Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 16, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | Creative Realities, Inc. | |
Trading Symbol | CREX | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 21,674,986 | |
Amendment Flag | false | |
Entity Central Index Key | 0001356093 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly 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 $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 5,988 | $ 2,883 |
Accounts receivable, net of allowance of $808 and $620, respectively | 8,806 | 3,006 |
Unbilled receivables | 369 | |
Work-in-process and inventories, net | 2,024 | 1,880 |
Prepaid expenses and other current assets | 2,325 | 1,634 |
Total current assets | 19,143 | 9,772 |
Operating lease right-of-use assets | 1,073 | 654 |
Property and equipment, net | 154 | 75 |
Intangibles, net | 26,445 | 4,850 |
Goodwill | 16,012 | 7,525 |
Other assets | 52 | 5 |
TOTAL ASSETS | 62,879 | 22,881 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Short-term seller note payable | 2,396 | |
Accounts payable | 4,881 | 2,517 |
Accrued expenses | 2,459 | 2,110 |
Deferred revenues | 3,586 | 426 |
Customer deposits | 2,973 | 1,525 |
Current maturities of operating and finance leases | 560 | 281 |
Total current liabilities | 16,855 | 6,859 |
Long-term Related Party Acquisition Term Loan, net of $2,010 and $0 discount, respectively | 7,990 | |
Long-term Related Party Consolidation Term Loan, net of $2,146 and $143 discount, respectively | 5,039 | 4,624 |
Long-term related party convertible loans payable, at fair value | 2,251 | |
Warrant liability, at fair value | 7,796 | |
Contingent acquisition consideration, at fair value | 5,600 | |
Long-term obligations under operating leases | 513 | 373 |
Other liabilities | 26 | 45 |
TOTAL LIABILITIES | 43,819 | 14,152 |
Common stock, $0.01 par value, 200,000 shares authorized; 21,675 and 12,009 shares issued and outstanding, respectively | 217 | 120 |
Additional paid-in capital | 68,626 | 60,863 |
Accumulated deficit | (49,783) | (52,254) |
Total shareholders’ equity | 19,060 | 8,729 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 62,879 | $ 22,881 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance receivable, net | $ 808 | $ 620 |
Related party loans payable, net discount | 2,010 | 0 |
Related party loans amortizing payable, net discount | $ 2,146 | $ 143 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 21,675 | 12,009 |
Common stock, shares outstanding | 21,675 | 12,009 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Sales | ||
Hardware | $ 6,459 | $ 2,816 |
Services and other | 4,298 | 2,188 |
Total sales | 10,757 | 5,004 |
Cost of sales | ||
Hardware | 5,382 | 1,914 |
Services and other | 1,483 | 856 |
Total cost of sales | 6,865 | 2,770 |
Gross profit | 3,892 | 2,234 |
Operating expenses: | ||
Sales and marketing | 707 | 335 |
Research and development | 241 | 171 |
General and administrative | 2,754 | 2,109 |
Bad debt (recovery)/expense | 106 | (512) |
Depreciation and amortization | 707 | 344 |
Deal and transaction expenses | 391 | |
Total operating expenses | 4,906 | 2,447 |
Operating loss | (1,014) | (213) |
Other income/(expenses): | ||
Interest expense | (449) | (249) |
Gain/(loss) on extinguishment/settlement of obligations | (295) | 1,565 |
Change in fair value of special loan | 166 | |
Change in fair value of warrant liability | 5,469 | |
Loss on debt waiver consent | (1,212) | |
Other income | 6 | 4 |
Total other income | 3,519 | 1,486 |
Income before income taxes | 2,505 | 1,273 |
Benefit from/(provision for) income taxes | (3) | (1) |
Net income | $ 2,502 | $ 1,272 |
Basic earnings per common share (in Dollars per share) | $ 0.17 | $ 0.11 |
Diluted earnings per common share (in Dollars per share) | $ 0.17 | $ 0.11 |
Weighted average shares outstanding - basic (in Shares) | 14,618 | 11,325 |
Weighted average shares outstanding - diluted (in Shares) | 14,618 | 11,325 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net income | $ 2,502 | $ 1,272 |
Adjustments to reconcile net income/(loss) to net cash used in operating activities | ||
Depreciation and amortization | 707 | 344 |
Amortization of debt discount | 181 | 72 |
Stock-based compensation | 551 | 539 |
Gain on forgiveness of Paycheck Protection Program | (1,552) | |
Employee Retention and other Government Credits | 16 | |
Change in fair value of Convertible Loan | (166) | |
Loss on extinguishment of debt | 295 | |
Loss on debt waiver consent | 1,212 | |
Allowance for doubtful accounts | 116 | 6 |
Increase in notes due to in-kind interest | 158 | |
Gain on change in fair value of warrants | (5,469) | |
Gain on settlement of obligations | (13) | |
Changes to operating assets and liabilities: | ||
Accounts receivable and unbilled receivables | (3,724) | (1,491) |
Inventories | 52 | 225 |
Prepaid expenses and other current assets | 855 | (156) |
Vendor deposits | (78) | |
Operating lease right-of-use assets, net | 75 | 82 |
Other assets | (11) | (1) |
Accounts payable | 2,292 | (101) |
Deferred revenue | 1,901 | 661 |
Accrued expenses | 35 | 40 |
Deposits | (213) | 150 |
Operating lease liabilities, net | (75) | (90) |
Other liabilities | (19) | |
Net cash used in operating activities | 1,201 | (21) |
Investing activities | ||
Purchases of property and equipment | (10) | (3) |
Acquisition of a business, net of cash acquired | (17,184) | |
Capitalization of intern and external labor for software development | (775) | (112) |
Net cash used in investing activities | (17,969) | (115) |
Financing activities | ||
Principal payments on finance leases | (4) | |
Proceeds from sale of common stock in PIPE, net of offering expenses | 1,814 | |
Proceeds from sale and exercise of pre-funded warrants in PIPE, net of offering expenses | 8,295 | |
Proceeds from Acquisition Loan, net of offering expenses | 9,868 | |
Repayment of Seller Note | (104) | |
Proceeds from sale of shares via registered direct offering, net | 1,849 | |
Net cash provided by / (used in) financing activities | 19,873 | 1,845 |
Increase/(decrease) in Cash and Cash Equivalents | 3,105 | 1,709 |
Cash and Cash Equivalents, beginning of period | 2,883 | 1,826 |
Cash and Cash Equivalents, end of period | $ 5,988 | $ 3,535 |
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, 2020 | $ 109 | $ 56,712 | $ (52,486) | $ 4,335 |
Balance (in Shares) at Dec. 31, 2020 | 10,924,287 | |||
Stock-based compensation | 514 | 514 | ||
Shares issued to directors as compensation | 25 | 25 | ||
Shares issued to directors as compensation (in Shares) | 19,380 | |||
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 | ||
Sales of Shares via registered direct offering, net of offering cost | $ 8 | 1,841 | 1,849 | |
Sales of Shares via registered direct offering, net of offering cost (in Shares) | 800,000 | |||
Net income | 1,272 | 1,272 | ||
Balance at Mar. 31, 2021 | $ 118 | 59,381 | (51,214) | 8,285 |
Balance (in Shares) at Mar. 31, 2021 | 11,840,811 | |||
Balance at Dec. 31, 2021 | $ 120 | 60,863 | (52,254) | 8,729 |
Balance (in Shares) at Dec. 31, 2021 | 12,008,519 | |||
Stock-based compensation | 551 | 551 | ||
Shares issued and warrants exercised in private investment in public entity (“PIPE”) | $ 72 | 2,206 | 2,278 | |
Shares issued and warrants exercised in private investment in public entity (“PIPE”) (in Shares) | 7,166,505 | |||
Shares issued in Reflect Systems, Inc. Merger | $ 25 | 4,975 | 5,000 | |
Shares issued in Reflect Systems, Inc. Merger (in Shares) | 2,500,001 | |||
Warrant repricing events | 31 | (31) | ||
Net income | 2,502 | 2,502 | ||
Balance at Mar. 31, 2022 | $ 217 | $ 68,626 | $ (49,783) | $ 19,060 |
Balance (in Shares) at Mar. 31, 2022 | 21,675,025 |
Nature of Organization and Oper
Nature of Organization and Operations | 3 Months Ended |
Mar. 31, 2022 | |
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, Creative Realities Canada, Inc., a Canadian corporation, and Reflect Systems, Inc., a Delaware corporation. 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 the effective time of the Merger collectively received from the Company, in the aggregate, the following Merger consideration: (i) $16,166 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) calendar 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. The Retention Bonus Plan and financings are described below. Retention Bonus Plan On February 17, 2022, in connection with the closing of the Merger (the “Closing”), the Company adopted a Retention Bonus Plan, pursuant to which the Company is required to pay to key members of Reflect’s management team an aggregate of $1,333 in cash, which was paid 50% at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% on the one-year anniversary of Closing and 25% on the two-year anniversary of the Closing. The future cash payments due on the one-year and two-year anniversaries of the Closing have been deposited into an escrow agreement. The Retention Bonus Plan also requires the Company to issue Common Stock having an aggregate value of $667 to the plan participants as follows: 50% of the value of such shares were issued at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% of the value of such shares will be issued on the one-year anniversary of Closing and the remaining 25% of the value of such shares will be issued on the two-year anniversary of the Closing. The shares issued on the Closing were valued at $2.00 per share, and the shares to be issued after the Closing will be determined based on dividing the value of shares issuable on such date divided by the trailing 10-day volume weighted average price (VWAP) of the shares as of such date as reported on the Nasdaq Capital Market. Upon the resignation of a participant’s employment for “good reason,” or termination of the employment of a participant without “cause,” each as defined in the Retention Bonus Plan, the participant will be fully vested and will receive all cash and shares allocated to such participant under the Retention Bonus Plan. Any amounts unpaid by reason of a lapse in continuous employment or otherwise will be reallocated among the remaining Retention Bonus Plan participants. 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 offering expenses payable by the Company. Net proceeds to the Company were $10,160. The remaining exercise price for the Pre-Funded Warrant was $0.0001. Collectively, we refer to this transaction throughout this filing as the “Equity Financing”. 