Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | xG TECHNOLOGY, INC. | |
Entity Central Index Key | 1,565,228 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | XGTI | |
Entity Common Stock, Shares Outstanding | 16,148,946 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 455 | $ 2,799 |
Accounts receivable, net | 6,652 | 8,337 |
Inventories, net | 16,192 | 14,753 |
Prepaid expenses and other current assets | 875 | 626 |
Total current assets | 24,174 | 26,515 |
Property and equipment, net | 2,926 | 3,237 |
Intangible assets, net | 6,317 | 6,894 |
Total assets | 33,417 | 36,646 |
Current liabilities | ||
Accounts payable | 10,451 | 10,918 |
Accrued expenses | 3,556 | 3,150 |
Convertible note payable | 2,000 | 2,000 |
Due to related parties | 943 | 998 |
Deferred revenue and customer deposits | 915 | 634 |
Obligation under capital leases | 10 | 18 |
Derivative liabilities | 662 | 1,271 |
Total current liabilities | 18,537 | 18,989 |
Long-term obligation under capital leases, net of current portion | 27 | 30 |
Total liabilities | 18,564 | 19,019 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock - $0.00001 par value per share: 10,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 0 shares issued and outstanding as of March 31, 2018 and December 31, 2017 | 0 | 0 |
Common stock - $0.00001 par value per share, 100,000,000 shares authorized, 14,959,784 and 14,897,392 shares issued and 14,959,782 and 14,897,390 outstanding as of March 31, 2018 and December 31, 2017, respectively | 0 | 0 |
Additional paid in capital | 238,052 | 237,140 |
Accumulated other comprehensive income | 437 | 354 |
Treasury stock, at cost - 2 shares at March 31, 2018 and December 31, 2017, respectively | (22) | (22) |
Accumulated deficit | (223,614) | (219,845) |
Total stockholders’ equity | 14,853 | 17,627 |
Total liabilities and stockholders' equity | $ 33,417 | $ 36,646 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 14,959,784 | 14,897,392 |
Common Stock, Shares, Outstanding | 14,959,782 | 14,897,390 |
Treasury stock, shares | 2 | 2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, net | $ 9,733 | $ 9,335 |
Cost of revenue and operating expenses | ||
Cost of components and personnel | 4,790 | 5,571 |
Inventory valuation adjustments | 113 | 99 |
General and administrative expenses | 5,832 | 6,548 |
Research and development expenses | 2,442 | 1,874 |
Amortization and depreciation | 887 | 989 |
Total cost of revenue and operating expenses | (14,064) | (15,081) |
Loss from operations | (4,331) | (5,746) |
Other income (expense) | ||
Changes in fair value of derivative liabilities | 609 | (217) |
Preliminary gain on bargain purchase | 0 | 11,839 |
Gain on debt extinguishment | 0 | 2,900 |
Interest expense | (47) | (484) |
Total other income | 562 | 14,038 |
Net (loss) income | $ (3,769) | $ 8,292 |
Basic (loss) earnings per share | $ (0.25) | $ 0.87 |
Diluted (loss) earnings per share | $ (0.25) | $ 0.84 |
Weighted average number of shares outstanding: | ||
Basic | 14,948 | 9,585 |
Diluted | 14,948 | 9,925 |
Comprehensive (loss) income: | ||
Net (loss) income | $ (3,769) | $ 8,292 |
Unrealized gain (loss) on currency translation adjustment | 437 | (17) |
Comprehensive (loss) income | $ (3,332) | $ 8,275 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows used in operating activities | ||
Net (loss) income | $ (3,769) | $ 8,292 |
Adjustments to reconcile net (loss) income to net cash used in operating activities | ||
Gain on bargain purchase | 0 | (11,839) |
Gain on debt extinguishment | 0 | (2,900) |
Stock-based compensation | 815 | 165 |
Payment made in stock (payroll and consultants) | 68 | 669 |
Stock Issuance Commitments | 90 | 303 |
Inventory valuation adjustments | 113 | 99 |
Depreciation and amortization | 887 | 989 |
Change in fair value of derivative liabilities | (609) | 217 |
Guaranteed interest and debt issuance costs | 0 | 434 |
Changes in assets and liabilities | ||
Accounts receivable | 1,795 | (3,243) |
Inventory | (1,213) | 732 |
Prepaid expenses and other current assets | (230) | (97) |
Accounts payable | (827) | 2,430 |
Accrued expenses and interest expense | 304 | 2,906 |
Deferred revenue and customer deposits | 269 | (41) |
Due to related parties | (45) | 765 |
Net cash used in operating activities | (2,352) | (119) |
Cash flows used in investing activities | ||
Cash disbursed for property and equipment | (30) | (316) |
Cash used in Vislink acquisition | 0 | (6,500) |
Net cash used in investing activities | (30) | (6,816) |
Cash flows provided by (used in) financing activities | ||
Principal repayments made on capital lease obligations | (11) | (14) |
Proceeds from multiple issuances of convertible preferred stock, common stock and warrants | 0 | 3,500 |
Costs incurred in connection with multiple financings | 0 | (459) |
Principal repayments of Vislink notes | 0 | (2,000) |
Proceeds from the exercise of warrants | 0 | 1,589 |
Net cash (used in) provided by financing activities | (11) | 2,616 |
Effect of exchange rate changes on cash | 49 | (17) |
Net decrease in cash | (2,344) | (4,336) |
Cash, beginning of period | 2,799 | 9,054 |
Cash, end of period | 455 | 4,718 |
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 0 | 0 |
Supplemental cash flow disclosures of investing and financing activities | ||
Services previously accrued | 19 | 295 |
Settlement of amounts due to related parties | 10 | 60 |
Settlement of notes payable to sellers of Vislink with assumption of liabilities and debt extinguishment | 0 | 7,500 |
Total debt issuance costs and guaranteed interest incurred from leak-out agreement | 0 | 434 |
Stock issued as payment of interest on convertible note | 0 | 90 |
Purchase Consideration | ||
Amount of consideration: | 0 | 16,000 |
Assets acquired and liabilities assumed at preliminary fair value | ||
Cash | 0 | 0 |
Accounts receivable | 0 | 7,129 |
Inventories | 0 | 14,761 |
Property and equipment | 0 | 1,301 |
Prepaid expenses | 0 | 1,209 |
Accounts payable | 0 | (2,079) |
Deferred rent | 0 | 0 |
Accrued expenses | 0 | (451) |
Net tangible assets acquired | 0 | 21,870 |
Identifiable intangible assets | ||
Intangible assets | 0 | 5,969 |
Total Identifiable Intangible Assets | 0 | 5,969 |
Total net assets acquired | 0 | 27,839 |
Consideration paid | 0 | 16,000 |
Preliminary gain on bargain purchase | 0 | 11,839 |
Customer Relationships [Member] | ||
Identifiable intangible assets | ||
Total Identifiable Intangible Assets | 0 | 0 |
Trademarks and Trade Names [Member] | ||
Identifiable intangible assets | ||
Total Identifiable Intangible Assets | 0 | 0 |
Series D Preferred Stock [Member] | ||
Supplemental cash flow disclosures of investing and financing activities | ||
Conversion of Convertible Preferred Stock | $ 0 | $ 648 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The overarching strategy of xG Technology, Inc. (“xG” or the “Company”) is to design, develop and deliver advanced wireless communications solutions that provide customers in its target markets with enhanced levels of reliability, mobility, performance and efficiency in their business operations and missions. xG’s business lines include the brands of Integrated Microwave Technologies LLC (“IMT”), Vislink Communication Systems (“Vislink” or “VCS”), and xMax. There is considerable brand interaction, owing to complementary market focus, compatible product and technology development roadmaps, and solution integration opportunities. In addition to these brands, xG has a dedicated Federal Sector Group focused on providing next-generation spectrum sharing solutions to national defense, scientific research and other federal organizations. IMT: The IMT business develops, manufactures and sells microwave communications equipment utilizing COFDM (Coded Orthogonal Frequency Division Multiplexing) technology. COFDM is a transmission technique that combines encoding technology with OFDM (Orthogonal Frequency Division Multiplexing) modulation to provide the low latency and high image clarity required for real-time live broadcasting video transmissions. IMT has extensive experience in ultra-compact COFDM wireless technology, and this has allowed IMT to develop integrated solutions that deliver reliable video footage captured from both aerial and ground-based sources to fixed and mobile receiver locations. Vislink: On February 2, 2017, the Company completed the acquisition of certain assets and liabilities related to the hardware segment of Vislink International Limited, an England and Wales registered limited company (the ‘‘UK Seller’’), and Vislink Inc., a Delaware corporation (the ‘‘US Seller’’, and together with the UK Seller, the ‘‘Sellers’’), pursuant to a Business Purchase Agreement, dated December 16, 2016, as amended on January 13, 2017, by and among the Company, the Sellers and Vislink PLC, an England and Wales registered limited company, as guarantor. The Company refers to the hardware segment acquired as Vislink Communications Systems (“Vislink” or ‘‘VCS’’). VCS specializes in the wireless capture, delivery and management of secure, high-quality, live video from the field to the point of usage. VCS designs and manufactures products encompassing microwave radio components, satellite communication, cellular and wireless camera systems, and associated amplifier items. VCS serves two core markets: broadcast and media and law enforcement, public safety and surveillance. In the broadcast and media market, VCS provides broadcast communication links for the collection of live news and sports and entertainment events. VCS’ customers in the broadcast and media market include national broadcasters, multi-channel broadcasters, network owners and station groups, sports and live broadcasters and hosted service providers. In the law enforcement, public safety and surveillance market, VCS provides secure video communications and mission-critical solutions for law enforcement, defense and homeland security applications. VCS’ customers in the law enforcement, public safety and surveillance market include metropolitan, regional and national law enforcement agencies as well as domestic and international defense agencies and organizations. The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the consolidated financial statements as filed on the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on April 2, 2018. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company's consolidated financial position as of March 31, 2018, the results of its operations and cash flows for the three months ended March 31, 2018 and 2017. Such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2018 may not be indicative of results for the year ending December 31, 2018. The accompanying condensed consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) include the accounts of xG and its wholly-owned subsidiaries, IMT and Vislink, since the date Vislink was acquired. All intercompany transactions and balances have been eliminated in the consolidation. Certain reclassifications have been made in the unaudited consolidated financial statements for comparative purposes. These reclassifications have no effect on the results of operations or financial position of the Company. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s decision-making group is the senior executive management team. The Company and the decision-making group view the Company’s operations as different product offerings but manage its business as one operating segment. All long-lived assets of the Company reside in the U.S. and U.K. Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, and debt discounts and the valuation of the assets and liabilities acquired in the acquisition of Vislink. Inventory is recorded at the lower of cost, on a first-in, first-out basis, or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. During the three months ended March 31, 2018 and 2017, we calculated approximately $ 113,000 99,000 The Company recognizes revenues when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and determinable, and collectability is reasonably assured. Revenues from management and consulting, time-and-materials service contracts, maintenance agreements and other services are recognized as the services are provided or at the time the goods are shipped and title has passed. The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with Accounting Standards Codifications (“ASC”) 718 "Compensation Stock Compensation", which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes Option Pricing Model. The fair value of common stock issued for services is determined based on the Company's stock price on the date of issuance. The Company accounts for stock compensation arrangements with persons classified as non-employees for accounting purposes in accordance with ASC 505-50 "Stock-Based Transactions with Nonemployees", which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of share-based compensation is subject to periodic adjustment as the underlying instruments vest. The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges are amortized over the vesting period. The Company reports (loss) earnings per share in accordance with ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic (loss) earnings per share of common stock is calculated by dividing net (loss) earnings allocable to common stockholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted (loss) earnings per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants, outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common stockholders is the same for periods with a net loss. Three Months Ended March 31, 2018 2017 Numerator: Net (loss) income applicable to common stockholders basic and diluted $ (3,769) $ 8,292 Denominator: Weighted average shares outstanding - basic 14,948 9,585 Dilutive stock options 0 340 Weighted average shares outstanding - diluted 14,948 9,925 Net loss per share applicable to common stockholders: Basic $ (0.25) $ 0.87 Dilutive $ (0.25) $ 0.84 Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: Stock options 6,376 3,556 Convertible debt 48 48 Warrants 8,695 8,182 U.S. GAAP requires disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the consolidated balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including, accounts receivable, accounts payable, and accrued expenses, the Company estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value. U.S. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3 Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The functional currency of our foreign subsidiary is typically the applicable local currency which is British Pounds. The translation from the respective foreign currency to United States Dollars (U.S. Dollars) is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using an average exchange rate during the period. Gains or losses resulting from such translation are included as a separate component of accumulated other comprehensive income. Gains or losses resulting from foreign currency transactions are included in foreign currency income or loss except for the effect of exchange rates on long-term inter-company transactions considered to be a long-term investment, which are accumulated and credited or charged to other comprehensive income. Transaction gains and losses are recognized in our results of operations based on the difference between the foreign exchange rates on the transaction date and on the reporting date. The Company recognized a net foreign exchange gain of approximately of $ 3,600 83,000 The exchange rates adopted for the foreign exchange transactions are the rates of exchange as quoted on OANDA, a Canadian-based foreign exchange company and internet website providing currency conversion, online retail foreign exchange trading, online foreign currency transfers, and forex information. Translation of amounts from British Pounds into United States dollars was made at the following exchange rates for the respective periods: ⋅ As of March 31, 2018 British Pounds $1.40084 to US $1.00 ⋅ Average rate for the three months ended March 31, 2018 British Pounds $1.391167 to US $1.00 Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein, except as disclosed. In March 2018, the FASB issued ASU 2018-05 “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)”, which amended ASC 740 to incorporate the requirements of Staff Accounting Bulletin (“SAB”) 118. Issued in December 2017 by the SEC, SAB 118 addresses the application of U.S. GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (the “Tax Reform Act”) which was signed into law on December 22, 2017. The Company’s accounting is complete as it pertains to the Tax Reform Act and no provisional amounts have been recorded as a result. In March 2018, the FASB issued ASU Number 2018-04, Investments - Debt Securities (Topic 320) and Regulated Operations (Topic 980). This update amended the guidance for other than temporary impairment of equity securities at fair value upon a registrant's adoption of ASC Topic 320. The Company adopted Topic 320 concurrently with ASU Number 2016-01 in January 2018. In February 2018, FASB issued Accounting Standards Update 2018-03; Technical Corrections and Improvements to Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The technical corrections and improvements intended to clarify certain aspects of the guidance on recognizing and measuring financial assets and liabilities in ASU 2016-01. This includes equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities, fair value option liabilities denominated in foreign currency and transition guidance for equity securities without a readily determinable fair value. The Company is required to adopt these standards starting in the first quarter of fiscal year 2019 and does not anticipate that implementation will have a material impact on its condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard will permit entities to reclassify tax effects stranded in accumulated other comprehensive income ("AOCI") as a result of U.S. tax reform to retained earnings. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The effects of this standard on our financial position, results of operations and cash flows are not expected to be material. In January 2016, the FASB released ASU 2016-02, “Leases.” The FASB issued a subsequent amendment to the initial guidance in January 2018 within ASU 2018-01. The core principle of the standard requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. The amendment offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The Company plans to adopt these new standards in the first quarter of 2019. The Company has not yet determined the effect of these standards on its condensed consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 completes the joint effort by the FASB and IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The ASU 2014-09 revenue recognition model virtually replaces all existing revenue recognition guidance and applies to all companies that enter into contracts with customers to transfer goods or services. ASU 2014-09 (as updated by ASU 2015-14 in August 2015, ASU No. 2016-08 in March 2016, ASU No. 10 in April 2016 and ASU No. 12 in May 2016) is effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Public and nonpublic entities have the choice to apply ASU 2014-09 either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying ASU 2014-09 at the date of initial application and not adjusting comparative information. Our emerging growth company (“EGC”) status expires at the end of this calendar year of 2018. Upon the loss of EGC status, an issuer is required to adopt the standard in its next filing. This accounting standard becomes effective for the Company for reporting periods beginning after December 15, 2018, and interim reporting periods thereafter, specifically the first quarter of 2019. The Company is still evaluating whether the adoption of ASU 2014-09 will have a material impact on its consolidated financial statements. Additionally, the Company intends to utilize the modified retrospective adoption and recognize the cumulative effect of initially applying ASU 2014-09, if significant, as an adjustment to the opening balance of accumulated deficit at the date of initial application. Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company's present or future condensed consolidated financial statements. |
