Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 12, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | OMNIQ Corp. | |
Entity Central Index Key | 0000278165 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 Common Stock, Shares Outstanding | 4,107,230 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 3,321 | $ 1,615 |
Accounts receivable, net | 12,714 | 6,694 |
Inventory | 1,768 | 1,889 |
Prepaid expenses | 667 | 362 |
Other current assets | 8 | 65 |
Total current assets | 18,478 | 10,625 |
Property and equipment, net of accumulated depreciation of $2,221 and $2,195, respectively | 417 | 463 |
Goodwill | 14,695 | 13,921 |
Trade name, net of accumulated amortization of $3,018 and $2,932, respectively | 1,372 | 1,458 |
Customer relationships, net of accumulated amortization of $6,954 and $6,578, respectively | 5,636 | 6,012 |
Other intangibles, net of accumulated amortization of $224 and $185, respectively | 1,199 | 1,138 |
Cash, restricted | 541 | 533 |
Right of use lease asset | 118 | 131 |
Other assets | 148 | 172 |
Total assets | 42,604 | 34,453 |
Current liabilities | ||
Accounts payable and accrued liabilities | 24,993 | 18,694 |
Accrued interest and accrued liabilities, related party | 37 | |
Line of credit | 4,978 | 1,365 |
Accrued payroll and sales tax | 2,287 | 1,556 |
Notes payable, related parties - current portion | 790 | 1,025 |
Notes payable - current portion | 6,450 | 6,497 |
Lease liability - current portion | 49 | 54 |
Other current liabilities | 1,410 | 1,599 |
Total current liabilities | 40,994 | 30,790 |
Long term liabilities | ||
Notes payable, related party, less current portion | 1,065 | 1,172 |
Accrued interest and accrued liabilities, related party | 42 | 76 |
Notes payable, less current portion | 142 | 143 |
Lease liability | 73 | 80 |
Other long term liabilities | 444 | 384 |
Total liabilities | 42,760 | 32,645 |
Stockholders' equity (deficit) | ||
Common stock; $0.001 par value; 200,000,000 shares authorized; 4,024,837 and 3,960,405 shares issued and outstanding, respectively. | 4 | 4 |
Additional paid-in capital | 47,845 | 46,861 |
Accumulated (deficit) | (47,994) | (45,063) |
Accumulated other comprehensive loss | (16) | 1 |
Total stockholders' equity (deficit) | (156) | 1,808 |
Total liabilities and stockholders' equity (deficit) | 42,604 | 34,453 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, value | ||
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, value | ||
Series C Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, value | 5 | 5 |
Total stockholders' equity (deficit) | $ 5 | $ 5 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accumulated depreciation of fixed assets | $ 2,221 | $ 2,195 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 4,024,837 | 3,960,405 |
Common stock, shares outstanding | 4,024,837 | 3,960,405 |
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 | $ 3,018 | $ 2,932 |
Customer Relationships [Member] | ||
Accumulated amortization | 6,954 | 6,578 |
Other Intangible Assets [Member] | ||
Accumulated amortization | $ 224 | $ 185 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Total Revenues | $ 13,799 | $ 18,620 |
Cost of goods sold | ||
Cost of goods sold | 10,763 | 14,023 |
Gross profit | 3,036 | 4,597 |
Operating expenses | ||
General and administrative | 793 | 689 |
Salary and employee benefits | 2,856 | 2,855 |
Depreciation and amortization | 548 | 543 |
Professional fees | 875 | 415 |
Total operating expenses | 5,072 | 4,502 |
Income (loss) from operations | (2,036) | 95 |
Other income (expenses): | ||
Interest expense | (795) | (684) |
Other (expenses) income | (42) | (46) |
Total other expenses | (837) | (730) |
Net loss before Income Taxes | (2,873) | (635) |
Provision for Income Taxes | ||
Current | ||
Total Provision for Income Taxes | ||
Net loss attributable to OMNIQ Corp. | (2,873) | (635) |
Less: Preferred stock - Series C dividend | (72) | (47) |
Net loss attributable to the common stockholders | $ (2,945) | $ (682) |
Net loss per share - basic | $ (0.74) | $ (0.19) |
Net loss per share from continuing operations - basic | $ (0.74) | $ (0.19) |