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 Communications, LLC (“Slipstream”), pursuant to a Second Amended and Restated Credit and Security Agreement (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. Collectively, we refer to this transaction throughout this filing as the “Debt Financing”. The net proceeds from the Credit Agreement were used to fund, in part, payment of the closing cash consideration in the Merger, and the cash payable under the terms of the Retention Bonus Plan at the Closing. On February 17, 2022, in connection with the closing of the acquisition of Reflect, the Company issued to the representative of Reflect stockholders, RSI Exit Corporation (“Stockholders’ Representative”), 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 15, 2022, Any remaining or unpaid principal is due and payable on February 17, 2023. The Secured Promissory Notes represents consideration in the Merger and is included as part of the purchase price. See Note 8 Loans Payable Liquidity and Financial Condition The accompanying Condensed Consolidated Financial Statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties. We produced positive net income for the three months ended March 31, 2022 and for the year ended December 31, 2021 and had positive cash flows from operating activities for both periods. As of March 31, 2022, we had cash and cash equivalents of $5,988 and a working capital surplus of $2,288. 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 Merger, 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 May 16, 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 Condensed Consolidated Financial Statements follows: 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the applicable instructions to Form 10-Q and 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 interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 22, 2022. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented. 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. See Note 4 Revenue 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, 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 net realizable value, determined by the first-in, first-out (FIFO) method, and consist of the following: March 31, December 31, 2022 2021 Raw materials, including those on consignment, net of reserve of $628 and $502, respectively $ 1,765 $ 1,583 Work-in-process 259 297 Total inventories $ 2,024 $ 1,880 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 Earnings/(Loss) per Common Share Basic and diluted earnings/(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 and warrants totaling 20,732,886 at March 31, 2022 were excluded from the computation of income/(loss) per share as no stock options or warrants were in-the-money as of March 31, 2022. Shares reserved for outstanding stock options and warrants totaling 7,032,375 at March 31, 2021 were excluded from the computation of income/(loss) per share as no stock options or warrants were in-the-money as of March 31, 2021. In calculating diluted earnings per share for the three months ended March 31, 2021, 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 March 31, 2022 and December 31, 2021. 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 Definite-lived intangible assets are amortized straight-line in accordance with their identified useful lives. Pursuant to ASC 350, these intangible assets are evaluated for impairment at least annually, or as indicators of impairment are identified. 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: warrant liability valuation, contingent purchase consideration valuation, 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. 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 condensed consolidated balance sheets. 10. Business Combinations Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Refer to Note 5, Business Combination |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 3: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently adopted On January 1, 2022, we early adopted Accounting Standards Update (“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) Not yet adopted 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 three months ended March 31, 2022 and 2021: (in thousands) Three Months Ended Three Months Ended Hardware $ 6,459 $ 2,816 Services: Installation Services 1,339 575 Software Development Services 191 274 Media Sales 65 - Managed Services 2,703 1,339 Total Services 4,298 2,188 Total Hardware and Services $ 10,757 $ 5,004 The italicized headers within this footnote represent separate performance obligations the Company may sell. When a contract includes more than one such element, the Company bifurcates these performance obligations according to our accounting policy and separately accounts for each. System hardware sales System hardware revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer. When hardware revenue is an element in a multiple-element performance obligation, including those sales in which the Company has bundled installation services, the recognition of system hardware revenue is recognized at completion of the installation services. 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. The aggregate amount of the transaction price allocated to installation service performance obligations that are partially unsatisfied as of March 31, 2022 and 2021 were $301 and $0, respectively. Software design and development services Software and software license sales are recognized as 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 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 revenues are classified as “Managed Services” within our disaggregated revenue. Maintenance and support services The Company sells maintenance and support services which include access to technical support personnel for software and hardware troubleshooting and monitoring of the health of a customer’s network, access to a sophisticated web-portal for managing the end-to-end hardware and software digital ecosystem, and hosting support services through our network operations center, or NOC. These services provide either physical or automated remote monitoring which support customer networks 7 days a week, 24 hours a day. These contracts are generally 12-36 months in length and generally automatically renew for additional 12-month periods unless cancelled by the customer. Rates for maintenance and support contracts are typically established based upon a fee per location or fee per device structure, with total fees subject to the number of services selected. Revenue is recognized ratably and evenly over the term of the agreement. Maintenance and Support revenues are classified as “Managed Services” within our disaggregated revenue. 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. Media Sales Through the Company’s acquisition of Reflect as a result of the Merger, the Company has the capability to assist its customers with designing, deploying and monetizing, through media services their digital advertising networks. This is executed through both subscription agreements to programmatic advertising content and through direct sales media agreements in which the Company sells ads on behalf of its clients to be deployed on those client networks. The Company and its clients operate these agreements on a revenue share basis. Media sales activities are classified as Services revenues. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | NOTE 5: BUSINESS COMBINATION On November 12, 2021, the Company and 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 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. Retention Bonus Plan On February 17, 2022, in connection with the closing of the Merger, the Company adopted a Retention Bonus Plan, pursuant to which the Company is required to pay to key members of Reflect’s management team an aggregate of $1,333 in cash, which was paid 50% at the closing of the Merger (the “Closing”), and subject to continuous employment with Reflect or Creative Realities, 25% on the one-year anniversary of Closing and 25% on the two-year anniversary of the Closing. The future cash payments due on the one-year and two-year anniversaries of the Closing have been deposited into an escrow agreement. The Retention Bonus Plan also requires the Company to issue Common Stock having an aggregate value of $667 to the plan participants as follows: 50% of the value of such shares were issued at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% of the value of such shares will be issued on the one-year anniversary of Closing and the remaining 25% of the value of such shares will be issued on the two-year anniversary of the Closing. The shares issued on the Closing were valued at $2.00 per share, and the shares to be issued after the Closing will be determined based on dividing the value of shares issuable on such date divided by the trailing 10-day volume weighted average price (VWAP) of the shares as of such date as reported on the Nasdaq Capital Market. Upon the resignation of a participant’s employment for “good reason,” or termination of the employment of a participant without “cause,” each as defined in the Retention Bonus Plan, the participant will be fully vested and will receive all cash and shares allocated to such participant under the Retention Bonus Plan. Any amounts unpaid by reason of a lapse in continuous employment or otherwise will be reallocated among the remaining Retention Bonus Plan participants. Secured Promissory Note On February 17, 2022, pursuant to the terms of the Merger, the Company issued to Stockholders’ Representative 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 15, 2022. Any remaining or unpaid principal shall be due and payable on February 17, 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 preliminary purchase price of Reflect consisted of the following items: (in thousands) Consideration Cash consideration for Reflect stock $ 16,664 (1) Cash consideration for Retention Bonus Plan 1,333 (2) Common stock issued to Reflect shareholders 4,667 (3) Common stock issued to Retention Bonus Plan 333 (4) Secured Promissory Note 2,500 (5) Earnout liability 5,600 (6) Total consideration 31,097 Cash acquired (813 ) (7) Net consideration transferred $ 30,284 (1) Cash consideration for outstanding shares of Reflect capital stock per Merger Agreement. (2) Cash consideration utilized