Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | AMERICAN VIRTUAL CLOUD TECHNOLOGIES, INC. | |
Trading Symbol | AVCT | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 32,470,006 | |
Amendment Flag | false | |
Entity Central Index Key | 0001704760 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38167 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2402421 | |
Entity Address, Address Line One | 1720 Peachtree Street | |
Entity Address, Address Line Two | Suite 629 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30309 | |
City Area Code | (404) | |
Local Phone Number | 239-2863 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 10,747 | $ 31,119 |
Trade receivables, net (including related party amounts of $0 and $2,511, respectively) | 6,891 | 9,137 |
Prepaid expenses and other current assets | 7,887 | 2,124 |
Assets held for sale - current (See Note 5) | 27,775 | |
Total current assets | 25,525 | 70,155 |
Property and equipment, net | 5,307 | 4,753 |
Goodwill | 10,468 | |
Assets held for sale - noncurrent (See Note 5) | 31,258 | |
Other noncurrent assets | 290 | 1,269 |
TOTAL ASSETS | 31,122 | 117,903 |
Current liabilities | ||
Accounts payable and accrued expenses (including related party amounts of $0 and $2,285, respectively) | 11,070 | 17,014 |
Deferred revenue (including related party amounts of $0 and $41, respectively) | 25 | 82 |
Current portion of notes payable and capital leases | 28 | 26,393 |
Subordinated promissory note - related party | 5,000 | |
Liabilities associated with assets held for sale - current (See Note 5) | 29,237 | |
Total current liabilities | 11,123 | 77,726 |
Long-term liabilities | ||
Notes payable and capital leases (net of current portion and deferred financing fees) | 11 | |
Warrant liabilities | 2,462 | 39,162 |
Liabilities associated with assets held for sale - noncurrent (See Note 5) | 102 | |
Other liabilities | 56 | |
Total long-term liabilities | 2,518 | 39,275 |
Total liabilities | 13,641 | 117,001 |
Commitments and contingent liabilities (see note 15) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 5,000,000 authorized; none outstanding | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 24,605,474 and 5,905,639 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 2 | |
Additional paid-in capital | 252,383 | 204,730 |
Accumulated deficit | (234,904) | (203,828) |
Total stockholders’ equity | 17,481 | 902 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 31,122 | $ 117,903 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 24,605,474 | 5,905,639 |
Common stock, shares outstanding | 24,605,474 | 5,905,639 |
Trade Receivables | ||
Related party amounts (in Dollars) | $ 0 | $ 2,511 |
Accounts Payable and Accrued Expenses | ||
Related party amounts (in Dollars) | 0 | 2,285 |
Deferred Revenue | ||
Related party amounts (in Dollars) | $ 0 | $ 41 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Cloud subscription and software (including related party amounts of $0, $0, $13 and $0, respectively) | $ 4,198 | $ 3,575 | $ 11,618 | $ 10,770 |
Managed and professional services (including related party amounts of $48, $0, $124 and $0, respectively) | 540 | 573 | 897 | 1,846 |
Other | 41 | |||
Total revenues | 4,738 | 4,148 | 12,556 | 12,616 |
Cost of revenue (including related party amounts of $377, $373, $1,514 and $1,081, respectively) | 4,530 | 4,242 | 14,643 | 11,505 |
Gross profit (loss) | 208 | (94) | (2,087) | 1,111 |
Goodwill impairment | 10,468 | |||
Research and development (including related party amounts of $0, $116, $0 and $331, respectively) | 3,709 | 4,508 | 12,932 | 13,606 |
Selling, general and administrative (including related party amounts of $424, $857, $2,086 and $2,349, respectively) | 8,689 | 12,290 | 23,041 | 27,878 |
Loss from continuing operations | (12,190) | (16,892) | (48,528) | (40,373) |
Other (expense) income | ||||
Change in fair value of warrant liabilities | (5,174) | 3,064 | 35,314 | 3,041 |
Change in fair value of derivative liabilities | 750 | 721 | ||
Interest expense - related parties | (4,602) | (764) | (14,611) | |
Interest expense - other | (10,012) | (1,687) | (19,512) | (3,975) |
Other income (expense) (including related party amounts of $1,708, $0, $1,708 and $0, respectively) | 1,081 | (33) | 958 | (80) |
Total other (expenses) income | (13,355) | (3,258) | 16,717 | (15,625) |
Net loss from continuing operations before income taxes | (25,545) | (20,150) | (31,811) | (55,998) |
Provision (benefit) for income taxes | (2) | 6 | (13) | (26) |
Net loss from continuing operations, net of tax | (25,547) | (20,144) | (31,824) | (56,024) |
Net (loss) income from discontinued operations, net of tax (Notes 1 and 5) | (17,173) | 748 | (19,826) | |
Net loss | $ (25,547) | $ (37,317) | $ (31,076) | $ (75,850) |
Basic and diluted (loss) income per common share | ||||
Loss from continuing operations (in Dollars per share) | $ (2.27) | $ (9.72) | $ (4.05) | $ (35.32) |
(Loss) income from discontinued operations (in Dollars per share) | (8.28) | 0.09 | (12.5) | |
Loss per common share (in Dollars per share) | $ (2.27) | $ (18) | $ (3.96) | $ (47.82) |
Weighted average shares outstanding - basic and diluted (in Shares) | 11,262,991 | 2,072,643 | 7,850,250 | 1,586,102 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Weighted average shares outstanding - basic and diluted (in Shares) | 11,262,991 | 2,072,643 | 7,850,250 | 1,586,102 |
Cloud Subscription and Software | ||||
Related party amounts | $ 0 | $ 0 | $ 13 | $ 0 |
Managed and Professional Services | ||||
Related party amounts | 48 | 0 | 124 | 0 |
Cost of Revenue | ||||
Related party amounts | 377 | 373 | 1,514 | 1,081 |
Research and Development | ||||
Related party amounts | 0 | 116 | 0 | 331 |
Selling, General and Administrative | ||||
Related party amounts | 424 | 857 | 2,086 | 2,349 |
Other Income Expense | ||||
Related party amounts | $ 1,708 | $ 0 | $ 1,708 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 90,830 | $ (43,661) | $ 47,169 | |
Balance (in Shares) at Dec. 31, 2020 | 1,316,870 | |||
Common stock issued on conversion of Debentures | 109,695 | 109,695 | ||
Common stock issued on conversion of Debentures (in Shares) | 2,587,414 | |||
Common stock issued on conversion of Penny Warrants (See Note 8) | 2 | 2 | ||
Common stock issued on conversion of Penny Warrants (See Note 8) (in Shares) | 398,293 | |||
Cumulative effect of accounting change related to adoption of Accounting Standard Update No. 2020-06 | (36,983) | 1,219 | (35,764) | |
Debenture discount relative to fair value of warrants | 9,223 | 9,223 | ||
Vested and delivered RSUs | ||||
Vested and delivered RSUs (in Shares) | 56,166 | |||
Shares repurchased for tax withholding | (1,142) | (1,142) | ||
Shares repurchased for tax withholding (in Shares) | (10,207) | |||
Share-based compensation | 6,752 | 6,752 | ||
Net loss | (75,850) | (75,850) | ||
Balance at Sep. 30, 2021 | 178,377 | (118,292) | 60,085 | |
Balance (in Shares) at Sep. 30, 2021 | 4,348,536 | |||
Balance at Jun. 30, 2021 | 65,729 | (80,975) | (15,246) | |
Balance (in Shares) at Jun. 30, 2021 | 1,353,496 | |||
Common stock issued on conversion of Debentures | 109,695 | 109,695 | ||
Common stock issued on conversion of Debentures (in Shares) | 2,587,414 | |||
Common stock issued on conversion of Penny Warrants (See Note 8) | 2 | 2 | ||
Common stock issued on conversion of Penny Warrants (See Note 8) (in Shares) | 398,293 | |||
Vested and delivered RSUs | ||||
Vested and delivered RSUs (in Shares) | 9,333 | |||
Share-based compensation | 2,951 | 2,951 | ||
Net loss | (37,317) | (37,317) | ||
Balance at Sep. 30, 2021 | 178,377 | (118,292) | 60,085 | |
Balance (in Shares) at Sep. 30, 2021 | 4,348,536 | |||
Balance at Dec. 31, 2021 | 204,730 | (203,828) | 902 | |
Balance (in Shares) at Dec. 31, 2021 | 5,905,639 | |||
Common stock issued on redemption of Series B Preferred Stock | $ 1 | 4,639 | 4,640 | |
Common stock issued on redemption of Series B Preferred Stock (in Shares) | 4,089,594 | |||
Common stock issued to holders of Series B Preferred Stock pursuant to the Exchange Agreement (See Note 8) | 3,942 | 3,942 | ||
Common stock issued to holders of Series B Preferred Stock pursuant to the Exchange Agreement (See Note 8) (in Shares) | 1,720,428 | |||
Common stock issued on redemption of the Convertible Note | $ 1 | 11,671 | 11,672 | |
Common stock issued on redemption of the Convertible Note (in Shares) | 5,513,138 | |||
Common stock issued to settle certain warrants (See Note 8) | 11,529 | 11,529 | ||
Common stock issued to settle certain warrants (See Note 8) (in Shares) | 3,666,666 | |||
Sale of common stock | 14,339 | 14,339 | ||
Sale of common stock (in Shares) | 4,515,000 | |||
Common stock redeemed and retired (See Note 9) | ||||
Common stock redeemed and retired (See Note 9) (in Shares) | (913,361) | |||
Common stock issued on conversion of Penny Warrants (See Note 8) | 4 | 4 | ||
Common stock issued on conversion of Penny Warrants (See Note 8) (in Shares) | 28,333 | |||
Vested and delivered RSUs | ||||
Vested and delivered RSUs (in Shares) | 80,037 | |||
Shares repurchased for tax withholding | (48) | (48) | ||
Share-based compensation | 1,570 | 1,570 | ||
Other | 7 | 7 | ||
Net loss | (31,076) | (31,076) | ||
Balance at Sep. 30, 2022 | $ 2 | 252,383 | (234,904) | 17,481 |
Balance (in Shares) at Sep. 30, 2022 | 24,605,474 | |||
Balance at Jun. 30, 2022 | $ 1 | 207,433 | (209,357) | (1,923) |
Balance (in Shares) at Jun. 30, 2022 | 6,556,543 | |||
Common stock issued on redemption of Series B Preferred Stock | 3,144 | 3,144 | ||
Common stock issued on redemption of Series B Preferred Stock (in Shares) | 3,531,564 | |||
Common stock issued to holders of Series B Preferred Stock pursuant to the Exchange Agreement (See Note 8) | 3,942 | 3,942 | ||
Common stock issued to holders of Series B Preferred Stock pursuant to the Exchange Agreement (See Note 8) (in Shares) | 1,720,428 | |||
Common stock issued on redemption of the Convertible Note | $ 1 | 11,671 | 11,672 | |
Common stock issued on redemption of the Convertible Note (in Shares) | 5,513,138 | |||
Common stock issued to settle certain warrants (See Note 8) | 11,529 | 11,529 | ||
Common stock issued to settle certain warrants (See Note 8) (in Shares) | 3,666,666 | |||
Sale of common stock | 14,339 | 14,339 | ||
Sale of common stock (in Shares) | 4,515,000 | |||
Common stock redeemed and retired (See Note 9) | ||||
Common stock redeemed and retired (See Note 9) (in Shares) | (913,361) | |||
Vested and delivered RSUs | ||||
Vested and delivered RSUs (in Shares) | 15,496 | |||
Shares repurchased for tax withholding | (1) | (1) | ||
Share-based compensation | 319 | 319 | ||
Other | 7 | 7 | ||
Net loss | (25,547) | (25,547) | ||
Balance at Sep. 30, 2022 | $ 2 | $ 252,383 | $ (234,904) | $ 17,481 |
Balance (in Shares) at Sep. 30, 2022 | 24,605,474 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash Flows from Continuing Operations | |||||
Net loss from continuing operations | $ (25,547) | $ (20,144) | $ (31,824) | $ (56,024) | |
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities: | |||||
Impairment of goodwill | 10,468 | ||||
Depreciation | 1,559 | 885 | |||
Amortization of intangible assets | 2,063 | ||||
Amortization of Convertible Debenture discount | 9,253 | ||||
Interest on convertible debt paid-in-kind | 2,518 | 8,257 | |||
Share-based compensation | 1,300 | 6,752 | |||
Change in fair value of warrant liabilities | 5,174 | (3,064) | (35,314) | (3,041) | |
Change in fair value of derivative liabilities | (721) | ||||
Amortization of deferred financing costs and discounts | 4,715 | 807 | |||
Noncash portion of gain on sale of certain rights to software | 792 | ||||
Noncash financing fees | 4,650 | ||||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 1,584 | (1,130) | |||
Prepaid expenses and other current assets | (5,763) | (1,494) | |||
Accounts payable and accrued expenses | (5,944) | 3,772 | |||
Deferred revenue | (57) | (24) | |||
Other | 112 | (321) | |||
Net cash used in continuing operating activities | (54,443) | (30,245) | |||
Cash Flows from Continuing Investing Activities: | |||||
Purchase of property and equipment | (266) | (1,729) | |||
Deferred development costs | (917) | (462) | |||
Net cash used in continuing investing activities | (1,183) | (2,191) | |||
Cash Flows from Continuing Financing Activities: | |||||
Payment of taxes from withheld shares | (48) | (1,142) | |||
Debt repayments | (27,076) | (207) | |||
(Repayment of) proceeds from promissory note - related party | (5,000) | 5,000 | |||
Redemption of Series B Preferred Stock paid in cash | (1,344) | ||||
Proceeds from issuance of Convertible Debentures (See Note 8) | 24,000 | ||||
Proceeds from the issuance of common stock | 14,339 | 2 | |||
Proceeds from issuance of Series B Preferred Stock and February 2022 Warrants (See Note 8) | 15,000 | ||||
Proceeds from issuance of Convertible Note (See Note 8) | 10,000 | ||||
Proceeds from exercise of certain warrants | 4 | ||||
Payment of deferred financing fees | (1,202) | (953) | |||
Net cash provided by continuing financing activities | 4,673 | 26,700 | |||
Cash Flows from Discontinued Operations | |||||
Net cash (used in) provided by operating activities | (5,503) | 421 | |||
Net cash provided by (used in) investing activities | 31,948 | (822) | |||
Net cash used in financing activities | (167) | ||||
Net cash provided by (used in) discontinued operations | 26,445 | (568) | |||
Net change in cash | (24,508) | (6,304) | |||
Cash, beginning of period | 35,255 | 10,505 | $ 10,505 | ||
Cash, end of period | $ 10,747 | $ 4,201 | 10,747 | 4,201 | $ 35,255 |
Supplemental Disclosures about Cash Flow Information | |||||
Cash paid for interest | 7,865 | 666 | |||
Cash paid for income taxes | 270 | 248 | |||
Supplemental Schedule of Noncash Investing and Financing Activities | |||||
Series B Preferred Stock converted to common stock | 4,640 | ||||
Convertible Notes converted to common stock | 11,672 | ||||
Noncash conversion of Debentures to common stock | 109,695 | ||||
Fair value of Penny Warrants related to the issuance of Convertible Debentures | 9,223 | ||||
Capital expenditures included in accounts payable and accrued expenses | $ 79 |
Organization, Business Operatio
Organization, Business Operations and Certain Recent Developments | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Business Operations and Certain Recent Developments [Abstract] | |
