any indicators of impairment occur in subsequent periods, the Company will perform an analysis in order to determine whether goodwill is impaired. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2017 | |
Loans Payable [Abstract] | |
LOANS PAYABLE | NOTE 6: LOANS PAYABLE At the end of December 2016 and the beginning of January 2017, Slipstream Communications, LLC, a related party, see Note 8: Related Party Transactions, purchased all of our outstanding debt from the original debtholders. The terms of the debt have remained the same. The outstanding debt with detachable warrants are shown in the table below. Further discussion of the notes follows. Issuance Date Original Principal Additional Principal Total Principal Maturity Date Warrants 8/17/2016 3,000 - 3,000 8/17/2019 17,647,056 8.0% interest 6/29/2016 50 2 52 4/10/2019 89,286 14% interest* 6/13/2016 200 19 219 4/10/2019 357,143 14% interest* 6/13/2016 250 14 264 4/10/2019 446,429 14% interest* 5/3/2016 500 17 517 4/10/2019 892,857 14% interest* 12/28/2015 150 6 156 4/10/2019 267,857 14% interest* 12/28/2015 500 20 520 4/10/2019 892,857 14% interest* 12/28/2015 600 24 624 4/10/2019 1,071,429 14% interest* 10/26/2015 300 13 313 4/10/2019 535,714 14% interest* 10/15/2015 150 7 157 4/10/2019 267,857 14% interest* 10/15/2015 500 23 523 4/10/2019 892,857 14% interest* 6/23/2015 400 21 421 4/10/2019 640,000 14% interest* 6/23/2015 119 31 150 4/10/2019 935,210 Refinanced May 20, 2015 debt, 14% interest * 5/20/2015 465 - 465 4/10/2019 762,295 14% cash interest $ 7,184 $ 197 $ 7,381 25,698,847 Debt discount (1,916 ) Total debt $ 7,184 $ 5,465 * 12% cash, 2% added to principal Obligations under the secured convertible promissory notes are secured by a grant of collateral security in all of the tangible assets of the co-makers pursuant to the terms of an amended and restated security agreement. Included in accrued expenses is unpaid interest of $295 on outstanding debt. Term Notes On December 12, 2016, we entered into a $1.0 million secured revolving promissory note pursuant to the August 17, 2016 Loan and Security Agreement with Slipstream Communications, LLC, a related party, addressed below (see Note 8), wherein we borrowed $786 with interest thereon at 8% per annum, maturing on February 1, 2017. In connection with the loan, we issued the lender a five-year warrant to purchase up to 1,542,452 shares of common stock at a per-share price of $0.28 (subject to adjustment), all pursuant to a securities purchase agreement. In connection with the secured revolving promissory note, we incurred fees aggregating $37. The fair value of the warrants on the issuance date was $136. This note was repaid on January 12, 2017. On August 17, 2016, we entered into a Loan and Security Agreement with Slipstream Communications, LLC, a related party (see Note 8), under which we obtained a $3.0 million term loan, with interest thereon at 8% per annum, maturing on August 17, 2017 (with a one-year option for us to extend that maturity, so long as we are not then in default and we deliver additional warrants to the lender). The term loan contains certain customary restrictions including, but not limited to, restrictions on mergers and consolidations with other entities, cancellation of any debt or incurring new debt (subject to certain exceptions), and other customary restrictions. In connection with this loan, we issued the lender a five-year warrant to purchase up to 5,882,352 shares of common stock shares of Creative Realities’ common stock at a per-share price of $0.28 (subject to adjustment), all pursuant to a securities purchase agreement. The proceeds from the loan were used to (i) satisfy the obligations owed to Allied Affiliated Lending, L.P. under the Factoring Agreement, (ii) pay off certain obligations under settlement arrangements in effect as of the date hereof (see Note 8), and (iii) obtain working capital. The Loan and Security Agreement permits the lender to make additional advances of up to an additional $1.0 million. In connection with this financing transaction, we terminated the Factoring Agreement with Allied Affiliated Lending. Our principal subsidiaries — Creative Realities, Inc., Creative Realities, LLC, Conexus World Global, LLC, and Broadcast International, Inc. — were also parties to the securities purchase agreement and are co-makers of the secured convertible promissory notes. In connection with the term loan, we incurred fees aggregating $20. The fair value of the warrants on the issuance date was $361. On August 10, 2017, Slipstream Communications, LLC extended the maturity date of the 8% senior notes to August 17, 2018. In exchange for the extension of the maturity date of the 8% senior notes, CRI provided 5,882,352 five-year warrants to purchase Company common shares. The fair value of the warrants was $1,240, which is accounted for as an additional debt discount and amortized over the remaining life of the loan. On November 13, 2017, Slipstream Communications, LLC extended the maturity dates for the term loan to August 17, 2019. In exchange for the extension of the maturity date of the 8% senior notes, CRI provided 5,882,352 five-year warrants to purchase Company common shares. The fair value of the warrants was $976, which is accounted for as an additional debt discount and amortized over the remaining life of the loan. See Note 11 for the Black Scholes inputs used to calculate the fair value of the warrants. Convertible Promissory Notes In December 2016 and January 2017, Slipstream Communications, LLC purchased all of our outstanding convertible promissory notes from the original debtholders. The terms of the notes have remained the same. Further discussion of the notes follows. The convertible promissory notes were issued in a private placement exempt from registration under the Securities Act of 1933. Our principal subsidiaries — Creative Realities, LLC, Wireless Ronin Technologies Canada, Inc., and Conexus World Global, LLC — were also parties to the Securities Purchase Agreement and are co-makers of the secured convertible promissory notes. Obligations under the secured convertible promissory notes are secured by a grant of collateral security in all of the personal property of the co-makers pursuant to the terms of a security agreement. The secured convertible promissory notes bear interest at the rate of 14% per annum. Of this amount, 12% per annum is payable monthly in cash, and the remaining 2% per annum is payable in the form an additional principal through increases in the principal amount of the note. Upon the consummation of a change in control transaction of the company or a default, interest on the secured convertible promissory note will increase to the rate of 17% per annum. On August 10, 2017, Slipstream Communications, LLC extended the maturity date of the convertible notes to October 15, 2018. On November 13, 2017, Slipstream Communications, LLC elected to extend the maturity date of the convertible promissory notes on a rolling quarter addition basis to January 15, 2019, which is now April 10, 2019. At any time prior to the maturity date, the holder of a promissory note may convert the outstanding principal and accrued and unpaid interest into our common stock at its conversion rate. We may not prepay the secured convertible promissory note prior to the maturity date. The secured convertible promissory note contains other customary terms. See Note 11 for the Black Scholes inputs used to calculate the fair value of the warrants. On June 29, 2016, we entered into a secured convertible promissory note in the principal amount of $50 and an immediately exercisable five-year warrant to purchase up to 89,286 shares of the Company’s common stock at a per-share price of $0.28 (subject to adjustment). The fair value of the warrants on the issuance date was $6. This note was subsequently purchased by Slipstream Communications, LLC on December 20, 2016. On June 13, 2016, upon receipt of an additional $300 of principal, we exchanged two short term demand notes entered into in July 2015 totaling $150 for two secured convertible promissory notes totaling a principal amount of $450 and immediately exercisable five-year warrants to purchase up to 803,572 shares of the Company’s common stock at a per-share price of $0.28 (subject to adjustment). This exchange is accounted for as a modification of the debt. The fair value of the warrants on the issuance date was $57. On December 20, 2016, $200 of this note was subsequently purchased by Slipstream Communications, LLC, the remaining $250 was already owed to Slipstream Communications, LLC. On or about May 3, 2016, we entered into a secured convertible promissory note in the principal amount of $500,000 and an immediately exercisable five-year warrant to purchase up to 892,857 shares of the Company’s common stock at a per-share price of $0.28 (subject to adjustment). In connection with the secured convertible promissory note, we incurred commissions to a placement agent aggregating $25. The fair value of the warrants on the issuance date was $89. This note was subsequently purchased by Slipstream Communications, LLC on December 22, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7: COMMITMENTS AND CONTINGENCIES Structured Settlement Program During March and December 2017, the Company settled and/or wrote off debt of $1,159 for $288 cash payment and recognized a gain of $872. This debt included $693 of payables previously recorded by our dissolved subsidiary Broadcast International, Inc, as we had exhausted all efforts to identify and settle these obligations in the first quarter of 2017. In August 2016, the Company settled debt of $90 for $35 cash payment, resulting in a gain on debt settlement of $55. In June 2016, the Company settled debt of $614 for $123 cash payment and the issuance of 409,347 shares of the Company’s restricted common stock, fair value at conversion date of $85, and recognized a gain on debt restructuring of $406. In conjunction with this debt settlement, an additional 809,842 shares of restricted common stock were issued to investors for cash to facilitate the settlement of a portion of the $614 debt. In March 2016, the Company issued 8.00% nonconvertible promissory notes in favor of certain general unsecured creditors in the aggregate principal amount of $288 to settle an aggregate amount of $839 of accounts payable, accrued expenses and other liabilities. The aggregate amount of payables, accrued expenses and other liabilities was subsequently revised to $796. In September 2016, the amounts previously settled with nonconvertible promissory notes were paid in cash of $249 resulting in a gain on the debt settlement of $547. No gain was previously recorded. Litigation In February 2016, a former vendor alleging our failure to pay outstanding invoices for approximately $335, which is included in accounts payable in the December 31, 2016 accompanying consolidated balance sheet, initiated a breach-of-contract lawsuit against us. Also in February 2016, a former vendor alleging our failure to pay outstanding invoices for approximately $51, which is included in accounts payable in the December 31, 2016 accompanying consolidated balance sheet, filed a motion for summary judgment against us. During 2017, we negotiated settlement with the vendor for $45. The Company is involved in various legal proceedings incidental to the operations of its business. The Company believes that the outcome of all such other pending legal proceedings in the aggregate will not have a material adverse effect on its business, financial condition, liquidity, or operating results. Leases Future minimum lease payments under leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2017 are as follows: Year ending December 31, Lease Obligations 2018 $ 587 2019 499 2020 398 2021 61 Total future minimum obligations $ 1,545 Rent expense totaled $474 and $416 for the years ended December 31, 2017 and 2016, respectively, and is included in General and Administrative expenses. Our CEO was awarded 4,951,557 performance shares with a grant date to be determined upon certain conditions being satisfied. As December 31, 2017 those conditions had not been met and were deemed not probable to be achieved resulting in no compensation expense being recorded. Termination benefits On August 10, 2017, the Company announced that it was closing its New Jersey and Minnesota locations. The Company has accrued one-time termination benefits related to severance to the affected employees of $146 and will recognize the expense over the period the employees are expected to continue service to the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8: RELATED PARTY TRANSACTIONS As discussed in Note 1, on September 1, 2017, our CEO received 3,198,054 shares of our common stock valued at $1,119, as part of the issuance of the ConeXus Holdback shares. During the year-ended December 31, 2017, 5,422,604 of the 8,806,906 shares of common stock were issued to the CEO upon conversion of preferred stock. For the years-ended December 31, 2017 and 2016, the Company had sales of $3,390 and $1,344, respectively, with a related party entity that is 22.5% owned by a member of senior management. Accounts receivable due from the related party was $3,017 and $543 at December 31, 2017 and 2016, respectively. On November 13, 2017, Slipstream Communications, LLC, a related party investor, extended the maturity date of the term loan for which we issued to Slipstream Communications a five-year warrant to purchase up to 5,882,352 shares of common stock at a per-share price of $0.28 (subject to adjustment). The fair value of the warrants on the issuance date was $1.0 million. On August 10, 2017, Slipstream Communications, LLC, a related party investor, extended the maturity date of the term loan for which we issued to Slipstream Communications a five-year warrant to purchase up to 5,882,352 shares of common stock at a per-share price of $0.28 (subject to adjustment). The fair value of the warrants on the issuance date was $1.2 million. In December 2016 and January 2017, the Company’s majority shareholder and investor, Slipstream Communications LLC acquired all of the Company’s outstanding debt (see Note 6). On December 12, 2016, we entered into a $1.0 million secured revolving promissory note pursuant to the August 17, 2016 Loan and Security Agreement with Slipstream Communications, LLC, a related party investor, with interest thereon at 8% per annum, maturing on February 1, 2017. In connection with the loan, we issued the lender a five-year warrant to purchase up to 1,542,452 shares of common stock at a per-share price of $0.28 (subject to adjustment), all pursuant to a securities purchase agreement. This note was repaid on January 12, 2017. On August 17, 2016, we entered into a Loan and Security Agreement with Slipstream Communications, LLC, a related party investor, under which we obtained a $3.0 million term loan, with interest thereon at 8% per annum, maturing on August 17, 2018 (see Note 6). In connection with the loan, we issued the lender a five-year warrant to purchase up to 5,882,352 shares of Creative Realities’ common stock at a per share price of $0.28 (subject to adjustment). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 9: INCOME TAXES Our gross deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs). We have substantial NOLs that are limited in its usage by IRC Section 382. IRC Section 382 generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership within a statutory testing period. We have performed a preliminary analysis of the annual NOL carryforwards and limitations that are available to be used against taxable income. The estimated federal NOL carryforward after application of the IRC Section 382 limitation is $19.3 million and foreign NOL carryforward is $7.0 million as of December 31, 2017. The Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to the U.S. income tax law. Effective in 2018, the Tax Act reduces U.S. statutory tax rates from 35% to 21%. Accordingly, we remeasured our deferred taxes as of December 31, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are settled or realized, resulting in a one-time $0.2 million net tax benefit in 2017. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we have made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. A summary of the deferred tax assets and liabilities is included below: December 31, 2017 2016 Deferred tax assets (liabilities): Reserves $ 12 $ 35 Property and equipment 80 171 Accrued expenses 619 1,034 Severance 56 39 Non-qualified stock options 268 420 Net foreign carryforwards 1,906 1,844 Net operating loss and credit carryforwards 6,801 8,054 Intangibles 605 907 Total deferred tax assets 10,347 12,504 Valuation allowance (10,896 ) (13,114 ) Net deferred tax liabilities $ (549 ) $ (610 ) Year ended December 31, 2017 2016 Tax provision summary State income tax $ 21 $ 18 Deferred tax benefit, release of valuation allowance - (635 ) Deferred tax benefit - federal 2,382 (1,101 ) Deferred tax benefit - state (149 ) (89 ) Deferred tax benefit - foreign (75 ) (453 ) Change in valuation allowance (2,218 ) 1,895 Tax (benefit)/expense $ (39 ) $ (365 ) A reconciliation of the statutory income tax rate to the effective income tax rates as a percentage of income before income taxes is as follows: 2017 2016 Federal statutory rate -34.00 % -34.00 % State taxes -2.44 % -2.75 % Foreign rate differential -0.08 % 3.11 % Other 3.55 % 1.68 % Impact of Tax Act 3.10 % 0 % Changes in valuation allowance -37.79 % 36.72 % Effective tax rate -67.66 % 4.80 % |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Preferred Stock [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 10: CONVERTIBLE PREFERRED STOCK The preferred stock entitles its holders to a 6% dividend, payable semi-annually in cash or in kind through the three-year anniversary of the original issue date, and from and after such three-year anniversary in duly authorized, validly issued, fully paid and non-assessable shares of common stock. The three-year anniversary of the initial investment date occurred during the second half of 2017 for $5.2 million of the $5.5 million originally issued Convertible Preferred Stock and therefore dividends on those investments were paid via issuance of common shares as of the year-end date. During the years ended December 31, 2017 and 2016 respectfully, the Company issued an aggregate of 245,816 and 452,224 shares of preferred stock in satisfaction of its semi-annual dividend obligation. During the years ended December 31, 2017 and 2016 respectfully, the Company issued an aggregate of 718,840 and 0 shares of common stock in satisfaction of its semi-annual dividend obligation. The preferred stock may be converted into our common stock at the option of a holder at an initial conversion price as adjusted of $0.255 per share. Subject to certain conditions, we may call and redeem the preferred stock after three years. From and after the three-year anniversary of the date of issuance, the Company has the right (but not the obligation), upon at least 30 days prior written notice, to call some or all of the Series A Preferred Stock for redemption at any time after the common stock has had a closing price on the relevant trading market, for a period of at least 15 consecutive days, all of which must be after the three-year anniversary date of the purchase agreement, equal to at least one and one-half times the initial conversion price. During such time as a majority of the preferred stock sold remains outstanding, holders will have the right to elect a member to our Board of Directors. The preferred stock has full-ratchet price protection in the event that we issue common stock below the conversion price, as adjusted, subject to certain customary exceptions. The warrants issued to purchasers of the preferred stock contain weighted-average price protection in the event that we issue common stock below the exercise price, as adjusted, again subject to certain customary exceptions. In the Securities Purchase Agreement, we granted purchasers of the preferred stock certain registration rights pertaining to the common shares they may receive upon conversion of their preferred stock and upon exercise of their warrants. In 2017, 385,200 shares of Series A Convertible Preferred Stock and 1,860,561 shares of Series A-1 Convertible Preferred Stock were converted into 8,806,906 shares of common stock at the conversion rate of $0.255 per share. In 2016, 307,500 shares of Series A Preferred Stock were converted into 1,205,882 shares of common stock at the conversion rate of $0.255 per share. Number of Convertible Preferred Series A Number of Convertible Preferred Series A-1 Shares of Common Stock Received Q4 2017 - - - Q3 2017 132,200 1,860,561 7,814,749 Q2 2017 12,750 - 50,000 Q1 2017 240,250 - 942,157 Q4 2016 132,000 - 517,647 Q3 2016 75,500 - 296,078 Q2 2016 - - - Q1 2016 100,000 - 392,157 During the quarter-ended September 30, 2017, the four holders of Series A-1 Convertible Preferred Stock (substantially similar in terms to the Company’s Convertible Preferred Stock, and issued to the shareholders of Conexus World Global LLC) converted all 1,860,561 shares of Series A-1 Convertible Preferred Stock into 7,296,318 shares of common stock. Additionally, certain accredited investors converted 132,200 shares of Series A Convertible Preferred Stock for 518,431 shares of common stock. During the quarter ended June 30, 2017, accredited investors converted 12,750 shares of Convertible Preferred Stock for 50,000 shares of common stock. During the quarter ended March 31, 2017, accredited investors converted 240,250 shares of Convertible Preferred Stock for 942,157 shares of common stock. During the three months ended December 31, September 30, and March 31, 2016, accredited investors converted 132,000, 75,500, and 100,000 shares of Convertible Preferred Stock for 517,647, 296,078 and 392,157 shares of common stock, respectively. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Warrants [Abstract] | |
WARRANTS | NOTE 11: WARRANTS On November 13, 2017, the Company issued a warrant to purchase 5,882,352 shares of common stock at the per share price of $0.28 (subject to adjustment) to Slipstream Communications, LLC in connection with extension of the term loan facility. On August 10, 2017, the Company issued a warrant to purchase 5,882,352 shares of common stock at the per share price of $0.28 (subject to adjustment) to Slipstream Communications, LLC in connection with extension of the term loan facility. On August 17, 2016, the Company issued a warrant to purchase 5,882,352 shares of common stock at the per share price of $0.28 (subject to adjustment) to Slipstream Communications, LLC in connection with extension of the term loan facility. On June 29, 2016, the Company issued a warrant to purchase 89,286 shares of common stock at the per share price of $0.28 (subject to adjustment) pursuant to a securities purchase agreement as more fully described in Note 7, Loans Payable. On June 13, 2016, the Company issued a warrant to purchase 803,572 shares of common stock at the per share price of $0.28 (subject to adjustment) pursuant to a securities purchase agreement as more fully described in Note 7, Loans Payable. On May 3, 2016, the Company issued a warrant to purchase 892,857 shares common stock at the per share price of $0.28 (subject to adjustment) pursuant to a securities purchase agreement as more fully described in Note 7, Loans Payable. On January 15, 2016, the Company issued a warrant to purchase 250,000 shares of the Company’s common stock at the per share price of $0.28 (subject to adjustment) in exchange for services rendered related to the issuance of debt on December 28, 2015. The fair value of the warrants on the issuance date was $20. The warrants were initially recorded as a liability with a discount to the debt issued to amortized over the life of the debt but were reclassified to equity as a result of retrospective application of the adoption of ASU 2017-11. Listed below are the range of inputs used for the probability weighted Black Scholes option pricing model valuations when the warrants were issued and at December 31, 2017. Issuance Date Expected Term at Issuance Date Risk Free Interest Rate at Date of Issuance Volatility at Date of Issuance Stock Price at Date of Issuance 8/20/2014 5.00 1.50% 96.00% $0.63 2/13/2015 5.00 1.28% 100.00% $0.34 5/22/2015 5.00 1.28% 107.58% $0.29 10/15/2015 5.00 1.71% 58.48% $0.22 10/26/2015 5.00 1.71% 60.47% $0.21 12/21/2015 5.00 1.75% 58.48% $0.21 12/28/2015 5.00 1.75% 58.48% $0.16 1/15/2016 5.00 1.76% 58.48% $0.17 5/3/2016 5.00 1.25% 51.15% $0.21 6/13/2016 5.00 1.14% 51.12% $0.17 6/29/2016 5.00 1.01% 48.84% $0.17 8/17/2016 5.00 1.15% 51.55% $0.15 11/4/2016 5.00 1.66% 47.48% $0.16 12/12/2016 5.00 1.90% 48.54% $0.19 8/19/2017 5.00 1.81% 64.71% $0.35 11/13/2017 5.00 2.08% 66.24% $0.29 Remaining Expected Term at Risk Free Interest Rate at Volatility at Stock Price at 1.64 - 4.87 1.83% 72.34% $0.32 A summary of outstanding debt and equity warrants is included below: Warrants (Equity) Warrants (Liability) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance, January 1, 2016 12,937,902 1.88 3.90 6,487,500 0.35 3.64 Warrants issued to financial advisors 500,000 0.28 4.46 - - - Warrants issued with promissory notes 1,785,715 0.28 4.37 - - - Warrants issued with term loan 7,424,804 0.28 4.70 - - - Warrants expired (1,116,359 ) 11.52 - - - - Balance, December 31, 2016 21,532,062 0 .65 3.79 6,487,500 0.35 2.64 Warrants issued with term loan 11,764,704 0.28 4.75 - - - Warrants expired (292,755 ) 46.68 - - - - Balance December 31, 2017 33,004,011 0 .47 3.55 6,487,500 0.35 1.64 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12: STOCKHOLDERS’ EQUITY On August 9, 2017, our Board of Directors authorized a program to repurchase up to 5 million shares of our outstanding common stock through August 9, 2019. The authorization allows for the repurchases to be conducted through open market or privately negotiated transactions. Shares acquired under the stock repurchase program are expected to be retired and returned to the status of authorized but unissued shares of common stock. The stock repurchase program can be suspended, modified or discontinued at any time at our discretion. During the fourth quarter of 2017, 1,185,968 shares of common stock were repurchased at an aggregate price of $149 and were immediately cancelled. On September 1, 2017, the Company issued to the prior shareholders of ConeXus 5,631,373 shares of common stock valued at $0.35 per share for a total of $1,971 to settle the contingency of the Company in the ConeXus merger. 