Weighted average number of common shares outstanding - basic | 3,984,006 | 3,584,076 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - 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, 2018 | $ 5 | $ 4 | $ 42,264 | $ (230) | $ (39,752) | $ 1 | $ 2,292 |
Beginning balance, shares at Dec. 31, 2018 | 4,829 | 3,597 | |||||
Dividend on Class C Shares | (47) | (47) | |||||
ESPP Stock Issuance | 1 | 1 | |||||
Accumulated other Comprehensive Loss | |||||||
Stock-based compensation - options and warrants | 323 | 323 | |||||
Stock redemption | (230) | 230 | |||||
Stock redemption, shares | (25) | ||||||
Net (loss) | (633) | (635) | |||||
Ending balance at Mar. 31, 2019 | $ 5 | $ 4 | 42,358 | (40,432) | 1 | 1,936 | |
Ending balance, shares at Mar. 31, 2019 | 4,829 | 3,572 | |||||
Beginning balance at Dec. 31, 2019 | $ 5 | $ 4 | 46,861 | (45,063) | 1 | 1,808 | |
Beginning balance, shares at Dec. 31, 2019 | 4,829 | 3,960 | |||||
Dividend on Class C Shares | (72) | (72) | |||||
Accumulated other Comprehensive Loss | (17) | (17) | |||||
Stock-based compensation - options and warrants | 190 | 190 | |||||
Subscribed common stock | 440 | 440 | |||||
Professional fees - restricted shares | 354 | 354 | |||||
Professional fees - restricted shares, shares | 65 | ||||||
Other misc. items | 14 | 14 | |||||
Net (loss) | (2,873) | (2,873) | |||||
Ending balance at Mar. 31, 2020 | $ 5 | $ 4 | $ 47,845 | $ (47,994) | $ (16) | $ (156) | |
Ending balance, shares at Mar. 31, 2020 | 4,829 | 4,025 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from continuing operating activities: | ||
Net loss | $ (2,873) | $ (635) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Stock based compensation | 544 | 323 |
Amortization of ROU lease asset | 13 | 18 |
Depreciation and amortization | 548 | 543 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,006) | (1,941) |
Prepaid expenses | (310) | (319) |
Inventory | 121 | 173 |
Accounts payable and accrued liabilities | 6,186 | 6,214 |
Accrued interest and accrued liabilities, related party | 3 | |
Accrued payroll and sales taxes payable | 731 | 144 |
Other assets | 54 | (102) |
Lease liability | (12) | (17) |
Other liabilities | (531) | 132 |
Net cash (used in) provided by operating activities | (1,532) | 4,533 |
Cash flows from investing activities: | ||
Restricted cash | (8) | |
Other assets | 24 | (213) |
Purchase of property and equipment | (1) | |
Net cash provided by (used in) investing activities | 15 | (213) |
Cash flows from financing activities: | ||
Proceeds from ESPP stock issuance | 1 | |
Proceeds from / (payments on) line of credit | 3,613 | (3,737) |
Payment on notes/loans payable | (390) | (618) |
Net cash provided by (used in) financing activities | 3,223 | (4,354) |
Net increase (decrease) in cash | 1,706 | (34) |
Cash, beginning of period | 1,615 | 378 |
Cash, end of period | 3,321 | 344 |
Cash paid for interest | 601 | |
Cash paid for taxes | ||
Supplementary for non-cash flow information: | ||
Stock issued for services | 354 | |
Intangible assets acquired in non-cash exchange | 885 | |
Stock options and warrants issued | $ 190 | $ 323 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The interim consolidated financial statements of OMNIQ Corp. include the combined accounts of Quest Marketing, Inc., an Oregon Corporation, Quest Exchange Ltd., a Canadian based holding company, HTS Image Processing, Inc. (“HTS”), a Delaware corporation, HTS (USA), Inc., a Delaware corporation and HTS Image Ltd. (“HTS Ltd.”) (f/k/a Teamtronics Ltd.), an Israeli corporation. On December 31, 2016, the Company acquired one hundred percent (100%) of the shares of Bar Code Specialties, Inc. (“BCS”) and merged BCS into Quest Marketing to form one US legal entity as part of its streamlining efforts. The interim consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2019 and notes thereto included in the Company’s Form 10-K filed with the SEC on March 30, 2020. The Company operates in one segment. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020. COVID-19 The novel coronavirus (“COVID-19”) was first identified in late 2019. COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization (“WHO”) characterized COVID-19 as a pandemic. COVID-19 is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk. It has significantly disrupted supply chains and businesses around the world. The extent and duration of the COVID-19 impact on our operations and financial position is highly uncertain. Management cares about the employees, customers and the communities served, so quick and strict action was taken based on the Center for Disease Control and WHO recommendations to combat illness in the workforce and to lessen business interruption for the Company and customers. OMNIQ has been designated an essential business and the operations remain open to serve customers. The Company’s management and employees are focused on safely providing the equipment, parts, and services customers need to continue their work. Management continues to closely monitor and evaluate the impact of the COVID-19 pandemic on the Company’s operations and will take, the necessary actions to right-size the business in this environment, which is evolving daily. Some potential actions include, but are not limited to, modified work schedules as well as appropriate adjustments to the operating expenditures and capital spending plans. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of OMNIQ Corp. is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. RECENT ACCOUNTING PRONOUNCEMENTS The Company has evaluated recent pronouncements and believes that none of them will have a material effect on the Company’s financial statements. REVERSE STOCK SPLIT Effective November 20, 2019, the Company implemented a one-for-20 reverse stock split of the Company’s common stock (the “Reverse Split”). The par value of common stock and the number of authorized shares were not adjusted as a result of the Reverse 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 the Reverse 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 Reverse Split, 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 Reverse Split was reduced proportionately. GOODWILL AND INTANGIBLE ASSETS 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 three months ended March 31, 2020 and March 31, 2019 was $501 thousand and $501 thousand, respectively. NET LOSS PER COMMON SHARE 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 three months ended March 31, 2020 and 2019 were 3,984,006 and 3,584,076, 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. Dilutive securities are excluded from the computation of diluted net loss per share because such securities have anti-dilutive impact due to losses reported. 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, as of March 31: (In thousands) 2020 2019 Options to purchase common stock 717 792 Convertible preferred stock 241 241 Warrants to purchase common stock 225 275 Potential shares excluded from diluted net loss per share 1,183 1,308 FOREIGN CURRENCY TRANSLATION The consolidated financial statements of the Company are presented in U.S. dollars. The functional currency for the Company and each of its subsidiaries (“Quest US entities”), except HTS Ltd., is U.S. dollars. The functional currency of HTS Ltd. is the Israeli Shekel. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. For the Company’s U.S. entities, continuing operations are conducted in U.S. dollars. The Company owns a non-operating subsidiary in Canada, from which it has had no activity since October 1, 2016. For HTS Ltd., continuing operations are conducted in Israeli Shekel. Reclassifications and adjustments |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020, the Company had a working capital deficit of $22.5 million and an accumulated deficit of $48.0 million. 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 continuation of improving cash flow, maintaining moderate cost reductions, 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 consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 3 – CONCENTRATIONS For the three months ended March 31, 2020 and the year ended December 31, 2019, one customer accounted for 32.5% and 12.3% of the Company’s revenues, respectively. At March 31, 2020 and December 31, 2019, one customer accounted for 36.6% and 29.6% of the Company’s accounts receivable balance, respectively. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisition | NOTE 4 – BUSINESS ACQUISITION Eyepax acquisition On February 28, 2020 (Closing Date), the Company entered into an Asset Purchase Agreement, with Eyepax IT Consulting, LLC (Seller); whereby, the Company acquired Seller’s accounts receivable and the license, ownership rights and source code of the parking Enforcement and Revenue Control System. The Company also assumed the Seller’s accounts payable liabilities. The aggregate purchase price paid is as follows: 1. $100,000 shall be paid on the Closing Date, less $5,000 previously paid as an advance payment, accordingly the remaining balance to be paid on Closing Date is $95,000. 2. $25,000 per month for three months shall be paid on or before the last business day of the month beginning with the first month after the Closing Date, and a fourth payment of $20,000 until a total of $95,000 has been made. 3. Beginning on the first month after Closing Date, $5,000 per month shall be paid in ten (10) monthly installments. 4. 80,000 shares of the Company’s common stock in the name of the Seller, will be issued during 45 days from Closing Date at $5.00 per common share. 5. Stock options to purchase 20,000 shares of the Company’s common stock at an exercise price of $5.00 per share. The option shares will vest in equal quarterly periods, expiring on February 28th, 2023. The purchase price was measured at fair value on the Closing Date as follows: (In thousands) Cash payments to Seller 245 Subscribed common stock 440 Stock purchase options 91 Total 776 The assets acquired and liabilities assumed have been recognized at the Closing date and were measured at fair value as follows: (In thousands) Accounts receivable 14 Software (intangible) 100 Liabilities assumed (113 ) Net assets acquired at fair value 1 Total purchase price 776 Goodwill recognized 775 The Company estimated the fair value the stock purchase option using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate and dividend yield. In valuing these options, the Company assumed a cumulative stock volatility of 269.42%, 36 months expected life, and a risk-free interest rate of 1.160% and dividend yield of 0%. |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | NOTE 5 – OTHER LIABILITIES At March 31, 2020 and December 31, 2019, other liabilities consisted of the following: (In thousands) March 31, 2020 December 31, 2019 Other vendor payable $ 801 $ 801 Dividend payable 417 344 Bonus payable 128 385 Others 508 453 Total other liabilities 1,854 1,983 Less Current Portion (1,410 ) (1,599 ) Total long term other liabilities $ 444 $ 384 |
Credit Facilities and Line of C
Credit Facilities and Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Line of Credit | NOTE 6 – CREDIT FACILITIES AND LINE OF CREDIT 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 outstanding under the Action credit line at March 31, 2020 and December 31, 2019, was $5.0 million and $1.4 million respectively, which includes accrued interest. 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. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 7 – NOTES PAYABLE Notes payable at March 31, 2020 and December 31, 2019, consists of the following: (In thousands) March 31, 2020 December 31, 2019 Supplier Note Payable $ 6,443 $ 6,490 All Other 149 150 Total 6,592 6,640 Less current portion (6,450 ) (6,497 ) Long Term Notes Payable $ 142 $ 143 Future maturities of notes payable as of March 31, 2020 are as follows; 2019 $ 6,448 2020 6 2021 138 2022 - 2023 - Total $ 6,592 In connection with the acquisition of Bar Code Specialties, Inc. (“BCS”), a California corporation, 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 ended October 2018. The loan bears interest at 8.0% and is unsecured and subordinated to the Company’s bank debt. The balance on this loan at March 31, 2020 and December 31, 2019 was $138 thousand, all of which 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 (as defined below) and Action Capital, whereby the noteholder agrees to subordinate its right to payment of capital and interest until the Supplier with the Secured Promissory Note is reimbursed in full, therefore, the note is classified as long-term. On July 18, 2016, the Company and the Supplier entered into a certain secured promissory note, with an effective date of July 1, 2016, in the principal amount of $12.5 million (the “Secured Promissory Note”). 