to fund the Retention Bonus Plan per Merger Agreement. (3) Company common stock issued in exchange for outstanding shares of Reflect capital stock per Merger Agreement. (4) Company common stock issued to fund the Retention Bonus Plan per Merger Agreement. (5) 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 15, 2022. Any remaining or unpaid principal shall be due and payable on February 17, 2023. (6) Represents an estimate of the fair value of the Guaranteed Consideration as of the Merger, which, if any, is payable on or after the three-year anniversary of the effective time of the Merger (subject to the Extension Option), 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), subject to the terms of the Merger Agreement. (7) Represents the Reflect cash balance acquired at Closing. The Company incurred $391 of direct transaction costs for the three months ended March 31, 2022. These costs are included in deal and transaction expense in the accompanying Condensed Consolidated Statement of Operations. The Company accounted for the Merger using the acquisition method of accounting. The preliminary allocation of the purchase price is based on estimates of the fair value of assets acquired and liabilities assumed as of February 17, 2022. The Company is continuing to obtain information to determine the acquired assets and liabilities, including tax assets, liabilities and other attributes. The components of the preliminary purchase price allocation are as follows: (in thousands) Total Accounts receivable $ 1,823 Inventory 196 Prepaid expenses & other current assets 1,484 Property and equipment 96 Operating right of use assets 493 Deferred tax assets, net of valuation allowance - Other assets 36 Identified intangible assets: Definite-lived trade names 4,000 Definite-lived Developed technology 12,000 Definite-lived Customer relationships 5,000 Definite-lived Noncompete agreements 500 Goodwill 8,487 Accounts payable (104 ) Accrued expenses (314 ) Customer deposits (1,661 ) Deferred revenues (1,259 ) Current maturities of operating leases (277 ) Long-term obligations under operating leases (216 ) Net consideration transferred $ 30,284 The Company has engaged a third party valuation specialist to assist in the identification and calculation of the fair value of those separately identifiable intangible assets. The valuation procedures are not complete as of the time of this filing and, as such, preliminary valuations have been assigned based on internal financial models, cash projects, and historic retention information. The Company anticipates adjusting the values of these intangible assets, if any change is identified, through a measurement period to goodwill. Any adjustments to amortization expense will be recorded as an adjustment to the second quarter amortization expense. The Company anticipates completing the following valuation approaches by asset: ● Customer relationship asset will be estimated using the income approach through a discounted cash flow analysis wherein the cash flows will be based on estimates used to price the Merger. Discount rates applied will be benchmarked with reference to the implied rate of return from the Company’s pricing model and the weighted average cost of capital. ● Trade name asset represents the “Reflect” brand name as marketed primarily as a full services digital software solution, marketed in numerous verticals with the exception of food service. The Company will apply the income approach through an excess earnings analysis to determine the fair value of the trade name asset. The Company will apply the income approach through a relief-from-royalty analysis to determine the fair value of this asset. ● The developed technology assets are primarily comprised of know-how and functionality embedded in Reflect’s proprietary content management applications, which drive currently marketed products and services. The Company will apply the income approach through a relief-from-royalty analysis to determine the preliminary fair value of this asset. The Company is amortizing the identifiable intangible assets on a straight-line basis over the weighted average lives ranging from 5 to 10 years as outlined below. The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets: (in thousands) Preliminary Valuation Amortization Period Identifiable definite-lived intangible assets: Trade names $ 4,000 5 years Developed technology 12,000 7 years Noncompete 500 2 years Customer relationships 5,000 10 years Total $ 21,500 The Company estimated the preliminary fair value of the acquired property, plant and equipment using a combination of the cost and market approaches, depending on the component. The preliminary fair value of such property, plant and equipment is $96. The excess of the purchase price over the preliminary estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as goodwill and is subject to change upon final valuation. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Merger. These benefits include a comprehensive portfolio of iconic customer brands, complementary product offerings, enhanced national footprint, and attractive synergy opportunities and value creation. None of the goodwill is expected to be deductible for income tax purposes. The following unaudited pro forma information presents the combined financial results for the Company and Reflect as if the Merger had been completed at the beginning of the Company’s prior year, January 1, 2021. (in thousands, except earnings per common share) 2021 Net sales $ 30,680 Net income/(loss) $ 799 Earnings per common share $ 0.06 The information above does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information and does not reflect future events that may occur after December 31, 2021 or any operating efficiencies or inefficiencies that may result from the Merger and related financings. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that the Company will experience going forward. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 6: 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. As discussed in Note 5 Business Combinations As discussed in Note 8 Intangible Assets, Including Goodwill As discussed in Note 9 Loans Payable As discussed in Note 13 Warrants |
Supplemental Cash Flow Statemen
Supplemental Cash Flow Statement Information | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION | NOTE 7: SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION Three Months Ended March 31, 2022 2021 Supplemental Cash Flow Information Cash paid during the period for: Interest $ 321 $ - Income taxes, net $ - $ - |
Intangible Assets, Including Go
Intangible Assets, Including Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, INCLUDING GOODWILL | NOTE 8: INTANGIBLE ASSETS, INCLUDING GOODWILL Intangible Assets Intangible assets consisted of the following at March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform $ 16,635 3,930 $ 4,635 3,652 Purchased and developed software 3,725 2,874 3,488 2,713 In-Process internally developed software platform 1,362 - 824 - Customer relationships 8,960 1,802 3,960 1,692 Non-compete 500 31 - - Trademarks and trade names 4,640 740 640 640 35,822 9,377 13,547 8,697 Accumulated amortization 9,377 8,697 Net book value of amortizable intangible assets $ 26,445 $ 4,850 For the three months ended March 31, 2022, the Company added intangible assets as a result of accounting for the Merger in accordance with ASC 805 Business Combinations Business Combinations Both the intangible assets and the related amortization expense related to the Merger which were recorded during the three months ended March 31, 2022 represent estimates. The Company has engaged a third party valuation specialist to value the separately identifiable intangible assets. Any differences between the values initially recorded for the intangible assets as of the Merger and those as a result of the valuation report will be recorded as a measurement period adjustment through goodwill, including adjusting year-to-date amortization expense as a period expense, if applicable. 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. Following the Merger, the Company evaluated its reporting units in accordance with ASC 280 Segment Reporting |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 9: LOANS PAYABLE The outstanding debt with detachable warrants, as applicable, are shown in the table below. Further discussion of the notes follows. As of March 31, 2022 Debt Type Issuance Principal Maturity Warrants Interest Rate Information A 2/17/2022 10,000 2/15/2025 2,500,000 8.0% interest (1) B 2/17/2022 2,396 2/17/2023 - 0.59% interest (2) C 2/17/2022 7,185 2/15/2025 2,694,495 10.0% interest (3) Total debt, gross 19,581 5,194,495 Debt discount (4,156 ) Total debt, net $ 15,425 Less current maturities (2,396 ) Long term debt $ 13,029 As of December 31, 2021 Debt Type Issuance Principal Maturity Warrants Interest Rate Information D 8/17/2016 4,767 2/17/2025 588,236 8.0% interest (4) E 12/30/2019 2,418 2/17/2025 - 10.0% interest (4) Total debt, gross 7,185 588,236 Fair value (B) (166 ) Total debt, gross 7,019 Debt discount (144 ) Total debt, net $ 6,875 Less current maturities - Long term debt 6,875 A – Acquisition Loan B – Reflect Seller Secured Promissory Note C – Consolidation Term Loan D – Term Loan with related party E – Secured Convertible Special Loan Promissory Note, at fair value (1) 8.0% cash interest per annum through maturity at February 15, 2025. (2) 0.59% cash interest per annum (the applicable federal rate) through maturity at February 17, 2023. (3) 10.0% cash interest per annum through maturity at February 15, 2025. (4) Interest was paid-in-kind (“PIK”) through October 2021, at which point interest became payable in cash at the stated interest rates through maturity. 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 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, Creative Realities, Inc. received a notice from Old National Bank regarding forgiveness of the loan in the principal amount of $1,552 (the “PPP Loan”) that was made pursuant to the Small Business Administration Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act of 2020. According to such notice, the full principal amount of the PPP Loan and the accrued interest have been forgiven, resulting in a gain of $1,552 during the three months ended March 31, 2021. Secured Promissory Note On February 17, 2022, in connection with the closing of the Merger, 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% per annum (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 15, 2022. Any remaining or unpaid principal shall be due and payable on February 17, 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 Secured Promissory Note is secured by a first-lien security interest in certain contracts of Reflect, including obligations arising out of those certain contracts.. 