LIQUIDITY AND FINANCIAL CONDITI
LIQUIDITY AND FINANCIAL CONDITION | 3 Months Ended |
Mar. 31, 2018 | |
LIQUIDITY AND FINANCIAL CONDITION [Abstract] | |
LIQUIDITY AND FINANCIAL CONDITION [Text Block] | NOTE 2 LIQUIDITY AND FINANCIAL CONDITION Under Accounting Standards Update, or ASU, 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirement of ASC 205-40. As reflected in the condensed consolidated financial statements, the Company had working capital and an accumulated deficit of $ 5.6 223.6 4.3 2.4 The Company’s condensed consolidated financial statements are prepared assuming the Company can continue as a going concern, which contemplates continuity of operations through realization of assets, and the settling of liabilities in the normal course of business. The Company implemented a cost reduction plan in April 2018 that is expected to result in approximately $ 5 The ability to recognize revenue and ultimately cash receipts is contingent upon, but not limited to, acceptable performance of the delivered equipment and services. If the Company is unable to close on some of its revenue producing opportunities in the near term, the carrying value of its assets may be materially impacted. |
ACQUISITION OF VISLINK
ACQUISITION OF VISLINK | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | NOTE 3 ACQUISITION OF VISLINK Acquisition of Vislink International Limited On February 2, 2017, the Company completed the acquisition of certain assets and liabilities related to the hardware segment of Vislink International Limited, an England and Wales registered limited company (the ‘‘UK Seller’’), and Vislink Inc., a Delaware corporation (the ‘‘US Seller’’, and together with the UK Seller, the ‘‘Sellers’’), pursuant to a Business Purchase Agreement, dated December 16, 2016, as amended on January 16, 2017, by and among the Company, the Sellers and Vislink PLC, an England and Wales registered limited company, as guarantor. The purchase price paid for the transaction was an aggregate of $ 16 6.5 9.5 The fair value of the purchase consideration issued to the sellers of Vislink was allocated to the net assets acquired. The Company accounted for the Vislink acquisition as the purchase of a business under U.S. GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as of the acquisition date at their respective fair values and consolidated with those of the Company. The fair value of the net assets acquired was approximately $ 26.9 The Company utilized the services of an independent appraisal company to assist it in assessing the fair value of the assets and liabilities acquired. This assessment included an evaluation of the fair value of inventory, fixed assets and the fair value of the intangible assets acquired based upon the expected cash flows from the assets acquired. Additionally, the Company incorporated the carrying value of the remaining working capital as Vislink’s management represented that the carrying value of these assets and liabilities served as a reasonable proxy for fair value. The valuation process included discussions with management regarding the history and business operations of Vislink, a study of the economic and industry conditions in which Vislink competes and an analysis of the historical and projected financial statements and other records and documents. When it became apparent there was a potential for a bargain purchase gain, management reviewed the Vislink assets and liabilities acquired and the assumptions utilized in estimating their fair values. The Company determined that provisional amounts, previously recognized, required adjustments to reflect new information obtained. According to ASC 805-10-25-15, the Company has a period of time, referred to as the measurement period, to finalize the accounting for a business combination. Upon additional review of identifying and valuing all assets and liabilities of the business, the Company concluded that recording a bargain purchase gain with respect to Vislink was appropriate and required under U.S. GAAP. The Company then undertook a review to determine what factors might contribute to a bargain purchase and if it was reasonable for a bargain purchase to occur. Factors that contributed to the bargain purchase price were: · The Vislink acquisition was completed with motivated Sellers who had a public strategy to concentrate on growing their software business as opposed to their technology and hardware businesses. As a strategic decision, the Sellers intended to sell off the assets of the hardware business. · The announcement of the U.K. leaving the European Union led to a decline in the pound, which led to pressure by Vislink’s creditors to raise funds. The owners of Vislink were motivated to complete a transaction in order to use the proceeds to reduce the line of credit they owed to the bank. · The industry in 2015 and 2016 experienced a downturn as decreased spending combined with economic uncertainty caused corporations to delay wireless and broadcast infrastructure upgrades. The Sellers believed these trends would continue. According to IBISWorld, industry revenue is expected to fall at an annualized rate of 0.6 · Prior to the U.K. leaving the European Union, Vislink was under contract to be sold for a much higher price. The Company took advantage of the economic and industry downturn to negotiate a favorable price which was less than the value of the assets acquired for a total purchase consideration of $ 16 Based upon these factors, the Company concluded that the occurrence of a bargain purchase was reasonable. Purchase Consideration Amount of consideration: $ 16,000,000 Tangible assets acquired and liabilities assumed at fair value Accounts receivable $ 7,129,000 Inventories 15,232,000 Property and equipment 3,868,000 Prepaid expenses 944,000 Accounts payable (2,294,000) Customer deposits (1,137,000) Accrued expenses (451,000) Net tangible assets acquired $ 23,291,000 Identifiable intangible assets Trade names and technology $ 1,100,000 Customer relationships 2,520,000 Total Identifiable Intangible Assets $ 3,620,000 Total net assets acquired $ 26,911,000 Consideration 16,000,000 Gain on bargain purchase $ 10,911,000 Since the closing of the transaction, the Company assumed $ 4.6 4.9 2 2.9 10.9 15.5 The estimated useful life remaining on the property and equipment acquired is 1 11 3 10 For the Three Months Ended 2017 Revenues, net $ 10,576 Net (loss) allocable to common stockholders $ (7,525) Net (loss) per share $ (0.79) Weighted average number of shares outstanding 9,585 The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisitions been completed as of January 1, 2017 or to project potential operating results as of any future date or for any future periods. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 4 INTANGIBLE ASSETS Software Development Patents and Licenses Trade Names and Customer Relationships Accumulated Accumulated Accumulated Accumulated Costs Amortization Costs Amortization Costs Amortization Costs Amortization Net Balance as of December 31, 2017 $ 18,647,000 $ (18,211,000) $ 12,378,000 $ (9,171,000) $ 1,450,000 $ (243,000) $ 2,880,000 $ (836,000) $ 6,894,000 Additions - - - - - - - - - Impairments - - - - - - - - - Amortization - (134,000) - (166,000) - (56,000) - (221,000) (577,000) Balance as of March 31, 2018 $ 18,647,000 $ (18,345,000) $ 12,378,000 $ (9,337,000) $ 1,450,000 $ (299,000) $ 2,880,000 $ (1,057,000) $ 6,317,000 Amortization of intangible assets amounted to $ 0.6 0.8 Software Development Costs: At March 31, 2018 and December 31, 2017, the Company had net capitalized software costs of $ 0.3 0.4 0.1 0.2 Patents and Licenses: At March 31, 2018 and December 31, 2017, the Company had net capitalized costs of patents and licenses of $ 3.0 3.2 18.5 20 0.2 Other Intangible Assets The Company’s remaining intangible assets include the trade names, technology and customer lists acquired in its acquisition of IMT and Vislink. The Company amortizes trade names, technology and customer relationships over their useful lives which range between 3 15 Balance 2018 $ 1,724,000 2019 1,763,000 2020 993,000 2021 818,000 2022 574,000 Thereafter 445,000 $ 6,317,000 The Company's intangible assets acquired in 2016 and 2017 will be amortized over a weighted average remaining life of approximately 2.67 |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 5 CONVERTIBLE NOTES PAYABLE Treco On October 6, 2011, the Company entered into a convertible promissory note (the “$ 2 2 42,000 9 87,000 24,397 90,000 45,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies Disclosure [Text Block] | NOTE 6 COMMITMENTS AND CONTINGENCIES Leases: The Company leases office space in Sarasota, Florida pursuant to a lease which runs through September 2019. Future