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 September 7, 2018, the Company entered into a Sixth Amendment to the Secured Promissory Note (the “Sixth Amendment”) extending the maturity date to January 31, 2019. The Sixth Amendment also increases the principal amount to $8.7 million, an increase of $6.8 million, by rolling the Company’s then existing and outstanding accounts payable into the note by the previously mentioned amount of increase. The Company will continue to make monthly payments in the amount of $300 thousand for the first three monthly payments, and also in the amount of $500 thousand for the last two monthly payments prior to the note’s maturity. ● On April 30, 2019, the Company entered into a Seventh Amendment to the Secured Promissory Note (the “Seventh Amendment”) extending the maturity date to July 31, 2019. The Seventh 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. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable, Related Parties | NOTE 8 –NOTES PAYABLE, RELATED PARTIES Notes and loans payable, related parties consisted of the following: (In thousands) March 31, 2020 December 31, 2019 Note payable – debt restructure Marin $ 840 $ 900 Note payable – debt restructure Thomet 525 563 Note payable – debt restructure Zicman 125 135 Convertible note payable – shareholders 150 150 Note payable – RWCC 215 449 Total notes payable, related parties 1,855 2,197 Less current portion 790 1,025 Long-term portion $ 1,065 $ 1,172 Note payable – debt restructure Marin On February 28, 2018, the Company finalized two settlement agreements with David and Kathy Marin (the “Marin Settlement Agreements”) which have an effective date of December 30, 2017. 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 Agreement I, 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. 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. As a result, the balance on this loan and related accrued interest at December 31, 2018 were all classified as long term, being due in 2023. As of March 31, 2020, the balance of this loan was $840 thousand. Note payable – debt restructure Thomet On February 28, 2018, the Company finalized 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 $13 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. 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. The effective date of the agreement is December 30, 2017. As of March 31, 2020, the balance of this loan was $525 thousand and is due in 2023. Note payable – debt restructure Zicman On February 28, 2018, the Company finalized a settlement agreement with George Zicman whereby the Company settled its indebtedness to Mr. Zicman in the 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. 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 Agreement II. The effective date of the agreement is December 30, 2017. As of March 31, 2020, the balance of this loan was $126 thousand. 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. Convertible note payable - shareholders On October 5, 2018, the Company entered into a purchase agreement with Walefar Investments, Ltd. (“Walefar”) and Campbeltown Consulting, Inc. (“Campbeltown”) (Walefar and Campbeltown are collectively referred to as the “Sellers”). Pursuant to the agreement, the Company purchased 100% of the capital stock of HTS Image Processing, Inc. (“HTS”) from the Sellers. As consideration, the Company (i) issued to the Sellers 1,122,648 shares of the Company’s common stock, having a value of $5.3 million based on the average closing price of the common stock for the 20 days’ preceding the agreement (the “Per Share Value”), (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 “Convertible Promissory Note”). 