Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 01, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Vislink Technologies, Inc. | ||
Entity Central Index Key | 0001565228 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,700,000 | ||
Entity Common Stock, Shares Outstanding | 19,054,595 | ||
Trading Symbol | VISL | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 2,005,000 | $ 2,799,000 |
Accounts receivable, net | 6,191,000 | 8,337,000 |
Inventories, net | 13,050,000 | 14,753,000 |
Prepaid expenses and other current assets | 780,000 | 626,000 |
Total current assets | 22,026,000 | 26,515,000 |
Property and equipment, net | 2,096,000 | 3,237,000 |
Intangible assets, net | 4,691,000 | 6,894,000 |
Total assets | 28,813,000 | 36,646,000 |
Current liabilities | ||
Accounts payable | 7,072,000 | 10,918,000 |
Accrued expenses | 2,112,000 | 3,150,000 |
Convertible notes payable | 2,000,000 | |
Convertible promissory notes, net of discount of $16 and $-0-, respectively | 400,000 | |
Due to related parties | 361,000 | 998,000 |
Customer deposits and deferred revenue | 1,574,000 | 634,000 |
Obligation under capital lease | 18,000 | |
Derivative liabilities | 1,118,000 | 2,399,000 |
Total current liabilities | 12,637,000 | 20,117,000 |
Obligation under capital lease, net of current portion | 30,000 | |
Convertible promissory notes, net of discount of $47 and $-0-, respectively | 5,886,000 | |
Total liabilities | 18,523,000 | 20,147,000 |
Commitments and contingencies (See Note 16) | ||
Stockholders' equity | ||
Preferred stock - $0.00001 par value per share: 10,000,000 shares authorized at December 31, 2018 and 2017; -0- shares issued and outstanding as of December 31, 2018 and 2017 | ||
Common stock, - $0.00001 par value per share, 100,000,000 shares authorized, 18,776,980 and 14,897,392 shares issued and 18,776,978 and 14,897,390 outstanding at December 31, 2018 and 2017, respectively | ||
Additional paid in capital | 244,562,000 | 235,819,000 |
Accumulated other comprehensive income | 275,000 | 354,000 |
Treasury stock, at cost - 2 shares as of December 31, 2018 and 2017, respectively | (22,000) | (22,000) |
Accumulated deficit | (234,525,000) | (219,652,000) |
Total stockholders' equity | 10,290,000 | 16,499,000 |
Total liabilities and stockholders' equity | $ 28,813,000 | $ 36,646,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Net of debt discount, current | $ 16 | $ 0 |
Net of debt discount, non current | $ 47 | $ 0 |
Preferred stock, par value | $ 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 | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 18,776,980 | 14,897,392 |
Common Stock, shares, outstanding | 18,776,978 | 14,897,390 |
Treasury stock, shares | 2 | 2 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue, net | $ 38,294,000 | $ 47,824,000 |
Cost of Revenue and operating expenses | ||
Cost of components and personnel | 19,192,000 | 28,220,000 |
Inventory valuation adjustments | 473,000 | 1,781,000 |
General and administrative expenses | 21,817,000 | 27,015,000 |
Research and development | 7,873,000 | 9,799,000 |
Impairment charge | 413,000 | |
Amortization and depreciation | 2,953,000 | 4,398,000 |
Total cost of revenue and operating expenses | 52,721,000 | 71,213,000 |
Loss from operations | (14,427,000) | (23,389,000) |
Other (expenses) income | ||
Changes in fair value of derivative liabilities | 3,186,000 | 105,000 |
Gain on bargain purchase | 10,911,000 | |
(Loss) gain on debt and payable extinguishment | (1,060,000) | 2,900,000 |
Other income (expenses) | 146,000 | (251,000) |
Interest expense | (2,718,000) | (629,000) |
Total other (expenses) income | (446,000) | 13,036,000 |
Net loss | $ (14,873,000) | $ (10,353,000) |
Basic and diluted loss per share | $ (0.90) | $ (0.85) |
Weighted average number of shares outstanding: | ||
Basic and Diluted | 16,489,000 | 12,138,000 |
Comprehensive loss: | ||
Net loss | $ (14,873,000) | $ (10,353,000) |
Unrealized (loss) gain on currency translation adjustment | (79,000) | 354,000 |
Comprehensive loss | $ (14,952,000) | $ (9,999,000) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Series D Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 221,960 | $ (22) | $ (209,299) | $ 12,639 | |||
Balance, shares at Dec. 31, 2016 | 7,606,518 | ||||||
Net loss | (10,353) | (10,353) | |||||
Unrealized gain on currency translation adjustment | 354 | 354 | |||||
Issuance of common stock in connection with: Underwritten offering, net of offering costs | 4,479 | 4,479 | |||||
Issuance of common stock in connection with: Underwritten offering, net of offering costs, shares | 3,310,978 | ||||||
Issuance of common stock in connection with: Exercise of common stock warrants | 2,124 | 2,124 | |||||
Issuance of common stock in connection with: Exercise of common stock warrants, shares | 1,062,113 | ||||||
Issuance of common stock in connection with: Payments made in stock (payroll and consultants) | 3,042 | 3,042 | |||||
Issuance of common stock in connection with: Payments made in stock (payroll and consultants), shares | 1,772,152 | ||||||
Issuance of common stock in connection with: Compensation awards previously accrued | 295 | 295 | |||||
Issuance of common stock in connection with: Compensation awards previously accrued, shares | 104,218 | ||||||
Issuance of common stock in connection with: Commitment agreement with Lincoln Park | 302 | 302 | |||||
Issuance of common stock in connection with: Commitment agreement with Lincoln Park, shares | 192,431 | ||||||
Issuance of common stock in connection with: Conversion of amounts due to related parties | 490 | 490 | |||||
Issuance of common stock in connection with: Conversion of amounts due to related parties, shares | 294,573 | ||||||
Issuance of common stock in connection with: Satisfaction of interest due on convertible promissory notes | 270 | 270 | |||||
Issuance of common stock in connection with: Satisfaction of interest due on convertible promissory notes, shares | 137,742 | ||||||
Stock-based compensation | 2,209 | 2,209 | |||||
Issuance of Series D Preferred stock | $ 5,000 | ||||||
Issuance of Series D Preferred stock, shares | 5,000,000 | ||||||
Issuance of common stock in connection with the conversion of Series D Preferred stock | $ (5,000) | 648 | 648 | ||||
Issuance of common stock in connection with the conversion of Series D Preferred stock, shares | (5,000,000) | 416,667 | |||||
Balance at Dec. 31, 2017 | 235,819 | (22) | 354 | (219,652) | 16,499 | ||
Balance, shares at Dec. 31, 2017 | 14,897,392 | ||||||
Net loss | (14,873) | (14,873) | |||||
Unrealized gain on currency translation adjustment | (79) | (79) | |||||
Issuance of common stock in connection with: Payments made in stock (payroll and consultants) | 1,793 | 1,793 | |||||
Issuance of common stock in connection with: Payments made in stock (payroll and consultants), shares | 2,083,136 | ||||||
Issuance of common stock in connection with: Compensation awards previously accrued | 19 | 19 | |||||
Issuance of common stock in connection with: Compensation awards previously accrued, shares | 12,232 | ||||||
Issuance of common stock in connection with: Conversion of amounts due to related parties | 240 | 240 | |||||
Issuance of common stock in connection with: Conversion of amounts due to related parties, shares | 429,585 | ||||||
Issuance of common stock in connection with: Satisfaction of interest due on convertible promissory notes | 180 | 180 | |||||
Issuance of common stock in connection with: Satisfaction of interest due on convertible promissory notes, shares | 276,796 | ||||||
Stock-based compensation | 3,728 | 3,728 | |||||
Satisfaction of convertible promissory notes | 2,339 | 2,339 | |||||
Satisfaction of convertible promissory notes, shares | 775,184 | ||||||
Beneficial conversion feature | 284 | 284 | |||||
Procurement fee for debt instrument | 160 | 160 | |||||
Procurement fee for debt instrument, shares | 302,655 | ||||||
Balance at Dec. 31, 2018 | $ 244,562 | $ (22) | $ 275 | $ (234,525) | $ 10,290 | ||
Balance, shares at Dec. 31, 2018 | 18,776,980 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows used in operating activities | ||
Net loss | $ (14,873,000) | $ (10,353,000) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Gain on bargain purchase | (10,911,000) | |
Loss (gain) on debt and payables extinguishment | 1,060,000 | (2,900,000) |
Gain on sale of property and equipment | (146,000) | |
Stock-based compensation (option awards) | 3,728,000 | 2,209,000 |
Stock-based compensation (payments for payroll and consultants) | 1,793,000 | 3,042,000 |
Stock issuance commitments | 519,000 | 715,000 |
Provision for bad debt | 142,000 | 335,000 |
Inventory valuation adjustments | 473,000 | 1,781,000 |
Depreciation and amortization | 2,953,000 | 4,398,000 |
Impairment charge | 413,000 | |
Change in fair value of derivative liabilities | (3,186,000) | (105,000) |
Guaranteed interest and debt issuance costs | 434,000 | |
Line of credit commitment fee | 302,000 | |
Non-cash interest costs | 2,301,000 | |
Changes in assets and liabilities | ||
Accounts receivable | 1,811,000 | (1,073,000) |
Inventories | 775,000 | 2,015,000 |
Prepaid expenses and other current assets | (186,000) | 463,000 |
Accounts payable | (3,365,000) | 2,996,000 |
Accrued expenses and interest expense | (1,178,000) | 329,000 |
Deferred revenue and customer deposits | 984,000 | 446,000 |
Due to related parties | (397,000) | 1,392,000 |
Net cash used in operating activities | (6,379,000) | (4,485,000) |
Cash flows provided (used) in investing activities | ||
Proceeds from sale of property and equipment | 250,000 | |
Cash disbursed for property and equipment | (69,000) | (374,000) |
Cash used in Vislink acquisition | (6,500,000) | |
Net cash provided (used) in investing activities | 181,000 | (6,874,000) |
Cash flows provided by financing activities | ||
Principal repayments made on capital lease obligations | (48,000) | (59,000) |
Proceeds from multiple issuances of convertible preferred stock, common stock and warrants | 6,700,000 | |
Costs incurred in connection with multiple financings | (900,000) | |
Principle repayments of Vislink notes | (2,000,000) | |
Principle repayments of notes payable | (824,000) | |
Proceeds received from the exercise of warrants | 2,124,000 | |
Proceeds from convertible promissory notes | 6,000,000 | |
Payment of issuance costs on convertible promissory notes | (433,000) | |
Principal repayments on convertible promissory notes | (84,000) | |
Net cash provided by financing activities | 5,435,000 | 5,041,000 |
Effect of exchange rate changes on cash | (31,000) | 63,000 |
Net decrease in cash | (794,000) | (6,255,000) |
Cash, beginning of year | 2,799,000 | 9,054,000 |
Cash, end of year | 2,005,000 | 2,799,000 |
Cash paid for interest | 36,000 | 242,000 |
Cash paid for taxes | ||
Supplemental cash flow disclosures of non-cash investing and financing activities Common stock issued in connection with: | ||
Conversion of amounts due to related parties | 240,000 | 490,000 |
Compensation awards previously accrued | 19,000 | 295,000 |
Conversion of principal and interest under convertible promissory notes | 2,339,000 | |
Conversion of Series D Convertible Preferred Stock | 648,000 | |
Stock issued as payment of interest on convertible notes | 180,000 | 180,000 |
Beneficial conversion feature | 284,000 | |
Compensatory fee for debt modification | 160,000 | |
Settlement of notes payable to sellers of Vislink with assumption of liabilities and debt extinguishment | 7,500,000 | |
Effect of the December 3, 2018 modification of the May 2018 debt instruments | 4,131,000 | |
Purchase Consideration | ||
Amount of consideration: | 16,000,000 | |
Assets acquired and liabilities assumed at fair value | ||
Accounts receivable | 7,129,000 | |
Inventories | 15,232,000 | |
Property and equipment | 3,868,000 | |
Other current assets | 944,000 | |
Accounts payable and deferred revenue | (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 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1 — NATURE OF OPERATIONS Description of Business Effective February 11, 2019, xG Technology, Inc changed its name to Vislink Technologies, Inc. The overarching strategy of Vislink Technologies, Inc. (“Vislink Technologies”, the “Company”, “we”, “our”, “us”) is to design, develop and deliver advanced wireless communications solutions that provide customers in our target markets with enhanced levels of reliability, mobility, performance and efficiency in their business operations and missions. Vislink Technologies business lines include the main brands Integrated Microwave Technologies (“IMT”) and Vislink (“Vislink”). There is considerable brand interaction, owing to complementary market focus, compatible product and technology development roadmaps, and solution integration opportunities. IMT: IMT 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: Vislink Communications Systems (“Vislink” or ‘‘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. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity And Financial Condition | |
Liquidity and Financial Condition | 2 — LIQUIDITY AND FINANCIAL CONDITION Under ASU 2014-15 Presentation of Financial Statements—Going 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 consolidated financial statements, the Company had $2.0 million in cash on the balance sheet at December 31, 2018. The Company had working capital and an accumulated deficit of $9.4 million and $234.5 million, respectively. Additionally, the Company had a loss from operations in the amount of $14.4 million and cash used in operating activities of $6.4 million for the year ended December 31, 2018. The Company’s 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 completed a cost reduction plan announced in April 2018 that resulted in approximately $8.2 million in annual savings. Savings were realized through immediate cost reductions affecting the xMax division by eliminating certain personnel costs, associated benefits and reduction in facilities and other expenses. The Company has also identified an additional $1.3 million in additional savings, primary related to facilities consolidation and severance. The Company believes it can raise additional working capital through equity or debt offerings; however, no assurance can be provided that the Company will be successful in such capital raising efforts. On May 29, 2018, the Company completed a private placement of $4 million in principal amount of 6% Senior Secured Convertible Debentures and warrants to purchase 3,000,000 shares of the Company’s common stock, $0.00001 par value per share, by executing certain agreements with accredited institutional investors. During the months of October 2018 and December 2018, the Company negotiated modifications of the terms of such private placement with a majority of the accredited institutional investors, whereby the Company at its option can satisfy these obligations with shares of common stock. With the proceeds of the May 2018 financing, as amended, along with the significant cost reductions, management believes substantial doubt has been mitigated. The Company believes it will have sufficient working capital to fund operations for at least the next twelve months from the date of issuance of these financial statements. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements and related notes thereto were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) include the accounts of Vislink Technologies and its wholly-owned subsidiaries, IMT and Vislink, since the date the acquisitions of IMT and Vislink were completed. All material intercompany balances and transactions are eliminated in consolidation. 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 (see Note 21). 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 and 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 Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the 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. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company did not have any cash equivalents on hand as of December 31, 2018 and 2017. Concentrations of Credit Risk The Company does not have any off-balance-sheet concentrations of credit risk. Credit risk is the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk is primarily attributable to its cash and accounts receivables. The Company’s policy is to maintain its cash with high credit quality financial institutions to limit its risk of loss exposure. During the year ended December 31, 2018, the Company had cash balances in excess of the federally insured limits of $250,000. The funds are on deposit with Wells Fargo Bank, N.A. Consequently, the Company does not believe that there is a significant risk related to having these balances in one financial institution. The Company has not experienced any losses in its bank accounts during the years ended December 31, 2018 and 2017. For customers, management assesses the credit quality of the customer, considering its financial position and past experience. During the year ended December 31, 2018, the Company did not experience concentrated sales to one customer in excess of 10% of the Company’s total consolidated sales. During the year ended December 31, 2017, the Company recorded sales to one customer of $5,535,000 (12%) in excess of 10% of the Company’s total consolidated sales. As of December 31, 2018, the Company did not experience a customer receivable in excess of 10% of the Company’s total accounts receivable. As of December 31, 2017, approximately 33% of net accounts receivable was due from two customers broken down individually as follows: $1,634,000 (20%) and $1,073,000 (13%). Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business. Further, the Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, the Company makes judgements regarding its customer’s ability to make required payments, prevailing economic conditions, past experience and other factors. As the financial condition of these factors change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. The Company maintains reserves for credit losses and losses have been within its expectations. Inventories Inventories, consisting principally of raw materials, work-in-process and finished goods, and 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. The Company evaluates inventory balances and either writes-down inventory that is obsolete or based on a net realizable value analysis or records a reserve for slow moving or excess inventory. Property and Equipment Property and equipment are presented at cost at the date of acquisition less depreciation. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 1 to 10 years. The costs of the day-to-day servicing of property and equipment, and repairs and maintenance are recognized in expenses as incurred. Depreciation amounted to $918,000 and $1,831,000 for the years ended December 31, 2018 and 2017, respectively. Intangible Assets Software: The Company capitalizes certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use or sale to others when both the preliminary project stage is completed, and it is probable that the software will be used as intended with a product. Capitalized software costs include only (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation and related benefits for employees who are directly associated with the product. Capitalized software costs are included in intangible assets on the Company’s balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximates 5 years. Software amortization totaled $268,000 and $923,000 for the years ended December 31, 2018 and 2017, respectively. Patents and licenses: Patents and licenses, measured initially at purchase cost, are included in intangible assets on the Company’s balance sheet and are amortized on a straight-line basis over their estimated useful lives of 18.5 to 20 years. Amortization totaled $664,000 for the years ended December 31, 2018 and 2017, respectively. 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 value of these acquired assets was determined by a third-party appraisal completed for these business combinations. Absent an indication of fair value from a potential buyer or similar specific transactions, the Company believes that the use of the methods employed provided a reasonable estimate in the reporting of the fair value assigned. The Company includes these costs in intangible assets on the balance sheet and are amortized over their useful lives of 3 to 15 years. Amortization amounted to $1,103,000 and $1,011,000 for the years ended December 31, 2018 and 2017, respectively. Other intangible assets capitalized were $-0- and $3,620,000 for the years ended December 31, 2018 and 2017, respectively. Warranty Reserve Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The warranty reserve for the years ended December 31, 2018 and 2017 was $325,000 and $507,000, respectively. The warranty reserve increased by $23,000 and $550,000 for the years ended December 31, 2018 and 2017, respectively. The claims made during the year ended December 31, 2018 and 2017 were ordinary and customary. Warranty reserve is included in accrued expenses on the accompanying consolidated balance sheets and cost of components in the accompanying consolidated statement of operations. Warranty Reserve January 1, 2017 $ 182,000 Warranty reserve expense 550,000 Warranty claims settled and true-up of accrual (225,000 ) December 31, 2017 $ 507,000 Warranty reserve expense 23,000 Warranty claims settled and true-up of accrual (205,000 ) December 31, 2018 $ 325,000 Shipping and Handling Costs Shipping and handling charges are invoiced to the customer and the Company nets these charges against the respective costs within general and administrative expenses. For the years ended December 31, 2018 and 2017, the amount of shipping and handling costs incurred were $774,000 and $886,000, respectively. Convertible Instruments The Company records debt net of debt discount for beneficial conversion features and warrants, on either a relative fair value or fair value basis depending on the respective accounting treatment of each instrument. Beneficial conversion features are recorded pursuant to the Beneficial Conversion (“BCF”) and Debt Topics of the FASB Accounting Standards Codification. The amounts allocated to warrants and beneficial conversion rights are recorded as debt discounts with corresponding entries to derivative liability and additional paid-in-capital. Costs paid to third parties (e.g., legal fees, printing costs, placement agent fees) that are directly related to issuing the debt and that otherwise wouldn’t be incurred, are treated as a direct deduction of the debt liability. Debt discount and issuance costs are generally amortized and recognized as additional interest expense in the statement of operations over the life of the debt instrument using the effective interest method. The Company evaluates and bifurcates conversion features from the instruments containing such features and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the underlying instrument, (b) the hybrid instrument that contains both the embedded derivative instrument and the underlying instrument is not re-measured at fair value under otherwise applicable U.S. GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing financial instruments as equity if the contracts (i) require physical settlement or net-share settlement in common stock or (ii) give the Company a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement). The Company classifies the following contracts as either an asset or a liability: contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement) or (iii) contain reset provisions. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. When shares are reissued, the cost method is used. In accordance with U.S. GAAP, the excess of the acquisition cost over the reissuance price of the treasury stock, if any, is recorded to additional paid-in capital, limited to the amount previously credited to additional paid-in capital, if any. Any excess is charged to accumulated deficit. 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. Research and Development Expenses Research and development costs are charged to expense as incurred in performing research, design and development activities. These expenses consist primarily of salary and benefit expenses, including stock-based compensation and payroll taxes for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, facilities and travel. Stock-Based Compensation The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with 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. Impairment of Long-Lived Assets Management reviews long-lived assets and other intangible assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the estimated undiscounted cash flows expected to result from the use of an asset and its eventual disposition is less than the carrying amount. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related net book value. For the years ended December 31, 2018 and 2017, the Company recorded total impairment charges of $0.4 million and $-0-, respectively. Income Taxes I ncome taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which management cannot conclude that it is more likely than not that such deferred tax assets will be realized. Advertising Costs Advertising costs are charged to operations as incurred. Advertising costs amounted to $82,000 and $542,000, for the years ended December 31, 2018 and 2017, respectively. Advertising costs are included in general and administrative expenses in the accompanying consolidated statement of operations. Sales Tax and Value Added Taxes The Company accounts for sales taxes and value added taxes imposed on its goods and services on a net basis. Loss 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 common share is calculated by dividing net (loss) earnings allocable to common stockholders by the weighted-average common shares outstanding during the period, without consideration of common stock equivalents. Diluted (loss) earnings per share is calculated by adjusting the weighted-average shares 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. The following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of earnings per share (in thousands): For the Years Ended December 31, 2018 2017 Stock options 5,857 6,551 Convertible debt 13,629 — Warrants 11,872 8,695 31,358 15,246 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 the fair value was 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 (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. 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 following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2018, consistent with the fair value hierarchy provisions. The asset impairment is a non-recurring level 3 measurement. Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets (non-recurring): Asset impairment $ — $ — $ 245,000 $ 245,000 Capitalized software development costs — — 168,000 168,000 — — 413,000 413,000 Liabilities: Derivative liability $ — $ — $ 1,118,000 $ 1,118,000 Total $ — $ — $ 1,118,000 $ 1,118,000 The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2017, consistent with the fair value hierarchy provisions: Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Derivative liability $ — $ — $ 2,399,000 $ 2,399,000 Total $ — $ — $ 2,399,000 $ 2,399,000 See Note 13 for additional disclosure regarding the Company’s warrants liabilities accounted for at fair value. Foreign Currency and Other Comprehensive (Loss) Gain 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. Dollar) 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 foreign currency exchange gains and losses are included as a component of general and administrative expenses, in the accompanying Consolidated Statements of Operations. The following table presents losses recognized from foreign exchange transactions; and changes in accumulated other comprehensive income representing the gain or loss on the translation of our foreign subsidiary’s financial statements as follows: For the Years Ended December 31, 2018 2017 Net foreign exchange transactions: Losses $ 483,000 $ 284,000 Accumulated comprehensive income: (Decreases) increases $ (79,000 ) $ 354,000 The exchange rate adopted for the foreign exchange transactions are the rates of exchange as quoted on an OANDA, a Canadian-based foreign exchange company providing currency conversion, online retail foreign exchange trading, online foreign currency transfers, and forex information, internet website. Translation of amounts from British Pounds into United States dollars was made at the following exchange rates for the respective periods: ● As of December 31, 2018 – British Pounds $1.2734340 to US$ 1.00 ● Average rate for the year ended December 31, 2018 – British Pounds $1.3347667 to US $1.00 ● As of December 31, 2017 – British Pounds $1.3491240 to US$ 1.00 ● Average rate for the 11 months ending December 31, 2017 – British Pounds $1.2936987 to US $1.00 Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein, except as disclosed. Recent Accounting Standards – Adopted and Not Yet Adopted Adopted on January 1, 2019 In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), that will supersede virtually all existing revenue guidance. Under this update, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the entitled consideration received in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the customer contracts. This update is effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company has been able to defer adoption to January 1, 2019, under the emerging growth company (“EGC”) status that expired on December 31, 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. On January 1, 2019, the Company adopted ASU 2014-09 “Revenue from Contracts with Customers” and all subsequent amendments to the ASU (collectively, “ASC 606”), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets. The Company will adopt ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2019. Under the modified retrospective transition method, an entity compares the revenue recognized from contract inception up to the date of initial application to the amount that would have been recognized if it had applied ASC 606 since contract inception. The difference between those two amounts would be accounted for as a cumulative effect adjustment and recognized on the date of initial application. The Company has completed its assessment of the new standard, including a review of the Company’s revenue streams to identify potential differences in accounting because of the new standard. This evaluation has influenced the Company to conclude that the adoption of the new guidance will not have a material impact and will not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustment is expected. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. As a lessor and lessee, we do not anticipate the classification of our leases to change, but we expect to recognize right-of-use assets and lease liabilities for substantially virtually all our operating lease commitments leases for which we are the lessee as a lease liability and corresponding right-of-use asset on consolidated balance sheet. The accounting for lessors remains largely unchanged from existing guidance. The new standard has been adopted on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company adopted the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients in transition. We expect to elect the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We do not expect to elect the use-of- hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect that this standard will have a material effect on our financial statements. While we continue to assess all the effects of adoption, we currently believe the most significant effects relate to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating leases. On adoption, the Company expects recognition of additional assets and corresponding liabilities pertaining to its operating leases on its consolidated balance sheets. The Company does not expect the adoption of the new standard to have a significant impact on its consolidated statements of operations and cash flows. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all our leases of real estate. New Standards Not Yet Adopted In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic) 808: Clarifying the Interaction between Topic 808 and Topic 606. The amendments in the update affect all entities that have collaborative arrangements. The amendments to this update make targeted improvements to generally accepted accounting principles (GAAP) for collaborative arrangements as follows: Clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements. Add unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. Require that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. The amendments in this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. An entity may not adopt th |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 4 — ACQUISITIONS 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 million consisting of (i) $6.5 million in cash consideration and (ii) promissory notes in the aggregate principal amount of $9.5 million (the ‘‘Notes’’). In connection with the Notes, the Company entered into a Security Agreement, dated February 2, 2017, with each of the Sellers (the ‘‘Security Agreements’’). The Notes were originally due to mature on March 20, 2017 (the ‘‘Maturity Date’’). Interest on the Notes was payable in cash on the Maturity Date at a rate per annum equal to LIBOR plus 1.9%. Pursuant to the Security Agreements, as collateral security for the Company’s obligations under the Notes, the Company granted the Sellers a security interest in certain assets purchased from the Sellers in connection with the transaction. 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 million. The excess of the aggregate fair value of the net tangible assets has been treated as a gain on bargain purchase in accordance with ASC 805. The purchase price allocation was based, in part, on management’s knowledge of Vislink’s business and the results of a third-party appraisal commissioned by management. 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% over the next five years reflecting further deterioration in the industry. As a result, the Sellers decided to sell the business. ● 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 million. 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 The following presents the unaudited pro-forma combined results of operations as if the entities were combined on January 1, 2017: For the Year Ended December 31, 2017 Revenues, net $ 49,118 Net loss allocable to common shareholders $ (25.810 ) Net loss per share $ (2.13 ) Weighted average number of shares outstanding 12,138 Since the closing of the transaction, the Company assumed $4.6 million of additional Vislink liabilities, thus reducing the principal amount due to the Sellers by $4.9 million. On March 17, 2017, the Company came to an agreement with the Sellers, pursuant to which the Company paid $2 million in cash and the Sellers extinguished the remaining $2.9 million of principal owed under the Notes and the Company recorded a gain on debt extinguishment in its Consolidated Statements of Operations. During the fourth quarter of 2017, the Company finalized its purchase price allocation analysis in accordance with ASC 805. As such, the Company’s final reported gain on bargain purchase was determined to be $10.9 million reduced from its previously reported gain on bargain purchase of $15.5 million. Such adjustments were made due to the Company completing its analysis of the net realizable value of certain of the tangible assets acquired. The estimated useful life remaining on the property and equipment acquired is 1 to 10 years and on the intangible assets is 3 to 10 years. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | 5 — ACCOUNTS RECEIVABLE Accounts receivable consist of the following: December 31, 2018 December 31, 2017 Accounts receivable $ 6,740,000 $ 9,305,000 Allowance for doubtful accounts (549,000 ) (968,000 ) Net accounts receivable $ 6,191,000 $ 8,337,000 During the years ended December 31, 2018 and 2017, the Company incurred bad debt expense of $142,000 and $335,000, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 6 — INVENTORIES Inventories included in the accompanying consolidated balance sheet are stated at the lower of cost or market as summarized below: December 31, 2018 December 31, 2017 Raw materials $ 6,173,000 $ 10,571,000 Work-in-process 3,711,000 2,660,000 Finished goods 4,052,000 5,249,000 Sub-total inventories 13,936,000 18,480,000 Less reserve for slow moving and excess inventory (886,000 ) (3,727,000 ) Total inventories, net $ 13,050,000 $ 14,753,000 Inventory valuation adjustments consist primarily of items that are written off due to obsolescence or reserved for slow moving or excess inventory. The Company recorded inventory valuation adjustments of $473,000 and $1,781,000 as of December 31, 2018 and 2017, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 7 — PROPERTY AND EQUIPMENT Property and equipment consist of the following: Useful Life (Years) December 31, 2018 2017 Cost: Furniture and fixtures 1 – 10 $ 291,000 $ 486,000 (A) Leasehold improvements 1 - 14 228,000 1,989,000 Computers, software and equipment 1 - 11 6,495,000 6,189,000 Vehicles 1 - 7 22,000 273,000 7,036,000 8,937,000 Accumulated depreciation (4,940,000 ) (5,700,000 ) Property and equipment, net $ 2,096,000 $ 3,237,000 Depreciation of property and equipment amounted to $918,000 and $1,831,000 for the years ended December 31, 2018 and 2017, respectively. With the Company curtailing the xG division, an impairment charge in the amount of $245,000 was recorded during the year ended December 31, 2018. Additionally, the Company reported a gain on sale of property and equipment in the amount of $146,000 for the year ended December 31, 2018. (A) The shorter of the economic life or remaining lease term. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8 — INTANGIBLE ASSETS Intangible assets consist of the following finite assets: Software Development Costs Patents and Licenses Trade Names and Technology Customer Relationships Accumulated Accumulated Accumulated Accumulated Costs Amortization Costs Amortization Costs Amortization Costs Amortization Net Balance as of January 1, 2017 $ 18,647,000 $ (17,288,000 ) $ 12,378,000 $ (8,507,000 ) $ 350,000 $ (35,000 ) $ 360,000 $ (33,000 ) $ 5,872,000 Additions - - - - 1,100,000 - 2,520,000 - 3,620,000 Impairments - - - - - - - - Amortization - (923,000 ) - (664,000 ) - (208,000 ) - (803,000 ) (2,598,000 ) 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 - - - - - - - - - Eliminations (18,647,000 ) 18,647,000 - - - - - - Impairments - (168,000 ) - - - - - (168,000 ) Amortization - (268,000 ) - (664,000 ) - (224,000 ) - (879,000 ) (2,035,000 ) Balance as of December 31, 2018 $ - $ - $ 12,378,000 $ (9,835,000 ) $ 1,450,000 $ (467,000 ) $ 2,880,000 $ (1,715,000 ) $ 4,691,000 Amortization of intangible assets amounted to $2,035,000 and $2,598,000 for the years ended December 31, 2018 and 2017, respectively. Software Development Costs: The Company recognized the amortization of software development costs in the amounts of $0.3 million and $0.9 million for the years ended December 31, 2018 and 2017, respectively. As a result of the closing of the xG division, the Company recording an impairment charge in the amount of $0.2 million and $-0- for the years ended December 31, 2018 and 2017, respectively. Patents and Licenses: At December 31, 2018 the Company has capitalized a total of $12.4 million of patents & licenses. Included in the capitalized costs is $12.3 million of costs associated with patents and licenses that have been filed. Also included in the capitalized costs is $0.1 million of costs associated with provisional patents and pending applications which have not yet been filed. The Company amortizes patents and licenses that have been filed over their useful lives which range between 18.5 to 20 years. The costs of provisional patents and pending applications is not amortized until the patent is filed and is reviewed each reporting period to determine if it is likely that the patent will be successfully filed. The Company recognized $0.7 million of amortization expense related to patents and licenses in each of the years ended December 31, 2018 and 2017. The weighted average remaining life of the amortization of the Company’s intangible assets is approximately 2.6 years. Estimated amortization expense for total intangible assets for the succeeding five years is as follows: 2019 $ 1,763,000 2020 993,000 2021 818,000 2022 574,000 2023 119,000 Thereafter 424,000 $ 4,691,000 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 9 — ACCRUED EXPENSES Accrued expenses consist of the following: December 31, 2018 December 31, 2017 Compensation $ 834,000 $ 1,306,000 Commissions 90,000 499,000 Warranty 325,000 507,000 Rent 71,000 54,000 Payables 576,000 27,000 Interest 112,000 42,000 Deferred Equity 104,000 715,000 $ 2,112,000 $ 3,150,000 |
Obligations Under Capital Lease
Obligations Under Capital Lease | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Obligations Under Capital Lease | 10 — OBLIGATIONS UNDER CAPITAL LEASE During the year ended December 31, 2018, the Company fully satisfied the remaining lease obligations. For the years ended December 31, 2018 and 2017, the Company held equipment under capital leases in the gross amount of $-0- and $54,000 net of $-0- and $82,000, respectively. Amortization expense for the capital leases for the year ended December 31, 2018 and 2017 are included in the depreciation expense. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 11 — CONVERTIBLE NOTES PAYABLE Treco On October 6, 2011, the Company entered into a convertible promissory note (the “$2 Million Convertible Note”) in favor of Treco International, S.A. (“Treco”), as part of the settlement compensation to Treco for terminating an infrastructure agreement. The $2 Million Convertible Note is payable on final maturity, October 6, 2018 and is convertible into common stock of the Company at a price of $42,000 per share. Interest at the rate of 9% per year is payable semi-annually in cash or shares, at the Company’s option. On October 6, 2018 the Company issued 48 shares of common stock in satisfaction of the full value of the remaining principal balance amounting to $2,000,000. The principal balance outstanding as of December 31, 2018 and 2017 amounted to $-0- and $2,000,000, respectively. The accrued interest was $-0- and $42,000 at December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017 the Company issued 276,796 and 137,742 shares of common stock, respectively in repayment of $180,000 and $270,000 of interest, respectively. May 2018 Financing On May 29, 2018, the Company completed a private placement of $4 million in principal of 6% Senior Secured Convertible Debentures (the “Debentures”) and warrants to purchase 3,000,000 shares of the Company’s common stock, par value $0.00001 per share, by executing certain agreements with accredited institutional investors. The Company received $3,636,760 net of debt issuance costs consisting of legal and placement fees totaling $363,240. The Debentures have a maturity date of May 29, 2019, with a conversion rate of $1.00 per share. If held beyond maturity, the conversion rate shall equal the lesser of (i) the then conversion price and (ii) 85% of the VWAP for the trading day immediately prior to the applicable conversion date. The Company shall pay interest to the holders on the aggregate and unconverted and outstanding principal amount on January 1, April 1, July 1 and October 1, with the remaining principal balance due at maturity. The warrants have a maturity date of May 29, 2023 with an exercise price of $1.00 per share. The warrants meet the definition of a derivative as noted in ASC 815-10-15-83 and ASC 815-10-15-88. We allocated the proceeds from the issuance of this note and the warrants based on the fair value for each item. Consequently, we recorded debt discount valued at $1,788,171 on the warrants and these associated costs are required to be accounted for as liabilities and were immediately expensed as interest. The warrants were valued using the binomial model style simulation. The assumptions used in the binomial model style simulation at the date the funds were received are as follows: (1) dividend yield of 0%; (2) expected volatility of 163.50%; (3) risk-free interest rate of 0.27%; and (4) expected life of 5.00 years. We also determined that the convertible promissory notes contained beneficial conversion rights (“BCF”) and calculated the relative fair value and assigned $193,877 to the BCF. Debt Modification of the May 2018 Financing executed on October 9, 2018 On October 9, 2018, the Company agreed to modify the May 2018 Financing (“old debt”) with two of the original four note holders (the “majority holders”) issuing amended and restated agreements. These modifications principally provide for: 1. The ability to make monthly redemption payments in common stock of the Company. 2. The issuance of 302,655 shares of common stock as compensatory shares; 3. A good-faith effort to modify the monthly redemption provisions before the next monthly redemption date; 4. An amendment of the conversion price to $0.45; and 5. In the event that any of the majority holders convert its amended debenture, the Company shall be given dollar for dollar credit for any and all conversions effected in any month against any monthly redemption amount (as defined in the amended debentures) and provided, further, that in the event that a majority holder’s conversions in any particular month exceed such majority holder’s individual monthly redemption amount (as defined in the amended debentures), such overage shall carry over into the succeeding month to be credited against the monthly redemption amount (as defined in the debentures). For the modification of the conversion option to $0.45 from $1.00, the Company applied ASC 470-50-40-10(a) and calculated the difference between the fair value of the embedded conversion option immediately before and after the modification. It has been concluded this is not a debt extinguishment. The Company determined that an increase in the conversion option fair value of $90,050 was recorded as additional debt discount with an offset to equity. The amount calculated will be amortized as interest expense over the remaining term of the debt instrument using the interest method. The Company considered ASC 470-50-40-17(b) to determine the proper accounting to apply for the 302,655 compensatory shares for the majority holders. Since the modification is not to be accounted for in the same manner as a debt extinguishment, a fair market value of $160,407 was assigned to the compensatory shares and recorded as additional debt discount to be amortized as interest expense over the remaining term of the debt instrument using the interest method. On December 3, 2018, the Company entered into a second modification agreement which led to an extinguishment of debt of the majority holders of the May 2018 Financing and created new debt obligations with revised terms and amounts. See below – Debt Modification of the May 2018 Financing executed on December 3, 2018. As of December 31, 2018, the remaining period over which any discount will be amortized is four months. The debentures (old debt) are summarized as of December 31, 2018 as follows: Remaining principal balance $ 415,625 Debt discount incurred $ 2,712,335 Amortization of debt discount (2,277,962 ) Effect of debt extinguishment (418,510 ) Un-amortized debt discount 15,683 Ending Balance – December 31, 2018 $ 399,942 Items charged to interest expense for the years ending December 31, 2018 and 2017 are: 2018 2017 Contractual interest expense $ 131,185 $ -0- Debt discount amortization 488,791 -0- Warrant costs 1,788,171 -0- Total charged to interest expense $ 2,408,147 $ -0- Debt Modification of the May 2018 Financing executed on December 3, 2018 On December 3, 2018, the Company agreed to a second modification with the Majority Holders of the May 2018 financing issuing amended and restated agreements. These modifications principally provide for: 1. A five percent (5%) original issue discount was retroactively applied to the principal amount. 2. The maturity date was extended to September 30, 2019 3. The equity conditions were modified 4. A floor price for all conversions and redemptions was added. The floor price with respect to the Trading Market that the Company’s Common Stock is listed or quoted, shall be a price equal to twenty cents ($0.20) (subject to adjustment for forward and reverse stock splits, recapitalizations and the like). 5. The definitions of Mandatory Redemption Amount, Monthly Redemption Date, Monthly Redemption Date, and Optional Redemption Amount (each as defined in the Second Amended Debentures) were each modified. 