| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
| Dec. 31, 2021 |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Business Combinations | Business
Combinations The
Company accounts for acquisitions that qualify as business combinations by applying the acquisition method according to Accounting Standards
Codification (“ASC”) 805, Business Combinations (“ASC 805”). Transaction costs related to the acquisition of
a business are expensed as incurred and excluded from the fair value of consideration transferred. The identifiable assets acquired,
liabilities assumed, and noncontrolling interests in an acquired entity are recognized and measured at their estimated fair values. The
excess of the fair value of consideration transferred over the fair values of identifiable assets acquired, liabilities assumed, and
noncontrolling interests in an acquired entity, net of the fair value of any previously held interest in the acquired entity, is recorded
as goodwill. Such valuations require management to make significant estimates and assumptions. |
| Principles of Consolidation | Principles
of Consolidation The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States
of America or (“U.S. GAAP”) as found in the Accounting Standards Codification (“ASC”), the Accounting Standards
Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and the rules and regulations of the US Securities
and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. We have eliminated all intercompany accounts and transactions upon the consolidation of our subsidiaries. |
| Segment Reporting | Segment
Reporting The
Company identifies operating segments 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 deciding 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 with different product offerings. All long-lived assets of
the Company reside in the U.S., the U.K., and the Netherlands. VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
| Use of Estimates | Use
of Estimates The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and
assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. These estimates
also affect the reported amounts of revenues and expenses during the reporting periods. Significant accounting estimates reflected in
the Company’s consolidated financial statements include the useful lives of property, plant, and equipment, the useful lives of
right-of-use assets, the useful lives of intangible assets, impairment of long-lived assets, allowance for accounts receivable doubtful
accounts, allowance for inventory obsolescence reserve, allowance for deferred tax assets, valuation of warranty reserves, contingent
consideration liabilities, and the accrual of potential liabilities. Actual results could differ from estimates, and any such differences
may be material to our financial statements. |
| Risks and Uncertainties | Risks
and Uncertainties The
Company’s operations will be subject to significant risks and uncertainties, including financial, operational, regulatory, and
other risks associated, including the potential risk of business failure. Global events, including global health concerns, like the COVID-19
pandemic, could also result in social, economic, and labor instability in the countries in which we operate or where the third parties
with whom we engage, including sites of manufacturing facilities of our third-party contract manufacturers. The extent of the impact
of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as the response to the pandemic
and information continues to evolve. The COVID-19 pandemic fluctuations, global supply chain challenges, employment pressures in various
industry sectors, and related economic repercussions have created significant uncertainty. Policymakers worldwide have responded with
fiscal policy actions to support their industries and economies, but these interventions’ magnitude and overall effectiveness remain
uncertain. Although capital markets and economies worldwide improved during the second and third quarters from the initial negative impacts
of the COVID-19 pandemic, there remains uncertainty around the strength and timing of global economic recoveries, which could cause a
local or global economic recession. Such economic disruption could have a material adverse effect on our business. International
security issues and adverse developments such as the current political tension between Russia, Ukraine, and potentially western security
alliances could adversely affect global trade and economic activity. We monitor developments in Ukraine and the related export controls
and financial and economic sanctions imposed on specific industry sectors and parties in Russia by the U.S., the U.K., the European Union,
and others. Although we do not presently foresee direct material adverse effects upon our business, financial condition, or results of
operations due to developments in Ukraine and the consequent controls and sanctions, these factors may affect companies in many sectors.
