AudioEye (AEYE) 10-Q 15 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 14, 2020
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Registrant Name	AUDIOEYE INC
Entity Central Index Key	0001362190
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Trading Symbol	AEYE
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,895,269
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Small Business	true

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash	$ 1,785	$ 1,972
Accounts receivable, net	2,505	2,958
Unbilled receivables	483	160
Deferred costs, short term	181	183
Debt issuance costs, net	82	137
Prepaid expenses and other current assets	234	198
Total current assets	5,270	5,608
Property and equipment, net	138	156
Right of use assets	776	827
Deferred costs, long term	137	145
Intangible assets, net	1,655	1,715
Goodwill	701	701
Total assets	8,677	9,152
Current liabilities:
Accounts payable and accrued expenses	2,235	973
Finance lease liabilities	53	52
Operating lease liabilities	214	209
Warrant liability	92	120
Deferred revenue	5,143	5,372
Total current liabilities	7,737	6,726
Long term liabilities:
Finance lease liabilities	41	52
Operating lease liabilities	600	655
Deferred revenue	141	153
Total liabilities	8,519	7,586
Stockholders' equity:
Preferred stock, value
Common stock, $0.00001 par value, 50,000 shares authorized, 8,877 shares issued and outstanding as of March 31, 2020 and December 31, 2019	1	1
Additional paid-in capital	51,746	51,490
Accumulated deficit	(51,590)	(49,926)
Total stockholders' equity	158	1,566
Total liabilities and stockholders' equity	8,677	9,152
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred stock, value	$ 1	$ 1

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	8,877,000	8,877,000
Common Stock, Shares, Outstanding	8,877,000	8,877,000
Series A Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	200,000	200,000
Preferred Stock, Shares Issued	105,000	105,000
Preferred Stock, Shares Outstanding	105,000	105,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 4,261	$ 1,986
Cost of revenue	1,320	922
Gross profit	2,941	1,064
Operating expenses:
Selling and marketing	1,818	1,313
Research and development	333	142
General and administrative	2,486	1,749
Total operating expenses	4,637	3,204
Operating loss	(1,696)	(2,140)
Other income (expense):
Change in fair value of warrant liability	28	0
Interest income (expense), net	4	(1)
Total other (loss) income	32	(1)
Net loss	(1,664)	(2,141)
Dividends on Series A Convertible preferred stock	(13)	(13)
Net loss available to common stockholders	$ (1,677)	$ (2,154)
Net loss per common share-basic and diluted	$ (0.19)	$ (0.28)
Weighted average common shares outstanding-basic and diluted	8,877	7,611

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Preferred Stock	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2018	$ 1	$ 1	$ 48,017	$ (42,144)	$ 5,875
Balance (in shares) at Dec. 31, 2018	7,580	105
Common stock issued in exchange for exercise of warrants and options on a cashless basis			42		42
Common stock issued in exchange for exercise of warrants and options on a cashless basis (in shares)	43
Restricted stock units, warrants and options issued for services			449		449
Net loss				(2,141)	(2,141)
Balance at Mar. 31, 2019	$ 1	$ 1	48,508	(44,285)	4,225
Balance (in shares) at Mar. 31, 2019	7,623	105
Balance at Dec. 31, 2019	$ 1	$ 1	51,490	(49,926)	1,566
Balance (in shares) at Dec. 31, 2019	8,877	105
Restricted stock units, warrants and options issued for services			256		256
Net loss				(1,664)	(1,664)
Balance at Mar. 31, 2020	$ 1	$ 1	$ 51,746	$ (51,590)	$ 158
Balance (in shares) at Mar. 31, 2020	8,877	105

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,664)	$ (2,141)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	201	173
Option, warrant, restricted stock unit and performance stock unit expense	256	449
Amortization of deferred commission	56	51
Amortization of debt issuance costs	55	0
Noncash operating lease expense	51	43
Change in fair value of warrant liability	(28)	0
Changes in operating assets and liabilities:
Accounts receivable	453	(138)
Unbilled receivables	(323)	22
Deferred costs	(46)	(65)
Prepaid expenses and other current assets	(36)	(79)
Accounts payable and accruals	1,262	247
Operating lease liabilities	(50)	(43)
Deferred revenue	(241)	(144)
Net cash used in operating activities	(54)	(1,625)
CASH FLOWS FROM INVESTING ACTIVITIES:
Software development costs	(124)	(60)
Net cash used in investing activities	(124)	(60)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options and warrants		42
Repayments of finance leases	(9)	(9)
Net cash provided by (used in) financing activities	(9)	33
Net decrease in cash	(187)	(1,652)
Cash-beginning of period	1,972	5,742
Cash-end of period	1,785	4,090
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$ 1	1
Income taxes paid		0
Non cash investing and financing activities:
Equipment acquired through finance leases		20
Accounting Standards Update 2016-02 [Member]
Non cash investing and financing activities:
Right of use assets and operating lease obligations recognized upon adoption of ASU 2016-02		$ 568

