Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 25, 2020 | Jun. 30, 2019 | |
Document and Entity Information | |||
Entity Registrant Name | OMNIQ Corp. | ||
Entity Central Index Key | 0000278165 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,800 | ||
Entity Common Stock, Shares Outstanding | 4,024,837 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,615 | $ 378 |
Accounts receivable, net | 6,694 | 12,262 |
Inventory | 1,889 | 1,803 |
Prepaid expenses | 362 | 169 |
Other current assets | 65 | 78 |
Total current assets | 10,625 | 14,690 |
Property and equipment, net of accumulated depreciation of $2,195 and $2,037, respectively | 463 | 389 |
Goodwill | 13,921 | 13,921 |
Trade name, net of accumulated amortization of $2,932 and $2,585, respectively | 1,458 | 1,805 |
Customer relationships, net of accumulated amortization of $6,578 and $5,076, respectively | 6,012 | 7,514 |
Other intangibles, net of accumulated amortization of $185 and $33, respectively | 1,138 | 1,267 |
Cash, restricted | 533 | 532 |
ROU asset | 131 | |
Other assets | 172 | 30 |
Total assets | 34,453 | 40,148 |
Current liabilities | ||
Accounts payable and accrued liabilities | 18,694 | 17,484 |
Line of credit | 1,365 | 4,534 |
Accrued payroll and sales tax | 1,556 | 2,173 |
Notes payable, related parties - current portion | 1,025 | 1,891 |
Notes payable - current portion | 6,497 | 8,823 |
Lease liability - current portion | 54 | |
Other current liabilities | 1,599 | 265 |
Total current liabilities | 30,790 | 35,170 |
Long term liabilities | ||
Notes payable, related party, less current portion | 1,172 | 1,912 |
Accrued interest and accrued liabilities, related party | 76 | 33 |
Notes payable, less current portion | 143 | 130 |
Lease liability | 80 | |
Other long term liabilities | 384 | 610 |
Total liabilities | 32,645 | 37,855 |
Stockholders' equity | ||
Common stock; $0.001 par value; 200,000,000 shares authorized; 3,960,405 and 3,596,585 shares issued and outstanding, respectively. | 4 | 4 |
Common stock; $0.001 par value; 554,233 shares to be received | (2,616) | |
Common stock to be repurchased by the Company | (230) | |
Additional paid-in capital | 46,861 | 44,882 |
Accumulated (deficit) | (45,063) | (39,753) |
Accumulated other comprehensive loss | 1 | 1 |
Total stockholders' equity | 1,808 | 2,293 |
Total liabilities and stockholders' equity | 34,453 | 40,148 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | ||
Series B Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | ||
Series C Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | $ 5 | $ 5 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated depreciation of fixed assets | $ 2,195 | $ 2,037 |
Accumulated amortization | $ (9,695) | $ (7,694) |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 3,960,405 | 3,596,585 |
Common stock, shares outstanding | 3,960,405 | 3,596,585 |
Common stock, shares to be received | 554,233 | 554,233 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares designated | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares designated | 1 | 1 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares designated | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 4,828,530 | 4,828,530 |
Preferred stock, shares outstanding | 4,828,530 | 4,828,530 |
Trade Names [Member] | ||
Accumulated amortization | $ 2,932 | $ 2,585 |
Customer Relationships [Member] | ||
Accumulated amortization | 6,578 | 5,076 |
Other Intangible Assets [Member] | ||
Accumulated amortization | $ 185 | $ 33 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||
Total Revenues, net | $ 57,199 | $ 56,202 |
Cost of goods sold | ||
Cost of goods sold | 43,165 | 43,140 |
Gross profit | 14,034 | 13,062 |
Operating expenses | ||
General and administrative | 2,674 | 2,472 |
Salary and employee benefits | 10,079 | 9,917 |
Depreciation and amortization | 2,154 | 1,841 |
Professional fees | 1,991 | 1,856 |
Total operating expenses | 16,898 | 16,086 |
Loss from operations | (2,864) | (3,024) |
Other income (expenses): | ||
Interest expense | (2,555) | (1,570) |
Other (expenses) income | (23) | (1,133) |
Total other expense | (2,578) | (2,703) |
Net loss before income taxes | (5,442) | (5,727) |
(Provision) benefit for Income Taxes | ||
Current | (14) | (47) |
Deferred | 552 | |
Total income tax benefit (provision) | (14) | 505 |
Net loss from continuing operations | (5,456) | (5,222) |
Less: Preferred stock - series C dividend | (146) | 189 |
Net loss attributable to the common stockholders | (5,310) | (5,411) |
Foreign currency translation adjustment | 1 | |
Other comprehensive income (loss) | $ (5,310) | $ (5,410) |
Net loss per share - basic | $ (1.37) | $ (2.18) |
Net loss per share - diluted | $ (1.37) | $ (2.18) |
Weighted average number of common shares outstanding - basic and diluted | 3,889,478 | 2,481,530 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Shares Repurchased [Member] | Accumulated Deficit [Member] | Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 5 | $ 2 | $ 34,530 | $ (230) | $ (35,555) | $ (1,248) | |
Beginning balance, shares at Dec. 31, 2017 | 4,829,000 | 1,841,000 | |||||
ASC 606 | 1,213 | 1,213 | |||||
Board Issuances | 119 | 119 | |||||
Board Issuances, shares | 50,000 | ||||||
Dividend on Class C Shares | (189) | (189) | |||||
ESPP Stock Issuance | 11 | 11 | |||||
ESPP Stock Issuance, shares | 4,000 | ||||||
Stock-based compensation - options, warrants, issuances | 1,818 | 1,818 | |||||
Stock-based compensation - options, warrants, issuances, shares | |||||||
Stock Based Compensation | 395 | 395 | |||||
Stock Based Compensation, shares | 141,000 | ||||||
Debt Settlements | $ 1 | 2,666 | 2,667 | ||||
Debt Settlements, shares | 430,000 | ||||||
Shares issued for acquisition of HTS | $ 1 | 5,298 | 5,299 | ||||
Shares issued for acquisition of HTS, shares | 1,123,000 | ||||||
Shares to be received | (2,616) | (2,616) | |||||
Shares to be received, shares | |||||||
Other | 45 | 45 | |||||
Other, shares | 8,000 | ||||||
Accumulated other Comprehensive Income (Loss) | 1 | 1 | |||||
Net (loss) income | (5,222) | (5,222) | |||||
Ending balance at Dec. 31, 2018 | $ 5 | $ 4 | 42,266 | (230) | (39,753) | 1 | 2,293 |
Ending balance, shares at Dec. 31, 2018 | 4,829,000 | 3,597,000 | |||||
Dividend on Class C Shares | 146 | 146 | |||||
ESPP Stock Issuance | 1 | 1 | |||||
ESPP Stock Issuance, shares | |||||||
Stock-based compensation - options, warrants, issuances | 1,267 | 1,267 | |||||
Stock-based compensation - options, warrants, issuances, shares | 78,000 | ||||||
Stock and warrant issuances, net of issuance costs | $ 1 | 3,406 | 3,407 | ||||
Stock and warrant issuances, net of issuance costs, shares | 833,000 | ||||||
Purchase price adjustment - shares to be received | $ (1) | 1 | |||||
Purchase price adjustment - shares to be received, shares | (555,000) | ||||||
Stock redemption | (230) | 230 | |||||
Stock redemption, shares | (25,000) | ||||||
Conversion of debt | 150 | 150 | |||||
Conversion of debt, shares | 32,000 | ||||||
Net (loss) income | (5,456) | (5,456) | |||||
Ending balance at Dec. 31, 2019 | $ 5 | $ 4 | $ 46,861 | $ (45,063) | $ 1 | $ 1,808 | |
Ending balance, shares at Dec. 31, 2019 | 4,829,000 | 3,960,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operations | ||
Net loss | $ (5,456) | $ (5,222) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Change in deferred tax allowance | (552) | |
Stock-based compensation | 1,267 | 2,387 |
Excess fair value of common stock issued for debt conversion | 1,264 | |
Depreciation and amortization | 2,154 | 1,841 |
Amortization of ROU asset | 93 | |
Write-off of other assets | (36) | |
Other | (10) | |
Amortization of debt discount | 59 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,568 | (5,853) |
Prepaid expenses | (271) | 322 |
Inventory | (178) | (429) |
Other assets | (11) | 49 |
Accounts payable and accrued liabilities | 2,011 | 8,114 |
Accrued interest and accrued liabilities, related party | 43 | 32 |
Accrued payroll and sales taxes payable | (617) | 642 |
Lease liability | (89) | |
Other liabilities | (259) | 88 |
Net cash provided by operating activities | 4,255 | 2,696 |
Cash flows from investing activities | ||
Restricted cash | 153 | |
Purchase of property and equipment | (134) | (29) |
Cash paid for acquisition net of cash acquired | (23) | |
Cash from sale of assets | 42 | |
Other assets | (117) | 8 |
Net cash provided by (used in) investing activities | (251) | 151 |
Cash flows from financing activities | ||
Proceeds from ESPP stock issuance | 1 | |
Proceeds from sale of common stock | 3,770 | 11 |
Payments on notes/loans payable | (3,369) | (3,819) |
Proceeds from the issuance of notes/loans payable | 487 | |
Proceeds from (payments on) line of credit | (3,169) | 866 |
Due to Owner | (100) | |
Net cash used in financing activities | (2,767) | (2,555) |
Net increase (decrease) in cash | 1,237 | 292 |
Foreign currency translation adjustment | 61 | |
Cash, beginning of year | 378 | 25 |
Cash, end of year | 1,615 | 378 |
Net increase (decrease) in restricted cash | 1 | (153) |
Restricted cash, beginning of year | 532 | 685 |
Restricted cash, end of year | 533 | 532 |
Cash paid for interest | 1,502 | 1,440 |
Cash paid for taxes | 47 | |
Supplementary for non-cash flow information: | ||
Stock issued for services | 274 | 2,213 |
Stock issued for debt settlement | 2,711 | |
Accounts payable converted to notes payable | (6,764) | |
Debt conversion | 550 | |
Notes payable - related party and accrued interest converted to common stock | 2,666 | |
Change in terms of accounts payable | $ (801) |
History and Organization of the
History and Organization of the Company | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
History and Organization of the Company | NOTE 1 – HISTORY AND ORGANIZATION OF THE COMPANY OMNIQ Corp. (formerly Quest Solution, Inc.), a Delaware corporation (“OMNIQ” or the “Company”), was incorporated in 1973. Prior to 2008, the Company was involved in various unrelated business activities. From 2008-2014, the Company was involved in multiple businesses inclusive of an oil and gas investment company. Due to changes in market conditions, management determined to look for acquisitions which were positive cash flow and would provide immediate shareholder value. In January 2014, the first such acquisition was completed of Quest Marketing Inc. (dba Quest Solution, Inc.) (“Quest Marketing”). Quest is a national mobility systems integrator with a focus on design, delivery, deployment and support of fully integrated mobile solutions. The Company takes a consultative approach by offering end to end solutions that include hardware, software, communications and full lifecycle management services. The professionals simplify the integration process and deliver the solutions to our customers. Motorola, Intermec, Honeywell, Panasonic, AirWatch, Wavelink, SOTI and Zebra are major suppliers which Quest Solution uses in the solutions we provide to our customers. The Company’s business strategy developed into leveraging management’s relationships in the business world for investments for the Company. The Company intends to continue with its acquisition of existing companies with revenues and positive cash flow. History In May 2014, the Board of Directors voted to seek approval from the shareholders of the Company for a name change from Amerigo Energy, Inc. to Quest Solution, Inc. The Company received the approval from a majority of its stockholders and filed the amendment to its Articles of Incorporation with the State of Delaware. The name change became effective by the State of Delaware on May 30, 2014. The Company also requested a new stock symbol as a result of the name change and we were assigned our new trading symbol “QUES”. In November 2014, the Company acquired 100% of the shares of Bar Code Specialties, Inc. (“BCS”) located in Southern California. BCS is a national mobility systems integrator and label manufacturer with a focus on warehouse and distribution industries. Since the combination of the two companies, the Company has been exploring efficiencies in all facets of the businesses and learning best practices from both executive teams. On December 31, 2016, the Company merged BCS into Quest Marketing to form one US legal entity as part of its streamlining efforts. Effective October 1, 2015, the Company acquired the interest in ViascanQdata, Inc. (“Viascan”), a Canadian based operation in the same business line as Quest and their CEO, Gilles Gaudreault, was appointed the CEO of Quest, with our then CEO, Tom Miller, remaining as President and Chairman of the Board. During the 2016 fiscal year, Viascan changed its corporate name to Quest Solution Canada Inc. Effective September 30, 2016, the Company sold all of the outstanding shares of Quest Solution Canada Inc., and the consideration received was $1.0 million in cash of which $577 thousand was received at closing and the balance was required to be paid before April 30, 2017. In addition, the Company redeemed 1 share of Preferred Class B Stock and 1,839,030 shares of Preferred Class C Stock of the Company, as well as the accrued dividend of $32 thousand thereon. Lastly, Quest Exchange Ltd., a wholly owned subsidiary of the Company, redeemed 5,200,000 exchangeable shares as part of the divestiture. Additionally, as part of the transaction, Viascan Group Inc., the acquirer, assumed $1.0 million of liabilities which the Company had at September 30, 2016. Other consideration that is part of the transaction included: - ● Full release from five employment contracts, inclusive of the former CEO, Gilles Gaudreault. This release included cancelation of the contracts as well as the deferred salary and signing bonus provisions which would have inured to the employee. - ● The Company canceled the intercompany debts of approximately $7.0 million as well. The Company will also receive a contingent consideration of 15% of the net value proceeds, up to a maximum of $2.3 million, received upon a liquidity event or a change of control of Quest Solution Canada Inc. for a period of 7 years subsequent to the transaction. - ● The Company also negotiated a right of first refusal for any offer to purchase Quest Solution Canada Inc. for a 7 year period. - ● The assets sold consisted primarily of accounts receivable, inventories, property and equipment, and other assets. The buyer also assumed certain accounts payable and accrued liabilities. The operations of Quest Solution Canada Inc. have been classified as a discontinued operation and the assets and liabilities of Quest Solution Canada Inc. have been classified as held for disposal. On October 5, 2018, the Company entered into the HTS Purchase Agreement with Walefar and Campbeltown, (Walefar and Campbeltown are collectively referred to as the “Sellers”). Pursuant to the HTS Purchase Agreement, the Company purchased 100% of the capital stock of HTS Image Processing, Inc. (“HTS”) from the Sellers. Also, the Company acquired HTS’s wholly owned subsidiaries HTS USA, Inc. and Teamtronics Ltd (“TT Ltd”). On April 4, 2019, the Company entered into a form of Securities Purchase Agreement (the “Securities Purchase Agreement”) with accredited investors (the “Purchasers”). Pursuant to the Securities Purchase Agreement, on April 9, 2019 (the “Closing Date”), the Company sold an aggregate, with the Conversions included, of $5.0 million of units (the “Units”) resulting in gross proceeds of $5.0 million, before deducting placement agent fees and offering expenses (the “Offering”). The individual Unit purchase price was $0.30. Each Unit is comprised of one share of the Company’s common stock, $0.001 par value per share (the “Common Stock”), and a warrant to purchase one share of Common Stock, and, as a result of the Offering, the Company issued 833,333 shares of Common Stock (the “Shares”) and warrants (the “Warrants”) to purchase 833,333 shares of Common Stock (the “Warrant Shares”) at an exercise price equal to $7.00 per Warrant Share, which Warrants are exercisable for a period of five and one-half years from the issuance date. Both Shai Lustgarten, the Company’s Chief Executive Officer, and Carlos J. Nissenson, a consultant to and principal stockholder of the Company, participated in the Offering by converting $200 thousand each of unpaid principal owed to them from the HTS acquisition (the “Conversions”), by the Company in exchange for Shares and Warrants on the same terms as all other Purchasers. With the Conversions included, the Offering resulted in gross proceeds of $5.0 million. As a result of the Conversions, a principal amount of $150 thousand is owed to each Walefar and Campbeltown respectively under the note issued to them as partial consideration in the sale of HTS Image Processing to the Company on October 5, 2018. On May 29, 2019, the Company, Campbeltown and Walefar entered into an Amendment to the HTS Purchase Agreement (the “Amendment”), which provided for an adjustment to the number of shares of common stock issued to Walefar and Campbeltown in the acquisition of HTS. Pursuant to the Amendment, Campbeltown and Walefar agreed to return for cancelation 277,166 and 277,116 shares of common stock respectively. This Amendment reduced the number of shares issued in the acquisition to 568,415 shares from 1,122,648 shares and the amount of share consideration to approximately $2.7 million from approximately $5.3 million. This adjustment was made as a result of a correction in the calculation of working capital and other share give back provisions of the HTS Purchase Agreement. This Amendment also reduced the Company’s issued and outstanding common stock to 3,850,451 from 4,404,684 as of June 4, 2019. On November 18, 2019, the Company filed an amendment to its Certificate of Incorporation, as amended with the Secretary of State of Delaware, pursuant to which the Company i) changed its name from Quest Solution, Inc. to OMNIQ Corp. (ticker symbol OMQS) and ii) effected a reverse split of its common effective November 20, 2019 (the “Reverse Split”). The Amendment provides that every twenty shares of the Company’s issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share. As a result of the Reverse Split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by the Company and outstanding immediately prior to the Effective Date, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares authorized for future grant under the Company’s equity incentive/compensation plans immediately prior to the Effective Date have been reduced proportionately. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 – GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2019, the Company had a working capital deficit of $20.2 million and an accumulated deficit of $45.1 million. These facts and others raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis. Management’s plan to eliminate the going concern situation includes, but is not limited to, the following: The continuation of improving cash flow by maintaining moderate cost reductions (subsequent to aggressive cost reduction actions already taken in 2018 and continued in 2019); Increasing the accounts receivable factoring line of credit; Negotiating lower interest rates on outstanding debt; Potential issuances of additional common stock; The creation of additional sales and profits across its product lines, and the obtaining of sufficient financing to restructure current debt in a manner more in line with the Company’s improving cash flow and cost reduction successes; The diversification in the sourcing and procurement of materials and finished goods. The addition of two new key vendors in 2018 increased the Company’s purchasing power by adding credit availability in an amount just under $5.0 million; With the acquisition of HTS in October 2018, the Company has in its portfolio of products a computer vision technology that is based on AI and machine learning concepts. These solutions have a higher gross profit that will provide an increase in cashflow on a consolidated basis. The Company plans for these products to be a significant revenue source in 2019. Also with the acquisition of HTS, the Company acquired an operating facility with the ability for light manufacturing and assembling components. The Company can use HTS’s assembling facility to reduce the cost of goods and increase profit margins; In April 2019, the Company raised approximately $5.0 million in gross proceeds from the sale of 833,333 shares of the Company’s common stock. |
Principles of Consolidation and