They could lead to increased market volatility and uncertainty, affecting us in turn. |
| 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, 2021 and 2020. |
| Concentrations | Concentrations The
Company does not have any off-balance-sheet concentrations of credit risk. Credit risk is that the counterparty will default on its contractual
obligations, resulting in a company’s financial loss. 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. Financial instruments that potentially subject the Company to concentration of credit risk consist principally
of cash deposits. The Federal Deposit Insurance Corporation (“FDIC”) insures accounts held within the United States up to
$ 250,000 85,000 100,000 On
December 31, 2021, and 2020, the Company had approximately $ 35.2 3.9 Management
assesses their credit quality for customers, considering their financial position and historical experience. For the year ended December
31, 2021, the Company recorded sales to two customers of $ 10,467,000 31 6,337,000 19 4,204,000 46 2,613,000 39 VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
| Accounts Receivable and Allowance for Doubtful Accounts | Accounts
Receivable and Allowance for Doubtful Accounts The
Company extends credit to its customers in the ordinary 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 judgments regarding its customer’s ability to make required payments, prevailing economic conditions, previous experience,
and other factors. As these factors’ financial situation changes, 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
consist of raw materials, work-in-process, and finished goods and are 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
completion, disposal, and transportation costs. The Company evaluates inventory balances and either write down obsolete inventory or
records a reserve for slow-moving or excess inventory based on net realizable value analysis. |
| 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, ranging from 1 14 |
| Goodwill | Goodwill Goodwill
represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired
and liabilities assumed in a business combination under the acquisition method of accounting under ASC 805 “Business Combinations”
(see Note 4). Goodwill is not amortized but, per ASC 350, is tested for impairment annually. Goodwill is also tested for impairment between
annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below
its carrying amount. Judgment is involved in determining if an indicator of impairment has occurred during the course of a year. When
testing goodwill for impairment, we may assess qualitative factors for some or all of our reporting units to determine whether it is
more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying
amount, including goodwill. Alternatively, we may bypass this qualitative assessment for some or all of our reporting units and perform
step 1 of the two-step goodwill impairment test. If we perform step 1 and the reporting unit’s carrying amount exceeds its fair
value, we will perform step 2 to measure such impairment. We have completed our annual impairment test and recorded $ 9,189,000 |
| Intangible Assets | Intangible
Assets 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 20 668,000 671,000 Other
intangible assets: The
Company’s remaining intangible assets include the trade names, technology, and customer lists acquired in its acquisition of IMT,
Vislink, and MVP. A third-party appraiser determined the value of these acquired assets for these business combinations. Absent an indication
of fair value from a potential buyer or similar specific transactions, we have determined that using the methods employed provided a
reasonable estimate in reporting the values assigned. The
Company amortizes intangible asset costs over their useful lives of 3 15 257,000 330,000 VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Warranty Reserve | Warranty
Reserve Although
the Company tests its product under its quality programs and processes, its warranty obligation is affected by product failure rates
and service delivery costs incurred in correcting a product failure. Required revisions to the estimated warranty liability will occur
should actual product failure rates or service costs differ from the Company’s estimates, where applicable, based on limited historical
data. The
claims made during the year ended December 31, 2021, and 2020 were ordinary and customary. The warranty reserve is included in accrued
expenses on the accompanying consolidated balance sheets and cost of components in the accompanying consolidated statement of operations. SCHEDULE
OF PRODUCT WARRANTY LIABILITY
Warranty
Reserve
December
31, 2019 $ 335,000
Warranty
reserve expense 8,000
Warranty
claims settled and true-up of accrual (60,000 )
December
31, 2020 $ 283,000
Warranty
reserve expense —
Warranty
claims settled and true-up of accrual (152,000 )
December
31, 2021 $ 131,000 |
| Shipping and Handling Costs | Shipping
and Handling Costs The
Company invoices its shipping and handling charges to the customer, and we net these charges against the respective costs within general
and administrative expenses. For the years ended December 31, 2021, and 2020, the shipping and handling costs incurred were $ 581,000 432,000 |
| 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 freestanding 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 the 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 Treasury
stock is recorded at cost upon the repurchasing of common shares. The cost method is used upon the re-issuance of shares. Under U.S.
GAAP, the excess of the acquisition cost over the re-issuance 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. The Company charges the accumulated deficit
for any excess. VISLINK TECHNOLOGIES, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Revenue Recognition | Revenue
Recognition We
account for the Company’s operating results under ASC Topic 606 adopted on January 1, 2019. It is a comprehensive revenue recognition
model that requires recognition when the Company transfers control of the promised goods or services to our customers at an amount that
reflects the consideration that we expect to receive. The application of ASC Topic 606 requires us to use more judgment and make more
estimates than under previously issued guidance. The
Company generates all its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation
by transferring control of the promised goods or services to a customer in an amount that reflects the consideration that we expect to
receive in exchange for those services. The
Company determines revenue recognition through the following steps: 1.
Identification of the contract, or contracts, with a customer. 2.