Organization, Business Operations and Certain Recent Developments | 1. Organization, Business Operations and Certain Recent Developments Overview American Virtual Cloud Technologies, Inc. (“AVCT,” the “Company,” “we,” “us,” or “our”) was incorporated in Delaware on April 7, 2016. On April 7, 2020 (the “Computex Closing Date”), AVCT (formerly known as Pensare Acquisition Corp.) consummated a business combination transaction (the “Computex Business Combination”) in which it acquired Stratos Management Systems, Inc. (“Computex”), an operating company that does business as Computex Technology Solutions. In connection with the closing of the Computex Business Combination, the Company changed its name to American Virtual Cloud Technologies, Inc. On December 1, 2020 (the “Kandy Closing Date”), the Company acquired the Kandy Communications business (hereafter referred to as “Kandy”) from Ribbon Communications, Inc. and certain of its affiliates (“Ribbon”), by acquiring certain assets, assuming certain liabilities of Kandy from Ribbon and acquiring all of the outstanding interests of Kandy Communications LLC. For accounting purposes, both Computex and Kandy were considered the acquirees, and the Company was considered the acquirer. The acquisitions were accounted for using the acquisition method of accounting. On January 27, 2022, the Company announced that it had executed a definitive agreement to sell Computex, which would complete the Company’s transition to a pure-play cloud communications and collaboration company, centered on its Kandy platform. On March 15, 2022, the sale of Computex was consummated. Net proceeds from the sale of Computex, after payment of closing and certain other obligations were used for working capital and general business purposes. On August 25, 2022, the Company announced that it had retained Northland Capital Markets to advise the Company in connection with a comprehensive strategic review process that could lead to the sale of the Company or selected assets. No assurance can be given that the Company’s review of strategic alternatives will result in one or more transactions being entered into or consummated, or if any transaction is undertaken, as to its terms, structure or timing of such transaction. Furthermore, any ultimate sale transaction(s), if any, may require a shareholder or judicial approval process that may or may not result in such approval being obtained. Unless otherwise noted, the discussion in these Notes to our condensed consolidated financial statements refers to our continuing operations. Refer to Note 5, Assets held for sale and operations classified as discontinued operations, Nature of Continuing and Discontinued Operations Continuing Operations The Kandy cloud communications platform is a cloud-based, real-time communications platform, offering proprietary unified communications as a service (“UCaaS”), communications platform as a service (“CPaaS”), Microsoft Teams Direct Routing as a Service (“DRaaS”), and SIP Trunking as a Service capabilities (“STaaS”). Kandy is considered to be a pure-play provider of such offerings for enterprise customers. As a provider of cloud-based enterprise services, Kandy deploys a global carrier grade cloud communications platform that supports the digital and cloud transformation of mid-market and enterprise customers across virtually any device, on virtually any network, in virtually any location. The Kandy platform is based on a powerful, proprietary multi-tenant, highly scalable, and secure cloud platform that includes pre-built customer engagement tools, based on web real-time communications technology (“WebRTC technology”) that enables frictionless communications. Further, Kandy supports rapid service creation and multiple go to market models including white labelling, multi-tier channel distribution, enterprise direct, and self-service via its SaaS (software as a service) web portals. Kandy’s cloud-based, real-time communications platform enables service providers, enterprises, software vendors, systems integrators, partners and developers to enrich their applications and their services with real-time contextual communications empowering the API (Application Programming Interface) economy. With Kandy’s platform, companies of various sizes and types can quickly embed real-time communications capabilities into their existing applications and business processes, providing a more engaging user experience. While the cloud communications business is focused on highly complex, medium and large enterprise deployments, the customer experience is augmented by our managed services capabilities. In addition, our strategic partnerships with companies such as AT&T, IBM/Kyndryl, and Etisalat, give us access to a marquee customer base and the ability to sell end-to-end solutions. Discontinued Operations Computex, classified within discontinued operations, is a leading multi-brand technology solutions provider to large global customers, providing a comprehensive and integrated set of technology solutions, through its extensive hardware, software and value-added service offerings. Reverse Stock Split On September 30, 2022, the Company filed a Certificate of Amendment of the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Certificate of Amendment”), which effected, upon filing on September 30, 2022 (the “Effective Stock Split Date”), a one-for-fifteen reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of common stock. In connection with the Reverse Stock Split, the CUSIP number (Committee on Uniform Securities Identification Procedures number) for the Company’s common stock changed. As a result of the Reverse Stock Split, each share of the Company’s common stock issued and outstanding immediately prior to the Effective Stock Split Date was automatically reclassified as and converted into one-fifteenth (1/15) of a share of the Company’s common stock. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split resulted in some stockholders owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Instead, stockholders who would otherwise have been entitled to fractional shares of the Company’s common stock became entitled to receive cash payments in lieu of such fractional shares. The Reverse Stock Split did not change the par value of the Company’s common stock nor the authorized number of shares. All outstanding warrants and preferred stock entitling their holders to purchase, obtain or convert into shares of the Company’s common stock were adjusted, as required by the terms of such securities. The Company’s common stock began trading on a Reverse Stock Split-adjusted basis when the market opened on October 3, 2022. The Reverse Stock Split has been retroactively reflected throughout this report, including in the computation of basic and diluted earnings/loss per common share, which has been adjusted retroactively for all periods presented. Recent Financing Transactions On December 2, 2021, the Company entered into the Credit Agreement with Monroe for a $27,000 Credit Facility (as such terms are defined in Note 7), part of which was used to pay off amounts owing under a prior credit agreement which was assumed as part of the acquisition of Computex. The remainder of the proceeds from the Credit Facility were scheduled to be used for working capital and general business purposes. However, on March 1, 2022, all amounts owing under the Credit Agreement were repaid from the proceeds of a securities sale executed on March 1, 2022, along with a portion of cash on hand. The net proceeds from the sale of Computex, after payment of closing and certain other obligations were used for working capital and general business purposes. As more fully discussed in Note 8, between November 2021 and October 2022, the Company completed a number of financing transactions, including amendments to certain such financing arrangements. In addition, on August 29, 2022, the Company entered into a settlement agreement (the “Ribbon Settlement Agreement”) with Ribbon, pursuant to which the Company and Ribbon modified and/or terminated certain previous agreements between the parties (See Note 9), and on October 20, 2022, entered into an amended agreement with a significant supplier, that resulted in the conversion of a trade payable balance to a promissory note (See Note 7). Nasdaq Notices Our common stock and public warrants are currently listed on the Nasdaq. On May 20, 2022, we received a written notice from the Nasdaq indicating that we were not in compliance with the Nasdaq Listing Rule which requires us to maintain a minimum bid price of $1.00 per share. Such notice had provided us with a period of 180 calendar days, or until November 16, 2022, to regain compliance by maintaining a minimum bid price of $1.00 per share for at least ten consecutive business days. On September 30, 2022, the Reverse Stock Split was completed, as a result of which the Company subsequently regained compliance with the minimum share price requirement, as confirmed in a letter from the Nasdaq which the Company received on October 18, 2022. On July 27, 2022, we received a written notice from the Nasdaq notifying us that for 30 consecutive business days, the Company’s Minimum Value of Listed Securities (“MVLS”) was below the minimum of $35 million that was required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(b)(2), and providing us with a period of 180 calendar days, or until January 23, 2023, to regain compliance by having a closing MVLS of at least $35 million for at least ten consecutive business days (or such longer period of time as the Nasdaq staff may require in some circumstances, but generally not more than 20 consecutive business days). We intend to continue to monitor our MLVS. If our common stock does not trade at a level that is likely to regain compliance with the Nasdaq requirements, our board of directors may consider other options that may be available to achieve compliance. We cannot provide assurance that we will be able to demonstrate compliance with the MVLS listing rule described above by the applicable deadline, in which case our common stock may then be subject to delisting. Covid-19 The novel strain of coronavirus (“COVID-19”) continues to significantly impact local, regional, and global economies, businesses, supply chains, production and sales across a range of industries. The extent of its impact on our operational and financial performance is uncertain and difficult to predict and we remain cautious about the global recovery. To protect the health and safety of our employees, our daily execution has evolved into a largely virtual model. However, we have found ways to continue to engage with and assist our customers and partners as they work to navigate the current environment. We will continue to monitor the current environment and may take further actions that may be required by federal, state or local authorities or that we determine to be in the interests of our employees, customers, and partners. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
Liquidity [Abstract] | |
Liquidity | 2. Liquidity Historically, the Company’s primary sources of liquidity have been cash and cash equivalents, cash flows from operations (when available) and cash flows from financing activities, including funding under credit agreements and the sale of equity securities. As of September 30, 2022, the Company had an aggregate cash balance of $10,747 in its operating bank accounts and net working capital of $14,402. As of November 10, 2022, aggregate cash in the Company’s operating bank accounts was $16,951. The Company currently projects that it will need additional capital to fund its current operations including research & development and capital investment requirements until the Company scales to a revenue level that permits cash self-sufficiency. This projection is based on the Company’s current expectations regarding product sales and service, cost structure, cash burn rate and other operating assumptions. The sources of this capital are anticipated to be from the sale of equity and/or debt. Alternatively, or in addition, the Company may seek to sell additional assets or portions of its business. Any of the foregoing may not be achievable on favorable terms, if at all, and may require the consent of equity holders and/or holders of any debt we may incur in the future, or may require modification of existing agreements, which may or may not be granted. Additionally, any debt or equity transactions may cause significant dilution to existing stockholders. If the Company is unable to raise additional capital moving forward, its ability to operate in the normal course and continue to invest in its product portfolio may be negatively impacted and the Company may be forced to scale back operations or divest some or all of its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Unless management is able to obtain additional financing, it is unlikely that the Company will be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of sales from continuing operations [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 15, 2022. The interim results for the period ended September 30, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022 or any future interim periods. The Company has reclassified certain prior period amounts, including the results of discontinued operations, reportable segment information and shares of common stock, to conform to the current period presentation. Unless otherwise indicated, amounts provided in these Notes pertain to the Company’s continuing operations. See Note 5, Assets held for sale and operations classified as discontinued, Principles of consolidation The accompanying condensed consolidated financial statements include the accounts of AVCT and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales (or revenues) and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that estimates made as of the date of the financial statements could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, revenue recognition, allowance for doubtful accounts, accounting for warrants, recognition and measurement of income tax assets, valuation of share-based compensation, discount related to the fair value of warrants, and the valuation of net assets acquired. Significant accounting policies The significant accounting policies used in preparing these condensed consolidated financial statements were applied on a basis consistent with those reflected in our consolidated financial statements that are included in the annual report on Form 10-K for the year ended December 31, 2021 that was filed with the SEC on April 15, 2022. Concentration of business and credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and trade receivables. Cash held by the Company in financial institutions regularly exceeds the federally insured limit of $250. At September 30, 2022, cash balances held with a financial institution exceeded the federally insured limit. However, management does not believe this poses a significant credit risk. Concentration of business risks are summarized in the following table: September 30, 2022 December 31, 2021 Number of Aggregate Number of Aggregate Customers that individually accounted for 10% or more of trade accounts receivable 3 $ 5,783 3 $ 6,104 Vendors that individually accounted for 10% or more of trade accounts payable 3 $ 5,255 2 $ 2,527 Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Number of customers that individually accounted for 10% or more of sales from continuing operations 4 4 4 4 Aggregate total sales of customers that individually accounted for 10% or more of sales from continuing operations $ 3,461 $ 3,470 $ 8,720 $ 7,894 Trade receivables, net Trade receivables on the accompanying condensed consolidated balance sheets are net of allowances of $739 and $147, as of September 30, 2022 and December 31, 2021, respectively. Fair value of financial instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. ASC Topic 820, Fair Value Measurements and Disclosures ● Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. ● Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Assets measured at fair value on a non-recurring basis include goodwill, tangible and intangible assets. Such assets are reviewed annually for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3). The carrying amounts of the Company’s financial instruments, which include trade receivables, deposits, accounts payable and accrued expenses and debt at floating interest rates, approximate their fair values, principally due to their short-term nature, maturities or nature of interest rates. The fair values of warrant liabilities are reflected on the condensed consolidated balance sheets as “Warrant Liabilities.” The fair values of certain warrants issued in 2017 (the “2017 Private Placement Warrants”) were determined using the Black-Scholes model in which the following weighted average assumptions were used for the valuations performed as of September 30, 2022: o stock price volatility – 145% o exercise price – $11.50 o discount rate – 4.1531% o remaining useful life – 2.52 years o stock price – $0.20 The valuations of the warrant liabilities are considered to be Level 2 valuations. Change in Segment reporting Effective January 1, 2021, the Company identified two operating segments, Computex and Kandy, pursuant to ASC 280, Segment Reporting Goodwill Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in December, or more frequently if a triggering event occurs between impairment testing dates. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. If, based on the qualitative test, the Company determines that it is “more likely than not” that the fair value of a reporting unit is less than its carrying value, then the Company evaluates goodwill for impairment by reviewing the fair value of the reporting unit versus its respective carrying value, including its goodwill. If it is determined that it is “not likely” that the fair value of the reporting unit is less than its carrying value, then no further testing is required. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. Fair values may be determined using a combination of both income and market-based approaches. Goodwill in the Kandy operating segment was recognized as a result of the Kandy Business Combination in December 2020, at which time approximately $24,144 of goodwill was attributed to the Kandy reporting unit. Subsequently, in the fourth quarter of 2021, as part of the Company’s annual impairment analysis, the Company recorded an impairment charge of approximately $13,676 to Kandy’s goodwill. During the second quarter of 2022, the Company concluded that a triggering event had occurred in the Company’s sole reporting unit, comprised of Kandy, as a result of declining financial performance coupled with changes in market conditions. Therefore, the Company conducted both qualitative and quantitative assessments and determined that it was appropriate to write off the entire remaining goodwill of $10,468. Therefore, the Company recognized a non-cash impairment charge of Balance, January 1, 2022 $ 10,468 Goodwill impairment (10,468 ) Balance, September 30, 2022 $ - The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. Fair values may be determined using a combination of both income and market-based approaches. Emerging growth company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. Private companies are those companies that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised, it adopts the new or revised standard at the time private companies adopt the new or revised standard, unless it chooses to early-adopt the new or revised accounting standard. Therefore, the Company’s financial statements may not be comparable to certain public companies. |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2022 | |
Recently Issued and Adopted Accounting Standards [Abstract] | |
Recently Issued and Adopted Accounting Standards | 4. Recently Issued and Adopted Accounting Standards Recently issued accounting standards In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (ASC 842) The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of changes in equity, statements of operations and statements of cash flows. Recently adopted accounting standards Effective July 1, 2021, the Company adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment In May 2021, the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Entities were required to apply the amendments prospectively to modifications or exchanges that occur on or after the effective date. ASU No. 2021-04 was effective for the Company on January 1, 2022. The adoption had no significant impact on the Company’s financial statements. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes ASU No. 2019-12 allows companies to treat tax law changes as intraperiod items, rather than as discrete items within the interim period. The adoption of ASU No. 2019-12, which was effective for the Company during the first quarter of the current year, had no significant impact on the Company’s financial statements. |
Assets Held for Sale and Operat
Assets Held for Sale and Operations Classified as Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Assets held for sale and operations classified as discontinued operations [Abstract] | |
Assets Held for Sale and Operations Classified as Discontinued Operations | 5. Assets held for sale and operations classified as discontinued operations On September 16, 2021, the Company issued a press release announcing that as a result of a decision by the Company’s Board of Directors to explore strategic alternatives previously announced on April 7, 2021, the Board had authorized the Company to focus its strategy on acquisitions and organic growth in its cloud technologies business as well as to explore strategic opportunities for its IT solutions business, including the divestiture of Computex. The Company believed that the change would allow the Company to optimize resource allocation, focus on core competencies, and improve its ability to invest in areas of maximal growth potential. On January 26, 2022, the Company entered into an asset purchase agreement to sell substantially all of the assets of its Computex business. Net sale proceeds received for the sale of substantially all of the assets and liabilities of Computex was $32,112. At December 31, 2021, the assets and liabilities of Computex were classified as held for sale, and the related revenues and expenses are classified as discontinued operations in the accompanying condensed consolidated statements of operations. During 2021, in connection with the planned sale of Computex, the Company compared the expected sales proceeds less costs to sell with the carrying value of the reporting unit and in connection therewith recorded a noncash goodwill impairment charge of $32,100 during the year ended December 31, 2021. The sale of Computex was consummated on March 15, 2022. Assets and liabilities classified as held for sale at December 31, 2021 consisted of the following: December 31, Current assets: Cash $ 4,136 Prepaid expenses 937 Trade receivables (net allowance of $146) 19,965 Inventory 2,737 Assets held for sale - current 27,775 Noncurrent assets: Property and equipment, net 4,489 Goodwill 6,579 Other intangible assets, net 20,105 Other noncurrent assets 85 Assets held for sale - noncurrent 31,258 Total assets held for sale $ 59,033 Current liabilities: Accounts payable and accrued expenses $ 26,023 Deferred revenue 3,214 Liabilities associated with assets held for sale - current 29,237 Long-term liabilities Other liabilities 102 Liabilities associated with assets held for sale - noncurrent 102 Total liabilities associated with assets held for sale $ 29,339 Revenues and expenses classified as discontinued operations consist of the following: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Revenues: Hardware $ - $ 13,000 $ 10,948 $ 39,219 Third party software and maintenance - 2,080 1,815 5,115 Managed and professional services - 8,050 7,214 24,497 Other - 233 165 793 Total revenues - 23,363 20,142 69,624 Cost of revenue - 16,039 14,176 48,647 Gross profit - 7,324 5,966 20,977 Goodwill impairment - 20,500 - 20,500 Selling, general and administrative - 7,809 9,520 23,423 Loss from operations - (20,985 ) (3,554 ) (22,946 ) Other (expense) income Gain on sale of Computex - - 4,314 - Gain on extinguishment of debt - 4,177 - 4,177 Interest expense - (342 ) - (860 ) Other expense - - - (155 ) Total other (expenses) income - 3,835 4,314 3,162 (Loss) income from discontinued operations before income taxes - (17,150 ) 760 (19,784 ) Income tax provision on discontinued operations - (23 ) (12 ) (42 ) Net (loss) income from discontinued operations $ - $ (17,173 ) $ 748 $ (19,826 ) |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Accounts payable and accrued expenses [Abstract] | |
Accounts payable and accrued expenses | 6. Accounts payable and accrued expenses Accounts payable and accrued expenses were as follows as of September 30, 2022 and December 31, 2021: September 30, December 31, Accounts payable $ 6,327 $ 3,692 Accrued compensation, benefits and related accruals 3,154 6,412 Accrued professional fees 990 1,867 Due to related parties 500 2,285 Third party interest accrual - 2,180 Other 99 578 $ 11,070 $ 17,014 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 7. Long-Term Debt Credit Agreement On December 2, 2021, the Company entered into a $27,000 term loan facility (the “Credit Facility”) under a Credit Agreement (the “Credit Agreement”) with Monroe Capital Management Advisors, LLC and certain affiliated entities (“Monroe”), proceeds of which were used, in part, to repay amounts owing under a prior credit agreement, which the Company had assumed when it acquired Computex. On March 1, 2022, all amounts owing under the Credit Agreement were repaid in full, including related accrued interest and other charges. The Credit Facility was scheduled to mature on the earlier of (i) December 2, 2022 and (ii) the date on which the Computex sale was consummated. As part of the Credit Agreement, the Company was required to comply with certain sales milestone terms, conditions and timeframes in connection with the then-pending sale of Computex. In connection with such sales milestone requirements, the Company paid amendment fees of $920 on January 18, 2022 as it was apparent that certain of the milestone dates for the closing of the Computex sale were not going to be met. Loans under the Credit Facility previously bore interest at a rate equal to, at the Company’s option, either the Base Rate for the interest period in effect for such borrowing plus 10.00% per annum, or the LIBOR Rate for the interest period in effect for such borrowing plus 11.00% per annum. Notwithstanding such interest rates, Monroe was guaranteed a minimum return of $7,290, including a closing fee of $675 that was paid to the administrative agent on the closing date. Additional fees would have been payable if the Credit Facility was not repaid in full by certain dates. In connection with the closing of the Credit Facility and pursuant to a subscription agreement, the Company issued, to certain funds affiliated with Monroe, warrants to purchase certain shares of the Company’s common stock at an exercise price of $0.0015 per share (the “Monroe Warrants”). The number of shares of the Company’s common stock issuable upon exercise of the Monroe Warrants is subject to, in addition to customary adjustments for stock dividends, stock splits, reclassifications and the like, adjustment for certain issuances (or deemed issuances) of the Company’s common stock at a price per share below $23.46 while the Monroe Warrants are outstanding, such that the Monroe Warrants will remain exercisable for, in the aggregate, approximately 2.5% of the total number of shares of the Company’s common stock outstanding, calculated on a fully-diluted basis. The Monroe Warrants were exercisable starting on the date of issuance and are scheduled to expire on January 31, 2029. The Monroe Warrants were exercisable for an aggregate of 687,587 shares of common stock as of September 30, 2022. Total long-term debt consisted of the following: September 30, December 31, Term Note payable to Monroe; guaranteed interest of $7,290 $ - $ 27,000 Capital lease obligations 28 104 Total long-term debt 28 27,104 Less: unamortized debt issuance costs $ - (700 ) Total notes payable and line of credit, net of unamortized debt issuance costs 28 26,404 Less: current maturities of notes payable and line of credit (28 ) (26,393 ) Long-term debt, net of current maturities and unamortized debt issuance costs $ - $ 11 Subordinated promissory note – related party On September 16, 2021, the Company entered into a promissory note in the principal amount of $5,000 (the “2021 Note”). The 2021 Note, which was secured by an affiliate of a shareholder that owns more than five percent of the Company’s shares, was originally scheduled to mature on the earliest of (a) September 16, 2022, (b) the Company’s consummation of a debt financing resulting in the receipt of gross proceeds of not less than $20,000, (c) the Company’s consummation of primary sales of registered equity securities resulting in the receipt of gross proceeds of not less than $20,000, (d) the Company’s consummation of the sale of Computex and (e) the date of any event of default. However, in connection with the closing of the Credit Facility, the 2021 Note was amended to, among other things, revise the definition of the maturity date so that the consummation of the Credit Agreement would not have resulted in the maturity of the 2021 Note. In consideration of the amendment, the Company paid the lender an amendment fee in the amount of $1,250. The amended maturity date of the 2021 Note was scheduled to be the earliest of (a) September 16, 2022, (b) the Company’s consummation of primary sales of registered equity securities resulting in the receipt of gross proceeds of not less than $20,000 (c) the consummation of the sale of the Computex business unit and (d) the date of any event of default, subject to extension if the Credit Agreement was not paid off as of such date. The 2021 Note became due on March 1, 2022 due to the Company’s sale of registered and equity securities and the early pay off of the Credit Agreement. However, for a waiver fee of $250, the lender extended the maturity date to May 1, 2022. On March 15, 2022, all amounts outstanding under the 2021 Note were paid. The 2021 Note had a minimum required return of 25.00%. October 2022 promissory note On October 20, 2022, the Company entered into an amended agreement with a significant supplier, that resulted in the conversion of a trade payable balance to a promissory note having a principal balance of approximately $2,430. Such promissory note is due on the earlier of (i) March 31, 2023; (ii) a sale transaction by the Company requiring shareholder approval, including a transfer of a majority of the Company’s capital stock or (iii) a payment default by the Company. The promissory note is unsecured and bears interest at a rate of 6% per annum, compounded semi-annually. Additionally, the amended agreement provides for new payment terms, with a $400 monthly prepayment towards actual costs incurred. Any excess of that prepayment over actual costs results in a reduction of the promissory note balance, while any excess of actual costs over the $400 monthly payment is to be added to such promissory note. The amended agreement also contains certain changes to notice provision clauses with respect to work force reductions as well as new loaded labor rates. |
Stockholders_ Equity (Deficit),