payments under such lease will amount to $ 138,000 The Company leases office space in Sunrise, Florida pursuant to a lease which runs through May 2019. Future payments under such lease will amount to $ 202,000 The Company leases warehouse space in Sunrise, Florida pursuant to a lease which runs through January 2019. Future payments under such lease will amount to $ 15,000 In January 2017, IMT signed a new lease for warehouse and office space in Hackettstown, New Jersey which runs through April 29, 2020 188,000 641,000 Location Lease End Date Approximate Colchester, U.K. March 2025 $ 3,618,000 Billerica, MA May 2021 $ 1,396,000 Singapore August 2020 $ 81,000 Dubai, United Arab Emirates July 2018 $ 16,000 Anaheim, CA June 2018 $ 10,000 The Company’s office, deployment sites and warehouse facilities rent expenses aggregated to approximately $ 397,000 203,000 Year Ending December 31, Balance 2018 $ 1,413,000 2019 1,691,000 2020 1,275,000 2021 594,000 2022 410,000 Thereafter 923,000 $ 6,306,000 Legal: The Company is subject, from time to time, to claims by third parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows. For the three months ended March 31, 2018 the Company did not have any material legal actions pending. Pension: The Company at its discretion may make matching contributions to the 401(k) plan its employees participate in. For the three months ended March 31, 2018 and 2017, the Company did not make any matching contributions. The Company currently operates a Group Personal Pension Plan in its U.K. subsidiary and funds are invested with Royal London. U.K. employees are entitled to join the plan to which the Company contributes varying amounts subject to status. In addition, the Company operates a stakeholder pension scheme in the U.K. For the three months ended March 31, 2018 and 2017, the Company did not make any matching contributions. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders Equity Note Disclosure [Text Block] | NOTE 7 STOCKHOLDERS’ EQUITY Common Stock Issuances During the three months ended March 31, 2018, the Company: ⋅ Issued 43,747 68,000 ⋅ Recognized $ 815,000 ⋅ Issued 6,411 10,000 ⋅ Issued 12,232 19,000 Warrants and Options During the three months ended March 31, 2018 and 2017, the Company recorded approximately $ 815,000 165,000 9.13 8.99 0 0.07 6.69 2.63 Warrants Number of Warrants Weighted Average Outstanding January 1, 2018 8,695,273 $ 5.50 Granted Exercised Forfeited or Expired (169) 7,458.00 Outstanding, March 31, 2018 8,695,104 $ 5.35 Exercisable, March 31, 2018 8,695,104 $ 5.35 Options Number of Options Weighted Average Outstanding January 1, 2018 6,550,500 $ 1.58 Granted Exercised Forfeited or Expired (175,000) 1.59 Outstanding, March 31, 2018 6,375,000 $ 1.58 Exercisable, March 31, 2018 1,115,176 $ 1.55 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 8 DERIVATIVE LIABILITIES Each of the warrants issued in connection with our August 2015, May 2016 and July 2016 underwritten offerings and the February 2016 Series B Preferred Stock Offering have been accounted for as derivative liabilities as each of the warrants contain a net cash settlement provision whereby, upon certain fundamental events, the holders could put the warrants back to the Company for cash. Number of shares underlying the warrants on March 31, 2018 968,080 Fair market value of stock $ 0.87 Exercise price $ 2.00 to 2,400 Volatility 54% to 162% Risk-free interest rate 1.93% to 2.39% Expected dividend yield Warrant life (years) 0.5 to 3.3 Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, who report to the Chief Financial Officer, determine its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. Level 3 Valuation Techniques: Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company deems financial instruments which do not have fixed settlement provisions to be derivative instruments. In accordance with ASC Topic 480, Distinguishing Liabilities from Equity The Company’s derivative liabilities are carried at fair value and are classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. In order to calculate fair value, the Company uses a binomial model style simulation, as the value of certain features of the warrant derivative liabilities would not be captured by the standard Black-Scholes model. Three Months Ended March 31, 2018 2017 Beginning balance $ 1,271,000 $ 1,183,000 Change in fair value of derivative liabilities (609,000) 217,000 Ending balance $ 662,000 $ 1,400,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9 RELATED PARTY TRANSACTIONS MB Technology Holdings, LLC On April 29, 2014, the Company entered into a management agreement (the “Management Agreement”) with MB Technology Holdings, LLC (“MBTH”), pursuant to which MBTH agreed to provide certain management and financial services to the Company for a monthly fee of $ 25,000 75,000 The Company has agreed to award MBTH a 3 0 0 27,000 The balance outstanding to MBTH at March 31, 2018 and December 31, 2017 was $ 943,000 998,000 On November 29, 2016, the Company and MBTH entered into an acquisition services agreement (the ‘‘M&A Services Agreement’’) pursuant to which the Company engaged MBTH to provide services in connection with merger and acquisition searches, negotiating and structuring deal terms and other related services. The M&A Services Agreement incorporates by reference the terms of the Management Agreement, as well as the Company’s agreement with MBTH on January 12, 2013 to pay MBTH a 3 (1) The Company will pay MBTH an acquisition fee equal to the greater of $ 250,000 8 (2) In addition to any other fees, the Company will pay MBTH a due diligence fee of $ 250,000 This due diligence fee shall be paid to MBTH as warrants to purchase shares of common stock of the Company in an amount equal to $250,000 divided by the lower of the market price of the common stock on the day of closing of the transaction or the price of equity offered to finance such acquisition. 0.01 (3) The Company and MBTH agreed to waive the 3 3 1 (4) In the event the Company engages an independent, external advisor to value an acquisition and the valuation is higher than the price negotiated by MBTH on behalf of the Company, then MBTH will receive an additional fee of 5 (5) MBTH has the option to convert up to 50 110 25 (6) If MBTH’s services assist the Company in achieving forward sales of at least $ 50 25 125 On February 16, 2017, the Board of Directors amended the terms of the Block Purchase Option in the M&A Services Agreement to allow MBTH the option to acquire 25 2.10 The M&A Services Agreement is effective as of November 1, 2016 and will automatically renew annually, unless earlier terminated by the Company or MBTH upon thirty (30) days’ written notice. The Company accrued $ 1,480,000 1,480,000 8 During the three months ended March 31, 2017, the Company recorded $ 265,000 From January 1, 2018 to March 31, 2018, the Company issued 6,411 10,000 |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | NOTE 10 CONCENTRATIONS During the three months ended March 31, 2018, the Company recorded sales to one customer of $ 1,023,000 11 10 During the three months ended March 31, 2017, the Company did not record revenue from individual sales or services rendered in excess of 10 At March 31, 2018, approximately 21 705,000 11 663,000 10 At March 31, 2017, the Company did not have accounts receivable of over 10 During the three months ended March 31, 2018, approximately 27 695,000 15 584,000 12 During the three months ended March 31, 2017, the Company did not incur inventory purchases over 10 |
GEOGRAPHICAL INFORMATION
GEOGRAPHICAL INFORMATION | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 11 GEOGRAPHICAL INFORMATION Three Months Ended Three Months Ended March 31, 2018 March 31, 2017 Revenue: North America $ 3,272,000 $ 1,864,000 South America 309,000 659,000 Europe 4,290,000 3,902,000 Asia 1,392,000 1,005,000 Rest of World 470,000 1,905,000 $ 9,733,000 $ 9,335,000 Three Months Ended Three Months Ended March 31, 2018 March 31, 2017 Long-Lived Assets: United States $ 4,005,000 $ 4,316,000 United Kingdom 5,238,000 8,924,000 $ 9,243,000 $ 13,240,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 12 SUBSEQUENT EVENTS Other Common Stock Issuances From April 1, 2018 to May 15, 2018, the Company issued a total of 1,116,998 1,126,000 From April 1, 2018 to May 15, 2018, the Company issued a total of 72,176 70,000 |
ORGANIZATION AND SUMMARY OF S18