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2020
ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION The accompanying unaudited interim financial statements of AudioEye, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019, as filed with the SEC on March 30, 2020. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2019 as reported in the Company’s Annual Report on Form 10‑K have been omitted. Certain prior period amounts have been reclassified to conform to current period classification. Reclassifications had no material effect on prior year net loss, earnings per share, or shareholders' equity. Corporate Information and Background AudioEye, Inc. (“we”, “our” or the “Company”) was incorporated on May 20, 2005 in the state of Delaware. The Company has developed patented, Internet content publication and distribution software that enables conversion of media into accessible formats and allows for real time distribution to end users on any Internet connected device. The Company’s focus is to create more comprehensive access to Internet and other media to all people regardless of their network connection, device, location, or disabilities. The Company is focused on developing innovations in the field of networked and device embedded technology. Our intellectual property is primarily comprised of trade secrets, trademarks, issued, published and pending patent applications, copyrights and technological innovations. We have a patent portfolio comprised of eight issued patents in the United States. We also have two pending patent applications and two international patent applications filed via the Patent Cooperation Treaty (“PCT”) and the European Patent Office. The patents have been extended and cover a period from 2002 through 2026. We have a trademark portfolio comprised of eight United States trademark registrations. Our common stock has been listed on the NASDAQ Capital Market under the symbol “AEYE” since September 4, 2018. Prior to September 4, 2018, our common stock was quoted on the OTCQB and the OTC Bulletin Board beginning on April 15, 2013 under the same symbol. In August 2018, the Company sold 1,000,000 shares (the “Shares”) of its common stock at $6.25 per Share for net proceeds of approximately $5,609,000, after costs and expenses of approximately $641,000 (the “Private Placement”). At the closing of the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors pursuant to which the Company agreed to register the Shares for resale. On September 4, 2018, the Company filed a registration statement on Form S-1 covering the resale of the securities subject to the Registration Rights Agreement, as well as certain other securities of the Company. On July 5, 2019, the Company filed a post-effective amendment to the registration statement on Form S-1 covering the resale of such securities in order to, among other things, incorporate into the filing information included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2019. On August 1, 2018, the Company amended its Certificate of Incorporation to implement a reverse stock split in the ratio of 1 share for every 25 shares of common stock and to reduce the number of authorized shares of common stock from 250,000,000 to 50,000,000. As a result, 186,994,384 shares of the Company’s common stock were exchanged for 7,479,775 shares of the Company’s common stock. These financial statements have been retroactively restated to reflect the reverse stock split. In April 2020, the Company filed a shelf registration statement on Form S-3 with the SEC to register the sale, in future offerings, of up to $7,000,000 in the aggregate of debt securities, common stock, preferred stock, warrants, rights or units consisting of any two or more of such securities. We intend to use the net proceeds of any offering of securities sold by us under the registration statement for general corporate purposes, which may include acquisitions, repayment of debt, capital expenditures and working capital requirements. Revenue Recognition Revenue is recognized when delivery of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition through the following five steps: · Identify the contract with the customer; · Identify the performance obligations in the contract; · Determine the transaction price; · Allocate the transaction price to the performance obligations in the contract; and · Recognize revenue when, or as, the performance obligations are satisfied. Certain Software as a Service (“SaaS”) invoices are prepared on an annual basis. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when the related performance obligations have been satisfied. Subscription revenue is recognized on a ratable basis over the contractual subscription term of the arrangement beginning on the date that our service is made available to the customer. Payments received in advance of services being rendered are recorded as deferred revenue. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when the performance obligation has been satisfied. We generate substantially all our revenue from subscription services, which are comprised of subscription fees from customer accounts on the Managed Platform. The following table presents our revenues disaggregated by sales channel: Three months ended March 31, 2020 2019 (in thousands) Direct (Enterprise) $ 2,387 $ 1,461 Indirect (Vertical partners) 1,862 525 Other 12 — Total revenues $ 4,261 $ 1,986 In accordance with Accounting Standard Codification ("ASC") Topic 606, Revenue from Contracts with Customers, and all related and subsequent amendments, the Company records accounts receivable for amounts invoiced to customers for which performance obligations have been satisfied, and for amounts invoiced and are in deferred revenue but for which the Company has an unconditional right to consideration as provided under the contractual arrangement. The Company recognizes unbilled receivables for those amounts the Company has the unconditional right to invoice and for which the performance obligations have been satisfied. The Company had one customer (including affiliates of such customer) which generated approximately 18% and 12% of the Company's revenue in each of the three months ended March 31, 2020 and 2019, respectively. The table below compares the deferred revenue balance as of March 31, 2020 versus December 31, 2019: March 31, December 31, 2020 2019 (in thousands) Deferred revenue $ 5,284 $ 5,525 As of March 31, 2020, approximately $5,143,000 was classified as short-term deferred revenue and is expected to be recognized over the next twelve months following March 31, 2020. The remaining approximately $141,000 is long-term deferred revenue to be recognized thereafter.Approximately $2,087,000, or approximately 38%, of deferred revenue from December 31, 2019 has been recognized as revenue through March 31, 2020. At March 31, 2020, the Company had one customer representing 18% of the outstanding accounts receivable. At December 31, 2019, the Company had one customer representing 40% of the outstanding accounts receivable. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law in the United States. The CARES Act, among other things, includes modifications to net operating loss carryforwards provisions and the net interest expense deduction, and deferment of social security tax payments. We are currently evaluating the provisions of the CARES Act and how certain elections may impact our financial position, results of operations, and disclosures if elected. Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (i.e., the difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock is computed using the if-converted method, which assumes conversion at the beginning of the year. However, when a net loss exists, no potential common stock equivalents are included in the computation of the diluted per-share amount because the computation would result in an anti-dilutive per-share amount. Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the three months ended March 31, 2020 and 2019 are as follows: 2020 2019 ( in thousands) Preferred stock 298 286 Options to purchase common stock 924 881 Warrants to purchase common stock 403 1,743 Restricted stock units 419 223 Totals 2,044 3,133 Fair Value Measurements Fair value is an estimate of the exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under U.S. GAAP provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities. On August 14, 2019, the Company entered into a Loan Agreement (the "Loan Agreement") with Sero Capital LLC, a shareholder that owns more than 10% of the outstanding shares of common stock of the Company. The Loan Agreement has a one-year term and provides the Company with an unsecured credit facility under which the Company may borrow up to the aggregate principal amount of $2,000,000. No amounts have been drawn under the Loan Agreement as of March 31, 2020. The Company does not at this time expect this loan agreement to be renewed. In consideration of the Loan Agreement, the Company issued to Sero Capital LLC a common stock warrant to acquire up to a total of 146,667 shares of the The estimated fair value of the Sero Capital LLC warrant was approximately $219,000 at date of issuance and approximately $92,000 at March 31, 2020. The Company valued the warrants as of March 31, 2020 using the Black-Scholes pricing model and the following assumptions: contractual term of six (6) months, a risk-free interest rate of 0.17%, a dividend yield of 0.0%, and volatility of 101.7%. The warrants are classified as a liability instrument since the holder has the option to require the Company to repurchase the warrants when certain events occur that are considered outside of the control of the Company. The unamortized balance was approximately $82,000 on March 31, 2020 and included as debt issuance costs in current assets on the consolidated balance sheet. The Company has no assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. The following are the Company's liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: Fair Value Fair Value Hierarchy (in thousands) Liabilities Warrant liability, March 31, 2020 $ 92 Level 3 Warrant liability, December 31, 2019 $ 120 Level 3 Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact our financial position, results of operations or disclosures. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU adds, modifies, and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, "Fair Value Measurement." This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not impact our financial position, results of operations or disclosures. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

GOING CONCERN AND MANAGEMENT'S

GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS	3 Months Ended
	Mar. 31, 2020
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS	NOTE 2 — GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS As of March 31, 2020, the Company had cash and cash equivalents of approximately $1,785,000 and a working capital deficit of approximately $2,467,000. In addition, the Company used actual net cash in operations of approximately $54,000 during the quarter ended March 31, 2020. The Company has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. On August 14, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) with Sero Capital LLC, a stockholder who owns more than 10% of the outstanding shares of common stock of the Company. The beneficial owner of Sero Capital LLC is David Moradi, who became a director of the Company on November 8, 2019. The Loan Agreement provides the Company with an unsecured credit facility under which the Company may borrow up to the aggregate principal amount of $2,000,000. Any advances under the Loan Agreement will bear interest at a per annum rate of 10.0% (subject to increase in the event of a default), which is payable monthly and may, at the Company’s option, be paid either in cash or by the issuance of shares of the Company’s common stock. The term of the Loan Agreement extends through August 14, 2020, subject to earlier termination as provided in the Loan Agreement. The Company’s obligations under the Loan Agreement are subject to acceleration upon the occurrence of an event of default (as defined in the Loan Agreement). The Company may prepay its obligations under the Loan Agreement without penalty, but subject to certain limitations regarding the number, timing and dollar amounts of prepayments. The Loan Agreement provides for certain customary covenants, representations, and events of default provisions. No amounts have been drawn under the Loan Agreement as of March 31, 2020. In consideration of the Loan Agreement, the Company issued to Sero Capital LLC a common stock warrant to acquire up to a total of 146,667 shares of the Company’s common stock at an exercise price of $6.00 per share, which exercise price may be paid in cash or, at the election of the holder, in a cashless, or “net,” exercise transaction. The warrant expires one year from the date of issuance. On April 15, 2020, the Company entered into a note agreement in the amount of $1.3 million with Liberty Capital Bank (“Loan”) pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act, which is being administered by the Small Business Administration (“SBA”). The Loan has been funded. All or a portion of the Loan may be forgiven upon application by the Company in accordance with the SBA requirements. Under the PPP, loan forgiveness is available for the sum of payroll costs, rent payments, mortgage interest and utilities during the eight-week period beginning on the date of loan approval. For purposes of the PPP, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25.0% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25.0%. Loan payments are deferred for six months. The loan has a maturity of two years and an interest rate of 1.0%. The loan is not collateralized and is not personally guaranteed. No fees were charged in connection with the loan. The Company intends to use all proceeds from the Loan to retain employees, maintain payroll and make lease, mortgage interest and utility payments. In April 2020, the Company filed a registration statement on Form S-3 with SEC to register the sale, in future offerings, of up to $7,000,000 in the aggregate of debt securities, common stock, preferred stock, warrants, rights or units consisting of any two or more of such securities. We intend to use the net proceeds of any offering of securities sold by us under the registration statement or otherwise for general corporate purposes, which may include acquisitions, repayment of debt, capital expenditures and working capital requirements. The Company expects that cash used in operations will continue to be negative in the near future. The Company may need to raise additional funds through debt or equity financing, including those debt and equity agreements and offerings noted previously. If the Company is unsuccessful in raising additional financing, it will need to reduce costs and operations in the future. Additionally, the Company is evaluating the reduction of salaries or deferral of bonuses for certain individuals. Accordingly, the accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	3 Months Ended
	Mar. 31, 2020
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT	NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment as of March 31, 2020 and December 31, 2019 is summarized as follows: March 31, December 31, 2020 2019 (in thousands) Computer equipment $ 64 $ 64 Equipment under finance lease 157 157 Furniture and fixtures 59 59 Total 280 280 Less accumulated depreciation (142) (124) Property and equipment, net $ 138 $ 156 Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful life of three (3) years. When property or equipment is retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference, less any amount realized from disposition, is reflected in earnings. Included in net property and equipment are assets under finance leases of approximately $157,000, less accumulated depreciation of approximately $73,000 as of March 31, 2020 and approximately $157,000 less accumulated depreciation of approximately $60,000 as of December 31, 2019. The Company spent $0 in the purchase of equipment during the three months ended March 31, 2020 and 2019. The Company also leased $0 in equipment during the three months ended March 31, 2020. Depreciation expense was approximately $18,000 and $13,000 for the three months ended March 31, 2020 and 2019, respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2020
INTANGIBLE ASSETS
INTANGIBLE ASSETS	NOTE 4 — INTANGIBLE ASSETS For the three months ended March 31, 2020 and 2019, the Company invested in Software development costs in the amounts of approximately $124,000 and $60,000 respectively. Patents, technology and other intangibles with contractual terms are generally amortized over their estimated useful lives of ten years. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. Software development costs are amortized over their estimated useful life of three years. Intangible assets consisted of the following: March 31, December 31, 2020 2019 (in thousands) Patents $ 3,698 $ 3,698 Capitalized software development 1,841 1,717 Domain name 10 10 Accumulated amortization (3,894) (3,710) Intangible assets, net $ 1,655 $ 1,715 Amortization expense for patents totaled approximately $93,000 and $94,000 for the three months ended March 31, 2020 and 2019, respectively. Amortization expense for software development totaled approximately $91,000 and $66,000 for the three months ended March 31, 2020 and 2019, respectively. Total amortization expense totaled approximately $184,000 and $160,000 for the three months ended March 31, 2020 and 2019, respectively.