Identification of the performance obligations in the contract. 3.
Determination of the transaction price. 4.
Allocation of the transaction price to the performance obligations in the contract; and 5.
Recognition of revenue, when, or as, we satisfy a performance obligation. At
contract inception, the Company assesses the goods and services promised in our contracts with customers and identifies a performance
obligation for each. To determine the performance obligations, the Company considers all the products and services promised in the contract
regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance
obligation is not subject to significant judgment. We measure revenue as the amount of consideration we expect to receive in exchange
for transferring goods and services. The value-added sales taxes and other charges we collect concurrent with revenue-producing activities
are excluded from income. |
| Remaining Performance Obligations | Remaining
Performance Obligations The
remaining performance obligations, or backlog, represent the aggregate amount of the transaction price allocated to the remaining obligations
that the Company has not performed under its customer contracts. The Company has elected to use the optional exemption in ASC 606-10-50-14,
which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of
one year or less. |
| Research and Development Expenses | Research
and Development Expenses As
the Company performs research, design, and development activities, we charge these costs to research and development expenses in the
Consolidated Statements of Operations and Comprehensive Loss. These expenses consist primarily of salary and benefit expenses, including
stock-based compensation and payroll taxes for employees and contractors’ costs engaged in research, design, development activities,
prototypes, facilities, and travel costs. VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Stock-Based Compensation | Stock-Based
Compensation The
Company accounts for stock compensation with persons classified as employees for accounting purposes under 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, and the fair
value of common stock issued for services is determined based on the Company’s stock price on the issuance date. The
expansion of Topic 718 fell under ASU 2018-07 to include share-based payment transactions for acquiring goods and services from nonemployees.
The measurement date for equity-classified nonemployee share-based payment awards is no longer at the earlier date at which a commitment
for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. Instead, the grant
date is now considered the measurement date. Under today’s guidance, the measurement of nonemployee share-based payment awards
with performance conditions is at the lowest aggregate fair value, often resulting in a zero value. The new ASU aligns the accounting
for nonemployee share-based payment awards with performance conditions with accounting for employee share-based payment awards under
Topic 718 by requiring entities to consider the probability of satisfying performance conditions. Current guidance requires entities
to use the contractual term to measure the nonemployee share-based payment awards. The new ASU allows entities to make an award-by-award
election to use the expected duration (consistent with employee share-based payment awards) or the contractual term for nonemployee awards. |
| Stock-Option Awards — Time-based and performance-based | Stock-Option
Awards — Time-based and performance-based Under
ASC Topic 718, the compensation cost is measured based on an award’s fair value at the grant’s date for the time vested option
award using the Black Scholes-Merton formula as a valuation technique. The Company used the U.S. Treasury note’s rate over the
expected option term for the risk-free rate. Employees’ expected term represents the period that options granted are expected to
be outstanding using the simplified method. The Company’s historical share option exercise experience does not provide a reasonable
basis for estimating the expected term. For nonemployee options, the expected term is the entire term of the option. Expected volatility
is based on the average weekly share price changes over the shorter expected term or the period from the Nasdaq Capital Markets Exchange
placement to the grant’s date. The Company estimates forfeiture and volatility using historical information. The risk-free interest
rate is based on the implied yield on U.S. Treasury zero-coupon issues over the options’ equivalent lives. The
Company has not paid dividends on its common stock, and no assumption of dividend payment(s) is made in the model. For employee equity-classified
awards, compensation cost is recognized over the employee’s requisite service period with a corresponding credit to additional
paid-in capital. The employee’s requisite service period begins at the service inception date and ends when the requisite service
has been provided. |
| Restricted Stock Unit Awards (“RSUs”) — Time Based | Restricted
Stock Unit Awards (“RSUs”) — Time Based Under
ASC 718, the exercise price for RSUs is determined using the fair market value of the Company’s common stock on the date of the
grant. For an award with graded vesting subject only to a service condition (e.g., time-based vesting), ASC 718-10-35-8 provides an accounting
policy choice between either graded vesting attribution or straight-line attribution. The Company elects the graded vesting method, recognizing
compensation expense for only the portion of awards expected to vest. Forfeitures of time-based units and awards are recognized as they
occur. Stock-based compensation costs are calculated using the closing stock price on the grant date to estimate time-based restricted
stock units’ fair value. |
| Restricted Stock Unit Awards (“RSUs”) — Performance-Based | Restricted
Stock Unit Awards (“RSUs”) — Performance-Based The
accruals of compensation cost for an award with a performance condition are related to that performance condition’s probable outcome.
