Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 22, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | Creative Realities, Inc. | ||
Trading Symbol | CREX | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 17,124,986 | ||
Entity Public Float | $ 25,772,393 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001356093 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-33169 | ||
Entity Incorporation, State or Country Code | MN | ||
Entity Tax Identification Number | 41-1967918 | ||
Entity Address, Address Line One | 13100 Magisterial Drive | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Louisville | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40223 | ||
City Area Code | (502) | ||
Local Phone Number | 791-8800 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 34 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Louisville, Kentucky |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,883 | $ 1,826 |
Accounts receivable, net of allowance for doubtful accounts of $620 and $1,230, respectively | 3,006 | 2,302 |
Unbilled receivables | 369 | 41 |
Inventories, net | 1,880 | 2,351 |
Prepaids and other current assets | 1,634 | 507 |
Total current assets | 9,772 | 7,027 |
Operating lease right-of-use assets | 654 | 931 |
Property and equipment, net | 75 | 175 |
Intangibles, net | 4,850 | 4,955 |
Goodwill | 7,525 | 7,525 |
Other assets | 5 | 5 |
TOTAL ASSETS | 22,881 | 20,618 |
CURRENT LIABILITIES | ||
Short-term seller note payable | 1,637 | |
Accounts payable | 2,517 | 1,661 |
Accrued expenses | 2,110 | 2,142 |
Deferred revenues | 426 | 764 |
Customer deposits | 1,525 | 770 |
Current maturities of operating leases | 281 | 355 |
Current maturities of financing leases | 4 | |
Total current liabilities | 6,859 | 7,333 |
Long-term Payroll Protection Program note payable | 1,552 | |
Long-term related party loans payable, net of $143 and $168 discount, respectively | 4,624 | 4,436 |
Long-term related party convertible loans payable, at fair value | 2,251 | 2,270 |
Long-term obligations under operating leases | 373 | 584 |
Long-term accrued expenses | 108 | |
Other liabilities | 45 | |
TOTAL LIABILITIES | 14,152 | 16,283 |
SHAREHOLDERS’ EQUITY | ||
Common stock, $0.01 par value, 200,000 shares authorized; 12,009 and 10,924 shares issued and outstanding, respectively | 120 | 109 |
Additional paid-in capital | 60,863 | 56,712 |
Accumulated deficit | (52,254) | (52,486) |
Total shareholders’ equity | 8,729 | 4,335 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 22,881 | $ 20,618 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance receivable, net (in Dollars) | $ 620 | $ 1,230 |
Related party loans payable, net (in Dollars) | $ 143 | $ 168 |
Common stock par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 12,009 | 10,924 |
Common stock, shares outstanding | 12,009 | 10,924 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sales | ||
Hardware | $ 9,450 | $ 8,991 |
Services and other | 8,987 | 8,466 |
Total sales | 18,437 | 17,457 |
Cost of sales | ||
Hardware | 6,914 | 6,251 |
Services and other | 3,166 | 3,085 |
Total cost of sales | 10,080 | 9,336 |
Gross profit | 8,357 | 8,121 |
Operating expenses: | ||
Sales and marketing | 1,153 | 1,676 |
Research and development | 550 | 1,083 |
General and administrative | 7,598 | 8,465 |
Bad debt expense/(recovery) | (277) | 828 |
Depreciation and amortization | 1,364 | 1,474 |
Lease termination expense | 18 | |
Goodwill impairment | 10,646 | |
Loss on disposal of fixed assets | 13 | |
Deal and transaction costs | 518 | |
Total operating expenses | 10,906 | 24,203 |
Operating loss | (2,549) | (16,082) |
Other income/(expenses): | ||
Interest expense, including amortization of debt discount | (805) | (1,023) |
Gain on settlement of obligations | 3,449 | 209 |
Gain/(loss) on fair value of debt | 166 | (93) |
Other income/(expense), net | (7) | (13) |
Total other income/(expense) | 2,803 | (920) |
Net income/(loss) before income taxes | 254 | (17,002) |
Income tax benefit/(expense) | (22) | 158 |
Net income/(loss) | $ 232 | $ (16,844) |
Net income/(loss) per common share - basic (in Dollars per share) | $ 0.02 | $ (1.65) |
Net income/(loss) per common share - diluted (in Dollars per share) | $ 0.02 | $ (1.65) |
Weighted average shares outstanding - basic (in Shares) | 11,761 | 10,195 |
Weighted average shares outstanding - diluted (in Shares) | 11,761 | 10,195 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Common Stock | Additional paid in capital | Accumulated (Deficit) | Total |
Balance at Dec. 31, 2019 | $ 98 | $ 54,052 | $ (35,642) | $ 18,508 |
Balance (in Shares) at Dec. 31, 2019 | 9,774,546 | |||
Shares issued to directors as compensation | $ 1 | 99 | 100 | |
Shares issued to directors as compensation (in Shares) | 88,073 | |||
Stock-based compensation | 620 | 620 | ||
Shares issued via at-the-market offering | $ 10 | 1,821 | 1,831 | |
Shares issued via at-the-market offering (in Shares) | 1,034,068 | |||
Exercise of warrants | 120 | 120 | ||
Exercise of warrants (in Shares) | 27,600 | |||
Net income (loss) | (16,844) | (16,844) | ||
Balance at Dec. 31, 2020 | $ 109 | 56,712 | (52,486) | 4,335 |
Balance (in Shares) at Dec. 31, 2020 | 10,924,287 | |||
Stock-based compensation – employees | 1,494 | 1,494 | ||
Stock-based compensation - directors | $ 1 | 398 | 399 | |
Stock-based compensation - directors (in Shares) | 106,528 | |||
Stock-based compensation - vendors | $ 1 | 129 | 130 | |
Stock-based compensation - vendors (in Shares) | 80,560 | |||
Conversion of Disbursed Escrow Loan | $ 1 | 263 | 264 | |
Conversion of Disbursed Escrow Loan (in Shares) | 97,144 | |||
Gain on Extinguishment of Special Loan | 26 | 26 | ||
Shares issued via registered direct offering | $ 8 | 1,841 | 1,849 | |
Shares issued via registered direct offering (in Shares) | 800,000 | |||
Net income (loss) | 232 | 232 | ||
Balance at Dec. 31, 2021 | $ 120 | $ 60,863 | $ (52,254) | $ 8,729 |
Balance (in Shares) at Dec. 31, 2021 | 12,008,519 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities: | ||
Net income/(loss) | $ 232 | $ (16,844) |
Adjustments to reconcile net income/(loss) to be used in operating activities: | ||
Depreciation and amortization | 1,364 | 1,474 |
Amortization of debt discount | 159 | 339 |
Stock-based compensation | 1,893 | 719 |
Allowance for doubtful accounts | 10 | 613 |
Employee retention and other government credits | (785) | |
Non-cash interest expense on related party loans | 467 | 517 |
Non-cash receivables from in-process projects | (369) | |
Non-cash application of customer deposits to completed projects | (506) | |
Stock compensation issued to vendors for services | 130 | |
Deferred tax (benefit)/expense | (175) | |
Gain on forgiveness of PPP loan | (1,552) | |
Gain on settlement of Seller Note | (1,538) | |
Gain on settlement of other obligation | (359) | (209) |
Loss on disposal of assets | 13 | |
(Gain)/loss on fair value of debt | (166) | 93 |
Goodwill impairment | 10,646 | |
Changes to operating assets and liabilities: | ||
Accounts receivable and unbilled receivables | (673) | 1,793 |
Inventories | 471 | (1,972) |
Prepaid expenses and other current assets | 18 | (71) |
Vendor deposits | (360) | (116) |
Other assets | 130 | |
Operating lease right of use asset | 277 | 149 |
Accounts payable and other current payables | 869 | 3 |
Deferred revenue | (338) | (8) |
Accrued expenses, net | 206 | (502) |
Customer deposits | 1,261 | 15 |
Operating lease liabilities | (285) | (139) |
Other liabilities | 45 | 2 |
Net cash provided by / (used in) operating activities | 471 | (3,530) |
Investing activities | ||
Purchases of property and equipment | (19) | (92) |
Capitalization of internal and external labor for software development | (1,140) | (565) |
Net cash used in investing activities | (1,159) | (657) |
Financing activities | ||
Proceeds from common stock issuance, net of issuance costs | 1,849 | 1,831 |
Proceeds from Payroll Protection Program loan | 1,552 | |
Principal payments on finance leases | (4) | (24) |
Repayment of seller note | (100) | |
Proceeds from warrant exercise into common stock | 120 | |
Net cash provided by financing activities | 1,745 | 3,479 |
Increase in Cash and Cash Equivalents | 1,057 | (708) |
Cash and Cash Equivalents, beginning of year | 1,826 | 2,534 |
Cash and Cash Equivalents, end of year | $ 2,883 | $ 1,826 |
Nature of Organization and Oper
Nature of Organization and Operations | 12 Months Ended |
Dec. 31, 2021 | |
Nature of Organization and Operations [Abstract] | |
NATURE OF ORGANIZATION AND OPERATIONS | NOTE 1: NATURE OF ORGANIZATION AND OPERATIONS Unless the context otherwise indicates, references in these Notes to the accompanying Consolidated Financial Statements to “we,” “us,” “our” and “the Company” refer to Creative Realities, Inc. and its subsidiaries. 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. The Company has 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. Our main operations are conducted directly through Creative Realities, Inc., and under our wholly owned subsidiaries Allure Global Solutions, Inc., a Georgia corporation, and Creative Realities Canada, Inc., a Canadian corporation, and Reflect Systems, Inc., a Delaware corporation, which was acquired on February 17, 2022. Acquisition of Reflect On November 12, 2021, the Company and Reflect Systems, Inc., or “Reflect,” entered into an Agreement and Plan of Merger (as amended on as amended on February 8, 2022, the “Merger Agreement)” pursuant to which a direct, wholly owned subsidiary of Creative Realities, CRI Acquisition Corporation, or “Merger Sub,” would merge with and into Reflect, with Reflect surviving as a wholly owned subsidiary of Creative Realities, and the surviving company of the merger, which transaction is referred to herein as the “Merger.” On February 17, 2022, the parties consummated the Merger. Reflect provides digital signage solutions, including software, strategic and media services to a wide range of companies across the retail, financial, hospitality and entertainment, healthcare, and employee communications industries in North America. Reflect offers digital signage platforms, including ReflectView, a platform used by companies to power hundreds of thousands of active digital displays. Through its strategic services, Reflect assists its customers with designing, deploying and optimizing their digital signage networks, and through its media services, Reflect assists customers with monetizing their digital advertising networks. Subject to the terms and conditions of the Merger Agreement, upon the closing of the Merger, Reflect stockholders as of to the effective time of the Merger collectively received from the Company, in the aggregate, the following Merger consideration: (i) $16,166 payable in cash, (ii) 2,333,334 shares of common stock of Creative Realities (valued based on an issuance price of $2 per share) (the “CREX Shares”), (iii) the Secured Promissory Note (as described below), and (iv) supplemental cash payments (the “Guaranteed Consideration”), if any, payable on or after the three-year anniversary of the effective time of the Merger (subject to the Extension Option described below, the “Guarantee Date”), in an amount by which the value of the CREX Shares on such anniversary is less than $6.40 per share, or if certain customers of Reflect collectively achieve over 85,000 billable devices online at any time on or before December 31, 2022, is less than $7.20 per share (such applicable amount, the “Guaranteed Price”), multiplied by the amount of CREX Shares held by the Reflect stockholders on the Guarantee Date (subject to the Extension Option described below), subject to the terms of the Merger Agreement. Creative Realities may exercise an extension option (the “Extension Option”) to extend the Guarantee Date from the three-year anniversary of the Closing Date to six (6) months thereafter if (i) the Extension Threshold Price is greater than or equal to 70% of the Guaranteed Price described above, and (ii) Creative Realities provides written notice of its election to exercise the Extension Option at least ten (10) days prior to the three-year anniversary of the Closing. The “Extension Threshold Price” means the average closing price per share of Creative Realities Shares as reported on the Nasdaq Capital Market (or NYSE) in the fifteen (15) consecutive trading day period ending fifteen (15) days prior to the three-year anniversary of the Closing Date. If the Extension Threshold Price is less than 80% of the Guaranteed Price, then the Guaranteed Price will be increased by $1.00 per share. In connection with the Merger, the Company adopted a Retention Bonus Plan and raised capital to, among other things, pay the cash portion of the Merger consideration. Equity Financing On February 3, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a purchaser (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser, in a private placement priced at-the-market under Nasdaq rules, (i) 1,315,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and accompanying warrants to purchase an aggregate of 1,315,000 shares of Common Stock, and (ii) pre-funded warrants to purchase up to an aggregate of 5,851,505 shares of Common Stock (the “Pre-Funded Warrants”) and accompanying warrants to purchase an aggregate of 5,851,505 shares of Common Stock (collectively, the “Private Placement”). The accompanying warrants to purchase Common Stock are referred to herein collectively as the “Common Stock Warrants.” Under the Securities Purchase Agreement, each Share and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.535, and each Pre-Funded Warrant and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.5349, for gross proceeds of approximately $11,000 before deducting placement agent fees and estimated offering expenses payable by the Company. The net proceeds from the Private Placement were used to fund, in part, payment of the closing cash consideration in the Merger. Debt Financing On February 17, 2022, the Company and its subsidiaries (collectively, the “Borrowers”) refinanced their current debt facilities with Slipstream, pursuant to the Credit Agreement, and raised $10,000 in gross proceeds with a maturity date of February 1, 2025. The Credit Agreement also provides that the Company’s outstanding loans from Slipstream, consisting of its pre-existing $4,767 senior secured term loan and $2,418 secured convertible loan, with an aggregate of $7,185 in outstanding principal and accrued and unpaid interest under such loans, were consolidated into a Consolidation Term Loan with a maturity date of February 1, 2025. On February 17, 2022, in connection with the closing of the acquisition of Reflect, the Company issued to RSI Exit Corporation (“Stockholders’ Representative”), the representative of Reflect stockholders, a $2,500 Note and Security Agreement (the “Secured Promissory Note”). The Secured Promissory Note accrues interest at 0.59% (the applicable federal rate) and requires the Company and Reflect to pay equal monthly principal installments of $104 on the fifteenth (15th) day of each month, commencing on March 17, 2022, for twelve months with any remaining or unpaid principal due and payable on February 15, 2023. See Note 8 Loans Payable Management believes that, based on (i) the execution of the Equity Financing, (ii) the refinancing of our debt as part of the Debt Financing, including extension of the maturity date on our term loans, and (iii) our operational forecast through 2022 following completion of the Reflect Acquisition, that we can continue as a going concern through at least March 31, 2023. However, given our historical net losses and cash used in operating activities, we obtained a continued support letter from Slipstream through March 31, 2023. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