6. Interest was retroactively modified to ten percent (10%), with 12 months interest guaranteed. 7. An alternate Conversion Price (as defined in the Second Amended Debentures) due to an Event of Default (as defined in the Second Amended Debentures) was added. 8. The Monthly Redemption (as defined in the Second Amended Debentures) section was modified. 9. Certain negative covenants were added. 10. The Event of Default (as defined in the Second Amended Debentures) sections were modified. The Company considered ASC 470-50-40-6 to 40-23 for the proper accounting guidance to apply for the December 31, 2018 modification of the May 2018 Financing. After the modification, it was concluded that the present value of cash flows under the terms of the new debt instruments differ by at least 10% from the present value of the remaining cash flows under the terms of the original debt instruments (commonly referred to as the “10% cash flow test”). The Company concludes that these modified terms are considered substantially different from the original terms thus requiring extinguishment accounting. In accordance with ASC 470-50-40-17(a), the Company determined the new debt instrument’s value exceeded the extinguishment of the old debt instrument plus fees paid associated with the modification and recognized a loss on debt extinguishment in the amount of $1,059,870. The modifications resulted in new debt instruments and the principal is summarized as follows: Principal remaining on old debt modified $ 3,400,000 Accrued interest on old debt modified 100,300 Additional proceeds 2,000,000 Original issue discount 105,265 Redemption premiums 525,045 Total new principal $ 6,130,610 The Company paid issuances costs associated with the debt modifications in the amount of $70,000 and was recorded as additional debt discount. The amount calculated will be amortized as interest expense over the remaining term of the debt instrument using the interest method. In October 2018, the Company issued 222,224 shares valued at $100,000 as conversion of principal and interest. On December 4, 2018, the Company issued 552,912 shares at a fair market value of $238,758 as a conversion of principal and interest. As of December 31, 2018, the remaining period over which any discount will be amortized is nine months. These debentures as of December 31, 2018 are summarized as follows: Remaining principal balance $ 5,933,289 Debt discount incurred $ 70,000 Amortization of debt discount (22,693 ) Un-amortized debt discount 47,307 Ending Balance – December 31, 2018 $ 5,885,982 Items charged to interest expense for the years ending December 31, 2018 and 2017 are: 2018 2017 Contractual interest expense $ 140,886 $ -0- Debt discount amortization 22,693 -0- Total charged to interest expense $ 163,579 $ -0- |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12 — INCOME TAXES The provision (benefit) for income taxes consists of the following: December 31, 2018 2017 Current tax provision (benefit) Federal $ — $ — State 6,000 — 6,000 — Deferred tax provision (benefit) Federal (3,567,000 ) 21,269,000 State (1,720,000 ) (1,994,000 ) Foreign (127,000 ) (885,000 ) Change in valuation allowance 5,414,000 (18,390,000 ) Income tax provision (benefit) $ 6,000 $ — A reconciliation of the statutory tax rate to the effective tax rate is as follows: December 31, 2018 2017 Statutory Federal income tax rate 21.00 % 34.00 % State and local taxes, net of Federal benefit 10.93 13.96 Permanent differences 4.35 (2.74 ) Provision to return 1.40 1.21 IMT opening balance (— ) (— ) Bargain purchase gain (— ) 36.65 Vislink opening balance (— ) (36.65 ) Invested earnings of foreign subsidiary (0.14 ) (8.30 ) Change in federal and state statutory rate (0.80 ) (212.41 ) Valuation allowance (36.78 ) 174.28 Effective tax rate (0.04 )% (— )% Under the provisions of ASC 740, the Company may recognize the benefits of uncertain tax positions when it is more likely than not that the merits of the position(s) will be sustained upon audit by the relevant tax authorities. There were no uncertain tax positions taken or expected to be taken on a tax return that would be determined to be an unrecognized tax benefit recorded on the Company’s financial statements for the years ended December 31, 2018 or 2017. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial accounting purposes and the amounts used for income tax reporting. Significant components of the Company’s deferred tax assets are as follows: December 31, 2018 2017 Deferred Tax Assets Federal R&D credit $ 2,819,000 $ 2,819,000 Inventory 78,000 836,000 Allowance for bad debt 32,000 102,000 Compensation Related 3,000 120,000 Pension 6,000 33,000 Other Accruals 305,000 88,000 State Net operating losses 8,532,000 6,909,000 Federal Net operating losses 36,079,000 33,657,000 Property & Equipment 12,000 119,000 Stock Options 6,214,000 5,240,000 Other 834,000 623,000 Valuation Allowance (53,573,000 ) (48,159,000 ) Total Deferred Tax Assets 1,341,000 2,387,000 Deferred Tax Liabilities Property and Equipment (215,000 ) (197,000 ) Intangibles (1,080,000 ) (1,567,000 ) Inventory — (623,000 ) Prepaid Expenses (24,000 ) — Compensation Related (22,000 ) — Total Deferred Tax Liabilities (1,341,000 ) (2,387,000 ) Net Deferred Tax Asset/(Liability) $ — $ — As of December 31, 2018, the Company has federal net operating losses (“NOL”) of approximately $156.9 million that will expire beginning in 2027. The Company has federal NOLs of approximately $10.4 million that may be carried forward indefinitely. The Company also has state NOL carryforwards of $152.7 million which will expire beginning in 2027. In addition, the Company has foreign NOL carryforwards of approximately $5.5 million that generally do not expire except under certain circumstances. The Company also has research and development credits of approximately $2.8 million which will begin to expire in 2027. The years that remain open for review by taxing authorities are 2015 to 2018 for Federal, Foreign and State Income Tax returns. Realization of the NOL carryforwards and other deferred tax temporary differences is contingent on future taxable earnings. The Company’s deferred tax assets were reviewed for expected utilization using a “more likely than not” approach by assessing the available positive and negative evidence surrounding its recoverability. Accordingly, a valuation allowance has been recorded against the Company’s deferred tax assets, as it was determined based upon past and present losses that it was “more likely than not” that the Company’s deferred tax assets would not be realized. The valuation allowance was increased to the full carrying amount of the Company’s deferred tax assets. In future years, if the deferred tax assets are determined by management to be “more likely than not” to be realized, the recognized tax benefits relating to the reversal of the valuation allowance will be recorded. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied. The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the Company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. The Company plans to perform a Section 382 analysis in the future. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into U.S. law. The Tax Act permanently reduces the U.S. statutory tax rate for corporations from 35% to 21% effective for tax years beginning after December 31, 2017, which affected the determination of deferred tax assets and liabilities as of December 31, 2017. The lower tax rate meant that the future tax benefits and expenses of the Company’s existing deferred tax assets and liabilities were revalued, as the tax benefits and expenses attributable to these assets and liabilities would be realized at a lower rate. The Company’s remeasurement of its U.S. deferred tax and liabilities based on the change in tax rate resulted in a tax expense of approximately $22.4 million, which has been fully offset by a corresponding remeasurement of the valuation allowance provided on the associated deferred tax assets and liabilities. Effective for tax years beginning after December 31, 2017, the Tax Act includes a participation exemption system of taxation, which generally provides for 100% dividends received deduction on certain qualifying dividend distributions received by U.S. C-corporation shareholders from their 10% or more owned foreign subsidiaries. As a result of this new participation exemption system, it is generally anticipated that the Company should not be subject to additional U.S. federal income taxation on its future receipt of actual dividend income (as opposed to a deemed inclusion amounts under certain anti-deferral rules) from its foreign subsidiary. In implementing a prospective participation exemption system, the Tax Act also imposed a one-time transition tax on a U.S. shareholder’s share of certain post-1986 earnings and profits of held specified foreign corporations where such earnings had not previously been subject to U.S. taxation (the “repatriation tax”). The net inclusion amounts attributable to a given specified foreign corporation is deemed distributed at the close of that specified foreign corporation’s last taxable year beginning before January 1, 2018. One of the Company’s subsidiaries is in the United Kingdom. However, the subsidiary’s operations generated an earnings and profits deficit. Accordingly, the Company did not incur a 2017 tax liability associated with a net inclusion amount and did not include a provision for the repatriation tax. For tax years beginning after December 31, 2017, the Tax Act provides for an additional tax on U.S. shareholders on foreign earnings of foreign subsidiaries denoted as global intangible low-taxed income (“GILTI”) whereby certain income earned by our foreign subsidiaries may be subject to U.S. taxation. Due to yearly variations in the factors giving rise to the income and related tax, the Company is unable to reasonably estimate the future impact of GILTI and any potential effect on the tax rate used to measure deferred tax assets and liabilities. Accordingly, the Company accounts for the tax in the year (if any) in which it is incurred. For the year ended December 31, 2018, the Company’s foreign subsidiary did not generate foreign earnings that would subject the Company to U.S. tax for GILTI. For tax years beginning after December 31, 2017, the Tax Act allows a foreign-derived intangible income deduction (“FDII”) which effectively taxes some foreign-derived income at a reduced rate. Due to yearly variations in income that might qualify for the deduction, the Company is unable to reasonably estimate a potential deduction’s effect on the tax rate used to measure deferred tax assets and liabilities as of December 31, 2017. The Company will account for this special deduction in the year (if any) in which the deduction is claimed. For tax years beginning after December 31, 2017, the Tax Act introduced a new limitation on the deduction of interest expense whereby current year interest deductions are limited (among other limitations) to 30% of adjusted taxable income, with various modifications and exceptions. The Company does incur interest expense, and evaluates each year the impact, if any, of the new limitation. The Company has not provided for deferred taxes and foreign withholding taxes on the excess of the financial reporting basis over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration. In general, it is the Company’s practice and intention to reinvest the earnings of our foreign subsidiary in those operations. Generally, the earnings of our foreign subsidiary have become subject to U.S. taxation based on certain provisions in U.S. tax law such as the recently enacted territorial transition tax under section 965 and under certain other circumstances. Due to the complexities of the provisions introduced with the Tax Act, and the underlying assumptions that would have to be made, it is not practicable to estimate the amount of tax provision required to account for these foreign undistributed earnings. The Company will account for any additional expense or deduction in the year it is claimed. The Company will continue to review each year whether this treatment is appropriate. The Company is currently not subject to any income tax examinations that would be material to the Company’s financial position or results of operations. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 13 — DERIVATIVE LIABILITIES Each of the warrants issued in connection with the August 2015 underwritten offering, the February 2016 Series B Preferred Stock Offering, the May 2016 financing, the July 2016 financing, the August 2017 underwritten offering, and the May 2018 financing 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. The following are the key assumptions that were used in connection with the valuation of the warrants exercisable into common stock as of December 31, 2018 and 2017: Years Ended December 31, 2018 2017 Number of shares underlying the warrants 4,928,152 968,080 Fair market value of stock $ 0.31 $ 1.62 Exercise price $ 0.45 to 13.79 $ 2.00 to 2,400 Volatility 118% to 149 % 67% to 160 % Risk-free interest rate 2.46% to 2.51 % 1.76% to 2.20 % Expected dividend yield — — Warrant life (years) 0.1 to 4.41 0.8 to 3.55 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, which reports to the Chief Financial Officer, determines 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 U.S. GAAP the fair value of these warrants is classified as a liability on the Company’s consolidated balance sheets because, according to the terms of the warrants, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Such instruments do not have fixed settlement provisions and have also been recorded as derivative liabilities. Corresponding changes in the fair value of the derivative liabilities are recognized in earnings on the Company’s consolidated statements of operations in each subsequent period. The Company’s derivative liabilities are carried at fair value and were 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. 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: Years Ended December 31, 2018 2017 Beginning balance $ 2,399,000 $ 1,183,000 Recognition of warrant liability on issuance dates 1,905,000 1,321,000 Change in fair value of derivative liabilities (3,186,000 ) (105,000 ) Ending balance $ 1,118,000 $ 2,399,000 |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Preferred Stock | 14 — Preferred Stock In March 2013, by approval of the majority of the stockholders, the Company was authorized to issue 10,000,000 shares of “Blank Check” preferred stock, par value $0.00001 per share. On December 31, 2014, 3,000,000 shares were designated as authorized Series A Convertible Preferred Stock (“Series A Preferred Stock”). On February 11, 2015, 3,000,000 shares were designated as authorized Series B Convertible Preferred Stock (“Series B Preferred Stock”). On February 24, 2015, 3,000,000 shares were designated as authorized Series C Convertible Preferred Stock (“Series C Preferred Stock”). On February 5, 2016, the Company terminated the Series A Preferred Stock and Series C Preferred Stock and increased the number of designated shares of Series B Preferred Stock to 5,000,000. On April 25, 2016, 5,000,000 shares were designated as authorized Series D Convertible Preferred Stock (“Series D Preferred Stock”). On December 6, 2016, the Company terminated the Series B Preferred Stock. In addition, on December 21, 2016, 5,000 shares were designated as authorized Series E Convertible Preferred Stock (“Series E Preferred Stock”). Series D Convertible Preferred Stock Stated Value The stated value of the Series D Preferred Stock is $1.00 per share. Ranking The Series D Preferred Stock shall rank junior to the Series B Preferred Stock, $0.00001 par value per share, of the Company in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution or winding up of the Company. The Series D Preferred Stock will rank senior to all of the Company’s common stock and other classes of capital stock with respect to dividend rights and/or rights upon distributions, liquidation, dissolution or winding up of the Company, other than to the Series B Preferred Stock and any class of parity stock that the holders of a majority of the outstanding shares of Series D Preferred Stock consent to the creation of. Liquidation Preference of Preferred Stock Upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, before the payment of any amount to the holder of shares of junior stock, but pari passu with any parity stock, the holders of Preferred Stock are entitled to receive the amount equal to the greater of (i) the stated value of the Series D Preferred Stock or (ii) the amount the holder of Series D Preferred Stock would receive if such holder converted the Series D Preferred Stock into common stock immediately prior to the date of the liquidation event, including accrued and unpaid dividends. Conversion Rights of Preferred A holder of Series D Preferred Stock shall have the right to convert the Series D Preferred Stock, in whole or in part, upon written notice to the Company at a conversion price equal to $1.20 per share, which is adjusted for any share dividend, share split, share combination, reclassification or similar transaction that proportionately decreases or increases the common stock. Voting Rights Except with respect to certain material changes in the terms of the Series D Preferred Stock and certain other matters, and except as may be required by Delaware law, holders of Series D Preferred Stock shall have no voting rights. The approval of a majority of the holders of the Series D Preferred Stock is required to amend the Certificate of Designations. Series E Convertible Preferred Stock The board of directors of the Company has designated up to 5,000 shares of the 10,000,000 authorized shares of preferred stock as Series E Preferred Stock. When issued, the shares of Series E Preferred Stock will be validly issued, fully paid and non-assessable. Each share of Series E Preferred Stock will have a stated value of $1,000 per share. In connection with the December 2016 financing, the Company issued 2,400 shares of Series E Preferred Stock which was immediately converted into 1,200,000 shares of common stock after closing. Rank. The Series E Preferred Stock will rank on parity to our common stock. Conversion. Each share of the Series E Preferred is convertible into shares of the Company’s common stock (subject to adjustment as provided in the related certificate of designation of preferences, rights and limitations) at any time at the option of the holder at a conversion price of not less than 100% of the public offering price of the common stock. Holders of Series E Preferred Stock will be prohibited from converting Series E Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of common stock then issued and outstanding. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice to the Company. Liquidation Preference. In the event of the Company’s liquidation, dissolution or winding-up, holders of Series E Preferred Stock will be entitled to receive an amount equal to the stated value per share before any distribution shall be made to the holders of any junior securities, and then will be entitled to receive the same amount that a holder of common stock would receive if the Series E Preferred Stock were fully converted into shares of common stock at the conversion price (disregarding for such purposes any conversion limitations) which amounts shall be paid pari passu with all holders of common stock. Voting Rights. Shares of Series E Preferred Stock will generally have no voting rights, except as required by law and except that the affirmative vote of the holders of a majority of the then outstanding shares of Series E Preferred Stock is required to, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock, (b) amend the Company’s certificate of incorporation or other charter documents in any manner that materially adversely affects any rights of the holders, (c) increase the number of authorized shares of Series E Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing. Dividends. Shares of Series E Preferred Stock will not be entitled to receive any dividends, unless and until specifically declared by the Company’s board of directors. The holders of the Series E Preferred Stock will participate, on an as-if-converted-to-common stock basis, in any dividends to the holders of common stock. Redemption. The Company is not obligated to redeem or repurchase any shares of Series E Preferred Stock. Shares of Series E Preferred Stock are not otherwise entitled to any redemption rights or mandatory sinking fund or analogous fund provisions. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 15 — STOCKHOLDERS’ EQUITY Common Stock For the year ending December 31, 2018 The Company transacted the following: ● issued 2,083,136 shares of its common stock for employees, directors, consultants and other professionals for a total value of $1,793,336. The value of the common stock issued was based on the fair value of the stock at the time of issuance. ● recognized $3,728,154 of compensation costs associated with outstanding stock options recorded in general and administrative expenses with the offset as a credit to additional paid in capital. ● issued 429,585 shares of its common stock in satisfaction of related party obligations valued at $240,000. The value of the common stock issued was based on the fair value of the stock at the time of issuance. ● issued 12,232 shares of common stock in satisfactions of amounts previously deferred for employee/consultant agreements in the amount of $19,081. ● issued 276,796 shares of its common stock in satisfaction of accrued interest on a convertible promissory note valued at $180,000. The value of the common stock issued was based on the fair value of the stock at the time of issuance. ● reviewed the conversion features embedded in the May 2018 convertible promissory notes. We evaluated the beneficial conversion feature (“BCF”) and calculated a relative fair value in the amount of $193,877. On October 9, 2018, the Company evaluated a modification of the embedded conversion option and recognized an increase in the value of the BCF in the amount of $90,050. The amounts recognized are recorded as a charge to debt discount and offset as a credit to additional paid-in capital. The amounts charged to debt discount are amortized to interest expense using the interest method. ● issued 775,184 shares of its common stock valued at $2,338,758 as payment towards outstanding convertible promissory notes. The value of the common stock issued was based on the fair value of the stock at time of issuance. ● issued 302,655 shares of its common stock valued at $160,407 as the compensatory fee incurred for the October 9, 2018 debt modification. The value of the common stock issued was based on the fair value of the stock at time of issuance. For the year ending December 31, 2017 August 2017 Financing On August 18, 2017, the Company closed a financing for 1,560,978 shares of common stock and warrants to purchase 780,489 shares of common stock (the “August 2017 Warrants”). The Company received gross proceeds of $3,200,000 from the offering, before deducting placement agent fees and other offering expenses payable by the Company. Aegis Capital Corp. acted as the sole placement agent for the offering. The common stock was sold in a registered direct offering by means of a prospectus supplement to the Company’s then-existing shelf registration statement, while the August 2017 Warrants were sold privately to the same investors by means of an exemption from registration. The August 2017 Warrants are exercisable immediately on the date of issuance at an exercise price of $2.50 per share and will expire five (5) years after the initial date of issuance. Lincoln Park Purchase Agreement On May 19, 2017, the Company entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC, an Illinois limited liability company (“Lincoln Park”). Under the terms and subject to the conditions of the Lincoln Park Purchase Agreement, the Company has the right to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $15,000,000 in shares of common stock, subject to certain limitations, from time to time over the 30-month period commencing on the date that a registration statement covering the resale of shares of common stock issuable under the Lincoln Park Purchase Agreement is