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. 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). 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). The Company assessed the combination of the pre-existing senior secured term loan and secured convertible loan in accordance with ASC 470 Debt In addition to refinancing the existing debt with Slipstream, the Company issued to Slipstream a $10,000, 36-month senior secured term loan (the “Acquisition Loan”) resulting in $10,000 in gross proceeds, or $9,950 in net proceeds. The Acquisition Loan matures on February 17, 2025 (the “Maturity Date”)and has an interest rate of 8.0%, with 50.0% warrant coverage (or 2,500,000 warrants). 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. The warrants were assessed in accordance with ASC 470 and ASC 815 Derivatives 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. Loan and Security Agreement History Ninth, Tenth, Eleventh, Twelfth, and Thirteenth Amendment; Modification of Conversion Date of Special Loan under Loan and Security Agreement Prior to the execution of the Credit Agreement, Borrower and Slipstream were parties to a Loan and Security Agreement. On March 7, 2021, On February 28, 2021, January 31, 2021, December 31, 2020, November 30, 2020, and September 29, 2020, the parties entered into several amendments to the Loan and Security Agreement to amend the automatic conversion date of the Special Loan and, later, to eliminate the conversion feature. Each amendment extended the automatic conversion date of the Special Loan. The Company paid no fees in exchange for these extensions, with the exception of the March 7, 2021 extension which resulted in the Company recording of $133 of incremental debt discount, a net gain of $26 via the extinguishment of the Special Loan, and expense of $69 of costs incurred with third parties as a result of extinguishment of the Special Loan, modification of the New Term Loan, and extinguishment of the Disbursed Escrow Loan. 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 bore no interest. Upon entry into the 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 Shareholders Equity during the three months ended March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10: 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. This suit remains in the early stages of litigation with discovery requests ongoing, and, as a result, the outcome of the suit 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 recovery, if any, at the time of this filing. The Company has notified its insurance company on notice 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. 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 Report. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11: RELATED PARTY TRANSACTIONS We had no related party transactions beyond those financing transactions with Slipstream, a related party, discussed in Note 8 Loans Payable |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12: INCOME TAXES Our deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs). 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. 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 with a definite life. For the three months ended March 31, 2022, we reported tax liability of $0. As of March 31, 2022, the net deferred tax assets totaled $0 after valuation allowance, consistent with December 31, 2021. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2022 | |
Warrants [Abstract] | |
WARRANTS | NOTE 13: WARRANTS A summary of outstanding warrants is included below: Warrants (Equity) Amount Weighted Weighted Balance January 1, 2022 4,103,211 $ 4.48 1.73 Warrants issued 5,851,505 1.535 5.00 Warrants exercised (5,851,505 ) 1.535 4.86 Balance March 31, 2022 4,103,211 $ 4.15 1.48 Warrants (Liability) Amount Weighted Weighted Balance January 1, 2022 - $ - - Warrants issued 13,761,000 1.63 5.00 Warrants expired - - - Balance March 31, 2022 13,761,000 $ 1.63 4.86 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. The Company evaluated the Purchaser Warrant and concluded that it does not meet the criteria to be classified within stockholders’ equity. The Purchaser Warrant includes provisions which could result in a different settlement value, for the Purchaser Warrant depending on the registration status of the underlying shares. Because these conditions are not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Purchaser Warrant is not considered to be indexed to the Company’s own stock. The Company recorded these warrants as liabilities on the consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations at each reporting date. At the date of issuance, the Company performed a Black-Scholes valuation of the Purchaser Warrant, resulting in a fair value of $0.8656 per warrant. In recording the warrant liability, the Company recorded an expense in the Condensed Consolidated Statement of Operations associated with the issuance of the Purchaser Warrant of $1,211. At March 31, 2022, the Company reassessed the fair value of the Purchase Warrant via Black Scholes valuation methodology and determined that the fair value of the Purchaser Warrant was $0.5815 per warrant, resulting in the Company recording a gain on the fair value of the Purchaser Warrant of $398 in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2022. On February 3, 2022, the Company, entered into a 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. During the three months ended March 31, 2022, each of the Pre-Funded Warrants were exercised. The Common Stock Warrants expire five years from the date of issuance, The Company evaluated the Pre-Funded Warrants and concluded that they met the criteria to be classified within stockholders’ equity, with proceeds recorded as common stock and additional paid-in-capital. The Company evaluated the Common Stock Warrant and concluded they do not meet the criteria to be classified within stockholders’ equity. The Common Stock Warrant include provisions which could result in a different settlement value, for the Common Stock Warrant depending on the registration status of the underlying shares. Because these conditions are not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Common Stock Warrant is not considered to be indexed to the Company’s own stock. The Company recorded these warrants as liabilities on the consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations at each reporting date. At the date of issuance, the Company performed a Black-Scholes valuation of the warrants, resulting in a fair value of $1.0927 per warrant. At March 31, 2022, the Company reassessed the fair value of these warrants via Black Scholes valuation methodology and determined that the fair value of these warrants was $0.5815 per warrant, resulting in the Company recording a gain on the fair value of these warrants of $3,664 in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2022. 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 (the “Lender Warrant”). These warrants are not exercisable until 180 days after the issuance date. The common shares underlying these warrants have not yet been registered for resale under the Securities Act of 1933, which provides Slipstream with an option for cashless exercise once the warrant becomes exercisable until such time as such registration occurs. The warrants issued to Slipstream expire five years from the date of issuance. The Company evaluated the Lender Warrant and concluded that it does not meet the criteria to be classified within stockholders’ equity. The Lender Warrant includes provisions which could result in a different settlement value, for the Lender Warrant depending on the registration status of the underlying shares. Because these conditions are not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Lender Warrant is not considered to be indexed to the Company’s own stock. The Company recorded these warrants as liabilities on the consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations at each reporting date. At the date of issuance, the Company performed a Black-Scholes valuation of the warrants, resulting in a fair value of $0.8129 per warrant. In recording the warrant liability, the Company recorded an increased in debt discount in the Condensed Consolidated Balance Sheet associated with the issuance of the warrants of $4,223, which is being amortized through interest expense in the Condensed Consolidated Statement of Operations over the life of the Acquisition and Consolidation Term Loans. At March 31, 2022, the Company reassessed the fair value of these warrants via Black Scholes valuation methodology and determined that the fair value of these warrants was $0.5420 per warrant, resulting in the Company recording a gain on the fair value of these warrants of $1,408 in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2022. As of March 31, 2022, there remained outstanding 597,678 warrants which contain weighted average anti-dilution protection. During the three months ended March 31, 2022, those warrants were subject to a downward adjustment in their strike price following completion of the Company’s issuance of common stock and warrants in (1) the Merger, (2) the Debt Offering, and (3) the Equity Offering – each in February 2022. The strike prices prior to adjustment ranged from $5.61 and $5.76 and were adjusted to between $3.41 and $3.48. The remaining weighted-average contractual life of warrants subject to weighted average anti-dilution protection is 0.67 years as of March 31, 2022. The repricing resulted in a reclassification of $31 between retained earnings and additional paid in capital during the three months ended March 31, 2022. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 14: STOCK-BASED COMPENSATION A summary of outstanding options 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 8.74 $ 2.59 628,333 $ 3.44 $3.01 - $7.50 184,830 4.10 $ 6.72 176,497 $ 6.69 $7.51+ 103,979 3.20 11.55 103,845 $ 11.55 2,068,675 7.43 $ 3.51 908,675 Performance 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 - $3.00 800,000 8.18 $ 2.53 266,667 $ 2.53 800,000 8.18 $ 2.53 266,667 Time Vesting Options Performance Vesting Options Weighted Weighted Average Average Options Exercise Options Exercise Date/Activity Outstanding Price Outstanding Price Balance, December 31, 2021 2,068,809 $ 3.48 800,000 $ 2.53 Granted - - - - Exercised - - - Forfeited or expired (134 ) 160.50 - - Balance, March 31, 2022 1,813,809 3.48 800,000 $ 2.53 The weighted average remaining contractual life for options exercisable is 7.26 years as of March 31, 2022. Valuation Information for Stock-Based Compensation For purposes of determining estimated fair value under FASB ASC 718-10, Stock Compensation 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 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 exercise price of the foregoing options is $2.53 per share, the closing price of the Company’s common stock on the date of issuance. 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. During the three months ended March 31, 2022, the Company deemed it probable that the Company would achieve both the Revenue and EBITDA targets for Calendar Year 2022 and recorded catch-up compensation expense in the Condensed Consolidated Statement of Operations with respect to these awards of $112 during the three months ended March 31, 2022, specifically related to the Revenue Target. These awards have not yet vested and are subject to actual results for the full fiscal year 2022. Should this target not be achieved, amounts recorded as expense in the Condensed Consolidated Statement of Operations would be reversed. The Company anticipates recording approximately $225 during each subsequent quarter of 2022 related to the Revenue target for Calendar Year 2020 and 2021 portion of these awards. During the three months ended March 31, 2021, the Company deemed it probable that the Company would achieve the EBITDA target for Calendar Year 2021 and recorded catch-up compensation expense in the Consolidated Statement of Operations with respect to these awards of $263 during the three months ended March 31, 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 2,696, 674 Compensation expense recognized for the issuance of stock options, including those options awarded to our Board, for the three months ended March 31, 2022 and 2021 of $646 and $539, respectively, was included in general and administrative expense in the Condensed Consolidated Statement of Operations. Amounts recorded include stock compensation expense for awards granted to directors of the Company in exchange for services at fair value of $82 and $27 for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, there was approximately $1,420 and $674 of total unrecognized compensation expense related to unvested share-based awards with time vesting and performance vesting criteria, respectively. As of March 31, 2021, there was approximately $2,113 and $1,236 of total unrecognized compensation expense related to unvested share-based awards with time vesting and performance vesting criteria, 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. |
Significant Customers_Vendors
Significant Customers/Vendors | 3 Months Ended |
Mar. 31, 2022 | |
Significant Customersvendors [Abstract] | |
SIGNIFICANT CUSTOMERS/VENDORS | NOTE 15: SIGNIFICANT CUSTOMERS/VENDORS Significant Customers We had three (3) and two (2) customers that in the aggregate accounted for 62.5% and 41.1% of accounts receivable as of March 31, 2022 and December 31, 2021, respectively. We had three (3) and two (2) customers that accounted for 70% and 40% of revenue for the three months ended March 31, 2022 and 2021, respectively. Significant Vendors We had two (2) and three (3) vendors that accounted for 57.9% and 69.1% of outstanding accounts payable at March 31, 2022 and December 31, 2021, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 16: 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 2021 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) Three Months Ended Three Months Ended Finance lease cost Amortization of right-of-use assets $ - $ 4 Interest - - Operating lease cost 99 84 Total lease cost $ 99 $ 88 Weighted Average Remaining Lease Term Operating leases 2.24 3.4 years Weighted Average Discount Rate Operating leases 10.0 % 10.0 % The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2022: (in thousands) Operating The remainder of 2022 $ 442 2023 594 2024 85 2025 78 Thereafter - Total undiscounted cash flows 1,199 Less imputed interest $ (126 ) Present value of lease liabilities $ 1,073 Supplemental cash flow information related to leases are as follows: (in thousands) Three Three Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75 $ 90 Operating cash flows from finance leases - 4 Financing cash flows from finance leases - (4 ) |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the applicable instructions to Form 10-Q and 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 interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 22, 2022. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented. |
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. See Note 4 Revenue 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, 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 net realizable value, determined by the first-in, first-out (FIFO) method, and consist of the following: March 31, December 31, 2022 2021 Raw materials, including those on consignment, net of reserve of $628 and $502, respectively $ 1,765 $ 1,583 Work-in-process 259 297 Total inventories $ 2,024 $ 1,880 |
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 Earnings/(Loss) per Common Share | 5. Basic and Diluted Earnings/(Loss) per Common Share Basic and diluted earnings/(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 and warrants totaling 20,732,886 at March 31, 2022 were excluded from the computation of income/(loss) per share as no stock options or warrants were in-the-money as of March 31, 2022. Shares reserved for outstanding stock options and warrants totaling 7,032,375 at March 31, 2021 were excluded from the computation of income/(loss) per share as no stock options or warrants were in-the-money as of March 31, 2021. In calculating diluted earnings per share for the three months ended March 31, 2021, 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 March 31, 2022 and December 31, 2021. |
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 Definite-lived intangible assets are amortized straight-line in accordance with their identified useful lives. Pursuant to ASC 350, these intangible assets are evaluated for impairment at least annually, or as indicators of impairment are identified. |
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: warrant liability valuation, contingent purchase consideration valuation, 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. |
Leases | 9. 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 condensed consolidated balance sheets. |
Business Combinations | 10. Business Combinations Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Refer to Note 5, Business Combination |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of inventories | March 31, December 31, 2022 2021 Raw materials, including those on consignment, net of reserve of $628 and $502, respectively $ 1,765 $ 1,583 Work-in-process 259 297 Total inventories $ 2,024 $ 1,880 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of revenue by major source | (in thousands) Three Months Ended Three Months Ended Hardware $ 6,459 $ 2,816 Services: Installation Services 1,339 575 Software Development Services 191 274 Media Sales 65 - Managed Services 2,703 1,339 Total Services 4,298 2,188 Total Hardware and Services $ 10,757 $ 5,004 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of preliminary purchase price of Reflect | (in thousands) Consideration Cash consideration for Reflect stock $ 16,664 (1) Cash consideration for Retention Bonus Plan 1,333 (2) Common stock issued to Reflect shareholders 4,667 (3) Common stock issued to Retention Bonus Plan 333 (4) Secured Promissory Note 2,500 (5) Earnout liability 5,600 (6) Total consideration 31,097 Cash acquired (813 ) (7) Net consideration transferred $ 30,284 (1) Cash consideration for outstanding shares of Reflect capital stock per Merger Agreement. (2) Cash consideration utilized to fund the Retention Bonus Plan per Merger Agreement. (3) Company common stock issued in exchange for outstanding shares of Reflect capital stock per Merger Agreement. (4) Company common stock issued to fund the Retention Bonus Plan per Merger Agreement. (5) 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 15, 2022. Any remaining or unpaid principal shall be due and payable on February 17, 2023. (6) Represents an estimate of the fair value of the Guaranteed Consideration as of the Merger, which, if any, is payable on or after the three-year anniversary of the effective time of the Merger (subject to the Extension Option), 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), subject to the terms of the Merger Agreement. (7) Represents the Reflect cash balance acquired at Closing. |
Schedule of preliminary purchase price allocation | (in thousands) Total Accounts receivable $ 1,823 Inventory 196 Prepaid expenses & other current assets 1,484 Property and equipment 96 Operating right of use assets 493 Deferred tax assets, net of valuation allowance - Other assets 36 Identified intangible assets: Definite-lived trade names 4,000 Definite-lived Developed technology 12,000 Definite-lived Customer relationships 5,000 Definite-lived Noncompete agreements 500 Goodwill 8,487 Accounts payable (104 ) Accrued expenses (314 ) Customer deposits (1,661 ) Deferred revenues (1,259 ) Current maturities of operating leases (277 ) Long-term obligations under operating leases (216 ) Net consideration transferred $ 30,284 |
Schedule of preliminary valuation and amortization period of identifiable intangible assets | (in thousands) Preliminary Valuation Amortization Period Identifiable definite-lived intangible assets: Trade names $ 4,000 5 years Developed technology 12,000 7 years Noncompete 500 2 years Customer relationships 5,000 10 years Total $ 21,500 |
Schedule of unaudited pro forma | (in thousands, except earnings per common share) 2021 Net sales $ 30,680 Net income/(loss) $ 799 Earnings per common share $ 0.06 |