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. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-K and Article 8 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for annual financial reporting. The Consolidated Financial Statements include the accounts of Creative Realities, Inc. and our wholly owned subsidiaries Allure, and Creative Realities (Canada), Inc. All intercompany balances and transactions have been eliminated in consolidation, as applicable. 2. Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. The Company receives variable consideration in very few instances. Revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company does not have any material extended payment terms as payment is due at or shortly after the time of the sale, typically ranging between thirty and ninety days. Observable prices are used to determine the standalone selling price of separate performance obligations or a cost plus margin approach when one is not available. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. A contract liability is recognized as deferred revenue when the Company invoices clients in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation. The Company uses the practical expedient for recording an immediate expense for incremental costs of obtaining contracts, including certain design/engineering services, commissions, incentives and payroll taxes, as these incremental and recoverable costs have terms that do not exceed one year. 3. Inventories Inventories are stated at the lower of cost or net realizable value, determined by the first-in, first-out (FIFO) method, and consist of the following: December 31, December 31, 2021 2020 Raw materials, net of reserve of $502 and $104, respectively $ 1,580 $ 1,920 Inventory on consignment with distributors 3 208 Work-in-process 297 223 Total inventories $ 1,880 $ 2,351 4. Impairment of Long-Lived Assets We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with ASC 360, 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 as 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. 5. Basic and Diluted Income/(Loss) per Common Share Basic and diluted income/(loss) per common share for all periods presented is computed using the weighted average number of common shares outstanding. Basic weighted average shares outstanding includes only outstanding common shares. Diluted weighted average shares outstanding includes outstanding common shares and potential dilutive common shares outstanding in accordance with the treasury stock method. Shares reserved for outstanding stock options, including stock options with performance restricted vesting, and warrants totaling approximately 6,972,020 and 7,040,709 at December 31, 2021 and 2020, respectively were excluded from the computation of income/(loss) per share as all options and warrants were anti-dilutive due to the net loss in 2020 and no options or warrants were in the money for 2021. In calculating diluted earnings per share for the years ended December 31, 2021 and 2020, in accordance with ASC 260 Earnings per share 6. Income Taxes 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, 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. The Company accounts for uncertain tax positions utilizing an established recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We had no uncertain tax positions as of December 31, 2021 and December 31, 2020. 7. Goodwill and Definite-Lived Intangible Assets We follow the provisions of ASC 350, Goodwill and Other Intangible Assets. Pursuant to ASC 350, goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment at least annually. The Company uses an annual measurement date of September 30 (see Note 7 Intangible Assets and Goodwill 8. Use of Estimates The preparation of financial statements in conformity with GAAP 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, valuation allowances related to deferred taxes, the fair value of acquired assets and liabilities, the fair value of liabilities reliant upon the appraised fair value of the Company, valuation of stock-based compensation awards 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. 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 consist of the following at December 31, 2021 and 2020: December 31, 2021 2020 Equipment $ 89 $ 81 Leasehold improvements 135 135 Furniture and fixtures 121 119 Other depreciable assets 56 56 Total property and equipment 401 391 Less: accumulated depreciation and amortization (326 ) (216 ) Net property and equipment $ 75 $ 175 The estimated useful lives used to compute depreciation and amortization are as follows: Asset class Useful life assigned Equipment 3 – 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or term of lease Depreciation expense was $109 and $124 for the years ended December 31, 2021 and 2020, respectively. 12. 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. The Company capitalizes its costs incurred for additional functionality to its internal software. We capitalized approximately $1,140 and $603 for the years ended December 31, 2021 and 2020, 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 3 years once the new projects are completed and placed in service. These costs are included in intangible assets, net on the Consolidated Balance Sheets. 13. Leases We account for leases in accordance with ASU No. 2016-02, Leases We determine if an arrangement is a lease at inception. Right of use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is a hypothetical rate based on our understanding of what our credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating leases are included in operating lease right-of-use assets, current maturities of operating leases, and long-term obligations under operating leases on our Consolidated Balance Sheets. Finance leases are included in property and equipment, net, current maturities of financing leases, and long-term obligations under financing leases on our Consolidated Balance Sheets. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 3: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently adopted None. Not yet adopted In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers (Topic 606) In May 2021, the FASB issued ASU No. 2021-04, Modification of equity-classified written call options In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 4: REVENUE RECOGNITION The Company applies ASC 606 for revenue recognition. The following table disaggregates the Company’s revenue by major source for the years ended December 31, 2021 and 2020: (in thousands) Year Year Hardware $ 9,450 $ 8,991 Services: Installation Services 2,600 2,537 Software Development Services 791 549 Managed Services 5,596 5,380 Total Services 8,987 8,466 Total Hardware and Services $ 18,437 $ 17,457 System hardware sales System hardware revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer in instances in which the sale of hardware is the sole performance obligation. Shipping charges billed to customers are included in hardware sales and the related shipping costs are included in hardware cost of sales. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer. System hardware revenues are classified as “Hardware” within our disaggregated revenue. Installation services The Company performs outsourced installation services for customers and recognizes revenue upon completion of the installations. Installation services also includes engineering services performed as part of an installation project. When system hardware sales include installation services to be performed by the Company, the goods and services in the contract are not distinct, so the arrangement is accounted for as a single performance obligation. Our customers control the work-in-process and can make changes to the design specifications over the contract term. Revenues are recognized over time as the installation services are completed based on the relative portion of labor hours completed as a percentage of the budgeted hours for the installation. Installation services revenues are classified as “Installation Services” within our disaggregated revenue. Software design and development services Software and software license sales are revenue when a fixed fee order has been received and delivery has occurred to the customer. Revenue is recognized generally upon customer acceptance (point-in-time) of the software product and verification that it meets the required specifications. Software is delivered to customers electronically. Software design and development revenues are classified as “Software Development Services” within our disaggregated revenue. Software as a service Software as a service includes revenue from software licensing and delivery in which software is licensed on a subscription basis and is centrally hosted. These services often include software updates which provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period. Contracts for these services are generally 12-36 months in length. We account for revenue from these services in accordance with ASC 985-20-15-5 and recognize revenue ratably over the performance period. Software as a service revenue are classified as “Managed Services” within our disaggregated revenue. Maintenance and support services The Company sells support services which include access to technical support personnel for software and hardware troubleshooting. The Company offers 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. These contracts are generally 12-36 months in length. Revenue is recognized over the term of the agreement in proportion to the costs incurred in fulfilling performance obligations under the contract. Maintenance and Support revenues are classified as “Managed Services” within our disaggregated revenue. Maintenance and support fees are based on the level of service provided to end 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. These agreements are 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. These contracts are generally 12-36 months in length. Revenue is recognized ratably and evenly over the service period. The Company also performs time and materials-based maintenance and repair work for customers. Revenue is recognized at a point in time when the performance obligation has been fully satisfied. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 5: FAIR VALUE MEASUREMENT We measure certain financial assets, including cash equivalents, at fair value on a recurring basis. In accordance with 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, 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 Company previously recorded warrant liabilities that were measured at fair value on a recurring basis using a binomial option pricing model. All of the Company’s outstanding warrants classified as liabilities expired during 2019. As discussed in Note 7 Intangible Assets, Including Goodwill As discussed in Note 8 Loans Payable |
Supplemental Cash Flow Statemen
Supplemental Cash Flow Statement Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Statement Information [Abstract] | |
SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION | NOTE 6: SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION Year Ended December 31, 2021 2020 Supplemental non-cash Investing and Financing activities Conversion of disbursed escrow loan into common stock $ 264 $ - Increase in debt related to financing fees $ 200 $ - Decrease in debt discount via amended Credit Agreement $ 133 $ - Supplemental disclosure information for cash flow Cash paid during the period for: Interest $ 106 $ 140 Income taxes, net $ 32 $ 19 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 7: INTANGIBLE ASSETS AND GOODWILL Intangible Assets Intangible assets consisted of the following at December 31, 2021 and December 31, 2020: December 31, December 31, 2021 2020 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform $ 4,635 3,652 $ 4,635 3,400 Purchased and developed software 3,488 2,713 3,167 2,002 In-Process internally developed software platform 824 - - - Customer relationships 3,960 1,692 5,330 2,870 Trademarks and trade names 640 640 1,020 925 13,547 8,697 14,152 9,197 Accumulated amortization 8,697 9,197 Net book value of amortizable intangible assets $ 4,850 $ 4,955 For the years ended December 31, 2021 and 2020, amortization of intangible assets charged to operations was $1,251 and $1,330, respectively. For the year ended December 31, 2021, the Company wrote-off a $380 fully amortized trade name asset and a $1,370 fully amortized customer list asset and the related accumulated amortization for each related to ConeXus World Global, LLC, an entity dissolved by the Company during 2021. There was no impact on the Company’s Condensed Consolidated Balance Sheet or Condensed Consolidated Statement of Operations during the period. Estimated amortization is as follows: Year ending December 31, Estimated Future Amortization 2022 $ 954 2023 636 2024 487 2025 415 Thereafter 1,503 Intangible assets include the following and are being amortized over their estimated useful lives as follows: Acquired Intangible Asset: Amortization Technology platform and patents 7 Purchased and developed software 3 Trademark 3 Customer relationships 15 Goodwill 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 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 to actual historic financial results, including revenue growth rates in the preceding three years. 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 was not considered to be impaired at September 30, 2021. The Company recognizes that any changes in our projected 2022 and future results could potentially have a material impact on our assessment of goodwill impairment. The Company will continue to monitor the actual performance of its operations against expectations and assess further indicators of possible impairment. 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 be required to perform an analysis in order to determine whether goodwill is impaired. Interim Impairment Assessment – March 31, 2020 Despite the excess fair value identified in our 2019 annual impairment assessment, we determined that the reduced cash flow projections and the significant decline in our market capitalization as a result of the COVID-19 pandemic during the three months ended March 31, 2020 indicated that an impairment loss may have been incurred during the first quarter. Therefore, we qualitatively assessed whether it was more likely than not that the goodwill was impaired as of March 31, 2020. We reviewed our previous forecasts and assumptions based on our current projections that are subject to various risks and uncertainties, including: (1) forecasted revenues, expenses and cash flows, including the duration and extent of impact to our business and our alliance partners from the COVID-19 pandemic, (2) current discount rates, (3) the reduction in our market capitalization, (5) changes to the regulatory environment and (6) the nature and amount of government support that will be provided. As a result of this qualitative assessment, we concluded that indicators of impairment were present and that a quantitative interim impairment assessment of our goodwill was necessary as of March 31, 2020. As a result of the adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The fair value of the reporting unit was estimated via the income approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for our industry. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and by analyzing published rates relevant to our business to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. We utilized a discount rate of 14.5% in our valuation completed as of March 31, 2020. While our outlook for the digital signage industry over the long term remains strong, we have experienced rapid and immediate deterioration in our short term business as a result of the COVID-19 pandemic, generating increased uncertainty across our customer base in many of our key vertical markets. The elective and forced closures of businesses across the United States has resulted in reduced demand for our services, which primarily assist business in engaging with their end customers in a physical space through digital technology. The elimination and minimization of public gatherings has materially impacted demand for products and services in our movie theater, sports arena and large entertainment markets. These conditions resulted in downward revisions of our internal forecasts on current and future projected earnings and cash flows, leading to an implied fair value of goodwill substantially below the carrying value. Therefore, during the three months ended March 31, 2020, we recorded a non-cash impairment loss of $10,646. We recorded the estimated impairment losses in the caption “Goodwill impairment” in our Consolidated Statement of Operations. Annual Impairment Assessment – September 30, 2020 The Company 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 to actual historic financial results, including revenue growth rates in the preceding three years. 