declared effective by the Securities and Exchange Commission (the “SEC”) and a final prospectus in connection therewith is filed. Pursuant to the Registration Rights Agreement, the Company agreed to file such registration statement with the SEC within sixty (60) business days of the execution of the Lincoln Park Purchase Agreement. Pursuant to the Lincoln Park Purchase Agreement, the Company may, at its sole discretion and subject to certain conditions, direct Lincoln Park to purchase up to 125,000 shares of common stock on any business day (such purchases, “Regular Purchases”), provided that at least one (1) business day has passed since the most recent Regular Purchase was completed, and in no event will the amount of a single Regular Purchase exceed $1.0 million. The purchase price of Regular Purchases will be based on the prevailing market prices of the common stock, which shall be equal to the lesser of the lowest sale price of the common stock during the purchase date and the average of the three (3) lowest closing sale prices of the common stock during the ten (10) business days prior to the purchase date. The Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or additional purchases if the closing sale price of the common stock is not below the threshold prices as set forth in the Lincoln Park Purchase Agreement. There is no upper limit on the price per share that Lincoln Park must pay for common stock under a Regular Purchase or an accelerated purchase. In connection with its 2017 Annual Meeting of Stockholders held on June 15, 2017, the Company did not receive stockholder approval, as required pursuant to Nasdaq Marketplace Rule 5635(d), to issue shares of common stock under the Lincoln Park Purchase Agreement in an amount equal to 20% or more of the Company’s outstanding shares of common stock. As such, the Company will not be permitted to draw down the full $15,000,000 in shares of common stock under the Lincoln Park Purchase Agreement unless and until the Company receives such stockholder approval. Under the Lincoln Park Purchase Agreement, the Company is required to issue to Lincoln Park 192,431 shares of common stock as commitment shares in consideration for entering into the Lincoln Park Purchase Agreement. The 192,431 shares of common stock were issued on September 11, 2017 with a fair market value of $302,000, which was included in general and administrative expenses for the year ended December 31, 2017. As of December 31, 2017, the Company has not sold any shares of common stock under the Lincoln Park Purchase Agreement. February 2017 Financing On February 14, 2017, the Company completed a public underwritten offering of 1,750,000 shares of its common stock and five-year warrants to purchase up to an aggregate of 1,312,500 shares of its common stock at an exercise price of $2.00 per share. The Company received $3,500,000 in gross proceeds from the offering, before deducting the associated underwriting discount and estimated offering expenses payable by the Company. Aegis Capital Corp. acted as sole book-running manager for the offering. Shares Issued for Services In 2017, the Company issued a total of 1,772,152 shares of common stock with a grant date fair value of $3,042,000 to employees, directors, consultants and general counsel in lieu of paying cash for their services. Stock Options — Equity Incentive Plans: The Company’s stock option plans provide for the grant of options to purchase shares of common stock to officers, directors, other key employees and consultants. The purchase price may be paid in cash or “net settled” in shares of the Company’s common stock. In a net settlement of an option, the Company does not require a payment of the exercise price of the option from the optionee, but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Options generally vest over a three-year period from the date of grant and expire ten years from the date of grant. The Company has four plans under which they awarded share-based compensation grants of options to certain directors, employees, and advisors of the Company: the 2013 Stock Option Plan, 2015 Incentive Compensation Plan, 2016 Incentive Compensation Plan and the 2017 Incentive Compensation Plan. On February 16, 2017, the Board of Directors approved a motion to cancel all outstanding stock options as the options were all out of the money in all previous stock option plans, thereby cancelling the 1,844 options that were outstanding on December 31, 2016. On March 16, 2017, the Board of Directors passed a motion to grant options to certain directors, employees, and advisors of the Company. Under the 2013 Stock Option Plan the Company issued 1,135,000 ten (10) year options, under the 2015 Incentive Compensation Plan, the Company issued 755,500 ten (10) year options, and under the 2016 Incentive Compensation Plan, the Company issued 1,665,000 ten (10) year options, totaling 3,555,500 (10) years options with an exercise price of $1.55 per share on March 24, 2017. The fair value of the options granted on March 24, 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.90%, dividend yield of -0-%, volatility factor of 286.51% and the expected life of options is 6.00 years. The Company estimates forfeiture and volatility using historical information of our stock price. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent lives of the options. The expected life of the options represents the estimated period until exercise considering the contractual terms. The Company has not paid dividends on common stock and no assumption of dividend payment is made in the model. The options vest at one third on March 24, 2018, one third on March 24, 2019 and one third on March 24, 2020. On June 15, 2017, the Company held its Annual Meeting of Stockholders and the stockholders approved the proposal to establish the Company’s 2017 Incentive Compensation Plan. On July 1, 2017, under the 2017 Incentive Compensation plan the Company issued 2,795,000 ten (10) years options to employees with an exercise price of $1.62 per share. The fair value of the options granted on July 1, 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.84%, dividend yield of -0-%, volatility factor of 283.93% and the expected life of options is 6.00 years. The Company estimates forfeiture and volatility using historical information of our stock price. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent lives of the options. The expected life of the options represents the estimated period until exercise considering the contractual terms. The Company has not paid dividends on common stock and no assumption of dividend payment is made in the model. The options vest at one third on July 1, 2018, one third on July 1, 2019 and one third on July 1, 2020. On November 16, 2017, under the 2017 Incentive Compensation plan the Company issued 340,000 ten (10) years options to employees with an exercise price of $1.54 per share. The fair value of the options granted on November 16, 2017 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.98%, dividend yield of -0-%, volatility factor of 281.91% and the expected life of options is 6.00 years. The Company estimates forfeiture and volatility using historical information of our stock price. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent lives of the options. The expected life of the options represents the estimated period until exercise considering the contractual terms. The Company has not paid dividends on common stock and no assumption of dividend payment is made in the model. The options vest at one third on November 16, 2018, one third on November 16, 2019 and one third on November 16, 2020. Effective, April 30, 2018, the Board of Directors by unanimous written consent, approve of the immediate vesting of all remaining options for employees who were terminated on April 30, 2018 and June 25, 2018. During the years ended December 31, 2018 and 2017, the Company recorded approximately $3,728,000 and $2,209,125, respectively as stock compensation expense from the amortization of stock options issued, of which $0.8 million was the expense for accelerating the vesting of the remaining options for terminated employees. The weighted average fair value of options granted during the years ended December 31, 2018 and 2017 was $0.89 and $1.58, respectively. Each option is estimated on the date of grant, using the Black-Scholes model and the following assumptions (all in weighted averages): 2018 2017 Exercise price $ 0.89 $ 1.58 Volatility 148.71 % 285.27 % Risk-free interest rate 2.63 % 1.88 % Expected dividend yield 0 % 0 % Expected term (years) 6 6 The risk-free rate is based on the rate for the U.S. Treasury note over the expected term of the option. The expected term for employees represents the period that options granted are expected to be outstanding using the simplified method, a s the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. For non-employee options, the expected term is the full term of the option. Expected volatility is based on the average of the weekly share price changes over the shorter of the expected term or the period from the placement on London Stock Exchange’s Alternative Investment Market to the date of the grant. As of December 31, 2018, the weighted average remaining contractual life was 8.41 years for options outstanding and 8.34 years for options exercisable. The intrinsic value of options exercisable at December 31, 2018 was $0. As of December 31, 2018, the remaining stock compensation expense is approximately $3.34 million over the remaining amortization period which is 1.47 years. The Company estimates forfeiture and volatility using historical information. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent lives of the options. The expected life of the options represents the estimated period using the simplified method. The Company has not paid dividends on its common stock and no assumption of dividend payment(s) is made in the model. A summary of the status of the Company’s stock option plan for the year ended December 31, 2018 is as follows: Number of Options (in shares) Weighted Average Exercise Price Outstanding, January 1, 2018 6,550,500 $ 1.58 Options granted 220,000 $ 0.89 Options exercised -0- $ -0- Options cancelled/expired (913,332 ) $ (1.58 ) Outstanding, December 31, 2018 5,857,168 $ 1.55 Exercisable, December 31, 2018 2,537,194 $ 1.57 A summary of the status of the Company’s stock option plan for the year ended December 31, 2018 is as follows (continued): Common stock issuable upon exercise of options outstanding Common stock issuable upon options exercisable Range of exercise prices Options Outstanding (in shares) Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Options Exercisable (in shares) Remaining Exercisable Contractual Life (years) Weighted Average Exercise Price $0 to $46,202 5,857,168 8.41 $ 1.55 2,537,194 8.34 $ 1.57 Warrants: The following table sets forth common share purchase warrants outstanding as of December 31, 2018: Quantity of Warrants Weighted Average Exercise Price Outstanding, December 31, 2017 8,695,273 $ 5.50 Warrants granted 3,200,000 $ 1.00 Warrants exercised -0- $ -0- Warrants cancelled/expired (23,460 ) $ (1,105.00 ) Outstanding, December 31, 2018 11,871,813 $ 1.98 Exercisable, December 31, 2018 11,871,813 $ 1.98 During the year ended December 31, 2018, the Company granted 3,200,000 warrants, no warrants were exercised, and 23,460 warrants were cancelled or expired. The weighted average exercise prices of warrants outstanding at December 31, 2018 is $1.98 with a weighted average remaining contractual life of 3.35 years. As of December 31, 2018, these outstanding warrants contained no intrinsic value. Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at 12/31/18 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at 12/31/18 Weighted Average Exercise Price $ *0.45 1,037,288 2.55 $ *0.45 1,037,288 $ 0.45 $ 1.00 3,200,000 4.41 $ 1.00 3,200,000 $ 1.00 $ 2.00 6,512,475 3.02 $ 2.00 6,512,475 $ 2.00 $ 2.50 982,989 3.09 $ 2.50 982,989 $ 2.50 $ 8.40 20,833 2.82 $ 8.40 20,833 $ 8.40 $ 13.79 116,666 2.38 $ 13.79 116,666 $ 13.79 $ 420.00 -0- 0.00 $ 420.00 -0- $ 420.00 $ 1,380.00 1,209 1.10 $ 1,380.00 1,209 $ 1,380.00 $ 2,400.00 353 1.15 $ 2,400.00 353 $ 2,400.00 11,871,813 3.35 $ 1.98 11,871,813 $ $1.98 *represents group of warrants repriced to $0.45 from $6.85 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16 — COMMITMENTS AND CONTINGENCIES Leases: For the year ending December 31, 2018, the Company’s leasing arrangements gave rise to operating lease agreements for office space, deployment sites and storage warehouses, both domestically and internationally. The operating leases contain various lease terms and provisions with remaining lease commitments between 5 months and 6 years as of December 31, 2018. During the years ended December 31, 2018 and 2017, the Company sublet a portion of its space under operating leases at The Fairways and Hemel locations. The Company incurred rent expense aggregating to approximately $1,466,000 and 1,509,000, offset by sublet income of $146,000 and $112,000, for the years ended December 31, 2018 and 2017, respectively. The table below lists location and lease expiration dates from 2019 through 2025: Location Lease End Date Approximate Future Payments Colchester, U.K. – The Fairways Jun 2020 $ 301,227 Colchester, U.K. – Waterside House May 2025 1,673,513 Anaheim, CA Jul 2021 79,068 Billerica, MA May 2021 1,065,402 Hemel, UK Oct 2020 333,293 Singapore Aug 2020 55,021 Hackettstown, NJ Apr 2020 122,302 Dubai, United Arab Emirates Jun 2019 10,994 Sunrise, Florida May 2019 40,275 Sublets: Colchester, UK – The Fairways Mar 2020 $ 69,000 Hemel, UK Oct 2020 167,000 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, Amount 2019 1,299,000 2020 1,043,000 2021 469,000 2022 268,000 2023 268,000 Thereafter 335,000 $ 3,682,000 Sublets: 2019 $ 146,000 2020 90,000 $ 236,000 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 years ended December 31, 2018 and 2017, the Company did not have any material legal actions pending. Delisting Notice: On May 17, 2018 the Company, received a written notification from The Nasdaq Stock Market LLC (“NASDAQ”) indicating that the Company was not in compliance with NASDAQ Listing Rule 5550(a)(2) as Company’s closing bid price was below $1.00 per share for the previous 30 consecutive business days. Pursuant to the Nasdaq Listing Rule 5810(c)(3)(A), the Company was granted a 180-day compliance period, or until November 13, 2018, to regain compliance with the minimum bid price requirements. During the compliance period, the Company’s shares of common stock will continue to be listed and traded on NASDAQ. The Company was afforded a second 180 calendar day grace period by NASDAQ to regain compliance with the minimum bid price requirements. If the Company does not regain compliance by May 13, 2019, NASDAQ will provide notice that the Company’s shares of common stock will be subject to delisting. Pension: The Company at its discretion may make matching contributions to the 401(k) plan its employees participate in. For the years ended December 31, 2018 and 2017, the Company made matching contributions of $27,000 and $67,000, respectively. 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 years ended December 31, 2018 and 2017, the Company made matching contributions of $236,000 and $169,000, respectively. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | 17 — CONCENTRATIONS During the year ended December 31, 2018, the Company did not experience sales to one customer in excess of 10% of the Company’s total consolidated sales. During the year ended December 31, 2017, the Company recorded sales to one customer in the amount of $5.5 million (12%) in excess of the Company total consolidated sales. At December 31, 2018, The Company did not have a customer with amounts due in excess of 10% of the Company’s total consolidated accounts receivable. At December 31, 2017, approximately 33% of net accounts receivable was due from two customers broken down individually as follows: $1,634,000 (20%) and $1,073,000 (13%). During the year ended December 31, 2018, approximately 27% of the Company’s inventory purchases were generated from two vendors as follows: $2,165,000 (12%) and $2,596,000 (15%). During the year ended December 31, 2017, approximately 33% of the Company’s inventory purchases originated from two vendors as follows: $5,056,000 (18%) and $4,180,000 (15%). During the years ended December 31, 2018 and 2017, the Company recorded accounts payable to a single vendor in the amount of $0.8 million (12%) and $-0-, respectively. |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographical Information | 18 – GEOGRAPHICAL INFORMATION The Company has one operating segment and the decision-making group is the senior executive management team. Year Ended Year Ended December 31, 2018 December 30, 2017 Revenue: North America $ 17,686,000 $ 19,900,000 South America 1,185,000 6,933,000 Europe 11,569,000 11,451,000 Asia 4,880,000 5,105,000 Rest of World 2,974,000 4,435,000 $ 38,294,000 $ 47,824,000 Year Ended Year Ended December 31, 2018 December 31, 2017 Long-Lived Assets: United States $ 5,637,000 $ 5,700,000 United Kingdom 1,150,000 4,431,000 $ 6,787,000 $ 10,131,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 19 — 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. The Management Agreement was effective January 1, 2014. The Company incurred fees related to the Management Agreement for the years ended December 31, 2018 and 2017 of $300,000 each year, respectively. Roger Branton, the Company’s Chief Executive Officer, Chief Financial Officer and director, and George Schmitt, the Company’s director and former Chief Executive Officer and Executive Chairman of the Board, are directors of MBTH, and Richard Mooers, a director of the Company, is also a director of MBTH. The Company has agreed to award MBTH a 3% cash success fee if MBTH arranges financing, a merger, consolidation or sale by the Company of substantially all its assets. The Company incurred approximately $0 and $96,000 for fees associated with financings during the years ended December 31, 2018 and 2017, respectively. In addition, during the years ended December 31, 2018 and 2017, Company’s Board of Directors approved an additional $48,000 and $54,000 in fees, respectively, to be paid to MBTH as consideration for additional efforts provided by MBTH in connection with the Company’s financing and acquisition efforts. The Company recorded these fees in general and administrative expenses on the accompanying Consolidated Statement of Operations. 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% success fee (the ‘‘3% Success Fee’’) on any financing arranged for the Company, merger or consolidation of the Company or sale by the Company of substantially all its assets. The M&A Services Agreement has the following additional terms: (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. (2) In addition to any other fees, the Company will pay MBTH a due diligence fee of $250,000 only on successfully closed transactions. 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. The exercise price of such warrants will be $0.01. (3) The Company and MBTH agreed to waive the 3% Success Fee in connection with the Company’s proposed acquisition of Vislink. The Company and MBTH also agreed to waive, on a case by case basis, the 3% Success Fee whenever any future Acquisition Fee is more than $1 million. (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% of such gain (the “Bargain Purchase Gain”). (5) MBTH has the option to convert up to 50% of its fees into shares of common stock of the Company, so long as the receivable remains outstanding. The conversion price will be the lower of 110% of the price of the common stock on the day of closing of a transaction or the price of equity securities offered in connection with any acquisition financing. If MBTH converts at least 25% of its fees, then the Company agrees to register all shares of common stock of the Company held by MBTH. (6) If MBTH’s services assist the Company in achieving forward sales of at least $50 million via acquisitions, then the Company agrees to offer MBTH a three (3) year option to acquire up to 25% of the Company’s shares of common stock outstanding after such issuance (the “Block Purchase Option”). The price per share of common stock will be 125% of the price of the Company’s common stock on the day the option is exercised. 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% of the fully diluted outstanding shares of common stock and warrants of the Company at a price of $2.10 per share and for a five-year term. There has been no impact on the results from operations since the certainty of the performance condition is not known. 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 in acquisition fees during the year ended December 31, 2017 in connection with the acquisition of Vislink as per the M&A Services Agreement. The $1,480,000 in acquisition fees represents 8% of the acquisition price. The Company recorded these fees in general and administrative expenses on the accompanying Consolidated Statement of Operations and included such fees in due to related parties on the Consolidated Balance Sheet. The Company accrued an additional $691,000 in fees as 5% of the Bargain Purchase Gain during the year ended December 31, 2017 in connection with the acquisition of Vislink as per the M&A Services Agreement. Of the $691,000, $546,000 represents 5% of the Bargain Purchase Gain of $10,911,000 after an independent, external advisor valued the acquisition. The Board of Directors agreed to reward MBTH $145,000 as a 5% fee for negotiating the $2.9 million gain on debt extinguishment. The Company recorded these fees in general and administrative expenses on the accompanying Consolidated Statement of Operations and included such fees in due to related parties on the Consolidated Balance Sheet. During the year ended December 31, 2017, the Company recorded $265,000 as the Fair Market Value (“FMV”) of the warrant paid to MBTH in connection with the closing of the Vislink acquisition as per the M&A Services Agreement. The Company recorded these fees in general and administrative expenses on the accompanying Consolidated Statement of Operations. On March 3, 2016, the Company’s Board of Directors approved the issuance of up to $300,000 in shares of common stock to MBTH as compensation for financial services in connection with the IMT acquisition. Such shares of common stock were to be issued to MBTH in an initial tranche in the amount of up to $150,000 on March 15, 2016, and a second tranche to MBTH of up to $150,000 in shares of common stock if IMT achieved certain performance goals by December 31, 2016. On August 10, 2016, the disinterested members of the Board of Directors, believing it to be in the best interest of the Company, resolved to pay the award in cash instead of common stock. The Company accrued $150,000 in the due to related party balance owed to MBTH for the initial tranche and paid this cash fee in 2016. During the year ended December 31, 2017, the Company accrued the second tranche of $150,000 in the due to related party owed to MBTH and paid this cash fee in 2017. During the year ended December 31, 2018, the Company did not incur any fees pursuant to the M & A Services Agreement. During the years ended December 31, 2018 and 2017, the Company accrued an additional $24,000 and 94,000, respectively, for rent expense in the due to related party balance owed to MBTH. Effective May 1, 2018, MBTH assumed the liability of the office rent for the Company’s executive offices in Sarasota, Florida. During the year ended December 31, 2018 and 2017, the Company issued 429,585 and 140,252 shares of common stock to MBTH in settlement of amounts due of $240,000 each year, respectively. In addition, during the year ended December 31, 2018 and 2017, the Company repaid $769,000 and $1,724,000 in amounts due to MBTH in cash, respectively. The balance outstanding to MBTH as of December 31, 2018 and 2017 is $361,000 and $998,000, respectively and has been included in due to related parties on the Consolidated Balance Sheets. George Schmitt – Related Party George Schmitt, the Company’s director and former Chief Executive Officer and Executive Chairman of the Board earned an annual salary of $87,500 in fiscal year 2018 and $300,000 for fiscal year 2017, respectively receiving all his compensation in shares of the Company’s common stock. |
