Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 10, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Sysorex, Inc. | |
Entity Central Index Key | 0001737372 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 410,044 | |
Entity File Number | 000-55924 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 28 | |
Accounts receivable and other receivables, net | 645 | 2,069 |
Prepaid expenses and other current assets | 24 | 28 |
Total Current Assets | 669 | 2,125 |
Property and equipment, net | 6 | 10 |
Operating lease right-of-use asset, net | 187 | |
Intangible assets, net | 835 | 913 |
Other assets | 29 | 29 |
Total Assets | 1,726 | 3,077 |
Current Liabilities | ||
Accounts payable | 9,105 | 10,271 |
Accrued liabilities | 476 | 467 |
Operating lease obligation | 86 | |
Short-term debt, net of discount | 1,181 | 826 |
Deferred revenue | 171 | 35 |
Total Current Liabilities | 11,019 | 11,599 |
Long Term Liabilities | ||
Related party payable | 11,111 | 10,901 |
Payable to related party | 705 | 616 |
Operating lease obligation, noncurrent | 101 | |
Other liabilities | 10 | |
Total Liabilities | 22,936 | 23,126 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Common stock, par value $0.00001 per share, 500,000,000 shares authorized; 482,923 shares issued as of March 31, 2020 and December 31, 2019 and 410,044 shares and 407,544 shares outstanding as of March 31, 2020 and December 31, 2019, respectively | ||
Treasury stock, at cost, 75,379 shares at March 31, 2020, and December 31, 2019, respectively | ||
Additional paid-in-capital | (11,511) | (11,511) |
Accumulated deficit | (9,699) | (8,538) |
Total Stockholders' Deficit | (21,210) | (20,049) |
Total Liabilities and Stockholders' Deficit | $ 1,726 | $ 3,077 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 482,923 | 482,923 |
Common stock, shares outstanding | 410,044 | 407,544 |
Treasury stock, shares | 75,379 | 75,379 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Products | $ 1,152 | $ 232 |
Services | 1,114 | 34 |
Total Revenues | 2,266 | 266 |
Cost of Revenues | ||
Products | 1,127 | 144 |
Services | 868 | 25 |
Total Cost of Revenues | 1,995 | 169 |
Gross Profit | 271 | 97 |
Operating Expenses | ||
Sales and marketing | 270 | 286 |
General and administrative | 768 | 798 |
Amortization of intangibles | 78 | 751 |
Total Operating Expenses | 1,116 | 1,835 |
Loss from Operations | (845) | (1,738) |
Other Income (Expenses) | ||
Interest expense | (327) | (146) |
Other Income (expense) | 11 | |
Total Other Income (Expense) | (316) | (146) |
Net Loss | $ (1,161) | $ (1,884) |
Net Loss per share - basic and diluted | $ (2.84) | $ (6) |
Weighted Average Shares Outstanding - basic and diluted | 408,505 | 339,082 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ (11,539) | $ (3,123) | $ (14,662) | ||
Balance, shares at Dec. 31, 2018 | 416,482 | 81,250 | |||
Shares reissued from Treasury related to exercise of former parent warrants | |||||
Shares reissued from Treasury related to exercise of former parent warrants, shares | (5,871) | ||||
Net loss | (1,884) | (1,884) | |||
Balance at Mar. 31, 2019 | (11,539) | (5,007) | (16,546) | ||
Balance, shares at Mar. 31, 2019 | 416,482 | 75,379 | |||
Balance at Dec. 31, 2019 | (11,511) | (8,538) | (20,049) | ||
Balance, shares at Dec. 31, 2019 | 482,923 | 75,379 | |||
Shares issued for trademark | |||||
Shares issued for trademark, shares | 2,500 | ||||
Net loss | (1,161) | (1,161) | |||
Balance at Mar. 31, 2020 | $ (11,511) | $ (9,699) | $ (21,210) | ||
Balance, shares at Mar. 31, 2020 | 485,423 | 75,379 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (1,161) | $ (1,884) |
Adjustment to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 3 | 4 |
Amortization of intangibles | 78 | 751 |
Amortization of right-of-use assets | 31 | |
Amortization of debt discount | 74 | |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | 1,426 | 152 |
Prepaid assets and other current assets | 3 | 5 |
Other assets | (9) | |
Accounts payable | (1,166) | (3,622) |
Accrued liabilities | 8 | (12) |
Accrued issuable equity | (8) | (43) |
Deferred revenue | 136 | |
Total Adjustments | 585 | (2,774) |
Net Cash Used In Operating Activities | (576) | (4,658) |
Cash Flows From Financing Activities | ||
Related party advances | 298 | 4,822 |
Advances from (payments to) revolver line of credit | 138 | (96) |
Proceeds from short-term debt note | 319 | |
Repayments on short-term debt note | (207) | |
Net Cash Provided by Financing Activities | 548 | 4,726 |
Net (Decrease) Increase in Cash | (28) | 68 |
Cash - beginning of period | 28 | 6 |
Cash - end of period | 74 | |
Supplemental Disclosure of Cash Flow Information: | ||
Interest | 5 | |
Income taxes | ||
Non-cash Investing and Financing Activities: | ||
Non-cash financing activity Right of use asset obtained in exchange for lease liability | $ 187 |
Description of Business, the Sp
Description of Business, the Spin-Off and Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, the Spin-Off and Going Concern and Management's Plans | Note 1 — Description of Business, the Spin-Off and Going Concern and Management’s Plans Description of Business Sysorex, Inc., through its wholly-owned subsidiary, Sysorex Government Services, Inc., formerly known as (f/k/a) Inpixon Federal, Inc. (“SGS”), (unless otherwise stated or the context otherwise requires, the terms “SGS” “we,” “us,” “our” and the “Company” refer collectively to Sysorex, Inc. and SGS), provides information technology solutions primarily to the public sector. These solutions include cybersecurity, professional services, engineering support, IT consulting, enterprise level technology, networking, wireless, help desk, and custom IT solutions. The Company is headquartered in Virginia. Going Concern and Management’s Plans As of March 31, 2020, the Company had a working capital deficit of approximately $10.3 million. In addition, the Company has a stockholders’ deficit of approximately $21.2 million. For the three months ended March 31, 2020 and 2019, the Company incurred net losses of approximately $1.2 million and $1.9 million, respectively. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. The Company does not believe that its capital resources as of March 31, 2020, availability on the Payplant facility to finance purchase orders and invoices in an amount equal to 80% of the face value of purchase orders received, funds from financing from our related party note and other short-term borrowings (as defined in Notes 5 and 6 below), higher margin public sector contracts capture, reauthorization of key vendors and credit limitation improvements will be sufficient to fund planned operations during the year ending December 31, 2020. As a result, substantial doubt exists the Company will be able to support its obligations for the next twelve months from the issuance date of the financial statements. The Company may raise additional capital as needed, through the issuance of equity, equity-linked or debt securities. The Company’s condensed consolidated financial statements as of March 31, 2020 have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date the financial statements are issued. Management’s plans and assessment of the probability that such plans will mitigate and alleviate any substantial doubt about the Company’s ability to continue as a going concern, is dependent upon the ability to attain funding to secure additional resources to generate sufficient revenues and increased margin. The Company’s condensed consolidated financial statements as of March 31, 2020 do not include any adjustments that might result from the outcome of this uncertainty. Impact of COVID 19 The outbreak of the novel coronavirus, SARS-CoV-2, which causes coronavirus disease 2019 (COVID-19), has evolved into a global pandemic. COVID -19 has spread to many regions of the world, including the United States. In response to the pandemic, the Company has implemented a work from home policy, with all employees continuing their work outside of the Company’s office. The Company’s sales and services activities to our customers, predominately the Federal and Local Government, are causing disruption and curtailment of our product offering and services as many of the offices and field locations are now closed. The Company is maintaining its overall headcount but continues to identify potential reductions in cash flows for operating expenses and other purchases to the extent possible. On May 3, 2020, the Company received a loan of approximately $349,700 under the Payroll Protection Program as part of the Coronavirus Aid, Relief and Economic Security Act (see Note 9 – Subsequent Events). While the company expects some degree of an adverse impact on revenues in the second quarter of 2020 and possibly the third quarter of 2020, the Company will need to implement its plan as discussed above in Going Concern and Management’s Plans. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 2 — Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information, which are the accounting principles that are generally accepted in the United States of America. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of the Company's operations for the three-month period ended March 31, 2020 is not necessarily indicative of the results to be expected for the year ending December 31, 2020. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes for the years ended December 31, 2019 and 2018 included in the Annual Report on Form 10-K filed with SEC on March 31, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 — Summary of Significant Accounting Policies The condensed consolidated financial statements have been prepared using the accounting records of Sysorex and SGS. All material inter-company 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 revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of: ● the allowance for doubtful accounts; and ● the impairment of long-lived assets. Revenue Recognition The Company reports revenues under ASC 606, “Revenue from Contracts with Customers” and all the related amendments (Topic 606) The Company recognizes revenue after applying the following five steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract, including whether they are distinct within the context of the contract; 3) determination of the transaction price, including the constraint on variable consideration; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, performance obligations are satisfied. Hardware and Software Revenue Recognition The Company is a primary resale channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. The Company evaluates the following indicators amongst others when determining whether it is acting as a principal in the transaction and recording revenue on a gross basis: (i) the Company is primarily responsible for fulfilling the promise to provide the specified product or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If the terms of a transaction do not indicate the Company is acting as a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis. The Company recognizes revenue once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: (i) the Company has a right to payment for the product or service, (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product to the customer, (iv) the customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. The Company’s products can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company’s warehouse, (ii) via drop-shipment by the vendor or supplier or (iii) via electronic delivery of keys for software licenses. The Company’s shipping terms typically specify F.O.B. destination. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouse. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. The Company may provide integration of products from multiple vendors as a solution it sells to the customer. In this arrangement, the Company provides direct warranty to the customer with the Company’s own personnel as the customer requires warranty on the solution and not individual vendor products. This type of warranty is sold integral to the overall solution quoted to the customer. The Company considers these service-type warranties to be performance obligations of the principal from the underlying products that make up a solution and therefore is acting as a principal in the transaction and records revenue on a gross basis at the point of sale. License and Maintenance Services Revenue Recognition The Company provides a customized design and configuration solution for its customers and in this capacity resells hardware, software and other IT equipment license and maintenance services in exchange for fixed fees. The Company selects the vendors and sells the products and services, including maintenance services, that best fit the customer’s needs. For sales of maintenance services and warranties, the customer obtains control at the point in time that the services to be provided by a third-party vendor are purchased by the customer and therefore the Company’s performance obligation to provide the overall systems solution is satisfied at that time. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer-approved invoice. For resale of services, including maintenance services, warranties, and extended warranties, the Company is acting as an agent as the primary activity for those services are fulfilled by a third party. While the Company may facilitate and act as a first responder for these services, the third-party service providers perform the primary maintenance and warranty services for the customer. Therefore, the Company is not primarily responsible for performing these services and revenue is recorded on a net basis. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the three months ended March 31, 2020 and 2019, the Company did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies. Recent Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Emerging Growth Company Sysorex is an “emerging growth company” as defined in the JOBS Act. As such, Sysorex will be eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards, meaning that Sysorex, as an emerging growth company, can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Sysorex has elected to take advantage of this extended transition period, and therefore our financial statements may not be comparable to those of companies that comply with such new or revised accounting standards. Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the condensed consolidated financial statements. |
Credit Risk and Concentrations
Credit Risk and Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Credit Risk and Concentrations | Note 4 — Credit Risk and Concentrations Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. The following table sets forth the percentages of revenue derived by the Company from those customers that accounted for at least 10% of revenues during the three months ended March 31, 2020 and 2019 (in thousands of dollars): For the Three Months Ended For the Three Months Ended $ % $ % Customer A 1,121 49 % 322 90 % Customer B 576 25 % — — As of March 31, 2020, Customer A represented approximately 67% of total accounts receivable and Customer B represented 0% of total accounts receivable. For the three months ended March 31, 2020, purchases from two vendors represented approximately 43% and 36% of total purchases. Purchases from these vendors during the three months ended March 31, 2020 were $859 thousand and $724 thousand. For the three months ended March 31, 2019, purchases from three vendors represented approximately 84%, 68%, and 25% of total purchases. Purchases from these vendors during the three months ended March 31, 2019 were $143 thousand, $115 thousand, and $43 thousand. As of March 31, 2020, two vendors represented approximately 32% and 15% of total gross accounts payable. |
Short-Term Debt
Short-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term Debt | Note 5 — Short-Term Debt Short Term Debt as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands): As of As of December 31, 2020 2019 Short-Term Debt Chicago Venture Convertible Note payable (A) $ 658 $ 658 Future Receivables Agreement (B) 216 - Revolving Credit Facility (C) 307 168 Total Short-Term Debt $ 1,181 $ 826 (A) Chicago Venture Convertible Note Payable On December 31, 2018, the Company issued a $625,000 principal face amount convertible promissory note (the "Convertible Note") to an investor, which yielded net proceeds of $500,000 to the Company pursuant to a Securities Purchase Agreement, dated as of December 31, 2018, by and between the Company and the investor. The Convertible Note bears interest at the rate of 10% per year and is due and payable 10 months after the date of issuance. The Convertible Note carries an original issue discount of $105,000 and the Company agreed to pay $20,000 to the Lender to cover its transaction costs incurred with the purchase and sale of the Convertible Note. The agreement states that the Lender has the right to convert all or part of the outstanding balance into fully paid and non-assessable shares of common stock. The conversion formula is as follows: The number of shares will equal the amount of the outstanding note balance being converted divided by $0.05 per share. Since the value of the underlying equity on the commitment date was $0.0229 per share, which was less than the lender conversion price $0.05, the Company determined there was no beneficial conversion feature. The lender conversion price is subject to certain adjustment such as down-round features whereby the agreement notes that if the Company were to sell, issue or grant any common stock, option to purchase common stock, right to reprice, preferred shares convertible into common stock, or debt, warrants, options or other securities which are convertible, exercisable, or exchangeable for shares of common stock at a price per share less than the lender conversion price, then the lender conversion price shall be reduced to equal the new lower price, subject to a floor of $0.01 per share. When and if there is an adjustment under the down-round provision, the Company will analyze the accounting treatment of the adjustment. Redemptions may occur at any time after the 6-month anniversary of the date of issuance of the Convertible Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. Please