Under ASC 718, a “performance condition” is the achievement of a specified target that is defined by referring to the employer’s
operations or activities, such as an option that vests if the employer’s growth rate increases by a certain amount or there are
the attainment of regulatory approval for a product. There is an accrual of compensation cost upon the likely achievement of the performance
condition, and there is no accrual if the accomplishment of the performance condition is not probable. The exercise price for RSUs is
determined using the fair market value of the Company’s common stock on the date of the grant. Stock-based compensation costs are
calculated using the closing stock price on the grant date to estimate performance-based restricted stock units’ fair value. VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Leases | Leases We
determine if an arrangement is a lease at inception. We recognize lease expense for lease payments on a straight-line basis over the
lease term. The Company includes operating leases as ROU assets as “Right of use assets, operating leases” in the consolidated
balance sheets. For lease liabilities, operating lease liabilities are included in “Operating lease obligations, current”
and “Operating lease liabilities, net of current portion” in the consolidated balance sheets. We recognize Operating lease
ROU assets and liabilities on the commencement date based on the present value of lease payments for all leases with a term longer than
12 months. There is no separation of lease and non-lease components for all our real estate contracts. The
ROU assets and related lease liabilities recorded under ASC 842 are calculated based on the present value of the lease payments using
(1) the rate implicit in the lease or (2) the lessee’s incremental borrowing rate (“IBR”), defined as the rate of interest
that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a comparable
economic environment. As most of our leases do not provide an implicit rate, we determined our incremental borrowing rates based on an
analysis of prior collateralized borrowings over similar terms of the lease payments at the commencement date to estimate the IBR under
ASC 842. There were no capital leases, which are now titled “finance leases” under ASC 842, in the Company’s lease
portfolio as of December 31, 2021. |
| Impairment and Abandonment | Impairment
and Abandonment Impairment
of inventory: Under
the Company’s strategic initiative plan, management recognized that certain items were not moving due to the diminishing consumer
demand and lack of profitability. As part of our product rationalization program, a decision to eliminate specific product lines resulted
in recognizing an impairment loss of approximately $- 0 3.8 Impairment
of long-lived assets: Management
reviews long-lived assets, including property, plant, equipment, other intangible assets with definite lives, and right-of-use operating
lease assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable.
We conduct the Company’s long-lived asset impairment analyses under ASC 360-10-15, “Impairment or Disposal of Long-Lived
Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows
are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted
future cash flows. The
contemplation of measuring an impairment charge occurs if the undiscounted cash flows do not indicate the asset’s carrying amount
is recoverable, by which the asset group’s carrying amount exceeds its fair value based on discounted cash flow analysis appraisals.
Under Topic 360, consideration is given to asset impairment, for intangible assets with definite lives continue to be amortized over
their estimated useful lives and are subject to impairment testing as part of their asset group if and when events or changes in circumstances
indicate. In the performance of the impairment tests, management utilizes a considerable amount of judgment and assumptions. As
part of the Company’s strategic initiative plan, including the consolidation and elimination of specific facilities, it was determined
that specific property and equipment were no longer useful, concluding they held no future economic benefit. For the years ended December
31, 2021, and 2020, the Company recognized a loss on property and equipment abandonment of approximately $- 0 0.7 Right-of-use
operating lease abandonment: As
part of the Company’s consolidating effort, management decided to vacate specific locations and scaled-down square footage usage
on another. The economic environment of these locations precluded the action of sub-letting unused sites and determining them abandoned.