Principles of Consolidation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Summary of Significant Accounting Policies | NOTE 3 – PRINCIPLES OF CONSOLIDATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial position and results of operations of OMNIQ Corp. and its wholly-owned subsidiaries Quest Marketing, Inc., Quest Exchange Ltd., and HTS Image Processing, Inc., collectively referred to herein as “we” or “us” or “our” or the “Company.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. RECLASSIFICATIONS AND COMPARABILITY Certain amounts in the financial statements of prior years have been reclassified to conform to the current year presentation for comparative purposes. This had no effect on total assets or net income. REVERSE STOCK SPLIT Effective November 20, 2019, the Company implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. As a result of the Reverse Split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by the Company and outstanding immediately prior to the Effective Time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares authorized for future grant under the Company’s equity incentive/compensation plans immediately prior to the Effective Time was reduced proportionately. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may materially differ from these estimates and assumptions used in preparation of the consolidated financial statements. Significant areas where estimates and management judgments were used include calculation of stock based compensation, deferred tax assets/liabilities, valuation of intangible assets, allowance for doubtful accounts receivable, and net realizable value of inventory. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. ● Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. The carrying amounts of certain financial instruments, such as cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. CASH AND CASH EQUIVALENTS Cash consists of petty cash, checking, savings, and money market accounts. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2019 and 2018. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has restricted cash on deposit with a federally insured bank in the amount of $533 thousand and $532 thousand at December 31, 2019 and 2018, respectively. This cash is security and collateral for a corporate credit card agreement with a bank and for deposit against a letter of credit issued for executive life insurance policies owned by the Company. ACCOUNTS RECEIVABLE Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. The Company generally requires no collateral to secure its ordinary accounts receivable. Based on management’s evaluation, accounts receivable has a balance in the allowance for doubtful accounts of $36 thousand and $33 thousand for the years ended December 31, 2019 and 2018, respectively. INVENTORY Substantially all inventory consists of raw materials and finished goods and are valued at the lower of cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost and depreciated using both straight-line and accelerated methods over estimated useful lives ranging from 3 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in the results of operations. Depreciation expense for the years ended December 31, 2019 and 2018 was $152 thousand and $57 thousand, respectively. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred. GOODWILL AND INTANGIBLE ASSETS As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration. Goodwill Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested for impairment annually or whenever events indicate that the carrying amount might not be recoverable. The qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. No impairment charges have been recorded as a result of the Company’s annual impairment assessments. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired. For goodwill and indefinite lived intangible assets, the Company completes what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative two-step impairment test. The quantitative analysis compares the fair value of our reporting unit or indefinite-lived intangible assets to the carrying amounts, and an impairment loss is recognized equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows, market multiples or appraised values, as appropriate. Discounted cash flow analysis requires assumptions about the timing and amount of future cash inflows and outflows, risk, the cost of capital, and terminal values. Each of these factors can significantly affect the value of the intangible asset. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s judgment. Any changes in key assumptions about the Company’s businesses and their prospects, or changes in market conditions, could result in an impairment charge. Some of the more significant estimates and assumptions inherent in the intangible asset valuation process include: the timing and amount of projected future cash flows; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal or regulatory trends. In the year ended December 31, 2019 the Company determined that there were no indicators of impairment of goodwill. Intangibles Intangible assets with finite useful lives consist of trademarks, customer lists, and intellectual property rights and are amortized on a straight-line basis over their estimated useful lives, which range from two to seven years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. There was no impairment recorded for 2019 and 2018. PURCHASE ACCOUNTING AND BUSINESS COMBINATIONS The Company accounts for its business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. The valuation and allocation processes rely on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when the Company receives updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. REVENUE RECOGNITION The Company is a primary distribution 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 goods 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 allow for the Company to recognize revenue when the product reaches the customer’s location. 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 warehouses. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. Revenue Recognition for Hardware Revenues from sales of hardware products are recognized on a gross basis as the Company is acting as a principal in these transactions, with the selling price to the customer recorded as Net sales and the acquisition cost of the product recorded as Cost of sales. The Company recognizes revenue from these transactions when control has passed to the customer, which is usually upon delivery of the product to the customer. The Company’s vendor partners warrant most of the products the Company sells. These manufacturer warranties are assurance-type warranties and are not considered separate performance obligations. The warranties are not sold separately and only provide assurance that products will conform to the manufacturer’s specifications. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. The Company considers these warranties to be separate performance obligations from the underlying product. For warranties, the Company is arranging for those services to be provided by the third-party and therefore is acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Software Revenues from most software license sales are recognized as a single performance obligation on a gross basis as the Company is acting as a principal in these transactions at the point the software license is delivered to the customer. Generally, software licenses are sold with accompanying third-party delivered software assurance, which is a product that allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. The Company evaluates whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering if the software provides its original intended functionality to the customer without the updates, if the customer would ascribe a higher value to the upgrades versus the up-front deliverable, if the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and if the customer chooses to not delay or always install upgrades. If the Company determines that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. The Company considers these warranties to be separate performance obligations from the underlying product. For warranties, the Company is arranging for those services to be provided by the third-party and therefore is acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Services The Company provides professional services, which include project managers and consultants recommending, designing and implementing IT solutions. Revenue from professional services is recognized either on a time and materials basis or proportionally as costs are incurred for fixed fee project work. Revenue is recognized on a gross basis each month as work is performed and the Company transfers those services. Revenues from the sale of professional and support services, provided by the Company, are recognized over the period the service is provided. As the customer receives the benefit of the service each month, the Company recognizes the respective revenue on a gross basis as the Company is acting as a principal in the transaction. Additionally, the Company’s managed services team provides project support to customers on a fixed fee basis. The Company is acting as the principal in the transaction and recognizes revenue on a gross basis based on the total number of hours incurred for the period over the total expected hours for the project. Total expected hours to complete the project is updated for each period and best represents the transfer of control of the service to the customer. Freight Costs The Company records both the freight billed to its customers and the related freight costs as Cost of sales when the underlying product revenue is recognized. For freight not billed to its customers, the Company records the freight costs as Cost of sales. The Company’s typical shipping terms result in shipping being performed before the customer obtains control of the product. The Company considers shipping to be a fulfillment activity and not a separate performance obligation. ADVERTISING The Company generally expenses marketing and advertising costs as incurred. During 2019 and 2018, the Company spent $224 thousand and $148 thousand, respectively, on marketing, trade show and store front expense and advertising, net of co-operative rebates. The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense. STOCK-BASED COMPENSATION The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values. For non-employee stock-based compensation, we have adopted ASC Topic 505 “Equity-Based Payments to Non-Employees”, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic 718. On December 23, 2015, the Company’s Board of Directors approved the Quest Solution, Inc. Employee Stock Purchase Plan (the “ESPP”), under which 95,000 shares of common stock were reserved for the purchase by the Company’s employees. Under the plan, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the closing market prices measured on the last days of each month. On March 6, 2018, the Board approved the Company’s 2018 Equity Incentive Plan and later amended it on October 31, 2018. On January 23, 2019, the Company’s shareholders adopted and ratified the 2018 Equity Incentive Plan. The total number of shares of Common Stock authorized for issuance under the 2018 Plan is 800,000. Equity instruments issued to parties other than employees for acquiring goods or services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”). Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Warrants The fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management’s judgment. Expected volatilities used in the valuation model are based on the average volatility of the Company’s stock. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve in effect at the time of grant. FOREIGN CURRENCY TRANSLATION The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. All of the Company’s continuing operations are conducted in U.S. dollars except its subsidiary located in Israel. The records of the Israeli operation were maintained in the local currency and re-measured to the functional currency as follows: monetary assets and liabilities are converted using the balance sheet period-end date exchange rate, while the non-monetary assets and liabilities are converted using the historical exchange rate. Expenses and income items are converted using the weighted average exchange rates for the reporting period. Foreign transaction gains and losses are reported on the consolidated statement of operations and were included in the amount of loss from discontinued operations. INCOME TAXES The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company’s income is subject to taxation in both the U.S. and a foreign jurisdiction, Israel. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company establishes reserves for income tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that positions do not meet the more-likely-than-not recognition threshold. The Company adjusts uncertain tax liabilities in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of uncertain tax liabilities and changes in liabilities that are considered appropriate. COMPREHENSIVE INCOME (LOSS) Comprehensive income/(loss) is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s other comprehensive income (loss) is composed of foreign currency translation adjustments. NET LOSS PER COMMON SHARE See NOTE 15 regarding our 1-for-20 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented. Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the years ended December 31, 2019 and 2018 were 3,889,478 and 2,481,530, respectively. Diluted net loss per share of common stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive. The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported: In thousands 2019 2018 Options to purchase common stock 737 629 Convertible preferred stock 241 241 Warrants to purchase common stock 225 225 Common stock subject to repurchase - (25 ) Potential shares excluded from diluted net loss per share 1,203 1,070 RECENT ACCOUNTING PRONOUNCEMENTS Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Adopted Accounting Pronouncements In July 2018, the FASB issued ASU 2018-10, Leases (Topic 842) In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses.” In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Income Taxes (ASC 740) |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4 – ACQUISITIONS On October 5, 2018 (“Closing Date”), the Company entered into the HTS Purchase Agreement with Walefar and Campbeltown, (Walefar and Campbeltown are collectively referred to as the “Sellers”). Pursuant to the HTS Purchase Agreement, the Company purchased 100% of the capital stock of HTS Image Processing, Inc., and HTS’s wholly owned subsidiaries HTS USA, Inc. and Teamtronics Ltd., from the Sellers. As consideration, the Company (i) issued to the Sellers 1,122,648 shares (“Shares Issued”) of the Company’s common stock, having a value of $5.3 million based on the average closing price of the Company’s common stock for the twenty days preceding the Closing Date, (ii) cash in the amount of $300 thousand, and (iii) a 12 month convertible promissory note with a principal amount of $700 thousand and an interest rate of six percent (6%) per year. The note also provides the Sellers the right to convert all or any portion of the then outstanding and unpaid principal amount and interest into fully paid and non-assessable shares of the Company’s common stock at a conversion price of $4.72. The HTS Purchase Agreement constitutes a “related party transaction” because of Company director Shai Lustgarten’s position as Chief Executive Officer of HTS and stock ownership in HTS. Additionally, Campbeltown is a “related party” because Carlos Jaime Nissenson, the beneficial owner of Campbeltown, is a consultant to the Company, a principal stockholder of the Company, and father of Company CFO and director Neev Nissenson. Carlos Jaime Nissenson was also a stockholder and director of HTS. The aggregate consideration (“Total Consideration) to be paid by the Company was an amount of shares of the Company’s common stock (the “Share Consideration”), having a preliminary value of $7.0 million based on the average closing price of the common stock for the 20 days’ preceding the closing of the Transaction (the “Per Share Value”), and $300 thousand in cash and a convertible promissory note in the amount of $700 thousand (the “Cash Consideration”). The Share Consideration and this Cash Consideration is collectively referred to as the (“Consideration”). The Share Consideration was to be adjusted by the net working capital plus $20 thousand for audit fees and reduced by the amount of money owed by HTS to banks and other financial institutions. On the Closing Date, the estimated Share Consideration was approximately $5.3 million. The HTS Purchase Agreement contained a provision where by HTS and Sellers agree to indemnify, defend and hold harmless the Company against any and all claims, demands, losses, costs, expenses, obligations, liabilities and damages, including interest, penalties and reasonable attorney’s fees and costs that arise within 12 months of the date of this HTS Purchase Agreement (“Covered Losses”), incurred by the Buyer or any of its affiliates arising, resulting from, or relating to any and all liabilities of HTS that have not been disclosed in the HTS Financial Statements, any misrepresentation of a material fact or omission to disclose a material fact made by HTS or the Sellers in the HTS Purchase Agreement. Also, the HTS Purchase Agreement provided that HTS shall have a gross profit of $1.1 million for the fiscal year ended December 31, 2017 and $1.7 million for the six months ended June 30, 2018. “Gross Contribution” shall be defined as revenue minus cost of material. Furthermore, the Gross Contribution Adjustment provided that in the event that HTS’ Gross Contribution is less than 85% of the figure set out above, any deficiency in excess of 15% (the “Net Deficiency”) shall result in the forfeiture of a portion of the Share Consideration, with a value equal to the Net Deficiency. Also, HTS was required to deliver to the Company audited financial statements as of December 31, 2017 and for the year then ended (“HTS Audited Financial Statements’) and reviewed financial statements as of September 30, 2018 and for the nine months then ended (“HTS Reviewed Financial Statements”). Based on the three indemnification clauses, above, the Sellers shall deposit 20%, or 224,530 shares, of the Share Consideration in escrow with the Buyer’s counsel (the “Covered Loss Shares”) for the purposes of Covered Losses or the Net Deficiency. In the event the Company makes a valid claim pursuant to the Covered Losses or the Net Deficiency, the dollar value of such claim shall be satisfied by cancelation of an amount of the Escrowed Shares with an equal value to the Losses or Net Deficiency. For purposes of any adjustment, the Shares shall be valued at the Per Share Value. The Covered Loss Shares shall be the maximum indemnification reimbursement. In addition, the Buyers shall deposit an additional 20%, or 224,530, of the Share Consideration, which shall not be released until the HTS Audited Financial Statements and the HTS Reviewed Financial Statements are delivered to the Company (“Audit Shares”) (collectively “Indemnification Shares”). Subsequent to the Acquisition Date, the amount for the working capital and money owned by HTS to banks and other financial institutions provided by the Sellers was adjusted. Upon the finalization of the assets and liabilities acquired as of October 1, 2018, the Share Consideration was adjusted to $2.7 million, or 568,415 shares. The Total Consideration was adjusted by $2.6 million, or 554,233 shares (“Adjusted Shares”). The Adjusted Shares were recorded as of the Acquisition Date at the Acquisition Date fair value of the Company’s common stock. Since the maximum amount of the Covered Loss shares is 224,530, the Company and the Sellers amended, the Agreement, on May 29, 2019 with an effective date of the Acquisition Date, to provide for the cancelation of the adjusted Shares. Also, On December 24, 2018, the Company received the HTS Audited Financial Statements. The HTS Reviewed Financial Statements were not delivered. As part of the Amendment, the Company waived the requirement for the HTS Reviewed Financial Statements. The Audit shares have been included in the purchase price at the Acquisition Date fair value of the Company’s common stock. In thousands Calculation of the purchase price: Fair value of stock at closing $ 2,683 Cash at closing 300 Convertible promissory note 700 Purchase price $ 3,683 The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: In thousands Cash $ 277 Accounts receivable, net 1,911 Inventory 1,196 Prepaid expenses 16 Fixed assets 96 Intangibles 4,700 Goodwill 3,806 Accounts payable (2,944 ) Related party payable (1,868 ) Notes payable (1,462 ) Notes payable- related parties (1,541 ) Foreign currency adjustment 48 Deferred tax liability (552 ) Net assets acquired $ 3,683 The transaction was accounted for using the acquisition method. Accordingly, goodwill has been measured as the excess of the total consideration over the amounts assigned to the identifiable assets acquired and liabilities assumed including the related deferred tax liability. Intangibles assets consisted of the following: In thousands, except years Fair Value Life in Years Market related intangibles $ 170 5 Customer relationships 3,400 9 Patents 1,030 11 Software 100 4 $ 4,700 The estimated fair values for the market related intangibles and patents were determined by using the relief-from-royalty or excess earnings methods. The estimated fair value for the customer relationships and software were determined using the multi-period excess earnings method and the cost approach, respectively. Each of the intangible assets will be amortized on a straight-line basis over their estimated useful lives. On May 29, 2019, the Company, Campbeltown and Walefar entered into an Amendment to the HTS Purchase Agreement (the “Amendment”), which provided for an adjustment to the number of shares of common stock issued to Walefar and Campbeltown in the acquisition of HTS. Pursuant to the Amendment, Campbeltown and Walefar agreed to each return for cancelation 277,116 shares of common stock. This Amendment reduced the amount of shares issued in the acquisition to 568,415 shares from 1,122,648 shares and the amount of share consideration to approximately $2.3 million from approximately $5.3 million . This adjustment was made as a result of a correction in the calculation of working capital and other share give back provisions of the HTS Purchase Agreement. This Amendment also reduces the Company’s issued and outstanding common stock to 3,850,421 from 4,404,653 as of May 29, 2019. Pro forma (Unaudited) The following unaudited pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2018. The unaudited pro forma results include amortization associated with preliminary estimates for the acquired intangible assets on these unaudited pro forma adjustments. The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies, or the effect of the incremental costs incurred in integrating the two companies. Accordingly, these unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations: For the year ended December 31, 2018 Quest HTS Total Dr Cr Proforma Revenues $ 56,202 $ 5,516 $ 61,718 - (1,909 ) $ 59,809 Net income (loss) $ (5,695 ) $ (1,276 ) $ (6,971 ) 314 (184 ) $ (7,101 ) For the year ended December 31, 2018, the proforma adjustments of $314 thousand is for the amortization expense for the nine months ended September 30, 2018 associated with the fair value of the intangible assets acquired and the $184 thousand is to remove the amortization for the nine months ended September 30, 2018 for the intangible assets that were revalued. The amortization expense for the three months ended December 31, 2018 is included in the Quest results of operations. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 5 – ACCOUNTS RECEIVABLE Accounts receivable consisted of the following as of December 31: In thousands 2019 2018 Trade Accounts Receivable $ 6,730 $ 12,295 Less Allowance for doubtful accounts (36 ) (33 ) Total Accounts Receivable (net) $ 6,694 $ 12,262 For the years ended December 31, 2019 and 2018, one customer accounted for 12.3% and 17.0%, respectively, of the Company’s revenues. Accounts receivable at December 31, 2019 and 2018 are made up of trade receivables due from customers in the ordinary course of business. Two customers together represented 20.9% of the balance of accounts receivable at December 31, 2019 and two customers made up 23.7% of the accounts receivable balance at December 31 for 2018, which represented greater than 10% of accounts receivable at December 31, 2019 and 2018, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6 – INVENTORIES Inventories consisted of the following as of December 31, 2019: In thousands 2019 2018 Equipment and Clearing Service $ 728 $ 801 Raw Materials 1,022 568 Work in process 44 47 Finished goods 95 388 Total inventories $ 1,889 $ 1,804 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 7 – GOODWILL AND INTANGIBLE ASSETS The Company’s goodwill balance is attributable to acquisitions. There have been no impairment charges recorded against goodwill in 2019 and 2018. Identifiable intangible assets are stated at cost, net of accumulated amortization. The assets are being amortized on the straight-line method over useful lives ranging from 3 to 11 years. Amortization expense for the years ended December 31, 2019 and 2018 was $2.0 million and $1.8 million, respectively. Goodwill and Intangible assets consisted of the following as of December 31: In thousands 2019 2018 Goodwill $ 13,921 $ 13,921 Trade Names 4,390 4,390 Customer Relationships 12,590 12,590 Intellectual property 1,323 1,300 Accumulated amortization (9,695 ) (7,694 ) Intangibles, net $ 22,529 $ 24,507 The future amortization expense on the Customer Relationships, and IP are as follows: In thousands Years ending December 31, 2020 2,007 2021 1,941 2022 1,315 2023 1,289 2024 546 Thereafter 1,510 Total $ 8,608 Goodwill is not amortized but is evaluated for impairment annually or when indicators of a potential impairment are present. The impairment testing of goodwill is performed separately from our impairment testing of intangibles. The annual evaluation for impairment of goodwill and intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans. None of the goodwill is deductible for income tax purposes. Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated, and the remaining carrying value is amortized over the new shorter useful life. No impairments were identified or changes to estimated useful lives have been recorded as of December 31, 2019 and 2018. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable are made up of payables due to vendors in the ordinary course of business at December 31, 2019 and 2018. One vendor made up 83.0% and 62.7% of our accounts payable in 2019 and 2018, respectively, which represented greater than 10% of accounts payable at December 31, 2019 and 2018, respectively. |
Credit Facilities and Line of C
Credit Facilities and Line of Credit | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Line of Credit | NOTE 9 – CREDIT FACILITIES AND LINE OF CREDIT The Company maintains operating lines of credit, factoring and revolving credit facilities with banks and finance companies to provide working capital for the business. On July 1, 2016, the Company entered into a Factoring and Security Agreement (the “FASA”) with Action Capital Corporation (“Action”) to establish a sale of accounts facility, whereby the Company may obtain short-term financing by selling and assigning to Action acceptable accounts receivable. Pursuant to the FASA, the outstanding principal amount of advances made by Action to the Company at any time shall not exceed $5.0 million. Action will reserve and withhold an amount in a reserve account equal to 5% of the face amount of each account purchased under the FASA. The balance at December 31, 2019 is $1.4 million. The per annum interest rate with respect to the daily average balance of unpaid advances outstanding under the FASA (computed on a monthly basis) will be equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 2%, plus a monthly fee equal to 0.75% of such average outstanding balance. The Company shall also pay all other costs incurred by Action under the FASA, including all bank fees. The FASA will continue in full force and effect unless terminated by either party upon 30 days’ prior written notice. Performance of the Company’s obligations under the FASA is secured by a security interest in certain collateral of the Company. The FASA includes customary representations and warranties and default provisions for transactions of this type. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue | NOTE 10 – DEFERRED REVENUE In May 2014, the FASB issued new revenue recognition guidance under ASU 2014-09 that supersedes the existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles (“GAAP”). The new standard, ASC Topic 606, focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of ASC Topic 606, the new standard, is for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. Since the issuance of the original standard, the FASB has issued several other subsequent updates including the following: 1) clarification of the implementation guidance on principal versus agent considerations (ASU 2016-08); 2) further guidance on identifying performance obligations in a contract as well as clarifications on the licensing implementation guidance (ASU 2016-10); 3) rescission of several SEC Staff Announcements that are codified in Topic 605 (ASU 2016-11); and 4) additional guidance and practical expedients in response to identified implementation issues (ASU 2016-12). The Company took into the guidance provided in these ASUs related to revenue recognition. Accordingly, the Company has adopted ASC Topic 606 as of January 1, 2018 using the modified retrospective transition approach, in which the cumulative effect of applying the standard would be recognized at the date of initial application. An adjustment to decrease deferred revenue in the amount of $1.2 million was established on the date of adoption relating to amounts deferred related to extended service contract sales through December 31, 2017. Prior to adoption of ASC Topic 606 net revenue from the sales of these contracts would be recognized immediately since the Company has no continuing obligation related to the sale of these products if the new guidance had been applied in the past. As a result of the adoption the Company recognizes revenue from extended service contracts on a net versus gross basis in the consolidated statements of operations. The Company recognized the cumulative effect of initially applying ASC Topic 606 as an adjustment of $1.2 million of net deferred revenue to the opening balance of accumulated deficit. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable, Related Parties | NOTE 11 – NOTES PAYABLE, RELATED PARTIES Notes payable, related parties consisted of the following as of December 31: 2019 2018 In thousands Note payable – debt restructure Marin $ 900 $ 1,160 Note payable – debt restructure Thomet 563 713 Note payable – debt restructure Zicman 135 171 Convertible note payable – shareholders 150 700 Note payable - RWCC 449 1,059 Total notes payable 2,197 3,803 Less current portion 1,025 1,891 Long-term portion $ 1,172 $ 1,912 For the years ended December 31, 2019 and December 31, 2018, the Company recorded interest expense in connection with these notes in the amount of $49 thousand and $115 thousand, respectively. NOTE PAYABLE – DEBT RESTRUCTURE MARIN On February 28, 2018, the Company entered into two settlement agreements with David and Kathy Marin (the “Marin Settlement Agreements”). Pursuant to the first Marin Settlement Agreement (the “Marin Settlement Agreement I”), the Company and the Marins agreed to reduce the Company’s purchase price for all of the capital stock of Bar Code Specialties, Inc., which was acquired by the Company from the Marins in November 2014. In the 2014 acquisition, the Company had issued David Marin a promissory note for $11.0 million of which an aggregate of $10.7 million. (the “Owed Amount”) was outstanding as of February 26, 2018 which includes accrued interest earned but not paid. Pursuant to the Marin Settlement I Agreement, the amount of the indebtedness owed to Marin was reduced by $9.5 million. bringing the total amount owed to $1.2 million. Section 3.1 of the original note was amended to provide that the Company shall pay the Marins 60 monthly payments of $20 thousand each commencing the earlier of (i) October 26, 2018 and (ii) the date that the Company’s obligation to Scansource, Inc., currently in the amount of $1.8 million is satisfied and all amounts currently in default under the credit agreement with Scansource (currently approximately $ 6.0 Million) is reduced to $2.0 million. The Marins have agreed to release their security interest against the Company. In connection with the $9.5 million. reduction in the purchase price, the Company issued the Marins 3 year warrants to purchase an aggregate of 150,000 shares of Common Stock at an exercise price of $4.00 per-share. On February 28, 2018, the Company entered into an additional settlement agreement with the Marins (the “Marin Settlement Agreement II”) whereby the Company settled a promissory note owed to the Marins in the original principal amount of $100 thousand which currently had a balance of $111 thousand in its entirety in exchange for an aggregate of 85,000 shares of the Company’s Series C Preferred Stock. The Series C Preferred Shares outstanding are convertible into common stock at the rate of 20 Preferred Shares to one share of common stock. The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days. The Preferred Stock pays a 6% dividend commencing two years from issuance. During the first two years, the Series C Preferred Stock shall neither pay nor accrue the dividend. The Company also agreed to transfer title to a vehicle that was being utilized by Mr. Marin to David Marin. In exchange therefor, the $100 thousand Note and the accrued interest thereon was cancelled in its entirety. NOTE PAYABLE – DEBT RESTRUCTURE THOMET On February 22, 2018, the Company entered into a settlement agreement with Kurt Thomet whereby the Company settled its indebtedness to Mr. Thomet in the current amount of $5.4 million in full in exchange for 60 monthly payments of $12,500 each commencing the earlier of (i) October 26, 2018 or (ii) the date when the Company’s obligation under its promissory note with Scansource, Inc. currently in the amount of $1.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. In addition, the Company issued Mr. Thomet an aggregate of 25,000 shares of restricted common stock and 1,000,000 shares of Series C Preferred Stock with the same rights and restrictions as described above in the description of the Marin Settlement II Agreement. NOTE PAYABLE – DEBT RESTRUCTURE ZICMAN On February 19, 2018, the Company entered into a settlement agreement with George Zicman whereby the Company settled its indebtedness to Mr. Zicman in the current amount of $1.3 million in full in exchange for 60 monthly payments of $3 thousand each commencing the earlier of (i) October 26, 2018 or (ii) the date when the Company’s obligation under its promissory note with Scansource, Inc. currently in the amount of $1.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. In addition, the Company issued Mr. Zicman an aggregate of 5,000 shares of common stock and 600,000 shares of Series C Preferred Stock with the same rights and restrictions as described above in the description of the Marin Settlement II Agreement. Each of the Marins, Thomet and Zicman entered into a voting agreement with the Company whereby they agreed to vote any shares of common stock beneficially owned by them as directed by the Company’s CEO and also agreed to a leakout restriction whereby they each agreed not to sell more than 10% of the common stock beneficially owned during any 30-day period. QUEST PREFERRED STOCK NOTE PAYABLE The Quest preferred stock 6% note payable is in conjunction with the promissory note issued in October 2015 related to the redemption and cancelation of 100% of the issued and outstanding Series A preferred stock as well as 170,000 stock options that had been issued to a now former employee. The principal payments have been postponed. In June 2016, the holder of the note granted the Company a forgiveness of debt in the amount of $75 thousand which was recorded as an increase in the additional paid in capital because it was a related party transaction. In addition, on June 17, 2016, the Company entered into Promissory Note Conversion Agreement with the Noteholder whereby $1.8 million of the promissory note was converted into 1,800,000 shares of Series C Preferred Stock. In July 2016, the holders of the notes signed subordination agreements with the Supplier of the Secured Promissory Note and Action, whereby the noteholder agree to subordinate its right and payment of capital and interest until the Supplier with the Secured Promissory Note is reimbursed in full. During the year ended December 31, 2018, the Company issued 430,000 shares of the Company’s common stock at a fair value of $2.7 million for the conversion of the principal and accrued interest of $1.2 million and $0.2 million, respectively, or $1.4 million. The difference of $1.3 million was recorded as loss on debt settlement in the consolidated statement of operations. CONVERTIBLE NOTE PAYABLE – SHAREHOLDERS The convertible note payable – shareholders relates to the purchase price paid for the acquisition of HTS. The Note is in the amount of $700 thousand with $350 thousand due to each of the two sellers. The $700 thousand was due and payable on October 5, 2019 with accrued interest at the rate of 6.0% per annum. The Holders have the right, at any time on or after the Issue Date, to convert all or any portion of the then outstanding and unpaid principal amount and interest (including any Default Interest) into fully paid and non-assessable shares of the Company’s common stock, as such common stock exists on the conversion date, or any shares of the Company’s capital stock or other securities of the Company into which such common stock shall hereafter be changed or reclassified, at the conversion price (as defined below) determined as provided herein (a “Conversion”); The number of conversion shares to be issued upon each conversion of the note shall be determined by dividing the conversion amount by the applicable conversion price then in effect on the date specified in the notice of conversion delivered to the Company by the holder. The conversion rate was set at $4.72 per share. On April 4, and in connection with the Securities Purchase Agreement, Shai Lustgarten, the Company’s Chief Executive Officer, and Carlos J. Nissenson, a consultant to and principal stockholder of the Company, participated in the Offering by converting $200 thousand each of unpaid principal owed to them from the HTS acquisition (the “Conversions”), by the Company in exchange for Shares and Warrants on the same terms as all other Purchasers. On September 30, 2019, and in accordance with the terms of the Convertible Promissory Note, Walefar and Campbeltown each exercised the right to convert $75 thousand in unpaid principal balance into fully paid and non-assessable shares of the Company’s common stock at a conversion price of $0.236. Accordingly, the Company issued 317,796 shares to each of Walefar and Campbeltown. As a result of the Conversions, a principal amount of $150 thousand is owed to each Walefar and Campbeltown respectively under the convertible note payable. NOTE PAYABLE - RWCC The company acquired the Note Payable – RWCC (“RWCC Note”) with the acquisition of HTS. The Certus Note was a non-interest-bearing note. The Certus Note was historically discounted using an effective interest rate of 5.0%. The outstanding balance of $1.0 million is due and payable in April 2020 with monthly payment of approximately $85 thousand per month. The Certus Note is classified as a related party note because the Chief Executive Officer of Certus, Ltd. is the son of a significant shareholder of the Company and a sibling of the Company’s Chief Financial Officer and member of the Board of Directors. The repayment of the notes payable, related parties as of December 31, 2019 is as follows for the years ending December 31,: In thousands 2020 1,025 2021 426 2022 426 2023 320 Thereafter - Total $ 2,197 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 12 - NOTES PAYABLE Notes payable consists of the following as of December 31,: In thousands 2019 2018 Supplier Secured Note Payable $ 6,490 $ 8,340 All Other 150 613 Total 6,640 8,953 Less current portion 6,497 8,823 Long Term Notes Payable $ 143 $ 130 Future maturities of notes payable are as follows for the years ending December 31,: In thousands 2020 $ 6,497 2021 6 2022 - Thereafter 137 Total $ 6,640 Supplier Secured Note Payable On July 18, 2016, the Company and the supplier entered into that certain Secured Promissory Note, with an effective date of July 1, 2016, in the principal amount of $12.5 million. The USD Note accrues interest at 12% per annum and is payable in six consecutive monthly installments of principal and accrued interest in a minimum principal amount of $250 thousand each, with any remaining principal and accrued interest due and payable on December 31, 2016. ● On November 30, 2016, the Company entered into an Amendment Agreement to the secured Promissory Note whereby the maturity date was extended to March 31, 2017 and the monthly installments of principal and accrued interest were increased to $400 thousand commencing December 15, 2016 with any remaining principal and accrued interest due and payable on March 31, 2017. The Amendment also provides that the Company will make an additional principal payment of $300 thousand by December 15, 2016. ● On March 31, 2017, the Company entered into a Second Amendment Agreement to the secured Promissory Note whereby the maturity date was extended to September 30, 2017 whereby any remaining principal and accrued interest is due and payable on September 30, 2017. The Amendment also provides that the Company will continue to make monthly installments of principal and accrued interest in a minimum principal amount of $400 thousand each. ● On September 30, 2017, the Company entered into a Third Amendment Agreement to the secured Promissory Note whereby the maturity date was extended to October 31, 2017. The Amendment also provides that the Company will continue to make monthly installments of principal and accrued interest in a minimum principal amount of $600 thousand each. ● On November 15, 2017 the Company entered into a Fourth Amendment extending the maturity date to December 31, 2017 and this Fourth Amendment is effective on October 31, 2017 whereby any remaining principal and accrued interest is due and payable on December 31, 2017. The Amendment also provides that the Company will continue to make monthly installments of principal and accrued interest in a minimum principal amount of $600 thousand each. ● On February 14, 2018 the Company entered into a Fifth Amendment extending the maturity date to March 31 st ● On September 14, 2018, the Company entered into a Sixth Amendment extending the maturity date to January 31, 2019. The Amendment also increases the principal amount to $8.7 million, an increase of $6.8 million , by rolling the Company’s existing outstanding accounts payable into the note by the previously mentioned amount of increase. ● On April 30, 2019, the Company entered into a Seventh Amendment extending the maturity date to July 31, 2019. The Amendment also provides that the Company will continue to make monthly installments of principal and accrued interest in a minimum principal amount of $350 thousand each. The Company has made partial payments towards the required monthly installments under the terms of the Seventh Amendment. As has been the case with each previous amendment, the Company is in continual negotiations with the holder of the Secured Promissory Note to extend the maturity date and establish a new schedule of payments. Bill Davidson Promissory Note In connection with the BCS acquisition, the Company assumed a related party note payable to the former CTO of the RFID division of BCS. The note is payable in equal monthly installments of $5 thousand beginning October 31, 2014 and ending October 2018. The loan bears interest at 8% and is unsecured and subordinated to the Company’s bank debt. The balance on this loan at December 31, 2019 and 2018 was $137 thousand and $130 thousand, respectively, of which all was classified as long term. In July 2016, the holder of the note signed a subordination agreement with the Supplier of the Secured Promissory Note and Action, whereby the noteholder agrees to subordinate its rights to payment of capital and interest until the Supplier with the Secured Promissory Note is reimbursed in full. This is subordinated to the Supplier Secured Note payable and can’t be paid until the Supplier Secured Note Payable is satisfied; therefore, the note is classified as long-term. Maren Trust Promissory Note In January 2016, the Company entered into a Stock Redemption Agreement whereby the Company would repurchase 25,354 shares of common stock for $220 thousand on an installment basis which was recorded as a note on the transaction date carrying interest at 9%. As at December 31, 2018, the Company did not complete the redemption of 25,354 shares of common stock and the remaining balance of the note was $241 thousand. In February 2018, the Company made the final payment and the 25,354 shares were cancelled. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | NOTE 13 – OTHER LIABILITIES At December 31, 2019 and 2018, other liabilities consisted of the following: In thousands 2019 2018 Other vendor payable $ 801 - Dividend payable 344 478 Bonus payable 385 - Others 453 397 Total other liabilities 1,983 875 Less Current Portion (1,599 ) (265 ) Total long term other liabilities $ 384 $ 610 The Company had purchased key man life insurance policies for some of its executives to insure the Company against risk of loss of an executive. Should loss of an executive occur, those funds would be used to pay off their respective promissory notes, repurchase their shares and settle out any amounts owed to them and their estate. On, June 10, 2016, the Company entered into an assignment and assumption with three of the beneficiaries of the key man insurance policies. The agreement states that the Company will be assigning the policy over to the beneficiary and the beneficiary will assume all the obligations under the premium financed note in place. The premium financed note has to be bifurcated with the lender in order to complete the transaction. At December 31, 2017, the balance of amount of premium financed note for the remaining policy is $1.5 million and the cash value of the policy as of this date is $1.4 million, with a net negative cash value of the policies of $86 thousand. The value of the policies is recorded at the new value per the right of offset noted in Topics 210-220. To have right of offset, the Company would need to show (1) amounts of debt are determinable, (2) reporting entity has the ‘right’ to setoff, (3) the right is enforceable by law, and (4) reporting entity has the ‘intention’ to setoff. Given that the Company has met all of these, the Company has elected to use the right of setoff as the cash value of the policies is being used as the collateral for the loans. Should the Company default on payments to the policy or determine to not continue with the policies, the cash value of the policy is intended to pay off of the loan. The Company also intends to settle out the loans in the future with the cash value of the policy. As of June 30, 2018, the Company has no further obligations related to the key man insurance policies other than finalizing paperwork on the latter assignments and in removing the liabilities from the Company books. As a result, the company recognized an accounting gain of $150 thousand. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14 – COMMITMENTS AND CONTINGENCIES PROFIT SHARING PLAN The Company maintains a contributory profit sharing plan covering substantially all fulltime employees within the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). In 2016, the Safe Harbor element was removed from the plan and the employer may make a discretionary matching contribution equal to a uniform percentage or dollar amount of participants’ elective deferrals for each Plan Year. In 2015, the Company is required to make a safe harbor non-elective contribution equal to 3 percent of a participant’s compensation. The plan also includes a 401(k) savings plan feature that allows substantially all employees to make voluntary contributions and provides for discretionary matching contributions determined annually by the Board of Directors. For the years ending December 31, 2019, and 2018, the Company elected to forgo the match. OPERATING LEASES As of December 31, 2019, the Company has three operating leases for office and assembly space and no financing leases. The impact of ASU No. 2016-02 on our consolidated balance sheet beginning January 1, 2019 was through the recognition of ROU assets and lease liabilities for operating leases. Amounts recognized at January 1 and December 31, 2019 for operating leases are as follows: In thousands January 1, 2019 December 31, 2019 ROU assets $ 235 $ 131 Lease liability $ 235 $ 134 The Company elected the practical expedient ASU 2018-11, Leases (Topic 842): Targeted Improvements Beginning January 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. As none of our leases included an implicit rate of return, we used our incremental borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. On January 1, 2019, the Company had three operating leases for office and/or warehouse space and one operating lease for a vehicle. The Company was leasing approximately 7,000 sf of office space in Eugene, OR with monthly payments of $4 thousand and an incremental borrowing rate of 15.06%. In December 2019, the Company terminated this lease. On January 1, 2019, the Company was also leasing a small office space in Akron, OH with monthly payments of $3 thousand and an incremental borrowing rate of 14.55%. As of December 31, 2019, the Company had 41 months remaining on the lease with a lease liability of $96 thousand. On January 1, 2019, the Company was also leasing a small office and warehouse in Anaheim, CA with monthly payments of $2 thousand and an incremental borrowing rate of 14.83%. As of December 31, 2019, the Company had 12 months remaining on the lease with a lease liability of $28 thousand. On January 1, 2019, the Company was leasing a vehicle with monthly payments of less than $1 thousand and an incremental borrowing rate of 14.83%. As of December 31, 2019, the Company had 25 months remaining on the lease with a lease liability of $9 thousand. Other information related to our operating leases is as follows: In thousands ROU asset - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (93 ) ROU asset - December 31, 2019 $ 131 Lease liability - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (90 ) Lease liability - December 31, 2019 $ 134 In thousands December 31, 2019 Lease liability Short term $ 54 Long term $ 80 Total $ 134 As of December 31, 2019, our operating leases had a weighted average remaining lease term of 33.78 months and a weighted average discount rate of 14.63%. The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2019: In thousands Year Minimum lease payments 2020 $ 70 2021 $ 41 2022 $ 38 Thereafter $ 16 Total $ 165 Less interest $ (31 ) Present value of future minimum lease payments $ 134 Less current obligations $ (54 ) Long term lease obligations $ 80 LITIGATION The Company was sued by Kurt Thomet for breach of obligations related to the outstanding debt obligations remaining from the promissory note executed on January 18, 2014 and subsequent amendments. The lawsuit was withdrawn in 2018 with the restructure of debt the subsequent to year end but effective December 31, 2018. The Company is not a party to any other pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 15 – STOCKHOLDERS’ EQUITY PREFERRED STOCK Series A As of December 31, 2019 and 2018, there were 1,000,000 Series A preferred shares designated and 0 Series A preferred shares outstanding. The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. Series B As of December 31, 2019 and 2018, there was 1 preferred share designated and 0 preferred shares outstanding. Series C As of December 31, 2019 and 2018, there were 15,000,000 Series C Preferred Shares authorized with 4,828,530 issued and outstanding. The series C preferred shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly dividend at a rate of $0.06 per share per annum and have a liquidation preference of $1 per share. As part of several debt settlement agreements effective December 30, 2017, 1,685,000 shares of Series C Preferred Stock were issued, with the caveat that the shares will not pay and will not accrue dividends for a 24-month period or any time prior to March 1, 2020. Series C preferred shares outstanding are convertible into common stock at the rate of 20 preferred shares to one share of common stock. As of December 31, 2019 and 2018, the accrued dividends on the Series C Preferred Stock was $344 thousand and $478 thousand, respectively. The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days. COMMON STOCK Effective November 11, 2019, the Company implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. On September 30, 2019, and in accordance with the terms of the Convertible Promissory Note, Walefar and Campbeltown each exercised the right to convert $75 thousand in unpaid principal balance into fully paid and non-assessable shares of the Company’s common stock at a conversion price of $0.236. Accordingly, the Company issued 317,796 shares to each of Walefar and Campbeltown. On September 5, 2019, the Company entered into a letter agreement with Shai Lustgarten, the Company’s Chief Executive Officer, pursuant to which the Company and Mr. Lustgarten agreed to extend the term of Mr. Lustgarten’s employment agreement for an additional two (2) years. As consideration and in light of the Company’s achievements under the leadership of Mr. Lustgarten, the Company, pursuant to its 2018 Equity Incentive Plan, issued to Mr. Lustgarten 50,000 shares of the Company’s common stock valued at $250 thousand. On September 5, 2019, the Company entered into a letter agreement with Mr. Carlos J. Nissensohn and/or an entity under his control, a consultant to the Company and principal stockholder, pursuant to which they agreed to extend the term of Mr. Nissensohn’s and/or an entity under his control’s consulting agreement for an additional two (2) years. As consideration and in light of Mr. Nissensohn’s and/or an entity under his control’s past consulting services which the Company believes were essential to its recent achievements, the Company, pursuant to the 2018 Equity Incentive Plan, issued to Mr. Nissensohn and/or an entity under his control 27,500 shares of the Company’s common stock, valued at $138 thousand. On April 4, 2019, the Company entered into a form of Securities Purchase Agreement (the “Securities Purchase Agreement”) with accredited investors (the “Purchasers”). Pursuant to the Securities Purchase Agreement, on April 9, 2019 (the “Closing Date”), the Company sold an aggregate, with the Conversions included, of $5.0 million of units (the “Units”) resulting in gross proceeds of $5.0 million, before deducting placement agent fees and offering expenses (the “Offering”). The individual Unit purchase price was $6.00. Each Unit is comprised of one share of the Company’s common stock, $0.001 par value per share (the “Common Stock”), and a warrant to purchase one share of Common Stock, and, as a result of the Offering, the Company issued 833,333 shares of Common Stock (the “Shares”) and warrants (the “Warrants”) to purchase 833,333 shares of Common Stock (the “Warrant Shares”) at an exercise price equal to $7.00 per Warrant Share, which Warrants are exercisable for a period of five and one-half years from the issuance date. Both Shai Lustgarten, the Company’s Chief Executive Officer, and Carlos J. Nissenson, a consultant to and principal stockholder of the Company, participated in the Offering by converting $200 thousand each of unpaid principal owed to them from the HTS acquisition (the “Conversions”), by the Company in exchange for Shares and Warrants on the same terms as all other Purchasers. With the Conversions included, the Offering resulted in gross proceeds of $5.0 million. As a result of the Conversions, a principal amount of $150 thousand is owed to each Walefar and Campbeltown respectively under the note issued to them as partial consideration in the sale of HTS Image Processing to the Company on October 5, 2018. In March 2018 and pursuant to the Company’s 2018 Equity Incentive Plan, the Company granted 50,000 shares of the Company’s common stock valued at $119 thousand to the Company’s Chief Executive Officer Shai Lustgarten. The shares were valued at the fair market value of the Company’s common stock on the date of issuance. During 2018, the Company issued 3,996 shares of the Company’s common stock, valued at $11 thousand, to employees of the Company as part of the Company’s 2018 Equity Incentive Plan. The shares were valued as of the date of grant at the fair value of the Company’s common stock. During 2018, the Company issued 141,022 shares of the Company’s common stock for services rendered by independent third parties, the Company’s former CFO, and related party noteholders. The shares were valued at $395 thousand using the fair market value of the shares on the date of issuance. During 2018, the Company issued 430,000 shares of the Company’s common stock at a fair value of $2.7 million for the conversion of principal and accrued interest of $1.2 million and $247 thousand, respectively, or $1.4 million. The difference of $1.2 million was record as interest expense in the consolidated statement of operations. The shares were valued using the fair value of the Company’s common stock as of the date of issuance. On June 26, 2018, the Company issued 7,500 shares of common stock to Maren Life Reinsurance LTD as part of a debt settlement agreement. In October 2018, and as partial consideration of the acquisition of HTS, the Company issued 1,122,648 shares of the Company’s common stock to the previous owners of HTS. These shares were valued at $5.3 million. See Note 4 – Acquisitions for further details. In January 2016, the Company entered into a Stock Redemption Agreement whereby the Company would repurchase 25,354 shares of common stock for $230 thousand on an installment basis which was recorded as a note on the transaction date carrying interest at 9%. In March 2019, the Company made its last payment under the Stock Redemption Agreement and the 25,354 shares were cancelled. Warrants and Stock Options In connection with the April 4, 2019 Securities Purchase Agreement previously described in detail, the Company issued warrants to purchase 891,667 shares of Common Stock at an exercise price equal to $7.00 per Warrant Share, which Warrants are exercisable for a period of five and one-half years from the issuance date. The warrants were valued at $2.9 million. Also during 2019, the Company issued options to purchase 128 thousand shares valued at $564 thousand. These options and warrants were valued at the grant date using the Black-Scholes valuation methodology. The Company determines the assumptions used in the valuation of warrants and option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options and warrants granted throughout the year. The valuation assumptions used to determine the fair value of each option/warrants award on the date of grant were: expected stock price volatility 156.0% - 157.0%; expected term in years 4.0-5.5; and risk-free interest rate 1.40% - 2.31%. The following table summarizes information about warrants granted during the years ended December 31,: 2019 2018 Number of Weighted Number of Weighted Balance, beginning of year 275,000 $ 4.55 295,250 $ 5.00 Warrants granted 891,667 7.00 50,000 9.72 Warrants expired - - 70,250 10.40 Warrants cancelled, forfeited - - - - Warrants exercised - - - - Balance, end of year 1,166,667 6.42 275,000 4.55 Exercisable warrants 1,166,667 $ 6.42 275,000 $ 4.55 Outstanding warrants as of December 31, 2019 are as follows: Range of Weighted Average Outstanding Weighted Exercisable Weighted 2.20 1.59 75,000 $ 2.20 75,000 $ 2.20 4.00 1.00 150,000 4.00 150,000 4.00 5.60 0.49 10,000 5.60 10,000 5.60 7.00 4.77 891,667 7.00 891,667 7.00 12.00 0.78 15,000 12.00 15,000 12.00 10.00 1.78 25,000 10.00 25,000 10.00 2.20 to 12.00 3.93 1,166,667 $ 6.42 1,166,667 $ 6.42 Warrants outstanding have the following expiry date and exercise prices as of the year ended December 31,: Expiry Date Exercise 2019 2018 December 30, 2020 $ 4.00 150,000 150,000 August 2, 2021 2.20 75,000 75,000 June 26, 2020 5.60 10,000 10,000 October 10, 2020 12.00 15,000 15,000 October 10, 2021 10.00 25,000 25,000 October 6, 2024 7.00 891,667 - $ 6.42 1,166,667 275,000 Share Purchase Option Plan The Company has a stock option plan whereby the Board of Directors, may grant to directors, officers, employees, or consultants of the Company options to acquire common shares. The Board of Directors of the Company has the authority to determine the terms, limits, restrictions and conditions of the grant of options, to interpret the plan and make all decisions relating thereto. The plan was adopted by the Company’s Board of Directors on November 17, 2014 in order to provide an inducement and serve as a long term incentive program. The maximum number of common shares that may be reserved for issuance was set at 500,000. The option exercise price is established by the Board of Directors and may not be lower than the market price of the common shares at the time of grant. The options may be exercised during the option period determined by the Board of Directors, which may vary, but will not exceed ten years from the date of the grant. There are 500,000 of the Company’s common shares which may be issued pursuant to the exercise of share options granted under the Plan. As at December 31, 2017, the Company had issued options, allowing for the subscription of 481,250 common shares of its share capital. Stock Options 2019 2018 Number of options Weighted Number of options Weighted Balance, beginning of year 1,006,050 $ 3.80 481,250 $ 4.20 Stock options granted 127,500 5.00 592,000 3.40 Stock options expired - - (1,800 ) - Stock options cancelled, forfeited - - (65,400 ) - Stock options exercised - - - - Balance, end of year 1,133,550 4.00 1,006,050 3.80 Exercisable stock options 952,425 $ 3.94 792,050 $ 3.80 During 2018, the Company canceled a total of 65,400 stock options. Outstanding stock options as of December 31, 2019 are as follows: Range of Weighted Outstanding Weighted Exercisable Weighted 1.50 to 1.80 2.13 114,050 $ 1.70 114,050 $ 1.70 2.20 1.59 175,000 2.20 175,000 2.20 5.00 3.58 127,500 5.00 31,875 5.00 10.00 4.89 125,000 10.00 125,000 10.00 2.40 3.18 340,000 2.40 297,500 2.40 4.40 3.84 108,250 4.40 81,188 4.40 5.40 3.92 143,750 5.40 127,813 5.40 0.075 to 0.50 3.22 1,133,550 $ 4.00 952,425 $ 3.94 Stock options outstanding at the end of the year have the following expiry date and exercise prices: Expiry Date Exercise December 31, 2019 December 31, 2018 August 2, 2021 $ 2.20 175,000 175,000 February 17, 2022 1.70 114,050 114,050 March 05, 2023 2.40 340,000 340,000 July 31, 2023 5.00 127,500 - October 31, 2023 4.40 108,250 108,250 November 30, 2023 5.40 143,750 143,750 November 20, 2024 10.00 125,000 125,000 $ 4.00 1,133,550 1,006,050 The Company recorded stock compensation expense relating to the vesting of stock options and warrants as follows for the years ended December 31, 2019 and 2018; 2019 2018 In thousands Stock compensation $ 388 $ 569 Stock Option vesting 879 1,818 Total $ 1,267 $ 2,387 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16 – RELATED PARTY TRANSACTIONS During part of 2018, the Company leased a building from the former owner of BCS for $9 thousand per month, which was believed to be the current fair market value of similar buildings in the area. These amounts are included in the lease disclosure schedule, Note 14. In addition, on August 2, 2017, the Company entered into a Consulting agreement with Carlos J. Nissenson, a principal shareholder of the Company and a family member of a Director of the Company. The terms and condition of the contract are as follows: ● 24-month term with 90 day termination notice by the Company ● A monthly fee of $15 thousand and a one-time signatory fee of 30,000 restricted shares ● 75,000 warrants to buy shares at $2.20 having a four-year life and a vesting period of 12 months in four quarterly and equal installments, subject to continuous service to the Company ● In case the Company procures debt financing during the term of this agreement, without any equity component, Mr. Nissenson shall be entitled to 3% of the gross funds raised, however if the Company is required to pay a success fee to another external entity, then Mr. Nissenson shall be entitled to only 2% of the gross funds raised ● In addition to the above, in the event of an equity financing resulting in gross proceeds of at least $3 million to the Company within 24 months of the date the contract, Mr. Nissenson shall further be entitled to certain warrants to be granted by the Company which upon their exercise pursuant to their terms, Mr. Nissenson shall be entitled to receive QUEST shares which represent 3% of the QUEST issued share capital immediately prior to the consummation of such investment. The warrants will carry an exercise price per warrant/share representing 100% of the closing price per share as closed in the equity financing. This section and the issue of the warrant by QUEST are subject to the approval of the Board of Directors of QUEST. However, if the Board does not approve the issuance of warrants; then Mr. Nissenson will be entitled to a fee with the equivalent value based on a Black Scholes valuation ● In addition to the above, Mr. Nissenson will be entitled to a $ st ● In addition to the aforementioned, in the event that the Company shall close any M&A transaction with a third party target, Mr. Nissenson shall be entitled to a success fee in the amount equal to 3% of the total transaction price, in any combination of cash and shares that will be determined by QUEST Additional related party transactions are discussed in Notes 11 and 15. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 17 – INCOME TAX For the year ended December 31, 2019, the Company has $14 thousand of current income tax provision (US State & Local and Foreign) and no deferred income tax provision. The tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December 31, In thousands Deferred tax assets 2019 2018 Reserves and deferred revenue $ 238 $ 460 163(J) Limitation 664 299 Stock options - 976 Net operating loss 5,319 5,029 Total gross deferred tax assets 6,221 6,764 Less: Valuation Allowance (5,414 ) (5,870 ) Net deferred tax assets 807 894 Deferred tax liabilities Amortization of intangible assets and depreciation (807 ) (894 ) Total deferred tax liabilities (807 ) (894 ) Net deferred tax assets $ - $ - Components of net deferred tax assets, including a valuation allowance, are as follows as of December 31: 2019 2018 Deferred tax assets $ 5,414 $ 5,870 Valuation allowance (5,414 ) (5,870 ) Total deferred tax assets $ - $ - The valuation allowance for deferred tax assets as of December 31, 2019 and 2018 was $5.4 million and $5.9 million, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management has recorded a 100% Valuation Allowance, against its Net Deferred Tax Assets, since Management believes it is more likely than not that it will not be realized at the date of this statement. The Company will continue to monitor the potential utilization of this asset. Should factors and evidence change to aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur. The Company records any penalties and interest as a component of operating expenses. The reconciliation between statutory rate and effective rate is as follows as of December 31, 2019 and 2018: 2019 2018 Federal statutory tax rate 21.0 % 21.0 % State taxes 1.41 % 1.73 % Foreign income taxes - % (0.66 )% Nondeductible items (11.52 )% (8.87 )% Acquisition accounting adjustments - % 8.74 % Change in valuation allowance 13.48 % 8.58 % Return to provision adjustments (25.33 )% (22.09 )% Other 0.56 % (0.44 )% Effective tax rate (0.40 )% 7.99 % The Company reported no uncertain tax liability as of December 31, 2019 and expects no significant change to the uncertain tax liability over the next twelve months. The Company’s 2014, 2015, 2016, 2017, and 2018 federal and state income tax returns are open for examination by the applicable governmental authorities. As of December 31, 2019, the Company had a net operating loss (NOL) carryforward of approximately $22.1 million. The NOL carryforward begins to expire in 2024. Under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income. Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine unrelated shareholders that do not individually own 5% or more of the corporation’s stock into one or more “public groups” that may be treated as 5-percent shareholder) increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years). In general, the annual use limitation equals the aggregate value of common stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The Company has not completed a study as to whether there is a 382 limitation on its NOLs that will limit or possibly eliminate the use of its NOLs in the future. Company’s Management has recorded a 100% valuation allowance on the entire NOL as it believes that it is more likely than not that the deferred tax asset associated with the NOLs will not be realized regardless of whether or not an “ownership change” has occurred. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 – SUBSEQUENT EVENTS In accordance with ASC 855, “Subsequent Events”, the Company has evaluated all subsequent events through the date of this filing. No other significant events have occurred besides the events disclosed in the Notes to the Financial Statements. Asset purchase agreement On February 28, 2020, the Company entered in an asset purchase agreement (the “Asset Purchase Agreement”) with EyepaxIT Consulting LLC, a California limited liability company, (“Eyepax”) and the principal owners of Eyepax (collectively the “Sellers”), effective September 30, 2019, pursuant to which the Company purchased certain assets from the Sellers at a cash purchase price of $245,000. As additional consideration, the Company shall issue to the Sellers 80,000 shares of the Company’s common stock and an option to purchase 20,000 shares of the Company’s common stock at an exercise price of $5.00 per share, subject to adjustment, which shall vest quarterly in four (4) equal installments and expire on February 28, 2023. Pursuant to the Asset Purchase Agreement, the Company shall enter into an employment agreement with Mr. Lalith Caldera, a principal owner of Eyepax, and pay Mr. Caldera an annual salary of $100,000. COVID-19 On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including geographical areas in which the Company operates. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our customers, employees and vendors all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain. |
Principles of Consolidation a_2
Principles of Consolidation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial position and results of operations of OMNIQ Corp. and its wholly-owned subsidiaries Quest Marketing, Inc., Quest Exchange Ltd., and HTS Image Processing, Inc., collectively referred to herein as “we” or “us” or “our” or the “Company.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. |
Reclassifications and Comparability | RECLASSIFICATIONS AND COMPARABILITY Certain amounts in the financial statements of prior years have been reclassified to conform to the current year presentation for comparative purposes. This had no effect on total assets or net income. |
Reverse Stock Split | REVERSE STOCK SPLIT Effective November 20, 2019, the Company implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. As a result of the Reverse Split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by the Company and outstanding immediately prior to the Effective Time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares authorized for future grant under the Company’s equity incentive/compensation plans immediately prior to the Effective Time was reduced proportionately. |
Use of Estimates | USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may materially differ from these estimates and assumptions used in preparation of the consolidated financial statements. Significant areas where estimates and management judgments were used include calculation of stock based compensation, deferred tax assets/liabilities, valuation of intangible assets, allowance for doubtful accounts receivable, and net realizable value of inventory. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. ● Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. The carrying amounts of certain financial instruments, such as cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash consists of petty cash, checking, savings, and money market accounts. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2019 and 2018. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has restricted cash on deposit with a federally insured bank in the amount of $533 thousand and $532 thousand at December 31, 2019 and 2018, respectively. This cash is security and collateral for a corporate credit card agreement with a bank and for deposit against a letter of credit issued for executive life insurance policies owned by the Company. |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. The Company generally requires no collateral to secure its ordinary accounts receivable. Based on management’s evaluation, accounts receivable has a balance in the allowance for doubtful accounts of $36 thousand and $33 thousand for the years ended December 31, 2019 and 2018, respectively. |
Inventory | INVENTORY Substantially all inventory consists of raw materials and finished goods and are valued at the lower of cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are recorded at cost and depreciated using both straight-line and accelerated methods over estimated useful lives ranging from 3 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in the results of operations. Depreciation expense for the years ended December 31, 2019 and 2018 was $152 thousand and $57 thousand, respectively. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred. |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS As a result of acquisitions, the Company recorded goodwill and identifiable intangible assets as part of its allocation of the purchase consideration. Goodwill Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested for impairment annually or whenever events indicate that the carrying amount might not be recoverable. The qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. No impairment charges have been recorded as a result of the Company’s annual impairment assessments. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired. For goodwill and indefinite lived intangible assets, the Company completes what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative two-step impairment test. The quantitative analysis compares the fair value of our reporting unit or indefinite-lived intangible assets to the carrying amounts, and an impairment loss is recognized equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows, market multiples or appraised values, as appropriate. Discounted cash flow analysis requires assumptions about the timing and amount of future cash inflows and outflows, risk, the cost of capital, and terminal values. Each of these factors can significantly affect the value of the intangible asset. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s judgment. Any changes in key assumptions about the Company’s businesses and their prospects, or changes in market conditions, could result in an impairment charge. Some of the more significant estimates and assumptions inherent in the intangible asset valuation process include: the timing and amount of projected future cash flows; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal or regulatory trends. In the year ended December 31, 2019 the Company determined that there were no indicators of impairment of goodwill. Intangibles Intangible assets with finite useful lives consist of trademarks, customer lists, and intellectual property rights and are amortized on a straight-line basis over their estimated useful lives, which range from two to seven years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. There was no impairment recorded for 2019 and 2018. |
Purchase Accounting and Business Combinations | PURCHASE ACCOUNTING AND BUSINESS COMBINATIONS The Company accounts for its business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. The valuation and allocation processes rely on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when the Company receives updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. |
Revenue Recognition | Revenue Recognition The Company is a primary distribution 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 goods 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 allow for the Company to recognize revenue when the product reaches the customer’s location. 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 warehouses. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. Revenue Recognition for Hardware Revenues from sales of hardware products are recognized on a gross basis as the Company is acting as a principal in these transactions, with the selling price to the customer recorded as Net sales and the acquisition cost of the product recorded as Cost of sales. The Company recognizes revenue from these transactions when control has passed to the customer, which is usually upon delivery of the product to the customer. The Company’s vendor partners warrant most of the products the Company sells. These manufacturer warranties are assurance-type warranties and are not considered separate performance obligations. The warranties are not sold separately and only provide assurance that products will conform to the manufacturer’s specifications. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. The Company considers these warranties to be separate performance obligations from the underlying product. For warranties, the Company is arranging for those services to be provided by the third-party and therefore is acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Software Revenues from most software license sales are recognized as a single performance obligation on a gross basis as the Company is acting as a principal in these transactions at the point the software license is delivered to the customer. Generally, software licenses are sold with accompanying third-party delivered software assurance, which is a product that allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. The Company evaluates whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering if the software provides its original intended functionality to the customer without the updates, if the customer would ascribe a higher value to the upgrades versus the up-front deliverable, if the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and if the customer chooses to not delay or always install upgrades. If the Company determines that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. The Company considers these warranties to be separate performance obligations from the underlying product. For warranties, the Company is arranging for those services to be provided by the third-party and therefore is acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Services The Company provides professional services, which include project managers and consultants recommending, designing and implementing IT solutions. Revenue from professional services is recognized either on a time and materials basis or proportionally as costs are incurred for fixed fee project work. Revenue is recognized on a gross basis each month as work is performed and the Company transfers those services. Revenues from the sale of professional and support services, provided by the Company, are recognized over the period the service is provided. As the customer receives the benefit of the service each month, the Company recognizes the respective revenue on a gross basis as the Company is acting as a principal in the transaction. Additionally, the Company’s managed services team provides project support to customers on a fixed fee basis. The Company is acting as the principal in the transaction and recognizes revenue on a gross basis based on the total number of hours incurred for the period over the total expected hours for the project. Total expected hours to complete the project is updated for each period and best represents the transfer of control of the service to the customer. Freight Costs The Company records both the freight billed to its customers and the related freight costs as Cost of sales when the underlying product revenue is recognized. For freight not billed to its customers, the Company records the freight costs as Cost of sales. The Company’s typical shipping terms result in shipping being performed before the customer obtains control of the product. The Company considers shipping to be a fulfillment activity and not a separate performance obligation. |
Advertising | ADVERTISING The Company generally expenses marketing and advertising costs as incurred. During 2019 and 2018, the Company spent $224 thousand and $148 thousand, respectively, on marketing, trade show and store front expense and advertising, net of co-operative rebates. The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense. |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values. For non-employee stock-based compensation, we have adopted ASC Topic 505 “Equity-Based Payments to Non-Employees”, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic 718. On December 23, 2015, the Company’s Board of Directors approved the Quest Solution, Inc. Employee Stock Purchase Plan (the “ESPP”), under which 95,000 shares of common stock were reserved for the purchase by the Company’s employees. Under the plan, employees may purchase a limited number of shares of the Company’s common stock at a 15% discount from the closing market prices measured on the last days of each month. On March 6, 2018, the Board approved the Company’s 2018 Equity Incentive Plan and later amended it on October 31, 2018. On January 23, 2019, the Company’s shareholders adopted and ratified the 2018 Equity Incentive Plan. The total number of shares of Common Stock authorized for issuance under the 2018 Plan is 800,000. Equity instruments issued to parties other than employees for acquiring goods or services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”). Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Warrants The fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management’s judgment. Expected volatilities used in the valuation model are based on the average volatility of the Company’s stock. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve in effect at the time of grant. |
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company is U.S. dollars. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. All of the Company’s continuing operations are conducted in U.S. dollars except its subsidiary located in Israel. The records of the Israeli operation were maintained in the local currency and re-measured to the functional currency as follows: monetary assets and liabilities are converted using the balance sheet period-end date exchange rate, while the non-monetary assets and liabilities are converted using the historical exchange rate. Expenses and income items are converted using the weighted average exchange rates for the reporting period. Foreign transaction gains and losses are reported on the consolidated statement of operations and were included in the amount of loss from discontinued operations. |
Income Taxes | INCOME TAXES The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company’s income is subject to taxation in both the U.S. and a foreign jurisdiction, Israel. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company establishes reserves for income tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that positions do not meet the more-likely-than-not recognition threshold. The Company adjusts uncertain tax liabilities in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of uncertain tax liabilities and changes in liabilities that are considered appropriate. |
Comprehensive Income (Loss) | COMPREHENSIVE INCOME (LOSS) Comprehensive income/(loss) is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company’s other comprehensive income (loss) is composed of foreign currency translation adjustments. |