see Note-9 Subsequent Events, regarding extension of the promissory note maturity date to June 30, 2020. (B Future Receivables Agreement On January 21, 2020, SGS and GCF Resources LLC ("GCF") entered into a Future Receivables Agreement pursuant to which GCF agreed to purchase receivables from SGS with a value of $497,000 for the sum of $350,000. The terms of the agreement call for weekly instalments of $20,710, until paid in full. The balance as of March 31, 2020 is $216,000. See Note 9 – Subsequent events regarding payoff of GCF loan. (C) Revolving Credit Facility On August 31, 2018, the Company entered in an agreement with Payplant Alternatives Funds LLC ("Payplant"), pursuant to which Payplant may purchase from the Company, in Payplant's sole and absolute discretion, Eligible Receivables, as that term is defined in the agreement, in exchange for cash advances, subject to the terms and conditions in the agreement. On September 21, 2018, the Company entered into the Payplant Loan and Security Agreement (the "Loan Agreement") with Payplant LLC as agent for Payplant. Pursuant to the Loan Agreement and the terms set forth in the form of promissory note attached as Exhibit A to the Loan Agreement, (the "Note"), Payplant, in its sole and absolute discretion, may loan money to the Borrowers on the basis of purchase orders or invoices issued by the Borrowers to customers for goods and services provided. The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30-day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. In no event will interest, when combined with all fees that may be characterized as interest, exceed the Maximum Rate, as defined in the Loan Agreement. All computations of interest will be made on the basis of a 360-day year. The Borrowers will have the right to prepay any loan upon the payment of a premium of at least 30 days of interest. As security for the repayment of any loans and the performance of the Borrowers' Obligations, as defined in the Loan Agreement, the Borrowers granted to Payplant a security interest in the Collateral, as defined in the Loan Agreement. As of March 31, 2020 and December 31, 2019, the principal amount outstanding under the Loan Agreement was $307,000 and $168,000, respectively, and is included in Short Term Debt in the condensed consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 — Related Party Transactions On December 31, 2018, the Company entered into a note purchase agreement with Inpixon (the "Note Purchase Agreement") pursuant to which Inpixon, the Company's former parent, agreed to purchase from the Company at a purchase price equal to the Loan Amount (as defined below), a secured promissory note (the "Related Party Note") for up to an aggregate principal amount of 3,000,000 (the "Principal Amount"), including any amounts advanced through the date of the Related Party Note (the "Prior Advances"), to be borrowed and disbursed in increments (such borrowed amount, together with the Prior Advances, collectively referred to as the "Loan Amount"), with interest to accrue at a rate of ten percent (10%) per annum on all such Loan Amounts, beginning as of the date of disbursement with respect to any portion of such Loan Amount. In addition, the Company agreed to pay $20,000 to Inpixon to cover Inpixon' legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Related Party Note (the "Transaction Expense Amount"), all of which amount is included in the Principal Amount. The initial Loan Amount, therefore, includes any amounts disbursed to the Company and the Transaction Expense Amount. The Company may borrow under the Related Party Note, as needed, for a total outstanding balance, exclusive of any unpaid accrued interest, not to exceed the Principal Amount at any one time. All sums advanced by Inpixon to the maturity date pursuant to the terms of the Note Purchase Agreement will become part of the aggregate Loan Amount underlying the Related Party Note. All outstanding principal amounts and accrued unpaid interest owing under the Related Party Note shall become immediately due and payable on the earlier to occur of (i) December 31, 2020 (the "Maturity Date"), (ii) at such date when declared due and payable by Inpixon upon the occurrence of an Event of Default (as defined in the Related Party Note), or (iii) at any such earlier date as set forth in the Related Party Note. All accrued unpaid interest shall be payable in cash. Pursuant to the terms of the Related Party Note, the Company granted Inpixon, subject to any and all Payplant Liens (as defined in the Related Party Note) and Permitted Liens (as defined in the Related Party Note), a continuing first priority security interest in all assets of the Company whether owned as of the date of the Related Party Note or subsequently acquired, including all proceeds therefrom (collectively, the "Collateral") to secure the payment of the Related Party Note and all other loans and advances (including all renewals, modifications and extensions thereof) and all obligations of any and every kind and nature of the Company to Inpixon, whether arising prior to, under or after the Related Party Note, however incurred or evidenced, plus all interest, reasonable costs, reasonable expenses and reasonable attorneys' fees, which may be made or incurred by Inpixon in the disbursement, administration, and collection of such amounts, and in the protection, maintenance, and liquidation of the Collateral. On February 4, 2019, the Related Party Note was amended to increase the maximum principal amount that may be outstanding at any time under the Related Party Note from $3,000,000 to $5,000,000. On April 15, 2019, the Related Party Note was amended to increase the maximum principal amount that may be outstanding at any time under the Related Party Note from $5,000,000 to $8,000,000. On May 22, 2019, the Related Party Note was amended to increase the maximum principal amount that may be outstanding at any time under the Related Party Note from $8,000,000 to $10,000,000. On March 1, 2020, the Related Party Note was amended to extend the maturity date from December 31, 2020 to December 31, 2022, to increase the default interest rate from 18% to 21% or the maximum rate allowable by law and to require a cash payment by the Company to Inpixon against the loan amount in an amount equal to no less than 6% of the aggregate gross proceeds raised following the completion of any financing, or series of related financings, in which the Company raises aggregate gross proceeds of at least $5 million. The proceeds received, interest and legal costs accrued in accordance with the Related Party Note as of March 31, 2020 is $11,110,438. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 — Commitments and Contingencies Litigation Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. There are no pending legal proceedings to which the Company is a party to. |