Supplemental Cash Flow Statem_2
Supplemental Cash Flow Statement Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow statement information | Three Months Ended March 31, 2022 2021 Supplemental Cash Flow Information Cash paid during the period for: Interest $ 321 $ - Income taxes, net $ - $ - |
Intangible Assets, Including _2
Intangible Assets, Including Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | March 31, December 31, 2022 2021 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform $ 16,635 3,930 $ 4,635 3,652 Purchased and developed software 3,725 2,874 3,488 2,713 In-Process internally developed software platform 1,362 - 824 - Customer relationships 8,960 1,802 3,960 1,692 Non-compete 500 31 - - Trademarks and trade names 4,640 740 640 640 35,822 9,377 13,547 8,697 Accumulated amortization 9,377 8,697 Net book value of amortizable intangible assets $ 26,445 $ 4,850 |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt with detachable warrants | As of March 31, 2022 Debt Type Issuance Principal Maturity Warrants Interest Rate Information A 2/17/2022 10,000 2/15/2025 2,500,000 8.0% interest (1) B 2/17/2022 2,396 2/17/2023 - 0.59% interest (2) C 2/17/2022 7,185 2/15/2025 2,694,495 10.0% interest (3) Total debt, gross 19,581 5,194,495 Debt discount (4,156 ) Total debt, net $ 15,425 Less current maturities (2,396 ) Long term debt $ 13,029 As of December 31, 2021 Debt Type Issuance Principal Maturity Warrants Interest Rate Information D 8/17/2016 4,767 2/17/2025 588,236 8.0% interest (4) E 12/30/2019 2,418 2/17/2025 - 10.0% interest (4) Total debt, gross 7,185 588,236 Fair value (B) (166 ) Total debt, gross 7,019 Debt discount (144 ) Total debt, net $ 6,875 Less current maturities - Long term debt 6,875 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Warrants [Abstract] | |
Schedule of outstanding warrants | Warrants (Equity) Amount Weighted Weighted Balance January 1, 2022 4,103,211 $ 4.48 1.73 Warrants issued 5,851,505 1.535 5.00 Warrants exercised (5,851,505 ) 1.535 4.86 Balance March 31, 2022 4,103,211 $ 4.15 1.48 Warrants (Liability) Amount Weighted Weighted Balance January 1, 2022 - $ - - Warrants issued 13,761,000 1.63 5.00 Warrants expired - - - Balance March 31, 2022 13,761,000 $ 1.63 4.86 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock options outstanding | Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.01 - $3.00 1,780,000 8.74 $ 2.59 628,333 $ 3.44 $3.01 - $7.50 184,830 4.10 $ 6.72 176,497 $ 6.69 $7.51+ 103,979 3.20 11.55 103,845 $ 11.55 2,068,675 7.43 $ 3.51 908,675 Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.01 - $3.00 800,000 8.18 $ 2.53 266,667 $ 2.53 800,000 8.18 $ 2.53 266,667 |
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, 2021 2,068,809 $ 3.48 800,000 $ 2.53 Granted - - - - Exercised - - - Forfeited or expired (134 ) 160.50 - - Balance, March 31, 2022 1,813,809 3.48 800,000 $ 2.53 |
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) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of components of lease costs, lease term and discount rate | (in thousands) Three Months Ended Three Months Ended Finance lease cost Amortization of right-of-use assets $ - $ 4 Interest - - Operating lease cost 99 84 Total lease cost $ 99 $ 88 Weighted Average Remaining Lease Term Operating leases 2.24 3.4 years Weighted Average Discount Rate Operating leases 10.0 % 10.0 % |
Schedule of maturities of lease liabilities | (in thousands) Operating The remainder of 2022 $ 442 2023 594 2024 85 2025 78 Thereafter - Total undiscounted cash flows 1,199 Less imputed interest $ (126 ) Present value of lease liabilities $ 1,073 |
Schedule of cash flow information related to leases | (in thousands) Three Three Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75 $ 90 Operating cash flows from finance leases - 4 Financing cash flows from finance leases - (4 ) |
Nature of Organization and Op_2
Nature of Organization and Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 17, 2022 | Feb. 03, 2022 | Feb. 17, 2022 | Mar. 31, 2022 |
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 the effective time of the Merger collectively received from the Company, in the aggregate, the following Merger consideration: (i) $16,166 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 | |||
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 offering expenses payable by the Company. Net proceeds to the Company were $10,160. The remaining exercise price for the Pre-Funded Warrant was $0.0001. Collectively, we refer to this transaction throughout this filing as the “Equity Financing”. The net proceeds from the Private Placement were used to fund, in part, payment of the closing cash consideration in the Merger. | |||
Net proceeds | $ 10,160 | |||
Remaining exercise price per shares (in Dollars per share) | $ 0.0001 | |||
Gross proceeds | $ 10,000 | $ 10,000 | ||
Secured term loan | 4,767 | 4,767 | ||
Secured convertible loan | 2,418 | $ 2,418 | ||
Outstanding balance of principal | 7,185 | |||
Security agreement | $ 2,500 | |||
Promissory note accrues interest | 0.59% | |||
Principal installments | $ 104 | |||
Cash and cash equivalents | $ 5,988 | |||
Working capital surplus | $ 2,288 | |||
Maturity date | Feb. 1, 2025 | Feb. 17, 2025 | ||
Retention Bonus Plan [Member] | ||||
Nature of Organization and Operations (Details) [Line Items] | ||||
Merger agreement description | the Company adopted a Retention Bonus Plan, pursuant to which the Company is required to pay to key members of Reflect’s management team an aggregate of $1,333 in cash, which was paid 50% at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% on the one-year anniversary of Closing and 25% on the two-year anniversary of the Closing. The future cash payments due on the one-year and two-year anniversaries of the Closing have been deposited into an escrow agreement. The Retention Bonus Plan also requires the Company to issue Common Stock having an aggregate value of $667 to the plan participants as follows: 50% of the value of such shares were issued at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% of the value of such shares will be issued on the one-year anniversary of Closing and the remaining 25% of the value of such shares will be issued on the two-year anniversary of the Closing. The shares issued on the Closing were valued at $2.00 per share, and the shares to be issued after the Closing will be determined based on dividing the value of shares issuable on such date divided by the trailing 10-day volume weighted average price (VWAP) of the shares as of such date as reported on the Nasdaq Capital Market. | |||
Extension Option [Member] | ||||
Nature of Organization and Operations (Details) [Line Items] | ||||
Guaranteed price percentage | 70.00% | |||
Nasdaq Capital Market [Member] | ||||
Nature of Organization and Operations (Details) [Line Items] | ||||
Guaranteed price percentage | 80.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - shares | Mar. 31, 2022 | Mar. 31, 2021 |
Accounting Policies [Abstract] | ||
Outstanding stock options and warrants | 20,732,886 | 7,032,375 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of inventories - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of inventories [Abstract] | ||
Raw materials, including those on consignment, net of reserve of $628 and $502, respectively | $ 1,765 | $ 1,583 |
Work-in-process | 259 | 297 |
Total inventories | $ 2,024 | $ 1,880 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of inventories (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of inventories [Abstract] | ||
Raw materials, net of reserve | $ 628 | $ 502 |
Revenue Recognition (Details)
Revenue Recognition (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition [Abstract] | |
Installation service performance obligations, description | The aggregate amount of the transaction price allocated to installation service performance obligations that are partially unsatisfied as of March 31, 2022 and 2021 were $301 and $0, respectively. |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of revenue by major source - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Hardware | $ 6,459 | $ 2,816 |
Total Services | 4,298 | 2,188 |
Total Hardware and Services | 10,757 | 5,004 |
Installation Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | 1,339 | 575 |
Software Development Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | 191 | 274 |
Media Sales [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | 65 | |
Managed Services [Member] | ||
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items] | ||
Total Services | $ 2,703 | $ 1,339 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2022 | Feb. 17, 2022 | Mar. 31, 2022 |
Business Combination (Details) [Line Items] | |||
Merger agreement | Subject to the terms and conditions of the Merger Agreement, upon the closing of the Merger, Reflect stockholders as of 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. | ||
Extend the guarantee date description | 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. | ||
Retention bonus plan description | the Company is required to pay to key members of Reflect’s management team an aggregate of $1,333 in cash, which was paid 50% at the closing of the Merger (the “Closing”), and subject to continuous employment with Reflect or Creative Realities, 25% on the one-year anniversary of Closing and 25% on the two-year anniversary of the Closing. The future cash payments due on the one-year and two-year anniversaries of the Closing have been deposited into an escrow agreement. The Retention Bonus Plan also requires the Company to issue Common Stock having an aggregate value of $667 to the plan participants as follows: 50% of the value of such shares were issued at the Closing, and subject to continuous employment with Reflect or Creative Realities, 25% of the value of such shares will be issued on the one-year anniversary of Closing and the remaining 25% of the value of such shares will be issued on the two-year anniversary of the Closing. The shares issued on the Closing were valued at $2.00 per share, and the shares to be issued after the Closing will be determined based on dividing the value of shares issuable on such date divided by the trailing 10-day volume weighted average price (VWAP) of the shares as of such date as reported on the Nasdaq Capital Market. | ||