Net Loss Per Common Share | NET LOSS PER COMMON SHARE See NOTE 15 regarding our 1-for-20 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented. Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the years ended December 31, 2019 and 2018 were 3,889,478 and 2,481,530, respectively. Diluted net loss per share of common stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive. The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported: In thousands 2019 2018 Options to purchase common stock 737 629 Convertible preferred stock 242 241 Warrants to purchase common stock 225 225 Common stock subject to repurchase - (25 ) Potential shares excluded from diluted net loss per share 1,203 1,070 |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Adopted Accounting Pronouncements In July 2018, the FASB issued ASU 2018-10, Leases (Topic 842) In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses.” In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Income Taxes (ASC 740) |
Principles of Consolidation a_3
Principles of Consolidation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Anti Dilutive Securities Excludes from Computation of Earnings Per Share | The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported: In thousands 2019 2018 Options to purchase common stock 737 629 Convertible preferred stock 241 241 Warrants to purchase common stock 225 225 Common stock subject to repurchase - (25 ) Potential shares excluded from diluted net loss per share 1,203 1,070 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Purchase Price | The Audit shares have been included in the purchase price at the Acquisition Date fair value of the Company’s common stock. In thousands Calculation of the purchase price: Fair value of stock at closing $ 2,683 Cash at closing 300 Convertible promissory note 700 Purchase price $ 3,683 |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: In thousands Cash $ 277 Accounts receivable, net 1,911 Inventory 1,196 Prepaid expenses 16 Fixed assets 96 Intangibles 4,700 Goodwill 3,806 Accounts payable (2,944 ) Related party payable (1,868 ) Notes payable (1,462 ) Notes payable- related parties (1,541 ) Foreign currency adjustment 48 Deferred tax liability (552 ) Net assets acquired $ 3,683 |
Summary of Intangible Assets | Intangibles assets consisted of the following: In thousands, except years Fair Value Life in Years Market related intangibles $ 170 5 Customer relationships 3,400 9 Patents 1,030 11 Software 100 4 $ 4,700 |
Schedule of Proforma for Acquisitions | The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies, or the effect of the incremental costs incurred in integrating the two companies. Accordingly, these unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations: For the year ended December 31, 2018 Quest HTS Total Dr Cr Proforma Revenues $ 56,202 $ 5,516 $ 61,718 - (1,909 ) $ 59,809 Net income (loss) $ (5,695 ) $ (1,276 ) $ (6,971 ) 314 (184 ) $ (7,101 ) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable Net | Accounts receivable consisted of the following as of December 31: In thousands 2019 2018 Trade Accounts Receivable $ 6,730 $ 12,295 Less Allowance for doubtful accounts (36 ) (33 ) Total Accounts Receivable (net) $ 6,694 $ 12,262 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of December 31, 2019: In thousands 2019 2018 Equipment and Clearing Service $ 728 $ 801 Raw Materials 1,022 568 Work in process 44 47 Finished goods 95 388 Total inventories $ 1,889 $ 1,804 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill and Intangible assets consisted of the following as of December 31: In thousands 2019 2018 Goodwill $ 13,921 $ 13,921 Trade Names 4,390 4,390 Customer Relationships 12,590 12,590 Intellectual property 1,323 1,300 Accumulated amortization (9,695 ) (7,694 ) Intangibles, net $ 22,529 $ 24,507 |
Schedule of Finite-lived Intangible Assets, Future Amortization Expense | The future amortization expense on the Customer Relationships, and IP are as follows: In thousands Years ending December 31, 2020 2,007 2021 1,941 2022 1,315 2023 1,289 2024 546 Thereafter 1,510 Total $ 8,608 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable, Related Parties | Notes payable, related parties consisted of the following as of December 31: 2019 2018 In thousands Note payable – debt restructure Marin $ 900 $ 1,160 Note payable – debt restructure Thomet 563 713 Note payable – debt restructure Zicman 135 171 Convertible note payable – shareholders 150 700 Note payable - RWCC 449 1,059 Total notes payable 2,197 3,803 Less current portion 1,025 1,891 Long-term portion $ 1,172 $ 1,912 |
Schedule of Future Maturities of Notes Payable, Related Parties | The repayment of the notes payable, related parties is contingent on the complete reimbursement of the Supplier Secured Promissory Note and other conditions and on these factors management has estimated that the future maturities of notes payable, related parties, as of December 31, 2019 is as follows for the years ending December 31,: In thousands 2020 1,025 2021 426 2022 426 2023 320 Thereafter - Total $ 2,197 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consists of the following as of December 31,: In thousands 2019 2018 Supplier Secured Note Payable $ 6,490 $ 8,340 All Other 150 613 Total 6,640 8,953 Less current portion 6,497 8,823 Long Term Notes Payable $ 143 $ 130 |
Schedule of Future Maturities of Note Payable | Future maturities of notes payable are as follows for the years ending December 31,; In thousands 2020 $ 6,497 2021 6 2022 - Thereafter 137 Total $ 6,640 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | At December 31, 2019 and 2018, other liabilities consisted of the following: In thousands 2019 2018 Other vendor payable $ 801 - Dividend payable 344 478 Bonus payable 385 - Others 453 397 Total other liabilities 1,983 875 Less Current Portion (1,599 ) (265 ) Total long term other liabilities $ 384 $ 610 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease | Amounts recognized at January 1 and December 31, 2019 for operating leases are as follows: In thousands January 1, 2019 December 31, 2019 ROU assets $ 235 $ 131 Lease liability $ 235 $ 134 |
Schedule of Other Information Related to Operating Lease | Other information related to our operating leases is as follows: In thousands ROU asset - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (93 ) ROU asset - December 31, 2019 $ 131 Lease liability - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (90 ) Lease liability - December 31, 2019 $ 134 In thousands December 31, 2019 Lease liability Short term $ 54 Long term $ 80 Total $ 134 |
Schedule of Future Minimum Rental Payments for Operating Leases | The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2019: In thousands Year Minimum lease payments 2020 $ 70 2021 $ 41 2022 $ 38 Thereafter $ 16 Total $ 165 Less interest $ (31 ) Present value of future minimum lease payments $ 134 Less current obligations $ (54 ) Long term lease obligations $ 80 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stock Options Warrants | The following table summarizes information about warrants granted during the years ended December 31,: 2019 2018 Number of Weighted Number of Weighted Balance, beginning of year 275,000 $ 4.55 295,250 $ 5.00 Warrants granted 891,667 7.00 50,000 9.72 Warrants expired - - 70,250 10.40 Warrants cancelled, forfeited - - - - Warrants exercised - - - - Balance, end of year 1,166,667 6.42 275,000 4.55 Exercisable warrants 1,166,667 $ 6.42 275,000 $ 4.55 |
Schedule of Outstanding Warrants | Outstanding warrants as of December 31, 2019 are as follows: Range of Weighted Average Outstanding Weighted Exercisable Weighted 2.20 1.59 75,000 $ 2.20 75,000 $ 2.20 4.00 1.00 150,000 4.00 150,000 4.00 5.60 0.49 10,000 5.60 10,000 5.60 7.00 4.77 891,667 7.00 891,667 7.00 12.00 0.78 15,000 12.00 15,000 12.00 10.00 1.78 25,000 10.00 25,000 10.00 2.20 to 12.00 3.93 1,166,667 $ 6.42 1,166,667 $ 6.42 |
Schedule of Warrants Outstanding, Expiry Date and Exercise Prices | Warrants outstanding have the following expiry date and exercise prices as of the year ended December 31,: Expiry Date Exercise 2019 2018 December 30, 2020 $ 4.00 150,000 150,000 August 2, 2021 2.20 75,000 75,000 June 26, 2020 5.60 10,000 10,000 October 10, 2020 12.00 15,000 15,000 October 10, 2021 10.00 25,000 25,000 October 6, 2024 7.00 891,667 - $ 6.42 1,166,667 275,000 |
Schedule of Stock Options Granted | Stock Options 2019 2018 Number of options Weighted Number of options Weighted Balance, beginning of year 1,006,050 $ 3.80 481,250 $ 4.20 Stock options granted 127,500 5.00 592,000 3.40 Stock options expired - - (1,800 ) - Stock options cancelled, forfeited - - (65,400 ) - Stock options exercised - - - - Balance, end of year 1,133,550 4.00 1,006,050 3.80 Exercisable stock options 952,425 $ 3.94 792,050 $ 3.80 |
Schedule of Outstanding Stock Options | Outstanding stock options as of December 31, 2019 are as follows: Range of Weighted Outstanding Weighted Exercisable Weighted 1.50 to 1.80 2.13 114,050 $ 1.70 114,050 $ 1.70 2.20 1.59 175,000 2.20 175,000 2.20 5.00 3.58 127,500 5.00 31,875 5.00 10.00 4.89 125,000 10.00 125,000 10.00 2.40 3.18 340,000 2.40 297,500 2.40 4.40 3.84 108,250 4.40 81,188 4.40 5.40 3.92 143,750 5.40 127,813 5.40 0.075 to 0.50 3.22 1,133,550 $ 4.00 952,425 $ 3.94 |
Schedule of Stock Options, Expiry Date and Exercise Prices | Stock options outstanding at the end of the year have the following expiry date and exercise prices: Expiry Date Exercise December 31, 2019 December 31, 2018 August 2, 2021 $ 2.20 175,000 175,000 February 17, 2022 1.70 114,050 114,050 March 05, 2023 2.40 340,000 340,000 July 31, 2023 5.00 127,500 - October 31, 2023 4.40 108,250 108,250 November 30, 2023 5.40 143,750 143,750 November 20, 2024 10.00 125,000 125,000 $ 4.00 1,133,550 1,006,050 |
Summary of Stock Compensation Expense | The Company recorded stock compensation expense relating to the vesting of stock options and warrants as follows for the years ended December 31, 2019 and 2018; 2019 2018 In thousands Stock compensation $ 388 $ 569 Stock Option vesting 879 1,818 Total $ 1,267 $ 2,387 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December 31, In thousands Deferred tax assets 2019 2018 Reserves and deferred revenue $ 238 $ 460 163(J) Limitation 664 299 Stock options - 976 Net operating loss 5,319 5,029 Total gross deferred tax assets 6,221 6,764 Less: Valuation Allowance (5,414 ) (5,870 ) Net deferred tax assets 807 894 Deferred tax liabilities Amortization of intangible assets and depreciation (807 ) (894 ) Total deferred tax liabilities (807 ) (894 ) Net deferred tax assets $ - $ - |
Schedule of Deferred Tax Assets and Valuation Allowances | Components of net deferred tax assets, including a valuation allowance, are as follows as of December 31: 2019 2018 Deferred tax assets $ 5,414 $ 5,870 Valuation allowance (5,414 ) (5,870 ) Total deferred tax assets $ - $ - |
Schedule of Reconciliation of Statutory Rate and Effective Tax Rate | The reconciliation between statutory rate and effective rate is as follows as of December 31, 2019 and 2018: 2019 2018 Federal statutory tax rate 21.0 % 21.0 % State taxes 1.41 % 1.73 % Foreign income taxes - % (0.66 )% Nondeductible items (11.52 )% (8.87 )% Acquisition accounting adjustments - % 8.74 % Change in valuation allowance 13.48 % 8.58 % Return to provision adjustments (25.33 )% (22.09 )% Other 0.56 % (0.44 )% Effective tax rate (0.40 )% 7.99 % |
History and Organization of t_2
History and Organization of the Company (Details Narrative) - USD ($) | May 29, 2019 | Apr. 09, 2019 | Oct. 05, 2018 | Sep. 30, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 04, 2019 | Jun. 03, 2019 | Apr. 04, 2019 | Nov. 30, 2014 |
Accrued dividend | $ 32,000 | |||||||||
Net value proceeds of contingent consideration | $ 2,683,000 | |||||||||
Aggregate gross proceeds from issuance of stock | $ 3,770,000 | $ 11,000 | ||||||||
Common stock par value | $ 0.001 | $ 0.001 | ||||||||
Warrants exercise price | $ 6.42 | |||||||||
Debt instrument conversion of shares amount | $ 550,000 | |||||||||
Common stock, shares issued | 3,960,405 | 3,596,585 | ||||||||
Common stock, shares outstanding | 3,960,405 | 3,596,585 | ||||||||
Walefar and Campbeltown [Member] | ||||||||||
Debt instrument conversion of shares amount | $ 150,000 | |||||||||
Securities Purchase Agreement [Member] | ||||||||||
Aggregate gross proceeds from issuance of stock | $ 5,000,000 | |||||||||
Shares issued, price per share | $ 0.30 | |||||||||
Common stock par value | $ 0.001 | |||||||||
Number of warrants to purchase common stock | 833,333 | 891,667 | ||||||||
Warrants exercise price | $ 7 | $ 7 | ||||||||
Securities Purchase Agreement [Member] | Principal Stockholder [Member] | ||||||||||
Debt instrument conversion of shares amount | $ 200,000 | |||||||||
HTS Purchase Agreement [Member] | ||||||||||
Number of common stock issued | 1,122,648 | |||||||||
Number of common stock issued, value | $ 5,300,000 | |||||||||
Common stock, shares issued | 4,404,684 | 3,850,451 | ||||||||
Common stock, shares outstanding | 4,404,684 | 3,850,451 | ||||||||
HTS Purchase Agreement [Member] | Campbeltown Consulting, Ltd [Member] | ||||||||||
Number of shares return for cancelation | 277,166 | |||||||||
HTS Purchase Agreement [Member] | Walefar Investments, Ltd [Member] | ||||||||||
Number of shares return for cancelation | 277,116 | |||||||||
HTS Image Processing, Inc [Member] | ||||||||||
Percentage of shares acquired | 100.00% | |||||||||
Maximum [Member] | HTS Purchase Agreement [Member] | ||||||||||
Number of common stock issued | 1,122,648 | |||||||||
Number of common stock issued, value | $ 5,300,000 | |||||||||
Common stock, shares issued | 4,404,653 | |||||||||
Common stock, shares outstanding | 4,404,653 | |||||||||
Minimum [Member] | HTS Purchase Agreement [Member] | ||||||||||
Number of common stock issued | 568,415 | |||||||||
Number of common stock issued, value | $ 2,700,000 | |||||||||
Common stock, shares issued | 3,850,421 | |||||||||
Common stock, shares outstanding | 3,850,421 | |||||||||
Preferred Class B Stock [Member] | ||||||||||
Number of redeemed shares during the period | 1 | |||||||||
Preferred Class C Stock [Member] | ||||||||||
Number of redeemed shares during the period | 1,839,030 | |||||||||
Quest Solution Canada Inc. [Member] | ||||||||||
Sale of stock, consideration received on transaction | $ 1,000,000 | |||||||||
Cash from divestiture of Quest Solution Canada Inc. | $ 577,000 | |||||||||
Cancelled debt, value | $ 7,000,000 | |||||||||
Contingent consideration, percentage | 15.00% | |||||||||
Quest Solution Canada Inc. [Member] | Maximum [Member] | ||||||||||
Net value proceeds of contingent consideration | $ 2,300,000 | |||||||||
Quest Exchange Ltd., [Member] | ||||||||||
Number of redeemed shares during the period | 5,200,000 | |||||||||
Viascan Group Inc [Member] | ||||||||||
Liabilities assumed | $ 1,000,000 | |||||||||
Bar Code Specialties Inc. [Member] | ||||||||||
Percentage of shares acquired | 100.00% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Working capital deficit | $ 20,200 | |
Accumulated deficit | (45,063) | $ (39,753) |
Proceeds from sale of common stock | 3,770 | 11 |
April 2019 [Member] | ||
Proceeds from sale of common stock | $ 5,000 | |
Number of stock issued | 833,333 | |
Maximum [Member] | ||
Increase in credit availability | $ 5,000 |
Principles of Consolidation a_4
Principles of Consolidation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Nov. 11, 2019 | Dec. 23, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2019 |
Reverse stock split | one-for-20 | ||||
Cash equivalents | |||||
Restricted cash | 533 | 532 | |||
Allowance for doubtful accounts | 36 | 33 | |||
Depreciation expense | 152 | 57 | |||
Impairment of goodwill | |||||
Impairment charges | |||||
Advertising expense | $ 224 | $ 148 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||
Income tax likelihood, description | Greater than 50% | ||||
Weighted average number of common shares outstanding | 3,889,478 | 2,481,530 | |||
Right-of-use assets | $ 131 | $ 235 | |||
Operating lease liabilities | 134 | ||||
ASU 2016-02 [Member] | |||||
Right-of-use assets | 235 | ||||
Operating lease liabilities | $ 235 | ||||
2018 Equity Incentive Plan [Member] | |||||
Common stock, shares authorized | 800,000 | ||||
Board of Directors [Member] | Employee Stock Purchase Plan [Member] | |||||
Common stock, reserved for future issuance | 95,000 | ||||
Discount, percentage | 15.00% | ||||
Minimum [Member] | |||||
Property and equipment estimated useful lives | 3 years | ||||
Minimum [Member] | Trade Names and Customer Lists [Member] | |||||
Finite-lived intangible asset, useful life | 2 years | ||||
Maximum [Member] | |||||
Property and equipment estimated useful lives | 15 years | ||||
Maximum [Member] | Trade Names and Customer Lists [Member] | |||||
Finite-lived intangible asset, useful life | 7 years |
Principles of Consolidation a_5
Principles of Consolidation and Summary of Significant Accounting Policies - Schedule of Anti Dilutive Securities Excludes from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Potential shares excluded from diluted net loss per share | 1,203,000 | 1,070,000 |
Options to Purchase Common Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 737,000 | 629,000 |
Convertible Preferred Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 241,000 | 241,000 |
Warrants to Purchase Common Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 225,000 | 225,000 |
Common Stock Subject to Repurchase [Member] | ||
Potential shares excluded from diluted net loss per share | (25,000) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2019 | Oct. 05, 2018 | Oct. 02, 2018 | Oct. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 04, 2019 | Jun. 03, 2019 |
Cash acquired | $ 300 | ||||||||||
Cash consideration | 300 | ||||||||||
Convertible promissory note | 700 | ||||||||||
Audit fees | 20 | $ 1,991 | $ 1,856 | ||||||||
Gross profit | $ 14,034 | $ 13,062 | |||||||||
Escrow deposit, description | Based on the three indemnification clauses, above, the Sellers shall deposit 20%, or 224,530 shares, of the Share Consideration in escrow with the Buyer's counsel (the "Covered Loss Shares") for the purposes of Covered Losses or the Net Deficiency. In the event the Company makes a valid claim pursuant to the Covered Losses or the Net Deficiency, the dollar value of such claim shall be satisfied by cancelation of an amount of the Escrowed Shares with an equal value to the Losses or Net Deficiency. For purposes of any adjustment, the Shares shall be valued at the Per Share Value. The Covered Loss Shares shall be the maximum indemnification reimbursement. In addition, the Buyers shall deposit an additional 20%, or 224,530, of the Share Consideration, which shall not be released until the HTS Audited Financial Statements and the HTS Reviewed Financial Statements are delivered to the Company ("Audit Shares") (collectively "Indemnification Shares"). | ||||||||||
Common stock, shares issued | 3,960,405 | 3,596,585 | |||||||||
Common stock, shares outstanding | 3,960,405 | 3,596,585 | |||||||||
Amortization expense | $ 314 | ||||||||||
Amortization of intangible assets | $ 184 | $ 2,000 | $ 1,800 | ||||||||
Share Consideration [Member] | |||||||||||
Number of common stock issued, value | 7,000 | ||||||||||
HTS [Member] | |||||||||||
Number of common stock issued | 1,122,648 | 1,122,648 | |||||||||
Number of common stock issued, value | $ 5,300 | $ 5,300 | |||||||||
Gross profit | $ 1,700 | $ 1,100 | |||||||||
Gross contribution adjustment, description | The Gross Contribution Adjustment provided that in the event that HTS' Gross Contribution is less than 85% of the figure set out above, any deficiency in excess of 15% (the "Net Deficiency") shall result in the forfeiture of a portion of the Share Consideration, with a value equal to the Net Deficiency. | ||||||||||
Share consideration, value | $ 2,600 | $ 2,700 | |||||||||
Share consideration, shares | 554,233 | 568,415 | |||||||||
Covered loss on shares | 224,530 | ||||||||||
HTS Purchase Agreement [Member] | |||||||||||
Percentage for purchase of capital stock | 100.00% | ||||||||||
Number of common stock issued | 1,122,648 | ||||||||||
Number of common stock issued, value | $ 5,300 | ||||||||||
Cash acquired | $ 300 | ||||||||||
Debt instrument term | 12 months | ||||||||||
Common stock, shares issued | 4,404,684 | 3,850,451 | |||||||||
Common stock, shares outstanding | 4,404,684 | 3,850,451 | |||||||||
HTS Purchase Agreement [Member] | Minimum [Member] | |||||||||||
Number of common stock issued | 568,415 | ||||||||||
Number of common stock issued, value | $ 2,700 | ||||||||||
Common stock, shares issued | 3,850,421 | ||||||||||
Common stock, shares outstanding | 3,850,421 | ||||||||||
HTS Purchase Agreement [Member] | Maximum [Member] | |||||||||||
Number of common stock issued | 1,122,648 | ||||||||||
Number of common stock issued, value | $ 5,300 | ||||||||||
Common stock, shares issued | 4,404,653 | ||||||||||
Common stock, shares outstanding | 4,404,653 | ||||||||||
HTS Purchase Agreement [Member] | Campbeltown Consulting, Ltd [Member] | |||||||||||
Number of shares return for cancelation | 277,166 | ||||||||||
HTS Purchase Agreement [Member] | Walefar Investments, Ltd [Member] | |||||||||||
Number of shares return for cancelation | 277,116 | ||||||||||
HTS Purchase Agreement [Member] | Convertible Promissory Note [Member] | |||||||||||
Debt instrument principal amount | $ 700 | ||||||||||
Debt interest rate | 6.00% | ||||||||||
Debt instrument conversion price | $ 4.72 |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Purchase Price (Details) $ in Thousands | Oct. 05, 2018USD ($) |
Business Combinations [Abstract] | |
Fair value of stock at closing | $ 2,683 |
Cash at closing | 300 |