Stockholders' Deficiency
Stockholders' Deficiency | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficiency | Note 8 — Stockholders’ Deficiency Treasury stock As part of the Spin-off (as defined below), and in connection with the initial distribution of its common stock, the Company has 117,917 shares of common stock reserved for issuance in treasury (a) for the holders of certain Parent warrants who will be entitled to receive shares of the Company’s common stock if the warrants are exercised, and (b) for the holders of Parent securities that were subject to beneficial ownership limitations in connection with the distribution and for future issuances. Under the terms of a Trademark License Agreement, the Company issued 2,500 shares of common stock. The fair value of the shares on the date of issuance was $300. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 — Subsequent Events On April 23, 2020, the Company entered into a note extension (the "Extension") with Chicago Venture Partners, L.P. ("CVP"), pursuant to which the maturity date of that certain Convertible Promissory Note, issued by the Company to CVP on December 31, 2018 (the "Note"), was extended to June 30, 2020. On April 27, 2020, the Company paid off its GCF loan balance. See Note 6 (B Future Receivables Agreement. On May 7, 2020, Sysorex, Inc. (the "Company and its wholly owned subsidiary, Sysorex Government Services, Inc. formerly known as Inpixon Federal" ) was granted a loan (the "Loan") from Wells Fargo, N.A. in the principal amount of $349,693, pursuant to the Paycheck Protection Program (the "PPP") under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated May 3, 2020 issued by the Company (the "Note"), matures on May 3, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 1, 2020. The Note may be prepaid by the Company at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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 revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company's significant estimates consist of: ● the allowance for doubtful accounts; and ● the impairment of long-lived assets. |
Revenue Recognition | Revenue Recognition The Company reports revenues under ASC 606, “Revenue from Contracts with Customers” and all the related amendments (Topic 606) The Company recognizes revenue after applying the following five steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract, including whether they are distinct within the context of the contract; 3) determination of the transaction price, including the constraint on variable consideration; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, performance obligations are satisfied. Hardware and Software Revenue Recognition The Company is a primary resale channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. The Company evaluates the following indicators amongst others when determining whether it is acting as a principal in the transaction and recording revenue on a gross basis: (i) the Company is primarily responsible for fulfilling the promise to provide the specified product or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If the terms of a transaction do not indicate the Company is acting as a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis. The Company recognizes revenue once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: (i) the Company has a right to payment for the product or service, (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product to the customer, (iv) the customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. The Company’s products can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company’s warehouse, (ii) via drop-shipment by the vendor or supplier or (iii) via electronic delivery of keys for software licenses. The Company’s shipping terms typically specify F.O.B. destination. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouse. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. The Company may provide integration of products from multiple vendors as a solution it sells to the customer. In this arrangement, the Company provides direct warranty to the customer with the Company’s own personnel as the customer requires warranty on the solution and not individual vendor products. This type of warranty is sold integral to the overall solution quoted to the customer. The Company considers these service-type warranties to be performance obligations of the principal from the underlying products that make up a solution and therefore is acting as a principal in the transaction and records revenue on a gross basis at the point of sale. License and Maintenance Services Revenue Recognition The Company provides a customized design and configuration solution for its customers and in this capacity resells hardware, software and other IT equipment license and maintenance services in exchange for fixed fees. The Company selects the vendors and sells the products and services, including maintenance services, that best fit the customer’s needs. For sales of maintenance services and warranties, the customer obtains control at the point in time that the services to be provided by a third-party vendor are purchased by the customer and therefore the Company’s performance obligation to provide the overall systems solution is satisfied at that time. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer-approved invoice. For resale of services, including maintenance services, warranties, and extended warranties, the Company is acting as an agent as the primary activity for those services are fulfilled by a third party. While the Company may facilitate and act as a first responder for these services, the third-party service providers perform the primary maintenance and warranty services for the customer. Therefore, the Company is not primarily responsible for performing these services and revenue is recorded on a net basis. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the three months ended March 31, 2020 and 2019, the Company did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies. |