Prior Period Financial Statemen
Prior Period Financial Statement Revision | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Prior Period Financial Statement Revision | 20 — PRIOR PERIOD FINANCIAL STATEMENT REVISION During the second quarter of 2018, the Company identified an error related to the non-recognition of a derivative liability embedded in common stock warrants issued to investors as part of the August 2017 equity financing. Whereas part of the proceeds has been allocated to additional paid-in-capital and not to a derivative liability. Additionally, no gain or loss was recognized as part of the mark to market valuation of the derivative liability. The Company assessed the materiality of these errors on our financial statements for prior periods in accordance with the SEC Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, codified in Accounting Standards Codification (ASC) 250-10-20, Error in Previously Issued Financial Statements, and concluded that they were not material to any prior annual or interim periods. The Company has corrected these errors for all prior periods presented by revising the consolidated financial statements and other financial information included herein. The Company also corrected the timing of immaterial previously recorded out-of-period adjustments and reflected them in the revised prior period financial statements, where applicable. Periods not presented herein will be revised, as applicable, in future filings. The effects of the correction of immaterial errors on our Consolidated Financial Statements were as follows (in thousands): December 31, 2017 Amounts Previously Reported Adjustment As Revised Consolidated Balance Sheet: Total Liabilities $ 19,019 $ 1,128 $ 20,147 Stockholders’ equity before accumulated deficit 237,472 (1,321 ) 236,151 Accumulated deficit (219,845 ) 193 (219,652 ) Total liabilities and stockholders’ equity $ 36,646 $ - $ 36,646 Consolidated Statement of Operations: Net loss for the year ended $ (10,546 ) $ 193 $ (10,353 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21 — SUBSEQUENT EVENTS Shares Issued for Services From January 1, 2019 to March 31, 2019, the Company issued a total of 401,550 shares of common stock with a grant date fair value of $158,000 to employees, directors, consultants and general counsel in lieu of paying cash for their services. From January 1, 2019 to March 31, 2019, the Company issued a total of 27,174 shares of common stock to MBTH in settlement of amounts due of $10,000. On February 11, 2019, the Company has changed its name to Vislink Technologies, Inc. Effective January 1, 2019, a new related party agreement (the “MBMG Agreement”) became effective between the Company and MB Merchant Group, LLC (“MBMG”). This agreement supersedes the previous one with MBTH. MBMG, the founding entity of MBTH, agrees to provide services in connection with, and Vislink Technologies agrees to compensate MBMG on a success basis for future mergers and acquisitions beginning January 1, 2019. In consideration for MBMG’s services hereunder, the Company agrees to compensate MBMG as follows: A. Fees. a. Acquisition Fee. The Company agrees to pay MBMG an acquisition fee comprised of the greater of $250,000 or 6% of the total acquisition price for all deals where the total consideration for the acquisition paid by Vislink Technologies is less than $10 million. For deals which are $10 million to $100 million, Vislink Technologies will pay MBMG a fee of $600k (for the first $10 million) plus a 4% fee of the excess value over $10 million. For deals which are $100 million to $400 million, Vislink Technologies will pay MBMG a fee of $4.2 million (for the first $100 million) plus a 2% fee of the excess over $100 million. For deals which are over $400 million, Vislink Technologies will pay MBMG a fee of $10.2 million plus a 1.1% fee of the excess over $400 million. b. Due Diligence Fee. MBMG will receive a success-based due diligence fee of $250,000, only on successfully closed deals, in addition to any other fees. c. Waiver of Finance Fee. The 3% finance fee shall be waived on a case by case basis whenever an acquisition fee is more than $1m. The waiver should be for that part of the financing which is for the acquisition and should not relate to any additional fees raised for Vislink Technologies above the acquisition price. And such 3% fee is hereby amended and changed to 2% beginning January 1, 2019. d. Additional Incentive Fee. Should Vislink Technologies engage an external, independent advisor to value the acquisition, and the result is a higher value than the price MBMG negotiated (a “Bargain Purchase Gain”), then MBMG will receive an additional fee of 5% of such gain. This is to further incent MBMG to help Vislink Technologies achieve the best value in acquisitions. B. Expenses. The Company will be responsible for (1) fees and expenses, if any, charged by any lender, or other sources of financing; (2) fees, expenses or commissions, if any, payable to finders or to any legal, accounting, tax, surveyors, engineers and other professionals or advisors used or retained by the Company in connection with this engagement; (3) reasonable out-of-pocket expenses incurred in direct connection with the services to be rendered by MBMG hereunder, including but not limited to transportation, meals and lodging, telephone and courier charges; and (4) for such legal fees as are required to furnish the services contemplated hereunder, provided however that any such legal fee is first approved by the Company before being incurred. C. Payment Terms. Where possible, 50% of the acquisition fee shall be paid at closing and, in any case, not later than 30 days following closing and 25% will be due 3 months following closing, with the final 25% due 6 months following closing. D. Partial Conversion Option. MBMG shall have the option to convert up to 50% of its fees into common shares of Vislink Technologies so long as the receivable remains outstanding. The conversion price will be fixed at 110% of the price of the shares on the day of closing or the price in connection with any acquisition financing, whichever is lower. Provided MBMG converts at least 25% of its fees, then Vislink Technologies agrees to register all of shares in Vislink Technologies held by MBMG. E. Block Purchase Option. Vislink Technologies previously agreed to grant MBTH a five-year nondilutive option to acquire up to 25% of Vislink Technologies shares at $2.10 based on the number of shares outstanding as of such option exercise. MBMG and MBTH have separately agreed to split that option effective January 1, 2019. This split will be based on ownership in MBTH on December 30, 2018 and provided that MBMG be willing to accept this assignment to continue such M&A services to Vislink Technologies as evidenced by its signature on this agreement. Vislink Technologies agrees to allow both MBTH and MBMG to amend the strike price of said options based on any financing done in 2019 and such reset to be at the lowest and same price as Vislink Technologies may do in any of its 2019 financings. This is in return for continuing to perform the services in connection herewith, and in recognition of the present pricing issues Vislink Technologies has faced in the capital markets, which were not caused by MBMG, and where the value of this option was unintentionally impacted, and where Vislink Technologies recognizes the continued importance of M&A’s to its future success and as part of completing Vislink Technologies ’s turnaround, recapitalization and reorganization consistent with its needs going forward. F. Consulting Fee. Vislink Technologies previously paid MBTH a $25,000 per month consulting fee as a part of its services. Henceforth, such fee will be increased to $50,000; and Vislink Technologies at its sole discretion will have the option to credit such fees against future acquisition fees due each year to the extent it deems that appropriate based on all services received from MBMG. It should be pointed out that MBTH, and now MBMG, had been allowing substantial fees to be in arrears for going on two years now since the Vislink transaction and as a way to further help Vislink Technologies manage some of its historical cash flow challenges. MBMG will continue to work with Vislink Technologies where necessary and requested by Vislink Technologies for its management of cash flow; but with a hope that this can be cleaned up in 2019 and put back in current standing. G. Term. The MBMG Agreement shall be effective as of January 1, 2019 and shall automatically renew annually thereafter until sooner terminated by either party on thirty (30) days prior written notice. In the event of termination, including though not limited to, in connection with a change of control of Vislink Technologies, the provisions of Sections II and III of the Agreement shall survive. If this MBMG Agreement expires or is terminated by the Company for any reason and the Company (and/or any of its subsidiaries or affiliates) consummates, or enters in to an agreement in principle to engage in (and subsequently closes at any time) any Transaction prior to the date that is twelve months after such expiration or termination date (the “Tail Period”) MBMG shall be entitled to receive its Transaction Fee upon the consumption of such Transaction as if no such expiration or termination had occurred. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements and related notes thereto were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) include the accounts of Vislink Technologies and its wholly-owned subsidiaries, IMT and Vislink, since the date the acquisitions of IMT and Vislink were completed. All material intercompany balances and transactions are eliminated in consolidation. |
Reclassifications | 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 (see Note 21). |
Segment Reporting | 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 and 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 | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company did not have any cash equivalents on hand as of December 31, 2018 and 2017. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company does not have any off-balance-sheet concentrations of credit risk. Credit risk is the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk is primarily attributable to its cash and accounts receivables. The Company’s policy is to maintain its cash with high credit quality financial institutions to limit its risk of loss exposure. During the year ended December 31, 2018, the Company had cash balances in excess of the federally insured limits of $250,000. The funds are on deposit with Wells Fargo Bank, N.A. Consequently, the Company does not believe that there is a significant risk related to having these balances in one financial institution. The Company has not experienced any losses in its bank accounts during the years ended December 31, 2018 and 2017. For customers, management assesses the credit quality of the customer, considering its financial position and past experience. During the year ended December 31, 2018, the Company did not experience concentrated sales to one customer in excess of 10% of the Company’s total consolidated sales. During the year ended December 31, 2017, the Company recorded sales to one customer of $5,535,000 (12%) in excess of 10% of the Company’s total consolidated sales. As of December 31, 2018, the Company did not experience a customer receivable in excess of 10% of the Company’s total accounts receivable. As of December 31, 2017, approximately 33% of net accounts receivable was due from two customers broken down individually as follows: $1,634,000 (20%) and $1,073,000 (13%). |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its customers in the normal course of business. Further, the Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, the Company makes judgements regarding its customer’s ability to make required payments, prevailing economic conditions, past experience and other factors. As the financial condition of these factors change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. The Company maintains reserves for credit losses and losses have been within its expectations. |
Inventories | Inventories Inventories, consisting principally of raw materials, work-in-process and finished goods, and 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. The Company evaluates inventory balances and either writes-down inventory that is obsolete or based on a net realizable value analysis or records a reserve for slow moving or excess inventory. |
Property and Equipment | Property and Equipment Property and equipment are presented at cost at the date of acquisition less depreciation. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 1 to 10 years. The costs of the day-to-day servicing of property and equipment, and repairs and maintenance are recognized in expenses as incurred. Depreciation amounted to $918,000 and $1,831,000 for the years ended December 31, 2018 and 2017, respectively. |
Intangible Assets | Intangible Assets Software: The Company capitalizes certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use or sale to others when both the preliminary project stage is completed, and it is probable that the software will be used as intended with a product. Capitalized software costs include only (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation and related benefits for employees who are directly associated with the product. Capitalized software costs are included in intangible assets on the Company’s balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximates 5 years. Software amortization totaled $268,000 and $923,000 for the years ended December 31, 2018 and 2017, respectively. Patents and licenses: Patents and licenses, measured initially at purchase cost, are included in intangible assets on the Company’s balance sheet and are amortized on a straight-line basis over their estimated useful lives of 18.5 to 20 years. Amortization totaled $664,000 for the years ended December 31, 2018 and 2017, respectively. 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 value of these acquired assets was determined by a third-party appraisal completed for these business combinations. Absent an indication of fair value from a potential buyer or similar specific transactions, the Company believes that the use of the methods employed provided a reasonable estimate in the reporting of the fair value assigned. The Company includes these costs in intangible assets on the balance sheet and are amortized over their useful lives of 3 to 15 years. Amortization amounted to $1,103,000 and $1,011,000 for the years ended December 31, 2018 and 2017, respectively. Other intangible assets capitalized were $-0- and $3,620,000 for the years ended December 31, 2018 and 2017, respectively. |
Warranty Reserve | Warranty Reserve Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The warranty reserve for the years ended December 31, 2018 and 2017 was $325,000 and $507,000, respectively. The warranty reserve increased by $23,000 and $550,000 for the years ended December 31, 2018 and 2017, respectively. The claims made during the year ended December 31, 2018 and 2017 were ordinary and customary. Warranty reserve is included in accrued expenses on the accompanying consolidated balance sheets and cost of components in the accompanying consolidated statement of operations. Warranty Reserve January 1, 2017 $ 182,000 Warranty reserve expense 550,000 Warranty claims settled and true-up of accrual (225,000 ) December 31, 2017 $ 507,000 Warranty reserve expense 23,000 Warranty claims settled and true-up of accrual (205,000 ) December 31, 2018 $ 325,000 |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling charges are invoiced to the customer and the Company nets these charges against the respective costs within general and administrative expenses. For the years ended December 31, 2018 and 2017, the amount of shipping and handling costs incurred were $774,000 and $886,000, respectively. |
Convertible Instruments | Convertible Instruments The Company records debt net of debt discount for beneficial conversion features and warrants, on either a relative fair value or fair value basis depending on the respective accounting treatment of each instrument. Beneficial conversion features are recorded pursuant to the Beneficial Conversion (“BCF”) and Debt Topics of the FASB Accounting Standards Codification. The amounts allocated to warrants and beneficial conversion rights are recorded as debt discounts with corresponding entries to derivative liability and additional paid-in-capital. Costs paid to third parties (e.g., legal fees, printing costs, placement agent fees) that are directly related to issuing the debt and that otherwise wouldn’t be incurred, are treated as a direct deduction of the debt liability. Debt discount and issuance costs are generally amortized and recognized as additional interest expense in the statement of operations over the life of the debt instrument using the effective interest method. The Company evaluates and bifurcates conversion features from the instruments containing such features and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the underlying instrument, (b) the hybrid instrument that contains both the embedded derivative instrument and the underlying instrument is not re-measured at fair value under otherwise applicable U.S. GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing financial instruments as equity if the contracts (i) require physical settlement or net-share settlement in common stock or (ii) give the Company a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement). The Company classifies the following contracts as either an asset or a liability: contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement) or (iii) contain reset provisions. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. |
Treasury Stock | Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. When shares are reissued, the cost method is used. In accordance with U.S. GAAP, the excess of the acquisition cost over the reissuance price of the treasury stock, if any, is recorded to additional paid-in capital, limited to the amount previously credited to additional paid-in capital, if any. Any excess is charged to accumulated deficit. |
Revenue Recognition | 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. |
Research and Development Expenses | Research and Development Expenses Research and development costs are charged to expense as incurred in performing research, design and development activities. These expenses consist primarily of salary and benefit expenses, including stock-based compensation and payroll taxes for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, facilities and travel. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Management reviews long-lived assets and other intangible assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the estimated undiscounted cash flows expected to result from the use of an asset and its eventual disposition is less than the carrying amount. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related net book value. For the years ended December 31, 2018 and 2017, the Company recorded total impairment charges of $0.4 million and $-0-, respectively. |
Income Taxes | Income Taxes I ncome taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which management cannot conclude that it is more likely than not that such deferred tax assets will be realized. |
Advertising Costs | Advertising Costs Advertising costs are charged to operations as incurred. Advertising costs amounted to $82,000 and $542,000, for the years ended December 31, 2018 and 2017, respectively. Advertising costs are included in general and administrative expenses in the accompanying consolidated statement of operations. |
Sales Tax and Value Added Taxes | Sales Tax and Value Added Taxes The Company accounts for sales taxes and value added taxes imposed on its goods and services on a net basis. |
Loss Per Share | Loss 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 common share is calculated by dividing net (loss) earnings allocable to common stockholders by the weighted-average common shares outstanding during the period, without consideration of common stock equivalents. Diluted (loss) earnings per share is calculated by adjusting the weighted-average shares 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. The following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of earnings per share (in thousands): For the Years Ended December 31, 2018 2017 Stock options 5,857 6,551 Convertible debt 13,629 — Warrants 11,872 8,695 31,358 15,246 |
Fair Value of Financial Instruments | 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 the fair value was 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 (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. 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 following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2018, consistent with the fair value hierarchy provisions. The asset impairment is a non-recurring level 3 measurement. Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets (non-recurring): Asset impairment $ — $ — $ 245,000 $ 245,000 Capitalized software development costs — — 168,000 168,000 — — 413,000 413,000 Liabilities: Derivative liability $ — $ — $ 1,118,000 $ 1,118,000 Total $ — $ — $ 1,118,000 $ 1,118,000 The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2017, consistent with the fair value hierarchy provisions: Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Derivative liability $ — $ — $ 2,399,000 $ 2,399,000 Total $ — $ — $ 2,399,000 $ 2,399,000 See Note 13 for additional disclosure regarding the Company’s warrants liabilities accounted for at fair value. |
Foreign Currency and Other Comprehensive (Loss) Gain | Foreign Currency and Other Comprehensive (Loss) Gain 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. Dollar) 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 foreign currency exchange gains and losses are included as a component of general and administrative expenses, in the accompanying Consolidated Statements of Operations. The following table presents losses recognized from foreign exchange transactions; and changes in accumulated other comprehensive income representing the gain or loss on the translation of our foreign subsidiary’s financial statements as follows: For the Years Ended December 31, 2018 2017 Net foreign exchange transactions: Losses $ 483,000 $ 284,000 Accumulated comprehensive income: (Decreases) increases $ (79,000 ) $ 354,000 The exchange rate adopted for the foreign exchange transactions are the rates of exchange as quoted on an OANDA, a Canadian-based foreign exchange company providing currency conversion, online retail foreign exchange trading, online foreign currency transfers, and forex information, internet website. Translation of amounts from British Pounds into United States dollars was made at the following exchange rates for the respective periods: ● As of December 31, 2018 – British Pounds $1.2734340 to US$ 1.00 ● Average rate for the year ended December 31, 2018 – British Pounds $1.3347667 to US $1.00 ● As of December 31, 2017 – British Pounds $1.3491240 to US$ 1.00 ● Average rate for the 11 months ending December 31, 2017 – British Pounds $1.2936987 to US $1.00 |
Subsequent Events | Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no events or transactions are required to be disclosed herein, except as disclosed. |