DEFERRED COSTS

DEFERRED COSTS	3 Months Ended
	Mar. 31, 2020
DEFERRED COSTS
DEFERRED COSTS	NOTE 5 — DEFERRED COSTS The Company capitalizes initial and renewal sales commission payments in the period a customer contract is obtained, and payment is received; and the commissions are amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit, which we have deemed to be the contract term. Such commissions are amortized over the contract term when the underlying contracted products are technology-based. The table below summarizes the activity within the deferred commission costs account, during the three months ended March 31, 2020: Commission December 31, Costs Commission March 31, 2019 Deferred Amortized 2020 (in thousands) Deferred costs, short term $ 183 $ 54 $ (56) $ 181 Deferred costs, long term 145 (8) — 137 Deferred commission costs $ 328 $ 46 $ (56) $ 318 During the three months ended March 31, 2020, the Company deferred an aggregate of approximately $46,000 for commissions paid of which approximately $27,000 was classified as long-term and approximately $19,000 was classified as short-term. During the three months ended March 31, 2020, the Company reclassified approximately $35,000 of previously deferred commissions cost from long-term to short-term classification. Amortization of deferred costs for the three months ended March 31, 2020 was approximately $56,000. During the three months ended March 31, 2019, the Company deferred an aggregate of approximately $65,000 for commissions paid. Amortization of deferred costs for the three months ended March 31, 2019 was approximately $51,000.

LEASE LIABILITIES AND RIGHT OF

LEASE LIABILITIES AND RIGHT OF USE ASSETS	3 Months Ended
	Mar. 31, 2020
LEASE LIABILITIES AND RIGHT OF USE ASSETS
LEASE LIABILITIES AND RIGHT OF USE ASSETS	NOTE 6 — LEASE LIABILITIES AND RIGHT OF USE ASSETS Finance Leases March 31, December 31, 2020 2019 (in thousands) Finance equipment lease dated April 5, 2018 $ 7 $ 8 Finance equipment lease dated May 8, 2018 8 9 Finance equipment lease dated June 27, 2018 12 13 Finance equipment lease dated September 18, 2018 9 10 Finance equipment lease dated September 28, 2018 10 11 Finance equipment lease dated February 20, 2019 13 14 Finance equipment lease dated June 4, 2019 16 18 Finance equipment lease dated September 30, 2019 19 21 Total finance lease liabilities 94 104 Less current portion (53) (52) Long term portion $ 41 $ 52 The Company did not enter any finance leases during the quarter ended March 31, 2020. During the year ended December 31, 2019, the Company entered into three finance leases for computer equipment for three-year terms. The Company recognized these arrangements as finance leases based on the determination that the leases exceeded 75% of the economic life of the underlying assets. The Company initially recorded the equipment and finance leases liability at the estimated present value of the aggregate amount of the minimum lease payments of approximately $61,000. The leases include base monthly payments in aggregate of approximately $5,000, due on the contract monthly anniversary of each calendar month. At the expiration of the lease, the Company is required to return all leased equipment to the lessor with right of repurchase at fair value. The Company has made payments in the amount of approximately $14,000 during the quarter ended March 31, 2020. The effective interest rate of the finance leases is estimated at 6.0% based on the implicit rate in the lease agreements. The following summarizes the right to use assets under finance leases included in property and equipment: March 31, December 31, 2020 2019 (in thousands) Classes of property Computer equipment $ 157 $ 157 Less: accumulated depreciation (73) (60) $ 84 $ 97 The following summarizes the total remaining future minimum finance lease payments at March 31, 2020 (in thousands): Period ending December 31, 2020 $ 46 2021 43 2022 10 Total minimum lease payments 99 Amount representing interest (5) Present value of minimum lease payments 94 Current portion of finance lease obligations 53 Finance lease obligations, less current portion $ 41 Operating Leases The Company’s principal offices are located at 5210 E. Williams Circle, Suite 750, Tucson, Arizona 85711, consisting of approximately 5,151 square feet as of December 31, 2019. The Company’s principal office originally consisted of approximately 2,362 square feet. On December 21, 2017, effective February 1, 2018, the Company amended its existing lease to expand its principal office to approximately 4,248 square feet and to extend the expiration date to September 30, 2021. Beginning February 1, 2018, the basic rent increased to $9,598 per month. On October 2, 2018, effective December 1, 2018, the Company further amended its existing lease to expand its principal office to approximately 5,151 square feet. In accordance with the amended lease, rent increased to $11,810 on January 1, 2019, escalating over time to $12,977 at the end of the lease, which was further extended to October 31, 2022. On December 29, 2017, effective February 1, 2018, the Company amended its existing lease to expand its Atlanta office from approximately 2,739 square feet to approximately 3,831 square feet. Beginning February 1, 2018, the basic rent increased by $1,500 through the remainder of the lease term. In February 2019, the Company entered into a lease for new offices in Marietta, Georgia located at 450 Franklin Gateway, Marietta, Georgia consisting of approximately 9,662 square feet. The new lease commenced on June 1, 2019, with move-in on June 15, 2019. Beginning in 2017, the Company leased office space in New York for $300 per month, which was increased to $850 per month in October 2018 through May 31, 2019. Beginning in June 2019, the Company moved to larger office space in New York, leased for $4,482 per month, for a term of 12 months ending May 31, 2020. Beginning November 1, 2015, we subleased an office in Scottsdale, Arizona from a company controlled by our Executive Chairman for $3,578 per month, which continues on a month to month basis as of March 31, 2020. These New York and Scottsdale properties were considered short-term leases and therefore were not measured under Topic 842. The Company has made operating lease payments in the amount of approximately $63,000 during the three months ended March 31, 2020. Rent expense charged to operations, which differs from rent paid due to rent credits and to increasing amounts of base rent, is calculated by allocating total rental payments on a straight-line basis over the term of the lease. Operating lease liabilities at March 31, 2020 and December 31, 2019 consist of: March 31, December 31, 2020 2019 (in thousands) Tucson Arizona office lease $ 371 $ 402 Marietta Georgia office lease 443 462 Total operating lease liabilities 814 864 Less current portion (214) (209) Long term portion $ 600 $ 655 As of January 1, 2019, the Company adopted the provisions of ASC Topic 842 using the modified retrospective method. In adopting ASC Topic 842, Leases (Topic 842), the Company elected the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of twelve (12) months or less. Effective January 1, 2019, the Company initially recognized operating lease liabilities of approximately $568,000 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The discount rate utilized in such present value calculation was 6% based on an estimate of the Company’s incremental borrowing rate. At such time, the Company also recognized corresponding right-of-use (“ROU”) assets of approximately $557,000 and eliminated the prior period deferred rent of approximately $11,000. During the fiscal year ended December 31, 2019, the Company entered into an operating lease for new office space in Marietta, Georgia, for a five-year term. The Company measured and recorded a right of use asset and corresponding operating lease liability of approximately $484,000 at the lease commencement date in June 2019. The following summarizes the total remaining future minimum operating lease payments at March 31, 2020 (in thousands): Period ending December 31, 2020 $ 192 2021 262 2022 257 2023 118 2024 81 Total minimum lease payments 910 Less: present value discount (96) Present value of minimum lease payments 814 Current portion of operating lease obligations 214 Operating lease obligations, less current portion $ 600 The following summarizes lease expenses for the three months ended March 31, 2020 (in thousands): Finance lease expenses: Depreciation and amortization expense $ 14 Interest on lease liabilities 1 Finance lease expense 15 Operating lease expense 64 Short-term lease expense 31 Total lease expenses $ 110 The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2019: Weighted average remaining lease term (years) Operating Leases 3.64 Finance Leases 1.79 Weighted average discount rate (%) Operating Leases 6.00 Finance Leases 6.00