3,198,054 of these shares were issued to Rick Mills, a majority shareholder of ConeXus, a related party, and the CEO of Creative Realities, Inc. Since the measurement period for the business combination has expired, the issuance of the shares is recognized as a charge to operations during the year of $1.9 million. In May 2017, the Company paid a vendor for services at a value of $500 with the issuance of 1,960,784 shares of common stock. During 2017, accredited investors converted 2,245,511 shares of Convertible Preferred Stock in exchange for 8,806,906 shares of common stock. During 2016, accredited investors converted 307,500 shares of Convertible Preferred Stock in exchange for 1,205,882 shares of common stock. In conjunction with the structured settlement program, the Company issued 409,347 shares of its restricted common stock to creditors and 809,842 shares of stock were issued to investors (see Note 8). A summary of outstanding options is included below: Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.18 - $0.65 7,145,000 7.51 $ 0.28 3,833,956 $ 0.31 $0.66 - $0.79 30,000 6.04 0.79 30,000 $ 0.79 $0.80 - $12.25 15,500 4.59 3.73 15,500 $ 3.73 7,190,500 7.50 $ 0.29 Options Weighted Average Outstanding Exercise Price Balance, December 31, 2016 7,490,499 $ 0.29 Granted - - Exercised - - Forfeited or expired 299,999 0.18 Balance, December 31, 2017 7,190,500 $ 0.29 The weighted average remaining contractual life for options exercisable is 7.50 years as of December 31, 2017. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13: STOCK-BASED COMPENSATION Stock Compensation Expense Information FASB ASC 718-10 requires measurement and recognition of compensation expense for all stock-based payments including warrants, stock options, restricted stock grants and stock bonuses based on estimated fair values. Under the Amended and Restated 2006 Equity Incentive Plan, the Company reserved 1,720,000 shares for purchase by the Company’s employees and under the Amended and Restated 2006 Non-Employee Director Stock Option Plan the Company reserved 700,000 shares for purchase by the Company’s employees. There are 365,500 options outstanding under the 2006 Equity Incentive Plan. In October 2014, the Company’s shareholders approved the 2014 Stock Incentive Plan, under which 7,390,355 shares were reserved for purchase by the Company’s employees. There are 6,825,000 options outstanding under the 2014 Stock Incentive Plan. Compensation expense recognized for the issuance of stock options for the years ended December 31, 2017 and 2016 was as follows: December 31, 2017 2016 Stock-based compensation costs included in: Costs of sales $ 6 $ 1 Sales and marketing expense 76 74 General and administrative expense 202 198 Total stock-based compensation expense $ 284 $ 273 At December 31, 2017, there was approximately $554 of total unrecognized compensation expense related to unvested share-based awards. Generally, this expense will be recognized over the next 1.6 years and will be adjusted for any future changes in estimated forfeitures. Valuation Information for Stock-Based Compensation For purposes of determining estimated fair value under FASB ASC 718-10, the Company computed the estimated fair values of stock options using the Black-Scholes model. There were no options granted during the year ended December 31, 2017. On November 11, 2016, the Company granted 10-year options to purchase 425,000 shares of its common stock to an employee. The options vest over 4 years and have an exercise price of $0.18. The fair value of the options on the grant date was $0.09 and was determined using the Black-Sholes model. The values set forth above were calculated using the following weighted average assumptions: Risk-free interest rate 1.14% Expected term 6.25 years Expected price volatility 47.89% Dividend yield 0% The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment behavior, so we estimate the expected term of awards granted by taking the average of the vesting term and the contractual term of the awards, referred to as the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the term of the Company’s stock options. The Company used historical closing stock price volatility for a period of 2 years. Although the Company has historical pricing for a period equal to the expected life of the respective awards, the Company used a shorter period of time as the Company went through reorganization and was fundamentally a different company. The dividend yield assumption is based on the Company’s history and expectation of no future dividend payouts. Our stock-based compensation expense is based on awards ultimately expected to vest and is reduced for estimated forfeitures as permitted by FASB ASU 2016-09, Stock Compensation, |
Profit-Sharing Plan
Profit-Sharing Plan | 12 Months Ended |
Dec. 31, 2017 | |
Profit-Sharing Plan [Abstract] | |
PROFIT-SHARING PLAN | NOTE 14: PROFIT-SHARING PLAN We have a defined contribution 401(k) retirement plans for eligible associates. Associates may contribute up to 15% of their pretax compensation to the plan subject to IRS limitations. There are currently plans to implement an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3% on April 1, 2018. |
Segment Information and Signifi
Segment Information and Significant Customers | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information and Significant Customers [Abstract] | |
SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS | NOTE 15: SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS Segment Information We currently operate in one reportable segment, marketing technology solutions. Substantially all property and equipment is located at our offices in the United States. All sales for the years ended December 31, 2017 and 2016, were in the United States and Canada. Major Customers We had three and two customers that accounted for 71% and 71% of accounts receivable as of December 31, 2017 and 2016, respectively. We do not believe the loss of this customer will have a material adverse effect on our business. The Company had three customers that accounted for 56% and 56% of revenue for the years ended December 31, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016, the Company had sales of $3,390 and $1,344, respectively, with a related party entity that is 22.5% owned by a member of senior management. Accounts receivable due from the related party was $3,017 and $543 at December 31, 2017 and 2016, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16: SUBSEQUENT EVENTS On January 16, 2018, we entered into the Third Amendment to the Loan and Security Agreement with Slipstream Communications, LLC which extended the period through which the Company could draw on the Revolver established by the Loan and Security Agreement. In conjunction with this Amendment, we entered into a $1.0 million secured revolving promissory note pursuant to the August 17, 2016 Loan and Security Agreement with Slipstream Communications, LLC, a related party, addressed below (see Note 10), wherein we borrowed $1.0 million with interest thereon at 8% per annum, maturing on January 16, 2019. In connection with the loan, we issued the lender a five-year warrant to purchase up to 1,851,851 shares of common stock at a per-share price of $0.27 (subject to adjustment), all pursuant to a securities purchase agreement. In connection with the secured revolving promissory note, we did not incur any fees. On August 10, 2017, we announced the planned closure of our office facilities located at 22 Audrey Place, Fairfield, New Jersey 07004 which housed our previous operations center and ceased use of the facilities in February 2018. In ceasing use of these facilities, we will incur a one-time non-cash charge of $0.6 million in the first quarter of 2018 to accrue for the remaining rent under the lease term, net of anticipated subtenant rental income. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | 1. Principles of Consolidation The consolidated financial statements include the accounts of Creative Realities, Inc., our wholly owned subsidiaries ConeXus World Global LLC, Creative Realities, LLC and Wireless Ronin Technologies Canada, Inc. All inter-company balances and transactions have been eliminated in consolidation, as applicable. |
Foreign Currency | 2. Foreign Currency For the Company’s Canadian operations, the local currency has been determined to be the functional currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transaction. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded as general and administrative expenses in the consolidated statements of operations. Translation adjustments which were considered immaterial to date, have been recorded as general and administrative expenses in the consolidated statements of operations. |
Revenue Recognition | 3. Revenue Recognition We recognize revenue primarily from these sources: ● Hardware: System hardware sales ● Services and Other: Professional and implementation services Software design and development services Software and software license sales Maintenance and support services We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 910, Contractors-Construction, ASC 605, Revenue Recognition Accounting for Revenue Arrangements with Multiple Deliverables Software (v) persuasive evidence of an arrangement exists; (vi) delivery has occurred, which is when product title transfers to the customer, or services have been rendered; (vii) customer payments are fixed or determinable and free of contingencies and significant uncertainties; and (viii) collection is reasonably assured. If it is determined that collection of a fee is not reasonably assured, we defer the revenue and recognize it at the time collection becomes reasonably assured, which is generally upon receipt of cash payment. Revenues are reported on a gross basis. We enter into arrangements with customers that may include a combination of software products, system hardware, maintenance and support, or installation and training services. We allocate the total arrangement fee among the various elements of the arrangement based on the relative fair value of each of the undelivered elements determined by vendor-specific objective evidence (VSOE). In software arrangements for which we do not have VSOE of fair value for all elements, revenue is deferred until the earlier of when VSOE is determined for the undelivered elements (residual method) or when all elements for which we do not have VSOE of fair value have been delivered. We have determined VSOE of fair value for each of our products and services. The VSOE for maintenance and support services is based upon the renewal rate for continued service arrangements. The VSOE for installation and training services is established based upon pricing for the services. The VSOE for software and licenses is based on the normal pricing and discounting for the product when sold separately. Each element of our multiple-element arrangements qualifies for separate accounting. Nevertheless, when a sale includes both software and maintenance, we defer revenue under the residual method of accounting. Under this method, the undelivered maintenance and support fees included in the price of software is amortized ratably over the period the services are provided. We defer maintenance and support fees based upon the customer’s renewal rate for these services. System hardware sales Included in “hardware” are system hardware sales whereby revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer. Shipping charges billed to customers are included in sales and the related shipping costs are included in cost of sales. Total hardware sales were $5,400 and $3,031 for the years ended December 31, 2017 and 2016, respectively. Services and Other Included in “services and other” revenue is professional and implementation services, software design and development services, software and software license sales and maintenance and support services revenue. Total services and other revenue was $12,298 and $10,642 for the years ended December 31, 2017 and 2016, respectively. Professional and implementation services Professional services revenue is derived primarily from consulting services related to the design and development of various marketing experiences, and content development and management. The majority of professional services and accompanying agreements qualify for separate accounting. Implementation services revenue is derived from implementation, maintenance and support contracts, content development, software development and training. These services are bid either on a fixed-fee basis, time-and-materials basis or both. For time-and-materials contracts, we recognize revenue as services are performed. For fixed-fee contracts, we recognize revenue upon completion of specific contractual milestones, by using the percentage-of-completion method. Software design and development services Software design and development services includes revenue from contracts for technology integration consulting services where we design/redesign, build and