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 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 director and CFO Neev Nissenson. Carlos Jaime Nissenson was also a stockholder and director of HTS. Pursuant to the agreement, Shai Lustgarten received 561,324 shares of the Company’s common stock and Carlos Jaime Nissenson received 561,324 shares of the Company’s common stock. 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 277,116 and 277,116 shares of common stock, respectively. 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 $2.7 million from $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. As a result of the Offering (see Note 9), $400 thousand of the notes outstanding were converted to common stock. 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 $4.72. Accordingly, the Company issued 15,890 shares to each of Walefar and Campbeltown. As of March 31, 2020, the remaining principal amount of $75 thousand is owed to each Walefar and Campbeltown, respectively, ($150 thousand total) under the Convertible Promissory Note. Note payable – RWCC The company acquired the Note Payable – RWCC (“RWCC Note”) (f.k.a. Certus) with the acquisition of HTS. The RWCC Note was a non-interest-bearing note. The RWCC Note was historically discounted using an effective interest rate of 5.0%. The outstanding balance of $215 thousand is classified as short term and is due and payable in April 2020 with monthly payment of approximately $85,000 per month. The RWCC Note is classified as a related party note because the Chief Executive Officer of RWCC is the son of a significant shareholder of the Company and a sibling of a member of the Board of Directors. Repayment of notes payable The repayment of the notes payable, related parties at March 31, 2020 is as follows: (In thousands) 2020 $ 685 2021 426 2022 426 2023 319 Thereafter - Total $ 1,856 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9 – STOCKHOLDERS’ EQUITY PREFERRED STOCK Series A As of March 31, 2020, there were 1,000,000 Series A preferred shares designated and no Series A preferred shares outstanding. The board of directors of the Company (the “Board”) had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares. Series B As of March 31, 2020, there was 1 preferred share designated and no preferred shares outstanding. Series C As of March 31, 2020, there were 15,000,000 Series C preferred share authorized and 4,828,530 Series C preferred shares outstanding. They have preferential rights above common shares and the Series B preferred shares and are entitled to receive a quarterly dividend at a rate of $0.06 per share per annum. As part of a debt settlement agreement effective December 30, 2017, 1,685,000 shares were issued with the quarterly dividend at a rate of $0.06 per share per annum were waived for a period of 24 months, with no dividends being accrued or paid. Series C preferred shares outstanding are convertible into common stock at the rate of 20 preferred shares for one common share. COMMON STOCK On February 27, 2020, the Company issued an aggregate of 64 thousand shares of common stock valued at $354 thousand as compensation for professional services to the Company. As of March 31, 2020, the Company had, 4,024,837 common shares outstanding. Warrants and Stock Options Warrants March 31, 2020 March 31, 2019 Number of warrants Weighted Average Exercise Price Number of warrants Weighted Average Exercise Price Balance, beginning of period 1,166,667 $ 6.42 275,000 $ 4.60 Warrants granted 25,000 11.60 - - Warrants expired - - - - Warrants cancelled, forfeited - - - - Warrants exercised - - - - Balance, end of period 1,191,667 $ 6.53 275,000 $ 4.60 Exercisable warrants 1,191,667 $ 6.53 275,000 $ 4.60 Outstanding warrants as of March 31, 2020 are as follows: Range of Exercise Prices Weighted Average residual life span (in years) Outstanding Warrants Weighted Average Exercise Price Exercisable Warrants Weighted Average Exercise Price $ 2.20 1.34 75,000 $ 2.20 75,000 $ 2.20 $ 4.00 0.75 150,000 $ 4.00 150,000 $ 4.00 $ 5.60 0.24 10,000 $ 5.60 10,000 $ 5.60 $ 7.00 4.52 891,667 $ 7.00 891,667 $ 7.00 $ 8.00 1.91 10,000 $ 8.00 10,000 $ 8.00 $ 10.00 1.53 25,000 $ 10.00 25,000 $ 10.00 $ 12.00 