Convertible promissory note | 700 |
Purchase price | $ 3,683 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 05, 2018 |
Business Combinations [Abstract] | |||
Cash | $ 277 | ||
Accounts receivable, net | 1,911 | ||
Inventory | 1,196 | ||
Prepaid expenses | 16 | ||
Fixed assets | 96 | ||
Intangibles | 4,700 | ||
Goodwill | $ 13,921 | $ 13,921 | 3,806 |
Accounts payable | (2,944) | ||
Related party payable | $ (2,197) | $ (3,803) | (1,868) |
Notes payable | (1,462) | ||
Notes payable- related parties | (1,541) | ||
Foreign currency adjustment | 48 | ||
Deferred tax liability | (552) | ||
Net assets acquired | $ 3,683 |
Acquisitions - Summary of Intan
Acquisitions - Summary of Intangible Assets (Details) $ in Thousands | Oct. 05, 2018USD ($) |
Intangibles assets | $ 4,700 |
Market Related Intangibles [Member] | |
Intangibles assets | $ 170 |
Finite-lived intangible asset, useful life | 5 years |
Customer Relationships [Member] | |
Intangibles assets | $ 3,400 |
Finite-lived intangible asset, useful life | 9 years |
Patents [Member] | |
Intangibles assets | $ 1,030 |
Finite-lived intangible asset, useful life | 11 years |
Software [Member] | |
Intangibles assets | $ 100 |
Finite-lived intangible asset, useful life | 4 years |
Acquisitions - Schedule of Prof
Acquisitions - Schedule of Proforma for Acquisitions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenues | $ 61,718 |
Net income (loss) | (6,971) |
Dr [Member] | |
Revenues | |
Net income (loss) | 314 |
Cr [Member] | |
Revenues | (1,909) |
Net income (loss) | (184) |
Proforma [Member] | |
Revenues | 59,809 |
Net income (loss) | (7,101) |
Quest Marketing, Inc [Member] | |
Revenues | 56,202 |
Net income (loss) | (5,695) |
HTS [Member] | |
Revenues | 5,516 |
Net income (loss) | $ (1,276) |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue [Member] | One Customer [Member] | ||
Percentage of concentration risk | 12.30% | 17.00% |
Accounts Receivable [Member] | Minimum [Member] | ||
Percentage of concentration risk | 10.00% | 10.00% |
Accounts Receivable [Member] | Two Customers [Member] | ||
Percentage of concentration risk | 20.90% | 23.70% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade Accounts Receivable | $ 6,730 | $ 12,295 |
Less Allowance for doubtful accounts | (36) | (33) |
Total Accounts Receivable (net) | $ 6,694 | $ 12,262 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Equipment and Clearing service | $ 728 | $ 801 |
Raw Materials | 1,022 | 568 |
Work in process | 44 | 47 |
Finished goods | 95 | 388 |
Total inventories | $ 1,889 | $ 1,803 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Impairment of goodwill | |||
Amortization expense | $ 184 | 2,000 | 1,800 |
Impairment charges | |||
Minimum [Member] | |||
Finite useful lives of amortization period | 3 years | ||
Maximum [Member] | |||
Finite useful lives of amortization period | 11 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated amortization | $ (9,695) | $ (7,694) |
Intangibles, net | 22,529 | 24,507 |
Goodwill [Member] | ||
Intangibles gross | 13,921 | 13,921 |
Trade Names [Member] | ||
Intangibles gross | 4,390 | 4,390 |
Customer Relationships [Member] | ||
Intangibles gross | 12,590 | 12,590 |
Intellectual Property [Member] | ||
Intangibles gross | $ 1,323 | $ 1,300 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite-lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 2,007 |
2021 | 1,941 |
2022 | 1,315 |
2023 | 1,289 |
2024 | 546 |
Thereafter | 1,510 |
Total | $ 8,608 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Details Narrative) - Accounts Payable [Member] - One Vendor [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Percentage of concentration risk | 83.00% | 62.70% |
Minimum [Member] | ||
Percentage of concentration risk | 10.00% | 10.00% |
Credit Facilities and Line of_2
Credit Facilities and Line of Credit (Details Narrative) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2019 |
Line of credit, balance | $ 1,400 | |
Factoring and Security Agreement [Member] | Action Capital Corporation [Member] | ||
Line of credit maximum borrowing capacity | $ 5,000 | |
Percentage of reserve account | 5.00% | |
Percentage of average outstanding balance | 0.75% | |
Factoring and Security Agreement [Member] | Action Capital Corporation [Member] | Prime Rate [Member] | ||
Percentage of average outstanding balance | 2.00% |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) $ in Thousands | Jan. 02, 2018USD ($) |
Deferred Revenue Disclosure [Abstract] | |
Deferred net revenue | $ 1,200 |
Notes Payable, Related Partie_2
Notes Payable, Related Parties (Details Narrative) | Sep. 30, 2019USD ($)$ / sharesshares | Feb. 28, 2018USD ($)TradingDays$ / sharesshares | Feb. 22, 2018USD ($)ft²shares | Feb. 19, 2018USD ($)ft²shares | Jun. 17, 2016USD ($)shares | Jun. 30, 2016USD ($) | Oct. 31, 2015shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2014USD ($)ft²$ / sharesshares | Oct. 05, 2019USD ($)$ / shares | Apr. 09, 2019$ / sharesshares | Apr. 04, 2019$ / sharesshares | Oct. 05, 2018USD ($) |
Interest expense | $ 49,000 | $ 115,000 | ||||||||||||
Warrant exercise price per share | $ / shares | $ 6.42 | |||||||||||||
Promissory note, balance | $ 6,640,000 | 8,953,000 | ||||||||||||
Debt instrument conversion of shares amount | 550,000 | |||||||||||||
Stock issued during the period | 119 | |||||||||||||
Due and payable | 2,197,000 | 3,803,000 | $ 1,868,000 | |||||||||||
Series C Preferred Stock [Member] | ||||||||||||||
Stock issued during the period | ||||||||||||||
Stock issued during the period, shares | shares | ||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Debt instruments interest rate | 6.00% | |||||||||||||
Percentage of redemption and cancelation | 100.00% | |||||||||||||
Number of option issued | shares | 170,000 | |||||||||||||
Convertible Note Payable [Member] | HTS [Member] | Walefar [Member] | ||||||||||||||
Debt instrument face amount | $ 150,000 | |||||||||||||
Debt instrument conversion of shares amount | $ 317,796 | |||||||||||||
Debt instrument conversion of shares | shares | 75,000 | |||||||||||||
Debt convertible price per share | $ / shares | $ 0.236 | |||||||||||||
Convertible Note Payable [Member] | HTS [Member] | Campbeltown [Member] | ||||||||||||||
Debt instrument face amount | $ 150,000 | |||||||||||||
Debt instrument conversion of shares amount | $ 317,796 | |||||||||||||
Debt instrument conversion of shares | shares | 75,000 | |||||||||||||
Debt convertible price per share | $ / shares | $ 0.236 | |||||||||||||
RWCC Note [Member] | HTS [Member] | ||||||||||||||
Debt instrument face amount | 1,000,000 | |||||||||||||
Debt monthly payment | $ 85,000 | |||||||||||||
Debt instruments interest rate | 5.00% | |||||||||||||
Debt instrument maturity date | Apr. 30, 2020 | |||||||||||||
Two Sellers [Member] | Convertible Note Payable [Member] | HTS [Member] | ||||||||||||||
Debt convertible price per share | $ / shares | $ 4.72 | |||||||||||||
Debt instruments interest rate | 6.00% | |||||||||||||
Due and payable | $ 700 | |||||||||||||
Seller One [Member] | Convertible Note Payable [Member] | HTS [Member] | ||||||||||||||
Due and payable | 350 | |||||||||||||
Seller Two [Member] | Convertible Note Payable [Member] | HTS [Member] | ||||||||||||||
Due and payable | $ 350 | |||||||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | ||||||||||||||
Debt instrument face amount | $ 11,000,000 | |||||||||||||
Debt owed amount | 1,200,000 | |||||||||||||
Forgiveness of debt | $ 9,500,000 | |||||||||||||
Date of agreement | Feb. 28, 2018 | |||||||||||||
Debt instrument description | Section 3.1 of the original note was amended to provide that the Company shall pay the Marins 60 monthly payments of $20 thousand each commencing the earlier of (i) October 26, 2018 and (ii) the date that the Company's obligation to Scansource, Inc., currently in the amount of $1.8 million is satisfied and all amounts currently in default under the credit agreement with Scansource (currently approximately $ 6.0 Million) is reduced to $2.0 million. The Marins have agreed to release their security interest against the Company. In connection with the $9.5 million. reduction in the purchase price, the Company issued the Marins 3 year warrants to purchase an aggregate of 150,000 shares of Common Stock at an exercise price of $0.20 per-share. | |||||||||||||
Number of monthly installments | ft² | 60 | |||||||||||||
Debt monthly payment | $ 20,000 | |||||||||||||
Warrants term | 3 years | |||||||||||||
Number of warrants to purchase common stock | shares | 150,000 | |||||||||||||
Warrant exercise price per share | $ / shares | $ 4 | |||||||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | Scansource, Inc [Member] | ||||||||||||||
Debt instrument face amount | $ 6,000,000 | |||||||||||||
Debt default, amount | 1,800,000 | |||||||||||||
Reduction in debt default amount | 2,000,000 | |||||||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | Owed Amount [Member] | ||||||||||||||
Debt owed amount | $ 10,700,000 | |||||||||||||
Marin Settlement Agreement II [Member] | David Marin [Member] | ||||||||||||||
Debt instrument face amount | $ 100,000 | |||||||||||||
Promissory note, balance | $ 111,000 | |||||||||||||
Marin Settlement Agreement II [Member] | David Marin [Member] | Series C Preferred Stock [Member] | ||||||||||||||
Debt instrument conversion of shares | shares | 85,000 | |||||||||||||
Debt convertible price per share | $ / shares | $ 1 | |||||||||||||
Shares issued, price per share | $ / shares | $ 1 | |||||||||||||
Conversion of preferred stock, shares | shares | 20 | |||||||||||||
Preferred stock conversion, description | The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of Preferred Stock which convert to one share of common stock) in the event that the Company's common stock has a closing price of $30 per share for 20 consecutive trading days. | |||||||||||||
Debt instrument, convertible, stock price | $ / shares | $ 30 | |||||||||||||
Debt instrument, convertible, consecutive trading days | TradingDays | 20 | |||||||||||||
Preferred Stock, Dividend Rate, Percentage | 6.00% | |||||||||||||
Value of note and accrued interest cancelled | $ 100 | |||||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | ||||||||||||||
Date of agreement | Feb. 22, 2018 | |||||||||||||
Debt instrument description | October 26, 2018 or (ii) the date when the Company's obligation under its promissory note with Scansource, Inc. currently in the amount of $1.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. In addition, the Company issued Mr. Thomet an aggregate of 25,000 shares of restricted common stock and 1,000,000 shares of Series C Preferred Stock with the same rights and restrictions as described above in the description of the Marin Settlement II Agreement. | |||||||||||||
Number of monthly installments | ft² | 60 | |||||||||||||
Debt monthly payment | $ 12,500 | |||||||||||||
Aggregate indebtedness settled | $ 5,400 | |||||||||||||
Number of restricted common stock shares | shares | 25,000 | |||||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | Series C Preferred Stock [Member] | ||||||||||||||
Number of restricted common stock shares | shares | 1,000,000 | |||||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | Scansource, Inc [Member] | ||||||||||||||
Debt instrument face amount | $ 6,000,000 | |||||||||||||
Debt default, amount | 1,800,000 | |||||||||||||
Reduction in debt default amount | $ 2,000,000 | |||||||||||||
Settlement Agreement [Member] | George Zicman [Member] | ||||||||||||||
Aggregate indebtedness settled | $ 1,300,000 | |||||||||||||
Settlement Agreement [Member] | Goerge Zicman [Member] | ||||||||||||||
Date of agreement | Feb. 19, 2018 | |||||||||||||
Debt instrument description | October 26, 2018 or (ii) the date when the Company's obligation under its promissory note with Scansource, Inc. currently in the amount of $1.8 million is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. In addition, the Company issued Mr. Zicman an aggregate of 5,000 shares of common stock and 600,000 shares of Series C Preferred Stock with the same rights and restrictions as described above in the description of the Marin Settlement II Agreement. | |||||||||||||
Number of monthly installments | ft² | 60 | |||||||||||||
Debt monthly payment | $ 3,000 | |||||||||||||
Stock issued during the period, shares | shares | 5,000 | |||||||||||||
Settlement Agreement [Member] | Goerge Zicman [Member] | Series C Preferred Stock [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 6,000,000 | |||||||||||||
Stock issued during the period, shares | shares | 600,000 | |||||||||||||
Settlement Agreement [Member] | Goerge Zicman [Member] | Scansource, Inc [Member] | ||||||||||||||
Reduction in debt default amount | $ 2,000,000 | |||||||||||||
Voting Agreement [Member] | Marins, Kurt Thomet And Goerge Zicman [Member] | ||||||||||||||
Beneficiary percentage of common stock | 10.00% | |||||||||||||
Promissory Note Conversion Agreement [Member] | Noteholders [Member] | ||||||||||||||
Forgiveness of debt | $ 75,000 | |||||||||||||
Debt monthly payment | $ 1,200,000 | |||||||||||||
Debt instrument conversion of shares amount | $ 2,700,000 | |||||||||||||
Debt instrument conversion of shares | shares | 430,000 | |||||||||||||
Accrued interest | $ 200,000 | |||||||||||||
Debt instrument principal and accrued interest | 1,400,000 | |||||||||||||
Loss on debt settlement | $ 1,300,000 | |||||||||||||
Promissory Note Conversion Agreement [Member] | Noteholders [Member] | Series C Preferred Stock [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 1,800,000 | |||||||||||||
Debt instrument conversion of shares | shares | 1,800,000 | |||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Number of warrants to purchase common stock | shares | 833,333 | 891,667 | ||||||||||||
Warrant exercise price per share | $ / shares | $ 7 | $ 7 | ||||||||||||
Shares issued, price per share | $ / shares | $ 0.30 | |||||||||||||
Securities Purchase Agreement [Member] | HTS [Member] | ||||||||||||||
Debt instrument face amount | $ 200,000 | |||||||||||||
Common Stock One [Member] | ||||||||||||||
Stock issued during the period | $ 1,000 | |||||||||||||
Stock issued during the period, shares | shares | 4,012 |
Notes Payable, Related Partie_3
Notes Payable, Related Parties - Schedule of Notes Payable, Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 05, 2018 |
Total notes payable | $ 2,197 | $ 3,803 | $ 1,868 |
Less current portion | 1,025 | 1,891 | |
Long-term portion | 1,172 | 1,912 | |
Note Payable - Debt Restructure Marin [Member] | |||
Total notes payable | 900 | 1,160 | |
Note Payable - Debt Restructure Thomet [Member] | |||
Total notes payable | 563 | 713 | |
Note Payable - Debt Restructure Zicman [Member] | |||
Total notes payable | 135 | 171 | |
Convertible Note Payable - Shareholders [Member] | |||
Total notes payable | 150 | 700 | |
Note Payable - RWCC [Member] | |||
Total notes payable | $ 449 | $ 1,059 |
Notes Payable, Related Partie_4
Notes Payable, Related Parties - Schedule of Future Maturities of Notes Payable, Related Parties (Details) - Notes Payable, Related Parties [Member] $ in Thousands | Dec. 31, 2019USD ($) |
2020 | $ 1,025 |
2021 | 426 |
2022 | 426 |
2023 | 320 |
Thereafter | |
Total | $ 2,197 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | Apr. 30, 2019 | Sep. 14, 2018 | Feb. 14, 2018 | Nov. 15, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Nov. 30, 2016 | Jul. 18, 2016 | Mar. 31, 2019 | Feb. 28, 2018 | Jan. 31, 2016 | Dec. 31, 2018 | Oct. 31, 2018 | Dec. 31, 2019 | Dec. 15, 2016 |
Notes payable | $ 8,953 | $ 6,640 | |||||||||||||
Bill Davidson Promissory Note [Member] | BCS Acquisition [Member] | |||||||||||||||
Debt instruments interest rate | 1.84% | ||||||||||||||
Debt instruments periodic payment | $ 5 | ||||||||||||||
Debt instrument due date | Jul. 31, 2019 | ||||||||||||||
Bill Davidson Promissory Note [Member] | BCS Acquisition [Member] | Debt [Member] | |||||||||||||||
Notes payable | $ 130 | $ 137 | |||||||||||||
Stock Redemption Agreement [Member] | |||||||||||||||
Debt instruments interest rate | 9.00% | ||||||||||||||
Stock Repurchased During Period, shares | 25,354 | 25,354 | |||||||||||||
Stock Repurchased During Period, value | $ 230 | ||||||||||||||
Stock Redemption Agreement [Member] | Maren Trust Promissory Note [Member] | |||||||||||||||
Debt instruments interest rate | 9.00% | ||||||||||||||
Notes payable | $ 241 | ||||||||||||||
Stock Repurchased During Period, shares | 25,354 | 25,354 | 25,354 | ||||||||||||
Stock Repurchased During Period, value | $ 220 | ||||||||||||||
Secured Promissory Note [Member] | |||||||||||||||
Debt instrument face amount | $ 12,500 | ||||||||||||||
Debt instruments interest rate | 12.00% | ||||||||||||||
Debt instruments periodic payment | $ 250 | ||||||||||||||
Debt instrument due date | Dec. 31, 2016 | ||||||||||||||
Secured Promissory Note [Member] | Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 300 | ||||||||||||||
Debt instrument due date | Mar. 31, 2017 | ||||||||||||||
Debt instrument, increase, accrued interest | $ 400 | ||||||||||||||
Secured Promissory Note [Member] | Second Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 400 | ||||||||||||||
Debt instrument due date | Sep. 30, 2017 | ||||||||||||||
Secured Promissory Note [Member] | Third Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 600 | ||||||||||||||
Debt instrument due date | Oct. 31, 2017 | ||||||||||||||
Secured Promissory Note [Member] | Fourth Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 600 | ||||||||||||||
Debt instrument due date | Dec. 31, 2017 | ||||||||||||||
Secured Promissory Note [Member] | Fifth Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 400 | ||||||||||||||
Debt instrument due date | Mar. 31, 2018 | ||||||||||||||
Secured Promissory Note [Member] | Sixth Amendment Agreement [Member] | |||||||||||||||
Debt instrument face amount | $ 8,700 | ||||||||||||||
Debt instrument, increase, accrued interest | $ 6,800 | ||||||||||||||
Secured Promissory Note [Member] | Seventh Amendment Agreement [Member] | |||||||||||||||
Debt instrument, increase, accrued interest | $ 350 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total notes payable | $ 6,640 | $ 8,953 |
Less: current portion | 6,497 | 8,823 |
Long Term Notes Payable | 143 | 130 |
Supplier Secured Note Payable [Member] | ||
Total notes payable | 6,490 | 8,340 |
All Other [Member] | ||
Total notes payable | $ 150 | $ 613 |
Notes Payable - Schedule of Fut
Notes Payable - Schedule of Future Maturities of Note Payable (Details) - Notes Payable [Member] $ in Thousands | Dec. 31, 2019USD ($) |
2020 | $ 6,497 |
2021 | 6 |
2022 | |
Thereafter | 137 |
Total | $ 6,640 |
Other Liabilities (Details Narr
Other Liabilities (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Premium financed notes | $ 1,500 | |
Cash value | 1,400 | |
Policy negative cash value | $ 86 | |
Gain on write off of insurance liabilities | $ 150 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Other vendor payable | $ 801 | |
Dividend payable | 344 | 478 |
Bonus payable | 385 | |
Others | 453 | 397 |
Total other liabilities | 1,983 | 875 |
Less Current Portion | (1,599) | (265) |
Total long term other liabilities | $ 384 | $ 610 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) $ in Thousands | Jan. 02, 2019USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Incremental borrowing rate | 14.63% | ||
Lease liability | $ 235 | $ 134 | $ 235 |
Weighted average remaining lease term | 33.78 months | ||
Vehicle Lease [Member] | |||
Lease provides for monthly payments | $ 1 | ||
Incremental borrowing rate | 14.83% | ||
Remaining lease term | 25 months | ||
Lease liability | $ 9 | ||
Eugene [Member] | |||
Square feet of office space | ft² | 7,000 | ||
Lease provides for monthly payments | $ 4 | ||
Incremental borrowing rate | 15.06% | ||
Akron [Member] | |||
Lease provides for monthly payments | $ 3 | ||
Incremental borrowing rate | 14.55% | ||
Remaining lease term | 41 months | ||
Lease liability | $ 96 | ||
Anaheim [Member] | |||
Lease provides for monthly payments | $ 2 | ||
Incremental borrowing rate | 14.83% | ||
Remaining lease term | 12 months | ||
Lease liability | $ 28 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Operating Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | |||
ROU assets | $ 131 | $ 235 | |
Lease liability | $ 134 | $ 235 | $ 235 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Other Information Related to Operating Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
ROU asset, Beginning balance | ||||
Decrease | (11) | |||
Amortization | (93) | |||
ROU asset, Ending balance | 131 | |||
Lease liability, Beginning balance | 235 | |||
Decrease | (11) | |||
Amortization | (90) | |||
Lease liability, Ending balance | 134 | |||
Lease liability: Short term | $ 54 | |||
Lease liability: Long term | 80 | |||
Total | $ 134 | $ 134 | $ 235 | $ 235 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | |||
2020 | $ 70 | ||
2021 | 41 | ||
2022 | 38 | ||
Thereafter | 16 | ||
Total | 165 | ||
Less interest | (31) | ||
Present value of future minimum lease payments | 134 | $ 235 | $ 235 |
Less current obligations | (54) | ||
Long term lease obligations | $ 80 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Nov. 20, 2019 | Nov. 11, 2019 | Sep. 30, 2019 | Sep. 05, 2019 | Apr. 09, 2019 | Jun. 26, 2018 | Mar. 31, 2019 | Oct. 31, 2018 | Mar. 31, 2018 | Jan. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 05, 2019 | Apr. 04, 2019 | Dec. 31, 2017 | Dec. 30, 2017 | Oct. 31, 2015 | Nov. 17, 2014 |