implement new or enhanced systems applications and related processes for clients recognized on the percentage-of-completion method. The percentage-of-completion accounting involves calculating the percentage of services provided during the reporting period compared to the total estimated services to be provided over the duration of the contract. Estimated revenues from applying the percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed probable. Contract costs include all direct material, labor, subcontractors, certain indirect costs, such as indirect labor, equipment costs, supplies, tools and depreciation costs. Selling, general and administrative costs are charged to expense as incurred. This method is followed where reasonably dependable estimates of revenues and costs can be made. We measure progress for completion based on either the hours worked as a percentage of the total number of hours of the project or by delivery and customer acceptance of specific milestones as outlined per the terms of the agreement with the customer. Estimates of total contract revenue and costs are continuously monitored during the term of the contract, and recorded revenue and costs are subject to revision as the contract progresses. Such revisions may result in increases or decreases to revenue and income and are reflected in the financial statements in the periods in which they are first identified. If estimates indicate that a contract loss will occur, a loss provision is recorded in the period in which the loss first becomes probable and reasonably estimable. Contract losses are determined to be the amount by which the estimated direct and indirect costs of the contract exceed the estimated total revenue that will be generated by the contract and are included in cost of sales and classified in accrued expenses in the balance sheet. Our presentation of revenue recognized on a contract completion basis has been consistently applied for all periods presented. Software and software license sales Software and software license sales are revenue when a fixed fee order has been received and delivery has occurred to the customer. We assess whether the fee is fixed or determinable and free of contingencies based upon signed agreements received from the customer confirming terms of the transaction. Software is delivered to customers electronically or on a CD-ROM, and license files are delivered electronically. Maintenance and support services Maintenance and support services revenue consists of software updates and various forms of support services. Software updates provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period. Support includes access to technical support personnel for software and hardware issues. We also offer a hosting service through our network operations center, or NOC, allowing the ability to monitor and support its customers’ networks 7 days a week, 24 hours a day. This revenue is recognized ratably over the term of the contract, which is typically one to three years. Maintenance and support is renewable by the customer. Rates for maintenance and support, including subsequent renewal rates, are typically established based upon a fee per location, per device, or a specified percentage of net software license fees as set forth in the arrangement. Support agreement fees are based on the level of service provided to its customers, which can range from monitoring the health of a customer’s network to supporting a sophisticated web-portal to managing the end-to-end hardware and software of a digital marketing system. Costs and estimated earnings recognized in excess of billings on uncompleted contracts are recorded as unbilled services and are included in work-in-process on the balance sheet. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as deferred revenues until revenue recognition criteria are met. Unbilled receivables are a normal part of our business as some receivables are invoiced in the month following shipment or completion of services. Our policy is to present any taxes imposed on revenue-producing transactions on a net basis. |
Cash and Cash Equivalents | 4. Cash and Cash Equivalents Cash equivalents consist of liquid investments with original maturities of three months or less when purchased. As of December 31, 2017, the Company had substantially all cash deposited with commercial banks. The balances are insured by the Federal Deposit Insurance Corporation up to $250. |
Accounts Receivable and Allowance for Doubtful Accounts | 5. Accounts Receivable and Allowance for Doubtful Accounts Our unsecured accounts receivable are customer obligations due under normal trade terms, carried at their face value less an allowance for doubtful accounts. Approximately 51% or $3,017 of our accounts receivable at December 31, 2017 is from a related party (see Note 8). We entered into a factoring arrangement with Allied Affiliated Funding for our accounts receivable with recourse on October 15, 2015 which concluded on August 17, 2016. During that period, the majority of our receivables were factored. We determine our allowance for doubtful accounts based on the evaluation of the aging of our accounts receivable and on a customer-by-customer analysis of our high-risk customers. Our reserves contemplate our historical loss rate on receivables, specific customer situations and the economic environments in which we operate. We determine past-due accounts receivable on a customer-by-customer basis. Accounts receivable are written off after all reasonable collection efforts have failed. |
Work-In-Process and Inventories | 6. Work-In-Process and Inventories Our work-in-process and inventories are recorded using the lower of cost or market on a first-in, first-out (FIFO) method. Inventory is net of an allowance for obsolescence of $10 and $10 as of December 31, 2017 and 2016, respectively. |
Fair Value of Financial Instruments | 7. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. FASB ASC 820-10, Fair Value Measurements and Disclosures |
Impairment of Long-Lived Assets | 8. Impairment of Long-Lived Assets We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with FASB ASC 360-10-05-4, Accounting for the Impairment or Disposal of Long-Lived Assets If the impairment tests indicate that the carrying value of the asset is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized. The impairment loss is determined by the amount by which the carrying value of such asset exceeds its fair value. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate. Assets to be disposed of are carried at the lower of their carrying value or fair value less costs to sell. Considerable management judgment is necessary to estimate the fair value of assets, and accordingly, actual results could vary significantly from such estimates. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2017 and 2016. |
Property and Equipment | 9. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives, principally using straight-line methods. Leasehold improvements are amortized over the shorter of the life of the improvement or the lease term, using the straight-line method. Property and equipment consists of the following at December 31, 2017 and 2016: December 31, 2017 2016 Equipment $ 1,700 $ 1,644 Leasehold improvements 680 673 Purchased and developed software 1,516 1,007 Furniture and fixtures 439 438 Other depreciable assets 27 27 Total property and equipment 4,362 3,789 Less: accumulated depreciation and amortization (3,226 ) (2,877 ) Net property and equipment $ 1,136 $ 912 The estimated useful lives used to compute depreciation and amortization are as follows: Equipment 3 – 5 years Furniture and fixtures 5 years Purchased and developed software 5 years Leasehold improvements Shorter of 5 years or term of lease Depreciation expense was $345 and $272 for the years ended December 31, 2017 and 2016, respectively. |
Research and Development and Software Development Costs | 10. Research and Development and Software Development Costs Research and development expenses consist primarily of development personnel and non-employee contractor costs related to the development of new products and services, enhancement of existing products and services, quality assurance and testing. Effective April 2015, the Company began capitalizing its costs for additional functionality to its internal software. We capitalized approximately $524 and $270 for the years ended December 31, 2017 and 2016, respectively. These software development costs include both enhancements and upgrades of our client based systems including functionality of our internal information systems to aid in our productivity, profitability and customer relationship management. We are amortizing these costs over 5 years once the new projects are finished and placed in service. These costs are included in property and equipment, net on the consolidated balance sheets. |
Basic and Diluted Loss per Common Share | 11. Basic and Diluted Loss per Common Share Basic and diluted loss per common share for all periods presented is computed using the weighted average number of common shares outstanding. Basic weighted average shares outstanding include only outstanding common shares. Diluted net loss per common share is computed by dividing net loss by the weighted average common and potential dilutive common shares outstanding computed in accordance with the treasury stock method. Shares reserved for outstanding stock options and warrants totaling approximately 46.7 and 36.0 million at December 31, 2017 and 2016, respectively, were excluded from the computation of loss per share as well as the potential common shares issuable upon conversion of convertible preferred stock and convertible promissory notes as their effect was antidilutive due to our net loss. Net loss attributable to common shareholders for the year ended December 31, 2017 and December 31, 2016 is after dividends on convertible preferred stock of $246 and $463, respectively. |
Deferred Income Taxes | 12. Deferred Income Taxes The calculation of our income tax provision involves dealing with uncertainties in the application of complex tax regulations. We recognize tax liabilities for uncertain income tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. We had no uncertain tax positions as of December 31, 2017 and 2016. Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in basis of intangibles (other than goodwill), stock-based compensation, reserves for uncollectible accounts receivable and inventory, differences in depreciation methods, and accrued expenses. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense on our statement of operations. |
Accounting for Stock-Based Compensation | 13. Accounting for Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10 that requires the measurement and recognition of compensation expense for all stock-based payments including warrants, stock options, restricted stock grants and stock bonuses based on estimated fair value. For purposes of determining estimated fair value under FASB ASC 718-10-30, the Company computes the estimated fair values of stock options using the Black-Scholes option pricing model. Stock-based compensation expense to employees of $284 and $273 was charged to expense during the years ended December 31, 2017 and 2016, respectively. |
Goodwill and Definite-Lived Intangible Assets | 14. Goodwill and Definite-Lived Intangible Assets We follow the provisions of FASB ASC 350, Goodwill and Other Intangible Assets |
Use of Estimates | 15. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our significant estimates include; the allowance for doubtful accounts, recognition of revenue under fixed price contracts, deferred tax assets, deferred revenue, depreciable lives and methods for property and equipment and definite lived intangible assets, valuation of warrants and other stock-based compensation, as well as valuations and purchase price allocations related to business combinations, expected future cash flows including growth rates, discount rates and terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, goodwill and other intangible assets and the related amortization methods and periods. Actual results could differ from those estimates. |
Change in authorized shares | 16. Change in authorized shares On February 11, 2016, the Company filed an S-1 Registration Statement registering 20,268,959 shares of common stock issuable upon conversion of its secured notes and upon exercise of the warrants. This S-1 was effective June 1, 2016. |