Recent Accounting Standards | Recent Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Emerging Growth Company | Emerging Growth Company Sysorex is an “emerging growth company” as defined in the JOBS Act. As such, Sysorex will be eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards, meaning that Sysorex, as an emerging growth company, can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Sysorex has elected to take advantage of this extended transition period, and therefore our financial statements may not be comparable to those of companies that comply with such new or revised accounting standards. |
Subsequent Events | Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the condensed consolidated financial statements. |
Credit Risk and Concentrations
Credit Risk and Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of risk percentage of revenue from customers | For the Three Months Ended For the Three Months Ended $ % $ % Customer A 1,121 49 % 322 90 % Customer B 576 25 % — — |
Short-Term Debt (Tables)
Short-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short term debt | As of As of December 31, 2020 2019 Short-Term Debt Chicago Venture Convertible Note payable (A) $ 658 $ 658 Future Receivables Agreement (B) 216 - Revolving Credit Facility (C) 307 168 Total Short-Term Debt $ 1,181 $ 826 (A) Chicago Venture Convertible Note Payable On December 31, 2018, the Company issued a $625,000 principal face amount convertible promissory note (the "Convertible Note") to an investor, which yielded net proceeds of $500,000 to the Company pursuant to a Securities Purchase Agreement, dated as of December 31, 2018, by and between the Company and the investor. The Convertible Note bears interest at the rate of 10% per year and is due and payable 10 months after the date of issuance. The Convertible Note carries an original issue discount of $105,000 and the Company agreed to pay $20,000 to the Lender to cover its transaction costs incurred with the purchase and sale of the Convertible Note. The agreement states that the Lender has the right to convert all or part of the outstanding balance into fully paid and non-assessable shares of common stock. The conversion formula is as follows: The number of shares will equal the amount of the outstanding note balance being converted divided by $0.05 per share. Since the value of the underlying equity on the commitment date was $0.0229 per share, which was less than the lender conversion price $0.05, the Company determined there was no beneficial conversion feature. The lender conversion price is subject to certain adjustment such as down-round features whereby the agreement notes that if the Company were to sell, issue or grant any common stock, option to purchase common stock, right to reprice, preferred shares convertible into common stock, or debt, warrants, options or other securities which are convertible, exercisable, or exchangeable for shares of common stock at a price per share less than the lender conversion price, then the lender conversion price shall be reduced to equal the new lower price, subject to a floor of $0.01 per share. When and if there is an adjustment under the down-round provision, the Company will analyze the accounting treatment of the adjustment. Redemptions may occur at any time after the 6-month anniversary of the date of issuance of the Convertible Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. Please see Note-9 Subsequent Events, regarding extension of the promissory note maturity date to June 30, 2020. (B Future Receivables Agreement On January 21, 2020, SGS and GCF Resources LLC ("GCF") entered into a Future Receivables Agreement pursuant to which GCF agreed to purchase receivables from SGS with a value of $497,000 for the sum of $350,000. The terms of the agreement call for weekly instalments of $20,710, until paid in full. The balance as of March 31, 2020 is $216,000. See Note 9 – Subsequent events regarding payoff of GCF loan. (C) Revolving Credit Facility On August 31, 2018, the Company entered in an agreement with Payplant Alternatives Funds LLC ("Payplant"), pursuant to which Payplant may purchase from the Company, in Payplant's sole and absolute discretion, Eligible Receivables, as that term is defined in the agreement, in exchange for cash advances, subject to the terms and conditions in the agreement. On September 21, 2018, the Company entered into the Payplant Loan and Security Agreement (the "Loan Agreement") with Payplant LLC as agent for Payplant. Pursuant to the Loan Agreement and the terms set forth in the form of promissory note attached as Exhibit A to the Loan Agreement, (the "Note"), Payplant, in its sole and absolute discretion, may loan money to the Borrowers on the basis of purchase orders or invoices issued by the Borrowers to customers for goods and services provided. The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30-day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. In no event will interest, when combined with all fees that may be characterized as interest, exceed the Maximum Rate, as defined in the Loan Agreement. All computations of interest will be made on the basis of a 360-day year. The Borrowers will have the right to prepay any loan upon the payment of a premium of at least 30 days of interest. As security for the repayment of any loans and the performance of the Borrowers' Obligations, as defined in the Loan Agreement, the Borrowers granted to Payplant a security interest in the Collateral, as defined in the Loan Agreement. As of March 31, 2020 and December 31, 2019, the principal amount outstanding under the Loan Agreement was $307,000 and $168,000, respectively, and is included in Short Term Debt in the condensed consolidated financial statements. |