Under ASC 360, leased space abandonment is an impairment indicator, and the Company assessed the lease ROU assets for impairment. For
the years ending December 31, 2021, and 2020, we recognized a loss on impairment of right-of-use assets of approximately $- 0 0.9 VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Income Taxes | Income
Taxes Under
ASC 740, as part of our consolidated financial statements, it is required to estimate our income tax provision (benefit) in each jurisdiction
in which we operate. The Company uses the asset and liability method of accounting for income taxes. The recognition of deferred income
tax assets and liabilities 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 fall under this method. Deferred income tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years these temporary differences are expected to be
recovered or settled. The recognition of the effect on deferred tax assets and liabilities of a change in tax rates in income is 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. The Company will file income tax returns in
the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company recognizes the impact of an uncertain tax position
in its financial statements if, in management’s judgment, it is more likely than not sustainable upon audit based upon the position’s
technical merits. It involves identifying potential uncertain tax positions, evaluating applicable tax laws, and assessing whether the
liability for uncertain tax positions is necessary. The Company’s policy is to classify assessments, if any, for tax-related interest
expense and penalties as general and administrative expenses. |
| Advertising Costs | Advertising
Costs Advertising
costs are charged to operations as incurred. Advertising costs amounted to approximately $ 139,000 114,000 |
| 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 per share under ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting
earnings per share. The basic loss per share calculation divides the net loss allocable to common stockholders by the weighted-average
shares of common stock outstanding during the period, without considering common stock equivalents. The diluted loss per share calculation
is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents,
including stock options and warrants, outstanding for the period as determined using the treasury stock method. For purposes of the diluted
net loss per share calculation, common stock equivalents are excluded from the calculation because their effect would be anti-dilutive.
Therefore, basic and diluted net loss per share applicable to common stockholders is the same for periods with a net loss. The
following table illustrates the anti-dilutive potential common stock equivalents excluded from the calculation of loss per share (in
thousands): SCHEDULE
OF ANTI-DILIUTIVE POTENTIAL COMMON STOCK EQUIVALENTS EXCLUDE FROM THE CALCULATION OF LOSS PER SHARE
For the Years Ended
December 31,
2021 2020
Anti-dilutive potential common stock equivalents excluded from the calculation of loss per share:
Stock options 1,553 56
Warrants 9,210 178
Total 10,763 234 VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Foreign Currency and Other Comprehensive (Loss) Gain | Foreign
Currency and Other Comprehensive (Loss) Gain We
have two foreign subsidiaries, one in the United Kingdom and the other in the Netherlands, and their functional currencies are British
Pounds and Euros, respectively. The translation from the respective foreign currency to United States Dollars (“US Dollars”)
is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts
using an average exchange rate during the period. We included gains or losses resulting from such translation as a separate component
of accumulated other comprehensive (loss) income. We record gains or losses resulting from foreign currency transactions in foreign currency
income or loss except for the effect of exchange rates on long-term inter-company transactions considered a long-term investment accumulated
and credited or charged to other comprehensive income. Transaction
gains and losses are recognized in our operations’ results based on the difference between the foreign exchange rates on the transaction
date and the reporting date. The foreign currency exchange gains and losses are included as a component of general and administrative
expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations. The
Company has recognized foreign exchanges gains and losses and changes in accumulated comprehensive income approximately as follows: SCHEDULE
OF FOREIGN EXCHANGE AND CHANGE IN ACCUMULATED COMPREHENSIVE INCOME
For the Years Ended
December 31,
2021 2020
Net foreign exchange transactions:
Losses $ 100,000 $ 27,000
Net foreign exchange transactions: Losses $ 100,000 $ 27,000
Accumulated comprehensive income:
Unrealized losses on currency translation adjustment $ 445,000 $ 59,000
Accumulated comprehensive income: Unrealized losses on
currency translation adjustment $ 445,000 $ 59,000 The
exchange rates adopted for the foreign exchange transactions are exchange rates, as quoted on OANDA, a Canadian-based foreign exchange
company and internet website providing currency conversion, online retail foreign exchange trading, online foreign currency transfers,
and forex information. The Company translated amounts from British Pounds into United States Dollars and Euros to British Pounds at the
following exchange rates for the respective periods:
● As
of December 31, 2021 – £ 1.351043 1.00 0.839362 1.00
● The
average exchange rate for the year ended December 31, 2021 – £ 1.375369 1.00 0.850858 1.00
● As
of December 31, 2020 – British Pounds $ 1.364900 1.00
● The
average rate for the year ended December 31, 2020 – British Pounds $ 1.28336 1.00 VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements The
authoritative guidance for fair value measurements falls under topic ASC 820, “Fair Value Measurements and Disclosures,”
requiring disclosing financial instruments’ fair value to the extent practicable for financial instruments recognized or unrecognized
in the consolidated balance sheet. The fair value of the financial instruments disclosed herein does not necessarily represent the potential
amount 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 various methods and assumptions based on estimates of market conditions
and risks existing at the time. For specific instruments, including accounts receivable and accounts payable, the Company estimated that
the carrying amount approximated fair value because of these instruments’ short maturities. All debt is based on current rates
at which the Company could borrow funds with similar remaining maturities and approximates fair value. GAAP
establishes a hierarchy for inputs used in measuring fair value that maximizes observable inputs and minimizes unobservable inputs by
requiring the use of the most observable inputs when available. Observable inputs consist of items 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
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. Below is the description of the hierarchy. These tiers include:
● Level
1 is defined as observable inputs such as quoted prices in active markets.