Recently Issued Accounting Pronouncements | 17. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers (Topic 606), The Company adopted the new revenue guidance effective January 1, 2018 using the modified retrospective method of adoption. Based on the Company’s initial assessment any adjustments for transition are not expected to be material. The Company conducted a risk assessment and had developed a transition plan that enabled the Company to meet the implementation requirement. Revenue streams and performance obligations evaluated include those outlined in the Revenue In July 2017, the FASB issued Accounting Standards Update No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic 480), Derivatives and Hedging (Topic 815) Part I. Accounting for Certain Financial Instruments With Down Round Features, Part II Replacement of the Indefinite Deferral for Mandatorily Redeemable Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Year ended December 31, 2016 As previously reported As adjusted Operating income/(loss) (4,557 ) (4,557 ) Other income (expenses): Interest expense (1,908 ) (1,636 ) Change in fair value of warrant liability (982 ) (42 ) Gain on settlement of debt 1,008 1,008 Other income/(expense) 164 164 Total other income/(expense) (1,718 ) (506 ) Income/(loss) before income taxes (6,275 ) (5,063 ) Benefit/(provision) from income taxes 365 365 Net loss (5,910 ) (4,698 ) Dividends on preferred stock 463 463 Net loss attributable to common shareholders (6,373 ) (5,161 ) Net loss per common share - basic and diluted (0.09 ) (0.07 ) Net loss attributable to common shareholders (0.10 ) (0.08 ) Weighted average shares outstanding - basic and diluted 65,443 65,443 December 31, 2016 As previously reported As adjusted LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Loans payable, net $ 7,635 $ 7,627 Total current liabilities 14,374 14,481 Warrant liability 3,316 705 TOTAL LIABILITIES 18,518 16,014 SHAREHOLDERS’ EQUITY Additional paid-in capital 21,834 23,095 Accumulated deficit (20,524 ) (19,281 ) Total shareholders’ equity 1,976 4,480 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 24,419 $ 24,419 In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU No. 2016-02, Leases |
Reclassification | 18. Reclassification: Certain prior year amounts have been reclassified to conform to the current year presentation. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment | December 31, 2017 2016 Equipment $ 1,700 $ 1,644 Leasehold improvements 680 673 Purchased and developed software 1,516 1,007 Furniture and fixtures 439 438 Other depreciable assets 27 27 Total property and equipment 4,362 3,789 Less: accumulated depreciation and amortization (3,226 ) (2,877 ) Net property and equipment $ 1,136 $ 912 |
Schedule of estimated useful lives used to compute depreciation and amortization | Equipment 3 – 5 years Furniture and fixtures 5 years Purchased and developed software 5 years Leasehold improvements Shorter of 5 years or term of lease |
Schedule of impact to financial statements | Year ended December 31, 2016 As previously reported As adjusted Operating income/(loss) (4,557 ) (4,557 ) Other income (expenses): Interest expense (1,908 ) (1,636 ) Change in fair value of warrant liability (982 ) (42 ) Gain on settlement of debt 1,008 1,008 Other income/(expense) 164 164 Total other income/(expense) (1,718 ) (506 ) Income/(loss) before income taxes (6,275 ) (5,063 ) Benefit/(provision) from income taxes 365 365 Net loss (5,910 ) (4,698 ) Dividends on preferred stock 463 463 Net loss attributable to common shareholders (6,373 ) (5,161 ) Net loss per common share - basic and diluted (0.09 ) (0.07 ) Net loss attributable to common shareholders (0.10 ) (0.08 ) Weighted average shares outstanding - basic and diluted 65,443 65,443 |
Schedule of consolidated balance sheet | December 31, 2016 As previously reported As adjusted LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Loans payable, net $ 7,635 $ 7,627 Total current liabilities 14,374 14,481 Warrant liability 3,316 705 TOTAL LIABILITIES 18,518 16,014 SHAREHOLDERS’ EQUITY Additional paid-in capital 21,834 23,095 Accumulated deficit (20,524 ) (19,281 ) Total shareholders’ equity 1,976 4,480 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 24,419 $ 24,419 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement [Abstract] | |
Schedule of fair value measurement warrants | Quote Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description Fair Value (Level 1) (Level 2) (Level 3) Warrant liability at December 31, 2016 $ 3,316 - - $ 3,316 Reclassification of warrants from liabilities to equity per ASU 2017-11 $ (2,611 ) - - $ (2,611 ) Revised warrant liability at December 31, 2016 $ 705 - - $ 705 Warrant liability at December 31, 2017 $ 858 - - $ 858 |
Schedule of change in level 3 fair value | Warrant liability December 31, 2016 $ 705 New warrant liabilities - Increase in fair value of warrant liability 153 Ending warrant liability as of December 31, 2017 $ 858 |
Other Financial Statement Inf26
Other Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Financial Statement Information [Abstract] | |
Schedule of inventories | December 31, December 31, 2017 2016 Finished goods $ 719 $ 138 Work-in-process 132 447 Total inventories $ 851 $ 585 |
Schedule of supplemental cash flow information | 2017 2016 Cash paid for interest $ 640 $ 363 Cash paid for taxes $ 5 $ 11 Non-cash Investing and Financing Activities Noncash preferred stock dividends $ 246 $ 463 Issuance of notes in exchange for accounts payable $ - $ 288 Issuance of stock upon conversion of preferred stock $ 2,246 $ 307 Issuance of warrants with term loan extensions $ 2,218 361 Issuance of stock in exchange for accounts payable $ - $ 86 |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Other Intangible Assets [Abstract] | |
Schedule of other intangible assets | December 31, 2017 2016 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform 2,865 2,568 4,190 2,433 Customer relationships 2,460 2,093 2,460 1,404 Trademarks and trade names 680 469 680 393 6,005 5,130 7,330 4,230 Accumulated amortization 5,130 4,230 Impairment loss on technology platform - 1,065 Net book value of amortizable intangible assets 875 2,035 |
Schedule of estimated amortization | Year ending December 31, 2017 2018 $ 739 2019 76 2020 60 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loans Payable [Abstract] | |
Schedule of outstanding convertible promissory notes | Issuance Date Original Principal Additional Principal Total Principal Maturity Date Warrants 8/17/2016 3,000 - 3,000 8/17/2019 17,647,056 8.0% interest 6/29/2016 50 2 52 4/10/2019 89,286 14% interest* 6/13/2016 200 19 219 4/10/2019 357,143 14% interest* 6/13/2016 250 14 264 4/10/2019 446,429 14% interest* 5/3/2016 500 17 517 4/10/2019 892,857 14% interest* 12/28/2015 150 6 156 4/10/2019 267,857 14% interest* 12/28/2015 500 20 520 4/10/2019 892,857 14% interest* 12/28/2015 600 24 624 4/10/2019 1,071,429 14% interest* 10/26/2015 300 13 313 4/10/2019 535,714 14% interest* 10/15/2015 150 7 157 4/10/2019 267,857 14% interest* 10/15/2015 500 23 523 4/10/2019 892,857 14% interest* 6/23/2015 400 21 421 4/10/2019 640,000 14% interest* 6/23/2015 119 31 150 4/10/2019 935,210 Refinanced May 20, 2015 debt, 14% interest * 5/20/2015 465 - 465 4/10/2019 762,295 14% cash interest $ 7,184 $ 197 $ 7,381 25,698,847 Debt discount (1,916 ) Total debt $ 7,184 $ 5,465 * 12% cash, 2% added to principal |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum lease payments under leases | Year ending December 31, Lease Obligations 2018 $ 587 2019 499 2020 398 2021 61 Total future minimum obligations $ 1,545 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Summary of the deferred tax assets and liabilities | December 31, 2017 2016 Deferred tax assets (liabilities): Reserves $ 12 $ 35 Property and equipment 80 171 Accrued expenses 619 1,034 Severance 56 39 Non-qualified stock options 268 420 Net foreign carryforwards 1,906 1,844 Net operating loss and credit carryforwards 6,801 8,054 Intangibles 605 907 Total deferred tax assets 10,347 12,504 Valuation allowance (10,896 ) (13,114 ) Net deferred tax liabilities $ (549 ) $ (610 ) |
Summary of tax provision | Year ended December 31, 2017 2016 Tax provision summary State income tax $ 21 $ 18 Deferred tax benefit, release of valuation allowance - (635 ) Deferred tax benefit - federal 2,382 (1,101 ) Deferred tax benefit - state (149 ) (89 ) Deferred tax benefit - foreign (75 ) (453 ) Change in valuation allowance (2,218 ) 1,895 Tax (benefit)/expense $ (39 ) $ (365 ) |
Summary of reconciliation statutory income tax | 2017 2016 Federal statutory rate -34.00 % -34.00 % State taxes -2.44 % -2.75 % Foreign rate differential -0.08 % 3.11 % Other 3.55 % 1.68 % Impact of Tax Act 3.10 % 0 % Changes in valuation allowance -37.79 % 36.72 % Effective tax rate -67.66 % 4.80 % |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Preferred Stock [Abstract] | |
Schedule of conversation of stock | Number of Convertible Preferred Series A Number of Convertible Preferred Series A-1 Shares of Common Stock Received Q4 2017 - - - Q3 2017 132,200 1,860,561 7,814,749 Q2 2017 12,750 - 50,000 Q1 2017 240,250 - 942,157 Q4 2016 132,000 - 517,647 Q3 2016 75,500 - 296,078 Q2 2016 - - - Q1 2016 100,000 - 392,157 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants [Abstract] | |
Schedule of range of inputs used for probability weighted Black Scholes option pricing model valuations | Issuance Date Expected Term at Issuance Date Risk Free Interest Rate at Date of Issuance Volatility at Date of Issuance Stock Price at Date of Issuance 8/20/2014 5.00 1.50% 96.00% $0.63 2/13/2015 5.00 1.28% 100.00% $0.34 5/22/2015 5.00 1.28% 107.58% $0.29 10/15/2015 5.00 1.71% 58.48% $0.22 10/26/2015 5.00 1.71% 60.47% $0.21 12/21/2015 5.00 1.75% 58.48% $0.21 12/28/2015 5.00 1.75% 58.48% $0.16 1/15/2016 5.00 1.76% 58.48% $0.17 5/3/2016 5.00 1.25% 51.15% $0.21 6/13/2016 5.00 1.14% 51.12% $0.17 6/29/2016 5.00 1.01% 48.84% $0.17 8/17/2016 5.00 1.15% 51.55% $0.15 11/4/2016 5.00 1.66% 47.48% $0.16 12/12/2016 5.00 1.90% 48.54% $0.19 8/19/2017 5.00 1.81% 64.71% $0.35 11/13/2017 5.00 2.08% 66.24% $0.29 Remaining Expected Term at Risk Free Interest Rate at Volatility at Stock Price at 1.64 - 4.87 1.83% 72.34% $0.32 |
Summary of outstanding debt and equity warrants | Warrants (Equity) Warrants (Liability) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance, January 1, 2016 12,937,902 1.88 3.90 6,487,500 0.35 3.64 Warrants issued to financial advisors 500,000 0.28 4.46 - - - Warrants issued with promissory notes 1,785,715 0.28 4.37 - - - Warrants issued with term loan 7,424,804 0.28 4.70 - - - Warrants expired (1,116,359 ) 11.52 - - - - Balance, December 31, 2016 21,532,062 0 .65 3.79 6,487,500 0.35 2.64 Warrants issued with term loan 11,764,704 0.28 4.75 - - - Warrants expired (292,755 ) 46.68 - - - - Balance December 31, 2017 33,004,011 0 .47 3.55 6,487,500 0.35 1.64 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity [Abstract] | |
Summary of stock options outstanding | Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.18 - $0.65 7,145,000 7.51 $ 0.28 3,833,956 $ 0.31 $0.66 - $0.79 30,000 6.04 0.79 30,000 $ 0.79 $0.80 - $12.25 15,500 4.59 3.73 15,500 $ 3.73 7,190,500 7.50 $ 0.29 |
Summary of stock option activity | Options Weighted Average Outstanding Exercise Price Balance, December 31, 2016 7,490,499 $ 0.29 Granted - - Exercised - - Forfeited or expired 299,999 0.18 Balance, December 31, 2017 7,190,500 $ 0.29 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Schedule of compensation expense | December 31, 2017 2016 Stock-based compensation costs included in: Costs of sales $ 6 $ 1 Sales and marketing expense 76 74 General and administrative expense 202 198 Total stock-based compensation expense $ 284 $ 273 |
Schedule of weighted average assumptions | Risk-free interest rate 1.14% Expected term 6.25 years Expected price volatility 47.89% Dividend yield 0% |
Nature of Operations and Liqu35
Nature of Operations and Liquidity (Details) - USD ($) $ in Thousands | Oct. 15, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Nature of Operations and Liquidity (Textual) | ||||
Working capital deficit | $ (3,801) | |||
Maturity date, description | On November 13, 2017, Slipstream Communications, LLC, a related party, extended the maturity date of our term loan to August 17, 2019 and extended the maturity date of our promissory notes on a rolling quarter addition basis which is now April 15, 2019. While management believes that due to the extension of our debt maturity date, our current cash balance and our operational forecast for 2018, we can continue as a going concern through at least March 31, 2019, given our net losses and working capital deficit, we obtained a continued support letter from Slipstream Communications, LLC through March 31, 2019. | |||
Issuance of the shares is recognized charge to operations | $ 1,900 | |||
Cash and cash equivalents | $ 1,003 | $ 1,352 | $ 1,361 | |
Rick Mills [Member] | ||||
Nature of Operations and Liquidity (Textual) | ||||
Common stock, shares issue | 3,198,054 | |||
Common Stock [Member] | ||||
Nature of Operations and Liquidity (Textual) | ||||
Shares issued under plan of merger | 5,631,373 | |||
Common stock, shares issue | 718,840 | 0 | ||
ConeXus World Global, LLC [Member] | Series A-1 Preferred Stock [Member] | ||||
Nature of Operations and Liquidity (Textual) | ||||
Shares issued | 2,080,000 | |||
Shares issued under plan of merger | 416,000 | |||
Conversion of shares amount | $ 823 | |||
Principal amount of convertible debt | $ 150 | |||
ConeXus World Global, LLC [Member] | Common Stock [Member] | ||||
Nature of Operations and Liquidity (Textual) | ||||
Shares issued | 2,639,258 | |||
Shares issued under plan of merger | 4,000,000 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,362 | $ 3,789 |
Less: accumulated depreciation and amortization | (3,226) | (2,877) |
Net property and equipment | 1,136 | 912 |