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty | 8. Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty Preferred stock During the first quarter of 2022, the Board of Directors created and established a new series of preferred stock, designated as “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”). The authorized number of shares of the Series B Preferred Stock was established at 21,500 with a par value of $0.0001 per share. The number of shares of Series B Preferred Stock issued during the nine months ended September 30, 2022 was 16,125, none Common stock The Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. On September 30, 2022, the Company filed the Certificate of Amendment with the Secretary of State of the State of Delaware, which effected a one-for-fifteen reverse stock split of the Company’s issued and outstanding shares of common stock. The Reverse Stock Split, which has been retroactively reflected throughout this report, did not change the par value of the Company’s common stock nor the authorized number of shares. As of September 30, 2022, a total of 24,605,474 shares of the Company’s common stock were issued and outstanding. Recent sales of securities The November Purchase Agreement On November 2, 2021, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with a buyer for the purchase and sale of (i) a warrant to purchase up to 333,333 shares (at the time) of the Company’s common stock, subject to increases as described below (the “Series A Warrants”), in a private placement; and (ii) an aggregate of 166,666 shares of the Company’s common stock, and a warrant to purchase up to 166,666 shares of the Company’s common stock (the “Series B Warrants” and, collectively with the Series A Warrants, the “A&B Warrants,” in a registered direct offering. The aggregate purchase price for the shares and the A&B Warrants was $5,000. Upon any exercise of the Series B Warrant, the number of shares issuable upon exercise of the Series A Warrant increased by the number of shares of the Company’s common stock issued upon exercise of the Series B Warrant. Northland Securities, Inc. (the “Placement Agent”) received fees of 7% of the aggregate gross proceeds. In connection with the Company’s consummation of the Credit Agreement, the exercise price of the A&B Warrants were subsequently reduced by 25%, the number of warrants were increased and the buyers received certain newly-issued warrants (the “Series C Warrants”). As of the date of such modification, the Company recognized a change in fair value of the warrant liabilities equal to the excess of the fair value of the modified instrument over the previous fair value. The fair value of the Series C Warrants as of the issuance date was considered to be analogous to a financing charge and was included in interest expense. The December 2021 securities sale On December 15, 2021, the Company consummated the sale of certain securities pursuant to a securities purchase agreement, dated as of December 13, 2021 between the Company and an investor (the “Buyer”). At the closing, the Company issued to the Buyer (i) a warrant (the “Series D Warrant”) to purchase up to 1,041,666 shares of the Company’s common stock, in a private placement; and (ii) an aggregate of 522,666 shares of the Company’s common stock, and 12,456 shares of Series A Preferred Stock (“Series A Preferred”) with a stated value of $1,000 per share, initially convertible into 519,000 shares of the Company’s common stock, in a registered direct offering. The aggregate purchase price paid at the closing for the common stock, the Series A Preferred and the Series D Warrants was $25,000. The initial exercise price of the Series D Warrants were subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and were subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of the Company’s common stock, or securities convertible, exercisable or exchangeable for, common stock at a price below the then-applicable exercise price (subject to certain exceptions). The Series A Preferred shares were convertible into shares of the Company’s common stock at the election of the holders at any time at an initial conversion price of $1.60. In December 2021, the holders of the Series A Preferred exercised their conversion rights and the Series A Preferred Shares were converted to 519,000 shares of the Company’s common stock. February 2022 Purchase Agreement On February 28, 2022, the Company entered into a securities purchase agreement (the “February 2022 Purchase Agreement”) with a buyer for the purchase and sale of (i) an aggregate of up to 21,500 shares of Series B Preferred Stock with a stated value of $1,000 per share, initially convertible into up to 1,433,333 shares of the Company’s common stock and (ii) warrants (the “February 2022 Warrants”) to purchase up to that number of shares of the Company’s common stock equal to the number of shares of the Company’s common stock into which the shares of Series B Preferred Stock actually sold pursuant to the purchase agreement were initially convertible, in a registered direct offering. Pursuant to the February 2022 Purchase Agreement, an aggregate of 16,125 shares of Series B Preferred Stock, initially convertible into 1,075,000 shares of the Company’s common stock, together with the February 2022 Warrants, initially exercisable for 1,075,000 shares of the Company’s common stock, were issued and sold at an initial closing on March 1, 2022 (the “Initial Closing”). The aggregate purchase price paid for the Series B Preferred Stock and the February 2022 Warrants at the Initial Closing was $15,000. The remaining 5,375 Preferred Shares were never issued by the Company and any rights that the Company had to require such a purchase subsequently expired. On March 1, 2022, the Company consummated the Initial Closing in which the Company issued to the buyer (i) 16,125 Series B Preferred Stock with a stated value of $1,000 per share, initially convertible into up to 1,075,000 shares of the Company’s common stock and (ii) the February 2022 Warrants that were initially exercisable for up to 1,075,000 shares of the Company’s common stock, in a registered direct offering. As a result of the issuance of the Series B Preferred Stock and February 2022 Warrants, the exercise price of the Series A Warrants, the Series B Warrants and the Series D Warrants previously issued by the Company to an affiliate of the buyer was automatically reduced by 33.3% (with a proportional increase to the number of shares of the Company’s common stock issuable upon exercise of such warrants). The Series B Preferred Stock was convertible into shares of the Company’s common stock at the election of the holder with the conversion price being subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of the Company’s common stock, or securities convertible, exercisable or exchangeable for, the Company’s common stock at a price below the then-applicable Conversion Price (subject to certain exceptions). The Company was required to redeem the Series B Preferred Stock in 12 equal monthly installments, commencing on April 1, 2022. Subject to certain conditions, including certain equity conditions, the Company could redeem the applicable number of Series B Preferred Stock on each monthly redemption date either in cash, shares of the Company’s common stock or a combination. The number of shares used to redeem any Series B Preferred Stock in such event would be calculated as 88% of the lowest daily volume weighted average price of the Company’s common stock during the eight trading days immediately prior to the payment date. Based on an evaluation of ASC 480, the Company had classified the Series B Preferred Stock as stock settled debt and therefore recorded the instrument as a liability on the issuance date, as the instrument was mandatorily redeemable and thus (1) embodies an unconditional obligation (2) required the Company to settle the unconditional obligation in cash or by issuing a variable number of its common shares and (3) is based on a monetary amount known at inception. The exercise price of the February 2022 Warrants were subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of the Company’s common stock, or securities convertible, exercisable or exchangeable for, the Company’s common stock at a price below the then-applicable exercise price (subject to certain exceptions). All of the outstanding shares of the Series B Preferred Stock have since been converted. Of the $16,125 principal, $14,781 was converted into 4,089,594 shares and $1,344 was paid in cash. Certain installments were based on exercises of the buyer’s acceleration right with respect to installment payments. April 2022 Purchase Agreement On April 14, 2022, the Company entered into a securities purchase agreement (the “April 2022 Purchase Agreement”) with a buyer affiliated with a greater than 5% stockholder for the purchase and sale of a new series of senior secured convertible notes of the Company, in the aggregate original principal amount of $12,000 (the “Convertible Notes”). The transaction was funded on April 19, 2022. The Convertible Notes were convertible into shares of the Company’s common stock. The purchase price of the Convertible Notes was $10,000 and net proceeds received totaled $9,950. The Convertible Notes were scheduled to mature on October 1, 2023. Interest was only payable if there was an event of default, which would have resulted in interest at the rate of 15.00% per annum. The Company was required to redeem $800 of the outstanding amounts under the Convertible Notes on a monthly basis, commencing on August 1, 2022, until the maturity date of October 1, 2023. Subject to certain conditions, including certain equity conditions, the Company was permitted to pay the amount due on each monthly redemption date, and the amount due at maturity, either in cash, shares of the Company’s common stock or a combination. The number of shares used to pay any portion of the Convertible Notes was generally calculated as 88% of the lowest daily volume weighted average price of the common stock during the eight trading days immediately prior to the payment date. The full principal amount of $12,000 due under the Convertible Notes have since been satisfied with shares of common stock, with 5,513,138 issued during the three months ended September 30, 2022, and 349,109 issued in October 2022. Based on ASC 815, Derivatives and Hedging Amendments - recent securities During the third quarter of 2022, the Company entered into certain amendments and other agreements with the holders of the securities underlying the securities discussed above, specifically, the securities underlying i) the November Purchase Agreement ii) the December 2021 securities sale iii) the February 2022 Purchase Agreement and iv) the April 2022 Purchase Agreement, as follows: ● An amended waiver agreement (the “Waiver Agreement”) on August 31, 2022, in which the holders waived certain rights, including, among other things, certain rights that would have accrued if the Company had sold shares of common stock and rights to the timing of certain payments which the holders agreed to defer. ● An exchange agreement (the “Exchange Agreement”) on September 11, 2022, with the holders of the Series B Preferred Stock and Convertible Notes, pursuant to which the parties agreed, among other things, to (i) exchange the remaining amount outstanding under the Series B Preferred Stock, consisting of $3,942 in stated value, into rights to acquire an aggregate of 1,720,428 shares of the Company’s common stock and (ii) to convert $1,600 in original principal amount of the Convertible Notes into 698,217 shares of the Company’s common stock. The $3,942 represented the remainder of certain additional financing charges of $7,125 which arose as a result of the stock price being below a floor price, as defined in the agreement. Of the total financing charges of $7,125, an aggregate of $3,183 was paid in cash. ● A settlement agreement, on September 26, 2022, with the holders of the Company’s convertible notes, and holders of certain warrants, pursuant to which the parties agreed, among other things, to effect, a series of sequential transactions consisting of one or more exercises of certain of the warrants, each followed by an exchange of the shares of the Company’s common stock, into certain rights to acquire an aggregate of 6,186,642 shares of the Company’s common stock (with respect to the warrants) and 480,024 shares of the Company’s common stock (in exchange for the remaining principal amount of the convertible notes), all of which shares have been fully issued and therefore the holders have no further rights to such warrants or the Convertible Notes. September 2022 Sale of Securities Pursuant to an Equity Distribution Agreement entered into on September 1, 2022 with Northland Securities, Inc., as its sales agent (the “Sales Agent”), the Company sold 4,515,000 shares of its common stock in September 2022. Net proceeds from the sale totaled $14,339, after deduction of a Sales Agent commission of 3.0% and other direct costs. October 2022 Sale of Securities On October 20, 2022, the Company consummated a securities purchase agreement entered into with two institutional accredited investors, relating to the sale of (i) an aggregate of 5,000,000 shares of the Company’s common stock, in a registered direct offering and (ii) warrants to purchase up to an aggregate of 10,000,000 shares of the Company’s common stock, an exercise price of $1.80 per share, in a concurrent private placement, for a combined purchase price of $2.00 per share. The Company will be required to file, within 30 days of the date of such purchase agreement, a registration statement to register the resale of the shares of common stock issuable upon exercise of the warrants. In addition, the Company has agreed, subject to certain exceptions, not to issue or agree to issue any shares of the Company’s common stock or common stock equivalents for a period ending on the later of (i) 90 days after the transaction’s closing date and (ii) the date on which the resale registration statement is declared effective by the SEC. Warrant Summary All warrants issued between November 2021 and March 2022 have since been converted to common stock, except the Monroe warrants. As of September 30, 2022, 687,587 Monroe warrants were exercisable for $0.0015 per share. Registration rights agreements In connection with the November and December sales of securities and the Credit Agreement with Monroe, the Company entered into certain registration rights agreements with the investors to register the common stock underlying the warrants by specified dates and to use reasonable best efforts to cause such registration statements to be declared effective under the Securities Act, as soon as practicable, thereafter, subject to certain fees if the shares were not registered by certain dates. As of February 9, 2022, all such shares were registered. In connection with the April 2022 sale of Convertible Notes, the Company entered into a substantially similar registration rights agreement with the purchaser of the Convertible Notes with respect to the registration for resale of the shares of common stock into which the Convertible Notes are convertible. As of June 1, 2022, all such shares were registered. See discussion above regarding registration rights agreement relating to the shares underlying the warrants issued as part of the October 2022 Sale of Securities. On April 7, 2020, the Company, Pensare Sponsor Group, LLC (the “Sponsor”) and certain other initial stockholders of the Company, as well as Stratos Management Systems Holdings, LLC, (“Holdings”), and certain other Investors (as defined below), entered into a Registration Rights Agreement (the “2020 Registration Rights