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, 2020. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 8: LOANS PAYABLE The outstanding debt with detachable warrants, as applicable, are shown in the table below. Further discussion of the notes follows. As of December 31, 2021 Debt Type Issuance Principal Maturity Warrants Interest Rate Information C 8/17/2016 4,767 2/17/2025 588,236 8.0% interest E 12/30/2019 2,418 2/17/2025 - 10.0% interest Total debt, gross 7,185 588,236 Fair value (E) (166 ) Total debt, gross 7,019 Debt discount (144 ) Total debt, net $ 6,875 Less current maturities - Long term debt 6,875 As of December 31, 2020 Debt Type Issuance Principal Maturity Warrants Interest Rate Information A 6/30/2018 $ 264 N/A - 0.0% interest B 1/16/2018 1,085 3/31/2023 61,729 10.0% interest (1) C 8/17/2016 3,255 3/31/2023 588,236 10.0% interest (1) D 11/19/2018 1,637 2/15/2020 - 3.5% interest E 12/30/2019 2,177 3/31/2023 - 10.0% interest (2) F 4/27/2020 1,552 4/27/2022 (3) - 1.0% interest (3) Total debt, gross 9,970 649,965 Fair value (E) 93 Total debt, gross 10,063 Debt discount (168 ) Total debt, net $ 9,895 Less current maturities (1,637 ) Long term debt 8,258 A – Secured Disbursed Escrow Promissory Note with related party B – Secured Revolving Promissory Note with related party C – Term Loan with related party D – Amended and Restated Seller Note from acquisition of Allure E – Secured Convertible Special Loan Promissory Note, at fair value F – Paycheck Protection Program Loan from Small Business Administration (1) 8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date. (2) 8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of December 31, 2020 is $2,177; however, fair value accounting for the convertible debt instrument results in an additional $93 of debt recorded on the Consolidated Balance Sheet as of December 31, 2020 related to this instrument. (3) 1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Second Amended and Restated Loan and Security Agreement On February 17, 2022, Creative Realities, Inc. (the” Company”) and its subsidiaries (collectively, the “Borrowers”) refinanced their current debt facilities with Slipstream Communications, LLC (“Slipstream”), pursuant to a Second Amended and Restated Credit and Security Agreement (the “Credit Agreement”). The Borrowers include Reflect Systems, Inc. (“Reflect”), which became a wholly owned subsidiary of the Company as a result of the closing of the Merger on February 17, 2022. The debt facilities continue to be fully secured by all assets of the Borrowers. The Credit Agreement also provides that the Company’s outstanding loans from Slipstream at December 31, 2021, consisting of its pre-existing $4,767 senior secured term loan and $2,418 secured convertible loan, with an aggregate of $7,185 in outstanding principal and accrued and unpaid interest under such loans, were consolidated into a term loan (the “Consolidation Term Loan”). The Consolidation Term Loan has an interest rate of 10.0%, with 75.0% warrant coverage (or 2,694,495 warrants). The Company issued to Slipstream a $7,185 Consolidation Term Note in connection with consolidating the Consolidation Term Loan. On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Consolidation Term Loan (estimated to be $60 per monthly payment). Commencing on September 1, 2023, and on the first day of each month thereafter until the Maturity Date, the Borrowers will make a payment on the Consolidation Term Loan, in an equal monthly installment of principal sufficient to fully amortize the Consolidation Term Loan in eighteen equal installments (estimated to be $399 per monthly installment). In addition to refinancing the existing debt with Slipstream, the Company also raised $10,000 in gross proceeds, or $9,950 in net proceeds, from entry into a new, 36-month senior secured term loan (the “Acquisition Loan”) with Slipstream as part of the Credit Agreement, which matures on February 17, 2025 (the “Maturity Date”). The Acquisition Loan has an interest rate of 8.0%, with 50.0% warrant coverage (or 2,500,000 warrants). The Company issued to Slipstream a $10,000 Acquisition Term Note in connection with obtaining the Acquisition Loan. On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Acquisition Loan (estimated to be $67 per monthly payment). No principal payments on the Acquisition Loan are payable until the Maturity Date. In connection with the Acquisition Loan and Consolidation Term Loan warrant coverage, the Company issued to Slipstream a warrant to purchase an aggregate of 5,194,495 shares of Company common stock (the “Lender Warrant”). The Lender Warrant has a five-year term, an initial exercise price of $2.00 per share, subject to adjustments in the Lender Warrant, and is not exercisable until August 17, 2022. In certain circumstances, upon a fundamental transaction of the Company (e.g., a disposal or sale of all or the greater part of the assets or undertaking of the Company, an amalgamation or merger with another company, or implementation of a scheme of arrangement), the holder of the Lender Warrant will have the right to require the Company to repurchase the Lender Warrant at its fair value using a Black Scholes option pricing formula; provided that such holder may not require the Company or its successor entity to repurchase the Lender Warrant for the Black Scholes value in connection with a fundamental transaction that is not approved by the Company’s Board of Directors, and therefore not within the Company’s control. Secured Promissory Note On February 17, 2022, in connection with the closing of the Reflect Acquisition, the Company issued to RSI Exit Corporation (“Stockholders’ Representative”), the representative of Reflect stockholders, a $2,500 Note and Security Agreement (the “Secured Promissory Note”). The Secured Promissory Note accrues interest at 0.59% (the applicable federal rate) and requires the Company and Reflect to pay equal monthly principal installments of $104 on the fifteenth (15th) day of each month, commencing on March 17, 2022. Any remaining or unpaid principal shall be due and payable on February 15, 2023. All payments under the Secured Promissory Note will be paid to the escrow agent in the Merger Agreement to be placed into the escrow account to secure the Reflect stockholders’ indemnification obligations until released on the one-year anniversary of the closing of the Merger, at which time any remaining proceeds not subject to a pending indemnification claim will be paid to the exchange agent for payment to the Reflect Stockholders. The obligations of the Company and Reflect set forth in the Secured Promissory Note are secured by a first-lien security interest in various contracts of Reflect, together with all accounts arising under such contracts, supporting obligations related to the accounts arising under such contracts, all related books and records, and products and proceeds of the foregoing. Slipstream subordinated its security interest in such collateral, and the recourse for any breach of the Secured Promissory Note by the Company or Reflect will be against such collateral. The Company has the right to offset amounts payable under the Secured Promissory Note upon a final, non-appealable decision of a court that entitles the Company or its affiliates to any damages for indemnification under the Merger Agreement, or the Stockholders’ Representative’s agreement in writing to such damages. Amended and Restated Loan and Security Agreement On March 7, 2021, the Company and its subsidiaries (collectively, the “Borrowers”) refinanced their current debt facilities with Slipstream pursuant to an Amended and Restated Credit and Security Agreement (the “Prior Credit Agreement”). The debt facilities continue to be fully secured by all assets of the Borrowers. The maturity date (“Maturity Date”) on the outstanding debt and new debt is extended to March 31, 2023. The Prior Credit Agreement (i) provides a $1,000 of availability under a line of credit (the “Line of Credit”), (ii) consolidates our existing term and revolving line of credit facilities into a new term loan (the “New Term Loan”) having an aggregate principal balance of approximately $4,550 (including a 3.0% issuance fee capitalized into the principal balance), (iii) increases the outstanding special convertible term loan (the “Convertible Loan”) to approximately $2,280 (including a 3.0% issuance fee capitalized into the principal balance), and (iv) extinguishes the outstanding obligations owed with respect to a $264 existing disbursed escrow loan in exchange for shares of the Company’s common stock (the “Disbursed Escrow Conversion Shares”), valued at $2.718 per share (the trailing 10-day VWAP as reported on the Nasdaq Capital Market as of the date of execution of the Prior Credit Agreement). The Line of Credit and Convertible Loan accrue interest at 10% per year, and the New Term Loan accrues interest at 8% per year. The New Term Loan requires no principal payments until the Maturity Date, and interest payments are payable on the first day of each month until the Maturity Date. All interest payments owed prior to October 1, 2021 are payable as PIK payments, or increases to the principal balance only. The Line of Credit and Convertible Loan require payments of accrued interest payable on the first day of each month through April 1, 2022. All such interest payments made prior to October 1, 2021 are payable as PIK payments, or increases to the principal balances under the Line of Credit and Convertible Loan only. No principal payments are owed under the Line of Credit or Convertible Loan until April 1, 2022, at which time all principal and interest on each of the Line of Credit and Convertible Loan will be paid in monthly installments until the Maturity Date to fully amortize outstanding principal by the Maturity Date. All payments of interest (other than PIK payments) and principal on the Line of Credit and Convertible Loan may be paid, in the Borrowers’ sole discretion, in shares of the Company’s Common Stock (the “Payment Shares,” and together with the Disbursed Escrow Conversion Shares, the “Shares”). The Payment Shares will be valued on a per-Share basis at 70% of the VWAP of the Company’s shares of common stock as reported on the Nasdaq Capital Market for the 10 trading days immediately prior to the date such payment is due; provided that the Payment Shares shall not be valued below $0.50 per Share (the “Share Price”). The Prior Credit Agreement limits the Company’s ability to issue Shares as follows (the “Exchange Limitations”): (1) The total number of Shares that may be issued under the Prior Credit Agreement will be limited to 19.99% of the Company’s outstanding shares of common stock on the date the Prior Credit Agreement is signed (the “Exchange Cap”), unless stockholder approval is obtained to issue shares in excess of the Exchange Cap; (2) if Slipstream and its affiliates (the “Slipstream Group”) beneficially own the largest ownership position of shares of Company common stock immediately prior to the proposed issuance of Payment Shares and such shares are less than 19.99% of the then-issued and outstanding shares of Company common stock, the issuance of such Payment Shares will not cause the Slipstream Group to beneficially own in excess of 19.99% of the issued and outstanding shares of Company common stock after such issuance unless stockholder approval is obtained for ownership in excess of 19.99%; and (3) if the Slipstream Group does not beneficially own the largest ownership position of shares of Company common stock immediately prior to the proposed issuance of Payment Shares, the Company may not issue Payment Shares to the extent that such issuance would result in Slipstream Group beneficially owning more than 19.99% of the then issued and outstanding shares of Company common stock unless (A) such ownership would not be the largest ownership position in the Company, or (B) stockholder approval is obtained for ownership in excess of 19.99%. Accounting for the Prior Credit Agreement was accounted for as a debt extinguishment in the first quarter of 2021. Loan and Security Agreement History On August 17, 2016, the Company entered into a Loan and Security Agreement with Slipstream (“Loan and Security Agreement”). Since the initial entry into the Loan and Security Agreement in 2016, the Company has entered into several financing arrangements with varying interest rates, maturity dates, and number of associated detachable warrants, each entered within the structure of the Loan and Security Agreement. The debt instruments outstanding under the Loan and Security Agreement as of December 31, 2020 include the Term Loan, Secured Revolving Promissory Note, Secured Disbursed Escrow Promissory Note, and the Special Loan. The Loan and Security Agreement 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. Obligations under the loan and security agreement are secured by a grant of collateral security in all of the tangible assets of Creative Realities, Inc. and each of its wholly owned subsidiaries. Ninth, Tenth, Eleventh, Twelfth, and Thirteenth Amendment; Modification of Conversion Date of Special Loan under Loan and Security Agreement On February 28, 2021, January 31, 2021, December 31, 2020, November 30, 2020, and September 29, 2020, the Company entered into several amendments to Loan and Security Agreement with its subsidiaries and Slipstream to amend the automatic conversion date of the Special Loan. Each amendment extended the automatic conversion date of the Special Loan, which was ultimately Amended and Restated in full on March 7, 2021 as discussed further above. The Company paid no fees in exchange for these extensions. Eighth Amendment; Modification of Interest Rates under Loan and Security Agreement On April 1, 2020, the Company entered into an Eighth Amendment to Loan and Security Agreement (the “Eighth Amendment”) with its subsidiaries and Slipstream to amend the terms of the payments and interest accruing on the Company’s Term Loan, Secured Revolving Promissory Note, and Special Loan. The Eighth Amendment increased the interest rates of these loans from 8% to 10%, effective April 1, 2020. Until January 1, 2021, rather than cash payments of accrued interest under the term and revolving loans, interest will be paid by the issuance of and treated as additional principal thereunder. Commencing January 2, 2021, such interest will be payable in cash. Interest on the special loan will no longer be paid in cash, but by the issuance of and treated as additional principal thereunder. Upon entry into the Eighth Amendment, the Company completed an analysis of the changes in the Loan and Security Agreement within ASC 470 Debt Secured Disbursed Escrow Promissory Note The Fourth Amendment to the Loan and Security Agreement included entry into a Secured Disbursed Escrow Promissory Note between the Company and Slipstream, and, effective June 30, 2018, we drew $264 in conjunction with our exit from a previously leased operating facility. The principal amount of the Secured Disbursed Escrow Promissory Note bears no interest. Upon entry into the Prior Credit Agreement on March 7, 2021, this note was converted into Disbursed Escrow Conversion Shares, with elimination of the debt recorded as an equity issuance with the Statement of Shareholder’s Equity. SBA Paycheck Protection Program Loan On April 27, 2020, the Company entered into a Promissory Note with Old National Bank (the “Promissory Note”), which provided for an unsecured loan of $1,552 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note had a term of two years with a 1% per annum interest rate. On January 11, 2021, the Company received a notice from Old National Bank that the full principal amount of the PPP Loan and the accrued interest have been forgiven, resulting in a gain of $1,552 during the year-ended December 31, 2021. Amended and Restated Seller Note from acquisition