Description of Business, the _2
Description of Business, the Spin-Off and Going Concern and Management's Plans (Details) - USD ($) $ in Thousands | May 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Description of Business, the Spin-Off and Going Concern and Management's Plans (Textual) | |||||
Working capital deficit | $ 10,300 | ||||
Stockholders' deficit | (21,210) | $ (16,546) | $ (20,049) | $ (14,662) | |
Incurred net losses | $ (1,161) | $ (1,884) | |||
Percentage of face value of purchase orders received | 80.00% | ||||
Subsequent Event [Member] | |||||
Description of Business, the Spin-Off and Going Concern and Management's Plans (Textual) | |||||
Amount received a loan | $ 349,700 |
Credit Risk and Concentration_2
Credit Risk and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Concentration Risk [Line Items] | ||
Net revenues | $ 2,266 | $ 266 |
Concentration risk, percentage | 10.00% | 10.00% |
Customer Concentration Risk [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Net revenues | $ 1,121 | $ 322 |
Concentration risk, percentage | 49.00% | 90.00% |
Customer Concentration Risk [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Net revenues | $ 576 | |
Concentration risk, percentage | 25.00% |
Credit Risk and Concentration_3
Credit Risk and Concentrations (Details Textual) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)Vendor | Mar. 31, 2019USD ($)Vendor | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | 10.00% |
Accounts Receivable [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 67.00% | |
Accounts Receivable [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 0.00% | |
Total Purchase [Member] | Vendor One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 43.00% | 84.00% |
Purchases from vendors | $ | $ 859 | $ 143 |
Number of vendors | Vendor | 2 | 3 |
Total Purchase [Member] | Vendor Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 36.00% | 68.00% |
Purchases from vendors | $ | $ 724 | $ 115 |
Number of vendors | Vendor | 2 | 3 |
Total Purchase [Member] | Vendor Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.00% | |
Purchases from vendors | $ | $ 43 | |
Number of vendors | Vendor | 3 | |
Accounts Payable [Member] | Vendor One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 32.00% | |
Number of vendors | 2 | 3 |
Accounts Payable [Member] | Vendor Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.00% | |
Number of vendors | 2 | 3 |
Accounts Payable [Member] | Vendor Three [Member] | ||
Concentration Risk [Line Items] | ||
Number of vendors | 3 |
Short-Term Debt (Details)
Short-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Chicago Venture Convertible Note payable | [1] | $ 658 | $ 658 |
Future Receivables Agreement | [2] | 216 | |
Revolving Credit Facility | [3] | 307 | 168 |
Total Short-Term Debt | $ 1,181 | $ 826 | |
[1] | Chicago Venture Convertible Note Payable On December 31, 2018, the Company issued a $625,000 principal face amount convertible promissory note (the "Convertible Note") to an investor, which yielded net proceeds of $500,000 to the Company pursuant to a Securities Purchase Agreement, dated as of December 31, 2018, by and between the Company and the investor. The Convertible Note bears interest at the rate of 10% per year and is due and payable 10 months after the date of issuance. The Convertible Note carries an original issue discount of $105,000 and the Company agrees to pay $20,000 to the Lender to cover its transaction costs incurred with the purchase and sale of the Convertible Note. The agreement states that the Lender has the right to convert all or part of the outstanding balance into fully paid and non-assessable common stock. The conversion formula is as follows: The number of shares will equal the amount of the outstanding note balance being converted divided by $0.05 per share. The Company determined since the value of the underlying equity on the commitment date was $0.0229 per share, was less than the Lender Conversion Price $0.05, the Company determined there was no beneficial conversion feature. The Lender Conversion Price is subject to certain adjustment such as down-round features whereby the agreement notes that if the Company were to sell, issue or grant any common stock, option to purchase common stock, right to reprice, preferred shares convertible into common stock, or debt, warrants, options or other securities which are convertible, exercisable, or exchangeable for shares of common stock at a price per share less than the Lender Conversion Price, then the Lender Conversion Price shall be reduced to equal the new lower price, subject to a floor of $0.01 per share. When and if there is an adjustment under the down-round provision, the Company will analyze the accounting treatment of the adjustment. Redemption Redemptions may occur at any time after the 6-month anniversary of the date of issuance of the Convertible Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. On July 5, 2019, the Company issued 22,857 shares of common stock for the settlement of approximately $20,000 of short-term debt. On October 15, 2019, the Company and an accredited investor (the "Lender") entered into a waiver agreement (the "Waiver Agreement") in connection with the Lender's delivery of a redemption notice for $7,600 (the "Redemption Amount") in accordance with that certain Securities Purchase Agreement, dated as of December 31, 2018, and that certain Convertible Promissory Note issued to the Lender by the Company on December 31, 2018 (the "Note"). Pursuant to the Waiver Agreement, the Lender agreed to waive certain Equity Conditions Failures (as defined in the Note) in order to receive shares of common stock of the Company instead of cash to satisfy the Redemption Amount. In addition, the Company and the Lender agreed to issue such shares below the minimum redemption conversion price of $1.00 at a modified redemption conversion price equal to $0.210140, which is equal to 70% multiplied by the lowest closing bid price during the twenty (20) trading days immediately preceding this redemption. Accordingly, the Company issued the Lender 36,166 shares of common stock to satisfy the Redemption Amount. Short-Term Note Extension On December 31, 2019, Chicago Venture Partners, LP agreed to extend the previously agreed to pursuant to the terms of the Convertible Promissory Note dated as of December 31, 2018 whereby Chicago Venture Partners, LP will not be entitled to redeem all or any portion of the principal amount of the original December 31, 2018 Note until March 31, 2020, and the maturity date of the Original Note was extended to March 31, 2020. | ||