Agreement”). The 2020 Registration Rights Agreement amended, restated and replaced a previous registration rights agreement entered into among AVCT, the Sponsor and certain other initial stockholders of AVCT on July 27, 2017. Pursuant to the terms of the 2020 Registration Rights Agreement, the holders of certain of the Company’s securities, including holders of the Company’s founders’ shares, shares of common stock underlying the Company’s private warrants, shares of common stock underlying the securities issued in the 2020 Private Placement (as defined below) are entitled to certain registration rights under the Securities Act and applicable state securities laws with respect to such shares of common stock, including up to eight demand registrations in the aggregate and customary “piggy-back” registration rights. Convertible Debentures, related warrants and guaranty On April 7, 2020, the Company consummated the sale, in a private placement (the “2020 Private Placement”), of units of securities of the Company (“Units”) to certain investors (each, an “Investor”), as contemplated by the terms of the previously disclosed Securities Purchase Agreement, dated as of April 3, 2020 (the “Securities Purchase Agreement”). Each Unit consisted of (i) $1,000 in principal amount of the Company’s Series A convertible debentures (the “Convertible Debentures” or “Debentures”) and (ii) a warrant to purchase 6 shares of the Company’s common stock at an exercise price of $0.15 per whole share (the “Penny Warrants”). The issuances of such securities were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. In addition, in connection with the acquisition of Kandy on December 1, 2020 and pursuant to the terms of the Kandy purchase agreement, the Company, in December 2020, issued 43,778 Units to Ribbon as consideration for the Kandy purchase, sold 10,000 Units to SPAC Opportunity Partners, LLC, a significant shareholder of the Company, and 1,000 Units to a director of the Company. Also, the Company sold 24,000 additional Units between January 1, 2021 and May 27, 2021, including 9,540 Units that were sold to related parties. Penny Warrants The Penny Warrants issued on April 7, 2020 entitled the holders to purchase an aggregate of up to 287,795 shares of the Company’s common stock (including warrants to purchase up to 133,333 shares, 57,106 shares, and 20,000 shares issued to Holdings, the Sponsor and MasTec Inc., respectively, as part of the Units issued to them), at an exercise price of $0.15 per share. The Penny Warrants issued in December 2020, as part of the Units sold, entitled the holders to purchase an aggregate of up to 365,186 shares of the Company’s common stock at an exercise price of $0.15 per share. Such warrants consisted of 291,853 warrants issued to Ribbon, 66,666 warrants issued to SPAC Opportunity Partners, LLC and 6,666 warrants issued to a director of the Company. The Penny Warrants issued between January 1, 2021 and May 27, 2021, as part of the Units sold during that period, entitled the holders to purchase an aggregate of up to 160,000 warrants (including 63,000 warrants issued to related parties). The Penny Warrants are exercisable at any time through the fifth anniversary of the date of issuance. The number of shares issuable upon exercise of each Penny Warrant is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like and have been adjusted to reflect the Reverse Stock Split. Starting in 2021 and pursuant to the terms of the Penny Warrant agreements, holders of 445,604 Penny Warrants exercised their right to convert such Penny Warrants to 444,553 shares of common stock and 291,853 Penny Warrants were cancelled as part of the Ribbon Settlement. As of September 30, 2022, unexercised Penny Warrants totaled 75,525. Derivative consideration and other disclosures relating to the Debentures and Penny Warrants Based on ASC 815, the convertible feature of the Debentures issued on April 7, 2020 was not considered a derivative and therefore was not recorded in liabilities, as part of the Debentures, and was not bifurcated. However, an embedded beneficial conversion feature was previously assessed in relation to the Debentures issued in December 2020 and was previously recorded in equity at its intrinsic value with a corresponding debt discount recorded to the Debentures at December 31, 2020. The beneficial conversion feature on such Debentures, which was evaluated in accordance with ASC 470-20 “ Debt with Conversion and Other Options Both the Penny Warrants issued on April 7, 2020 as well as the Penny Warrants issued on and after the Kandy acquisition date had qualified as derivatives, but satisfied the criteria for classification as equity instruments, and were bifurcated from the host contract (the Convertible Debentures) and recorded in equity at their relative fair values with a corresponding debt discount recorded to the Debentures. Prior to the conversion of the Debentures to common stock, the discount (consisting of the relative fair value of the warrants) was being expensed as interest over the then term of the Debentures to increase the carrying value to face value. However, effective September 8, 2021, the remaining unamortized discount was transferred to additional paid in capital in connection with the conversion of the Debentures to shares of common stock. During the three and nine months ended September 30, 2021, the Company recorded accretion of the discount of $2,792 and $9,253, respectively, and paid-in-kind interest of $2,518 and $8,257, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Services provided by Navigation Capital Partners, Inc. Effective October 1, 2020, the Company and Navigation Capital Partners, Inc. (“Navigation”), an affiliate of a significant shareholder, entered into an agreement whereby, Navigation provided capital markets advisory and business consulting services to the Company for a fee of $50 per month. In addition, the Company’s then President, Kevin Keough, and Mr. Robert Willis, a Company director and Vice Chairman of Capital Markets, provided such services to the Company via Navigation. Accordingly, Mr. Keough and Mr. Willis did not receive any direct compensation from the Company between July 21, 2021 (the effective date of their appointment) and April 21, 2022. Instead, Mr. Keough and Mr. Willis were compensated by Navigation. In consideration for such services provided by Navigation to the Company, Navigation was granted 12,000 restricted stock units (“RSUs”) that were scheduled to vest over four years, similar to time-based RSUs granted to directors in lieu of director’s fees. On April 21, 2022, the agreement with Navigation was terminated and therefore, the RSUs were forfeited prior to any being vested. At the date of termination, the unpaid balance owing under the consulting agreement was $900, which was scheduled to be paid at the rate of $100 per month. Selling, general and administrative expenses for the nine months ended September 30, 2022 included $150 ( none With respect to the RSU’s issued to Navigation, selling, general and administrative expenses include stock compensation expenses of $180 during the nine months ended September 30, 2022 ( none Services provided by True North Advisory LLC On January 21, 2022, the Company entered into a Services Agreement (the “Services Agreement”) with True North Advisory LLC (“True North”), a company affiliated with Michael Tessler, the previous Chairman of the Company’s board of directors. Pursuant to the Services Agreement, among other things, True North previously provided strategic advice with respect to the Company’s business as requested by the Company from time to time, for a fee of $25 per month, plus reimbursement for out-of-pocket expenses. As a result, selling, general and administrative expenses for the nine months ended September 30, 2022 include $109, related to such agreement ( none Transactions with Ribbon On August 29, 2022, the Company entered into the Ribbon Settlement Agreement, pursuant to which the Company and Ribbon modified and/or terminated certain previous agreements between the parties. In particular, pursuant to the Ribbon Settlement Agreement: ● a reseller agreement between the parties was terminated ● the Company granted Ribbon certain non-exclusive perpetual rights to use certain intellectual property owned by the Company ● Ribbon paid the Company $2,500 in cash ● the 913,361 shares of the Company’s common stock previously owned by Ribbon were canceled ● certain warrants, previously owned by Ribbon, which were exercisable to purchase 291,853 shares of the Company’s common stock, were terminated and canceled ● certain agreements for rental of certain premises from Ribbon were amended to, among other things, reduce the portion of the premises used by the Company (and concurrently reduce the corresponding rent or other fees payable); and ● certain agreements for use of certain Ribbon software were amended to, among other things, amend the license fee structure from a bulked fixed pricing schedule to a variable rate pricing structure so as to reduce the fees payable by the Company. In connection with the Ribbon Settlement Agreement, the Company recorded a gain of $1,708, which is included in “other income (expenses)” on the condensed consolidated statement of operations. Due to the redemption of the shares previously owned by Ribbon, Ribbon is no longer considered a related party. Pursuant to a transition services agreement entered into with Ribbon in connection with the acquisition of Kandy, Ribbon previously provided certain services to the Company. Accounts payable and accrued expenses include amounts due to Ribbon of $1,629 and $799 as of September 30, 2022 and December 31, 2021, respectively. Prepaid expenses and other current assets as of December 31, 2021 include $190 due from Ribbon for collections it received on the Company’s behalf in excess of reimbursable expenses it paid on the Company’s behalf. Additionally, from time to time, the Company provided certain services to Ribbon. Included in the consolidated statement of operations are certain revenues for services provided to Ribbon, certain expenses for services provided by Ribbon and certain expenses for rental of office space from Ribbon. The following summarizes such revenue and expenses: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue earned from Ribbon $ 48 $ - $ 137 $ - Service fees charged by Ribbon: Cost of revenue $ - $ 305 $ - $ 1,013 Research and development - 116 - 331 Selling, general and administrative expenses 216 534 1,088 1,448 216 955 1,088 2,792 Rent and software purchased from Ribbon: Cost of revenue 377 68 1,514 $ 68 Selling, general and administrative expenses 133 173 2,086 451 $ 510 $ 241 $ 3,600 $ 519 Services provided by Saw Holdings, LLC Effective April 1, 2022, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Saw Holdings, LLC (“Saw Holdings”), a company affiliated with Robert Willis, a member of the Company’s board of directors. Pursuant to the Consulting Agreement, Saw Holdings previously provided consulting and capital markets advisory services to the Company for a fee of $25 per month, plus reimbursement for out-of-pocket expenses. The Consulting Agreement, which had an initial term of three months, was terminated in July 2022. Certain Debentures Debenture interest is separately identified as related party amounts on the condensed consolidated statements of operations. As indicated in Note 8, the Debentures were converted to common stock on September 8, 2021. Accordingly, no Debentures were outstanding as of September 30, 2022. The 2021 Note The 2021 Note, which was secured by a related party, is discussed in Note 7 and is separately identified on the condensed consolidated balance sheet at December 31, 2021. The related interest expense for the nine months ended September 30, 2022 of $764 ( none |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 10. Revenue Recognition In the following tables, revenue is disaggregated by geographies and by verticals (or sector). Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Geography Domestic $ 3,468 $ 2,821 $ 8,956 $ 9,350 International 1,270 1,327 3,600 3,266 Total revenues $ 4,738 $ 4,148 $ 12,556 $ 12,616 Revenues by Verticals (or Sector) Finance $ 16 $ 231 $ 34 $ 1,640 Manufacturing and logistics 3 8 18 25 Public sector 365 347 1,006 1,022 Technology service providers 4,325 3,504 11,402 9,831 Other 29 58 96 98 Total revenues $ 4,738 $ 4,148 $ 12,556 $ 12,616 Revenues by geography, in the table above, is generally based on the “ship-to address,” with the exception of certain services that may be performed at, or on behalf of, multiple locations, which are categorized based on the “bill-to address.” Contract liabilities and remaining performance obligations The Company’s contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. At September 30, 2022 and December 31, 2021, the contract liability balance (deferred revenue) was $25 and $82, respectively. All of the performance obligations related to such deferred revenue as of September 30, 2022 are expected to be performed within 12 months and consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing the services. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 11. Share-Based Compensation The American Virtual Cloud Technologies, Inc. 2020 Equity Incentive Plan (the “Plan”) provides for the issuance of stock options, stock appreciation rights, RSUs and other share-based awards. Stock options have a maximum term of ten years from the grant date. As of September 30, 2022, a total of 666,666 shares had been authorized for issuance under the Plan, of which 263,887 shares remained available for issuance. The RSUs were issued to certain directors, employees and, in one case, a contractor, and can only be settled in shares. RSUs awarded to directors are time-based. RSUs issued to non-directors are 50% time-based and 50% performance-based. Generally, the awards vest over 3 or 4 years. The time-based awards vest on each grant date anniversary, while the performance-based awards vests on December 31 st The following summarizes RSU activity between January 1, 2022 and September 30, 2022: Weighted Average Number Grant Date of RSUs Fair Value Outstanding at January 1, 2022 179,555 $ 67.80 Granted 201,264 $ 18.00 Vested and delivered (67,485 ) $ 38.34 Vested, not delivered (6,666 ) $ 51.30 Forfeited (98,222 ) $ 33.04 Cancelled (66,666 ) $ 32.10 Unvested RSUs at September 30, 2022 141,780 $ 40.78 Awards outstanding in the table above consist of 104,110 time-based awards and 37,670 performance-based awards and exclude 37,471 performance-based RSUs that have been awarded but deemed not granted as the performance targets have not yet been determined. Share-based compensation expenses recognized were as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Cost of revenue $ 39 $ 104 $ 146 $ 291 Research and development (19 ) 309 274 691 Selling, general and administrative expenses 299 2,538 880 5,770 $ 319 $ 2,951 $ 1,300 $ 6,752 Stock compensation expense is sometimes negative due to forfeitures, as forfeited awards result in a full clawback of previously recognized stock compensation expense. As indicated in Note 9, selling, general and administrative expenses for the nine months ended September 30, 2022, in the table above, include $180 ( none |
Reconciliation of Net loss per