of Allure The Amended and Restated Seller Note represented a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated to a reduced amount of $1,637 through the Stock Purchase Agreement and a subsequent net working capital adjustment. That debt accrued interest at 3.5% per annum, and required us to make quarterly payments of interest only through February 19, 2020, on which date the promissory note matured and all remaining amounts owing thereunder became due. On February 20, 2020, Creative Realities, Inc. and Allure made a demand for arbitration against Seller for (1) breach of contract, (2) indemnification, and (3) fraudulent misrepresentation under the Allure Purchase Agreement. On May 13, 2021, the Company and Seller entered into a settlement agreement wherein neither party admitted liability, and the Company agreed to pay, and Seller agreed to accept, $100 as settlement in full for the outstanding balance of principal and accrued interest under the Amended and Restated Seller Note and a mutual release of all claims related to the Amended and Restated Seller Note and sale transaction under the Allure Purchase Agreement and all related agreements. As a result of this settlement, the full principal amount of the Seller Note and the accrued interest were eliminated, resulting in a gain in the Condensed Consolidated Financial statements of $1,624, representing $1,538 related to the Seller Note and $86 of related interest thereon, during 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES Litigation On August 2, 2019, the Company filed suit in Jefferson Circuit Court, Kentucky, against a supplier of Allure for breach of contract, breach of warranty, and negligence with respect to equipment installations performed by such supplier for an Allure customer. This case remains in the early stages of litigation, in part due to delays resulting from the COVID-19 pandemic, and, as a result, the outcome of each case is unclear, so the Company is unable to reasonably estimate the possible recovery, or range of recovery, if any. On October 10, 2019, the Allure customer that is the basis of our claim above sent a demand to the Company for payment of $3,200 as settlement for an alleged breach of contract related to hardware failures of equipment installations performed by Allure between November 2017 and August 2018. The suits filed by and against Allure have been adjoined in the Jefferson Circuit Court, Kentucky in January 2020. Due to delays arising as a result of the ongoing COVID-19 pandemic, these suits remain in the early stages of litigation and, as a result, the outcome of the suits and the allocation of liability, if any, remain unclear, so the Company is unable to reasonably estimate the possible liability, recovery, or range of magnitude for either the liability or recover, if any, at the time of this filing. The Company has notified its insurance company of potential claims and continues to evaluate both the claim made by the customer and potential avenues for recovery against third parties should the customer prevail. On February 20, 2020, Creative Realities, Inc. and Allure made a demand for arbitration against Seller for (1) breach of contract, (2) indemnification, and (3) fraudulent misrepresentation under the Allure Purchase Agreement. This demand included a claim for the right to offset the amounts owing under the Amended and Restated Seller Note due February 20, 2020. The Company did not pay the Amended and Restated Seller Note on its maturity date. On February 27, 2020, Seller sent the Company a notice of breach for failure to pay the Amended and Restated Seller Note on the maturity date of February 20, 2020 and demanding immediate payment. On September 11, 2020, the Company served a First Amended Demand in the arbitration with Seller, and on November 5, 2020, Seller pre-served a Motion for Summary Disposition in the arbitration demanding payment of the Amended and Restated Seller Note and accrued interest. On May 13, 2021, the Company and Seller entered into a settlement agreement wherein neither party admitted liability, and the Company agreed to pay, and Seller agreed to accept, $100 as settlement in full for the outstanding balance of principal and accrued interest under the Amended and Restated Seller Note and a mutual release of all claims related to the Amended and Restated Seller Note and sale transaction under the Allure Purchase Agreement and all related agreements. The Company recorded a gain on settlement of obligations of $1,624 during 2021 upon settlement. Except as noted above, the Company is not party to any other material legal proceedings, other than ordinary routine litigation incidental to the business, and there were no other such proceedings pending during the period covered by this Annual Report. Settlement of obligations During 2021, (i) the full principal amount of the PPP Loan and the accrued interest of $1,552 were forgiven and recorded as a gain on settlement, (ii) the Company settled the Amended and Restated Seller Note and related accrued interest for $100, recording a gain on settlement of $1,624, representing $1,538 related to the Amended and Restated Seller Note and $86 of related interest thereon, and (iii) the statute of limitations passed related to the remaining liability on a lease abandoned by the Company in 2015, resulting in a gain of $256. During the year ended December 31, 2020, the Company settled and/or wrote off obligations of $348 for aggregate cash payments of $139 and recognized a gain of $209 related to legacy accounts payable deemed to no longer be legal obligations to vendors. Employee-related Expenses We implemented cost-control measures in light of the effect of the COVID-19 pandemic on our business, including employment compensation reductions designed to achieve preliminary cost savings. On March 19, 2020, the Company’s Board of Directors approved a six-month reduction of the salaries of several Company employees by between five percent (5%) and twenty percent (20%). During 2021, the Company reinstated lost salaries one-third on each of April 1, July 1, and October 1, the final reinstate thereby increasing the compensation to its pre-pandemic levels. On March 20, 2020, we completed a reduction-in-force and accrued one-time termination benefits related to severance to the affected employees of $135, the total of which was paid during 2020. Lease termination On December 31, 2020, we vacated our office facilities located in Dallas, TX. In ceasing use of these facilities, we recorded a one-time non-cash charge of $18. There were no such lease terminations during 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10: RELATED PARTY TRANSACTIONS In addition to the financing transactions with Slipstream, a related party, discussed in Note 8 Loans Payable 33 Degrees Convenience Connect, Inc., a related party that was approximately 17.5% owned by a member of our senior management (“33 Degrees”) until September 2021, is a customer of both equipment and services from the Company. For the years ended December 31, 2021 and 2020, we had sales of $457 (2.5% of consolidated sales) and $1,057 (6.1% of consolidated sales), respectively, with 33 Degrees. Accounts receivable due from 33 Degrees was $35, or 1.0%, and $40, or 1.2% of consolidated accounts receivable at December 31, 2021 and December 31, 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES Income tax benefit/(expense) consisted of the following: Year ended December 31, 2021 2020 Tax provision summary: State income tax $ (22 ) $ (17 ) Deferred tax benefit/(expense) - federal - 150 Deferred tax benefit/(expense) – state - 25 Tax benefit/(expense) $ (22 ) $ 158 The income tax benefit includes federal and state income taxes currently payable and those deferred or prepaid because of temporary differences between financial statement and tax bases of assets and liabilities. The Company records income taxes under the liability method. Under this method, deferred income taxes are recognized for the estimated future tax effects of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws. 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: 2021 2020 Federal statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 5.21 % 1.53 % Foreign rate differential (26.47 )% 0.51 % PPP Loan Forgiveness (128.43 )% 0.00 % Discrete items, Transaction items, and Other 21.92 % (7.00 )% Changes in valuation allowance 115.43 % (15.11 )% Effective tax rate 8.66 % 0.93 % The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets, determined using the income tax rate applicable to each period, consist of the following: December 31, 2021 2020 Deferred tax assets (liabilities): Reserves $ 267 $ 318 Property and equipment (2 ) (40 ) Accrued expenses 106 326 Right-of-use Asset (91 ) (147 ) Right-of-use Liability 91 149 IRC 163(j) Interest Deduction 18 18 Non-qualified stock options 1,074 675 R&D credits 1,801 1,801 Net foreign carryforwards 3,485 3,106 US net operating loss and credit carryforwards 35,448 35,566 Intangibles (11 ) (13 ) Total deferred tax assets, net 42,186 41,759 Valuation allowance (42,186 ) (41,759 ) Net deferred tax assets $ - $ - As of December 31, 2021, the Company had no reserves recorded as a liability for unrecognized tax benefits for U.S. federal and state tax jurisdictions. There were no unrecognized tax benefits as of December 31, 2021 that, if recognized, would affect the tax rate. It is the Company’s policy to accrue interest and penalties related to liabilities for income tax contingencies in the provision for income taxes. As of December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. Our deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs). As of December 31, 2021, the Company has federal and state net operating loss carryforwards expiring between 2022 and 2037, $10,651 of which has an indefinite carryforward period. The federal statute of limitations remains open for tax years 2018 through 2020 and state tax jurisdictions generally have statutes of limitations open for tax years 2017 through 2020. We have substantial NOLs that are limited in 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. The goodwill impairment recorded March 31, 2020 altered the deferred tax impact associated with indefinite lived goodwill from a deferred tax liability to a deferred tax asset. As the indefinite-lived intangibles can no longer provide a source of income, a full valuation allowance was placed against the deferred tax assets. We have performed a preliminary analysis of the annual NOL carryforwards and limitations that are available to be used against taxable income. Based on the history of losses of the Company, there continues to be a full valuation allowance against the net deferred tax assets of the Company. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Warrants [Abstract] | |
WARRANTS | NOTE 12: WARRANTS A summary of outstanding warrants for the years ended December 31, 2021 and 2020 is included below: Year Ended December 31, 2021 Warrants (Equity) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance January 1, 2021 4,426,900 $ 4.62 2.83 Warrants issued - - - Warrants expired (323,689 ) 4.69 - Balance December 31, 2021 4,103,211 $ 4.48 1.73 Year Ended December 31, 2020 Warrants (Equity) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance January 1, 2020 4,733,028 $ 4.83 3.41 Warrants issued - - - Warrants exercised (27,600 ) 4.38 - Warrants expired (278,528 ) 7.08 - Balance December 31, 2020 4,426,900 $ 4.62 2.83 As of December 31, 2021, there remained outstanding 597,678 warrants which contain weighted average anti-dilution protection. During 2021, those warrants were subject to a downward adjustment in their strike price following completion of the Company’s issuance of common stock in (1) the Registered Direct Offering in February 2021 and (2) the conversion of the Disbursed Escrow Note in March 2021. The strike prices prior to adjustment ranged from $5.80 to $5.96 and were adjusted to between $5.61 and $5.76. The remaining weighted-average contractual life of warrants subject to weighted average anti-dilution protection is 0.92 years as of December 31, 2021. As of December 31, 2020, there remained outstanding 921,367 warrants which contain weighted average anti-dilution protection. During 2020, those warrants were subject to a downward adjustment in their strike price following completion of the Company’s issuance of common stock via at-the-market offering activities. The strike prices prior to adjustment ranged from $6.09 to $6.25 and were adjusted to between $5.80 and $5.96. The remaining weighted-average contractual life of warrants subject to weighted average anti-dilution protection is 1.71 years as of December 31, 2020. Subsequent Events On February 17, 2022, in connection with obtaining a waiver of certain restrictions in investment documents between an investor and the Company in order to consummate the financing contemplated by the Credit Agreement, the Company paid consideration to such investor in the form of a warrant (the “Purchaser Warrant”) to purchase 1,400,000 shares of Company common stock in an at-the-market offering under Nasdaq rules. The number of shares of Company common stock subject to the Purchaser Warrant is equal to the waiver fee ($175) divided by $0.125 per share. The exercise price of the Purchaser Warrant is $1.41 per share, and the Purchaser Warrant is not exercisable until August 17, 2022. The Purchaser Warrant expires five years from the date of issuance. On February 3, 2022, the Company, entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a purchaser (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser, in a private placement priced at-the-market under Nasdaq rules, (i) 1,315,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and accompanying warrants to purchase an aggregate of 1,315,000 shares of Common Stock, and (ii) pre-funded warrants to purchase up to an aggregate of 5,851,505 shares of Common Stock (the “Pre-Funded Warrants”) and accompanying warrants to purchase an aggregate of 5,851,505 shares of Common Stock (collectively, the “Private Placement”). The accompanying warrants to purchase Common Stock are referred to herein collectively as the “Common Stock Warrants.” Under the Securities Purchase Agreement, each Share and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.535, and each Pre-Funded Warrant and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.5349, for gross proceeds of approximately $11,000, before deducting placement agent fees and estimated offering expenses payable by the Company. On February 17, 2022, in connection with the restructured Credit Agreement with Slipstream, the Company issued 5,194,495 warrants with an exercise price of $2.00 per share which expire five years from the date of issuance. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13: STOCK-BASED COMPENSATION A summary of outstanding options as of December 31, 2021 is included below: Time Vesting Options Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.01 - $3.00 1,780,000 8.62 $ 2.48 601,667 $ 2.47 $3.01 - $7.50 184,830 4.35 $ 6.72 176,496 $ 6.69 $7.51+ 103,979 3.44 11.74 103,979 $ 11.74 2,068,809 7.71 $ 3.48 882,142 Performance Vesting Options Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Options Exercise Price Outstanding Life Price Exercisable Price $2.53 800,000 8.42 $ 2.53 266,667 $ 2.53 800,000 8.42 $ 2.53 266,667 $ 2.53 Time Vesting Options Performance Vesting Options Weighted Weighted Average Average Options Exercise Options Exercise Date/Activity Outstanding Price Outstanding Price Balance, December 31, 2020 1,813,809 3.48 800,000 $ 2.53 Granted 255,000 2.21 - - Exercised - - - - Forfeited or expired - - - - Balance, December 31, 2021 2,068,809 3.48 800,000 $ 2.53 The weighted average remaining contractual life for options exercisable is 7.2 years as of December 31, 2021. Valuation Information for Stock-Based Compensation For purposes of determining estimated fair value under FASB ASC 718-10, Stock Compensation On November 17, 2021, Creative Realities’ Board of Directors updated its director compensation plan to compensate non-officer directors resulting in the Company granting 10-year options to purchase an aggregate of 255,000 shares of its common stock to non-employee directors of the Company under the Company’s 2014 Stock Incentive Plan (the “Plan”). One-third of the options vested immediately, with the half of the remaining options vesting at each of the first and second anniversaries of the grant date. The options have an exercise price of $2.21, the market value of the Company’s common stock on the grant date. The fair value of the options on the grant date was $1.744 and was determined using the Black-Scholes model. These values were calculated using the following weighted average assumptions: Risk-free interest rate 1.60 % Expected term 6.25 years Expected price volatility 97.78 % Dividend yield 0 % On June 1, 2020 the Board of Directors of the Company granted 10-year options to purchase an aggregate of 2,380,000 shares of its common stock to employees of the Company subject to shareholder approval of an increase in the reserve of shares authorized for issuance under the Company’s 2014 Stock Incentive Plan (the “Plan”). On July 10, 2020, the Company held a special meeting of the Company’s shareholders at which the shareholders approved the amendment to the Plan, which increased the reserve of shares authorized for issuance thereunder to 6,000,000 shares. Of the 2,380,000 options awarded, 1,580,000 vest over 3 years and have an exercise price of $2.53, the market value of the Company’s common stock on the grant date. The fair value of the options on the grant date was $1.87 and was determined using the Black-Scholes model. These values were calculated using the following weighted average assumptions: Risk-free interest rate 0.66 % Expected term 6.25 years Expected price volatility 89.18 % Dividend yield 0 % The remaining 800,000 options awarded vest in equal installments over a three-year period subject to satisfying the Company revenue target and earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the applicable year. In each of calendar years 2020, 2021 and 2022, one-third of the total shares may vest (if the revenue and EBITDA targets are met), and the shares that are subject to vesting each year are allocated equally to each of the revenue and EBITDA targets for such year. These performance options include a catch-up provision, where any options that did not vest during a prior year due to the Company’s failure to meet a prior revenue or EBITDA target may vest in a subsequent vesting year if the revenue or EBITDA target, as applicable, is met in the future year. The revenue and EBITDA targets for the three plan years are as follows: Calendar Year Revenue Target EBITDA Target 2020 $ $32 million $2.2 million 2021 $ $35 million $3.1 million 2022 $ $38 million $3.5 million The executives met the foregoing EBTIDA target for calendar year 2021. The exercise price of the foregoing options is $2.53 per share, the closing price of the Company’s common stock on the grant date. The options were issued from the Company’s 2014 Stock Incentive Plan. The fair value of the options on the grant date was $1.87 and was determined using the Black-Scholes model. These values were calculated using the same weighted average assumptions as the time vesting options issued. Performance against the identified revenue and EBITDA targets will be assessed quarterly by the Company in order to determine whether any compensation expense should be recorded. No expense was recorded in 2020 as neither the revenue nor EBITDA target were achieved. The Company recorded stock compensation expense of $500 within general and administrative expense related to these awards for current year and catch-up expense related to the achievement of the EBITDA target in 2021. Stock Compensation Expense Information ASC 718-10, Stock Compensation 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. In August 2018, a special meeting of shareholders was held in which the shareholders voted to amend the Company’s 2014 Stock Incentive Plan to increase the reserve of shares authorized for issuance thereunder, from 7,390,355 shares to 18,000,000 shares. Following a 1-for-30 reverse stock split, the shares authorized for issuance under the Company’s 2014 Stock Incentive Plan was reduced to 600,000. On July 10, 2020, the Company’s shareholders approved an amendment to the Company’s 2014 Stock Incentive Plan to increase the reserve of authorized for issuance thereunder to 6,000,000. There are 2,856,674 options outstanding under the 2014 Stock Incentive Plan. Employee Awards Compensation expense recognized for the issuance of stock options to employees for the years ended December 31, 2021 and 2020 of $1,494 and $620, respectively, was included in general and administrative expense in the Consolidated Financial Statements. At December 31, 2021, there was approximately $1,360 and $999 of total unrecognized compensation expense related to unvested share-based awards with time vesting and performance vesting criteria for employees, respectively. Generally, expense related to the time vesting options will be recognized over the next two- and one-half years and will be adjusted for any future forfeitures as they occur. Compensation expense related to performance vesting options will be recognized if it becomes probable that the Company will achieve the identified performance metrics. Non-Employee Awards Compensation expense recognized for the issuance of stock options, including those options awarded to our Board of Directors, for the years ended December 31, 2021 and 2020 of $399 and $100, respectively, was included in general and administrative expense in the Consolidated Financial Statements. At December 31, 2021, there was approximately $260 of total unrecognized compensation expense related to unvested share-based awards with time vesting criteria for non-employee directors. Generally, expense related to the time vesting options will be recognized over the next two- years and will be adjusted for any future forfeitures as they occur. During 2021, the Company engaged certain consultants to perform services in exchange for Company common stock. Shares issued for services were calculated based on the ten (10) day volume weighted average price (“VWAP”) for the last ten (10) days during the month of service provided. The Company recorded $130 in compensation expenses in exchange for issuance of shares during 2021. $30 of the compensation expenses were recorded as capitalized software. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 14: LEASES We have entered into various non-cancelable operating lease agreements for certain of our offices and office equipment. Our leases have original lease periods expiring between 2022 and 2025. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease costs, lease term and discount rate are as follows: (in thousands) Year Ended Year Ended Finance lease cost Amortization of right-of-use assets $ 4 $ 20 Interest - 2 Operating lease cost 379 626 Total lease cost $ 383 $ 648 Weighted Average Remaining Lease Term Operating leases 2.8 years 3.8 years Finance leases - 0.9 years Weighted Average Discount Rate Operating leases 10.0 % 10.0 % Finance leases - % 14.0 % The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021: (in thousands) Operating 2022 $ 298 2023 295 2024 85 2025 78 Thereafter - Total undiscounted cash flows 756 Less imputed interest (102 ) Present value of lease liabilities 654 Lease liabilities, current 281 Lease liabilities, non-current 373 Present value of lease liabilities $ 654 Supplemental cash flow information related to leases are as follows: (in thousands) Year Ended Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 383 $ 627 Financing cash flows from finance leases (4 ) 24 |
Profit-Sharing Plan
Profit-Sharing Plan | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
PROFIT-SHARING PLAN | NOTE 15: PROFIT-SHARING PLAN We have a defined contribution 401(k) retirement plans for eligible associates in the United States. Associates may contribute up to 15% of their pretax compensation to the plan subject to IRS limitations. Beginning on April 1, 2018, the Company began contributing an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3%. The Company indefinitely suspended the employer match at the end of March 2020 in response to the uncertainty of the COVID-19 pandemic and reinstated the employer match in October 2021. We have a Registered Retirement Savings Plan for eligible associates in Canada. Associates may contribute up to 18% of earned income reported on their tax return in the previous year, subject to legal contribution limits. Beginning on April 1, 2018, the Company began contributing an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3%. The Company indefinitely suspended the employer match at the end of March 2020 in response to the uncertainty of the COVID-19 pandemic and reinstated the employer match in October 2021. The Company contributed $19 and $35 to employee retirement plans for the year-ended December 31, 2021 and 2020, respectively. |
Segment Information and Signifi
Segment Information and Significant Customers/Vendors | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information and Significant Customers/Vendors [Abstract] | |
SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS/VENDORS | NOTE 16: SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS/VENDORS 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, and a data center located in the United States. All material sales for the years ended December 31, 2021 and 2020 were in the United States and Canada. Significant Customers We had two (2) customers that accounted for 41.1% and 27.8% of revenue for the years ended December 31, 2021 and 2020, respectively. We had two (2) and customers that in the aggregate accounted for 56.6% and 42.6% of accounts receivable as of December 31, 2021 and December 31, 2020, respectively. Significant Vendors We had three (3) and two (2) vendors that accounted for 69.1% and 46.8% of outstanding accounts payable at December 31, 2021 and December 31, 2020, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17: SUBSEQUENT EVENTS Equity Financing On February 3, 2022, the Company entered into a Securities Purchase Agreement with the Purchaser for gross proceeds of approximately $11,000 before deducting placement agent fees and estimated offering expenses. The net proceeds from such equity financing were used to fund, in part, payment of the closing cash consideration in the Merger. A detailed explanation of this transaction is included in Note 1 to the audited annual financial statements included within this Annual Report. Debt Financing On February 17, 2022, the Company raised $10,000 in gross proceeds, or $9,950 in net proceeds, from entry into the Acquisition Loan with Slipstream as part of the Credit Agreement, with an interest rate of 8.0% and which matures on February 17, 2025. The Company also refinanced their current debt facilities with Slipstream, pursuant to the Credit Agreement into a single note for $7,185 with interest rate of 10.0% maturing on the same date. A detailed explanation of this transaction is included in Note 1 to the audited annual financial statements included within this Annual Report. Warrant Exercise On March 18, 2022, the Purchaser exercised 1,301,505 pre-funded warrants at an exercise price of $0.0001 per share in exchange for 1,301,505 shares of Company common stock. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-K and Article 8 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for annual financial reporting. The Consolidated Financial Statements include the accounts of Creative Realities, Inc. and our wholly owned subsidiaries Allure, and Creative Realities (Canada), Inc. All intercompany balances and transactions have been eliminated in consolidation, as applicable. |
Revenue Recognition | 2. Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. The Company receives variable consideration in very few instances. Revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company does not have any material extended payment terms as payment is due at or shortly after the time of the sale, typically ranging between thirty and ninety days. Observable prices are used to determine the standalone selling price of separate performance obligations or a cost plus margin approach when one is not available. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. A contract liability is recognized as deferred revenue when the Company invoices clients in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation. The Company uses the practical expedient for recording an immediate expense for incremental costs of obtaining contracts, including certain design/engineering services, commissions, incentives and payroll taxes, as these incremental and recoverable costs have terms that do not exceed one year. |
Inventories | 3. Inventories Inventories are stated at the lower of cost or net realizable value, determined by the first-in, first-out (FIFO) method, and consist of the following: December 31, December 31, 2021 2020 Raw materials, net of reserve of $502 and $104, respectively $ 1,580 $ 1,920 Inventory on consignment with distributors 3 208 Work-in-process 297 223 Total inventories $ 1,880 $ 2,351 |
Impairment of Long-Lived Assets | 4. Impairment of Long-Lived Assets We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with ASC 360, 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 as 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. |
Basic and Diluted Income/(Loss) per Common Share | 5. Basic and Diluted Income/(Loss) per Common Share Basic and diluted income/(loss) per common share for all periods presented is computed using the weighted average number of common shares outstanding. Basic weighted average shares outstanding includes only outstanding common shares. Diluted weighted average shares outstanding includes outstanding common shares and potential dilutive common shares outstanding in accordance with the treasury stock method. Shares reserved for outstanding stock options, including stock options with performance restricted vesting, and warrants totaling approximately 6,972,020 and 7,040,709 at December 31, 2021 and 2020, respectively were excluded from the computation of income/(loss) per share as all options and warrants were anti-dilutive due to the net loss in 2020 and no options or warrants were in the money for 2021. In calculating diluted earnings per share for the years ended December 31, 2021 and 2020, in accordance with ASC 260 Earnings per share |
Income Taxes | 6. Income Taxes 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, 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. The Company accounts for uncertain tax positions utilizing an established recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We had no uncertain tax positions as of December 31, 2021 and December 31, 2020. |
Goodwill and Definite-Lived Intangible Assets | 7. Goodwill and Definite-Lived Intangible Assets We follow the provisions of ASC 350, Goodwill and Other Intangible Assets. Pursuant to ASC 350, goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment at least annually. The Company uses an annual measurement date of September 30 (see Note 7 Intangible Assets and Goodwill |
Use of Estimates | 8. Use of Estimates The preparation of financial statements in conformity with GAAP 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, valuation allowances related to deferred taxes, the fair value of acquired assets and liabilities, the fair value of liabilities reliant upon the appraised fair value of the Company, valuation of stock-based compensation awards 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. |
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 consist of the following at December 31, 2021 and 2020: December 31, 2021 2020 Equipment $ 89 $ 81 Leasehold improvements 135 135 Furniture and fixtures 121 119 Other depreciable assets 56 56 Total property and equipment 401 391 Less: accumulated depreciation and amortization (326 ) (216 ) Net property and equipment $ 75 $ 175 The estimated useful lives used to compute depreciation and amortization are as follows: Asset class Useful life assigned Equipment 3 – 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or term of lease Depreciation expense was $109 and $124 for the years ended December 31, 2021 and 2020, respectively. |