[2] | Future Receivables Agreement On January 21, 2020, SGS and GCF Resources LLC ("GCF") entered into a Future Receivables Agreement pursuant to which GCF agreed to purchase receivables from SGS with a value of $497,000 for the sum of $350,000. The terms of the agreement call for weekly instalments of $20, 710, until paid in full. The balance as of March 31, 2020 is $216,000. | ||
[3] | Revolving Credit Facility On August 31, 2018, the Company entered in an agreement with Payplant Alternatives Funds LLC ("Payplant"), pursuant to which Payplant may purchase from the Company, in Payplant's sole and absolute discretion, Eligible Receivables, as that term is defined in the agreement, in exchange for cash advances, subject to the terms and conditions in the agreement.On September 21, 2018, the Company entered into the Payplant Loan and Security Agreement (the "Loan Agreement") with Payplant LLC as agent for Payplant. Pursuant to the Loan Agreement and the terms set forth in the form of promissory note attached as Exhibit A to the Loan Agreement, (the "Note"), Payplant, in its sole and absolute discretion, may loan money to the Borrowers on the basis of purchase orders or invoices issued by the Borrowers to customers for goods and services provided. The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30-day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. In no event will interest, when combined with all fees that may be characterized as interest, exceed the Maximum Rate, as defined in the Loan Agreement. All computations of interest will be made on the basis of a 360-day year. The Borrowers will have the right to prepay any loan upon the payment of a premium of at least 30 days of interest. As security for the repayment of any loans and the performance of the Borrowers' Obligations, as defined in the Loan Agreement, the Borrowers granted to Payplant a security interest in the Collateral, as defined in the Loan Agreement. As of March 31, 2020 and December 31, 2019, the principal amount outstanding under the Loan Agreement was $307,000 and $168,000, respectively, and is included in Short Term Debt in the condensed consolidated financial statements. |
Short-Term Debt (Details Textua
Short-Term Debt (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | Jan. 21, 2020 | Sep. 21, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Description of loan agreement percentage | The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30-day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. | ||||
Short-term debt | $ 1,181 | $ 826 | |||
Future receivables agreement, description | A Future Receivables Agreement pursuant to which GCF agreed to purchase receivables from SGS with a value of $497,000 for the sum of $350,000. The terms of the agreement call for weekly instalments of $20,710, until paid in full. The balance as of March 31, 2020 is $216,000. | ||||
Loan Agreement [Member] | |||||
Principal face amount | $ 307 | ||||
Chicago Venture Convertible Note Payable [Member] | |||||
Principal face amount | $ 625 | ||||
Net proceeds | $ 500 | ||||
Convertible note bears interest | 10.00% | ||||
Original issue discount | $ 105 | ||||
Cost incurred purchase and sale of convertible note | $ 20 | ||||
Outstanding note balance being converted divided per share | $ 0.05 | ||||
Equity on commitment date per share | 0.0229 | ||||
Conversion price per share | 0.05 | ||||
Lender conversion price subject to floor per share | $ 0.01 |
Related Party Transactions (Det
Related Party Transactions (Details) - Related Party Note [Member] - USD ($) $ in Thousands | Feb. 04, 2019 | Mar. 01, 2020 | May 22, 2019 | Apr. 15, 2019 | Dec. 31, 2018 | Mar. 31, 2020 |
Related Party Transactions (Textual) | ||||||
Aggregate principal amount | $ 3,000 | |||||
Related party note bears interest rate | 10.00% | 6.00% | ||||
Related party note maturity date | Dec. 31, 2020 | |||||
Proceeds received in accordance with the agreement | $ 11,110,438 | |||||
Transaction expense amount | $ 20 | |||||
Amended to increase maximum principal amount | $ 5,000 | |||||
Minimum [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Related party note bears interest rate | 18.00% | |||||
Related party note maturity date | Dec. 31, 2020 | |||||
Amended to increase maximum principal amount | $ 3,000 | $ 8,000 | $ 5,000 | |||
Maximum [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Related party note bears interest rate | 21.00% | |||||
Related party note maturity date | Dec. 31, 2022 | |||||
Amended to increase maximum principal amount | $ 5,000 | $ 10,000 | $ 8,000 |
Stockholders' Deficiency (Detai
Stockholders' Deficiency (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)shares | |
Trademark License Agreement [Member] | |
Fair value | $ | $ 300 |
Common stock of shares | 2,500 |
Treasury Stock [Member] | |
Common stock shares from treasury | 117,917 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ in Thousands | May 03, 2020 | May 07, 2020 |
Subsequent Events (Textual) | ||
Principal amount | $ 349,693 | |
Bears interest rate | 1.00% | |
Maturity, description | The Loan, which was in the form of a Note dated May 3, 2020 issued by the Company (the “Note”), matures on May 3, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 1, 2020. |