CREDIT FACILITY-RELATED PARTY

CREDIT FACILITY-RELATED PARTY	3 Months Ended
	Mar. 31, 2020
CONVERTIBLE NOTES PAYABLE
CREDIT FACILITY-RELATED PARTY	NOTE 7 — CREDIT FACILITY-RELATED PARTY On August 14, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) with Sero Capital LLC, a stockholder who owns more than 10% of the outstanding shares of common stock of the Company. The beneficial owner of Sero Capital LLC is David Moradi, who became a director of the Company on November 8, 2019. The Loan Agreement provides the Company with an unsecured credit facility under which the Company may borrow up to the aggregate principal amount of $2,000,000. Any advances under the Loan Agreement will bear interest at a per annum rate of 10% (subject to increase in the event of a default), which is payable monthly and may, at the Company’s option, be paid either in cash or by the issuance of shares of the Company’s common stock. The term of the Loan Agreement extends through August 14, 2020, subject to earlier termination as provided in the Loan Agreement. The Company’s obligations under the Loan Agreement are subject to acceleration upon the occurrence of an event of default (as defined in the Loan Agreement). The Company may prepay its obligations under the Loan Agreement without penalty, but subject to certain limitations regarding the number, timing and dollar amounts of prepayments. The Loan Agreement provides for certain customary covenants, representations and events of default. No amounts have been drawn under the Loan Agreement as of March 31, 2020. In consideration of the Loan Agreement, the Company issued to Sero Capital LLC a common stock warrant to acquire up to a total of 146,667 shares of the Company’s common stock at an exercise price of $6.00 per share, which exercise price may be paid in cash or, at the election of the holder, in a cashless, or “net,” exercise transaction. The warrant expires one year from the date of issuance.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2020
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 8 — STOCKHOLDERS’ EQUITY Preferred stock As of March 31, 2020 and December 31, 2019, the Company had 105,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) outstanding, which was issued at $10 per share, paying a 5% cumulative annual dividend, and convertible into the Company’s common stock at a price of $4.385 per share. For the three months ended March 31, 2020, preferred stockholders collectively earned, but were not paid, approximately $13,000 in quarterly dividends, which is equivalent to 2,985 shares of common stock based on a conversion price of $4.385 per share. As of March 31, 2020 and December 31, 2019, cumulative and unpaid dividends were approximately $258,000 and approximately $245,000, respectively, which is equivalent to 58,912 and 55,927 shares of common stock, respectively, based on a conversion price of $4.385 per share. On any matter presented to the stockholders of the Company, holders of Preferred Stock are entitled to cast the number of votes equal to the number of shares of common stock into which their shares of Preferred Stock are convertible as of the record date to vote on such matter. As long as any shares of Preferred Stock are outstanding, the Company has certain restrictions on share repurchases or amendments to the Certificate of Incorporation in a manner that adversely affects any rights of the Preferred Stockholders. In addition, the preferred stockholders have a liquidation preference for purposes of which the Preferred Stock would be valued at $10 per share plus accrued cumulative annual dividends. At March 31, 2020 and December 31, 2019, the liquidation preference was valued at approximately $1,308,000 and approximately $1,295,000, respectively. In the event of any liquidity event, holders of each share of Preferred Stock shall be entitled to be paid out of the assets of the Company legally available before any sums shall be paid to holders of common stock. Common stock As of March 31, 2020 and December 31, 2019, the Company had 8,876,553 shares of common stock issued and outstanding. During the three months ended March 31, 2020, the Company did not issue any shares of its common stock of the Company upon the exercise of options or warrants. Options As of March 31, 2020 and December 31, 2019, the Company had outstanding options to purchase 923,653 and 965,043 shares of common stock, respectively. Weighted Intrinsic Weighted Average Value Number of Average Remaining of Options Exercise Price Term Exercisable Options Outstanding at December 31, 2019 965,043 $ 3.70 759,631 $ 1,666,266 Granted — — — — — Exercised — — Forfeited/Expired (41,390) 10.99 Outstanding at March 31, 2020 923,653 $ 3.38 742,345 $ 1,498,979 During the three months ended March 31, 2020, there were no stock options granted or exercised. Option grants historically were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of, expected volatility, risk free interest rate, and expected dividend yield. For the three months ended March 31, 2020 and 2019, total stock-based compensation expense related to the options totaled approximately $85,000 and $72,000, respectively. The outstanding unamortized stock-based compensation expense related to options was approximately $700,000 (which will be recognized through December 2022) as of March 31, 2020. Warrants Below is a table summarizing the Company’s outstanding warrants as of March 31, 2020 and December 31, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Warrants Exercise Price Term Warrants Outstanding at December 31, 2019 424,708 $ 5.31 $ 189,450 Granted — — — — Exercised — — Forfeited/Expired (22,188) 9.59 Outstanding at March 31, 2020 402,520 $ 5.07 $ 130,400 For the three months ended March 31, 2020 and 2019, the Company incurred warrant-based compensation expense of $0. There was no outstanding unamortized stock-based compensation expense related to warrants as of March 31, 2020. Restricted stock units (“RSUs”) The following table summarizes the restricted stock unit activity for the three months ended March 31, 2020: Restricted stock units issued as of December 31, 2019 428,919 Granted 15,000 Forfeited/Canceled (25,000) Total Restricted stock units issued at March 31,2020 418,919 Vested at March 31, 2020 253,794 Unvested restricted stock units as of March 31, 2020 165,125 For the three months ended March 31, 2020 and 2019, the Company incurred RSU-based compensation expense of approximately $170,000 and $377,000, respectively. The outstanding unamortized stock-based compensation expense related to RSUs was approximately $591,000 (which will be recognized through December 2022) as of March 31, 2020. In January 2020, the Company granted awards of 10,000 RSUs and 5,000 RSUs to a consultant to the Company in accordance with a consulting agreement. The vesting of each award is subject to (i) a performance condition based on the extent to which established performance milestones are achieved within a specified timeframe as determined and certified by the Compensation Committee of the Board of Directors and (ii) continuing service within the Company through the one-year anniversary of the grant date. The settlement date for such RSUs, to the extent they vest is the earlier of (a) promptly after the vesting date or (b) in any event no later than March 15 of the calendar year following the calendar year in which such vesting occurs. The fair value of the RSUs at the date of grant was approximately $80,000.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2020
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 9 — COMMITMENTS AND CONTINGENCIES Litigation We may become involved in various routine disputes and allegations incidental to our business operations. While it is not possible to determine the ultimate disposition of these matters, our management believes that the resolution of any such matters, should they arise, is not likely to have a material adverse effect on our financial position or results of operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2020
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 10 — SUBSEQUENT EVENTS Note Payable As discussed in Note 2 in these footnotes to the unaudited financial statements, on April 15, 2020, the Company entered into a note agreement in the amount of $1.3 million with Liberty Capital Bank (“Loan”) pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act, which is being administered by the Small Business Administration (“SBA”). The Loan has been funded. All or a portion of the Loan may be forgiven upon application by the Company in accordance with the SBA requirements. Under the PPP, loan forgiveness is available for the sum of payroll costs, rent payments, mortgage interest and utilities during the eight-week period beginning on the date of loan approval. For purposes of the PPP, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25.0% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25.0%. Loan payments are deferred for six months. The loan has a maturity of two years and an interest rate of 1.0%. The loan is not collateralized and is not personally guaranteed. No fees were charged in connection with the loan. The application for these funds required the Company, in good faith, to certify that the current economic uncertainty made the loan request necessary to support the ongoing operation of the Company. The Company made this certification after analyzing and taking into account, among other things, such current economic uncertainty and the Company’s financial situation, business operations and potential ability to access other sources of liquidity sufficient to support ongoing operations in a manner not significantly detrimental to the Company’s business. Conversion of Preferred Shares In April 2020, one of our preferred shareholders elected to convert 5,000 of the shareholder’s shares of Preferred Stock into the Company’s common stock. The conversion, including approximately $12,000 of cumulative dividends, resulted in the issuance of 14,239 shares of the Company’s common stock. Exercise of Options from former employee In April 2020, a former employee exercised 35,325 options resulting in the Company issuing an aggregate of 4,477 shares of common stock upon the cashless, or net, exercise of those outstanding options. In May 2020, a former employee exercised 10,000 options resulting in the Company issuing an aggregate of 8,746 shares of common stock upon the cashless, or net, exercise of those outstanding options. Certification of Certain Performance RSUs In April 2020, the Compensation Committee of the Company certified the extent to which a consultant to the Company had achieved certain performance-based vesting conditions with respect to three performance RSU awards held by the consultants. Such certification effectuated the forfeiture of 3,215 of the performance RSUs granted in August 2019 and 3,000 of the performance RSUs granted in January 2020. Amendment of Equity Awards of Director In May 2020, the Compensation Committee of the Board of Directors amended the vesting of previously granted RSUs and the expiration date of previously granted stock options held by a Director on the Board Directors who was resigning and would not be standing for re-election at the Company’s 2020 Annual Meeting of Stockholders. This amendment effectively resulted in the immediate and full vesting of 11,280 RSUs and the amendment of a total of 110,000 stock options such that they will expire on their original expiration dates rather than three months following termination of service.