Research and Development and Software Development Costs | 12. 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. The Company capitalizes its costs incurred for additional functionality to its internal software. We capitalized approximately $1,140 and $603 for the years ended December 31, 2021 and 2020, 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 3 years once the new projects are completed and placed in service. These costs are included in intangible assets, net on the Consolidated Balance Sheets. |
Leases | 13. Leases We account for leases in accordance with ASU No. 2016-02, Leases We determine if an arrangement is a lease at inception. Right of use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is a hypothetical rate based on our understanding of what our credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating leases are included in operating lease right-of-use assets, current maturities of operating leases, and long-term obligations under operating leases on our Consolidated Balance Sheets. Finance leases are included in property and equipment, net, current maturities of financing leases, and long-term obligations under financing leases on our Consolidated Balance Sheets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of inventories | December 31, December 31, 2021 2020 Raw materials, net of reserve of $502 and $104, respectively $ 1,580 $ 1,920 Inventory on consignment with distributors 3 208 Work-in-process 297 223 Total inventories $ 1,880 $ 2,351 |
Schedule of property and equipment | December 31, 2021 2020 Equipment $ 89 $ 81 Leasehold improvements 135 135 Furniture and fixtures 121 119 Other depreciable assets 56 56 Total property and equipment 401 391 Less: accumulated depreciation and amortization (326 ) (216 ) Net property and equipment $ 75 $ 175 |
Schedule of estimated useful lives used to compute depreciation and amortization | Asset class Useful life assigned Equipment 3 – 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or term of lease |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
Schedule of revenue by major source | (in thousands) Year Year Hardware $ 9,450 $ 8,991 Services: Installation Services 2,600 2,537 Software Development Services 791 549 Managed Services 5,596 5,380 Total Services 8,987 8,466 Total Hardware and Services $ 18,437 $ 17,457 |
Supplemental Cash Flow Statem_2
Supplemental Cash Flow Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Statement Information [Abstract] | |
Schedule of supplemental cash flow information | Year Ended December 31, 2021 2020 Supplemental non-cash Investing and Financing activities Conversion of disbursed escrow loan into common stock $ 264 $ - Increase in debt related to financing fees $ 200 $ - Decrease in debt discount via amended Credit Agreement $ 133 $ - Supplemental disclosure information for cash flow Cash paid during the period for: Interest $ 106 $ 140 Income taxes, net $ 32 $ 19 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, December 31, 2021 2020 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform $ 4,635 3,652 $ 4,635 3,400 Purchased and developed software 3,488 2,713 3,167 2,002 In-Process internally developed software platform 824 - - - Customer relationships 3,960 1,692 5,330 2,870 Trademarks and trade names 640 640 1,020 925 13,547 8,697 14,152 9,197 Accumulated amortization 8,697 9,197 Net book value of amortizable intangible assets $ 4,850 $ 4,955 |
Schedule of estimated amortization | Year ending December 31, Estimated Future Amortization 2022 $ 954 2023 636 2024 487 2025 415 Thereafter 1,503 |
Schedule of estimated useful lives | Acquired Intangible Asset: Amortization Technology platform and patents 7 Purchased and developed software 3 Trademark 3 Customer relationships 15 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt with detachable warrants | As of December 31, 2021 Debt Type Issuance Principal Maturity Warrants Interest Rate Information C 8/17/2016 4,767 2/17/2025 588,236 8.0% interest E 12/30/2019 2,418 2/17/2025 - 10.0% interest Total debt, gross 7,185 588,236 Fair value (E) (166 ) Total debt, gross 7,019 Debt discount (144 ) Total debt, net $ 6,875 Less current maturities - Long term debt 6,875 As of December 31, 2020 Debt Type Issuance Principal Maturity Warrants Interest Rate Information A 6/30/2018 $ 264 N/A - 0.0% interest B 1/16/2018 1,085 3/31/2023 61,729 10.0% interest (1) C 8/17/2016 3,255 3/31/2023 588,236 10.0% interest (1) D 11/19/2018 1,637 2/15/2020 - 3.5% interest E 12/30/2019 2,177 3/31/2023 - 10.0% interest (2) F 4/27/2020 1,552 4/27/2022 (3) - 1.0% interest (3) Total debt, gross 9,970 649,965 Fair value (E) 93 Total debt, gross 10,063 Debt discount (168 ) Total debt, net $ 9,895 Less current maturities (1,637 ) Long term debt 8,258 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | Year ended December 31, 2021 2020 Tax provision summary: State income tax $ (22 ) $ (17 ) Deferred tax benefit/(expense) - federal - 150 Deferred tax benefit/(expense) – state - 25 Tax benefit/(expense) $ (22 ) $ 158 |
Schedule of reconciliation statutory income tax | 2021 2020 Federal statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 5.21 % 1.53 % Foreign rate differential (26.47 )% 0.51 % PPP Loan Forgiveness (128.43 )% 0.00 % Discrete items, Transaction items, and Other 21.92 % (7.00 )% Changes in valuation allowance 115.43 % (15.11 )% Effective tax rate 8.66 % 0.93 % |
Schedule of the deferred tax assets and liabilities | December 31, 2021 2020 Deferred tax assets (liabilities): Reserves $ 267 $ 318 Property and equipment (2 ) (40 ) Accrued expenses 106 326 Right-of-use Asset (91 ) (147 ) Right-of-use Liability 91 149 IRC 163(j) Interest Deduction 18 18 Non-qualified stock options 1,074 675 R&D credits 1,801 1,801 Net foreign carryforwards 3,485 3,106 US net operating loss and credit carryforwards 35,448 35,566 Intangibles (11 ) (13 ) Total deferred tax assets, net 42,186 41,759 Valuation allowance (42,186 ) (41,759 ) Net deferred tax assets $ - $ - |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Warrants [Abstract] | |
Schedule of outstanding warrants | Year Ended December 31, 2021 Warrants (Equity) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance January 1, 2021 4,426,900 $ 4.62 2.83 Warrants issued - - - Warrants expired (323,689 ) 4.69 - Balance December 31, 2021 4,103,211 $ 4.48 1.73 Year Ended December 31, 2020 Warrants (Equity) Amount Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance January 1, 2020 4,733,028 $ 4.83 3.41 Warrants issued - - - Warrants exercised (27,600 ) 4.38 - Warrants expired (278,528 ) 7.08 - Balance December 31, 2020 4,426,900 $ 4.62 2.83 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock options outstanding | Time Vesting Options Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.01 - $3.00 1,780,000 8.62 $ 2.48 601,667 $ 2.47 $3.01 - $7.50 184,830 4.35 $ 6.72 176,496 $ 6.69 $7.51+ 103,979 3.44 11.74 103,979 $ 11.74 2,068,809 7.71 $ 3.48 882,142 Performance Vesting Options Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Options Exercise Price Outstanding Life Price Exercisable Price $2.53 800,000 8.42 $ 2.53 266,667 $ 2.53 800,000 8.42 $ 2.53 266,667 $ 2.53 |
Schedule of stock option activity | Time Vesting Options Performance Vesting Options Weighted Weighted Average Average Options Exercise Options Exercise Date/Activity Outstanding Price Outstanding Price Balance, December 31, 2020 1,813,809 3.48 800,000 $ 2.53 Granted 255,000 2.21 - - Exercised - - - - Forfeited or expired - - - - Balance, December 31, 2021 2,068,809 3.48 800,000 $ 2.53 |
Schedule of fair value of the options | Risk-free interest rate 1.60 % Expected term 6.25 years Expected price volatility 97.78 % Dividend yield 0 % Risk-free interest rate 0.66 % Expected term 6.25 years Expected price volatility 89.18 % Dividend yield 0 % |
Schedule of revenue and EBITDA targets | Calendar Year Revenue Target EBITDA Target 2020 $ $32 million $2.2 million 2021 $ $35 million $3.1 million 2022 $ $38 million $3.5 million |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of components of lease costs, lease term and discount rate | (in thousands) Year Ended Year Ended Finance lease cost Amortization of right-of-use assets $ 4 $ 20 Interest - 2 Operating lease cost 379 626 Total lease cost $ 383 $ 648 Weighted Average Remaining Lease Term Operating leases 2.8 years 3.8 years Finance leases - 0.9 years Weighted Average Discount Rate Operating leases 10.0 % 10.0 % Finance leases - % 14.0 % |
Schedule of maturities of lease liabilities | (in thousands) Operating 2022 $ 298 2023 295 2024 85 2025 78 Thereafter - Total undiscounted cash flows 756 Less imputed interest (102 ) Present value of lease liabilities 654 Lease liabilities, current 281 Lease liabilities, non-current 373 Present value of lease liabilities $ 654 |
Schedule of cash flow information related to leases | (in thousands) Year Ended Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 383 $ 627 Financing cash flows from finance leases (4 ) 24 |
Nature of Organization and Op_2
Nature of Organization and Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 03, 2022 | Feb. 17, 2022 | Dec. 31, 2021 |
Nature of Organization and Operations (Details) [Line Items] | |||
Merger agreement description | Subject to the terms and conditions of the Merger Agreement, upon the closing of the Merger, Reflect stockholders as of to the effective time of the Merger collectively received from the Company, in the aggregate, the following Merger consideration: (i) $16,166 payable in cash, (ii) 2,333,334 shares of common stock of Creative Realities (valued based on an issuance price of $2 per share) (the “CREX Shares”), (iii) the Secured Promissory Note (as described below), and (iv) supplemental cash payments (the “Guaranteed Consideration”), if any, payable on or after the three-year anniversary of the effective time of the Merger (subject to the Extension Option described below, the “Guarantee Date”), in an amount by which the value of the CREX Shares on such anniversary is less than $6.40 per share, or if certain customers of Reflect collectively achieve over 85,000 billable devices online at any time on or before December 31, 2022, is less than $7.20 per share (such applicable amount, the “Guaranteed Price”), multiplied by the amount of CREX Shares held by the Reflect stockholders on the Guarantee Date (subject to the Extension Option described below), subject to the terms of the Merger Agreement. | ||
Guaranteed price per share (in Dollars per share) | $ 1 | ||
Maturity date | Mar. 31, 2023 | ||
Loan and security agreement, description | Management believes that, based on (i) the execution of the Equity Financing, (ii) the refinancing of our debt as part of the Debt Financing, including extension of the maturity date on our term loans, and (iii) our operational forecast through 2022 following completion of the Reflect Acquisition, that we can continue as a going concern through at least March 31, 2023. However, given our historical net losses and cash used in operating activities, we obtained a continued support letter from Slipstream through March 31, 2023. 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. | ||
Subsequent Event [Member] | |||
Nature of Organization and Operations (Details) [Line Items] | |||
Securities purchase agreement description | the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a purchaser (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser, in a private placement priced at-the-market under Nasdaq rules, (i) 1,315,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and accompanying warrants to purchase an aggregate of 1,315,000 shares of Common Stock, and (ii) pre-funded warrants to purchase up to an aggregate of 5,851,505 shares of Common Stock (the “Pre-Funded Warrants”) and accompanying warrants to purchase an aggregate of 5,851,505 shares of Common Stock (collectively, the “Private Placement”). The accompanying warrants to purchase Common Stock are referred to herein collectively as the “Common Stock Warrants.” Under the Securities Purchase Agreement, each Share and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.535, and each Pre-Funded Warrant and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.5349, for gross proceeds of approximately $11,000 before deducting placement agent fees and estimated offering expenses payable by the Company. The net proceeds from the Private Placement were used to fund, in part, payment of the closing cash consideration in the Merger. | ||
Maturity date | Feb. 1, 2025 | ||
Gross proceeds | $ 10,000 | ||
Secured term loan | 4,767 | ||
Secured convertible loan | 2,418 | ||
Outstanding balance of principal | 7,185 | ||
Security agreement | $ 2,500 | ||
Promissory note accrues interest | 0.59% | ||
Principal installments | $ 104 | ||
Extension Option [Member] | |||
Nature of Organization and Operations (Details) [Line Items] | |||
Guaranteed price percentage | 70.00% | ||
Nasdaq Capital Market [Member] | |||
Nature of Organization and Operations (Details) [Line Items] | |||
Guaranteed price percentage | 80.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Outstanding stock options and warrants (in Shares) | 6,972,020 | 7,040,709 |
Depreciation expense | $ 109 | $ 124 |
Capitalized computer software, gross | $ 1,140 | $ 603 |
Amortizing | 3 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of inventories - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of inventories [Abstract] | ||
Raw materials, net of reserve of $502 and $104, respectively | $ 1,580 | $ 1,920 |
Inventory on consignment with distributors | 3 | 208 |
Work-in-process | 297 | 223 |
Total inventories | $ 1,880 | $ 2,351 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of inventories (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of inventories [Abstract] | ||
Raw materials, net of reserve | $ 502 | $ 104 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 401 | $ 391 |
Less: accumulated depreciation and amortization | (326) | (216) |
Net property and equipment | 75 | 175 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 89 | 81 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 135 | 135 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 121 | 119 |
Other depreciable assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 56 | $ 56 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives used to compute depreciation and amortization | 12 Months Ended |
Dec. 31, 2021 | |
Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives used to compute depreciation and amortization [Line Items] | |
Property and equipment estimated useful lives | 3 – 5 years |
Furniture and fixtures [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives used to compute depreciation and amortization [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives used to compute depreciation and amortization [Line Items] | |
Property and equipment estimated useful lives | Shorter of 5 years or term of lease |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of revenue by major source - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Hardware | $ 9,450 | $ 8,991 |
Total Services | 8,987 | 8,466 |
Total Hardware and Services | 18,437 | 17,457 |
Installation Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | 2,600 | 2,537 |
Software Development Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | 791 | 549 |
Managed Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | $ 5,596 | $ 5,380 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Measurement [Abstract] | ||
Convertible loan | $ 166 | |
Loss from special loan | $ 93 |
Supplemental Cash Flow Statem_3
Supplemental Cash Flow Statement Information (Details) - Schedule of supplemental cash flow information - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental non-cash Investing and Financing activities | ||
Conversion of disbursed escrow loan into common stock | $ 264 | |
Increase in debt related to financing fees | 200 | |
Decrease in debt discount via amended Credit Agreement | 133 | |
Cash paid during the period for: | ||
Interest | 106 | 140 |
Income taxes, net | $ 32 | $ 19 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 1,251 | $ 1,330 | |
Amortized trade name asset | 380 | ||