Recent Accounting Standards - Adopted and Not Yet Adopted | Recent Accounting Standards – Adopted and Not Yet Adopted Adopted on January 1, 2019 In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), that will supersede virtually all existing revenue guidance. Under this update, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the entitled consideration received in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the customer contracts. This update is effective for annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company has been able to defer adoption to January 1, 2019, under the emerging growth company (“EGC”) status that expired on December 31, 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. On January 1, 2019, the Company adopted ASU 2014-09 “Revenue from Contracts with Customers” and all subsequent amendments to the ASU (collectively, “ASC 606”), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets. The Company will adopt ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2019. Under the modified retrospective transition method, an entity compares the revenue recognized from contract inception up to the date of initial application to the amount that would have been recognized if it had applied ASC 606 since contract inception. The difference between those two amounts would be accounted for as a cumulative effect adjustment and recognized on the date of initial application. The Company has completed its assessment of the new standard, including a review of the Company’s revenue streams to identify potential differences in accounting because of the new standard. This evaluation has influenced the Company to conclude that the adoption of the new guidance will not have a material impact and will not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustment is expected. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. As a lessor and lessee, we do not anticipate the classification of our leases to change, but we expect to recognize right-of-use assets and lease liabilities for substantially virtually all our operating lease commitments leases for which we are the lessee as a lease liability and corresponding right-of-use asset on consolidated balance sheet. The accounting for lessors remains largely unchanged from existing guidance. The new standard has been adopted on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company adopted the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients in transition. We expect to elect the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We do not expect to elect the use-of- hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect that this standard will have a material effect on our financial statements. While we continue to assess all the effects of adoption, we currently believe the most significant effects relate to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating leases. On adoption, the Company expects recognition of additional assets and corresponding liabilities pertaining to its operating leases on its consolidated balance sheets. The Company does not expect the adoption of the new standard to have a significant impact on its consolidated statements of operations and cash flows. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all our leases of real estate. New Standards Not Yet Adopted In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic) 808: Clarifying the Interaction between Topic 808 and Topic 606. The amendments in the update affect all entities that have collaborative arrangements. The amendments to this update make targeted improvements to generally accepted accounting principles (GAAP) for collaborative arrangements as follows: Clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements. Add unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. Require that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. The amendments in this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. An entity may not adopt the amendments earlier than its adoption date of Topic 606. The amendments in this Update should be applied retrospectively to the date of initial application of Topic 606. An entity should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. An entity may elect to apply the amendments in this Update retrospectively either to all contracts or only to contracts that are not completed at the date of initial application of Topic 606. An entity should disclose its election. An entity may elect to apply the practical expedient for contract modifications that is permitted for entities using the modified retrospective transition method in Topic 606. We are currently evaluating this guidance to determine the impact to our consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The amendments to this update affect reporting entities that are required to determine whether they should consolidate a legal entity under the guidance within the Variable Interest Entities Subsections of Subtopic 810-10. For entities other than private companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. All entities are required to apply the amendments in this update retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earlies period presented. Early adoption is permitted. The adoption of ASC 2017-17 is not expected to have a material impact on our results of operations, financial position or liquidity of our related financial statement disclosures. 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 consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Product Warranty Liability | Warranty reserve is included in accrued expenses on the accompanying consolidated balance sheets and cost of components in the accompanying consolidated statement of operations. Warranty Reserve January 1, 2017 $ 182,000 Warranty reserve expense 550,000 Warranty claims settled and true-up of accrual (225,000 ) December 31, 2017 $ 507,000 Warranty reserve expense 23,000 Warranty claims settled and true-up of accrual (205,000 ) December 31, 2018 $ 325,000 |
Schedule of Earnings Per Share, Basic and Diluted | The following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of earnings per share (in thousands): For the Years Ended December 31, 2018 2017 Stock options 5,857 6,551 Convertible debt 13,629 — Warrants 11,872 8,695 31,358 15,246 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring at December 31, 2018 and 2017, consistent with the fair value hierarchy provisions. The asset impairment is a non-recurring level 3 measurement. Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets (non-recurring): Asset impairment $ — $ — $ 245,000 $ 245,000 Capitalized software development costs — — 168,000 168,000 — — 413,000 413,000 Liabilities: Derivative liability $ — $ — $ 1,118,000 $ 1,118,000 Total $ — $ — $ 1,118,000 $ 1,118,000 The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2017, consistent with the fair value hierarchy provisions: Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Derivative liability $ — $ — $ 2,399,000 $ 2,399,000 Total $ — $ — $ 2,399,000 $ 2,399,000 |
Schedule of Foreign Exchanges and Changes in Accumulated Comprehensive Income | The following table presents losses recognized from foreign exchange transactions; and changes in accumulated other comprehensive income representing the gain or loss on the translation of our foreign subsidiary’s financial statements as follows: For the Years Ended December 31, 2018 2017 Net foreign exchange transactions: Losses $ 483,000 $ 284,000 Accumulated comprehensive income: (Decreases) increases $ (79,000 ) $ 354,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Tangible Assets Acquired and Liabilities | 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 |
Schedule of Pro-Forma Information | The following presents the unaudited pro-forma combined results of operations as if the entities were combined on January 1, 2017: For the Year Ended December 31, 2017 Revenues, net $ 49,118 Net loss allocable to common shareholders $ (25.810 ) Net loss per share $ (2.13 ) Weighted average number of shares outstanding 12,138 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following: December 31, 2018 December 31, 2017 Accounts receivable $ 6,740,000 $ 9,305,000 Allowance for doubtful accounts (549,000 ) (968,000 ) Net accounts receivable $ 6,191,000 $ 8,337,000 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories included in the accompanying consolidated balance sheet are stated at the lower of cost or market as summarized below: December 31, 2018 December 31, 2017 Raw materials $ 6,173,000 $ 10,571,000 Work-in-process 3,711,000 2,660,000 Finished goods 4,052,000 5,249,000 Sub-total inventories 13,936,000 18,480,000 Less reserve for slow moving and excess inventory (886,000 ) (3,727,000 ) Total inventories, net $ 13,050,000 $ 14,753,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schdule of Property and Equipment, Net | Property and equipment consist of the following: Useful Life (Years) December 31, 2018 2017 Cost: Furniture and fixtures 1 – 10 $ 291,000 $ 486,000 (A) Leasehold improvements 1 - 14 228,000 1,989,000 Computers, software and equipment 1 - 11 6,495,000 6,189,000 Vehicles 1 - 7 22,000 273,000 7,036,000 8,937,000 Accumulated depreciation (4,940,000 ) (5,700,000 ) Property and equipment, net $ 2,096,000 $ 3,237,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following finite assets: Software Development Costs Patents and Licenses Trade Names and Technology Customer Relationships Accumulated Accumulated Accumulated Accumulated Costs Amortization Costs Amortization Costs Amortization Costs Amortization Net Balance as of January 1, 2017 $ 18,647,000 $ (17,288,000 ) $ 12,378,000 $ (8,507,000 ) $ 350,000 $ (35,000 ) $ 360,000 $ (33,000 ) $ 5,872,000 Additions - - - - 1,100,000 - 2,520,000 - 3,620,000 Impairments - - - - - - - - Amortization - (923,000 ) - (664,000 ) - (208,000 ) - (803,000 ) (2,598,000 ) 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 - - - - - - - - - Eliminations (18,647,000 ) 18,647,000 - - - - - - Impairments - (168,000 ) - - - - - (168,000 ) Amortization - (268,000 ) - (664,000 ) - (224,000 ) - (879,000 ) (2,035,000 ) Balance as of December 31, 2018 $ - $ - $ 12,378,000 $ (9,835,000 ) $ 1,450,000 $ (467,000 ) $ 2,880,000 $ (1,715,000 ) $ 4,691,000 |
Schedule of Estimated Amortization Expense for Intangible Assets | Estimated amortization expense for total intangible assets for the succeeding five years is as follows: 2019 $ 1,763,000 2020 993,000 2021 818,000 2022 574,000 2023 119,000 Thereafter 424,000 $ 4,691,000 |
Accured Expenses (Tables)
Accured Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accured Expenses | Accrued expenses consist of the following: December 31, 2018 December 31, 2017 Compensation $ 834,000 $ 1,306,000 Commissions 90,000 499,000 Warranty 325,000 507,000 Rent 71,000 54,000 Payables 576,000 27,000 Interest 112,000 42,000 Deferred Equity 104,000 715,000 $ 2,112,000 $ 3,150,000 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The debentures (old debt) are summarized as of December 31, 2018 as follows: Remaining principal balance $ 415,625 Debt discount incurred $ 2,712,335 Amortization of debt discount (2,277,962 ) Effect of debt extinguishment (418,510 ) Un-amortized debt discount 15,683 Ending Balance – December 31, 2018 $ 399,942 These debentures as of December 31, 2018 are summarized as follows: Remaining principal balance $ 5,933,289 Debt discount incurred $ 70,000 Amortization of debt discount (22,693 ) Un-amortized debt discount 47,307 Ending Balance – December 31, 2018 $ 5,885,982 |
Schedule of Interest Expense | Items charged to interest expense for the years ending December 31, 2018 and 2017 are: 2018 2017 Contractual interest expense $ 131,185 $ -0- Debt discount amortization 488,791 -0- Warrant costs 1,788,171 -0- Total charged to interest expense $ 2,408,147 $ -0- Items charged to interest expense for the years ending December 31, 2018 and 2017 are: 2018 2017 Contractual interest expense $ 140,886 $ -0- Debt discount amortization 22,693 -0- Total charged to interest expense $ 163,579 $ -0- |
Schedule of New Debt Instrument | The modifications resulted in new debt instruments and the principal is summarized as follows: Principal remaining on old debt modified $ 3,400,000 Accrued interest on old debt modified 100,300 Additional proceeds 2,000,000 Original issue discount 105,265 Redemption premiums 525,045 Total new principal $ 6,130,610 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes consists of the following: December 31, 2018 2017 Current tax provision (benefit) Federal $ — $ — State 6,000 — 6,000 — Deferred tax provision (benefit) Federal (3,567,000 ) 21,269,000 State (1,720,000 ) (1,994,000 ) Foreign (127,000 ) (885,000 ) Change in valuation allowance 5,414,000 (18,390,000 ) Income tax provision (benefit) $ 6,000 $ — |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory tax rate to the effective tax rate is as follows: December 31, 2018 2017 Statutory Federal income tax rate 21.00 % 34.00 % State and local taxes, net of Federal benefit 10.93 13.96 Permanent differences 4.35 (2.74 ) Provision to return 1.40 1.21 IMT opening balance (— ) (— ) Bargain purchase gain (— ) 36.65 Vislink opening balance (— ) (36.65 ) Invested earnings of foreign subsidiary (0.14 ) (8.30 ) Change in federal and state statutory rate (0.80 ) (212.41 ) Valuation allowance (36.78 ) 174.28 Effective tax rate (0.04 )% (— )% |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets are as follows: December 31, 2018 2017 Deferred Tax Assets Federal R&D credit $ 2,819,000 $ 2,819,000 Inventory 78,000 836,000 Allowance for bad debt 32,000 102,000 Compensation Related 3,000 120,000 Pension 6,000 33,000 Other Accruals 305,000 88,000 State Net operating losses 8,532,000 6,909,000 Federal Net operating losses 36,079,000 33,657,000 Property & Equipment 12,000 119,000 Stock Options 6,214,000 5,240,000 Other 834,000 623,000 Valuation Allowance (53,573,000 ) (48,159,000 ) Total Deferred Tax Assets 1,341,000 2,387,000 Deferred Tax Liabilities Property and Equipment (215,000 ) (197,000 ) Intangibles (1,080,000 ) (1,567,000 ) Inventory — (623,000 ) Prepaid Expenses (24,000 ) — Compensation Related (22,000 ) — Total Deferred Tax Liabilities (1,341,000 ) (2,387,000 ) Net Deferred Tax Asset/(Liability) $ — $ — |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Valuation and Warrants Exercisable | The following are the key assumptions that were used in connection with the valuation of the warrants exercisable into common stock as of December 31, 2018 and 2017: Years Ended December 31, 2018 2017 Number of shares underlying the warrants 4,928,152 968,080 Fair market value of stock $ 0.31 $ 1.62 Exercise price $ 0.45 to 13.79 $ 2.00 to 2,400 Volatility 118% to 149 % 67% to 160 % Risk-free interest rate 2.46% to 2.51 % 1.76% to 2.20 % Expected dividend yield — — Warrant life (years) 0.1 to 4.41 0.8 to 3.55 |
Schedule of Changes in Fair Value of Level 3 Financial Liabilities | 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: Years Ended December 31, 2018 2017 Beginning balance $ 2,399,000 $ 1,183,000 Recognition of warrant liability on issuance dates 1,905,000 1,321,000 Change in fair value of derivative liabilities (3,186,000 ) (105,000 ) Ending balance $ 1,118,000 $ 2,399,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Each option is estimated on the date of grant, using the Black-Scholes model and the following assumptions (all in weighted averages): 2018 2017 Exercise price $ 0.89 $ 1.58 Volatility 148.71 % 285.27 % Risk-free interest rate 2.63 % 1.88 % Expected dividend yield 0 % 0 % Expected term (years) 6 6 |
Schedule of Stock Option Activity | A summary of the status of the Company’s stock option plan for the year ended December 31, 2018 is as follows: Number of Options (in shares) Weighted Average Exercise Price Outstanding, January 1, 2018 6,550,500 $ 1.58 Options granted 220,000 $ 0.89 Options exercised -0- $ -0- Options cancelled/expired (913,332 ) $ (1.58 ) Outstanding, December 31, 2018 5,857,168 $ 1.55 Exercisable, December 31, 2018 2,537,194 $ 1.57 |
Schedule of Stock Option Exercise Price | A summary of the status of the Company’s stock option plan for the year ended December 31, 2018 is as follows (continued): Common stock issuable upon exercise of options outstanding Common stock issuable upon options exercisable Range of exercise prices Options Outstanding (in shares) Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Options Exercisable (in shares) Remaining Exercisable Contractual Life (years) Weighted Average Exercise Price $0 to $46,202 5,857,168 8.41 $ 1.55 2,537,194 8.34 $ 1.57 |
Schedule of Warrant Outstanding | The following table sets forth common share purchase warrants outstanding as of December 31, 2018: Quantity of Warrants Weighted Average Exercise Price Outstanding, December 31, 2017 8,695,273 $ 5.50 Warrants granted 3,200,000 $ 1.00 Warrants exercised -0- $ -0- Warrants cancelled/expired (23,460 ) $ (1,105.00 ) Outstanding, December 31, 2018 11,871,813 $ 1.98 Exercisable, December 31, 2018 11,871,813 $ 1.98 |
Schedule of Warrant Outstanding Exercise Price | As of December 31, 2018, these outstanding warrants contained no intrinsic value. Common Stock Issuable Upon Exercise of Warrants Outstanding Common Stock Issuable Upon Warrants Exercisable Range of Exercise Prices Number Outstanding at 12/31/18 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at 12/31/18 Weighted Average Exercise Price $ *0.45 1,037,288 2.55 $ *0.45 1,037,288 $ 0.45 $ 1.00 3,200,000 4.41 $ 1.00 3,200,000 $ 1.00 $ 2.00 6,512,475 3.02 $ 2.00 6,512,475 $ 2.00 $ 2.50 982,989 3.09 $ 2.50 982,989 $ 2.50 $ 8.40 20,833 2.82 $ 8.40 20,833 $ 8.40 $ 13.79 116,666 2.38 $ 13.79 116,666 $ 13.79 $ 420.00 -0- 0.00 $ 420.00 -0- $ 420.00 $ 1,380.00 1,209 1.10 $ 1,380.00 1,209 $ 1,380.00 $ 2,400.00 353 1.15 $ 2,400.00 353 $ 2,400.00 11,871,813 3.35 $ 1.98 11,871,813 $ $1.98 *represents group of warrants repriced to $0.45 from $6.85 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Obligations Assumed | The table below lists location and lease expiration dates from 2019 through 2025: Location Lease End Date Approximate Future Payments Colchester, U.K. – The Fairways Jun 2020 $ 301,227 Colchester, U.K. – Waterside House May 2025 1,673,513 Anaheim, CA Jul 2021 79,068 Billerica, MA May 2021 1,065,402 Hemel, UK Oct 2020 333,293 Singapore Aug 2020 55,021 Hackettstown, NJ Apr 2020 122,302 Dubai, United Arab Emirates Jun 2019 10,994 Sunrise, Florida May 2019 40,275 Sublets: Colchester, UK – The Fairways Mar 2020 $ 69,000 Hemel, UK Oct 2020 167,000 |
Schedule of Future Minimum Rental Payments for Operating Leases | 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, Amount 2019 1,299,000 2020 1,043,000 2021 469,000 2022 268,000 2023 268,000 Thereafter 335,000 $ 3,682,000 Sublets: 2019 $ 146,000 2020 90,000 $ 236,000 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments Information | The Company has one operating segment and the decision-making group is the senior executive management team. Year Ended Year Ended December 31, 2018 December 30, 2017 Revenue: North America $ 17,686,000 $ 19,900,000 South America 1,185,000 6,933,000 Europe 11,569,000 11,451,000 Asia 4,880,000 5,105,000 Rest of World 2,974,000 4,435,000 $ 38,294,000 $ 47,824,000 Year Ended Year Ended December 31, 2018 December 31, 2017 Long-Lived Assets: United States $ 5,637,000 $ 5,700,000 United Kingdom 1,150,000 4,431,000 $ 6,787,000 $ 10,131,000 |
Prior Period Financial Statem_2
Prior Period Financial Statement Revision (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Consolidated Financial Statements | The effects of the correction of immaterial errors on our Consolidated Financial Statements were as follows (in thousands): December 31, 2017 Amounts Previously Reported Adjustment As Revised Consolidated Balance Sheet: Total Liabilities $ 19,019 $ 1,128 $ 20,147 Stockholders’ equity before accumulated deficit 237,472 (1,321 ) 236,151 Accumulated deficit (219,845 ) 193 (219,652 ) Total liabilities and stockholders’ equity $ 36,646 $ - $ 36,646 Consolidated Statement of Operations: Net loss for the year ended $ (10,546 ) $ 193 $ (10,353 ) |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | May 29, 2018 | Dec. 31, 2016 | |
Cash | $ 2,005,000 | $ 2,799,000 | $ 9,054,000 | |
Working capital | 9,400,000 | |||
Accumulated deficit | (234,525,000) | (219,652,000) | ||
Loss from operations | (14,427,000) | (23,389,000) | ||
Cash used in operating activities | (6,379,000) | $ (4,485,000) | ||
Expected amount of savings in cost reduction plan | 8,200,000 | |||
Other expenses | $ 1,300,000 | |||
6% Senior Secured Convertible Debentures [Member] | Private Placement [Member] | ||||
Debt instrument, principal amount | $ 4,000,000 | |||
Purchase of warrants | 3,000,000 | |||
Warrants exercise price per shares | $ 0.00001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Cash federally insured amount | $ 250,000 | ||
Depreciation | 918,000 | $ 1,831,000 | |
Amortization | 2,035,000 | 2,598,000 | |
Warranty reserve | 325,000 | 507,000 | $ 182,000 |
Increase in warranty reserve | 23,000 | 550,000 | |
Shipping and handling costs | 774,000 | 886,000 | |
Impairment charges | 400,000 | 0 | |
Advertising costs | $ 82,000 | $ 542,000 | |
Foreign exchange transaction rate | 1 | 1 | |
Foreign exchange transactions average rate | 1 | 1 | |
GBP [Member] | |||
Foreign exchange transaction rate | 1.2734340 | 1.3491240 | |
Foreign exchange transactions average rate | 1.3347667 | 1.2936987 | |
Software [Member] | |||
Finite-lived intangible asset, useful life | 5 years | ||
Amortization | $ 268,000 | $ 923,000 | |
Patents and Licenses [Member] | |||
Amortization | 664,000 | 664,000 | |
Other Intangible Assets [Member] | |||
Amortization | 1,103,000 | 1,011,000 | |
Intangible assets capitalized value | $ 0 | $ 3,620,000 | |
Maximum [Member] | |||
Estimated useful life | 10 years | ||
Maximum [Member] | Patents and Licenses [Member] | |||
Finite-lived intangible asset, useful life | 20 years | ||
Maximum [Member] | Other Intangible Assets [Member] | |||
Finite-lived intangible asset, useful life | 15 years | ||
Minimum [Member] | |||
Estimated useful life | 1 year | ||
Minimum [Member] | Patents and Licenses [Member] | |||
Finite-lived intangible asset, useful life | 18 years 6 months | ||
Minimum [Member] | Other Intangible Assets [Member] | |||
Finite-lived intangible asset, useful life | 3 years | ||
Sales Revenue, Net [Member] | One Customer [Member] | |||
Concentration risk percentage | 10.00% | 10.00% | |
Concentration risk amount | $ 5,535,000 | ||
Sales Revenue, Net [Member] | One Customer [Member] | Maximum [Member] | |||
Concentration risk percentage | 12.00% | ||
Accounts Receivable [Member] | Customer [Member] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable [Member] | Two Customers [Member] | |||
Concentration risk percentage | 33.00% | ||
Accounts Receivable [Member] | Customer One [Member] | |||
Concentration risk percentage | 20.00% | ||
Concentration risk amount | $ 1,634,000 | ||
Accounts Receivable [Member] | Customer Two [Member] | |||
Concentration risk percentage | 13.00% | ||
Concentration risk amount | $ 1,073,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Product Warranty Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Warranty reserve, beginning | $ 507,000 | $ 182,000 |
Warranty reserve expense | 23,000 | 550,000 |
Warranty claims settled and true-up of accrual | (205,000) | (225,000) |
Warranty reserve, ending | $ 325,000 | $ 507,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive securities excluded from computation of earnings per share, amount | 31,358,000 | 15,246,000 |
Stock Options [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 5,857,000 | 6,551,000 |
Convertible Debt [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 13,629,000 | |
Warrants [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 11,872,000 | 8,695,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Asset impairment | $ 245,000 | |
Capitalized software development costs | 168,000 | |
Total Assets (non-recurring) | 413,000 | |
Derivative liability | 1,118,000 | $ 2,399,000 |
Total Liabilities | 1,118,000 | 2,399,000 |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | ||
Asset impairment | ||
Capitalized software development costs | ||
Total Assets (non-recurring) | ||
Derivative liability | ||
Total Liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Asset impairment | ||
Capitalized software development costs | ||
Total Assets (non-recurring) | ||
Derivative liability | ||
Total Liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Asset impairment | 245,000 | |
Capitalized software development costs | 168,000 | |
Total Assets (non-recurring) | 413,000 | |
Derivative liability | 1,118,000 | 2,399,000 |
Total Liabilities | $ 1,118,000 | $ 2,399,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Foreign Exchanges and Changes in Accumulated Comprehensive Income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Net foreign exchange transactions: losses | $ 483,000 | $ 284,000 |
Accumulated comprehensive income: (Decrease) increase | $ (79,000) | $ 354,000 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Mar. 17, 2017 | Feb. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Payments to acquire businesses, gross | $ 16,000,000 | ||||
Cash consideration | 6,500,000 | ||||
Preliminary gain on bargain purchase | $ 9,500,000 | $ 10,911,000 | |||