Reconciliation of Net loss per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Net loss per Common Share | 12. Reconciliation of Net loss per Common Share Basic and diluted net loss per common share was calculated as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Loss from continuing operations, net of tax $ (25,547 ) $ (20,144 ) $ (31,824 ) $ (56,024 ) (Loss) income from discontinued operations, net of tax - (17,173 ) 748 (19,826 ) Net loss $ (25,547 ) $ (37,317 ) $ (31,076 ) $ (75,850 ) Weighted average shares outstanding, basic and diluted 11,262,991 2,072,643 7,850,250 1,586,102 Basic and diluted net (loss) income per common share Continuing operations $ (2.27 ) $ (9.72 ) $ (4.05 ) $ (35.32 ) Discontinued operations - (8.28 ) 0.09 (12.50 ) Net loss per common share $ (2.27 ) $ (18.00 ) $ (3.96 ) $ (47.82 ) Since their inclusion would have been antidilutive, excluded from the computation of diluted net loss per common share are the following, were they to be converted: September 30, September 30, Monroe Warrants 687,587 - Public Warrants 1,035,000 1,035,000 2017 Private Placement 700,833 700,833 2017 EBC Warrants - 45,000 Penny Warrants 75,525 413,711 Shares underlying certain unit purchase options (issued in 2017) - 99,000 Unvested RSUs 179,251 242,833 Vested, not delivered RSUs 6,666 27,166 2,684,862 2,563,543 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes The Company's effective tax rate for the three and nine ended months ended September 30, 2022 was -0.01% and -0.04%, respectively. For the three and nine months ended September 30, 2021, the effective tax rate was 0.03% and -0.05%, respectively. The effective tax rate for such periods differed from the federal statutory rate due to state taxes and the Company's full valuation allowance. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Registration Rights See Note 8 for a discussion of certain registration rights. Contingencies The Company continues to explore strategic opportunities, including the rationalization of resource allocation and core competencies, while seeking to focus on areas with growth potential. As part of such strategy, the Company may terminate certain contracts that do not align with its strategic direction, or which are deemed unprofitable. Termination of any such contracts could result in breakage costs, which would negatively impact the Company’s results of operations, financial position and cash flows. From time to time, the Company may be involved in various legal proceedings and claims in the ordinary course of business. As of September 30, 2022, and through the filing date of this report, the Company does not believe the resolution of any legal proceedings or claims of which it is aware or any potential actions will have a material effect on its financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the consolidated financial statements are issued. Other than as may be disclosed elsewhere in the Notes to the financial statements, there have been no subsequent events that require adjustment or disclosure in the condensed consolidated financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Business Operations and Certain Recent Developments [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 15, 2022. The interim results for the period ended September 30, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022 or any future interim periods. The Company has reclassified certain prior period amounts, including the results of discontinued operations, reportable segment information and shares of common stock, to conform to the current period presentation. Unless otherwise indicated, amounts provided in these Notes pertain to the Company’s continuing operations. See Note 5, Assets held for sale and operations classified as discontinued, |
Principles of consolidation | Principles of consolidation The accompanying condensed consolidated financial statements include the accounts of AVCT and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales (or revenues) and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that estimates made as of the date of the financial statements could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, revenue recognition, allowance for doubtful accounts, accounting for warrants, recognition and measurement of income tax assets, valuation of share-based compensation, discount related to the fair value of warrants, and the valuation of net assets acquired. |
Significant accounting policies | Significant accounting policies The significant accounting policies used in preparing these condensed consolidated financial statements were applied on a basis consistent with those reflected in our consolidated financial statements that are included in the annual report on Form 10-K for the year ended December 31, 2021 that was filed with the SEC on April 15, 2022. |
Concentration of business and credit risk | Concentration of business and credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and trade receivables. Cash held by the Company in financial institutions regularly exceeds the federally insured limit of $250. At September 30, 2022, cash balances held with a financial institution exceeded the federally insured limit. However, management does not believe this poses a significant credit risk. Concentration of business risks are summarized in the following table: September 30, 2022 December 31, 2021 Number of Aggregate Number of Aggregate Customers that individually accounted for 10% or more of trade accounts receivable 3 $ 5,783 3 $ 6,104 Vendors that individually accounted for 10% or more of trade accounts payable 3 $ 5,255 2 $ 2,527 Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Number of customers that individually accounted for 10% or more of sales from continuing operations 4 4 4 4 Aggregate total sales of customers that individually accounted for 10% or more of sales from continuing operations $ 3,461 $ 3,470 $ 8,720 $ 7,894 |
Trade receivables, net | Trade receivables, net Trade receivables on the accompanying condensed consolidated balance sheets are net of allowances of $739 and $147, as of September 30, 2022 and December 31, 2021, respectively. |
Fair value of financial instruments | Fair value of financial instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. ASC Topic 820, Fair Value Measurements and Disclosures ● Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. ● Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Assets measured at fair value on a non-recurring basis include goodwill, tangible and intangible assets. Such assets are reviewed annually for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3). The carrying amounts of the Company’s financial instruments, which include trade receivables, deposits, accounts payable and accrued expenses and debt at floating interest rates, approximate their fair values, principally due to their short-term nature, maturities or nature of interest rates. The fair values of warrant liabilities are reflected on the condensed consolidated balance sheets as “Warrant Liabilities.” The fair values of certain warrants issued in 2017 (the “2017 Private Placement Warrants”) were determined using the Black-Scholes model in which the following weighted average assumptions were used for the valuations performed as of September 30, 2022: o stock price volatility – 145% o exercise price – $11.50 o discount rate – 4.1531% o remaining useful life – 2.52 years o stock price – $0.20 The valuations of the warrant liabilities are considered to be Level 2 valuations. |
Change in Segment reporting | Change in Segment reporting Effective January 1, 2021, the Company identified two operating segments, Computex and Kandy, pursuant to ASC 280, Segment Reporting |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in December, or more frequently if a triggering event occurs between impairment testing dates. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. If, based on the qualitative test, the Company determines that it is “more likely than not” that the fair value of a reporting unit is less than its carrying value, then the Company evaluates goodwill for impairment by reviewing the fair value of the reporting unit versus its respective carrying value, including its goodwill. If it is determined that it is “not likely” that the fair value of the reporting unit is less than its carrying value, then no further testing is required. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. Fair values may be determined using a combination of both income and market-based approaches. Goodwill in the Kandy operating segment was recognized as a result of the Kandy Business Combination in December 2020, at which time approximately $24,144 of goodwill was attributed to the Kandy reporting unit. Subsequently, in the fourth quarter of 2021, as part of the Company’s annual impairment analysis, the Company recorded an impairment charge of approximately $13,676 to Kandy’s goodwill. During the second quarter of 2022, the Company concluded that a triggering event had occurred in the Company’s sole reporting unit, comprised of Kandy, as a result of declining financial performance coupled with changes in market conditions. Therefore, the Company conducted both qualitative and quantitative assessments and determined that it was appropriate to write off the entire remaining goodwill of $10,468. Therefore, the Company recognized a non-cash impairment charge of Balance, January 1, 2022 $ 10,468 Goodwill impairment (10,468 ) Balance, September 30, 2022 $ - The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. Fair values may be determined using a combination of both income and market-based approaches. |
Emerging growth company | Emerging growth company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. Private companies are those companies that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised, it adopts the new or revised standard at the time private companies adopt the new or revised standard, unless it chooses to early-adopt the new or revised accounting standard. Therefore, the Company’s financial statements may not be comparable to certain public companies. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of sales from continuing operations [Abstract] | |
Schedule of concentration of business risks | September 30, 2022 December 31, 2021 Number of Aggregate Number of Aggregate Customers that individually accounted for 10% or more of trade accounts receivable 3 $ 5,783 3 $ 6,104 Vendors that individually accounted for 10% or more of trade accounts payable 3 $ 5,255 2 $ 2,527 |
Schedule of sales from continuing operations | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Number of customers that individually accounted for 10% or more of sales from continuing operations 4 4 4 4 Aggregate total sales of customers that individually accounted for 10% or more of sales from continuing operations $ 3,461 $ 3,470 $ 8,720 $ 7,894 |
Schedule of goodwill activity | Balance, January 1, 2022 $ 10,468 Goodwill impairment (10,468 ) Balance, September 30, 2022 $ - |
Assets Held for Sale and Oper_2
Assets Held for Sale and Operations Classified as Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Assets held for sale and operations classified as discontinued operations [Abstract] | |
Schedule of assets and liabilities classified as held for sale | December 31, Current assets: Cash $ 4,136 Prepaid expenses 937 Trade receivables (net allowance of $146) 19,965 Inventory 2,737 Assets held for sale - current 27,775 Noncurrent assets: Property and equipment, net 4,489 Goodwill 6,579 Other intangible assets, net 20,105 Other noncurrent assets 85 Assets held for sale - noncurrent 31,258 Total assets held for sale $ 59,033 Current liabilities: Accounts payable and accrued expenses $ 26,023 Deferred revenue 3,214 Liabilities associated with assets held for sale - current 29,237 Long-term liabilities Other liabilities 102 Liabilities associated with assets held for sale - noncurrent 102 Total liabilities associated with assets held for sale $ 29,339 |
Schedule of revenues and expenses | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Revenues: Hardware $ - $ 13,000 $ 10,948 $ 39,219 Third party software and maintenance - 2,080 1,815 5,115 Managed and professional services - 8,050 7,214 24,497 Other - 233 165 793 Total revenues - 23,363 20,142 69,624 Cost of revenue - 16,039 14,176 48,647 Gross profit - 7,324 5,966 20,977 Goodwill impairment - 20,500 - 20,500 Selling, general and administrative - 7,809 9,520 23,423 Loss from operations - (20,985 ) (3,554 ) (22,946 ) Other (expense) income Gain on sale of Computex - - 4,314 - Gain on extinguishment of debt - 4,177 - 4,177 Interest expense - (342 ) - (860 ) Other expense - - - (155 ) Total other (expenses) income - 3,835 4,314 3,162 (Loss) income from discontinued operations before income taxes - (17,150 ) 760 (19,784 ) Income tax provision on discontinued operations - (23 ) (12 ) (42 ) Net (loss) income from discontinued operations $ - $ (17,173 ) $ 748 $ (19,826 ) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts payable and accrued expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | September 30, December 31, Accounts payable $ 6,327 $ 3,692 Accrued compensation, benefits and related accruals 3,154 6,412 Accrued professional fees 990 1,867 Due to related parties 500 2,285 Third party interest accrual - 2,180 Other 99 578 $ 11,070 $ 17,014 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt [Abstract] | |
Schedule of total long-term debt | September 30, December 31, Term Note payable to Monroe; guaranteed interest of $7,290 $ - $ 27,000 Capital lease obligations 28 104 Total long-term debt 28 27,104 Less: unamortized debt issuance costs $ - (700 ) Total notes payable and line of credit, net of unamortized debt issuance costs 28 26,404 Less: current maturities of notes payable and line of credit (28 ) (26,393 ) Long-term debt, net of current maturities and unamortized debt issuance costs $ - $ 11 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of revenue and expenses | Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue earned from Ribbon $ 48 $ - $ 137 $ - Service fees charged by Ribbon: Cost of revenue $ - $ 305 $ - $ 1,013 Research and development - 116 - 331 Selling, general and administrative expenses 216 534 1,088 1,448 216 955 1,088 2,792 Rent and software purchased from Ribbon: Cost of revenue 377 68 1,514 $ 68 Selling, general and administrative expenses 133 173 2,086 451 $ 510 $ 241 $ 3,600 $ 519 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of revenue is disaggregated by geographies and by verticals | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Geography Domestic $ 3,468 $ 2,821 $ 8,956 $ 9,350 International 1,270 1,327 3,600 3,266 Total revenues $ 4,738 $ 4,148 $ 12,556 $ 12,616 Revenues by Verticals (or Sector) Finance $ 16 $ 231 $ 34 $ 1,640 Manufacturing and logistics 3 8 18 25 Public sector 365 347 1,006 1,022 Technology service providers 4,325 3,504 11,402 9,831 Other 29 58 96 98 Total revenues $ 4,738 $ 4,148 $ 12,556 $ 12,616 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation [Abstract] | |
Schedule of RSU activity | Weighted Average Number Grant Date of RSUs Fair Value Outstanding at January 1, 2022 179,555 $ 67.80 Granted 201,264 $ 18.00 Vested and delivered (67,485 ) $ 38.34 Vested, not delivered (6,666 ) $ 51.30 Forfeited (98,222 ) $ 33.04 Cancelled (66,666 ) $ 32.10 Unvested RSUs at September 30, 2022 141,780 $ 40.78 |