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business [Policy Text Block] | The overarching strategy of xG Technology, Inc. (“xG” or the “Company”) is to design, develop and deliver advanced wireless communications solutions that provide customers in its target markets with enhanced levels of reliability, mobility, performance and efficiency in their business operations and missions. xG’s business lines include the brands of Integrated Microwave Technologies LLC (“IMT”), Vislink Communication Systems (“Vislink” or “VCS”), and xMax. There is considerable brand interaction, owing to complementary market focus, compatible product and technology development roadmaps, and solution integration opportunities. In addition to these brands, xG has a dedicated Federal Sector Group focused on providing next-generation spectrum sharing solutions to national defense, scientific research and other federal organizations. IMT: The IMT business develops, manufactures and sells microwave communications equipment utilizing COFDM (Coded Orthogonal Frequency Division Multiplexing) technology. COFDM is a transmission technique that combines encoding technology with OFDM (Orthogonal Frequency Division Multiplexing) modulation to provide the low latency and high image clarity required for real-time live broadcasting video transmissions. IMT has extensive experience in ultra-compact COFDM wireless technology, and this has allowed IMT to develop integrated solutions that deliver reliable video footage captured from both aerial and ground-based sources to fixed and mobile receiver locations. Vislink: On February 2, 2017, the Company completed the acquisition of certain assets and liabilities related to the hardware segment of Vislink International Limited, an England and Wales registered limited company (the ‘‘UK Seller’’), and Vislink Inc., a Delaware corporation (the ‘‘US Seller’’, and together with the UK Seller, the ‘‘Sellers’’), pursuant to a Business Purchase Agreement, dated December 16, 2016, as amended on January 13, 2017, by and among the Company, the Sellers and Vislink PLC, an England and Wales registered limited company, as guarantor. The Company refers to the hardware segment acquired as Vislink Communications Systems (“Vislink” or ‘‘VCS’’). VCS specializes in the wireless capture, delivery and management of secure, high-quality, live video from the field to the point of usage. VCS designs and manufactures products encompassing microwave radio components, satellite communication, cellular and wireless camera systems, and associated amplifier items. VCS serves two core markets: broadcast and media and law enforcement, public safety and surveillance. In the broadcast and media market, VCS provides broadcast communication links for the collection of live news and sports and entertainment events. VCS’ customers in the broadcast and media market include national broadcasters, multi-channel broadcasters, network owners and station groups, sports and live broadcasters and hosted service providers. In the law enforcement, public safety and surveillance market, VCS provides secure video communications and mission-critical solutions for law enforcement, defense and homeland security applications. VCS’ customers in the law enforcement, public safety and surveillance market include metropolitan, regional and national law enforcement agencies as well as domestic and international defense agencies and organizations. |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the consolidated financial statements as filed on the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on April 2, 2018. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company's consolidated financial position as of March 31, 2018, the results of its operations and cash flows for the three months ended March 31, 2018 and 2017. Such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2018 may not be indicative of results for the year ending December 31, 2018. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying condensed consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) include the accounts of xG and its wholly-owned subsidiaries, IMT and Vislink, since the date Vislink was acquired. All intercompany transactions and balances have been eliminated in the consolidation. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain reclassifications have been made in the unaudited consolidated financial statements for comparative purposes. These reclassifications have no effect on the results of operations or financial position of the Company. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s decision-making group is the senior executive management team. The Company and the decision-making group view the Company’s operations as different product offerings but manage its business as one operating segment. All long-lived assets of the Company reside in the U.S. and U.K. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, and debt discounts and the valuation of the assets and liabilities acquired in the acquisition of Vislink. |
Inventory, Policy [Policy Text Block] | Inventories Inventory is recorded at the lower of cost, on a first-in, first-out basis, or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. During the three months ended March 31, 2018 and 2017, we calculated approximately $ 113,000 99,000 |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenues when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and determinable, and collectability is reasonably assured. Revenues from management and consulting, time-and-materials service contracts, maintenance agreements and other services are recognized as the services are provided or at the time the goods are shipped and title has passed. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with Accounting Standards Codifications (“ASC”) 718 "Compensation Stock Compensation", which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes Option Pricing Model. The fair value of common stock issued for services is determined based on the Company's stock price on the date of issuance. The Company accounts for stock compensation arrangements with persons classified as non-employees for accounting purposes in accordance with ASC 505-50 "Stock-Based Transactions with Nonemployees", which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of share-based compensation is subject to periodic adjustment as the underlying instruments vest. The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges are amortized over the vesting period. |
Earnings Per Share, Policy [Policy Text Block] | (Loss) Earnings Per Share The Company reports (loss) earnings per share in accordance with ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic (loss) earnings per share of common stock is calculated by dividing net (loss) earnings allocable to common stockholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted (loss) earnings per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants, outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common stockholders is the same for periods with a net loss. Three Months Ended March 31, 2018 2017 Numerator: Net (loss) income applicable to common stockholders basic and diluted $ (3,769) $ 8,292 Denominator: Weighted average shares outstanding - basic 14,948 9,585 Dilutive stock options 0 340 Weighted average shares outstanding - diluted 14,948 9,925 Net loss per share applicable to common stockholders: Basic $ (0.25) $ 0.87 Dilutive $ (0.25) $ 0.84 Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: Stock options 6,376 3,556 Convertible debt 48 48 Warrants 8,695 8,182 |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments U.S. GAAP requires disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the consolidated balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including, accounts receivable, accounts payable, and accrued expenses, the Company estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value. U.S. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3 Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | The functional currency of our foreign subsidiary is typically the applicable local currency which is British Pounds. The translation from the respective foreign currency to United States Dollars (U.S. Dollars) is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using an average exchange rate during the period. Gains or losses resulting from such translation are included as a separate component of accumulated other comprehensive income. Gains or losses resulting from foreign currency transactions are included in foreign currency income or loss except for the effect of exchange rates on long-term inter-company transactions considered to be a long-term investment, which are accumulated and credited or charged to other comprehensive income. Transaction gains and losses are recognized in our results of operations based on the difference between the foreign exchange rates on the transaction date and on the reporting date. The Company recognized a net foreign exchange gain of approximately of $ 3,600 83,000 The exchange rates adopted for the foreign exchange transactions are the rates of exchange as quoted on OANDA, a Canadian-based foreign exchange company and internet website providing currency conversion, online retail foreign exchange trading, online foreign currency transfers, and forex information. Translation of amounts from British Pounds into United States dollars was made at the following exchange rates for the respective periods: ⋅ As of March 31, 2018 British Pounds $1.40084 to US $1.00 ⋅ Average rate for the three months ended March 31, 2018 British Pounds $1.391167 to US $1.00 |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein, except as disclosed. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Principles In March 2018, the FASB issued ASU 2018-05 “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)”, which amended ASC 740 to incorporate the requirements of Staff Accounting Bulletin (“SAB”) 118. Issued in December 2017 by the SEC, SAB 118 addresses the application of U.S. GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (the “Tax Reform Act”) which was signed into law on December 22, 2017. The Company’s accounting is complete as it pertains to the Tax Reform Act and no provisional amounts have been recorded as a result. In March 2018, the FASB issued ASU Number 2018-04, Investments - Debt Securities (Topic 320) and Regulated Operations (Topic 980). This update amended the guidance for other than temporary impairment of equity securities at fair value upon a registrant's adoption of ASC Topic 320. The Company adopted Topic 320 concurrently with ASU Number 2016-01 in January 2018. In February 2018, FASB issued Accounting Standards Update 2018-03; Technical Corrections and Improvements to Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The technical corrections and improvements intended to clarify certain aspects of the guidance on recognizing and measuring financial assets and liabilities in ASU 2016-01. This includes equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities, fair value option liabilities denominated in foreign currency and transition guidance for equity securities without a readily determinable fair value. The Company is required to adopt these standards starting in the first quarter of fiscal year 2019 and does not anticipate that implementation will have a material impact on its condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard will permit entities to reclassify tax effects stranded in accumulated other comprehensive income ("AOCI") as a result of U.S. tax reform to retained earnings. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The effects of this standard on our financial position, results of operations and cash flows are not expected to be material. In January 2016, the FASB released ASU 2016-02, “Leases.” The FASB issued a subsequent amendment to the initial guidance in January 2018 within ASU 2018-01. The core principle of the standard requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. The amendment offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The Company plans to adopt these new standards in the first quarter of 2019. The Company has not yet determined the effect of these standards on its condensed consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 completes the joint effort by the FASB and IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The ASU 2014-09 revenue recognition model virtually replaces all existing revenue recognition guidance and applies to all companies that enter into contracts with customers to transfer goods or services. ASU 2014-09 (as updated by ASU 2015-14 in August 2015, ASU No. 2016-08 in March 2016, ASU No. 10 in April 2016 and ASU No. 12 in May 2016) is effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Public and nonpublic entities have the choice to apply ASU 2014-09 either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying ASU 2014-09 at the date of initial application and not adjusting comparative information. Our emerging growth company (“EGC”) status expires at the end of this calendar year of 2018. Upon the loss of EGC status, an issuer is required to adopt the standard in its next filing. This accounting standard becomes effective for the Company for reporting periods beginning after December 15, 2018, and interim reporting periods thereafter, specifically the first quarter of 2019. The Company is still evaluating whether the adoption of ASU 2014-09 will have a material impact on its consolidated financial statements. Additionally, the Company intends to utilize the modified retrospective adoption and recognize the cumulative effect of initially applying ASU 2014-09, if significant, as an adjustment to the opening balance of accumulated deficit at the date of initial application. Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company's present or future condensed consolidated financial statements. |
ORGANIZATION AND SUMMARY OF S19
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table illustrates the determination of loss per share for each period presented (in thousands, except per share amounts): Three Months Ended March 31, 2018 2017 Numerator: Net (loss) income applicable to common stockholders basic and diluted $ (3,769) $ 8,292 Denominator: Weighted average shares outstanding - basic 14,948 9,585 Dilutive stock options 0 340 Weighted average shares outstanding - diluted 14,948 9,925 Net loss per share applicable to common stockholders: Basic $ (0.25) $ 0.87 Dilutive $ (0.25) $ 0.84 Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: Stock options 6,376 3,556 Convertible debt 48 48 Warrants 8,695 8,182 |
ACQUISITION OF VISLINK (Tables)
ACQUISITION OF VISLINK (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combination, Consideration Transferred [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Purchase Consideration Amount of consideration: $ 16,000,000 Tangible assets acquired and liabilities assumed at fair value Accounts receivable $ 7,129,000 Inventories 15,232,000 Property and equipment 3,868,000 Prepaid expenses 944,000 Accounts payable (2,294,000) Customer deposits (1,137,000) Accrued expenses (451,000) Net tangible assets acquired $ 23,291,000 Identifiable intangible assets Trade names and technology $ 1,100,000 Customer relationships 2,520,000 Total Identifiable Intangible Assets $ 3,620,000 Total net assets acquired $ 26,911,000 Consideration 16,000,000 Gain on bargain purchase $ 10,911,000 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following presents the unaudited pro-forma combined results of operations of xG and Vislink as if the entities were combined on January 1, 2017. For the Three Months Ended 2017 Revenues, net $ 10,576 Net (loss) allocable to common stockholders $ (7,525) Net (loss) per share $ (0.79) Weighted average number of shares outstanding 9,585 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Software Development Patents and Licenses Trade Names and Customer Relationships Accumulated Accumulated Accumulated Accumulated Costs Amortization Costs Amortization Costs Amortization Costs Amortization Net Balance as of December 31, 2017 $ 18,647,000 $ (18,211,000) $ 12,378,000 $ (9,171,000) $ 1,450,000 $ (243,000) $ 2,880,000 $ (836,000) $ 6,894,000 Additions - - - - - - - - - Impairments - - - - - - - - - Amortization - (134,000) - (166,000) - (56,000) - (221,000) (577,000) Balance as of March 31, 2018 $ 18,647,000 $ (18,345,000) $ 12,378,000 $ (9,337,000) $ 1,450,000 $ (299,000) $ 2,880,000 $ (1,057,000) $ 6,317,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Balance 2018 $ 1,724,000 2019 1,763,000 2020 993,000 2021 818,000 2022 574,000 Thereafter 445,000 $ 6,317,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Lease Obligations Assumed In Acquisition [Table Text Block] | Location Lease End Date Approximate Colchester, U.K. March 2025 $ 3,618,000 Billerica, MA May 2021 $ 1,396,000 Singapore August 2020 $ 81,000 Dubai, United Arab Emirates July 2018 $ 16,000 Anaheim, CA June 2018 $ 10,000 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The Company’s total obligation of minimum future annual rentals, exclusive of real estate taxes and related costs, is approximately as follows: Year Ending December 31, Balance 2018 $ 1,413,000 2019 1,691,000 2020 1,275,000 2021 594,000 2022 410,000 Thereafter 923,000 $ 6,306,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Class of Warrant or Right [Line Items] | |
Schedule of Share-based Compensation, Activity [Table Text Block] | A summary of the warrant and option activity is as follows: Warrants Number of Warrants Weighted Average Outstanding January 1, 2018 8,695,273 $ 5.50 Granted Exercised Forfeited or Expired (169) 7,458.00 Outstanding, March 31, 2018 8,695,104 $ 5.35 Exercisable, March 31, 2018 8,695,104 $ 5.35 Options Number of Options Weighted Average Outstanding January 1, 2018 6,550,500 $ 1.58 Granted Exercised Forfeited or Expired (175,000) 1.59 Outstanding, March 31, 2018 6,375,000 $ 1.58 Exercisable, March 31, 2018 1,115,176 $ 1.55 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
DERIVATIVE LIABILITY [Line Items] | |
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | The following are the key assumptions used in connection with the valuation of the warrants exercisable into common stock on the date of issuance and March 31, 2018: Number of shares underlying the warrants on March 31, 2018 968,080 Fair market value of stock $ 0.87 Exercise price $ 2.00 to 2,400 Volatility 54% to 162% Risk-free interest rate 1.93% to 2.39% Expected dividend yield Warrant life (years) 0.5 to 3.3 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis: Three Months Ended March 31, 2018 2017 Beginning balance $ 1,271,000 $ 1,183,000 Change in fair value of derivative liabilities (609,000) 217,000 Ending balance $ 662,000 $ 1,400,000 |
GEOGRAPHICAL INFORMATION (Table
GEOGRAPHICAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company has one operating segment and the decision-making group is the senior executive management team. Three Months Ended Three Months Ended March 31, 2018 March 31, 2017 Revenue: North America $ 3,272,000 $ 1,864,000 South America 309,000 659,000 Europe 4,290,000 3,902,000 Asia 1,392,000 1,005,000 Rest of World 470,000 1,905,000 $ 9,733,000 $ 9,335,000 Three Months Ended Three Months Ended March 31, 2018 March 31, 2017 Long-Lived Assets: United States $ 4,005,000 $ 4,316,000 United Kingdom 5,238,000 8,924,000 $ 9,243,000 $ 13,240,000 |
ORGANIZATION AND SUMMARY OF S26
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net (loss) income applicable to common stockholders - basic and diluted | $ (3,769) | $ 8,292 |
Denominator: | ||
Weighted average shares outstanding - basic | 14,948 | 9,585 |
Dilutive stock options | 0 | 340 |
Weighted average shares outstanding - diluted | 14,948 | 9,925 |
Net loss per share applicable to common stockholders: | ||
Basic | $ (0.25) | $ 0.87 |
Dilutive | $ (0.25) | $ 0.84 |
Employee Stock Option [Member] | ||
Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,376 | 3,556 |
Warrant [Member] | ||
Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,695 | 8,182 |
Convertible Debt Securities [Member] | ||
Anti-dilutive potential common stock equivalents from the calculation of (Loss) Income per share: | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 48 | 48 |
ORGANIZATION AND SUMMARY OF S27
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign Currency Transaction Gain (Loss), Realized | $ 3,600 | $ (80,000) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 83,000 | (17,000) |
Inventory Write-down | $ 113,000 | $ 99,000 |