Amortized customer list asset | $ 1,370 | ||
Discount rate | 14.50% | ||
Non-cash impairment loss | $ 10,646 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 13,547 | $ 14,152 |
Accumulated Amortization | 8,697 | 9,197 |
Gross carrying amount, Accumulated amortization | 8,697 | 9,197 |
Net book value of amortizable intangible assets | 4,850 | 4,955 |
Technology platform [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,635 | 4,635 |
Accumulated Amortization | 3,652 | 3,400 |
Purchased and developed software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,488 | 3,167 |
Accumulated Amortization | 2,713 | 2,002 |
In-Process internally developed software platform [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 824 | |
Accumulated Amortization | ||
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,960 | 5,330 |
Accumulated Amortization | 1,692 | 2,870 |
Trademarks and trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 640 | 1,020 |
Accumulated Amortization | $ 640 | $ 925 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details) - Schedule of estimated amortization $ in Thousands | Dec. 31, 2021USD ($) |
Schedule of estimated amortization [Abstract] | |
2022 | $ 954 |
2023 | 636 |
2024 | 487 |
2025 | 415 |
Thereafter | $ 1,503 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details) - Schedule of estimated useful lives | 12 Months Ended |
Dec. 31, 2021 | |
Technology platform and patents [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 7 years |
Purchased and Developed Software [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 3 years |
Trademark [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 3 years |
Customer relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 15 years |
Loans Payable (Details)
Loans Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | May 13, 2021 | Apr. 01, 2020 | Mar. 17, 2022 | Feb. 17, 2022 | Apr. 27, 2020 | Jun. 30, 2018 | Dec. 31, 2021 | Mar. 18, 2022 |
Loans Payable (Details) [Line Items] | ||||||||
Loans payable description | (1)8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date.(2)8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of December 31, 2020 is $2,177; however, fair value accounting for the convertible debt instrument results in an additional $93 of debt recorded on the Consolidated Balance Sheet as of December 31, 2020 related to this instrument. (3)1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. | |||||||
Credit agreement description | The Credit Agreement also provides that the Company’s outstanding loans from Slipstream at December 31, 2021, consisting of its pre-existing $4,767 senior secured term loan and $2,418 secured convertible loan, with an aggregate of $7,185 in outstanding principal and accrued and unpaid interest under such loans, were consolidated into a term loan (the “Consolidation Term Loan”). The Consolidation Term Loan has an interest rate of 10.0%, with 75.0% warrant coverage (or 2,694,495 warrants). The Company issued to Slipstream a $7,185 Consolidation Term Note in connection with consolidating the Consolidation Term Loan. On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Consolidation Term Loan (estimated to be $60 per monthly payment). Commencing on September 1, 2023, and on the first day of each month thereafter until the Maturity Date, the Borrowers will make a payment on the Consolidation Term Loan, in an equal monthly installment of principal sufficient to fully amortize the Consolidation Term Loan in eighteen equal installments (estimated to be $399 per monthly installment). In addition to refinancing the existing debt with Slipstream, the Company also raised $10,000 in gross proceeds, or $9,950 in net proceeds, from entry into a new, 36-month senior secured term loan (the “Acquisition Loan”) with Slipstream as part of the Credit Agreement, which matures on February 17, 2025 (the “Maturity Date”). The Acquisition Loan has an interest rate of 8.0%, with 50.0% warrant coverage (or 2,500,000 warrants). The Company issued to Slipstream a $10,000 Acquisition Term Note in connection with obtaining the Acquisition Loan. On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Acquisition Loan (estimated to be $67 per monthly payment). No principal payments on the Acquisition Loan are payable until the Maturity Date. In connection with the Acquisition Loan and Consolidation Term Loan warrant coverage, the Company issued to Slipstream a warrant to purchase an aggregate of 5,194,495 shares of Company common stock (the “Lender Warrant”). The Lender Warrant has a five-year term, an initial exercise price of $2.00 per share, subject to adjustments in the Lender Warrant, and is not exercisable until August 17, 2022. | |||||||
Gross proceeds | $ 10,000 | |||||||
Net proceeds | $ 9,950 | |||||||
Acquisition loan interest rate percentage | 8.00% | |||||||
Warrant coverage percentage | 50.00% | |||||||
Warrant shares (in Shares) | 2,500,000 | |||||||
Slipstream amount | $ 10,000 | |||||||
Payments on acquisition loan description | On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Acquisition Loan (estimated to be $67 per monthly payment). No principal payments on the Acquisition Loan are payable until the Maturity Date. | |||||||
Maturity date | Mar. 31, 2023 | |||||||
Amended and restated loan and security agreement, description | (i) provides a $1,000 of availability under a line of credit (the “Line of Credit”), (ii) consolidates our existing term and revolving line of credit facilities into a new term loan (the “New Term Loan”) having an aggregate principal balance of approximately $4,550 (including a 3.0% issuance fee capitalized into the principal balance), (iii) increases the outstanding special convertible term loan (the “Convertible Loan”) to approximately $2,280 (including a 3.0% issuance fee capitalized into the principal balance), and (iv) extinguishes the outstanding obligations owed with respect to a $264 existing disbursed escrow loan in exchange for shares of the Company’s common stock (the “Disbursed Escrow Conversion Shares”), valued at $2.718 per share (the trailing 10-day VWAP as reported on the Nasdaq Capital Market as of the date of execution of the Prior Credit Agreement). The Line of Credit and Convertible Loan accrue interest at 10% per year, and the New Term Loan accrues interest at 8% per year. | |||||||
Payment share percentage | 70.00% | |||||||
Share price (in Dollars per share) | $ 0.5 | |||||||
Prior credit agreement limits, description | The Prior Credit Agreement limits the Company’s ability to issue Shares as follows (the “Exchange Limitations”): (1) The total number of Shares that may be issued under the Prior Credit Agreement will be limited to 19.99% of the Company’s outstanding shares of common stock on the date the Prior Credit Agreement is signed (the “Exchange Cap”), unless stockholder approval is obtained to issue shares in excess of the Exchange Cap; (2) if Slipstream and its affiliates (the “Slipstream Group”) beneficially own the largest ownership position of shares of Company common stock immediately prior to the proposed issuance of Payment Shares and such shares are less than 19.99% of the then-issued and outstanding shares of Company common stock, the issuance of such Payment Shares will not cause the Slipstream Group to beneficially own in excess of 19.99% of the issued and outstanding shares of Company common stock after such issuance unless stockholder approval is obtained for ownership in excess of 19.99%; and (3) if the Slipstream Group does not beneficially own the largest ownership position of shares of Company common stock immediately prior to the proposed issuance of Payment Shares, the Company may not issue Payment Shares to the extent that such issuance would result in Slipstream Group beneficially owning more than 19.99% of the then issued and outstanding shares of Company common stock unless (A) such ownership would not be the largest ownership position in the Company, or (B) stockholder approval is obtained for ownership in excess of 19.99%. | |||||||
Vesting of performance shares previously granted to CEO | $ 264 | |||||||
Promissory note, description | the Company entered into a Promissory Note with Old National Bank (the “Promissory Note”), which provided for an unsecured loan of $1,552 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note had a term of two years with a 1% per annum interest rate. | |||||||
Amended and restated seller note from acquisition of allure description | The Amended and Restated Seller Note represented a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated to a reduced amount of $1,637 through the Stock Purchase Agreement and a subsequent net working capital adjustment. That debt accrued interest at 3.5% per annum, and required us to make quarterly payments of interest only through February 19, 2020, on which date the promissory note matured and all remaining amounts owing thereunder became due. | |||||||
Outstanding balance of principal and accrued interest | $ 100 | |||||||
Accrued interest | $ 1,624 | |||||||
Interest thereon | 86 | |||||||
Subsequent Event [Member] | ||||||||
Loans Payable (Details) [Line Items] | ||||||||
Warrant shares (in Shares) | 1,301,505 | |||||||
Reflect stockholders amount | $ 2,500 | |||||||
Accrues interest percentage | 0.59% | |||||||
Principal installments amount | $ 104 | |||||||
Maturity date | Feb. 1, 2025 | |||||||
Seller [Member] | ||||||||
Loans Payable (Details) [Line Items] | ||||||||
Accrued interest | $ 1,538 | |||||||
Minimum [Member] | ||||||||
Loans Payable (Details) [Line Items] | ||||||||
Loans interest rates percentage | 8.00% | |||||||
Maximum [Member] | ||||||||
Loans Payable (Details) [Line Items] | ||||||||
Loans interest rates percentage | 10.00% |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | |||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Maturity Date | Mar. 31, 2023 | |||
Issuance Date | Total debt, gross | Total debt, gross | ||
Total debt, gross | $ 7,185 | $ 9,970 | ||
Warrants | 588,236 | 649,965 | ||
Issuance Date | [1] | Fair value (E) | Fair value (E) | |
Fair value | $ (166) | $ 93 | ||
Total debt, gross | $ 7,019 | $ 10,063 | ||
Issuance Date | Debt discount | Debt discount | ||
Debt discount | $ (144) | $ (168) | ||
Issuance Date | Total debt, net | Total debt, net | ||
Total debt, net | $ 6,875 | $ 9,895 | ||
Issuance Date | Less current maturities | Less current maturities | ||
Less current maturities | $ (1,637) | |||
Issuance Date | Long term debt | Long term debt | ||
Long term debt | $ 6,875 | $ 8,258 | ||
8/17/2016 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | C | C | ||
Issuance Date | Aug. 17, 2016 | Aug. 17, 2016 | ||
Principal | $ 4,767 | $ 3,255 | ||
Maturity Date | Feb. 17, 2025 | Mar. 31, 2023 | ||
Warrants | 588,236 | 588,236 | ||
Interest Rate Information | 8.0% interest | 10.0% interest | [2] | |
12/30/2019 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | E | E | ||
Issuance Date | Dec. 30, 2019 | Dec. 30, 2019 | ||
Principal | $ 2,418 | $ 2,177 | ||
Maturity Date | Feb. 17, 2025 | Mar. 31, 2023 | ||
Warrants | ||||
Interest Rate Information | 10.0% interest | 10.0% interest | [3] | |
6/30/2018 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | A | |||
Issuance Date | Jun. 30, 2018 | |||
Principal | $ 264 | |||
Maturity Date | ||||
Warrants | ||||
Interest Rate Information | 0.0% interest | |||
1/16/2018 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | B | |||
Issuance Date | Jan. 16, 2018 | |||
Principal | $ 1,085 | |||
Maturity Date | Mar. 31, 2023 | |||
Warrants | 61,729 | |||
Interest Rate Information | [2] | 10.0% interest | ||
11/19/2018 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | D | |||
Issuance Date | Nov. 19, 2018 | |||
Principal | $ 1,637 | |||
Maturity Date | Feb. 15, 2020 | |||
Warrants | ||||
Interest Rate Information | 3.5% interest | |||
4/27/2020 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | F | |||
Issuance Date | Apr. 27, 2020 | |||
Principal | $ 1,552 | |||
Maturity Date | [4] | Apr. 27, 2022 | ||
Warrants | ||||
Interest Rate Information | [4] | 1.0% interest | ||
[1] | Secured Convertible Special Loan Promissory Note, at fair value | |||
[2] | 8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date. | |||
[3] | 8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of December 31, 2020 is $2,177; however, fair value accounting for the convertible debt instrument results in an additional $93 of debt recorded on the Consolidated Balance Sheet as of December 31, 2020 related to this instrument. | |||
[4] | 1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 20, 2020 | Mar. 19, 2020 | Oct. 10, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | May 13, 2021 | |
Commitments and Contingencies (Details) [Line Items] | ||||||
Outstanding balance of principal | $ 100 | |||||
Gain on settlement of obligations | $ 1,624 | |||||
Accrued interests | $ 86 | |||||
Gain on settlement | 1,624 | |||||
Gain amount | 256 | |||||
Debt written off | $ 348 | |||||
Aggregate cash payments | 139 | |||||
Legacy accounts payable | 209 | |||||
Termination benefits, description | On March 19, 2020, the Company’s Board of Directors approved a six-month reduction of the salaries of several Company employees by between five percent (5%) and twenty percent (20%). | |||||
Severance expense | $ 135 | |||||
Non-cash charges of lease | $ 18 | |||||
PPP Loan [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Accrued interests | 1,552 | |||||
Seller Note [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Accrued interests | 100 | |||||
Allure [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Settlement for an alleged breach of contract | $ 3,200 | |||||
Seller Note [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Representing amount | $ 1,538 |
Related Party Transactions (Det
Related Party Transactions (Details) - 33 Degrees [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions (Details) [Line Items] | ||
Related party owned percentage | 17.50% | |
Related party entity, description | For the years ended December 31, 2021 and 2020, we had sales of $457 (2.5% of consolidated sales) and $1,057 (6.1% of consolidated sales), respectively, with 33 Degrees. | |
Accounts receivable (in Dollars) | $ 35 | $ 40 |
Concentration credit risk percentage | 1.00% | 1.20% |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward, description | the Company has federal and state net operating loss carryforwards expiring between 2022 and 2037, $10,651 of which has an indefinite carryforward period. The federal statute of limitations remains open for tax years 2018 through 2020 and state tax jurisdictions generally have statutes of limitations open for tax years 2017 through 2020. |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income tax provision - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Tax provision summary: | ||
State income tax | $ (22) | $ (17) |
Deferred tax benefit/(expense) - federal | 150 | |
Deferred tax benefit/(expense) – state | 25 | |
Tax benefit/(expense) | $ (22) | $ 158 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of reconciliation statutory income tax | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation statutory income tax [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 5.21% | 1.53% |
Foreign rate differential | (26.47%) | 0.51% |
PPP Loan Forgiveness | (128.43%) | 0.00% |
Discrete items, Transaction items, and Other | 21.92% | (7.00%) |
Changes in valuation allowance | 115.43% | (15.11%) |
Effective tax rate | 8.66% | 0.93% |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of the deferred tax assets and liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets (liabilities): | ||
Reserves | $ 267 | $ 318 |
Property and equipment | (2) | (40) |
Accrued expenses | 106 | 326 |
Right-of-use Asset | (91) | (147) |
Right-of-use Liability | 91 | 149 |
IRC 163(j) Interest Deduction | 18 | 18 |
Non-qualified stock options | 1,074 | 675 |
R&D credits | 1,801 | 1,801 |
Net foreign carryforwards | 3,485 | 3,106 |
US net operating loss and credit carryforwards | 35,448 | 35,566 |
Intangibles | (11) | (13) |
Total deferred tax assets, net | 42,186 | 41,759 |
Valuation allowance | (42,186) | (41,759) |
Net deferred tax assets |