Security agreement amount | $ 2,500 | ||
Interest percentage | 0.59% | ||
Principal installments amount | $ 104 | ||
Merger shares, per share (in Dollars per share) | $ 6.4 | ||
Billable devices (in Shares) | 85,000 | ||
Guarnteed price per share (in Dollars per share) | $ 7.2 | ||
Direct transaction costs | $ 391 | ||
Fair value of property, plant and equipment | $ 96 | ||
Minimum [Member] | |||
Business Combination (Details) [Line Items] | |||
Weighted average lives ranging | 5 years | ||
Maximum [Member] | |||
Business Combination (Details) [Line Items] | |||
Weighted average lives ranging | 10 years | ||
Secured Debt [Member] | |||
Business Combination (Details) [Line Items] | |||
Interest percentage | 0.59% | ||
Principal installments amount | $ 104 |
Business Combination (Details)
Business Combination (Details) - Schedule of preliminary purchase price of Reflect $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($) | ||
Schedule of preliminary purchase price of Reflect [Abstract] | ||
Cash consideration for Reflect stock | $ 16,664 | [1] |
Cash consideration for Retention Bonus Plan | 1,333 | [2] |
Common stock issued to Reflect shareholders | 4,667 | [3] |
Common stock issued to Retention Bonus Plan | 333 | [4] |
Secured Promissory Note | 2,500 | [5] |
Earnout liability | 5,600 | [6] |
Total consideration | 31,097 | |
Cash acquired | (813) | [7] |
Net consideration transferred | $ 30,284 | |
[1] | Cash consideration for outstanding shares of Reflect capital stock per Merger Agreement. | |
[2] | Cash consideration utilized to fund the Retention Bonus Plan per Merger Agreement. | |
[3] | Company common stock issued in exchange for outstanding shares of Reflect capital stock per Merger Agreement. | |
[4] | Company common stock issued to fund the Retention Bonus Plan per Merger Agreement. | |
[5] | 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 15, 2022. Any remaining or unpaid principal shall be due and payable on February 17, 2023. | |
[6] | Represents an estimate of the fair value of the Guaranteed Consideration as of the Merger, which, if any, is payable on or after the three-year anniversary of the effective time of the Merger (subject to the Extension Option), 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), subject to the terms of the Merger Agreement. | |
[7] | Represents the Reflect cash balance acquired at Closing. |
Business Combination (Details_2
Business Combination (Details) - Schedule of preliminary purchase price allocation $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Schedule of preliminary purchase price allocation [Abstract] | |
Accounts receivable | $ 1,823 |
Inventory | 196 |
Prepaid expenses & other current assets | 1,484 |
Property and equipment | 96 |
Operating right of use assets | 493 |
Deferred tax assets, net of valuation allowance | |
Other assets | 36 |
Definite-lived trade names | 4,000 |
Definite-lived Developed technology | 12,000 |
Definite-lived Customer relationships | 5,000 |
Definite-lived Noncompete agreements | 500 |
Goodwill | 8,487 |
Accounts payable | (104) |
Accrued expenses | (314) |
Customer deposits | (1,661) |
Deferred revenues | (1,259) |
Current maturities of operating leases | (277) |
Long-term obligations under operating leases | (216) |
Net consideration transferred | $ 30,284 |
Business Combination (Details_3
Business Combination (Details) - Schedule of preliminary valuation and amortization period of identifiable intangible assets $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Identifiable definite-lived intangible assets: | |
Preliminary Valuation | $ 21,500 |
Trade names [Member] | |
Identifiable definite-lived intangible assets: | |
Preliminary Valuation | $ 4,000 |
Amortization Period | 5 years |
Developed technology [Member] | |
Identifiable definite-lived intangible assets: | |
Preliminary Valuation | $ 12,000 |
Amortization Period | 7 years |
Noncompete [Member] | |
Identifiable definite-lived intangible assets: | |
Preliminary Valuation | $ 500 |
Amortization Period | 2 years |
Customer relationships [Member] | |
Identifiable definite-lived intangible assets: | |
Preliminary Valuation | $ 5,000 |
Amortization Period | 10 years |
Business Combination (Details_4
Business Combination (Details) - Schedule of unaudited pro forma - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule of unaudited pro forma [Abstract] | |||
Net sales | $ 30,680 | ||
Net income/(loss) | $ 2,502 | $ 1,272 | $ 799 |
Earnings per common share (in Dollars per share) | $ 0.17 | $ 0.11 | $ 0.06 |
Supplemental Cash Flow Statem_3
Supplemental Cash Flow Statement Information (Details) - Schedule of supplemental cash flow statement information - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid during the period for: | ||
Interest | $ 321 | |
Income taxes, net |
Intangible Assets, Including _3
Intangible Assets, Including Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 680 | $ 140 |
Intangible Assets, Including _4
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | $ 35,822 | $ 13,547 |
Accumulated Amortization | 9,377 | 8,697 |
Gross Carrying Amount, Accumulated amortization | 9,377 | 8,697 |
Net book value of amortizable intangible assets | 26,445 | 4,850 |
Technology platform [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 16,635 | 4,635 |
Accumulated Amortization | 3,930 | 3,652 |
Purchased and developed software [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 3,725 | 3,488 |
Accumulated Amortization | 2,874 | 2,713 |
In-Process internally developed software platform [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 1,362 | 824 |
Accumulated Amortization | ||
Customer relationships [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 8,960 | 3,960 |
Accumulated Amortization | 1,802 | 1,692 |
Non-compete [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 500 | |
Accumulated Amortization | 31 | |
Trademarks and trade names [Member] | ||
Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Amount | 4,640 | 640 |
Accumulated Amortization | $ 740 | $ 640 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 17, 2022 | Apr. 27, 2020 | Jun. 30, 2018 | Mar. 31, 2022 | |
Loans Payable (Details) [Line Items] | ||||
Loans payable description | (1)8.0% cash interest per annum through maturity at February 15, 2025.(2)0.59% cash interest per annum (the applicable federal rate) through maturity at February 17, 2023.(3)10.0% cash interest per annum through maturity at February 15, 2025.(4)Interest was paid-in-kind (“PIK”) through October 2021, at which point interest became payable in cash at the stated interest rates through maturity. | |||
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 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. | |||
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). 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). The Company assessed the combination of the pre-existing senior secured term loan and secured convertible loan in accordance with ASC 470 Debt and determined the transaction should be accounted for as an extinguishment, in part as the Consolidation Term Loan eliminated a substantive conversion feature. In aggregate the Company recorded a loss on extinguishment of $295, primarily associated with the write-off of pre-existing debt discounts. | |||
Existing debt | $ 10,000,000 | |||
Gross proceeds | 10,000,000 | |||
Net proceeds | $ 9,950,000 | |||
Acquisition loan interest rate percentage | 8.00% | |||
Warrant coverage percentage | 50.00% | |||
Warrant shares (in Shares) | 2,500,000 | |||
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. | |||
Fair value of per warrant (in Dollars per share) | $ 0.8129 | |||
Incremental interest expense | $ 162,000 | |||
Loan and security agreement description | The Company paid no fees in exchange for these extensions, with the exception of the March 7, 2021 extension which resulted in the Company recording of $133 of incremental debt discount, a net gain of $26 via the extinguishment of the Special Loan, and expense of $69 of costs incurred with third parties as a result of extinguishment of the Special Loan, modification of the New Term Loan, and extinguishment of the Disbursed Escrow Loan. | |||
Vesting of performance shares previously granted to CEO | $ 264,000 | |||
Maturity date | Feb. 1, 2025 | Feb. 17, 2025 | ||
Minimum [Member] | ||||
Loans Payable (Details) [Line Items] | ||||
Consolidation term loans | $ 2,032,000 | |||
Maximum [Member] | ||||
Loans Payable (Details) [Line Items] | ||||
Consolidation term loans | $ 2,190,000 | |||
Secured Promissory Note [Member] | ||||
Loans Payable (Details) [Line Items] | ||||
Agreement shares issued | $ 2,500 | |||
Interest rate | 0.59% |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Feb. 17, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | ||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Maturity Date | Feb. 1, 2025 | Feb. 17, 2025 | ||
Issuance Date | Total debt, gross | Total debt, gross | ||
Total debt, gross | $ 19,581 | $ 7,185 | ||
Total debt, gross | 5,194,495 | 588,236 | ||
Issuance Date | Fair value (B) | |||
Fair value | $ (166) | |||
Total debt, gross | $ 7,019 | |||
Issuance Date | Debt discount | Debt discount | ||
Debt discount | $ (4,156) | $ (144) | ||
Issuance Date | Total debt, net | Total debt, net | ||
Total debt, net | $ 15,425 | $ 6,875 | ||
Issuance Date | Less current maturities | Less current maturities | ||
Less current maturities | $ (2,396) | |||
Issuance Date | Long term debt | Long term debt | ||
Long term debt | $ 13,029 | $ 6,875 | ||
2/17/2022 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | A | |||
Issuance Date | Feb. 17, 2022 | |||
Principal | $ 10,000 | |||
Maturity Date | Feb. 15, 2025 | |||
Warrants | 2,500,000 | |||
Interest Rate Information | [1] | 8.0% interest(1) | ||
2/17/2022 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | B | |||
Issuance Date | Feb. 17, 2022 | |||
Principal | $ 2,396 | |||
Maturity Date | Feb. 17, 2023 | |||
Warrants | ||||
Interest Rate Information | [2] | 0.59% interest (2) | ||
2/17/2022 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | C | |||
Issuance Date | Feb. 17, 2022 | |||
Principal | $ 7,185 | |||
Maturity Date | Feb. 15, 2025 | |||
Warrants | 2,694,495 | |||
Interest Rate Information | [3] | 10.0% interest(3) | ||
8/17/2016 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | D | |||
Issuance Date | Aug. 17, 2016 | |||