LIQUIDITY AND FINANCIAL CONDI28
LIQUIDITY AND FINANCIAL CONDITION (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
LIQUIDITY AND FINANCIAL CONDITION [Line Items] | ||||
Retained Earnings (Accumulated Deficit) | $ (223,614) | $ (219,845) | ||
Operating Income (Loss), Total | (4,331) | $ (5,746) | ||
Working Capital | 5,600 | |||
Net Cash Provided by (Used in) Operating Activities | $ (2,352) | $ (119) | ||
Subsequent Event [Member] | ||||
LIQUIDITY AND FINANCIAL CONDITION [Line Items] | ||||
Expected Amount Of Savings In Cost Reduction Plan | $ 5,000 |
ACQUISITION OF VISLINK (Details
ACQUISITION OF VISLINK (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Purchase Consideration | |||
Amount of consideration: | $ 0 | $ 16,000,000 | |
Tangible assets acquired and liabilities assumed at preliminary fair value | |||
Accounts receivable | 0 | 7,129,000 | |
Inventories | 0 | 14,761,000 | |
Property and equipment | 0 | 1,301,000 | |
Prepaid expenses | 0 | 1,209,000 | |
Accrued expenses | 0 | (451,000) | |
Net tangible assets acquired | 0 | 21,870,000 | |
Identifiable intangible assets | |||
Total Identifiable Intangible Assets | 0 | 5,969,000 | |
Total net assets acquired | 0 | 27,839,000 | |
Consideration | 0 | 16,000,000 | |
Gain on bargain purchase | 0 | 11,839,000 | |
Vislink International Limited [Member] | |||
Purchase Consideration | |||
Amount of consideration: | 16,000,000 | ||
Tangible assets acquired and liabilities assumed at preliminary fair value | |||
Accounts receivable | 7,129,000 | ||
Inventories | 15,232,000 | ||
Property and equipment | 3,868,000 | ||
Prepaid expenses | 944,000 | ||
Accounts payable | (2,294,000) | ||
Intangibles | (1,137,000) | ||
Accrued expenses | (451,000) | ||
Net tangible assets acquired | 23,291,000 | ||
Identifiable intangible assets | |||
Total Identifiable Intangible Assets | 3,620,000 | ||
Total net assets acquired | 26,911,000 | ||
Consideration | 16,000,000 | ||
Gain on bargain purchase | 10,911,000 | $ 15,500,000 | |
Trademarks and Trade Names [Member] | Vislink International Limited [Member] | |||
Identifiable intangible assets | |||
Total Identifiable Intangible Assets | 1,100,000 | ||
Customer Relationships [Member] | |||
Identifiable intangible assets | |||
Total Identifiable Intangible Assets | 0 | $ 0 | |
Customer Relationships [Member] | Vislink International Limited [Member] | |||
Identifiable intangible assets | |||
Total Identifiable Intangible Assets | $ 2,520,000 |
ACQUISITION OF VISLINK (Detai30
ACQUISITION OF VISLINK (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenues, net | $ 10,576 |
Net (loss) allocable to common stockholders | $ (7,525) |
Net (loss) per share | $ / shares | $ (0.79) |
Weighted average number of shares outstanding | shares | 9,585 |
ACQUISITION OF VISLINK (Detai31
ACQUISITION OF VISLINK (Details Textual) - USD ($) | Feb. 02, 2017 | Mar. 17, 2017 | Feb. 02, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | $ 16,000,000 | $ 16,000,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | 0 | $ 451,000 | ||||
Repayments of Notes Payable | $ 0 | 2,000,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 8 months 1 day | |||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 0 | $ 11,839,000 | ||||
Vislink Communication Systems [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Notes Payable | $ 4,900,000 | 4,900,000 | ||||
Payments to Acquire Businesses, Gross | 6,500,000 | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | 9,500,000 | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 1.9% | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | $ 26,900,000 | 26,900,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | $ 4,600,000 | $ 4,600,000 | ||||
Repayments of Notes Payable | $ 2,000,000 | |||||
Extinguishment of Debt, Amount | $ 2,900,000 | |||||
Revenue Reduction Annualized Rate | 0.60% | |||||
Vislink Communication Systems [Member] | Minimum [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 1 year | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |||||
Vislink Communication Systems [Member] | Maximum [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 11 years | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||||
Vislink International Limited [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | $ 451,000 | |||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 10,911,000 | $ 15,500,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance Beginning | $ 6,894,000 | |
Additions | 0 | |
Impairments | 0 | |
Amortization | (577,000) | $ (800,000) |
Balance Ending | 6,317,000 | |
Patents And Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance Beginning, Cost | 12,378,000 | |
Balance Beginning, A.A. | (9,171,000) | |
Additions | 0 | |
Impairments | 0 | |
Amortization | (166,000) | |
Balance Ending, Cost | 12,378,000 | |
Balance Ending, A.A. | (9,337,000) | |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance Beginning, Cost | 1,450,000 | |
Balance Beginning, A.A. | (243,000) | |
Additions | 0 | |
Impairments | 0 | |
Amortization | (56,000) | |
Balance Ending, Cost | 1,450,000 | |
Balance Ending, A.A. | (299,000) | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance Beginning, Cost | 2,880,000 | |
Balance Beginning, A.A. | (836,000) | |
Additions | 0 | |
Impairments | 0 | |
Amortization | (221,000) | |
Balance Ending, Cost | 2,880,000 | |
Balance Ending, A.A. | (1,057,000) | |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance Beginning, Cost | 18,647,000 | |
Balance Beginning, A.A. | (18,211,000) | |
Additions | 0 | |
Impairments | 0 | |
Amortization | (134,000) | $ (200,000) |
Balance Ending, Cost | 18,647,000 | |
Balance Ending, A.A. | $ (18,345,000) |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Mar. 31, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Balance 2,018 | $ 1,724,000 |
2,019 | 1,763,000 |
2,020 | 993,000 |
2,021 | 818,000 |
2,022 | 574,000 |
Thereafter | 445,000 |
Finite-Lived Intangible Assets, Net, Total | $ 6,317,000 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 577,000 | $ 800,000 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 8 months 1 day | ||
Minimum [Member] | Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Maximum [Member] | Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Patents And Licenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill), Total | $ 12,378,000 | $ 12,378,000 | |
Amortization of Intangible Assets | $ 166,000 | ||
Patents And Licenses [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 18 years 6 months | ||
Patents And Licenses [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 20 years | ||
Software Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill), Total | $ 18,647,000 | $ 18,647,000 | |
Amortization of Intangible Assets | $ 134,000 | $ 200,000 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details Textual) - USD ($) | Jan. 13, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Oct. 06, 2018 | Dec. 31, 2017 | Oct. 06, 2011 |
Debt Instrument [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | ||||
Treco International, S.A [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | |||||
Debt Instrument, Face Amount | $ 2,000,000 | |||||
Accrued Interest And Fees | $ 87,000 | |||||
Long-term Debt, Gross | $ 2,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 42,000 | |||||
Treco International, S.A [Member] | Convertible Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 24,397 | |||||
Paid-in-Kind Interest | $ 90,000 | |||||
Interest and Debt Expense | $ 45,000 | $ 45,000 |
COMMITMENTS AND CONTINGENCIES36
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Approximate Future Payments | $ 6,306,000 |
Colchester [Member] | Vislink [Member] | |
Approximate Future Payments | $ 3,618,000 |
Lease Expiration Date | Mar. 31, 2025 |
Billerica, MA [Member] | Vislink [Member] | |
Approximate Future Payments | $ 1,396,000 |
Lease Expiration Date | May 31, 2021 |
Singapore [Member] | Vislink [Member] | |
Approximate Future Payments | $ 81,000 |
Lease Expiration Date | Aug. 31, 2020 |
Dubai, United Arab Emirates [Member] | Vislink [Member] | |
Approximate Future Payments | $ 16,000 |
Lease Expiration Date | Jul. 31, 2018 |
Anaheim, CA [Member] | Vislink [Member] | |
Approximate Future Payments | $ 10,000 |
Lease Expiration Date | Jun. 30, 2018 |
COMMITMENTS AND CONTINGENCIES37
COMMITMENTS AND CONTINGENCIES (Details 1) | Mar. 31, 2018USD ($) |
Other Commitments [Line Items] | |
Balance 2,018 | $ 1,413,000 |
2,019 | 1,691,000 |
2,020 | 1,275,000 |
2,021 | 594,000 |
2,022 | 410,000 |
Thereafter | 923,000 |
Operating Leases, Future Minimum Payments Due, Total | $ 6,306,000 |
COMMITMENTS AND CONTINGENCIES38
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 31, 2017 | |
Other Commitments [Line Items] | |||
Operating Leases, Rent Expense, Net, Total | $ 397,000 | $ 203,000 | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 1,413,000 | ||
Operating Leases, Future Minimum Payments Due | 6,306,000 | ||
LeasesOfficeSpaceInSarasota [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Future Minimum Payments Due | 138,000 | ||
LeasesOfficeSpaceInSunrise [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 202,000 | ||
LeasesWarehouseSpaceInSunrise [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 15,000 | ||
Integrated Microwave Technologies LLC [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Future Minimum Payments Due | $ 188,000 | ||
Lease Expiration Date | Apr. 29, 2020 | ||
Vislink [Member] | Hemel UK [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Future Minimum Payments Due | $ 641,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Outstanding, Number of Warrants January 1, 2018 (in Shares) | shares | 8,695,273 |