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2020
ORGANIZATION AND BASIS OF PRESENTATION
Corporate Information and Background	Corporate Information and Background AudioEye, Inc. (“we”, “our” or the “Company”) was incorporated on May 20, 2005 in the state of Delaware. The Company has developed patented, Internet content publication and distribution software that enables conversion of media into accessible formats and allows for real time distribution to end users on any Internet connected device. The Company’s focus is to create more comprehensive access to Internet and other media to all people regardless of their network connection, device, location, or disabilities. The Company is focused on developing innovations in the field of networked and device embedded technology. Our intellectual property is primarily comprised of trade secrets, trademarks, issued, published and pending patent applications, copyrights and technological innovations. We have a patent portfolio comprised of eight issued patents in the United States. We also have two pending patent applications and two international patent applications filed via the Patent Cooperation Treaty (“PCT”) and the European Patent Office. The patents have been extended and cover a period from 2002 through 2026. We have a trademark portfolio comprised of eight United States trademark registrations. Our common stock has been listed on the NASDAQ Capital Market under the symbol “AEYE” since September 4, 2018. Prior to September 4, 2018, our common stock was quoted on the OTCQB and the OTC Bulletin Board beginning on April 15, 2013 under the same symbol. In August 2018, the Company sold 1,000,000 shares (the “Shares”) of its common stock at $6.25 per Share for net proceeds of approximately $5,609,000, after costs and expenses of approximately $641,000 (the “Private Placement”). At the closing of the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors pursuant to which the Company agreed to register the Shares for resale. On September 4, 2018, the Company filed a registration statement on Form S-1 covering the resale of the securities subject to the Registration Rights Agreement, as well as certain other securities of the Company. On July 5, 2019, the Company filed a post-effective amendment to the registration statement on Form S-1 covering the resale of such securities in order to, among other things, incorporate into the filing information included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2019. On August 1, 2018, the Company amended its Certificate of Incorporation to implement a reverse stock split in the ratio of 1 share for every 25 shares of common stock and to reduce the number of authorized shares of common stock from 250,000,000 to 50,000,000. As a result, 186,994,384 shares of the Company’s common stock were exchanged for 7,479,775 shares of the Company’s common stock. These financial statements have been retroactively restated to reflect the reverse stock split. In April 2020, the Company filed a shelf registration statement on Form S-3 with the SEC to register the sale, in future offerings, of up to $7,000,000 in the aggregate of debt securities, common stock, preferred stock, warrants, rights or units consisting of any two or more of such securities. We intend to use the net proceeds of any offering of securities sold by us under the registration statement for general corporate purposes, which may include acquisitions, repayment of debt, capital expenditures and working capital requirements.
Revenue Recognition	Revenue Recognition Revenue is recognized when delivery of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition through the following five steps: · Identify the contract with the customer; · Identify the performance obligations in the contract; · Determine the transaction price; · Allocate the transaction price to the performance obligations in the contract; and · Recognize revenue when, or as, the performance obligations are satisfied. Certain Software as a Service (“SaaS”) invoices are prepared on an annual basis. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when the related performance obligations have been satisfied. Subscription revenue is recognized on a ratable basis over the contractual subscription term of the arrangement beginning on the date that our service is made available to the customer. Payments received in advance of services being rendered are recorded as deferred revenue. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when the performance obligation has been satisfied. We generate substantially all our revenue from subscription services, which are comprised of subscription fees from customer accounts on the Managed Platform. The following table presents our revenues disaggregated by sales channel: Three months ended March 31, 2020 2019 (in thousands) Direct (Enterprise) $ 2,387 $ 1,461 Indirect (Vertical partners) 1,862 525 Other 12 — Total revenues $ 4,261 $ 1,986 In accordance with Accounting Standard Codification ("ASC") Topic 606, Revenue from Contracts with Customers, and all related and subsequent amendments, the Company records accounts receivable for amounts invoiced to customers for which performance obligations have been satisfied, and for amounts invoiced and are in deferred revenue but for which the Company has an unconditional right to consideration as provided under the contractual arrangement. The Company recognizes unbilled receivables for those amounts the Company has the unconditional right to invoice and for which the performance obligations have been satisfied. The Company had one customer (including affiliates of such customer) which generated approximately 18% and 12% of the Company's revenue in each of the three months ended March 31, 2020 and 2019, respectively. The table below compares the deferred revenue balance as of March 31, 2020 versus December 31, 2019: March 31, December 31, 2020 2019 (in thousands) Deferred revenue $ 5,284 $ 5,525 As of March 31, 2020, approximately $5,143,000 was classified as short-term deferred revenue and is expected to be recognized over the next twelve months following March 31, 2020. The remaining approximately $141,000 is long-term deferred revenue to be recognized thereafter.Approximately $2,087,000, or approximately 38%, of deferred revenue from December 31, 2019 has been recognized as revenue through March 31, 2020. At March 31, 2020, the Company had one customer representing 18% of the outstanding accounts receivable. At December 31, 2019, the Company had one customer representing 40% of the outstanding accounts receivable.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law in the United States. The CARES Act, among other things, includes modifications to net operating loss carryforwards provisions and the net interest expense deduction, and deferment of social security tax payments. We are currently evaluating the provisions of the CARES Act and how certain elections may impact our financial position, results of operations, and disclosures if elected.
Stock Based Compensation	Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (i.e., the difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock is computed using the if-converted method, which assumes conversion at the beginning of the year. However, when a net loss exists, no potential common stock equivalents are included in the computation of the diluted per-share amount because the computation would result in an anti-dilutive per-share amount. Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the three months ended March 31, 2020 and 2019 are as follows: 2020 2019 ( in thousands) Preferred stock 298 286 Options to purchase common stock 924 881 Warrants to purchase common stock 403 1,743 Restricted stock units 419 223 Totals 2,044 3,133
Fair Value Measurements	Fair Value Measurements Fair value is an estimate of the exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under U.S. GAAP provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities. On August 14, 2019, the Company entered into a Loan Agreement (the "Loan Agreement") with Sero Capital LLC, a shareholder that owns more than 10% of the outstanding shares of common stock of the Company. The Loan Agreement has a one-year term and provides the Company with an unsecured credit facility under which the Company may borrow up to the aggregate principal amount of $2,000,000. No amounts have been drawn under the Loan Agreement as of March 31, 2020. The Company does not at this time expect this loan agreement to be renewed. In consideration of the Loan Agreement, the Company issued to Sero Capital LLC a common stock warrant to acquire up to a total of 146,667 shares of the The estimated fair value of the Sero Capital LLC warrant was approximately $219,000 at date of issuance and approximately $92,000 at March 31, 2020. The Company valued the warrants as of March 31, 2020 using the Black-Scholes pricing model and the following assumptions: contractual term of six (6) months, a risk-free interest rate of 0.17%, a dividend yield of 0.0%, and volatility of 101.7%. The warrants are classified as a liability instrument since the holder has the option to require the Company to repurchase the warrants when certain events occur that are considered outside of the control of the Company. The unamortized balance was approximately $82,000 on March 31, 2020 and included as debt issuance costs in current assets on the consolidated balance sheet. The Company has no assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. The following are the Company's liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: Fair Value Fair Value Hierarchy (in thousands) Liabilities Warrant liability, March 31, 2020 $ 92 Level 3 Warrant liability, December 31, 2019 $ 120 Level 3
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact our financial position, results of operations or disclosures. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU adds, modifies, and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, "Fair Value Measurement." This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not impact our financial position, results of operations or disclosures. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