Principal | $ 4,767 | |||
Maturity Date | Feb. 17, 2025 | |||
Warrants | 588,236 | |||
Interest Rate Information | [4] | 8.0% interest(4) | ||
12/30/2019 [Member] | ||||
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items] | ||||
Debt Type | E | |||
Issuance Date | Dec. 30, 2019 | |||
Principal | $ 2,418 | |||
Maturity Date | Feb. 17, 2025 | |||
Warrants | ||||
Interest Rate Information | [4] | 10.0% interest(4) | ||
[1] | 8.0% cash interest per annum through maturity at February 15, 2025. | |||
[2] | 0.59% cash interest per annum (the applicable federal rate) through maturity at February 17, 2023. | |||
[3] | 10.0% cash interest per annum through maturity at February 15, 2025. | |||
[4] | Interest was paid-in-kind (“PIK”) through October 2021, at which point interest became payable in cash at the stated interest rates through maturity. |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended |
Oct. 10, 2019USD ($) | |
Allure [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Settlement for an alleged breach of contract | $ 3,200 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Income Tax Disclosure [Abstract] | |
Tax liability | $ 0 |
Deferred tax assets | $ 0 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 17, 2022 | Feb. 03, 2022 | Mar. 31, 2022 | Aug. 17, 2022 |
Warrants (Details) [Line Items] | ||||
Purchase of common stock (in Shares) | 1,400,000 | |||
Date of issuance | 5 years | |||
Fair value price per share | $ 0.8656 | $ 0.5815 | ||
Issuance of warrants (in Dollars) | $ 1,211 | $ 398 | ||
Securities purchase agreement, description | the Company, entered into a 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 | $ 2 | |||
Outstanding warrants (in Shares) | 597,678 | |||
Weighted-average contractual life of warrants | 8 months 1 day | |||
Repricing amount (in Dollars) | $ 31 | |||
Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Warrant waiver fee (in Dollars) | $ (175) | |||
Exercise price per share | $ 0.125 | |||
Warrant term | 5 years | |||
Purchaser Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Exercise price per share | $ 1.41 | |||
Minimum [Member] | ||||
Warrants (Details) [Line Items] | ||||
Strike prices | $ 3.41 | |||
Minimum [Member] | Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Strike prices | 5.61 | |||
Maximum [Member] | ||||
Warrants (Details) [Line Items] | ||||
Strike prices | 3.48 | |||
Maximum [Member] | Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Strike prices | 5.76 | |||
Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Date of issuance | 5 years | |||
Fair value price per share | $ 0.8129 | 1.0927 | ||
Issuance of warrants (in Dollars) | $ 4,223 | |||
Black-Scholes [Member] | ||||
Warrants (Details) [Line Items] | ||||
Date of issuance | 5 years | |||
Black Scholes One [Member] | ||||
Warrants (Details) [Line Items] | ||||
Fair value price per share | $ 0.5815 | |||
Issuance of warrants (in Dollars) | $ 3,664 | |||
Black Scholes Two [Member] | ||||
Warrants (Details) [Line Items] | ||||
Fair value price per share | $ 0.542 | |||
Issuance of warrants (in Dollars) | $ 1,408 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of outstanding warrants | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Warrants (Equity) [Member] | |
Class of Warrant or Right [Line Items] | |
Number of Shares, Warrants, Beginning Balance | shares | 4,103,211 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 4.48 |
Weighted Average Remaining Contractual Life, Beginning Balance | 1 year 8 months 23 days |
Number of Shares, Warrants issued | shares | 5,851,505 |
Weighted Average Exercise Price, Warrants issued | $ / shares | $ 1.535 |
Weighted Average Remaining Contractual Life, Warrants issued | 5 years |
Number of Shares, Warrants expired | shares | (5,851,505) |
Weighted Average Exercise Price, Warrants expired | $ / shares | $ 1.535 |
Weighted Average Remaining Contractual Life, Warrants expired | 4 years 10 months 9 days |
Number of Shares, Warrants, Ending Balance | shares | 4,103,211 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 4.15 |
Weighted Average Remaining Contractual Life, Ending Balance | 1 year 5 months 23 days |
Warrants (Liability) [Member] | |
Class of Warrant or Right [Line Items] | |
Number of Shares, Warrants, Beginning Balance | shares | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | |
Weighted Average Remaining Contractual Life, Beginning Balance | |
Number of Shares, Warrants issued | shares | 13,761,000 |
Weighted Average Exercise Price, Warrants issued | $ / shares | $ 1.63 |
Weighted Average Remaining Contractual Life, Warrants issued | 5 years |
Number of Shares, Warrants expired | shares | |
Weighted Average Exercise Price, Warrants expired | $ / shares | |
Weighted Average Remaining Contractual Life, Warrants expired | |
Number of Shares, Warrants, Ending Balance | shares | 13,761,000 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 1.63 |
Weighted Average Remaining Contractual Life, Ending Balance | 4 years 10 months 9 days |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 01, 2020 | Jul. 10, 2020 | Aug. 31, 2018 | Oct. 31, 2014 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Stock-Based Compensation (Details) [Line Items] | |||||||
Weighted average remaining contractual life | 7 years 3 months 3 days | ||||||
Granting options | 10 years | ||||||
Purchase an aggregate | 2,380,000 | ||||||
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 | ||||||
Compensation expense (in Dollars) | $ 112 | $ 263 | |||||
Revenue target (in Dollars) | 225 | ||||||
Options outstanding | 2,696,674 | ||||||
Issuance of shares authorized | 600,000 | ||||||
General and administrative expense (in Dollars) | 646 | 539 | |||||
Stock compensation expense (in Dollars) | 82 | 27 | |||||
Unrecognized compensation expense (in Dollars) | 1,236 | ||||||
Minimum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Unrecognized compensation expense (in Dollars) | 674 | ||||||
Maximum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Unrecognized compensation expense (in Dollars) | $ 1,420 | $ 2,113 | |||||
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 | 12,001 | ||||||
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 | ||||||
2014 Stock Incentive Plan [Member] | Minimum [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Issuance of shares authorized | 7,390,355 | ||||||
2014 Stock Incentive Plan [Member] | Maximum [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 | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Time Vesting Options , Number Outstanding (in Shares) | shares | 2,068,675 |
Time Vesting Options ,Weighted Average Remaining Contractual Life | 7 years 5 months 4 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 3.51 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 908,675 |
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 2 months 4 days |
Performance Vesting Options ,Weighted Average Exercise Price | $ 2.53 |
Performance Vesting Options , Options Exercisable (in Shares) | shares | 266,667 |
$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 8 months 26 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 2.59 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 628,333 |
Time Vesting Options ,Weighted Average Exercise Price | $ 3.44 |
$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 2 months 4 days |
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 | 0.01 |
$0.01 - $3.00 [Member] | Performance Vesting Options [Member] | Maximum [Member] | |
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items] | |
Performance Vesting Options , Exercise Price | $ 3 |
$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 1 month 6 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 6.72 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 176,497 |
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 2 months 12 days |
Time Vesting Options ,Weighted Average Exercise Price | $ 11.55 |
Time Vesting Options ,Number Outstanding shares (in Shares) | shares | 103,845 |
Time Vesting Options ,Weighted Average Exercise Price | $ 11.55 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option activity | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Time Vesting Options [Member] | |
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items] | |
Options Outstanding, Beginning Balance | shares | 2,068,809 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 3.48 |
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 | (134) |
Weighted Average Exercise Price, Forfeited or expired | $ / shares | $ 160.5 |
Options Outstanding Ending Balance | shares | 1,813,809 |
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 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 |
Significant Customers_Vendors (
Significant Customers/Vendors (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Significant Customersvendors [Abstract] | ||
Accounts receivable percentage | 62.50% | 41.10% |
Revenue percentage | 70.00% | 40.00% |
Outstanding accounts payable percentage | 57.90% | 69.10% |
Leases (Details)
Leases (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Lease expiration period, description | Our leases have original lease periods expiring between 2021 and 2025. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of components of lease costs, lease term and discount rate - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finance lease cost | ||
Amortization of right-of-use assets | $ 4 | |
Interest | ||
Operating lease cost | 99 | 84 |
Total lease cost | $ 99 | $ 88 |
Weighted Average Remaining Lease Term | ||
Operating leases | 2 years 2 months 26 days | 3 years 4 months 24 days |
Weighted Average Discount Rate | ||
Operating leases | 10.00% | 10.00% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of maturities of lease liabilities - Operating Leases [Member] $ in Thousands | Mar. 31, 2022USD ($) |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
The remainder of 2022 | $ 442 |
2023 | 594 |
2024 | 85 |
2025 | 78 |
Thereafter | |
Total undiscounted cash flows | 1,199 |
Less imputed interest | (126) |
Present value of lease liabilities | $ 1,073 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of cash flow information related to leases - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 75 | $ 90 |
Operating cash flows from finance leases | 4 | |
Financing cash flows from finance leases | $ (4) |