Purchased and developed software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,516 | 1,007 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,700 | 1,644 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 680 | 673 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 439 | 438 |
Other depreciable assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 27 | $ 27 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Purchased and developed software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Furniture and fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | Shorter of 5 years or term of lease |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Income Statements, Captions [Line Items] | ||
Operating income/(loss) | $ (6,100) | $ (4,557) |
Other income (expenses): | ||
Interest expense | (1,610) | (1,636) |
Change in fair value of warrant liability | (153) | (42) |
Gain on settlement of debt | 872 | 1,008 |
Other income/(expense) | 2 | 164 |
Total other income/(expense) | (889) | (506) |
Income/(loss) before income taxes | (6,989) | (5,063) |
Benefit/(provision) from income taxes | 39 | 365 |
Net loss | (7,256) | (4,698) |
Dividends on preferred stock | (246) | (463) |
Net loss attributable to common shareholders | $ (7,196) | $ (5,161) |
Net loss per common share - basic and diluted | $ (0.10) | $ (0.08) |
Weighted average shares outstanding - basic and diluted | 72,788 | 65,443 |
As previously reported [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Operating income/(loss) | $ (4,557) | |
Other income (expenses): | ||
Interest expense | (1,908) | |
Change in fair value of warrant liability | (982) | |
Gain on settlement of debt | 1,008 | |
Other income/(expense) | 164 | |
Total other income/(expense) | (1,718) | |
Income/(loss) before income taxes | (6,275) | |
Benefit/(provision) from income taxes | 365 | |
Net loss | (5,910) | |
Dividends on preferred stock | 463 | |
Net loss attributable to common shareholders | $ (6,373) | |
Net loss per common share - basic and diluted | $ (0.09) | |
Net loss attributable to common shareholders | $ (0.1) | |
Weighted average shares outstanding - basic and diluted | 65,443 | |
As adjusted [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Operating income/(loss) | $ (4,557) | |
Other income (expenses): | ||
Interest expense | (1,636) | |
Change in fair value of warrant liability | (42) | |
Gain on settlement of debt | 1,008 | |
Other income/(expense) | 164 | |
Total other income/(expense) | (506) | |
Income/(loss) before income taxes | (5,063) | |
Benefit/(provision) from income taxes | 365 | |
Net loss | (4,698) | |
Dividends on preferred stock | 463 | |
Net loss attributable to common shareholders | $ (5,161) | |
Net loss per common share - basic and diluted | $ (0.07) | |
Net loss attributable to common shareholders | $ (0.08) | |
Weighted average shares outstanding - basic and diluted | 65,443 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT LIABILITIES | |||
Loans payable, net | $ 7,627 | ||
Total current liabilities | 12,674 | 14,481 | |
Warrant liability | 858 | 705 | |
TOTAL LIABILITIES | 19,766 | 16,014 | |
SHAREHOLDERS' EQUITY | |||
Additional paid-in capital | 29,757 | 23,095 | |
Accumulated deficit | (26,231) | (19,281) | |
Total shareholders' equity | 4,352 | 4,480 | $ 8,588 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 26,045 | 24,419 | |
As previously reported [Member] | |||
CURRENT LIABILITIES | |||
Loans payable, net | 7,635 | ||
Total current liabilities | 14,374 | ||
Warrant liability | 3,316 | ||
TOTAL LIABILITIES | 18,518 | ||
SHAREHOLDERS' EQUITY | |||
Additional paid-in capital | 21,834 | ||
Accumulated deficit | (20,524) | ||
Total shareholders' equity | 1,976 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 24,419 | ||
As adjusted [Member] | |||
CURRENT LIABILITIES | |||
Loans payable, net | 7,627 | ||
Total current liabilities | 14,481 | ||
Warrant liability | 705 | ||
TOTAL LIABILITIES | 16,014 | ||
SHAREHOLDERS' EQUITY | |||
Additional paid-in capital | 23,095 | ||
Accumulated deficit | (19,281) | ||
Total shareholders' equity | 4,480 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 24,419 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Feb. 11, 2016 | |
Summary of Significant Accounting Policies and Accounting Changes (Textual) | |||
Total hardware sales | $ 5,400 | $ 3,031 | |
Total services and other revenue | 12,298 | 10,642 | |
Federal Deposit Insurance Corporation | 250 | ||
Inventory net of allowance | 10 | 10 | |
Depreciation expense | 345 | 272 | |
Research and development and software development costs | $ 524 | 270 | |
Intangible assets amortizes costs | Over 5 years once | ||
Impairment losses for loss on long lived assets | |||
Outstanding stock options and warrants | 46,700 | 36,000 | |
Dividends on convertible preferred stock | 246 | 463 | |
Stock based compensation expense | $ 284 | 273 | |
Recognizes liability related to warrants | 16,482,635 | ||
Common stock issuable upon conversion | 20,268,959 | ||
Percentage of accounts receivable | 51.00% | ||
Accounts receivable from related party | $ 3,017 | $ 543 |
Fair Value Measurement (Details
Fair Value Measurement (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Fair Value [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability at December 31, 2016 | $ 3,316 |
Reclassification of warrants from liabilities to equity per ASU 2017-11 | (2,611) |
Revised warrant liability at December 31, 2016 | 705 |
Warrant liability at December 31, 2017 | 858 |
Quote Prices In Active Markets (Level 1) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability at December 31, 2016 | |
Reclassification of warrants from liabilities to equity per ASU 2017-11 | |
Revised warrant liability at December 31, 2016 | |
Warrant liability at December 31, 2017 | |
Significant Other Observable Inputs (Level 2) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability at December 31, 2016 | |
Reclassification of warrants from liabilities to equity per ASU 2017-11 | |
Revised warrant liability at December 31, 2016 | |
Warrant liability at December 31, 2017 | |
Significant Other Unobservable Inputs (Level 3) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability at December 31, 2016 | 3,316 |
Reclassification of warrants from liabilities to equity per ASU 2017-11 | (2,611) |
Revised warrant liability at December 31, 2016 | 705 |
Warrant liability at December 31, 2017 | $ 858 |
Fair Value Measurement (Detai42
Fair Value Measurement (Details 1) - Change in Level 3 fair value [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability December 31, 2016 | $ 705 |
New warrant liabilities | |
Increase in fair value of warrant liability | 153 |
Ending warrant liability as of December 31, 2017 | $ 858 |
Other Financial Statement Inf43
Other Financial Statement Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Financial Statement Information [Abstract] | ||
Finished goods | $ 719 | $ 138 |
Work-in-process | 132 | 447 |
Total inventories | $ 851 | $ 585 |
Other Financial Statement Inf44
Other Financial Statement Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Information: | ||
Cash paid for interest | $ 640 | $ 363 |
Cash paid for taxes | 5 | 11 |
Non-Cash Investing and Financing Activities | ||
Noncash preferred stock dividends | 246 | 463 |
Issuance of notes in exchange for accounts payable | 288 | |
Issuance of stock upon conversion of preferred stock | 2,246 | 307 |
Issuance of warrants with term loan extensions | 2,218 | 361 |
Issuance of stock in exchange for accounts payable | $ 86 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,005 | $ 7,330 |
Accumulated Amortization | 5,130 | 4,230 |
Impairment loss on technology platform | 1,065 | |
Net book value of amortizable intangible assets | 875 | 2,035 |
Technology platform [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,865 | 4,190 |
Accumulated Amortization | 2,568 | 2,433 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,460 | 2,460 |
Accumulated Amortization | 2,093 | 1,404 |
Trademarks and trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 680 | 680 |
Accumulated Amortization | $ 469 | $ 393 |
Goodwill and Other Intangible46
Goodwill and Other Intangible Assets (Details 1) $ in Thousands | Dec. 31, 2017USD ($) |
Goodwill and Other Intangible Assets [Abstract] | |
2,018 | $ 739 |
2,019 | 76 |
2,020 | $ 60 |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Other Intangible Assets (Textual) | ||
Amortization of intangible assets | $ 1,160 | $ 1,731 |
Write-off of fully amortized intangible assets | 260 | |
Impairment loss on intangible assets | $ 1,065 |
Loans Payable (Details)
Loans Payable (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)shares | ||
Schedule of outstanding debt with detachable warrants | ||
Original Principal | $ 7,184 | |
Additional Principal | 197 | |
Total Principal | $ 7,381 | |
Warrants | shares | 25,698,847 | |
Debt discount | $ (1,916) | |
Total convertible promissory notes | $ 5,465 | |
8/17/2016 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Aug. 17, 2016 | |
Original Principal | $ 3,000 | |
Additional Principal | ||
Total Principal | $ 3,000 | |
Maturity Date | Aug. 17, 2019 | |
Warrants | shares | 17,647,056 | |
Convertible debt interest rate, description | 8.0% interest | |
6/29/2016 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Jun. 29, 2016 | |
Original Principal | $ 50 | |
Additional Principal | 2 | |
Total Principal | $ 52 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 89,286 | |
Convertible debt interest rate, description | 14% interest* | [1] |
6/13/2016 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Jun. 13, 2016 | |
Original Principal | $ 200 | |
Additional Principal | 19 | |
Total Principal | $ 219 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 357,143 | |
Convertible debt interest rate, description | 14% interest* | [1] |
6/13/2016 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Jun. 13, 2016 | |
Original Principal | $ 250 | |
Additional Principal | 14 | |
Total Principal | $ 264 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 446,429 | |
Convertible debt interest rate, description | 14% interest* | [1] |
5/3/2016 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | May 3, 2016 | |
Original Principal | $ 500 | |
Additional Principal | 17 | |
Total Principal | $ 517 | |
Maturity Date | Apr. 4, 2019 | |
Warrants | shares | 892,857 | |
Convertible debt interest rate, description | 14% interest* | [1] |
12/28/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Dec. 28, 2015 | |
Original Principal | $ 150 | |
Additional Principal | 6 | |
Total Principal | $ 156 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 267,857 | |
Convertible debt interest rate, description | 14% interest* | [1] |
12/28/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Dec. 28, 2015 | |
Original Principal | $ 500 | |
Additional Principal | 20 | |
Total Principal | $ 520 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 892,857 | |
Convertible debt interest rate, description | 14% interest* | [1] |
12/28/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Dec. 28, 2015 | |
Original Principal | $ 600 | |
Additional Principal | 24 | |
Total Principal | $ 624 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 1,071,429 | |
Convertible debt interest rate, description | 14% interest* | [1] |
10/26/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Oct. 26, 2015 | |
Original Principal | $ 300 | |
Additional Principal | 23 | |
Total Principal | $ 313 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 535,714 | |
Convertible debt interest rate, description | 14% interest* | [1] |
10/15/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Oct. 15, 2015 | |
Original Principal | $ 150 | |
Additional Principal | 7 | |
Total Principal | $ 157 | |
Maturity Date | Apr. 4, 2019 | |
Warrants | shares | 267,857 | |
Convertible debt interest rate, description | 14% interest* | [1] |
10/15/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Oct. 15, 2015 | |
Original Principal | $ 500 | |
Additional Principal | 13 | |
Total Principal | $ 525 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 892,857 | |
Convertible debt interest rate, description | 14% interest* | [1] |
6/23/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Jun. 23, 2015 | |
Original Principal | $ 400 | |
Additional Principal | 21 | |
Total Principal | $ 421 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 640,000 | |
Convertible debt interest rate, description | 14% interest* | [1] |
6/23/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | Jun. 23, 2015 | |
Original Principal | $ 119 | |
Additional Principal | 31 | |
Total Principal | $ 150 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 935,210 | |
Convertible debt interest rate, description | Refinanced May 20, 2015 debt, 14% interest * | [1] |
5/20/2015 [Member] | ||
Schedule of outstanding debt with detachable warrants | ||
Issuance Date | May 20, 2015 | |
Original Principal | $ 465 | |
Additional Principal | ||
Total Principal | $ 465 | |
Maturity Date | Apr. 10, 2019 | |
Warrants | shares | 762,295 | |
Convertible debt interest rate, description | 14% cash interest | [1] |
[1] | * 12% cash, 2% added to principal |
Loans Payable (Details Textual)