ORGANIZATION AND BASIS OF PRE_3

ORGANIZATION AND BASIS OF PRESENTATION (Tables)	3 Months Ended
	Mar. 31, 2020
ORGANIZATION AND BASIS OF PRESENTATION
Schedule of disaggregation of revenue	The following table presents our revenues disaggregated by sales channel: Three months ended March 31, 2020 2019 (in thousands) Direct (Enterprise) $ 2,387 $ 1,461 Indirect (Vertical partners) 1,862 525 Other 12 — Total revenues $ 4,261 $ 1,986
Schedule of deferred revenue	The table below compares the deferred revenue balance as of March 31, 2020 versus December 31, 2019: March 31, December 31, 2020 2019 (in thousands) Deferred revenue $ 5,284 $ 5,525
Schedule of antidilutive securities excluded from computation of earnings Per share	Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the three months ended March 31, 2020 and 2019 are as follows: 2020 2019 ( in thousands) Preferred stock 298 286 Options to purchase common stock 924 881 Warrants to purchase common stock 403 1,743 Restricted stock units 419 223 Totals 2,044 3,133
Schedule of fair value, assets and liabilities measured on recurring basis	The following are the Company's liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: Fair Value Fair Value Hierarchy (in thousands) Liabilities Warrant liability, March 31, 2020 $ 92 Level 3 Warrant liability, December 31, 2019 $ 120 Level 3

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2020
PROPERTY AND EQUIPMENT
Schedule of property, plant and equipment	Property and equipment as of March 31, 2020 and December 31, 2019 is summarized as follows: March 31, December 31, 2020 2019 (in thousands) Computer equipment $ 64 $ 64 Equipment under finance lease 157 157 Furniture and fixtures 59 59 Total 280 280 Less accumulated depreciation (142) (124) Property and equipment, net $ 138 $ 156

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2020
INTANGIBLE ASSETS
Schedule of finite-Lived intangible assets	Intangible assets consisted of the following: March 31, December 31, 2020 2019 (in thousands) Patents $ 3,698 $ 3,698 Capitalized software development 1,841 1,717 Domain name 10 10 Accumulated amortization (3,894) (3,710) Intangible assets, net $ 1,655 $ 1,715

DEFERRED COSTS (Tables)

DEFERRED COSTS (Tables)	3 Months Ended
	Mar. 31, 2020
DEFERRED COSTS
Schedule of deferred policy acquisition costs	The table below summarizes the activity within the deferred commission costs account, during the three months ended March 31, 2020: Commission December 31, Costs Commission March 31, 2019 Deferred Amortized 2020 (in thousands) Deferred costs, short term $ 183 $ 54 $ (56) $ 181 Deferred costs, long term 145 (8) — 137 Deferred commission costs $ 328 $ 46 $ (56) $ 318

LEASE LIABILITIES AND RIGHT O_2

LEASE LIABILITIES AND RIGHT OF USE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2020
LEASE LIABILITIES AND RIGHT OF USE ASSETS
Schedule of finance leased assets	March 31, December 31, 2020 2019 (in thousands) Finance equipment lease dated April 5, 2018 $ 7 $ 8 Finance equipment lease dated May 8, 2018 8 9 Finance equipment lease dated June 27, 2018 12 13 Finance equipment lease dated September 18, 2018 9 10 Finance equipment lease dated September 28, 2018 10 11 Finance equipment lease dated February 20, 2019 13 14 Finance equipment lease dated June 4, 2019 16 18 Finance equipment lease dated September 30, 2019 19 21 Total finance lease liabilities 94 104 Less current portion (53) (52) Long term portion $ 41 $ 52
Schedule of finance leased assets included in property plant and equipment	The following summarizes the right to use assets under finance leases included in property and equipment: March 31, December 31, 2020 2019 (in thousands) Classes of property Computer equipment $ 157 $ 157 Less: accumulated depreciation (73) (60) $ 84 $ 97
Schedule of total remaining future minimum lease payments for finance leases	The following summarizes the total remaining future minimum finance lease payments at March 31, 2020 (in thousands): Period ending December 31, 2020 $ 46 2021 43 2022 10 Total minimum lease payments 99 Amount representing interest (5) Present value of minimum lease payments 94 Current portion of finance lease obligations 53 Finance lease obligations, less current portion $ 41
Schedule of operating lease liabilities	Operating lease liabilities at March 31, 2020 and December 31, 2019 consist of: March 31, December 31, 2020 2019 (in thousands) Tucson Arizona office lease $ 371 $ 402 Marietta Georgia office lease 443 462 Total operating lease liabilities 814 864 Less current portion (214) (209) Long term portion $ 600 $ 655
Schedule of future minimum lease payments for operating leases	The following summarizes the total remaining future minimum operating lease payments at March 31, 2020 (in thousands): Period ending December 31, 2020 $ 192 2021 262 2022 257 2023 118 2024 81 Total minimum lease payments 910 Less: present value discount (96) Present value of minimum lease payments 814 Current portion of operating lease obligations 214 Operating lease obligations, less current portion $ 600
Schedule of lease expense	The following summarizes lease expenses for the three months ended March 31, 2020 (in thousands): Finance lease expenses: Depreciation and amortization expense $ 14 Interest on lease liabilities 1 Finance lease expense 15 Operating lease expense 64 Short-term lease expense 31 Total lease expenses $ 110
Summary of remaining lease terms and discount rates	The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2019: Weighted average remaining lease term (years) Operating Leases 3.64 Finance Leases 1.79 Weighted average discount rate (%) Operating Leases 6.00 Finance Leases 6.00

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2020
STOCKHOLDERS' EQUITY
Schedule of share-based compensation, stock options, activity	As of March 31, 2020 and December 31, 2019, the Company had outstanding options to purchase 923,653 and 965,043 shares of common stock, respectively. Weighted Intrinsic Weighted Average Value Number of Average Remaining of Options Exercise Price Term Exercisable Options Outstanding at December 31, 2019 965,043 $ 3.70 759,631 $ 1,666,266 Granted — — — — — Exercised — — Forfeited/Expired (41,390) 10.99 Outstanding at March 31, 2020 923,653 $ 3.38 742,345 $ 1,498,979
Schedule of other share-based compensation, activity	Below is a table summarizing the Company’s outstanding warrants as of March 31, 2020 and December 31, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Warrants Exercise Price Term Warrants Outstanding at December 31, 2019 424,708 $ 5.31 $ 189,450 Granted — — — — Exercised — — Forfeited/Expired (22,188) 9.59 Outstanding at March 31, 2020 402,520 $ 5.07 $ 130,400
Schedule of nonvested restricted stock shares activity	The following table summarizes the restricted stock unit activity for the three months ended March 31, 2020: Restricted stock units issued as of December 31, 2019 428,919 Granted 15,000 Forfeited/Canceled (25,000) Total Restricted stock units issued at March 31,2020 418,919 Vested at March 31, 2020 253,794 Unvested restricted stock units as of March 31, 2020 165,125

ORGANIZATION AND BASIS OF PRE_4

ORGANIZATION AND BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
ORGANIZATION AND BASIS OF PRESENTATION
Direct (Enterprise)	$ 2,387	$ 1,461
Indirect (Vertical partners)	1,862	525
Other	12
Total revenues	$ 4,261	$ 1,986

ORGANIZATION AND BASIS OF PRE_5

ORGANIZATION AND BASIS OF PRESENTATION - Deferred Revenue, by Arrangement (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
SIGNIFICANT ACCOUNTING POLICIES
Deferred revenue	$ 5,284	$ 5,525

ORGANIZATION AND BASIS OF PRE_6

ORGANIZATION AND BASIS OF PRESENTATION - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,044	3,133
Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	298	286
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	924	881
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	403	1,743
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	419	223

ORGANIZATION AND BASIS OF PRE_7

ORGANIZATION AND BASIS OF PRESENTATION - Fair value on a recurring basis (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 92	$ 120