Granted Number of Warrants (in Shares) | shares | 0 |
Exercised, Number of Warrants (in Shares) | shares | 0 |
Forfeited or Expired, Number of Warrants (in Shares) | shares | (169) |
Outstanding, Number of Warrants March 31, 2018 (in Shares) | shares | 8,695,104 |
Exercisable, Number of Warrants (in Shares) | shares | 8,695,104 |
Warrants Outstanding, Weighted Average Exercise Price January 1, 2018 | $ / shares | $ 5.5 |
Granted, Weighted Average Exercise Price | $ / shares | 0 |
Exercised, Weighted Average Exercise Price | $ / shares | 0 |
Forfeited or Expired, Weighted Average Exercise Price | $ / shares | 7,458 |
Warrants Outstanding, Weighted Average Exercise Price March 31, 2018 | $ / shares | 5.35 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 5.35 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Number of Options, Outstanding (in Shares) | shares | 6,550,500 |
Number of Options, Granted (in Shares) | shares | 0 |
Number of Options, Exercised (in Shares) | shares | 0 |
Number of Options, Cancelled (in Shares) | shares | (175,000) |
Number of Options, Outstanding (in Shares) | shares | 6,375,000 |
Number of Options, Exercisable (in Shares) | shares | 1,115,176 |
Weighted Average Exercise Price Outstanding | $ / shares | $ 1.58 |
Weighted Average Exercise Price, Granted | $ / shares | 0 |
Weighted Average Exercise Price, Exercised | $ / shares | 0 |
Weighted Average Exercise Price, Cancelled | $ / shares | 1.59 |
Weighted Average Exercise Price, Outstanding | $ / shares | 1.58 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 1.55 |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Class of Warrant or Right [Line Items] | ||
Share-based Compensation, Total | $ 815,000 | $ 165,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | $ 0.07 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 7 months 17 days | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 9 years 1 month 17 days | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 8 years 11 months 26 days | |
Stock Issued During Period, Shares, Deferred Compensation | 12,232 | |
Stock Issued During Period, Value, Deferred Compensation | $ 19,000 | |
Stock Issued During Period, Shares, Share-based Compensation, Gross | 43,747 | |
Stock Issued During Period, Value, Share-based Compensation, Gross | $ 68,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 6,690,000 | |
Stock or Unit Option Plan Expense | 815,000 | |
MB Technology Holdings LLC [Member] | ||
Class of Warrant or Right [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 10,000 | |
Stock Issued During Period, Shares, New Issues | 6,411 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of shares underlying the warrants | shares | 968,080 |
Fair market value of stock | $ 0.87 |
Expected dividend yield | 0.00% |
Maximum [Member] | |
Exercise price | $ 2,400 |
Volatility | 162.00% |
Risk-free interest rate | 2.39% |
Warrant life (years) | 3 years 3 months 18 days |
Minimum [Member] | |
Exercise price | $ 2 |
Volatility | 54.00% |
Risk-free interest rate | 1.93% |
Warrant life (years) | 6 months |
DERIVATIVE LIABILITIES (Detai43
DERIVATIVE LIABILITIES (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Beginning balance | $ 1,271,000 | $ 1,183,000 |
Change in fair value of derivative liabilities | (609,000) | 217,000 |
Ending balance | $ 662,000 | $ 1,400,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | Jan. 12, 2013 | Feb. 16, 2017 | Apr. 29, 2014 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||||||
Due to Related Parties, Current | $ 943,000 | $ 998,000 | ||||
Deiligence Fee | $ 250,000 | |||||
Deligence Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||||
MB Technology Holdings LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 25,000 | $ 75,000 | $ 75,000 | |||
Debt Conversion, Converted Instrument, Shares Issued | 6,411 | |||||
Distribution Fees | $ 0 | |||||
Deferred Compensation Arrangement with Individual, Cash Awards Granted, Percentage | 3.00% | |||||
Due to Related Parties, Current | $ 943,000 | $ 998,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.10 | |||||
Acquisition Fee Minimum Amount to Waive Success Fee | $ 1,000,000 | |||||
Related Party Transaction Fee, Common Stock Price Percentage for Conversion | 110.00% | |||||
Related Party Transaction Fee, Shares Registration Minimum Percentage | 25.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 25.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 125.00% | |||||
Diluted Outstanding Shares ,Percentage | 25.00% | |||||
MB Technology Holdings LLC [Member] | Vislink Communication Systems [Member] | MA Services Agreement One [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business Acquisition Cost Of Acquired Entity Transaction Costs, Percentage | 8.00% | |||||
Business Acquisition, Transaction Costs | 1,480,000 | |||||
MB Technology Holdings LLC [Member] | Vislink Communication Systems [Member] | MA Services Agreement Two [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business Acquisition, Transaction Costs | $ 1,480,000 | |||||
MB Technology Holdings LLC [Member] | Vislink International Limited [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Rate | 3.00% | |||||
MB Technology Holdings LLC [Member] | Minimum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 50,000,000 | |||||
MB Technology Holdings LLC [Member] | Success Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Rate | 3.00% | |||||
MB Technology Holdings LLC [Member] | Acquisition Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Rate | 8.00% | |||||
Related Party Transaction, Amounts of Transaction | $ 250,000 | |||||
Related Party Transaction, Terms and Manner of Settlement | (1) The Company will pay MBTH an acquisition fee equal to the greater of $250,000 or 8% of the total acquisition price (the ‘‘Acquisition Fee’’). Where possible, the Company will pay MBTH 50% of the Acquisition Fee at closing of a transaction, and in any case, not later than thirty (30) days following such closing, 25% of the Acquisition Fee three (3) months following such closing and 25% of the Acquisition Fee six (6) months following such closing. | |||||
MB Technology Holdings LLC [Member] | Deligence Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Terms and Manner of Settlement | This due diligence fee shall be paid to MBTH as warrants to purchase shares of common stock of the Company in an amount equal to $250,000 divided by the lower of the market price of the common stock on the day of closing of the transaction or the price of equity offered to finance such acquisition. | |||||
MB Technology Holdings LLC [Member] | Additional Fee on Independent Transaction [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Rate | 5.00% | |||||
MB Technology Holdings LLC [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to Related Parties, Current | $ 10,000 | |||||
MB Technology Holdings LLC [Member] | Warrant [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to Related Parties, Current | 265,000 | |||||
MB Technology Holdings LLC [Member] | Management Fees [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to Related Parties | $ 0 | $ 27,000 | ||||
M and A Services Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction Fee, Percentage of Fee That can be Converted to Equity | 50.00% | |||||
M and A Services Agreement [Member] | Success Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Rate | 3.00% |
CONCENTRATIONS (Details Textual
CONCENTRATIONS (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 21.00% | 10.00% |
Inventories [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 27.00% | 10.00% |
One Customer [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Net Assets Amount, Geographic Area | $ 1,023,000 | |
Concentration Risk, Percentage | 11.00% | |
One Customer [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Net Assets Amount, Geographic Area | $ 705,000 | |
Concentration Risk, Percentage | 11.00% | |
One Customer [Member] | Inventories [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Net Assets Amount, Geographic Area | $ 695,000 | |
Concentration Risk, Percentage | 15.00% | |
Two Customers [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Net Assets Amount, Geographic Area | $ 663,000 | |
Concentration Risk, Percentage | 10.00% | |
Two Customers [Member] | Inventories [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Net Assets Amount, Geographic Area | $ 584,000 | |
Concentration Risk, Percentage | 12.00% | |
Three Customers [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% |
GEOGRAPHICAL INFORMATION (Detai
GEOGRAPHICAL INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total Revenue | $ 9,733,000 | $ 9,335,000 |
Long-Lived Assets | 9,243,000 | 13,240,000 |
Rest of World [Member] | ||
Total Revenue | 470,000 | 1,905,000 |
North America [Member] | ||
Total Revenue | 3,272,000 | 1,864,000 |
South America [Member] | ||
Total Revenue | 309,000 | 659,000 |
Europe [Member] | ||
Total Revenue | 4,290,000 | 3,902,000 |
UNITED STATES | ||
Long-Lived Assets | 4,005,000 | 4,316,000 |
United Kingdom | ||
Long-Lived Assets | 5,238,000 | 8,924,000 |
Asia [Member] | ||
Total Revenue | $ 1,392,000 | $ 1,005,000 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] | 1 Months Ended |
May 15, 2018USD ($)shares | |
Subsequent Event [Line Items] | |
Stock Issued During Period, Shares, Issued for Services | shares | 1,116,998 |
Stock Issued During Period, Value, Issued for Services | $ | $ 1,126,000 |
MB Technology Holdings LLC [Member] | |
Subsequent Event [Line Items] | |
Stock Issued During Period, Shares, Issued for Services | shares | 72,176 |
Stock Issued During Period, Value, Issued for Services | $ | $ 70,000 |