Reverse split description | one-for-20 | |||||||||||||||||
Debt instrument conversion of shares amount | $ 550,000 | |||||||||||||||||
Stock issued during the period | 119 | |||||||||||||||||
Aggregate gross proceeds from issuance of stock | $ 3,770,000 | $ 11,000 | ||||||||||||||||
Common stock, price per share | $ 0.001 | $ 0.001 | ||||||||||||||||
Warrants exercise price | $ 6.42 | |||||||||||||||||
Number of common stock shares granted | 127,500 | 592,000 | ||||||||||||||||
Interest expense | $ 49,000 | $ 115,000 | ||||||||||||||||
Warrant to purchase of common stock, value | 1,166,667 | 275,000 | ||||||||||||||||
Number of stock options canceled | 65,400 | |||||||||||||||||
Minimum [Member] | ||||||||||||||||||
Expected stock price volatility | 156.00% | |||||||||||||||||
Expected term | 0 years | |||||||||||||||||
Risk-free interest rate | 1.40% | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Expected stock price volatility | 157.00% | |||||||||||||||||
Expected term | 2 years | |||||||||||||||||
Risk-free interest rate | 2.31% | |||||||||||||||||
Warrant [Member] | ||||||||||||||||||
Warrants and rights outstanding | $ 2,900,000 | |||||||||||||||||
HTS [Member] | ||||||||||||||||||
Number of common stock acquired | 1,122,648 | 1,122,648 | ||||||||||||||||
Number of common stock acquired value | $ 5,300,000 | $ 5,300,000 | ||||||||||||||||
Board of Directors [Member] | ||||||||||||||||||
Preferred stock voting rights | The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. | The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. | ||||||||||||||||
Employees [Member] | 2018 Equity Incentive Plan [Member] | ||||||||||||||||||
Number of shares issued for employees, shares | 3,996 | |||||||||||||||||
Number of shares issued for employees | $ 11,000 | |||||||||||||||||
Independent Third Parties [Member] | ||||||||||||||||||
Number of shares for services | 141,022 | |||||||||||||||||
Number of shares for services, value | $ 395,000 | |||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||
Preferred stock shares designated | 1,000,000 | 1,000,000 | ||||||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||||||
Preferred stock shares outstanding | 0 | 0 | ||||||||||||||||
Debt instruments interest rate | 6.00% | |||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||
Preferred stock shares designated | 1 | 1 | ||||||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||||||
Preferred stock shares outstanding | 0 | 0 | ||||||||||||||||
Preferred stock conversion, description | The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company's common stock has a closing price of $30 per share for 20 consecutive trading days. | |||||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||||
Preferred stock shares designated | 15,000,000 | 15,000,000 | ||||||||||||||||
Preferred stock, shares issued | 4,828,530 | 4,828,530 | ||||||||||||||||
Preferred stock shares outstanding | 4,828,530 | 4,828,530 | ||||||||||||||||
Dividend rate per annum | $ 0.06 | |||||||||||||||||
Accrued dividends | $ 344,000 | $ 478,000 | ||||||||||||||||
Liquidation preference per share | $ 1 | |||||||||||||||||
Preferred stock, conversion price per share | 1 | |||||||||||||||||
Preferred stock closing price per shares | $ 30 | |||||||||||||||||
Stock issued during the period | ||||||||||||||||||
Stock issued during the period, shares | ||||||||||||||||||
Number of common stock granted | ||||||||||||||||||
Common stock issued during period | ||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||
Debt instrument conversion of shares | 430,000 | |||||||||||||||||
Debt instrument conversion of shares amount | $ 2,700,000 | |||||||||||||||||
Debt instrument face amount | 1,200,000 | |||||||||||||||||
Accrued interest | 247,000 | |||||||||||||||||
Debt instrument principal and accrued interest | 1,400,000 | |||||||||||||||||
Interest expense | $ 1,200,000 | |||||||||||||||||
Mr. Lustgarten [Member] | 2018 Equity Incentive Plan [Member] | ||||||||||||||||||
Agreement term | 2 years | |||||||||||||||||
Stock issued during the period | $ 250,000 | |||||||||||||||||
Stock issued during the period, shares | 50,000 | |||||||||||||||||
Walefar [Member] | HTS [Member] | Convertible Note Payable [Member] | ||||||||||||||||||
Debt instrument conversion of shares | 75,000 | |||||||||||||||||
Debt instrument conversion of shares amount | $ 317,796 | |||||||||||||||||
Debt convertible price per share | $ 0.236 | |||||||||||||||||
Debt instrument face amount | $ 150,000 | |||||||||||||||||
Campbeltown [Member] | HTS [Member] | Convertible Note Payable [Member] | ||||||||||||||||||
Debt instrument conversion of shares | 75,000 | |||||||||||||||||
Debt instrument conversion of shares amount | $ 317,796 | |||||||||||||||||
Debt convertible price per share | $ 0.236 | |||||||||||||||||
Debt instrument face amount | $ 150,000 | |||||||||||||||||
Mr. Nissensohn [Member] | 2018 Equity Incentive Plan [Member] | ||||||||||||||||||
Agreement term | 2 years | |||||||||||||||||
Stock issued during the period | $ 138,000 | |||||||||||||||||
Stock issued during the period, shares | 27,500 | |||||||||||||||||
Walefar and Campbeltown [Member] | ||||||||||||||||||
Debt instrument conversion of shares amount | $ 150,000 | |||||||||||||||||
Chief Financial Officer [Member] | 2018 Equity Incentive Plan [Member] | ||||||||||||||||||
Number of common stock shares granted | 50,000 | |||||||||||||||||
Number of common stock granted | $ 119,000 | |||||||||||||||||
Settlement Agreement [Member] | ||||||||||||||||||
Dividend rate per annum | $ 0.06 | |||||||||||||||||
Debt settlement effective shares issued | 1,685,000 | |||||||||||||||||
Debt Settlement Agreements [Member] | Series C Preferred Stock [Member] | ||||||||||||||||||
Stock issued during the period | $ 1,685,000 | |||||||||||||||||
Stock issued during the period, shares | 1,685,000 | |||||||||||||||||
Letter Agreement [Member] | Mr. Lustgarten [Member] | ||||||||||||||||||
Reverse split description | Effective November 11, 2019, the Company implemented a one-for-20 reverse stock split of the Company's common stock. | |||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||
Aggregate gross proceeds from issuance of stock | $ 5,000,000 | |||||||||||||||||
Purchase price unit | $ 6 | |||||||||||||||||
Common stock, price per share | $ 0.001 | |||||||||||||||||
Number of warrants to purchase common stock | 833,333 | 891,667 | ||||||||||||||||
Warrants exercise price | $ 7 | $ 7 | ||||||||||||||||
Warrant term | 5 years 6 months | 5 years 6 months | ||||||||||||||||
Shares issued, price per share | $ 0.30 | |||||||||||||||||
Securities Purchase Agreement [Member] | Warrant [Member] | ||||||||||||||||||
Number of warrants to purchase common stock | 128,000 | |||||||||||||||||
Warrants and rights outstanding | $ 564,000 | |||||||||||||||||
Securities Purchase Agreement [Member] | HTS [Member] | ||||||||||||||||||
Debt instrument face amount | $ 200,000 | |||||||||||||||||
Securities Purchase Agreement [Member] | Principal Stockholder [Member] | ||||||||||||||||||
Debt instrument conversion of shares amount | $ 200,000 | |||||||||||||||||
Debt Settlement Agreement [Member] | Maren Life Reinsurance LTD [Member] | ||||||||||||||||||
Common stock issued during period | 7,500 | |||||||||||||||||
Stock Redemption Agreement [Member] | ||||||||||||||||||
Stock Repurchased During Period, shares | 25,354 | 25,354 | ||||||||||||||||
Stock Repurchased During Period, value | $ 230,000 | |||||||||||||||||
Debt instruments interest rate | 9.00% | |||||||||||||||||
Share Purchase Option Plan [Member] | Board of Directors [Member] | ||||||||||||||||||
Number of common stock shares granted | 500,000 | |||||||||||||||||
Maximum number of common shares reserved for issuance | 500,000 | |||||||||||||||||
Common stock shares subscribed | 481,250 | |||||||||||||||||
Number of stock options canceled | 65,400 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of warrants balance, beginning of period | 275,000 | 295,250 |
Number of warrants, granted | 891,667 | 50,000 |
Number of warrants, expired | 70,250 | |
Number of warrants, cancelled, forfeited | ||
Number of warrants, exercised | ||
Number of warrants, balance end of period | 1,166,667 | 275,000 |
Number of warrants, exercisable | 1,166,667 | 275,000 |
Weighted Average Exercise Price balance, beginning of period | $ 4.55 | $ 5 |
Weighted Average Exercise Price, granted | 7 | 9.72 |
Weighted Average Exercise Price, expired | 10.40 | |
Weighted Average Exercise Price, cancelled, forfeited | ||
Weighted Average Exercise Price, exercised | ||
Weighted Average Exercise Price balance, end of period | 6.42 | 4.55 |
Weighted Average Exercise Price, exercisable | $ 6.42 | $ 4.55 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Warrants (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Range of Exercise Prices, Upper Range Limit | $ 12 |
Weighted Average residual life span (in years) | 3 years 11 months 4 days |
Outstanding Warrants | shares | 1,166,667 |
Weighted Average Exercise Price | $ 6.42 |
Exercisable Warrants | shares | 1,166,667 |
Weighted Average Exercise Price | $ 6.42 |
Range of Exercise Prices, Lower Range Limit | 2.20 |
Exercise Price Range 1 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.20 |
Weighted Average residual life span (in years) | 1 year 7 months 2 days |
Outstanding Warrants | shares | 75,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercisable Warrants | shares | 75,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercise Price Range 2 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 4 |
Weighted Average residual life span (in years) | 1 year |
Outstanding Warrants | shares | 150,000 |
Weighted Average Exercise Price | $ 4 |
Exercisable Warrants | shares | 150,000 |
Weighted Average Exercise Price | $ 4 |
Exercise Price Range 3 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 5.60 |
Weighted Average residual life span (in years) | 5 months 27 days |
Outstanding Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 5.60 |
Exercisable Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 5.60 |
Exercise Price Range 4 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 7 |
Weighted Average residual life span (in years) | 4 years 9 months 7 days |
Outstanding Warrants | shares | 891,667 |
Weighted Average Exercise Price | $ 7 |
Exercisable Warrants | shares | 891,667 |
Weighted Average Exercise Price | $ 7 |
Exercise Price Range 5 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 12 |
Weighted Average residual life span (in years) | 9 months 11 days |
Outstanding Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 12 |
Exercisable Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 12 |
Exercise Price Range 6 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 1 year 9 months 11 days |
Outstanding Warrants | shares | 25,000 |
Weighted Average Exercise Price | $ 10 |
Exercisable Warrants | shares | 25,000 |
Weighted Average Exercise Price | $ 10 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Warrants Outstanding, Expiry Date and Exercise Prices (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Warrant Exercise Prices | $ 6.42 | |
Warrant Outstanding | 1,166,667 | 275,000 |
December 30, 2020 [Member] | ||
Warrant Expiry Date | Dec. 30, 2020 | Dec. 30, 2020 |
Warrant Exercise Prices | $ 4 | $ 4 |
Warrant Outstanding | 150,000 | 150,000 |
August 2, 2021 [Member] | ||
Warrant Expiry Date | Aug. 2, 2021 | Aug. 2, 2021 |
Warrant Exercise Prices | $ 2.20 | $ 2.20 |
Warrant Outstanding | 75,000 | 75,000 |
June 26, 2020 [Member] | ||
Warrant Expiry Date | Jun. 26, 2020 | Jun. 26, 2020 |
Warrant Exercise Prices | $ 5.60 | $ 5.60 |
Warrant Outstanding | 10,000 | 10,000 |
October 10, 2020 [Member] | ||
Warrant Expiry Date | Oct. 10, 2020 | Oct. 10, 2020 |
Warrant Exercise Prices | $ 12 | $ 12 |
Warrant Outstanding | 15,000 | 15,000 |
October 10, 2021 [Member] | ||
Warrant Expiry Date | Oct. 10, 2021 | Oct. 10, 2021 |
Warrant Exercise Prices | $ 10 | $ 10 |
Warrant Outstanding | 25,000 | 25,000 |
October 6, 2024 [Member] | ||
Warrant Expiry Date | Oct. 6, 2024 | Oct. 6, 2024 |
Warrant Exercise Prices | $ 7 | $ 7 |
Warrant Outstanding | 891,667 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Stock Options Granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of stock options balance, beginning of period | 1,006,050 | 481,250 |
Number of stock options, granted | 127,500 | 592,000 |
Number of stock options, expired | (1,800) | |
Number of stock options, cancelled, forfeited | (65,400) | |
Number of stock options, exercised | ||
Number of stock options balance, end of period | 1,133,550 | 1,006,050 |
Number of stock options, exercisable | 952,425 | 792,050 |
Weighted average exercise price balance, beginning of period | $ 3.80 | $ 4.20 |
Weighted average exercise price, stock options granted | 5 | 3.40 |
Weighted average exercise price, stock options expired | ||
Weighted average exercise price, stock options cancelled, forfeited | ||
Weighted average exercise price, stock options exercised | ||
Weighted average exercise price balance, end of period | 4 | 3.80 |
Weighted average exercise price, exercisable | $ 3.94 | $ 3.80 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Outstanding Stock Options (Details) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Range of Exercise Prices, Lower Range Limit | $ 0.075 |
Range of Exercise Prices, Upper Range Limit | $ 0.50 |
Weighted Average residual life span (in years) | 3 years 2 months 19 days |
Outstanding Stock Options | shares | 1,133,550 |
Weighted Average Exercise Price | $ 4 |
Exercisable Stock Options | shares | 952,425 |
Weighted Average Exercise Price | $ 3.94 |
Exercise Price Range 1 [Member] | |
Range of Exercise Prices, Lower Range Limit | 1.50 |
Range of Exercise Prices, Upper Range Limit | $ 1.80 |
Weighted Average residual life span (in years) | 2 years 1 month 16 days |
Outstanding Stock Options | shares | 114,050 |
Weighted Average Exercise Price | $ 1.70 |
Exercisable Stock Options | shares | 114,050 |
Weighted Average Exercise Price | $ 1.70 |
Exercise Price Range 2 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.20 |
Weighted Average residual life span (in years) | 1 year 7 months 2 days |
Outstanding Stock Options | shares | 175,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercisable Stock Options | shares | 175,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercise Price Range 3 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 5 |
Weighted Average residual life span (in years) | 3 years 6 months 29 days |
Outstanding Stock Options | shares | 127,500 |
Weighted Average Exercise Price | $ 5 |
Exercisable Stock Options | shares | 31,875 |
Weighted Average Exercise Price | $ 5 |
Exercise Price Range 4 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 4 years 10 months 21 days |
Outstanding Stock Options | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Exercisable Stock Options | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Exercise Price Range 5 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.40 |
Weighted Average residual life span (in years) | 3 years 2 months 5 days |
Outstanding Stock Options | shares | 340,000 |
Weighted Average Exercise Price | $ 2.40 |
Exercisable Stock Options | shares | 297,500 |
Weighted Average Exercise Price | $ 2.40 |
Exercise Price Range 6 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 4.40 |
Weighted Average residual life span (in years) | 3 years 10 months 3 days |
Outstanding Stock Options | shares | 108,250 |
Weighted Average Exercise Price | $ 4.40 |
Exercisable Stock Options | shares | 81,188 |
Weighted Average Exercise Price | $ 4.40 |
Exercise Price Range 7 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 5.40 |
Weighted Average residual life span (in years) | 3 years 11 months 1 day |
Outstanding Stock Options | shares | 143,750 |
Weighted Average Exercise Price | $ 5.40 |
Exercisable Stock Options | shares | 127,813 |
Weighted Average Exercise Price | $ 5.40 |
Stockholders' Equity - Schedu_6
Stockholders' Equity - Schedule of Stock Options, Expiry Date and Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock option exercise prices | $ 4 | $ 3.80 | $ 4.20 |
Stock option outstanding | 1,133,550 | 1,006,050 | 481,250 |
August 2, 2021 [Member] | |||
Stock option expiration date | Aug. 2, 2021 | Aug. 2, 2021 | |
Stock option exercise prices | $ 2.20 | $ 2.20 | |
Stock option outstanding | 175,000 | 175,000 | |
February 17, 2022 [Member] | |||
Stock option expiration date | Feb. 17, 2022 | Feb. 17, 2022 | |
Stock option exercise prices | $ 1.70 | $ 1.70 | |
Stock option outstanding | 114,050 | 114,050 | |
March 05, 2023 [Member] | |||
Stock option expiration date | Mar. 5, 2023 | Mar. 5, 2023 | |
Stock option exercise prices | $ 2.40 | $ 2.40 | |
Stock option outstanding | 340,000 | 340,000 | |
July 31, 2023 [Member] | |||
Stock option expiration date | Jul. 31, 2023 | Jul. 31, 2023 | |
Stock option exercise prices | $ 5 | $ 5 | |
Stock option outstanding | 127,500 | ||
October 31, 2023 [Member] | |||
Stock option expiration date | Oct. 31, 2023 | Oct. 31, 2023 | |
Stock option exercise prices | $ 4.40 | $ 4.40 | |
Stock option outstanding | 108,250 | 108,250 | |
November 30, 2023 [Member] | |||
Stock option expiration date | Nov. 30, 2023 | Nov. 30, 2023 | |
Stock option exercise prices | $ 5.40 | $ 5.40 | |
Stock option outstanding | 143,750 | 143,750 | |
November 20, 2024 [Member] | |||
Stock option expiration date | Nov. 20, 2024 | Nov. 20, 2024 | |
Stock option exercise prices | $ 10 | $ 10 | |
Stock option outstanding | 125,000 | 125,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Stock compensation | $ 388 | $ 569 |
Stock Option vesting | 879 | 1,818 |
Total | $ 1,267 | $ 2,387 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2019 |
Warrant exercise price per share | $ 6.42 | ||
Consulting Agreement [Member] | Carlos J. Nissenson [Member] | |||
Debt monthly payment | $ 15 | ||
One time signatory fee of restricted stock | 30,000 | ||
Number of warrant shares | 75,000 | ||
Warrant exercise price per share | $ 2.20 | ||
Warrant term | 4 years | ||
Equity component description | In case the Company procures debt financing during the term of this agreement, without any equity component, Mr. Nissenson shall be entitled to 3% of the gross funds raised, however if the Company is required to pay a success fee to another external entity, then Mr. Nissenson shall be entitled to only 2% of the gross funds raised | ||
Proceeds from equity financing | $ 3,000 | ||
Share capital percentage | 3.00% | ||
Warrant exercise price percentage | 100.00% | ||
Payment of financing | $ 50 | ||
Total transaction price percentage | 3.00% | ||
Bar Code Specialties Inc. [Member] | |||
Rent expense, per month | $ 9 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current income tax provision | $ 14 | $ 47 |
Valuation allowance for deferred tax assets | $ 5,400 | 5,900 |
Net operating loss (NOL) carryforward | $ 22,100 | |
Net operating loss (NOL) carryforward expiration year | Expire in 2024 | |
Description on ownership change | Within the meaning of IRC Section 382, an "ownership change" occurs when the aggregate stock ownership of certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine unrelated shareholders that do not individually own 5% or more of the corporation's stock into one or more "public groups" that may be treated as 5-percent shareholder) increases by more than 50 percentage points over such stockholders' lowest percentage ownership during the testing period (generally three years). | |
Effective income tax rate | 21.00% | 21.00% |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Reserves and deferred revenue | $ 238 | $ 460 |
163(J) Limitation | 664 | 299 |
Stock options | 976 | |
Net operating loss | 5,319 | 5,029 |
Total gross deferred tax assets | 6,221 | 6,764 |
Less: Valuation Allowance | (5,414) | (5,870) |
Net deferred tax assets | 807 | 894 |
Amortization of intangible assets and depreciation | (807) | (894) |
Total deferred tax liabilities | (807) | (894) |
Net deferred tax assets |
Income Tax - Schedule of Defe_2
Income Tax - Schedule of Deferred Tax Assets and Valuation Allowances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 5,414 | $ 5,870 |
Valuation allowance | (5,414) | (5,870) |
Total deferred tax assets |
Income Tax - Schedule of Reconc
Income Tax - Schedule of Reconciliation of Statutory Rate and Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory tax rate | 21.00% | 21.00% |
State taxes | 1.41% | 1.73% |
Foreign income taxes | (0.66%) | |
Nondeductible items | (11.52%) | (8.87%) |
Acquisition accounting adjustments | 8.74% | |
Change in valuation allowance | 13.48% | 8.58% |
Return to provision adjustments | (25.33%) | (22.09%) |
Other | 0.56% | (0.44%) |
Effective tax rate | (0.40%) | 7.99% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Thousands | Feb. 28, 2020 | Oct. 05, 2018 |
Cash purchase price | $ 300 | |
Subsequent Event [Member] | Asset Purchase Agreement [Member] | ||
Cash purchase price | $ 245 | |
Number of stock issued | 80,000 | |
Number of common stock option | 20,000 | |
Option expire date | Feb. 28, 2023 | |
Annual salary | $ 100 |