ORGANIZATION AND BASIS OF PRE_8

ORGANIZATION AND BASIS OF PRESENTATION - Additional Information (Details) - USD ($)	Aug. 01, 2018	Aug. 31, 2018	Aug. 01, 2018	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Apr. 30, 2020	Aug. 14, 2019	Jan. 01, 2019
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Stock Issued During Period, Shares, New Issues		1,000,000
Shares Issued, Price Per Share		$ 6.25
Proceeds from Issuance of Common Stock		$ 5,609,000
Payments of Stock Issuance Costs		$ 641,000
Stockholders' Equity Note, Stock Split			1 share for every 25 shares
Common Stock, Shares Authorized	50,000,000		50,000,000	50,000,000		50,000,000
Conversion of Stock, Shares Converted	186,994,384
Conversion of Stock, Shares Issued	7,479,775
Deferred Revenue, Current				$ 5,143,000	$ 5,143,000	$ 5,372,000
Deferred Revenue, Noncurrent				$ 141,000		153,000
Deferred revenue recognized to revenue					$ 2,087,000
Deferred revenue recognized through the period (as a percent)				38.00%
Fair value of warrants				$ 92,000		120,000
Debt issuance costs, net				82,000		137,000
Operating Lease Liability				814,000		864,000			$ 568,000
Operating Lease, Right-of-Use Asset				$ 776,000		$ 827,000			$ 557,000
Accounts Receivable [Member] | Major Customer Number Two [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Concentration Risk, Percentage						40.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Concentration Risk, Percentage				18.00%
Previously Reported [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Common Stock, Shares Authorized	250,000,000		250,000,000
Sero Capital LLC
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Percentage of equity interests held by the related party								10.00%
Warrants issued								146,667
Warrants exercise price								$ 6
Fair value of warrants				$ 92,000				$ 219,000
Warrants and Rights Outstanding, Term								1 year
Debt issuance costs, net				$ 82,000
Sero Capital LLC | Contractual term
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Warrants and Rights Outstanding, Term								6 months
Sero Capital LLC | Risk-free interest rate
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Warrants and Rights Outstanding, Measurement Input								0.17
Sero Capital LLC | Dividend yield
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Warrants and Rights Outstanding, Measurement Input								0
Sero Capital LLC | Volatility rate
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Warrants and Rights Outstanding, Measurement Input								101.7
Unsecured credit facility
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Maximum borrowing capacity								$ 2,000,000
Unsecured credit facility | Sero Capital LLC
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Percentage of equity interests held by the related party								10.00%
Maximum borrowing capacity								$ 2,000,000
Subsequent Event
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Authorized amount							$ 7,000,000

GOING CONCERN AND MANAGEMENT'_2

GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) - USD ($)	Aug. 14, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Going Concern And Management Liquidity Plans [Line Items]
Cash and cash equivalents		$ 1,785,000		$ 1,972,000
Working Capital Deficit		2,467,000
Net Cash Provided by (Used in) Operating Activities		(54,000)	$ (1,625,000)
Fair value of warrants		92,000		$ 120,000
Sero Capital LLC
Going Concern And Management Liquidity Plans [Line Items]
Percentage of equity interests held by the related party	10.00%
Warrants issued	146,667
Warrants exercise price	$ 6
Warrant expiration period	1 year
Fair value of warrants	$ 219,000	$ 92,000
Unsecured credit facility
Going Concern And Management Liquidity Plans [Line Items]
Maximum borrowing capacity	$ 2,000,000
Interest rate (as a percent)	10.00%
Unsecured credit facility | Sero Capital LLC
Going Concern And Management Liquidity Plans [Line Items]
Percentage of equity interests held by the related party	10.00%
Maximum borrowing capacity	$ 2,000,000
Interest rate (as a percent)	10.00%

GOING CONCERN AND MANAGEMENT'_3

GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS - Additional information (Details) - Subsequent Event - USD ($)	Apr. 30, 2020	Apr. 15, 2020
Subsequent Event [Line Items]
Authorized amount	$ 7,000,000
PPP Loan
Subsequent Event [Line Items]
Face amount of debt		$ 1,300,000
Authorized amount	$ 7,000,000

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 280	$ 280
Less accumulated depreciation	(142)	(124)
Property and equipment, net	138	156
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	64	64
Equipment under capital lease [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	157	157
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 59	$ 59

PROPERTY AND EQUIPMENT - Additi

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 280,000		$ 280,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	142,000		124,000
Payments to Acquire Property, Plant, and Equipment	0	$ 0
Noncash or Part Noncash Acquisition, Fixed Assets Acquired		20,000
Depreciation	18,000	$ 13,000
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	157,000		157,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	73,000		$ 60,000
Noncash or Part Noncash Acquisition, Fixed Assets Acquired	$ 0

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Intangible Assets
Accumulated amortization	$ (3,894)	$ (3,710)
Intangible assets, net	1,655	1,715
Patents [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	3,698	3,698
Capitalized software development [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	1,841	1,717
Domain Name [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	$ 10	$ 10

INTANGIBLE ASSETS - Additional

INTANGIBLE ASSETS - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 184,000	$ 160,000
Software Development [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	91,000	66,000
Finite-lived Intangible Assets Acquired	124,000	60,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 93,000	$ 94,000

DEFERRED COSTS (Details)

DEFERRED COSTS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Deferred costs, short term - Beginning balance	$ 183,000
Deferred costs, long term - Beginning balance	145,000
Commission Costs Deferred, short term	19,000
Commission Costs Deferred, long term	27,000
Commission Costs Deferred	46,000	$ 65,000
Deferred costs, short term - End balance	181,000
Deferred costs, long term - End balance	137,000
Accounting Standards Update 2014-09 [Member]
Deferred costs, long term - Beginning balance	145,000
Deferred commission costs - Beginning balance	328,000
Commission Costs Deferred, short term	54,000
Commission Costs Deferred, long term	(8,000)
Commission Costs Deferred	46,000
Commission Amortized, Short term	(56,000)
Commission Amortized, Long term	0
Commission Amortized	(56,000)
Deferred costs, short term - End balance	181,000
Deferred costs, long term - End balance	137,000
Deferred commission costs - End balance	$ 318,000

DEFERRED COSTS - Additional Inf

DEFERRED COSTS - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
DEFERRED COSTS
Commission Costs Deferred	$ 46,000	$ 65,000
Deferred commission costs, current	19,000
Deferred Commission Costs Non Current	27,000
Reclassified deferred commissions cost from long-term to short-term	35,000
Amortization of Deferred Charges	$ 56,000	$ 51,000

LEASE LIABILITIES AND RIGHT O_3

LEASE LIABILITIES AND RIGHT OF USE ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Total finance lease liabilities	$ 94	$ 104
Less current portion	(53)	(52)
Long term portion	41	52
Finance equipment lease dated April 5, 2018 [Member]
Total finance lease liabilities	7	8
Finance equipment lease dated May 8, 2018 [Member]
Total finance lease liabilities	8	9
Finance equipment lease dated June 27, 2018 [Member]
Total finance lease liabilities	12	13
Finance equipment lease dated September 18, 2018 [Member]
Total finance lease liabilities	9	10
Finance equipment lease dated September 28, 2018 [Member]
Total finance lease liabilities	10	11
Finance equipment lease dated February 20, 2019 [Member]
Total finance lease liabilities	13	14
Finance equipment lease dated June 4, 2019 [Member]
Total finance lease liabilities	16	18
Finance equipment lease dated September 30, 2019 [Member]
Total finance lease liabilities	$ 19	$ 21

LEASE LIABILITIES AND RIGHT O_4

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Right to use assets under finance leases (Details) - Computer Equipment [Member] - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Lessee, Finance Lease, Description [Abstract]
Computer equipment	$ 157	$ 157
Less: accumulated depreciation	(73)	(60)
Property and equipment, net	$ 84	$ 97

LEASE LIABILITIES AND RIGHT O_5

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Future minimum finance lease payments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
LEASE LIABILITIES AND RIGHT OF USE ASSETS
2020	$ 46
2021	43
2022	10
Total minimum lease payments	99
Amount representing interest	(5)
Present value of minimum lease payments	94	$ 104
Current portion of finance lease obligations	53	52
Finance lease obligations, less current portion	$ 41	$ 52

LEASE LIABILITIES AND RIGHT O_6

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Operating lease liabilities (Details) - USD ($)	Jan. 01, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Operating Lease, Expense	$ 1,500	$ 64,000		$ 300
Total operating lease liabilities	$ 568,000	814,000	$ 864,000	814,000
Less current portion		(214,000)	(209,000)	(214,000)
Long term portion		600,000	655,000	$ 600,000
Tucson Arizona office lease [Member]
Operating Lease, Expense		371,000	402,000
Marietta Georgia Office Lease [Member]
Operating Lease, Expense		$ 443,000	$ 462,000

LEASE LIABILITIES AND RIGHT O_7

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Future minimum operating lease payments (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
LEASE LIABILITIES AND RIGHT OF USE ASSETS
2020	$ 192,000
2021	262,000
2022	257,000
2023	118,000
2024	81,000
Total minimum lease payments	910,000
Less: present value discount	(96,000)
Present value of minimum lease payments	814,000	$ 864,000	$ 568,000
Current portion of operating lease obligations	214,000	209,000
Operating lease obligations, less current portion	$ 600,000	$ 655,000

LEASE LIABILITIES AND RIGHT O_8

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Lease expenses (Details) - USD ($)	Jan. 01, 2019	Mar. 31, 2020	Mar. 31, 2020
Finance lease expenses:
Depreciation/amortization expense		$ 14,000
Interest on lease liabilities		1,000
Finance lease expense		15,000
Operating lease expense	$ 1,500	64,000	$ 300
Short-term lease expense		31,000
Total lease expenses		$ 110,000