Loans Payable (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Jan. 16, 2018 | Nov. 13, 2017 | Dec. 12, 2016 | Jun. 29, 2016 | Jun. 13, 2016 | May 03, 2016 | Aug. 10, 2017 | Aug. 17, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 20, 2016 |
Loans Payable (Textual) | |||||||||||
Principal amount | $ 7,381 | ||||||||||
Warrants to purchase common stock | 16,482,635 | ||||||||||
Debt discount amortized | $ 756 | $ 852 | |||||||||
Fair value of warrants on the issuance | 153 | $ 42 | |||||||||
Interest Payable | $ 295 | ||||||||||
Slipstream Communications, LLC [Member] | |||||||||||
Loans Payable (Textual) | |||||||||||
Term loan interest percentage | 8.00% | 8.00% | |||||||||
Terms of warrant | 5 years | 5 years | |||||||||
Maturity date | Aug. 17, 2019 | Aug. 17, 2018 | |||||||||
Warrants to purchase common stock | 5,882,352 | 5,882,352 | |||||||||
Fair value of warrants | $ 976 | $ 1,024 | $ 200 | ||||||||
Revised fair value of warrants | $ 250 | ||||||||||
Fair value of warrants on the issuance | $ 1,000 | $ 1,200 | |||||||||
Adjusted per share price value | $ 0.28 | $ 0.28 | |||||||||
Subsequent Event [Member] | |||||||||||
Loans Payable (Textual) | |||||||||||
Principal amount | $ 1,000 | ||||||||||
Terms of warrant | 5 years | ||||||||||
Maturity date | Jan. 16, 2019 | ||||||||||
Warrants to purchase common stock | 1,851,851 | ||||||||||
Adjusted per share price value | $ 0.27 | ||||||||||
Subsequent Event [Member] | Slipstream Communications, LLC [Member] | |||||||||||
Loans Payable (Textual) | |||||||||||
Fair value of warrants on the issuance | $ 1,000 | ||||||||||
Loan and Security Agreement [Member] | Slipstream Communications, LLC [Member] | |||||||||||
Loans Payable (Textual) | |||||||||||
Principal amount | $ 1,000 | ||||||||||
Borrowed loan | $ 786 | $ 3,000 | |||||||||
Term loan interest percentage | 8.00% | 8.00% | |||||||||
Terms of warrant | 5 years | 5 years | |||||||||
Maturity date | Feb. 1, 2017 | Aug. 17, 2018 | |||||||||
Warrants to purchase common stock | 1,542,452 | 5,882,352 | |||||||||
Share price per share | $ 0.28 | $ 0.28 | |||||||||
Aggregate fees | $ 37 | $ 20 | |||||||||
Fair value of warrants | $ 136 | 361 | |||||||||
Additional advances | $ 1,000 | ||||||||||
Secured convertible promissory note [Member] | |||||||||||
Loans Payable (Textual) | |||||||||||
Principal amount | $ 50 | $ 450 | $ 500 | ||||||||
Terms of warrant | 5 years | 5 years | 5 years | ||||||||
Warrants to purchase common stock | 89,286 | 803,572 | 892,857 | ||||||||
Share price per share | $ 0.28 | $ 0.28 | $ 0.28 | ||||||||
Fair value of warrants | $ 6 | $ 57 | $ 89 | ||||||||
Interest rate, description | The secured convertible promissory notes bear interest at the rate of 14% per annum. Of this amount, 12% per annum is payable monthly in cash, and the remaining 2% per annum is payable in the form an additional principal through increases in the principal amount of the note. Upon the consummation of a change in control transaction of the company or a default, interest on the secured convertible promissory note will increase to the rate of 17% per annum. | ||||||||||
Proceeds from convertible debt | 300 | ||||||||||
Exchanged short term notes | $ 150 | ||||||||||
Incurred sales commissions | $ 25 |
Commitments and Contingencies50
Commitments and Contingencies (Details ) $ in Thousands | Dec. 31, 2017USD ($) |
Summary of future minimum lease payments | |
2,018 | $ 587 |
2,019 | 499 |
2,020 | 398 |
2,021 | 61 |
Total future minimum obligations | $ 1,545 |
Commitments and Contingencies51
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | Sep. 30, 2016 | Aug. 31, 2016 | Jun. 30, 2016 | Feb. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 10, 2017 | Mar. 31, 2016 |
Commitments and Contingencies (Textual) | ||||||||
Rent expense | $ 474 | $ 416 | ||||||
Negotiated settlement | 45 | |||||||
Settled and/or wrote off debt | $ 90 | $ 614 | 1,159 | |||||
Cash payment | 35 | $ 123 | 786 | 288 | ||||
Recognized a gain | $ 872 | $ 1,008 | ||||||
Issuance of shares of restricted common stock | 409,347 | 693 | ||||||
Fair value restricted share at conversion date | $ 85 | |||||||
Gains (Losses) on Restructuring of Debt | 406 | |||||||
Gain on the debt settlement | $ 55 | |||||||
Benefits related to severance of employees | $ 146 | |||||||
Unsecured creditors [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Cash payment | $ 249 | |||||||
Aggregate principal amount | $ 288 | |||||||
Debt issued percentage | 8.00% | |||||||
Gain on the debt settlement | $ 547 | |||||||
Accounts payable, accrued expenses and other liabilities | $ 839 | |||||||
CEO [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Performance shares with a grant date | 4,951,557 | |||||||
After Revision [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Accounts payable, accrued expenses and other liabilities | $ 796 | |||||||
Former Vendor [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Litigation amount | $ 335 | |||||||
Former Vendor One [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Litigation amount | $ 51 | |||||||
Investors [Member] | ||||||||
Commitments and Contingencies (Textual) | ||||||||
Settled and/or wrote off debt | $ 614 | |||||||
Issuance of shares of restricted common stock | 809,842 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2017 | Sep. 01, 2017 | Aug. 10, 2017 | Dec. 12, 2016 | Aug. 10, 2017 | Aug. 17, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transactions (Texual) | ||||||||
Promissory note, principal amount | $ 7,381 | |||||||
Sales | 17,698 | $ 13,673 | ||||||
Accounts receivable due from the related party | 3,017 | 543 | ||||||
Fair value of warrants on the issuance | $ 153 | $ 42 | ||||||
Convertible preferred stock | 307,500 | |||||||
Loan and Security Agreement [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Related party entity owned percentage | 22.50% | |||||||
Sales | $ 3,390 | $ 1,344 | ||||||
Slipstream Communications, LLC [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Warrant to purchase common stock | 5,882,352 | 5,882,352 | ||||||
Term of warrant | 5 years | 5 years | ||||||
Maturity date | Aug. 17, 2019 | Aug. 17, 2018 | ||||||
Adjusted per share price value | $ 0.28 | $ 0.28 | ||||||
Fair value of warrants on the issuance | $ 1,000 | $ 1,200 | ||||||
Slipstream Communications, LLC [Member] | Loan and Security Agreement [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Promissory note, principal amount | $ 1,000 | |||||||
Warrant to purchase common stock | 1,542,452 | 5,882,352 | ||||||
Interest on convertible promissory note | 8.00% | 8.00% | ||||||
Term of warrant | 5 years | 5 years | ||||||
Price per share | $ 0.28 | $ 0.28 | ||||||
Maturity date | Feb. 1, 2017 | Aug. 17, 2018 | ||||||
Term loan | $ 786 | $ 3,000 | ||||||
CEO [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Common stock issued shares | 5,422,604 | |||||||
Convertible preferred stock | 8,806,906 | |||||||
CEO [Member] | ConeXus World Global, LLC [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Common stock issued value | $ 1,119 | |||||||
Common stock issued shares | 3,198,054 | |||||||
Investor [Member] | ||||||||
Related Party Transactions (Texual) | ||||||||
Convertible preferred stock | 8,806,906 | 1,205,882 |
Income Taxes (Details )
Income Taxes (Details ) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets -liabilities): | ||
Reserves | $ 12 | $ 35 |
Property and equipment | 80 | 171 |
Accrued expenses | 619 | 1,034 |
Severance | 56 | 39 |
Non-qualified stock options | 268 | 420 |
Net foreign carryforwards | 1,906 | 1,844 |
Net operating loss and credit carryforwards | 6,801 | 8,054 |
Intangibles | 605 | 907 |
Total deferred tax assets | 10,347 | 12,504 |
Valuation allowance | (10,896) | (13,114) |
Net deferred tax liabilities | $ (549) | $ (610) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Tax provision summary | ||
State income tax | $ 21 | $ 18 |
Deferred tax benefit, release of valuation allowance | (635) | |
Deferred tax benefit - federal | 2,382 | (1,101) |
Deferred tax benefit - state | (149) | (89) |
Deferred tax benefit - foreign | (75) | (453) |
Change in valuation allowance | (2,218) | 1,895 |
Tax (benefit)/expense | $ (39) | $ (365) |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | ||
Federal statutory rate | (34.00%) | (34.00%) |
State taxes | (2.44%) | (2.75%) |
Foreign rate differential | (0.08%) | (3.11%) |
Other | 3.55% | 1.68% |
Impact of Tax Act | 3.10% | 0.00% |
Changes in valuation allowance | (37.79%) | 36.72% |
Effective tax rate | (67.66%) | 4.80% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes (Texual) | ||
Federal NOL carryforward for federal | $ 19.3 | |
Foreign NOL carryforward | $ 7 | |
U.S. statutory tax rates | 34.00% | 34.00% |
Net tax benefit | $ 0.2 | |
Maximum [Member] | ||
Income Taxes (Texual) | ||
U.S. statutory tax rates | 35.00% | |
Minimum [Member] | ||
Income Taxes (Texual) | ||
U.S. statutory tax rates | 21.00% |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - shares | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares of Common Stock Received | 7,814,749 | 50,000 | 942,157 | 517,647 | 296,078 | 392,157 | ||||
Convertible Preferred Series A [Member] | ||||||||||
Number of Convertible Preferred Series | 132,200 | 12,750 | 240,250 | 132,000 | 75,500 | 100,000 | 385,200 | 307,500 | ||
Series A-1 Preferred Stock [Member] | ||||||||||
Number of Convertible Preferred Series | 1,860,561 |
Convertible Preferred Stock (58
Convertible Preferred Stock (Details Textual) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Preferred stock dividend, payable semi-annually, description | The preferred stock entitles its holders to a 6% dividend, payable semi-annually in cash or in kind through the three-year anniversary of the original issue date, and from and after such three-year anniversary in duly authorized, validly issued, fully paid and non-assessable shares of common stock. The three-year anniversary of the initial investment date occurred during the second half of 2017 for $5.2 million of the $5.5 million originally issued Convertible Preferred Stock and therefore dividends on those investments were paid via issuance of common shares as of the year-end date. | |||||||||
Convertible preferred stock, shares issued upon conversion | 518,431 | |||||||||
Converted shares of stock conversion | 307,500 | 307,500 | ||||||||
Common stock at the conversion rate | $ 0.255 | |||||||||
Preferred stock redemption, description | From and after the three-year anniversary of the date of issuance, the Company has the right (but not the obligation), upon at least 30 days prior written notice, to call some or all of the Series A Preferred Stock for redemption at any time after the common stock has had a closing price on the relevant trading market, for a period of at least 15 consecutive days, all of which must be after the three-year anniversary date of the purchase agreement, equal to at least one and one-half times the initial conversion price. | |||||||||
Conexus World Global LLC [Member] | ||||||||||
Convertible preferred stock, shares issued upon conversion | 50,000 | 942,157 | 517,647 | 296,078 | 392,157 | |||||
Series A-1 Preferred Stock [Member] | ||||||||||
Number of Convertible Preferred Series | 1,860,561 | |||||||||
Convertible preferred stock, shares issued upon conversion | 7,296,318 | 1,860,561 | ||||||||
Converted shares of stock conversion | 8,806,906 | 8,806,906 | ||||||||
Common stock at the conversion rate | $ 0.255 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Number of Convertible Preferred Series | 132,200 | 12,750 | 240,250 | 132,000 | 75,500 | 100,000 | 385,200 | 307,500 | ||
Converted shares of stock conversion | 385,200 | 1,205,882 | 385,200 | 1,205,882 | ||||||
Common stock at the conversion rate | $ 0.255 | |||||||||
Series A Preferred Stock [Member] | Conexus World Global LLC [Member] | ||||||||||
Number of Convertible Preferred Series | 132,200 | 12,750 | 240,250 | 132,000 | 75,500 | 100,000 | ||||
Preferred Stock [Member] | ||||||||||
Aggregate shares issued | 245,816 | 452,224 | ||||||||
Common Stock [Member] | ||||||||||
Aggregate shares issued | 718,840 | 0 | ||||||||
Convertible preferred stock, shares issued upon conversion | 8,806,906 | 1,205,882 |
Warrants (Details)
Warrants (Details) - Warrants [Member] | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Risk Free Interest Rate at Date of Issuance | 1.83% |
Volatility at Date of Issuance | 72.34% |
Stock Price at Date of Issuance | $ 0.32 |
8/20/2014 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.50% |
Volatility at Date of Issuance | 96.00% |
Stock Price at Date of Issuance | $ 0.63 |
2/13/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.28% |
Volatility at Date of Issuance | 100.00% |
Stock Price at Date of Issuance | $ 0.34 |
5/22/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.28% |
Volatility at Date of Issuance | 107.58% |
Stock Price at Date of Issuance | $ 0.29 |
10/15/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.71% |
Volatility at Date of Issuance | 58.48% |
Stock Price at Date of Issuance | $ 0.22 |
10/26/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.71% |
Volatility at Date of Issuance | 60.47% |
Stock Price at Date of Issuance | $ 0.21 |
12/21/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.75% |