Warrants (Details)
Warrants (Details) - USD ($) | Feb. 03, 2022 | Feb. 17, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 17, 2022 |
Warrants (Details) [Line Items] | |||||
Warrants outstanding (in Shares) | 597,678 | ||||
Weighted-average contractual life of warrants | 11 months 1 day | ||||
Warrants outstanding | $ 921,367 | ||||
Warrants subject to weighted average | 1 year 8 months 15 days | ||||
Purchase of common stock (in Shares) | 1,400,000 | ||||
Securities purchase agreement, description | the Company, entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a purchaser (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser, in a private placement priced at-the-market under Nasdaq rules, (i) 1,315,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and accompanying warrants to purchase an aggregate of 1,315,000 shares of Common Stock, and (ii) pre-funded warrants to purchase up to an aggregate of 5,851,505 shares of Common Stock (the “Pre-Funded Warrants”) and accompanying warrants to purchase an aggregate of 5,851,505 shares of Common Stock (collectively, the “Private Placement”). The accompanying warrants to purchase Common Stock are referred to herein collectively as the “Common Stock Warrants.” Under the Securities Purchase Agreement, each Share and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.535, and each Pre-Funded Warrant and accompanying warrants to purchase Common Stock were sold together at a combined price of $1.5349, for gross proceeds of approximately $11,000, before deducting placement agent fees and estimated offering expenses payable by the Company. | ||||
Warrants issued (in Shares) | 5,194,495 | ||||
Exercise price per share (in Dollars per share) | $ 2 | ||||
Date of issuance | 5 years | ||||
Warrant [Member] | |||||
Warrants (Details) [Line Items] | |||||
Warrant waiver fee | $ (175,000) | ||||
Exercise price per share (in Dollars per share) | $ 0.125 | ||||
Purchaser Warrant [Member] | |||||
Warrants (Details) [Line Items] | |||||
Exercise price per share (in Dollars per share) | $ 1.41 | ||||
Minimum [Member] | |||||
Warrants (Details) [Line Items] | |||||
Strike prices | $ 5.8 | $ 6.09 | |||
Minimum [Member] | Warrant [Member] | |||||
Warrants (Details) [Line Items] | |||||
Strike prices | 5.61 | 5.8 | |||
Maximum [Member] | |||||
Warrants (Details) [Line Items] | |||||
Strike prices | 5.96 | 6.25 | |||
Maximum [Member] | Warrant [Member] | |||||
Warrants (Details) [Line Items] | |||||
Strike prices | $ 5.76 | $ 5.96 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of outstanding warrants - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||
Number of Shares, Warrants, Beginning Balance | 4,426,900 | 4,733,028 |
Weighted Average Exercise Price, Beginning Balance | $ 4.62 | $ 4.83 |
Weighted Average Remaining Contractual Life, Beginning Balance | 2 years 9 months 29 days | 3 years 4 months 28 days |
Number of Shares, Warrants issued | ||
Weighted Average Exercise Price, Warrants issued | ||
Weighted Average Remaining Contractual Life, Warrants issued | ||
Number of Shares, Warrants exercised | (27,600) | |
Weighted Average Exercise Price, Warrants exercised | $ 4.38 | |
Weighted Average Remaining Contractual Life, Warrants exercised | ||
Number of Shares, Warrants expired | (323,689) | (278,528) |
Weighted Average Exercise Price, Warrants expired | $ 4.69 | $ 7.08 |
Weighted Average Remaining Contractual Life, Warrants expired | ||
Number of Shares, Warrants, Ending Balance | 4,103,211 | 4,426,900 |
Weighted Average Exercise Price, Ending Balance | $ 4.48 | $ 4.62 |
Weighted Average Remaining Contractual Life, Ending Balance | 1 year 8 months 23 days | 2 years 9 months 29 days |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 01, 2020 | Nov. 17, 2021 | Jul. 10, 2020 | Aug. 31, 2018 | Oct. 31, 2014 | Dec. 31, 2021 | Dec. 31, 2020 |
Stock-Based Compensation (Details) [Line Items] | |||||||
Weighted average remaining contractual life | 7 years 2 months 12 days | ||||||
Granting options | 10 years | ||||||
Purchase an aggregate | 255,000 | ||||||
Exercise price of market value (in Dollars per share) | $ 2.21 | ||||||
Fair valu options grant value (in Dollars per share) | $ 1.744 | ||||||
Purchase aggregate | the Board of Directors of the Company granted 10-year options to purchase an aggregate of 2,380,000 shares of its common stock to employees of the Company subject to shareholder approval of an increase in the reserve of shares authorized for issuance under the Company’s 2014 Stock Incentive Plan (the “Plan”). On July 10, 2020, the Company held a special meeting of the Company’s shareholders at which the shareholders approved the amendment to the Plan, which increased the reserve of shares authorized for issuance thereunder to 6,000,000 shares. | ||||||
Options | 2,380,000 | ||||||
Option awarded vest over | 1,580,000 | ||||||
Options vesting period | 3 years | ||||||
Exercise price (in Dollars per share) | $ 2.53 | ||||||
Remaining options awarded vest | 800,000 | ||||||
Exercise price (in Dollars per share) | $ 2.53 | ||||||
Fair value of options on grant date (in Dollars per share) | $ 1.87 | ||||||
General and administrative expense (in Dollars) | $ 500 | $ 620 | |||||
Options outstanding | 2,856,674 | ||||||
Issuance of shares authorized | 600,000 | ||||||
General and administrative expense (in Dollars) | $ 399 | $ 100 | |||||
Compensation expense (in Dollars) | 130 | ||||||
Capitalized Software [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Compensation expense (in Dollars) | 30 | ||||||
Employee Awards [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
General and administrative expense (in Dollars) | $ 1,494 | ||||||
Black-Scholes model [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Fair value of options on grant date (in Dollars per share) | $ 1.87 | ||||||
2006 Equity Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares reserved for company's employees | 1,720,000 | ||||||
Options outstanding | 12,135 | ||||||
2006 Non-Employee Director Stock Option Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares reserved for company's employees | 700,000 | ||||||
2014 Stock Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares reserved for company's employees | 7,390,355 | ||||||
Issuance of shares authorized | 6,000,000 | ||||||
Minimum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Unrecognized compensation expense (in Dollars) | $ 999 | ||||||
Minimum [Member] | 2014 Stock Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Issuance of shares authorized | 7,390,355 | ||||||
Maximum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Unrecognized compensation expense (in Dollars) | 1,360 | ||||||
Unrecognized Tax Benefits, Income Tax Penalties Expense (in Dollars) | $ 260 | ||||||
Maximum [Member] | 2014 Stock Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Issuance of shares authorized | 18,000,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of stock options outstanding | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options , Number Outstanding (in Shares) | shares | 2,068,809 |
Time Vesting Options ,Weighted Average Remaining Contractual Life | 7 years 8 months 15 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 3.48 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 882,142 |
Performance Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Performance Vesting Options , Number Outstanding (in Shares) | shares | 800,000 |
Performance Vesting Options ,Weighted Average Remaining Contractual Life | 8 years 5 months 1 day |
Performance Vesting Options ,Weighted Average Exercise Price | $ 2.53 |
Performance Vesting Options , Options Exercisable (in Shares) | shares | 266,667 |
Performance Vesting Options ,Weighted Average Exercise Price | $ 2.53 |
$0.01 - $3.00 [Member] | Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options , Number Outstanding (in Shares) | shares | 1,780,000 |
Time Vesting Options ,Weighted Average Remaining Contractual Life | 8 years 7 months 13 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 2.48 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 601,667 |
Time Vesting Options ,Weighted Average Exercise Price | $ 2.47 |
$0.01 - $3.00 [Member] | Time Vesting Options [Member] | Minimum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options, Range of Exercise Prices Between | 0.01 |
$0.01 - $3.00 [Member] | Time Vesting Options [Member] | Maximum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options, Range of Exercise Prices Between | $ 3 |
$0.01 - $3.00 [Member] | Performance Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Performance Vesting Options , Number Outstanding (in Shares) | shares | 800,000 |
Performance Vesting Options ,Weighted Average Remaining Contractual Life | 8 years 5 months 1 day |
Performance Vesting Options ,Weighted Average Exercise Price | $ 2.53 |
Performance Vesting Options , Options Exercisable (in Shares) | shares | 266,667 |
Performance Vesting Options ,Weighted Average Exercise Price | $ 2.53 |
$0.01 - $3.00 [Member] | Performance Vesting Options [Member] | Minimum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Performance Vesting Options , Exercise Price | $ 2.53 |
$3.01 - $7.50 [Member] | Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options , Number Outstanding (in Shares) | shares | 184,830 |
Time Vesting Options ,Weighted Average Remaining Contractual Life | 4 years 4 months 6 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 6.72 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 176,496 |
Time Vesting Options ,Weighted Average Exercise Price | $ 6.69 |
$3.01 - $7.50 [Member] | Time Vesting Options [Member] | Minimum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options, Range of Exercise Prices Between | 3.01 |
$3.01 - $7.50 [Member] | Time Vesting Options [Member] | Maximum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options, Range of Exercise Prices Between | 7.5 |
$7.51+ [Member] | Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options, Range of Exercise Prices Between | $ 7.51 |
Time Vesting Options , Number Outstanding (in Shares) | shares | 103,979 |
Time Vesting Options ,Weighted Average Remaining Contractual Life | 3 years 5 months 8 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 11.74 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 103,979 |
Time Vesting Options ,Weighted Average Exercise Price | $ 11.74 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option activity | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items] | |
Options Outstanding Beginning Balance | shares | 1,813,809 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 3.48 |
Options Outstanding, Granted | shares | 255,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2.21 |
Options Outstanding, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Options Outstanding, Forfeited or expired | shares | |
Weighted Average Exercise Price, Forfeited or expired | $ / shares | |
Options Outstanding, Ending Balance | shares | 2,068,809 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 3.48 |
Performance Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items] | |
Options Outstanding Beginning Balance | shares | 800,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 2.53 |
Options Outstanding, Granted | shares | |
Weighted Average Exercise Price, Granted | $ / shares | |
Options Outstanding, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Options Outstanding, Forfeited or expired | shares | |
Weighted Average Exercise Price, Forfeited or expired | $ / shares | |
Options Outstanding, Ending Balance | shares | 800,000 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 2.53 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Schedule of fair value of the options | 12 Months Ended |
Dec. 31, 2021 | |
1.744 [Member] | |
Stock-Based Compensation (Details) - Schedule of fair value of the options [Line Items] | |
Risk-free interest rate | 1.60% |
Expected term | 6 years 3 months |
Expected price volatility | 97.78% |
Dividend yield | 0.00% |
1.87 [Member] | |
Stock-Based Compensation (Details) - Schedule of fair value of the options [Line Items] | |
Risk-free interest rate | 0.66% |
Expected term | 6 years 3 months |
Expected price volatility | 89.18% |
Dividend yield | 0.00% |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets $ in Millions | Dec. 31, 2021USD ($) |
Revenue Target [Member] | |
Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets [Line Items] | |
2020 | $ 32 |
2021 | 35 |
2022 | 38 |
EBITDA Target [Member] | |
Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets [Line Items] | |
2020 | 2.2 |
2021 | 3.1 |
2022 | $ 3.5 |
Leases (Details)
Leases (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease expiration period, description | Our leases have original lease periods expiring between 2022 and 2025. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of components of lease costs, lease term and discount rate - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finance lease cost | ||
Amortization of right-of-use assets | $ 4 | $ 20 |
Interest | 2 | |
Operating lease cost | 379 | 626 |
Total lease cost | $ 383 | $ 648 |
Weighted Average Remaining Lease Term | ||
Operating leases | 2 years 9 months 18 days | 3 years 9 months 18 days |
Finance leases | 10 months 24 days | |
Weighted Average Discount Rate | ||
Operating leases | 10.00% | 10.00% |
Finance leases | 14.00% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of maturities of lease liabilities - Operating Leases [Member] $ in Thousands | Dec. 31, 2021USD ($) |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
2022 | $ 298 |
2023 | 295 |
2024 | 85 |
2025 | 78 |
Thereafter | |
Total undiscounted cash flows | 756 |
Less imputed interest | (102) |
Present value of lease liabilities | 654 |
Lease liabilities, current | 281 |
Lease liabilities, non-current | 373 |
Present value of lease liabilities | $ 654 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of cash flow information related to leases - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 383 | $ 627 |
Financing cash flows from finance leases | $ (4) | $ 24 |
Profit-Sharing Plan (Details)
Profit-Sharing Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | ||
Defined contribution retirement plans, description | associates in the United States. Associates may contribute up to 15% of their pretax compensation to the plan subject to IRS limitations. Beginning on April 1, 2018, the Company began contributing an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3% | |
Description of registered retirement savings plan | Associates may contribute up to 18% of earned income reported on their tax return in the previous year, subject to legal contribution limits. Beginning on April 1, 2018, the Company began contributing an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3% | |
Employee retirement amount | $ 19 | $ 35 |
Segment Information and Signi_2
Segment Information and Significant Customers/Vendors (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Information and Significant Customers/Vendors (Details) [Line Items] | ||
Number of reportable segment | 1 | |
Accounts Receivable [Member] | ||
Segment Information and Significant Customers/Vendors (Details) [Line Items] | ||
Number of major customers | 2 | 2 |
Percent from major customers | 56.60% | 42.60% |
Accounts Payable [Member] | ||
Segment Information and Significant Customers/Vendors (Details) [Line Items] | ||
Percent from major customers | 69.10% | 46.80% |
Number of vendors | 3 | 2 |
Revenue [Member] | ||
Segment Information and Significant Customers/Vendors (Details) [Line Items] | ||
Number of major customers | 2 | 2 |
Percent from major customers | 41.10% | 27.80% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | ||
Mar. 18, 2022 | Feb. 17, 2022 | Feb. 03, 2022 | |
Subsequent Events (Details) [Line Items] | |||
Gross proceeds | $ 10,000 | $ 11,000 | |
Net proceeds | $ 9,950 | ||
Interest rate percentage | 8.00% | ||
Exercised warrants (in Shares) | 1,301,505 | ||
Warrants exercise price (in Dollars per share) | $ 0.0001 | ||
Shares of common stock (in Shares) | 1,301,505 | ||
Credit Agreement [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Interest rate percentage | 10.00% | ||
Credit agreement | $ 7,185 |