Schedule of share-based compensation expense | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Cost of revenue $ 39 $ 104 $ 146 $ 291 Research and development (19 ) 309 274 691 Selling, general and administrative expenses 299 2,538 880 5,770 $ 319 $ 2,951 $ 1,300 $ 6,752 |
Reconciliation of Net loss pe_2
Reconciliation of Net loss per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per common share | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Loss from continuing operations, net of tax $ (25,547 ) $ (20,144 ) $ (31,824 ) $ (56,024 ) (Loss) income from discontinued operations, net of tax - (17,173 ) 748 (19,826 ) Net loss $ (25,547 ) $ (37,317 ) $ (31,076 ) $ (75,850 ) Weighted average shares outstanding, basic and diluted 11,262,991 2,072,643 7,850,250 1,586,102 Basic and diluted net (loss) income per common share Continuing operations $ (2.27 ) $ (9.72 ) $ (4.05 ) $ (35.32 ) Discontinued operations - (8.28 ) 0.09 (12.50 ) Net loss per common share $ (2.27 ) $ (18.00 ) $ (3.96 ) $ (47.82 ) |
Schedule of diluted net loss per common share | September 30, September 30, Monroe Warrants 687,587 - Public Warrants 1,035,000 1,035,000 2017 Private Placement 700,833 700,833 2017 EBC Warrants - 45,000 Penny Warrants 75,525 413,711 Shares underlying certain unit purchase options (issued in 2017) - 99,000 Unvested RSUs 179,251 242,833 Vested, not delivered RSUs 6,666 27,166 2,684,862 2,563,543 |
Organization, Business Operat_2
Organization, Business Operations and Certain Recent Developments (Details) - USD ($) $ in Thousands | May 20, 2022 | Sep. 30, 2022 | Jul. 27, 2022 | Dec. 02, 2021 |
Organization, Business Operations and Certain Recent Developments [Abstract] | ||||
Credit facility | $ 27,000 | |||
Nasdaq notices, description | On May 20, 2022, we received a written notice from the Nasdaq indicating that we were not in compliance with the Nasdaq Listing Rule which requires us to maintain a minimum bid price of $1.00 per share. Such notice had provided us with a period of 180 calendar days, or until November 16, 2022, to regain compliance by maintaining a minimum bid price of $1.00 per share for at least ten consecutive business days. | |||
Minimum value of listed securities | $ 35,000 | $ 35,000 |
Liquidity (Details)
Liquidity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Liquidity [Abstract] | ||
Aggregate cash balance | $ 10,747,000 | $ 31,119,000 |
Net working capital | 14,402,000 | |
Aggregate cash | $ 16,951 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Jan. 01, 2021 | Sep. 30, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Stock price volatility | 145% | |||
Exercise price (in Dollars per share) | $ / shares | $ 11.5 | |||
Discount rate | 4.1531% | |||
Remaining useful life | 2 years 6 months 7 days | |||
stock price (in Dollars per share) | $ / shares | $ 0.2 | |||
Number of operating segments | 2 | |||
Number of reportable segment | 1 | |||
Goodwill | $ 10,468 | |||
Impairment charge of goodwill | 10,468 | |||
Concentration of Business and Credit Risk [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Federally insured limit | 250 | |||
Net of allowance for doubtful accounts | 739 | 147 | ||
Kandy [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Goodwill | $ 24,144 | |||
Impairment charge of goodwill | $ 13,676 | |||
Write off the entire remaining goodwill | 10,468 | |||
Non-cash impairment charge | $ 10,468 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of concentration of business risks $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule Of Concentration Of Business Risks Abstract | ||
Number of customers or vendors Customers that individually accounted for 10% or more of trade accounts receivable | 3 | 3 |
Aggregate total Customers that individually accounted for 10% or more of trade accounts receivable | $ 5,783 | $ 6,104 |
Number of customers or vendors Vendors that individually accounted for 10% or more of trade accounts payable | 3 | 2 |
Aggregate total Vendors that individually accounted for 10% or more of trade accounts payable | $ 5,255 | $ 2,527 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of concentration of business risks (Parentheticals) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Concentration Of Business Risks Abstract | ||
Percentage of customers trade accounts receivable | 10% | 10% |
Percentage of vendors trade accounts payable | 10% | 10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of sales from continuing operations $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Schedule Of Sales From Continuing Operations Abstract | ||||
Number of customers that individually accounted for 10% or more of sales from continuing operations | 4 | 4 | 4 | 4 |
Aggregate total sales of customers that individually accounted for 10% or more of sales from continuing operations | $ 3,461 | $ 3,470 | $ 8,720 | $ 7,894 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of sales from continuing operations (Parentheticals) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Sales From Continuing Operations Abstract | ||||
Percentage of customers sales from continuing operations | 10% | 10% | 10% | 10% |
Percentage of aggregate sales from continuing operations | 10% | 10% | 10% | 10% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of goodwill activity - Goodwill [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Balance, January 1, 2022 | $ 10,468 |
Goodwill impairment | (10,468) |
Balance, September 30, 2022 |
Assets Held for Sale and Oper_3
Assets Held for Sale and Operations Classified as Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 26, 2022 | Dec. 31, 2021 | |
Assets held for sale and operations classified as discontinued operations [Abstract] | ||
Net sale proceeds | $ 32,112 | |
Goodwill impairment charge | $ 32,100 |
Assets Held for Sale and Oper_4
Assets Held for Sale and Operations Classified as Discontinued Operations (Details) - Schedule of assets and liabilities classified as held for sale - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 4,136 | |
Prepaid expenses | 937 | |
Trade receivables (net allowance of $146) | 19,965 | |
Inventory | 2,737 | |
Assets held for sale - current | 27,775 | |
Noncurrent assets: | ||
Property and equipment, net | 4,489 | |
Goodwill | 6,579 | |
Other intangible assets, net | 20,105 | |
Other noncurrent assets | 85 | |
Assets held for sale - noncurrent | 31,258 | |
Total assets held for sale | 59,033 | |
Current liabilities: | ||
Accounts payable and accrued expenses | 26,023 | |
Deferred revenue | 3,214 | |
Liabilities associated with assets held for sale - current | 29,237 | |
Long-term liabilities | ||
Other liabilities | 102 | |
Liabilities associated with assets held for sale - noncurrent | 102 | |
Total liabilities associated with assets held for sale | $ 29,339 |
Assets Held for Sale and Oper_5
Assets Held for Sale and Operations Classified as Discontinued Operations (Details) - Schedule of assets and liabilities classified as held for sale (Parentheticals) $ in Thousands | Dec. 31, 2021 USD ($) |
Schedule Of Assets And Liabilities Classified As Held For Sale Abstract | |
Trade receivables, net allowance | $ 146 |
Assets Held for Sale and Oper_6
Assets Held for Sale and Operations Classified as Discontinued Operations (Details) - Schedule of revenues and expenses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Hardware | $ 13,000 | $ 10,948 | $ 39,219 | |
Third party software and maintenance | 2,080 | 1,815 | 5,115 | |
Managed and professional services | 8,050 | 7,214 | 24,497 | |
Other | 233 | 165 | 793 | |
Total revenues | 23,363 | 20,142 | 69,624 | |
Cost of revenue | 16,039 | 14,176 | 48,647 | |
Gross profit | 7,324 | 5,966 | 20,977 | |
Goodwill impairment | 20,500 | 20,500 | ||
Selling, general and administrative | 7,809 | 9,520 | 23,423 | |
Loss from operations | (20,985) | (3,554) | (22,946) | |
Other (expense) income | ||||
Gain on sale of Computex | 4,314 | |||
Gain on extinguishment of debt | 4,177 | 4,177 | ||
Interest expense | (342) | (860) | ||
Other expense | (155) | |||
Total other (expenses) income | 3,835 | 4,314 | 3,162 | |
(Loss) income from discontinued operations before income taxes | (17,150) | 760 | (19,784) | |
Income tax provision on discontinued operations | (23) | (12) | (42) | |
Net (loss) income from discontinued operations | $ (17,173) | $ 748 | $ (19,826) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accounts Payable And Accrued Expenses Abstract | ||
Accounts payable | $ 6,327 | $ 3,692 |
Accrued compensation, benefits and related accruals | 3,154 | 6,412 |
Accrued professional fees | 990 | 1,867 |
Due to related parties | 500 | 2,285 |
Third party interest accrual | 2,180 | |
Other | 99 | 578 |
Accounts payable and accrued expenses, total | $ 11,070 | $ 17,014 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Mar. 15, 2022 | Jan. 18, 2022 | Oct. 20, 2022 | Sep. 16, 2021 | Sep. 30, 2022 | Dec. 02, 2021 | |
Long-Term Debt (Details) [Line Items] | ||||||
Term loan facility | $ 27,000 | |||||
Amendment fees | $ 920 | |||||
Interest rate | 10% | |||||
Guaranteed a minimum return amount | $ 7,290 | |||||
Administrative amount | $ 675 | |||||
Common stock at exercise price per share (in Dollars per share) | $ 0.0015 | |||||
Common stock outstanding percentage | 2.50% | |||||
Warrants exercisable for an aggregate of shares (in Shares) | 687,587 | |||||
Promissory note, description | the Company entered into a promissory note in the principal amount of $5,000 (the “2021 Note”). The 2021 Note, which was secured by an affiliate of a shareholder that owns more than five percent of the Company’s shares, was originally scheduled to mature on the earliest of (a) September 16, 2022, (b) the Company’s consummation of a debt financing resulting in the receipt of gross proceeds of not less than $20,000, (c) the Company’s consummation of primary sales of registered equity securities resulting in the receipt of gross proceeds of not less than $20,000, (d) the Company’s consummation of the sale of Computex and (e) the date of any event of default. However, in connection with the closing of the Credit Facility, the 2021 Note was amended to, among other things, revise the definition of the maturity date so that the consummation of the Credit Agreement would not have resulted in the maturity of the 2021 Note. In consideration of the amendment, the Company paid the lender an amendment fee in the amount of $1,250. | |||||
Securities resulting in the receipt of gross proceeds | $ 20,000 | |||||
Waiver fee | $ 250 | |||||
Maturity date | May 01, 2022 | |||||
Minimum required return percentage | 25% | |||||
Common Stock [Member] | ||||||
Long-Term Debt (Details) [Line Items] | ||||||
Common stock at price per share (in Dollars per share) | $ 23.46 | |||||
LIBOR Rate [Member] | ||||||
Long-Term Debt (Details) [Line Items] | ||||||
Interest rate | 11% | |||||
Subsequent Event [Member] | ||||||
Long-Term Debt (Details) [Line Items] | ||||||
Interest rate | 6% | |||||
Principal balance | $ 2,430 | |||||
Monthly payment | 400 | |||||
Monthly payments to be added | $ 400 |
Long-Term Debt (Details) - Sche
Long-Term Debt (Details) - Schedule of total long-term debt - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of total long term debt [Abstract] | ||
Term Note payable to Monroe; guaranteed interest of $7,290 | $ 27,000 | |
Capital lease obligations | 28 | 104 |
Total long-term debt | 28 | 27,104 |
Less: unamortized debt issuance costs | (700) | |
Total notes payable and line of credit, net of unamortized debt issuance costs | 28 | 26,404 |
Less: current maturities of notes payable and line of credit | (28) | (26,393) |
Long-term debt, net of current maturities and unamortized debt issuance costs | $ 11 |
Long-Term Debt (Details) - Sc_2
Long-Term Debt (Details) - Schedule of total long-term debt (Parentheticals) $ in Thousands | Sep. 30, 2022 USD ($) |
Schedule of total long term debt [Abstract] | |
Note payable, guaranteed interest | $ 7,290 |
Stockholders_ Equity (Deficit_2
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Oct. 20, 2022 | Sep. 11, 2022 | Apr. 14, 2022 USD ($) | Mar. 01, 2022 | Feb. 28, 2022 USD ($) $ / shares shares | Dec. 02, 2021 $ / shares | Nov. 02, 2021 | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 26, 2022 shares | Dec. 31, 2020 $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | May 27, 2021 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 $ / shares shares | Oct. 30, 2022 shares | |
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred stock, shares outstanding | |||||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Number of vote for each share | 1 | 1 | 1 | ||||||||||||||
Common stock, shares issued | 24,605,474 | 24,605,474 | 24,605,474 | 5,905,639 | |||||||||||||
Common stock, shares outstanding | 24,605,474 | 24,605,474 | 24,605,474 | 5,905,639 | |||||||||||||
Warrant purchase description | On November 2, 2021, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with a buyer for the purchase and sale of (i) a warrant to purchase up to 333,333 shares (at the time) of the Company’s common stock, subject to increases as described below (the “Series A Warrants”), in a private placement; and (ii) an aggregate of 166,666 shares of the Company’s common stock, and a warrant to purchase up to 166,666 shares of the Company’s common stock (the “Series B Warrants” and, collectively with the Series A Warrants, the “A&B Warrants,” in a registered direct offering. The aggregate purchase price for the shares and the A&B Warrants was $5,000. | ||||||||||||||||
Gross proceeds | 7% | ||||||||||||||||
Warrants issued purchase description | At the closing, the Company issued to the Buyer (i) a warrant (the “Series D Warrant”) to purchase up to 1,041,666 shares of the Company’s common stock, in a private placement; and (ii) an aggregate of 522,666 shares of the Company’s common stock, and 12,456 shares of Series A Preferred Stock (“Series A Preferred”) with a stated value of $1,000 per share, initially convertible into 519,000 shares of the Company’s common stock, in a registered direct offering. The aggregate purchase price paid at the closing for the common stock, the Series A Preferred and the Series D Warrants was $25,000. | ||||||||||||||||
Convertible common stock | 1,433,333 | ||||||||||||||||
Warrants exercisable shares | 1,075,000 | ||||||||||||||||
Conversion, description | On March 1, 2022, the Company consummated the Initial Closing in which the Company issued to the buyer (i) 16,125 Series B Preferred Stock with a stated value of $1,000 per share, initially convertible into up to 1,075,000 shares of the Company’s common stock and (ii) the February 2022 Warrants that were initially exercisable for up to 1,075,000 shares of the Company’s common stock, in a registered direct offering. | ||||||||||||||||
Weighted average price | 88% | ||||||||||||||||
Principal amount (in Dollars) | $ | $ 16,125,000 | $ 16,125,000 | $ 16,125,000 | ||||||||||||||
Cash paid (in Dollars) | $ | 16,951 | 16,951 | 16,951 | ||||||||||||||
Purchase agreement percentage | 5% | ||||||||||||||||
Aggregate principal amount (in Dollars) | $ | $ 12,000,000 | 12,000,000 | $ 12,000,000 | $ 12,000,000 | |||||||||||||
Purchase price (in Dollars) | $ | 10,000,000 | ||||||||||||||||
Net proceeds (in Dollars) | $ | $ 9,950,000 | $ 14,339,000 | |||||||||||||||
Convertible notes interest payable percentage | 15% | 15% | 15% | ||||||||||||||