Debt instrument, description of variable rate basis | The Notes were originally due to mature on March 20, 2017 (the "Maturity Date"). Interest on the Notes was payable in cash on the Maturity Date at a rate per annum equal to LIBOR plus 1.9%. | ||||
Fair value of net assets acquired | $ 26,900,000 | ||||
Revenue reduction annualized rate | 0.60% | ||||
Total purchase amount | $ 16,000,000 | ||||
Additional closing transaction | 4,600,000 | ||||
Reducing principal amount due | 4,900,000 | ||||
Cash and sellers extinguished | $ 2,000,000 | ||||
Gain (loss) on extinguishment of debt | $ 2,900,000 | $ 10,900,000 | $ (1,060,000) | $ 2,900,000 | |
Gain on bargain purchase reported | $ 15,500,000 | ||||
Minimum [Member] | |||||
Property, plant and equipment, useful life | 1 year | ||||
Acquired finite-lived intangible assets, weighted average useful life | 3 years | ||||
Maximum [Member] | |||||
Property, plant and equipment, useful life | 10 years | ||||
Acquired finite-lived intangible assets, weighted average useful life | 10 years |
Acquisitions - Schedule of Tang
Acquisitions - Schedule of Tangible Assets Acquired and Liabilities (Details) - USD ($) | Feb. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Amount of consideration | $ 16,000,000 | ||
Accounts receivable | 7,129,000 | ||
Inventories | 15,232,000 | ||
Property and equipment | 3,868,000 | ||
Accounts payable | (2,294,000) | ||
Customer deposits | (1,080,000) | (1,567,000) | |
Accrued expenses | (451,000) | ||
Net tangible assets acquired | 23,291,000 | ||
Total Identifiable Intangible Assets | 3,620,000 | ||
Total net assets acquired | 26,911,000 | ||
Gain on bargain purchase | $ 9,500,000 | $ 10,911,000 | |
Vislink International Limited [Member] | |||
Amount of consideration | 16,000,000 | ||
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 | ||
Total Identifiable Intangible Assets | 3,620,000 | ||
Total net assets acquired | 26,911,000 | ||
Gain on bargain purchase | 10,911,000 | ||
Vislink International Limited [Member] | Trade Names and Technology [Member] | |||
Total Identifiable Intangible Assets | 1,100,000 | ||
Vislink International Limited [Member] | Customer Relationships [Member] | |||
Total Identifiable Intangible Assets | $ 2,520,000 |
Acquisitions - Schedule of Pro-
Acquisitions - Schedule of Pro-Forma Information (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Business Combinations [Abstract] | |
Revenues, net | $ 49,118 |
Net loss allocable to common shareholders | $ (25,810) |
Net loss per share | $ / shares | $ (2.13) |
Weighted average number of shares outstanding | shares | 12,138 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Bad debt expense | $ 142 | $ 335 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 6,740,000 | $ 9,305,000 |
Allowance for doubtful accounts | (549,000) | (968,000) |
Net accounts receivable | $ 6,191,000 | $ 8,337,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Inventory valuation adjustments | $ 473 | $ 1,781 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,173,000 | $ 10,571,000 |
Work-in-process | 3,711,000 | 2,660,000 |
Finished goods | 4,052,000 | 5,249,000 |
Sub-total inventories | 13,936,000 | 18,480,000 |
Less reserve for slow moving and excess inventory | (886,000) | (3,727,000) |
Total inventories, net | $ 13,050,000 | $ 14,753,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 918,000 | $ 1,831,000 |
Impairment of property plant and equipment | 245,000 | |
Gain on sale of property and equipment | $ 146,000 |
Property and Equipment - Schdul
Property and Equipment - Schdule of Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Property and equipment | $ 7,036,000 | $ 8,937,000 | |
Accumulated depreciation | (4,940,000) | (5,700,000) | |
Property and equipment, net | $ 2,096,000 | 3,237,000 | |
Minimum [Member] | |||
Estimated useful life | 1 year | ||
Maximum [Member] | |||
Estimated useful life | 10 years | ||
Furniture and Fixtures [Member] | |||
Property and equipment | $ 291,000 | 486,000 | |
Furniture and Fixtures [Member] | Minimum [Member] | |||
Estimated useful life | 1 year | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Estimated useful life | 10 years | ||
Leasehold Improvements [Member] | |||
Property and equipment | [1] | $ 228,000 | 1,989,000 |
Leasehold Improvements [Member] | Minimum [Member] | |||
Estimated useful life | [1] | 1 year | |
Leasehold Improvements [Member] | Maximum [Member] | |||
Estimated useful life | [1] | 14 years | |
Computers, Software and Equipment [Member] | |||
Property and equipment | $ 6,495,000 | 6,189,000 | |
Computers, Software and Equipment [Member] | Minimum [Member] | |||
Estimated useful life | 1 year | ||
Computers, Software and Equipment [Member] | Maximum [Member] | |||
Estimated useful life | 11 years | ||
Vehicles [Member] | |||
Property and equipment | $ 22,000 | $ 273,000 | |
Vehicles [Member] | Minimum [Member] | |||
Estimated useful life | 1 year | ||
Vehicles [Member] | Maximum [Member] | |||
Estimated useful life | 7 years | ||
[1] | The shorter of the economic life or remaining lease term. |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of intangible assets | $ 2,035,000 | $ 2,598,000 |
Asset impairment charges | 413,000 | |
Net of capitalized cost patent and licenses | 12,400,000 | |
Capitalized cost patent and licenses paid | 12,300,000 | |
Capitalized cost patent and licenses unpaid | $ 100,000 | |
Minimum [Member] | ||
Amortized weighted average remaining life | 3 years | |
Maximum [Member] | ||
Amortized weighted average remaining life | 10 years | |
Software Development [Member] | ||
Amortization of intangible assets | $ 300,000 | 900,000 |
Asset impairment charges | 200,000 | 0 |
Patents and Licenses [Member] | ||
Amortization of intangible assets | $ 700,000 | $ 700,000 |
Patents and Licenses [Member] | Minimum [Member] | ||
Finite-lived intangible asset, useful life | 18 years 6 months | |
Amortized weighted average remaining life | 2 years 6 months | |
Patents and Licenses [Member] | Maximum [Member] | ||
Finite-lived intangible asset, useful life | 20 years |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning balance cost/ accumulated amortization | $ 6,894,000 | $ 5,872,000 |
Additions,cost/ accumulated amortization | 3,620,000 | |
Impairments, cost/ accumulated amortization | (168,000) | |
Amortization, cost/ accumulated amortization | (2,035,000) | (2,598,000) |
Eliminations, cost/ accumulated amortization | ||
Ending balance, cost/ accumulated amortization | 4,691,000 | 6,894,000 |
Software Development [Member] | ||
Beginning balance cost | 18,647,000 | 18,647,000 |
Intangible assets, Additions | ||
Intangible assets, Impairments | ||
Intangible assets, Amortization | ||
Intangible assets, Eliminations | (18,647,000) | |
Ending balance cost | 18,647,000 | |
Beginning balance, accumulated amortization | (18,211,000) | (17,288,000) |
Intangible assets accumulated amortization, Additions | ||
Intangible assets accumulated amortization, Impairments | (168,000) | |
Intangible assets accumulated amortization | (268,000) | (923,000) |
Intangible assets accumulated amortization Eliminations | 18,647,000 | |
Ending balance, accumulated amortization | (18,211,000) | |
Patents and Licenses [Member] | ||
Beginning balance cost | 12,378,000 | 12,378,000 |
Intangible assets, Additions | ||
Intangible assets, Impairments | ||
Intangible assets, Amortization | ||
Intangible assets, Eliminations | ||
Ending balance cost | 12,378,000 | 12,378,000 |
Beginning balance, accumulated amortization | (9,171,000) | (8,507,000) |
Intangible assets accumulated amortization, Additions | ||
Intangible assets accumulated amortization, Impairments | ||
Intangible assets accumulated amortization | (664,000) | (664,000) |
Intangible assets accumulated amortization Eliminations | ||
Ending balance, accumulated amortization | (9,835,000) | (9,171,000) |
Trade Names and Technology [Member] | ||
Beginning balance cost | 1,450,000 | 350,000 |
Intangible assets, Additions | 1,100,000 | |
Intangible assets, Impairments | ||
Intangible assets, Amortization | ||
Intangible assets, Eliminations | ||
Ending balance cost | 1,450,000 | 1,450,000 |
Beginning balance, accumulated amortization | (243,000) | (35,000) |
Intangible assets accumulated amortization, Additions | ||
Intangible assets accumulated amortization | (224,000) | (208,000) |
Intangible assets accumulated amortization Eliminations | ||
Ending balance, accumulated amortization | (467,000) | (243,000) |
Customer Relationships [Member] | ||
Beginning balance cost | 2,880,000 | 360,000 |
Intangible assets, Additions | 2,520,000 | |
Intangible assets, Impairments | ||
Intangible assets, Amortization | ||
Intangible assets, Eliminations | ||
Ending balance cost | 2,880,000 | 2,880,000 |
Beginning balance, accumulated amortization | (836,000) | (33,000) |
Intangible assets accumulated amortization, Additions | ||
Intangible assets accumulated amortization, Impairments | ||
Intangible assets accumulated amortization | (879,000) | (803,000) |
Intangible assets accumulated amortization Eliminations | ||
Ending balance, accumulated amortization | $ (1,715,000) | $ (836,000) |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Amortization Expense for Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 1,763,000 | |
2020 | 993,000 | |
2021 | 818,000 | |
2022 | 574,000 | |
2023 | 119,000 | |
Thereafter | 424,000 | |
Finite-Lived Intangible Assets, Net, Total | $ 4,691,000 | $ 6,894,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation | $ 834,000 | $ 1,306,000 |
Commissions | 90,000 | 499,000 |
Warranty | 325,000 | 507,000 |
Rent | 71,000 | 54,000 |
Payables | 576,000 | 27,000 |
Interest | 112,000 | 42,000 |
Deferred Equity | 104,000 | 715,000 |
Accrued expenses | $ 2,112,000 | $ 3,150,000 |
Obligations Under Capital Lea_2
Obligations Under Capital Lease (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | ||
Capital leased assets, gross | $ 0 | $ 54,000 |
Capital lease obligation | $ 0 | $ 82,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Dec. 04, 2018 | Dec. 03, 2018 | Oct. 09, 2018 | May 29, 2018 | Mar. 17, 2017 | Oct. 06, 2011 | Oct. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Beneficial conversion | $ 193,877 | |||||||||
Gain (loss) on extinguishment of debt | $ 2,900,000 | $ 10,900,000 | $ (1,060,000) | $ 2,900,000 | ||||||
Number shares issued value | ||||||||||
Dividend Yield [Member] | ||||||||||
Fair value of assumtions percentage | 0.00% | |||||||||
Expected Volatility [Member] | ||||||||||
Fair value of assumtions percentage | 163.50% | |||||||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||||||
Fair value of assumtions percentage | 0.27% | |||||||||
Measurement Input, Expected Dividend Rate [Member] | ||||||||||
Fair value of assumtions of term | 5 years | |||||||||
WarrantMember | ||||||||||
Debt maturity date | May 29, 2023 | |||||||||
Number shares issued, shares | 780,489 | |||||||||
Warrant exercise price | $ 1 | |||||||||
Proceeds from Issuance of debt discount warrants | $ 1,788,171 | |||||||||
Six Percent Senior Secured Convertible Debentures [Member] | ||||||||||
Debt Instrument, Face Amount | $ 4,000,000 | |||||||||
Debt maturity date | May 29, 2019 | |||||||||
Debt instrument, convertible, conversion price | $ 1 | |||||||||
Stock Repurchased During Period, Shares | 3,000,000 | |||||||||
Proceeds Issuance Costs | $ 3,636,760 | |||||||||
Debt Related Commitment Fees and Debt Issuance Costs | 363,240 | |||||||||
Debt Conversion, Description | If held beyond maturity, the conversion rate shall equal the lesser of (i) the then conversion price and (ii) 85% of the VWAP for the trading day immediately prior to the applicable conversion date. The Company shall pay interest to the holders on the aggregate and unconverted and outstanding principal amount on January 1, April 1, July 1 and October 1, with the remaining principal balance due at maturity. | |||||||||
Beneficial conversion | $ 193,877 | |||||||||
Debt Modification of the May 2018 Financing executed on October 9, 2018 [Member] | ||||||||||
Debt maturity date | Sep. 30, 2019 | |||||||||
Debt instrument, convertible, conversion price | $ 0.20 | $ 0.45 | ||||||||
Stock issued during period, shares, conversion of convertible securities | 552,912 | 302,655 | 222,224 | |||||||
Debt interest rate | 10.00% | |||||||||
Additional debt discount with an offset to equity | $ 90,050 | |||||||||
Compensatory shares | 302,655 | |||||||||
Debt extinguishment | $ 160,407 | |||||||||
Debt discount percentage on principal amount | 5.00% | |||||||||
Percentage of Cash Flows from debt instrument | 10.00% | |||||||||
Gain (loss) on extinguishment of debt | $ 1,059,870 | |||||||||
Debt issuance cost | $ 70,000 | |||||||||
Number shares issued value | $ 238,758 | $ 100,000 | ||||||||
Debt Modification of the May 2018 Financing executed on October 9, 2018 [Member] | Minimum [Member] | ||||||||||
Debt instrument, convertible, conversion price | $ 0.45 | |||||||||
Debt Modification of the May 2018 Financing executed on October 9, 2018 [Member] | Maximum [Member] | ||||||||||
Debt instrument, convertible, conversion price | $ 1 | |||||||||
Treco International, S.A [Member] | ||||||||||
Debt Instrument, Face Amount | $ 2,000,000 | 2,000,000 | $ 0 | 2,000,000 | ||||||
Debt maturity date | Oct. 6, 2018 | |||||||||
Debt instrument, convertible, conversion price | $ 42,000 | |||||||||
Stock issued during period, shares, conversion of convertible securities | 48 | |||||||||
Debt interest rate | 9.00% | |||||||||
Accrued interest | $ 42,000 | $ 0 | $ 42,000 | |||||||
Number shares issued, shares | 276,796 | 137,742 | ||||||||
Paid-in-Kind Interest | $ 180,000 | $ 270,000 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Debt (Details) - USD ($) | Mar. 17, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Amortization of debt discount | $ 488,791 | $ 0 | ||
Effect of debt extinguishment | $ 2,900,000 | $ 10,900,000 | (1,060,000) | 2,900,000 |
Un-amortized debt discount | 0 | 16,000 | 0 | |
Ending Balance | $ 2,000,000 | 2,000,000 | ||
New Debt [Member] | ||||
Amortization of debt discount | 22,693 | $ 0 | ||
Convertible Notes Payable [Member] | Old Debt [Member] | ||||
Remaining principal balance | 415,625 | |||
Debt discount incurred | 2,712,335 | |||
Amortization of debt discount | (2,277,962) | |||
Effect of debt extinguishment | (418,510) | |||
Un-amortized debt discount | 15,683 | |||
Ending Balance | 399,942 | |||
Convertible Notes Payable [Member] | New Debt [Member] | ||||
Remaining principal balance | 5,933,289 | |||
Debt discount incurred | 70,000 | |||
Amortization of debt discount | (22,693) | |||
Un-amortized debt discount | 47,307 | |||
Ending Balance | $ 5,885,982 |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Interest Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contractual interest expense | $ 131,185 | $ 0 |
Debt discount amortization | 488,791 | 0 |
Warrant costs | 1,788,171 | 0 |
Total charged to interest expense | 2,408,147 | 0 |
New Debt [Member] | ||
Contractual interest expense | 140,886 | 0 |
Debt discount amortization | 22,693 | 0 |
Total charged to interest expense | $ 163,579 | $ 0 |
Convertible Notes Payable - S_3
Convertible Notes Payable - Schedule of New Debt Instrument (Details) - Convertible Notes Payable [Member] - Modifications Resulted in New Debt Instruments [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Principal remaining on old debt modified | $ 3,400,000 |
Accrued interest on old debt modified | 100,300 |
Additional proceeds | 2,000,000 |
Original issue discount | 105,265 |
Redemption premiums | 525,045 |
Total new principal | $ 6,130,610 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 2,800,000 | |
Net operating loss carryovers under Internal Revenue Code, description | The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the Company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. The Company plans to perform a Section 382 analysis in the future. | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 22,400,000 | |
Effective for tax years, description | The Tax Act includes a participation exemption system of taxation, which generally provides for 100% dividends received deduction on certain qualifying dividend distributions received by U.S. C-corporation shareholders from their 10% or more owned foreign subsidiaries. As a result of this new participation exemption system, it is generally anticipated that the Company should not be subject to additional U.S. federal income taxation on its future receipt of actual dividend income (as opposed to a deemed inclusion amounts under certain anti-deferral rules) from its foreign subsidiary. For tax years beginning after December 31, 2017, the Tax Act introduced a new limitation on the deduction of interest expense whereby current year interest deductions are limited (among other limitations) to 30% of adjusted taxable income, with various modifications and exceptions. The Company does incur interest expense, and evaluates each year the impact, if any, of the new limitation. | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 156,900,000 | |
Operating Loss Carryforwards, expired | 2027 | |
Federal [Member] | Carried Forward Indefinitely [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 10,400,000 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 152,700,000 | |
Operating Loss Carryforwards, expired | 2027 | |
Foreign [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 5,500,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current tax provision (benefit), Federal | ||
Current tax provision (benefit), State | 6,000 | |
Current Income Tax Expense (Benefit), Total | 6,000 | |
Deferred tax provision (benefit), Federal | (3,567,000) | 21,269,000 |
Deferred tax provision (benefit), State | (1,720,000) | (1,994,000) |
Deferred tax provision (benefit), Foreign | (127,000) | (885,000) |
Change in valuation allowance | 5,414,000 | (18,390,000) |
Income tax provision (benefit) | $ 6,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory Federal income tax rate | 21.00% | 34.00% |
State and local taxes net of Federal benefit | 10.93% | 13.96% |
Permanent differences | 4.35% | (2.74%) |
Provision to return | 1.40% | 1.21% |
IMT opening balance | (0.00%) | (0.00%) |
Bargain purchase gain | (0.00%) | 36.65% |
Vislink opening balance | 0.00% | (36.65%) |
Invested earnings of foreign subsidiary | (0.14%) | (8.30%) |
Change in federal statutory rate | (0.80%) | (212.41%) |
Valuation allowance | (36.78%) | 174.28% |
Effective tax rate | (0.04%) | (0.00%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets, Federal R&D credit | $ 2,819,000 | $ 2,819,000 |
Deferred Tax Assets, Inventory | 78,000 | 836,000 |
Deferred Tax Assets, Allowance for bad debt | 32,000 | 102,000 |
Deferred Tax Assets, Compensation Related | 3,000 | 120,000 |
Deferred Tax Assets, Pension | 6,000 | 33,000 |
Deferred Tax Assets, Other Accruals | 305,000 | 88,000 |
Deferred Tax Assets, State Net operating losses | 8,532,000 | 6,909,000 |
Deferred Tax Assets, Federal Net operating losses | 36,079,000 | 33,657,000 |
Deferred Tax Assets, Property & Equipment | 12,000 | 119,000 |
Deferred Tax Assets, Stock Options | 6,214,000 | 5,240,000 |
Deferred Tax Assets, Other | 834,000 | 623,000 |
Deferred Tax Assets, Valuation Allowance | (53,573,000) | (48,159,000) |
Total Deferred Tax Assets | 1,341,000 | 2,387,000 |
Deferred Tax Liabilities, Property & Equipment | (215,000) | (197,000) |
Deferred Tax Liabilities, Intangibles | (1,080,000) | (1,567,000) |
Deferred Tax Liabilities, Inventory | (623,000) | |
Deferred Tax Liabilities, Prepaid Expenses | (24,000) | |
Deferred Tax Liabilities, Compensation Related | (22,000) | |
Total Deferred Tax Liabilities | (1,341,000) | (2,387,000) |
Net Deferred Tax Asset/(Liability) |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Valuation and Warrants Exercisable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares underlying the warrants | 4,928,152 | 968,080 |
Fair market value of stock | $ 0.31 | $ 1.62 |
Exercise price | $ 0.89 | $ 1.58 |
Expected Dividend Yield [Member] | ||
Fair Value Assumptions Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Exercise price | $ 0.45 | $ 2 |
Warrant life (years) | 1 month 6 days | 9 months 18 days |
Minimum [Member] | Volatility [Member] | ||
Fair Value Assumptions Rate | 118.00% | 67.00% |
Minimum [Member] | Risk-free Interest Rate [Member] | ||
Fair Value Assumptions Rate | 2.46% | 1.76% |
Maximum [Member] | ||
Exercise price | $ 13.79 | $ 2,400 |
Warrant life (years) | 4 years 4 months 28 days | 3 years 6 months 18 days |
Maximum [Member] | Volatility [Member] | ||
Fair Value Assumptions Rate | 149.00% | 160.00% |
Maximum [Member] | Risk-free Interest Rate [Member] | ||
Fair Value Assumptions Rate | 2.51% | 2.20% |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Changes in Fair Value of Level 3 Financial Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning balance | $ 2,399,000 | $ 1,183,000 |
Recognition of warrant liabilities on issuance dates | 1,905,000 | 1,321,000 |
Change in fair value of derivative liabilities | (3,186,000) | (105,000) |
Ending balance | $ 1,118,000 | $ 2,399,000 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2016 | Apr. 25, 2016 | Feb. 05, 2016 | Feb. 24, 2015 | Feb. 11, 2015 | Dec. 31, 2014 | Mar. 31, 2013 | |
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Conversion of Stock, Amount Converted | $ 648 | ||||||||
Conversion of Stock, Shares Converted | 4,928,152 | 968,080 | |||||||
Series A Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 3,000,000 | ||||||||
Series B Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 5,000,000 | 3,000,000 | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | ||||||||
Series C Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 3,000,000 | ||||||||
Series D Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 5,000,000 | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1 | ||||||||
Series E Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Shares Authorized | 5,000 | 5,000 | |||||||
Convertible Preferred Stock, Terms of Conversion | Each share of the Series E Preferred is convertible into shares of the Company's common stock (subject to adjustment as provided in the related certificate of designation of preferences, rights and limitations) at any time at the option of the holder at a conversion price of not less than 100% of the public offering price of the common stock. Holders of Series E Preferred Stock will be prohibited from converting Series E Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of common stock then issued and outstanding. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice to the Company. | ||||||||
Conversion of Stock, Shares Issued | 2,400 | ||||||||
Conversion of Stock, Shares Converted | 1,200,000 | ||||||||
Series D Preferred Stock Issuable [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Sale of Stock, Price Per Share | $ 1.20 | ||||||||
Series E Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Nov. 16, 2017$ / sharesshares | Sep. 11, 2017USD ($)shares | Aug. 18, 2017USD ($)shares | Jul. 01, 2017$ / sharesshares | May 19, 2017USD ($)shares | Mar. 24, 2017$ / sharesshares | Mar. 15, 2017shares | Feb. 14, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016shares |
Number of common stock issued under compensation, value | $ | $ 160,407 | ||||||||||
Compensation cost | $ | $ 3,728,154 | ||||||||||
Number of common stock shares issued to related party obligations | 429,585 | ||||||||||
Number of common stock shares issued to related party obligations, value | $ | $ 240,000 | ||||||||||
Number of shares issued on conversion | 775,184 | ||||||||||
Number of shares issued on conversion, value | $ | $ 2,338,758 | ||||||||||
Beneficial conversion feature amount | $ | 193,877 | ||||||||||
Increase in the value of beneficial conversion feature | $ | $ 284,000 | ||||||||||
Common stock draw down description | In connection with its 2017 Annual Meeting of Stockholders held on June 15, 2017, the Company did not receive stockholder approval, as required pursuant to Nasdaq Marketplace Rule 5635(d), to issue shares of common stock under the Lincoln Park Purchase Agreement in an amount equal to 20% or more of the Company's outstanding shares of common stock. As such, the Company will not be permitted to draw down the full $15,000,000 in shares of common stock under the Lincoln Park Purchase Agreement unless and until the Company receives such stockholder approval. | ||||||||||
Sharebased compensation shares cancelled | 1,844 | ||||||||||