LEASE LIABILITIES AND RIGHT O_9

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Remaining lease terms and discount rates (Details)	Mar. 31, 2019
LEASE LIABILITIES AND RIGHT OF USE ASSETS
Weighted average remaining lease term (years) - Operating Leases	3 years 7 months 21 days
Weighted average remaining lease term (years) - Finance Leases	1 year 9 months 15 days
Weighted average discount rate (%) - Operating Leases	6.00%
Weighted average discount rate (%) - Finance Leases	6.00%

LEASE LIABILITIES AND RIGHT _10

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Additional Information (Details)	Oct. 31, 2022USD ($)	Jan. 01, 2019USD ($)	Feb. 01, 2018USD ($)ft²	Mar. 31, 2020USD ($)ft²	Mar. 31, 2019USD ($)	Dec. 31, 2019USD ($)ft²	Mar. 31, 2020USD ($)ft²	Feb. 01, 2019ft²	Dec. 01, 2018ft²
Term of finance leases						3 years
Present value of minimum lease payments				$ 94,000		$ 104,000	$ 94,000
Finance Lease, Base Monthly Payments				5,000
Repayments of Debt and Capital Lease Obligations				9,000	$ 9,000
Finance Lease, Principal Payments				$ 14,000
Debt Instrument, Interest Rate, Effective Percentage				6.00%			6.00%
Lease, Practical Expedients, Package [true false]		true
Lease, Practical Expedient, Use of Hindsight [true false]		true
Lease, Practical Expedient, Land Easement [true false]		true
Operating Lease, Payments				$ 63,000
Operating Lease, Right-of-Use Asset		$ 557,000		776,000		$ 827,000	$ 776,000
Weighted average discount rate for leases					6.00%
Weighted average remaining term					3 years 7 months 21 days
Deferred Rent Credit, Noncurrent		11,000
Area of Land | ft²			4,248			5,151			5,151
Operating Lease, Cost				3,578
Increase Lease And Rental Expense	$ 12,977	11,810	$ 9,598	850
Operating Lease, Expense		1,500		64,000			300
Operating Lease, Liability		$ 568,000		814,000		$ 864,000	814,000
Lessee, Operating Lease, Discount Rate		6.00%
Equipment [Member]
Present value of minimum lease payments						$ 61,000
Marietta Georgia
Area of Land | ft²								9,662
Operating Lease, Liability				$ 484,000			$ 484,000
Lessee Operating Lease Term						5 years
Arizona [Member]
Area of Land | ft²				2,362			2,362
Georgia [Member] | Minimum
Area of Land | ft²			2,739
Georgia [Member] | Maximum
Area of Land | ft²			3,831
NEW YORK
Operating Lease, Expense				$ 4,482

CREDIT FACILITY-RELATED PARTY (

CREDIT FACILITY-RELATED PARTY (Details)	Aug. 14, 2019USD ($)$ / sharesshares
Sero Capital LLC
Line of Credit Facility [Line Items]
Percentage of equity interests held by the related party	10.00%
Warrants issued | shares	146,667
Warrants exercise price | $ / shares	$ 6
Term of warrants	1 year
Sero Capital LLC | Contractual term
Line of Credit Facility [Line Items]
Term of warrants	6 months
Unsecured credit facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 2,000,000
Interest rate (as a percent)	10.00%
Unsecured credit facility | Sero Capital LLC
Line of Credit Facility [Line Items]
Percentage of equity interests held by the related party	10.00%
Maximum borrowing capacity	$ 2,000,000
Interest rate (as a percent)	10.00%

SSTOCKHOLDERS' EQUITY - Outstan

SSTOCKHOLDERS' EQUITY - Outstanding Options (Details) - Employee Stock Option - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Number of Options
Outstanding at beginning of the period (in shares)	965,043
Forfeited/Expired	(41,390)
Outstanding at the end of the period (in shares)	923,653	965,043
Exercisable (in shares)	742,345	759,631
Wtd Avg. Exercise Price
Outstanding at beginning of the period (in dollars per share)	$ 3.70
Forfeited/Expired	10.99
Outstanding at end of the period (in dollars per share)	$ 3.38	$ 3.70
Wtd Avg. Remaining Term
Outstanding, Wtd Average Remaining Term	2 years 10 months 21 days	3 years 4 days
Intrinsic Value of Options
Outstanding, Intrinsic Value of Options (in dollars)	$ 1,666,266
Granted, Intrinsic Value of Options (in dollars)	$ 0
Outstanding, Intrinsic Value of Options (in dollars)	$ 1,498,979	$ 1,666,266

STOCKHOLDERS' EQUITY - Outstand

STOCKHOLDERS' EQUITY - Outstanding Warrants (Details) - Warrant - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Number of warrants
Number of shares, Beginning	424,708
Number of shares, granted	0
Number of shares, Forfeited	(22,188)
Number of shares, Ending	402,520	424,708
Wtd Avg. Exercise Price
Outstanding (in dollars per share)	$ 5.31
Forfeited (in dollars per share)	9.59
Outstanding (in dollars per share)	$ 5.07	$ 5.31
Wtd Avg. Remaining Term
Outstanding	7 months 10 days	9 months 26 days
Intrinsic Value of Warrants
Outstanding	$ 189,450
Granted	0
Outstanding	$ 130,400	$ 189,450

STOCKHOLDERS' EQUITY - Restrict

STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - shares	1 Months Ended		3 Months Ended
	Aug. 31, 2019	Jan. 31, 2019	Mar. 31, 2020
Restricted stock units issued at beginning of year			428,919
Granted			15,000
Forfeited/Cancelled	(3,215)	(3,000)	(25,000)
Total Restricted stock units issued at end of year			418,919
Vested at March 31, 2020			253,794
Unvested restricted shares as of December 31, 2019			165,125

STOCKHOLDERS' EQUITY - Addition

STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 31, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Class of Stock [Line Items]
Common Stock, Shares, Issued		8,877,000		8,877,000
Common Stock, Shares, Outstanding		8,877,000		8,877,000
Allocated Share-based Compensation Expense		$ 85,000		$ 72,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 0
Common Stock Dividends, Shares		58,912		55,927
Preferred stock unpaid dividend equivalent common stock, Shares		258,000		245,000
Preferred Stock, Liquidation Preference, Value		$ 1,308,000		$ 1,295,000
Preferred Stock, Liquidation Preference Per Share		$ 10
Employee Stock Option
Class of Stock [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 700,000
Warrant
Class of Stock [Line Items]
Allocated Share-based Compensation Expense		0	$ 0
Restricted Stock Units (RSUs)
Class of Stock [Line Items]
Allocated Share-based Compensation Expense		170,000	$ 377,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		$ 591,000
Black-Scholes value on the grant date of the options	$ 80,000
Restricted Stock Unit Agreement One
Class of Stock [Line Items]
Number of options granted	10,000
Restricted Stock Unit Agreement Two
Class of Stock [Line Items]
Number of options granted	5,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Redemption Price (in dollars per share)		$ 4.385
Preferred Stock, Dividend Rate, Percentage		5.00%		5.00%
Common Stock Dividends, Shares		2,985
Dividends Payable		$ 13,000
Preferred Stock, Shares Issued		105,000		105,000
Preferred Stock, Shares Outstanding		105,000		105,000
Preferred Stock Issue Per Share		$ 10		$ 10

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details)	1 Months Ended				3 Months Ended
	May 31, 2020shares	Apr. 30, 2020USD ($)shares	Aug. 31, 2019shares	Jan. 31, 2019shares	Mar. 31, 2020shares	Apr. 15, 2020USD ($)
Subsequent Event
Subsequent Event [Line Items]
Number of preferred shareholders elected to convert Series A Preferred Stock into Company's common stock		1
Preferred Stock converted into the Company's common stock		5,000
Cumulative dividends | $		$ 12,000
Shares issued upon conversion		14,239
Number of option exercised	10,000	35,325
Common stock issued upon cashless, or net, exercise of outstanding options	8,746	4,477
Restricted Stock Units (RSUs)
Subsequent Event [Line Items]
RSU forfeited			3,215	3,000	25,000
Amendment of a total					253,794
Restricted Stock Units (RSUs) | Board of Directors | Subsequent Event
Subsequent Event [Line Items]
Amendment effectively resulted in the immediate and full vesting	11,280
Amendment of a total	110,000
PPP Loan | Subsequent Event
Subsequent Event [Line Items]
Face amount of debt | $						$ 1,300,000