Convertible note, description | The Company was required to redeem $800 of the outstanding amounts under the Convertible Notes on a monthly basis, commencing on August 1, 2022, until the maturity date of October 1, 2023. Subject to certain conditions, including certain equity conditions, the Company was permitted to pay the amount due on each monthly redemption date, and the amount due at maturity, either in cash, shares of the Company’s common stock or a combination. The number of shares used to pay any portion of the Convertible Notes was generally calculated as 88% of the lowest daily volume weighted average price of the common stock during the eight trading days immediately prior to the payment date. | ||||||||||||||||
Convertible common stock | 480,024 | 5,513,138 | |||||||||||||||
Estimated value of convertible note derivative (in Dollars) | $ | $ 721,000 | $ 721,000 | $ 721,000 | ||||||||||||||
Preferred stock and convertible notes description | ●An exchange agreement (the “Exchange Agreement”) on September 11, 2022, with the holders of the Series B Preferred Stock and Convertible Notes, pursuant to which the parties agreed, among other things, to (i) exchange the remaining amount outstanding under the Series B Preferred Stock, consisting of $3,942 in stated value, into rights to acquire an aggregate of 1,720,428 shares of the Company’s common stock and (ii) to convert $1,600 in original principal amount of the Convertible Notes into 698,217 shares of the Company’s common stock. The $3,942 represented the remainder of certain additional financing charges of $7,125 which arose as a result of the stock price being below a floor price, as defined in the agreement. Of the total financing charges of $7,125, an aggregate of $3,183 was paid in cash. | ||||||||||||||||
Aggregate shares of warrants | 6,186,642 | 160,000 | |||||||||||||||
Sale of shares | 4,515,000 | ||||||||||||||||
Commission percentage | 3% | ||||||||||||||||
Warrants issued | 63,000 | 687,587 | |||||||||||||||
Exercise price of Monroe warrants (in Dollars per share) | $ / shares | $ 0.0015 | ||||||||||||||||
Principle amount of debenture (in Dollars) | $ | $ 1,000,000 | ||||||||||||||||
Warrants to purchase common stock | 6 | ||||||||||||||||
Stock options exercise price (in Dollars per share) | $ / shares | $ 0.15 | $ 0.15 | $ 0.15 | ||||||||||||||
Purchase agreement units | 43,778 | ||||||||||||||||
Sold unit | 10,000 | ||||||||||||||||
Shareholder units | 1,000 | ||||||||||||||||
Additional sold units | 24,000 | ||||||||||||||||
Related party shares | 9,540 | ||||||||||||||||
Warrants description | The Penny Warrants issued on April 7, 2020 entitled the holders to purchase an aggregate of up to 287,795 shares of the Company’s common stock (including warrants to purchase up to 133,333 shares, 57,106 shares, and 20,000 shares issued to Holdings, the Sponsor and MasTec Inc., respectively, as part of the Units issued to them), at an exercise price of $0.15 per share. | ||||||||||||||||
Warrant agreements | 444,553 | ||||||||||||||||
Penny warrants were cancelled | 291,853 | ||||||||||||||||
Unexercised penny warrants | 75,525 | ||||||||||||||||
Beneficial conversion feature (in Dollars) | $ | $ 36,983,000 | ||||||||||||||||
Accretion of discount (in Dollars) | $ | $ 2,792,000 | $ 9,253,000 | |||||||||||||||
Paid-in-kind interest amount (in Dollars) | $ | $ 2,518,000 | $ 8,257,000 | |||||||||||||||
Common Stock [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Convertible common stock | 1,075,000 | ||||||||||||||||
Sale of shares | 4,515,000 | 4,515,000 | |||||||||||||||
Preferred Stock [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Remaining preferred shares | 5,375 | ||||||||||||||||
Warrant [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Aggregate shares of warrants | 365,186 | ||||||||||||||||
Exercise price per share (in Dollars per share) | $ / shares | $ 0.15 | ||||||||||||||||
Series C [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Percentage of decrease in exercise of warrants | 25% | ||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Conversion price (in Dollars per share) | $ / shares | $ 1.6 | ||||||||||||||||
Preferred shares | 519,000 | ||||||||||||||||
Warrant [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Warrant agreements | 445,604 | ||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Preferred stock, shares authorized | 21,500 | 21,500 | 21,500 | ||||||||||||||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 1,000 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred stock, shares issued | 16,125 | 16,125 | 16,125 | ||||||||||||||
Preferred stock, shares outstanding | |||||||||||||||||
Convertible preferred stock | 21,500 | ||||||||||||||||
Aggregate shares | 16,125 | ||||||||||||||||
Purchase price (in Dollars) | $ | $ 15,000,000 | ||||||||||||||||
Value of preferred stock converted into common stock (in Dollars) | $ | $ 14,781,000 | ||||||||||||||||
Preferred stock | 4,089,594 | ||||||||||||||||
Series B Warrants and Series D Warrants [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Warrant reduced percentage | 33.30% | ||||||||||||||||
Common Class B [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Cash paid (in Dollars) | $ | $ 1,344,000 | $ 1,344,000 | $ 1,344,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Share issued | 349,109 | ||||||||||||||||
Sale of securities description | The Company will be required to file, within 30 days of the date of such purchase agreement, a registration statement to register the resale of the shares of common stock issuable upon exercise of the warrants. In addition, the Company has agreed, subject to certain exceptions, not to issue or agree to issue any shares of the Company’s common stock or common stock equivalents for a period ending on the later of (i) 90 days after the transaction’s closing date and (ii) the date on which the resale registration statement is declared effective by the SEC. | ||||||||||||||||
Ribbon [Member] | Warrant [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Warrants issued | 291,853 | ||||||||||||||||
SPAC Opportunity Partners, LLC [Member] | Warrant [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Warrants issued | 66,666 | ||||||||||||||||
Director [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit), Related Warrants, Securities, Debentures and Guaranty (Details) [Line Items] | |||||||||||||||||
Warrants issued | 6,666 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Aug. 29, 2022 | Oct. 01, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 21, 2022 | Dec. 31, 2021 | |
Related Party Transactions (Details) [Line Items] | ||||||||
Related party business consulting services | $ 50 | |||||||
Consulting agreement | $ 900 | |||||||
Amount paid per month | $ 100 | |||||||
Selling, general and administrative expenses | $ 150 | $ 150 | $ 450 | |||||
Accounts payable and accrued expenses | 600 | 600 | $ 750 | |||||
Stock compensation expenses | 180 | |||||||
Fees per month | 25 | |||||||
Related party description | ●a reseller agreement between the parties was terminated ●the Company granted Ribbon certain non-exclusive perpetual rights to use certain intellectual property owned by the Company ●Ribbon paid the Company $2,500 in cash ●the 913,361 shares of the Company’s common stock previously owned by Ribbon were canceled ●certain warrants, previously owned by Ribbon, which were exercisable to purchase 291,853 shares of the Company’s common stock, were terminated and canceled ●certain agreements for rental of certain premises from Ribbon were amended to, among other things, reduce the portion of the premises used by the Company (and concurrently reduce the corresponding rent or other fees payable); and ●certain agreements for use of certain Ribbon software were amended to, among other things, amend the license fee structure from a bulked fixed pricing schedule to a variable rate pricing structure so as to reduce the fees payable by the Company. | |||||||
other income (expenses) | 1,708 | |||||||
Due to ribbon | 1,629 | 1,629 | 799 | |||||
Service fee | 25 | |||||||
Interest expense | $ 764 | |||||||
Accrued interest | 736 | |||||||
Prepaid Expenses and Other Current Assets [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Prepaid expenses and other current assets | $ 190 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Restricted stock units (in Shares) | 12,000 | |||||||
Agreement [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Selling, general and administrative expenses | $ 109 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of revenue and expenses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue earned from Ribbon | $ 48 | $ 137 | ||
Professional fees charged by Ribbon [Member] | ||||
Service fees charged by Ribbon: | ||||
Cost of revenue | 305 | 1,013 | ||
Research and development | 116 | 331 | ||
Selling, general and administrative expenses | 216 | 534 | 1,088 | 1,448 |
Total | 216 | 955 | 1,088 | 2,792 |
Rent and software purchased from Ribbon [Member] | ||||
Service fees charged by Ribbon: | ||||
Cost of revenue | 377 | 68 | 1,514 | 68 |
Selling, general and administrative expenses | 133 | 173 | 2,086 | 451 |
Total | $ 510 | $ 241 | $ 3,600 | $ 519 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue Recognition [Abstract] | ||
Contract liability | $ 25 | $ 82 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of revenue is disaggregated by geographies and by verticals - Revenue [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Geography | ||||
Domestic | $ 3,468 | $ 2,821 | $ 8,956 | $ 9,350 |
International | 1,270 | 1,327 | 3,600 | 3,266 |
Total revenues | 4,738 | 4,148 | 12,556 | 12,616 |
Revenues by Verticals (or Sector) | ||||
Finance | 16 | 231 | 34 | 1,640 |
Manufacturing and logistics | 3 | 8 | 18 | 25 |
Public sector | 365 | 347 | 1,006 | 1,022 |
Technology service providers | 4,325 | 3,504 | 11,402 | 9,831 |
Other | 29 | 58 | 96 | 98 |
Total revenues | $ 4,738 | $ 4,148 | $ 12,556 | $ 12,616 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) shares | |
Share-Based Compensation (Details) [Line Items] | ||
Shares remained available for issuance | 263,887 | 263,887 |
RSUs issued vesting, description | RSUs issued to non-directors are 50% time-based and 50% performance-based. Generally, the awards vest over 3 or 4 years. The time-based awards vest on each grant date anniversary, while the performance-based awards vests on December 31st of each year, if the market condition (stock price target) is met. If the market condition attached to the performance-based awards is not met in any year, the eligibility is delayed until the market condition is met, except that the market condition must be met by the second anniversary of the first target date, in the case of awards that vest over 3 years, and by the third anniversary of the first target date, for those awards that vest over 4 years. | |
Awards outstanding, description | Awards outstanding in the table above consist of 104,110 time-based awards and 37,670 performance-based awards and exclude 37,471 performance-based RSUs that have been awarded but deemed not granted as the performance targets have not yet been determined. | |
Stock compensation expense | $ | $ 180 | |
Share holders percentage | 5% | |
Equity Incentive Plan [Member] | ||
Share-Based Compensation (Details) [Line Items] | ||
Shares authorized for issuance | 666,666 | 666,666 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Schedule of RSU activity | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Schedule Of Rsu Activity Abstract | |
Number of RSUs, Outstanding Beginning | shares | 179,555 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 67.8 |
Number of RSUs, Granted | shares | 201,264 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 18 |
Number of RSUs, Vested and delivered | shares | (67,485) |
Weighted Average Grant Date Fair Value, Vested and delivered | $ / shares | $ 38.34 |
Number of RSUs, Vested, not delivered | shares | (6,666) |
Weighted Average Grant Date Fair Value, Vested, not delivered | $ / shares | $ 51.3 |
Number of RSUs, Forfeited | shares | (98,222) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 33.04 |
Number of RSUs, Cancelled | shares | (66,666) |
Weighted Average Grant Date Fair Value, Cancelled | $ / shares | $ 32.1 |
Number of RSUs, Unvested RSUs Ending | shares | 141,780 |
Weighted Average Grant Date Fair Value, Unvested RSUs Ending | $ / shares | $ 40.78 |
Share-Based Compensation (Det_3
Share-Based Compensation (Details) - Schedule of share-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation (Details) - Schedule of share-based compensation expense [Line Items] | ||||
Total expense | $ 319 | $ 2,951 | $ 1,300 | $ 6,752 |
Cost of revenue [Member] | ||||
Share-Based Compensation (Details) - Schedule of share-based compensation expense [Line Items] | ||||
Total expense | 39 | 104 | 146 | 291 |
Research and development [Member] | ||||
Share-Based Compensation (Details) - Schedule of share-based compensation expense [Line Items] | ||||
Total expense | (19) | 309 | 274 | 691 |
Selling, general and administrative expenses [Member] | ||||
Share-Based Compensation (Details) - Schedule of share-based compensation expense [Line Items] | ||||
Total expense | $ 299 | $ 2,538 | $ 880 | $ 5,770 |
Reconciliation of Net loss pe_3
Reconciliation of Net loss per Common Share (Details) - Schedule of basic and diluted net loss per common share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Basic And Diluted Net Loss Per Common Share Abstract | ||||
Loss from continuing operations, net of tax (in Dollars) | $ (25,547) | $ (20,144) | $ (31,824) | $ (56,024) |
(Loss) income from discontinued operations, net of tax (in Dollars) | (17,173) | 748 | (19,826) | |
Net loss (in Dollars) | $ (25,547) | $ (37,317) | $ (31,076) | $ (75,850) |
Weighted average shares outstanding, basic and diluted (in Shares) | 11,262,991 | 2,072,643 | 7,850,250 | 1,586,102 |
Basic and diluted net (loss) income per common share | ||||
Continuing operations | (2.27) | $ (9.72) | $ (4.05) | $ (35.32) |
Discontinued operations | (8.28) | 0.09 | (12.5) | |
Net loss per common share | $ (2.27) | $ (18) | $ (3.96) | $ (47.82) |
Reconciliation of Net loss pe_4
Reconciliation of Net loss per Common Share (Details) - Schedule of basic and diluted net loss per common share (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Basic And Diluted Net Loss Per Common Share Abstract | ||||
Weighted average shares outstanding diluted | 11,262,991 | 2,072,643 | 7,850,250 | 1,586,102 |
Diluted net (loss) income per common share (in Dollars per share) |
Reconciliation of Net loss pe_5
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 2,684,862 | 2,563,543 |
Monroe Warrants [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 687,587 | |
Public Warrants [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 1,035,000 | 1,035,000 |
2017 Private Placement [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 700,833 | 700,833 |
2017 EBC Warrants [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 45,000 | |
Penny Warrants [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 75,525 | 413,711 |
Shares underlying certain unit purchase options (issued in 2017) [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 99,000 | |
Unvested RSUs [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 179,251 | 242,833 |
Vested, not delivered RSUs [Member] | ||
Reconciliation of Net loss per Common Share (Details) - Schedule of diluted net loss per common share [Line Items] | ||
Diluted shares | 6,666 | 27,166 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (0.01%) | 0.03% | (0.04%) | (0.05%) |