Shaebased compensation options granted | 3,555,500 | 220,000 | |||||||||
Share-based compensation requisite service period | 10 years | ||||||||||
Stock option, exercise price | $ / shares | $ 1.55 | ||||||||||
Stock option related to Vesting of Remaining Options for Terminated Employees | $ | $ 800,000 | ||||||||||
Share-based compensation | $ | $ 3,728,000 | $ 2,209,000 | |||||||||
Weighted average fair value of options granted | $ / shares | $ 0.89 | $ 1.58 | |||||||||
Weighted average remaining contractual life of option | 6 years | 8 years 4 months 28 days | 8 years 4 months 2 days | ||||||||
Weighted average remaining contractual life, option exercisable | 8 years 4 months 2 days | ||||||||||
Intrinsic value of options exercisable, per share | $ / shares | $ 0 | $ 0 | |||||||||
Unrecognized cost of unvested options | $ | $ 3,340,000 | ||||||||||
Remaining amortization period | 1 year 8 months 19 days | ||||||||||
Number of warrants, Granted | 3,200,000 | ||||||||||
Number of warrants, Forfeited or Expired | (23,460) | ||||||||||
Number of warrants, Ending outstanding | 11,871,813 | 8,695,273 | |||||||||
Weighted Average Exercise Price, Ending outstanding | $ / shares | $ 1.98 | $ 5.50 | |||||||||
Measurement Input, Risk Free Interest Rate [Member] | |||||||||||
Warrants or rights outstanding measurement inputs | 0.0198 | 0.0184 | 1.90 | ||||||||
Measurement Input, Expected Dividend Rate [Member] | |||||||||||
Warrants or rights outstanding measurement inputs | 0 | 0 | 0 | ||||||||
Measurement Input, Option Volatility [Member] | |||||||||||
Warrants or rights outstanding measurement inputs | 2.8191 | 2.8393 | 2.8651 | ||||||||
Common Stock [Member] | |||||||||||
Number of common stock shares issued under compensation | 12,232 | 104,218 | |||||||||
Increase in the value of beneficial conversion feature | $ | |||||||||||
Number of shares issued | 1,560,978 | ||||||||||
Issuance of common stock | $ | $ 3,200,000 | ||||||||||
WarrantMember | |||||||||||
Number of shares issued | 780,489 | ||||||||||
Terminated Employees [Member] | |||||||||||
Share-based compensation | $ | $ 800,000 | ||||||||||
Employee Consultant Agreements [Member] | |||||||||||
Number of common stock shares issued under compensation | 12,232 | ||||||||||
Number of common stock issued under compensation, value | $ | $ 19,081 | ||||||||||
Accrued Interest on Convertible Promissory Note [Member] | |||||||||||
Number of shares issued on conversion | 276,796 | ||||||||||
Number of shares issued on conversion, value | $ | $ 180,000 | ||||||||||
August 2017 Financing [Member] | |||||||||||
Stock issued price per share | $ / shares | $ 2.50 | ||||||||||
Lincoln Park Purchase Agreement [Member] | |||||||||||
Number of shares issued | 192,431 | ||||||||||
Issuance of common stock | $ | $ 15,000,000 | ||||||||||
Lincoln Park Purchase Agreement [Member] | General and Administrative Expense [Member] | |||||||||||
Issuance of common stock | $ | $ 302,000 | ||||||||||
Lincoln Park Purchase Agreement [Member] | Common Stock [Member] | |||||||||||
Number of shares issued | 125,000 | ||||||||||
February 2017 Financing [Member] | |||||||||||
Number of shares issued | 1,750,000 | ||||||||||
February 2017 Financing [Member] | WarrantMember | |||||||||||
Number of shares issued | 1,312,500 | ||||||||||
Issuance of common stock | $ | $ 3,500,000 | ||||||||||
Stock issued price per share | $ / shares | $ 2 | ||||||||||
Shares Issued for Services [Member] | |||||||||||
Number of shares issued | 1,772,152 | ||||||||||
Issuance of common stock | $ | $ 3,042,000 | ||||||||||
2013 Stock Option Plan [Member] | |||||||||||
Shaebased compensation options granted | 1,135,000 | ||||||||||
Share-based compensation requisite service period | 10 years | ||||||||||
2015 Incentive Compensation Plan [Member] | |||||||||||
Shaebased compensation options granted | 755,500 | ||||||||||
Share-based compensation requisite service period | 10 years | ||||||||||
2016 Incentive Compensation Plan [Member] | |||||||||||
Shaebased compensation options granted | 1,665,000 | ||||||||||
Share-based compensation requisite service period | 10 years | ||||||||||
2017 Incentive Compensation Plan [Member] | |||||||||||
Shaebased compensation options granted | 340,000 | 2,795,000 | |||||||||
Share-based compensation requisite service period | 10 years | 10 years | |||||||||
Stock option, exercise price | $ / shares | $ 1.54 | $ 1.62 | |||||||||
Weighted average remaining contractual life of option | 6 years | 6 years | |||||||||
Employees and Consultants [Member] | |||||||||||
Number of common stock shares issued under compensation | 2,083,136 | ||||||||||
Number of common stock issued under compensation, value | $ | $ 1,793,336 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Exercise price | $ 0.89 | $ 1.58 |
Volatility | 148.71% | 285.27% |
Risk-free interest rate | 2.63% | 1.88% |
Expected dividend yield | 0.00% | 0.00% |
Expected term (years) | 6 years | 6 years |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Option Activity (Details) - $ / shares | Mar. 24, 2017 | Dec. 31, 2018 |
Equity [Abstract] | ||
Number of Options, Beginning Balance | 6,550,500 | |
Number of Options, Granted | 3,555,500 | 220,000 |
Number of Options, Exercised | 0 | |
Number of Options, cancelled/Expired | (913,332) | |
Number of Options, Ending Outstanding | 5,857,168 | |
Number of Options Exercisable | 2,537,194 | |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 1.58 | |
Weighted Average Exercise Price, Granted | 0.89 | |
Weighted Average Exercise Price, Exercised | 0 | |
Weighted Average Exercise Price, cancelled/Expired | (1.58) | |
Weighted Average Exercise Price, Outstanding Ending Balance | 1.55 | |
Weighted Average Exercise Price, Exercisable Balance | $ 1.57 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Stock Option Exercise Price (Details) - $ / shares | Mar. 24, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Equity [Abstract] | |||
Range of Exercise Prices, Lower Range | $ 0 | ||
Range of Exercise Prices, Upper Range | $ 46,202 | ||
Number of Options Outstanding | 5,857,168 | ||
Weighted-Average Remaining Contractual Life (years) | 6 years | 8 years 4 months 28 days | 8 years 4 months 2 days |
Weighted-Average Exercise Price | $ 1.55 | ||
Number of Options Exercisable | 2,537,194 | ||
Weighted-Average Remaining Contractual Life (years) | 8 years 4 months 2 days | ||
Weighted-Average Exercise Price, Options Exercisable | $ 1.57 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Warrant Outstanding (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of warrants, Beginning Balance | shares | 8,695,273 |
Number of warrants, Granted | shares | 3,200,000 |
Number of warrants, Exercised | shares | 0 |
Number of warrants, cancelled/expired | shares | (23,460) |
Number of warrants, Ending outstanding | shares | 11,871,813 |
Number of warrants, Ending exercisable | shares | 11,871,813 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 5.50 |
Weighted Average Exercise Price, Granted | $ / shares | 1 |
Weighted Average Exercise Price, Exercised | $ / shares | 0 |
Weighted Average Exercise Price, cancelled/expired | $ / shares | (1,105) |
Weighted Average Exercise Price, Ending outstanding | $ / shares | 1.98 |
Weighted Average Exercise Price, Ending exercisable | $ / shares | $ 1.98 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Warrant Outstanding Exercise Price (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Number of Warrants Outstanding | 11,871,813 | 8,695,273 | |
Warrants [Member] | |||
Number of Warrants Outstanding | 11,871,813 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 3 years 4 months 6 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 1.98 | ||
Number of Warrants Exercisable | 11,871,813 | ||
Warrants Exercisable Exercise Price | $ 1.98 | ||
Warrants [Member] | Exercise Price Range One [Member] | |||
Range of Exercise Prices, Upper Range | [1] | $ 0.45 | |
Number of Warrants Outstanding | 1,037,288 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 2 years 6 months 18 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 0.45 | ||
Number of Warrants Exercisable | 1,037,288 | ||
Warrants Exercisable Exercise Price | $ 0.45 | ||
Warrants [Member] | Exercise Price Range Two [Member] | |||
Range of Exercise Prices, Upper Range | $ 1 | ||
Number of Warrants Outstanding | 3,200,000 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 4 years 4 months 28 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 1 | ||
Number of Warrants Exercisable | 3,200,000 | ||
Warrants Exercisable Exercise Price | $ 1 | ||
Warrants [Member] | Exercise Price Range Three [Member] | |||
Range of Exercise Prices, Upper Range | $ 2 | ||
Number of Warrants Outstanding | 6,512,475 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 3 years 7 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 2 | ||
Number of Warrants Exercisable | 6,512,475 | ||
Warrants Exercisable Exercise Price | $ 2 | ||
Warrants [Member] | Exercise Price Range Four [Member] | |||
Range of Exercise Prices, Upper Range | $ 2.50 | ||
Number of Warrants Outstanding | 982,989 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 3 years 1 month 2 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 2.50 | ||
Number of Warrants Exercisable | 982,989 | ||
Warrants Exercisable Exercise Price | $ 2.50 | ||
Warrants [Member] | Exercise Price Range Five [Member] | |||
Range of Exercise Prices, Upper Range | $ 8.40 | ||
Number of Warrants Outstanding | 20,833 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 2 years 9 months 25 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 8.40 | ||
Number of Warrants Exercisable | 20,833 | ||
Warrants Exercisable Exercise Price | $ 8.40 | ||
Warrants [Member] | Exercise Price Range Six [Member] | |||
Range of Exercise Prices, Upper Range | $ 13.79 | ||
Number of Warrants Outstanding | 116,666 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 2 years 4 months 17 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 13.79 | ||
Number of Warrants Exercisable | 116,666 | ||
Warrants Exercisable Exercise Price | $ 13.79 | ||
Warrants [Member] | Exercise Price Range Seven [Member] | |||
Range of Exercise Prices, Upper Range | $ 420 | ||
Number of Warrants Outstanding | 0 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 0 years | ||
Warrants Outstanding Weighted Average Exercise Price | $ 420 | ||
Number of Warrants Exercisable | 0 | ||
Warrants Exercisable Exercise Price | $ 420 | ||
Warrants [Member] | Exercise Price Range Eight [Member] | |||
Range of Exercise Prices, Upper Range | $ 1,380 | ||
Number of Warrants Outstanding | 1,209 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 1 year 1 month 6 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 1,380 | ||
Number of Warrants Exercisable | 1,209 | ||
Warrants Exercisable Exercise Price | $ 1,380 | ||
Warrants [Member] | Exercise Price Range Nine [Member] | |||
Range of Exercise Prices, Upper Range | $ 2,400 | ||
Number of Warrants Outstanding | 353 | ||
Warrants Outstanding Weighted-Average Remaining Contractual Life (years) | 1 year 1 month 24 days | ||
Warrants Outstanding Weighted Average Exercise Price | $ 2,400 | ||
Number of Warrants Exercisable | 353 | ||
Warrants Exercisable Exercise Price | $ 2,400 | ||
[1] | represents group of warrants repriced to $0.45 from $6.85 |
Stockholders' Equity - Schedu_6
Stockholders' Equity - Schedule of Warrant Outstanding Exercise Price (Details) (Parenthetical) - Warrants [Member] | Dec. 31, 2018$ / shares |
Minimum [Member] | |
Warrant exercise price repriced | $ 0.45 |
Maximum [Member] | |
Warrant exercise price repriced | $ 6.85 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | May 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Operating leases, rent xxpense | $ 1,466,000 | $ 1,509,000 | |
Sublease income | 146,000 | 112,000 | |
Closing bid price | $ 1 | ||
Consecutive business days | 30 days | ||
Grace period | 180 days | ||
Contributions by employer amount | 27,000 | 67,000 | |
Stakeholder Pension Scheme [Member] | |||
Contributions by employer amount | $ 236,000 | $ 169,000 | |
Minimum [Member] | |||
Operating lease term | 5 months | ||
Maximum [Member] | |||
Operating lease term | 6 years |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Lease Obligations Assumed (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Approximate Future Payments | $ 3,682,000 |
Sublets [Member] | |
Approximate Future Payments | $ 236,000 |
Colchester, U.K. - The Fairways [Member] | |
Lease Expiration Date | Jun. 30, 2020 |
Approximate Future Payments | $ 301,227 |
Colchester, U.K. - The Fairways [Member] | Sublets [Member] | |
Lease Expiration Date | May 31, 2020 |
Approximate Future Payments | $ 69,000 |
Colchester, U.K. - Waterside House [Member] | |
Lease Expiration Date | May 31, 2025 |
Approximate Future Payments | $ 1,673,513 |
Anaheim, CA [Member] | |
Lease Expiration Date | Jul. 31, 2021 |
Approximate Future Payments | $ 79,068 |
Billerica, MA [Member] | |
Lease Expiration Date | May 31, 2021 |
Approximate Future Payments | $ 1,065,402 |
Hemel, U.K [Member] | |
Lease Expiration Date | Oct. 31, 2020 |
Approximate Future Payments | $ 333,293 |
Hemel, U.K [Member] | Sublets [Member] | |
Lease Expiration Date | Oct. 31, 2020 |
Approximate Future Payments | $ 167,000 |
Singapore [Member] | |
Lease Expiration Date | Aug. 31, 2020 |
Approximate Future Payments | $ 55,021 |
Hackettstown, NJ [Member] | |
Lease Expiration Date | Apr. 30, 2020 |
Approximate Future Payments | $ 122,302 |
Dubai, United Arab Emirates [Member] | |
Lease Expiration Date | Jun. 30, 2019 |
Approximate Future Payments | $ 10,994 |
Sunrise, Florida [Member] | |
Lease Expiration Date | May 31, 2019 |
Approximate Future Payments | $ 40,275 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2018USD ($) |
2019 | $ 1,299,000 |
2020 | 1,043,000 |
2021 | 469,000 |
2022 | 268,000 |
2023 | 268,000 |
Thereafter | 335,000 |
Operating Leases, Future Minimum Payments Due, Total | 3,682,000 |
Sublets [Member] | |
2019 | 146,000 |
2020 | 90,000 |
Operating Leases, Future Minimum Payments Due, Total | $ 236,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts payable | $ 7,072,000 | $ 10,918,000 |
Sales Revenue, Net [Member] | One Customer [Member] | ||
Concentration risk percentage | 10.00% | 10.00% |
Concentration risk net assets amount | $ 5,535,000 | |
Sales Revenue, Net [Member] | One Customer [Member] | Maximum [Member] | ||
Concentration risk percentage | 12.00% | |
Accounts Receivable [Member] | Customer [Member] | ||
Concentration risk percentage | 10.00% | |
Accounts Receivable [Member] | Two Customers [Member] | ||
Concentration risk percentage | 33.00% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Concentration risk percentage | 20.00% | |
Concentration risk net assets amount | $ 1,634,000 | |
Accounts Receivable [Member] | Customer Two [Member] | ||
Concentration risk percentage | 13.00% | |
Concentration risk net assets amount | $ 1,073,000 | |
Inventories [Member] | Two Vendors [Member] | ||
Concentration risk percentage | 27.00% | 33.00% |
Inventories [Member] | Vendor One [Member] | ||
Concentration risk percentage | 12.00% | 18.00% |
Accounts payable | $ 2,165,000 | $ 5,056,000 |
Inventories [Member] | Vendor Two [Member] | ||
Concentration risk percentage | 15.00% | 15.00% |
Accounts payable | $ 2,596,000 | $ 4,180,000 |
Inventories [Member] | One Vendor [Member] | ||
Concentration risk percentage | 12.00% | |
Accounts payable | $ 800,000 | $ 0 |
Geographical Information - Sche
Geographical Information - Schedule of Operating Segments Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenue | $ 38,294,000 | $ 47,824,000 |
Long-Lived Assets | 6,787,000 | 10,131,000 |
North America [Member] | ||
Total Revenue | 17,686,000 | 19,900,000 |
South America [Member] | ||
Total Revenue | 1,185,000 | 6,933,000 |
Europe [Member] | ||
Total Revenue | 11,569,000 | 11,451,000 |
Asia [Member] | ||
Total Revenue | 4,880,000 | 5,105,000 |
Rest of World [Member] | ||
Total Revenue | 2,974,000 | 4,435,000 |
United States [Member] | ||
Long-Lived Assets | 5,637,000 | 5,700,000 |
United Kingdom [Member] | ||
Long-Lived Assets | $ 1,150,000 | $ 4,431,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 17, 2017 | Feb. 16, 2017 | Feb. 02, 2017 | Nov. 29, 2016 | Mar. 15, 2016 | Mar. 03, 2016 | Apr. 29, 2014 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Related party transaction rate | 5.00% | ||||||||||
Bargain purchase gain amount | $ 9,500,000 | $ 10,911,000 | |||||||||
Gain (loss) on extinguishment of debt | $ 2,900,000 | $ 10,900,000 | (1,060,000) | 2,900,000 | |||||||
Number of stock issued for service | 1,793,000 | 3,042,000 | |||||||||
Due to related parties | 998,000 | 361,000 | 998,000 | ||||||||
Accrued rent | 54,000 | 71,000 | 54,000 | ||||||||
George Schmitt [Member] | |||||||||||
Annual salary | $ 87,500 | 300,000 | |||||||||
M&A Services Agreement [Member] | |||||||||||
Exercise price per share | $ 2.10 | ||||||||||
Option to acquire percentage | 25.00% | ||||||||||
Warrant term | 5 years | ||||||||||
Acquisition, transaction costs | 1,480,000 | $ 1,480,000 | |||||||||
Acquisition price percentage | 8.00% | ||||||||||
MB Technology Holdings, LLC [Member] | |||||||||||
Related party transaction rate | 8.00% | 3.00% | |||||||||
Financing fees | $ 0 | $ 96,000 | |||||||||
Due to related parties fees | 48,000 | 54,000 | |||||||||
Terms and manner of settlement description | 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. | ||||||||||
Related party amounts of transaction | $ 250,000 | ||||||||||
Due to diligence fee | 250,000 | ||||||||||
Warrant to purchase of common stock related to transaction | $ 250,000 | ||||||||||
Exercise price per share | $ 0.01 | ||||||||||
Acquisition fee minimum amount to waive success fee | $ 1,000,000 | ||||||||||
Related party transaction fee, percentage of fee converted to equity | 50.00% | ||||||||||
Related party transaction fee, common stock price percentage for conversion | 110.00% | ||||||||||
Related party transaction fee, shares registration minimum percentage | 25.00% | ||||||||||
Acquisition related to sales | $ 50,000,000 | ||||||||||
Option term | 3 years | ||||||||||
Option to acquire percentage | 25.00% | ||||||||||
Purchase price of common stock percentage | 125.00% | ||||||||||
Fair value of warrant | 265,000 | ||||||||||
Number of stock issued for service | $ 300,000 | ||||||||||
Accrued rent | 94,000 | $ 24,000 | $ 94,000 | ||||||||
Number of shares issued for settelement of debt | 429,585 | 140,252 | |||||||||
Value of shares issued for settelement of debt | $ 240,000 | $ 240,000 | |||||||||
Repayments to related party debt | 769,000 | 1,724,000 | |||||||||
MB Technology Holdings, LLC [Member] | Tranche One [Member] | |||||||||||
Number of stock issued for service | $ 150,000 | ||||||||||
Due to related parties | $ 150,000 | ||||||||||
MB Technology Holdings, LLC [Member] | Tranche Two [Member] | |||||||||||
Number of stock issued for service | $ 150,000 | ||||||||||
Due to related parties | 150,000 | 150,000 | |||||||||
MB Technology Holdings, LLC [Member] | Board of Directors [Member] | |||||||||||
Gain (loss) on extinguishment of debt | 2,900,000 | ||||||||||
MB Technology Holdings, LLC [Member] | Management Agreement [Member] | |||||||||||
Management fee | $ 25,000 | $ 300,000 | 300,000 | ||||||||
Vislink Inc [Member] | M&A Services Agreement [Member] | |||||||||||
Acquisition, transaction costs | 691,000 | $ 691,000 | |||||||||
Acquisition price percentage | 5.00% | ||||||||||
Bargain purchase gain amount | $ 10,911,000 | ||||||||||
Proportion of bargained cost | 546,000 | 546,000 | |||||||||
Reward Authorised | $ 145,000 | $ 145,000 |
Prior Period Financial Statem_3
Prior Period Financial Statement Revision - Schedule of Consolidated Financial Statements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total liabilities | $ 18,523,000 | $ 20,147,000 |
Stockholders' equity before accumulated deficit | 236,151,000 | |
Accumulated deficit | (234,525,000) | (219,652,000) |
Total liabilities and stockholders' equity | 28,813,000 | 36,646,000 |
Net loss for the year ended | $ (14,873,000) | (10,353,000) |
Previously Reported [Member] | ||
Total liabilities | 19,019,000 | |
Stockholders' equity before accumulated deficit | 237,472,000 | |
Accumulated deficit | (219,845,000) | |
Total liabilities and stockholders' equity | 36,646,000 | |
Net loss for the year ended | (10,546,000) | |
Restatement Adjustment [Member] | ||
Total liabilities | 1,128,000 | |
Stockholders' equity before accumulated deficit | (1,321,000) | |
Accumulated deficit | 193,000 | |
Total liabilities and stockholders' equity | ||
Net loss for the year ended | $ 193,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock issued puring period, value, issued for services | $ 1,793,000 | $ 3,042,000 | |
Due to related Parties | 361,000 | $ 998,000 | |
MB Technology Holdings [Member] | Minimum [Member] | |||
Consulting fee | $ 25,000 | ||
MB Merchant Group, LLC [Member] | |||
Waiver of finance fee, percentage | 3.00% | ||
MB Merchant Group, LLC [Member] | Minimum [Member] | |||
Waiver of finance fee, acquisition fee limit | $ 1,000,000 | ||
Subsequent Event [Member] | |||
Stock issued puring period, shares, issued for services | 401,550 | ||
Stock issued puring period, value, issued for services | $ 158,000 | ||
Subsequent Event [Member] | MB Technology Holdings [Member] | |||
Debt conversion, converted instrument, shares issued | 27,174 | ||
Due to related Parties | $ 10,000 | ||
Payment of acquisition fee, percentage | 50.00% | ||
Time of payment of acquisition fee | at closing and, in any case, not later than 30 days following closing | ||
Fees conversion into common stock | up to 50% of its fees | ||
Fees conversion into common stock, conversion price percentage | 110.00% | ||
Subsequent Event [Member] | MB Technology Holdings [Member] | Installment 1 [Member] | |||
Payment of acquisition fee, percentage | 25.00% | ||
Time of payment of acquisition fee | due 3 months following closing | ||
Subsequent Event [Member] | MB Technology Holdings [Member] | Installment 2 [Member] | |||
Payment of acquisition fee, percentage | 25.00% | ||
Time of payment of acquisition fee | due 6 months following closing | ||
Subsequent Event [Member] | MB Technology Holdings [Member] | Minimum [Member] | |||
Fees conversion into common stock, limit on acquisition fee percentage | 25.00% | ||
Nondilutive option term | 5 years | ||
Nondilutive option shares entitled for converting, percentage | 25.00% | ||
Nondilutive option shares conversion price | $ 2.10 | ||
Consulting fee | $ 50,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | |||
Success-based due diligence fee | $ 250,000 | ||
Waiver of finance fee, percentage | 2.00% | ||
Additional fee on bargain purchase gain | 5.00% | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Category 1 [Member] | |||
Acquisition fee, description | greater of $250,000 or 6% of the total acquisition price | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Category 2 [Member] | |||
Acquisition fee, description | fee of $600k (for the first $10 million) plus a 4% fee of the excess value over $10 million | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Category 3 [Member] | |||
Acquisition fee, description | fee of $4.2 million (for the first $100 million) plus a 2% fee of the excess over $100 million | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Category 4 [Member] | |||
Acquisition fee, description | Fee of $10.2 million plus a 1.1% fee of the excess over $400 million | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Maximum [Member] | Category 1 [Member] | |||
Acquisition fee, limit on acquisiion price paid | $ 10,000,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Maximum [Member] | Category 2 [Member] | |||
Acquisition fee, limit on acquisiion price paid | 100,000,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Maximum [Member] | Category 3 [Member] | |||
Acquisition fee, limit on acquisiion price paid | 400,000,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Minimum [Member] | Category 2 [Member] | |||
Acquisition fee, limit on acquisiion price paid | 10,000,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Minimum [Member] | Category 3 [Member] | |||
Acquisition fee, limit on acquisiion price paid | 100,000,000 | ||
Subsequent Event [Member] | MB Merchant Group, LLC [Member] | Minimum [Member] | Category 4 [Member] | |||
Acquisition fee, limit on acquisiion price paid | $ 400,000,000 |