● Level
2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
● Level
3 is defined as unobservable inputs in which little or no market data exists, requiring an entity to develop its assumptions. As
of December 31, 2021, the Company had no fair valued assets or liabilities classified under Level 1 or Level 2. Our
financial instruments include cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses,
and short-term debt. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information.
These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined
with precision. The carrying amount of cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable, and
accrued expenses are generally considered representative of their respective fair values because of the short-term nature of those instruments. In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements
for Fair Value Measurement The
Company did not record assets and liabilities subject to the fair value hierarchy provisions as of December 31, 2021. VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) Fair
Value of Financial Instruments and Fair Value Measurements (continued) The following table presents the Company’s assets and liabilities measured at fair value on a non-recurring basis on December 31, 2020,
consistent with the fair value hierarchy provisions. The asset impairment is a non-recurring level 3 measurement. SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING AND NON-RECURRING BASIS
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total
Assets (non-recurring):
Impaired inventory $ — $ — $ 3,800,000 $ 3,800,000
Abandonment of property and equipment 1,700,000 1,700,000
Abandonment of right-of-use operating leases 1,100,000 1,100,000
$ — $ — $ 6,600,000 $ 6,600,000
Liabilities:
Derivative liability $ — $ — $ 22,000 $ 22,000
$ — $ — $ 22,000 $ 22,000 See
Note 14 for additional disclosure regarding the Company’s warrants liabilities accounted for at fair value. |
| 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 Pronouncements | Recent
Accounting Pronouncements 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. |
| Recently Issued Accounting Principles Adopted | Recently
Issued Accounting Principles Adopted On
May 21, 2020, the SEC issued Final Rule Release No. 33-10786, “Amendments to Financial Disclosures about Acquired and Disposed
Businesses” (“SEC Rule 33-10786”), which amends the disclosure requirements applicable to acquisitions and dispositions
of businesses to improve the financial information provided to investors, facilitate more timely access to capital, and reduce the complexity
and costs to prepare disclosure. The SEC Rule 33-10786 amends, among other things, (i) the tests used to determine significance and expand
the use of proforma financial information; (ii) revise the proforma information requirements; (iii) reduce a maximum number of years
for which financial statements under Regulation S-X are required to two years; (iv) permit abbreviated financial statements for certain
acquisitions; (v) modify the disclosure requirements relating to the aggregate effect of acquisitions for which financial statements
are not required; and, (vi) conform the significance threshold and tests on both disposed and acquired business. The amendments are effective
January 1, 2021, but early compliance is permitted. The Company adopted the standard effective January 1, 2021, with no material impact
on its Condensed Consolidated Financial Statements. VISLINK
TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) |
| Not Yet Adopted as of December 31, 2021 | Not
Yet Adopted as of December 31, 2021 In
June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13,
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which, to provide financial
statement users with more decision-useful information about the expected credit losses on financial instruments, replaces the current
incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader
range of reasonable and supportable information to inform credit loss estimates. The amendments affect loans, debt securities, trade
receivables, net investments in leases, off-balance-sheet credit. ASU 2016-13 is effective for fiscal years beginning after December
15, 2022. The Company has not yet quantified the impact of ASU 2016-13 on its consolidated financial statements. Its adoption is unlikely
to have a material effect on the Company’s consolidated financial statements. |