Volatility at Date of Issuance | 58.48% |
Stock Price at Date of Issuance | $ 0.21 |
12/28/2015 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.75% |
Volatility at Date of Issuance | 58.48% |
Stock Price at Date of Issuance | $ 0.16 |
1/15/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.76% |
Volatility at Date of Issuance | 58.48% |
Stock Price at Date of Issuance | $ 0.17 |
5/3/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.25% |
Volatility at Date of Issuance | 51.15% |
Stock Price at Date of Issuance | $ 0.21 |
6/13/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.14% |
Volatility at Date of Issuance | 51.12% |
Stock Price at Date of Issuance | $ 0.17 |
6/29/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.01% |
Volatility at Date of Issuance | 48.84% |
Stock Price at Date of Issuance | $ 0.17 |
8/17/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.15% |
Volatility at Date of Issuance | 51.55% |
Stock Price at Date of Issuance | $ 0.15 |
11/4/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.66% |
Volatility at Date of Issuance | 47.48% |
Stock Price at Date of Issuance | $ 0.16 |
12/12/2016 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.90% |
Volatility at Date of Issuance | 48.54% |
Stock Price at Date of Issuance | $ 0.19 |
8/19/2017 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 1.81% |
Volatility at Date of Issuance | 64.71% |
Stock Price at Date of Issuance | $ 0.35 |
11/13/2017 [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 5 years |
Risk Free Interest Rate at Date of Issuance | 2.08% |
Volatility at Date of Issuance | 66.24% |
Stock Price at Date of Issuance | $ 0.29 |
Minimum [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 1 year 7 months 21 days |
Maximum [Member] | |
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model | |
Expected Term at Issuance Date | 4 years 10 months 14 days |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants (Equity) [Member] | ||
Summary of outstanding debt and equity warrants [Line Items] | ||
Number of Shares, Warrants, Beginning Balance | 21,532,062 | 12,937,902 |
Number of Shares, Warrants issued to financial advisors | 500,000 | |
Number of Shares, Warrants issued with promissory notes | 1,785,715 | |
Number of Shares, Warrants issued with term loan | 11,764,704 | 7,424,804 |
Number of Shares, Warrants expired | (292,755) | (1,116,359) |
Number of Shares, Warrants, Ending Balance | 33,004,011 | 21,532,062 |
Weighted Average Exercise Price, Beginning Balance | $ 0.65 | $ 1.88 |
Weighted Average Exercise Price, Warrants issued to financial advisors | 0.28 | |
Weighted Average Exercise Price, Warrants issued with promissory notes | 0.28 | |
Weighted Average Exercise Price, Warrants issued with term loan | 0.28 | 0.28 |
Weighted Average Exercise Price, Warrants expired | 46.68 | 11.52 |
Weighted Average Exercise Price, Ending Balance | $ 0.47 | $ 0.65 |
Weighted Average Remaining Contractual Life, Beginning Period | 3 years 9 months 14 days | 3 years 10 months 25 days |
Weighted Average Remaining Contractual Life, Warrants issued to financial advisors | 4 years 5 months 16 days | |
Weighted Average Remaining Contractual Life, Warrants issued with promissory notes | 4 years 4 months 13 days | |
Weighted Average Remaining Contractual Life, Warrants issued with term loan | 4 years 9 months | 4 years 8 months 12 days |
Weighted Average Remaining Contractual Life, Ending Period | 3 years 6 months 18 days | 7 months 24 days |
Warrants (Liability) [Member] | ||
Summary of outstanding debt and equity warrants [Line Items] | ||
Number of Shares, Warrants, Beginning Balance | 6,487,500 | 6,487,500 |
Number of Shares, Warrants issued to financial advisors | ||
Number of Shares, Warrants issued with promissory notes | ||
Number of Shares, Warrants issued with term loan | ||
Number of Shares, Warrants expired | ||
Number of Shares, Warrants, Ending Balance | 6,487,500 | 6,487,500 |
Weighted Average Exercise Price, Beginning Balance | $ 0.35 | $ 0.35 |
Weighted Average Exercise Price, Warrants issued to financial advisors | ||
Weighted Average Exercise Price, Warrants issued with promissory notes | ||
Weighted Average Exercise Price, Warrants issued with term loan | ||
Weighted Average Exercise Price, Warrants expired | ||
Weighted Average Exercise Price, Ending Balance | $ 0.35 | $ 0.35 |
Weighted Average Remaining Contractual Life, Beginning Period | 2 years 7 months 21 days | 3 years 7 months 21 days |
Weighted Average Remaining Contractual Life, Ending Period | 1 year 7 months 21 days | 2 years 7 months 21 days |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2017 | Nov. 13, 2017 | Aug. 10, 2017 | Dec. 20, 2016 | Aug. 17, 2016 | Jun. 29, 2016 | Jun. 13, 2016 | May 03, 2016 | Jan. 15, 2016 |
Warrants (Textual) | |||||||||
Warrants to purchase common stock | 16,482,635 | ||||||||
Warrant [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase common stock | 250,000 | ||||||||
Share price per share | $ 0.28 | ||||||||
Fair value of warrants | $ 20 | ||||||||
Warrant [Member] | Securities Purchase Agreement [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase common stock | 89,286 | 803,572 | 892,857 | ||||||
Share price per share | $ 0.28 | $ 0.28 | $ 0.28 | ||||||
Slipstream Communications, LLC [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase common stock | 5,882,352 | 5,882,352 | |||||||
Fair value of warrants | $ 976 | $ 1,024 | $ 200 | ||||||
Slipstream Communications, LLC [Member] | Warrant [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase common stock | 5,882,352 | 5,882,352 | 5,882,352 | ||||||
Share price per share | $ 0.28 | $ 0.28 | $ 0.28 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Schedule of stock options outstanding and exercisable | |
Number Outstanding | shares | 7,190,500 |
Weighted Average Remaining Contractual Life | 7 years 6 months |
Weighted Average Exercise Price | $ 0.29 |
$0.18 - $0.65 [Member] | |
Schedule of stock options outstanding and exercisable | |
Range of Exercise Prices Between, Lower Limit | 0.18 |
Range of Exercise Prices between, Upper Limit | $ 0.65 |
Number Outstanding | shares | 7,145,000 |
Weighted Average Remaining Contractual Life | 7 years 6 months 3 days |
Weighted Average Exercise Price | $ 0.28 |
Options Exercisable | shares | 3,833,956 |
Weighted Average Exercise Price | $ 0.31 |
$0.66 - $0.79 [Member] | |
Schedule of stock options outstanding and exercisable | |
Range of Exercise Prices Between, Lower Limit | 0.66 |
Range of Exercise Prices between, Upper Limit | $ 0.79 |
Number Outstanding | shares | 30,000 |
Weighted Average Remaining Contractual Life | 6 years 15 days |
Weighted Average Exercise Price | $ 0.79 |
Options Exercisable | shares | 30,000 |
Weighted Average Exercise Price | $ 0.79 |
$0.80 - $12.25 [Member] | |
Schedule of stock options outstanding and exercisable | |
Range of Exercise Prices Between, Lower Limit | 0.80 |
Range of Exercise Prices between, Upper Limit | $ 12.25 |
Number Outstanding | shares | 15,500 |
Weighted Average Remaining Contractual Life | 4 years 7 months 2 days |
Weighted Average Exercise Price | $ 3.73 |
Options Exercisable | shares | 15,500 |
Weighted Average Exercise Price | $ 3.73 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | Nov. 11, 2016 | Dec. 31, 2017 |
Schedule of stock option activity | ||
Options Outstanding, Beginning balance | 7,490,499 | |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Forfeited or expired | 299,999 | |
Options Outstanding, Ending balance | 425,000 | 7,190,500 |
Weighted Average Exercise Price, Beginning balance | $ 0.29 | |
Weighted Average Exercise Price, Granted | $ 0.18 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited or expired | 0.18 | |
Weighted Average Exercise Price, Ending balance | $ 0.29 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2017 | May 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 09, 2017 |
Stockholders' Equity (Textual) | ||||||
Weighted average remaining contractual life | 7 years 6 months | |||||
Issuance of common stock shares | 1,960,784 | |||||
Payment of vendor service value | $ 500 | $ 500 | ||||
Authorized program to repurchase | 5,000,000 | |||||
Repurchased common stock | 1,185,968 | |||||
Repurchased aggregate price common stock | $ 149 | |||||
Converted shares of stock conversion | 307,500 | |||||
ConeXus [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Payment of vendor service value | $ 1,900 | |||||
Common stock issued value | $ 1,971 | |||||
Common stock issued shares | 5,631,373 | |||||
Share price per share | $ 0.35 | |||||
Rick Mills [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Payment of vendor service value | $ 1,900 | |||||
Common stock issued shares | 3,198,054 | |||||
Investor [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Conversion of stock, description | During 2017, accredited investors converted 182,200 shares of Convertible Preferred Stock in exchange for 714,510 shares of common stock. During 2016, accredited investors converted 307,500 shares of Convertible Preferred Stock in exchange for 1,205,882 shares of common stock. In conjunction with the structured settlement program, the Company issued 409,347 shares of its restricted common stock to creditors and 809,842 shares of stock were issued to investors (see Note 8). | |||||
Number of Convertible Preferred Series | 2,245,511 | 307,500 | ||||
Converted shares of stock conversion | 8,806,906 | 8,806,906 | 1,205,882 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation costs included in: | ||
Total stock-based compensation expense | $ 284 | $ 273 |
Costs of Sales [Member] | ||
Stock-based compensation costs included in: | ||
Total stock-based compensation expense | 6 | 1 |
Sales and marketing expense [Member] | ||
Stock-based compensation costs included in: | ||
Total stock-based compensation expense | 76 | 74 |
General and administrative expense [Member] | ||
Stock-based compensation costs included in: | ||
Total stock-based compensation expense | $ 202 | $ 198 |
Stock-Based Compensation (Det66
Stock-Based Compensation (Details 1) - Stock Option [Member] | 12 Months Ended |
Dec. 31, 2017 | |
Option Indexed to Issuer's Equity [Line Items] | |
Risk-free interest rate | 1.14% |
Expected term | 6 years 2 months 30 days |
Expected price volatility | 47.89% |
Dividend yield | 0.00% |
Stock-Based Compensation (Det67
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Nov. 11, 2016 | Oct. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock-Based Compensation (Textual) | ||||
Options outstanding | 425,000 | 7,190,500 | 7,490,499 | |
Stock option expense recognize period | 1 year 7 months 6 days | |||
Options granted over period | 10 years | |||
Pre-vesting forfeiture rate | 10.00% | |||
Options vest over period | 4 years | |||
Unrecognized compensation expense | $ 554 | |||
Exercise price | $ 0.18 | |||
Fair value of options on grant date | $ 0.09 | |||
2006 Equity Incentive Plan [Member] | ||||
Stock-Based Compensation (Textual) | ||||
Shares reserved for company's employees | 1,720,000 | |||
Options outstanding | 365,500 | 365,500 | ||
2006 Non-Employee Director Stock Option Plan [Member] | ||||
Stock-Based Compensation (Textual) | ||||
Shares reserved for company's employees | 700,000 | |||
2014 Stock Incentive Plan [Member] | ||||
Stock-Based Compensation (Textual) | ||||
Shares reserved for company's employees | 7,390,355 |
Profit-Sharing Plan (Details)
Profit-Sharing Plan (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Profit Sharing Plan (Textual) | |
Percentage of pretax compensation to the plan | 15.00% |
Percentage of employer contribution | 50.00% |
Percentage of employee wages | 6.00% |
Percentage of effective rate | 3.00% |
Segment Information and Signi69
Segment Information and Significant Customers (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)SegmentsCustomers | Dec. 31, 2016USD ($)Customers | |
Segment Information and Significant Customers (Textual) | ||
Number of reportable segments | Segments | 1 | |
Accounts receivable due from the related party | $ 3,017 | $ 543 |
Sales | $ 17,698 | 13,673 |
Loan and Security Agreement [Member] | ||
Segment Information and Significant Customers (Textual) | ||
Related party entity owned percentage | 22.50% | |
Sales | $ 3,390 | $ 1,344 |
Accounts Receivable [Member] | ||
Segment Information and Significant Customers (Textual) | ||
Percent from major customers | 71.00% | 71.00% |
Number of major customers | Customers | 3 | 2 |
Revenue [Member] | ||
Segment Information and Significant Customers (Textual) | ||
Percent from major customers | 56.00% | 56.00% |
Number of major customers | Customers | 3 | 3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 16, 2018 | Aug. 10, 2017 | Dec. 31, 2017 |
Subsequent Events (Textual) | |||
Promissory note amount | $ 7,381 | ||
Warrants to purchase common stock | 16,482,635 | ||
One-time non-cash charge | $ 600 | ||
Subsequent Events [Member] | |||
Subsequent Events (Textual) | |||
Promissory note amount | $ 1,000 | ||
Borrowed amount | $ 1,000 | ||
Interest rate per annum | 8.00% | ||
Terms of warrant | 5 years | ||
Maturity date | Jan. 16, 2019 | ||
Adjusted per share price value | $ 0.27 | ||
Warrants to purchase common stock | 1,851,851 |