0.53 15,000 $ 12.00 15,000 $ 12.00 $ 14.00 0.91 15,000 $ 14.00 15,000 $ 14.00 $ 2.20 to 14.00 3.63 1,191,667 $ 6.53 1,191,667 $ 6.53 Warrants outstanding at March 31, 2020 and 2019 have the following expiry date and exercise prices: Expiry Date Exercise Prices March 31, 2020 March 31, 2019 June 26, 2020 $ 5.60 10,000 10,000 October 10, 2020 $ 12.00 15,000 15,000 December 30, 2020 $ 4.00 150,000 150,000 February 27, 2021 $ 14.00 15,000 - August 2, 2021 $ 2.20 75,000 75,000 October 10, 2021 $ 10.00 25,000 25,000 February 27, 2022 $ 8.00 10,000 - October 6, 2024 $ 7.00 891,667 - 1,191,667 275,000 2014 Stock Option Plan On November 17, 2014, the Board adopted a stock option plan (the “2014 Plan”) whereby the Board may grant to directors, officers, employees, or consultants of the Company options to acquire common shares. The Board 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 2014 Plan was adopted 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 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, which may vary, but will not exceed ten years from the date of the grant. 2018 Stock Option Plan On March 8, 2018, the Company adopted a stock option plan (the “2018 Plan”) as an incentive, to retain in the employ of and as directors, officers, consultants, advisors and employees to the Company. On October 31, 2018, the Board amended the Plan to increase the amount of shares authorized for issuance thereunder from 500 thousand to 800 thousand shares of the Corporation’s common stock, par value $0.001 (the “Shares”). On January 23, 2019, the Company’s shareholders adopted and ratified the Plan. As at March 31, 2020, the Company had issued options under the 2018 Plan allowing for the subscription of 709,250 shares of its common stock, with 90,750 shares remaining for issuance. Stock Options March 31, 2020 March 31, 2019 Number of stock options Weighted Average Exercise Price Number of stock options Weighted Average Exercise Price Balance, beginning of period 1,133,550 $ 4.00 1,006,050 $ 4.80 Stock options granted 20,000 5.00 - - Stock options expired 30,250 3.98 - - Stock options cancelled, forfeited - - - - Stock options exercised - - - - Balance, end of period 1,123,300 $ 4.01 1,006,050 $ 4.80 Exercisable stock options 986,925 $ 3.88 792,050 $ 4.80 For the three months ended March 31, 2020, the Company granted 20,000 stock options. Outstanding stock options as of March 31, 2020 are as follows: Range of Exercise Prices Weighted Average residual life span (in years) Outstanding Stock Options Weighted Average Exercise Price Exercisable Stock Options Weighted Average Exercise Price $ 1.50 to 1.80 1.88 114,050 $ 1.70 114,050 $ 1.70 $ 2.20 1.34 175,000 $ 2.20 175,000 $ 2.20 $ 5.00 3.28 147,500 $ 5.00 50,313 $ 5.00 $ 10.00 4.64 125,000 $ 10.00 125,000 $ 10.00 $ 2.40 2.93 335,000 $ 2.40 335,000 $ 2.40 $ 4.40 3.59 93,000 $ 4.40 69,750 $ 4.40 $ 5.40 3.67 133,750 $ 5.40 117,813 $ 5.40 $ 1.50 to 10.00 2.95 1,123,300 $ 4.01 986,926 $ 3.88 Stock options outstanding at March 31, 2020, and 2019 have the following expiration date and exercise prices: Expiration Date Exercise Prices March 31, 2020 March 31, 2019 August 2, 2021 $ 2.20 175,000 175,000 February 17, 2022 $ 1.50 38,017 38,017 February 17, 2022 $ 1.80 76,033 76,033 March 5, 2023 $ 2.40 335,000 340,000 July 31, 2023 $ 5.00 127,500 - October 31, 2023 $ 4.40 93,000 108,250 November 30, 2023 $ 5.40 133,750 143,750 November 20, 2024 $ 5.00 125,000 125,000 February 28, 2023 $ 5.00 20,000 - 1,123,300 1,006,050 Stock compensation expense is $123 thousand for the three months ended March 31, 2020 and $323 thousand for the three months ended March 31, 2019. The fair value of the Company’s stock option and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. |
Salary and Employee Benefits
Salary and Employee Benefits | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Salary and Employee Benefits | NOTE 10 – SALARY AND EMPLOYEE BENEFITS Salary and employee benefits for the three months ended March 31, 2020 and March 31, 2019 consists of the following: (In thousands) 2020 2019 Stock compensation 123 323 Salaries (except R&D) 1,280 1,275 R&D salaries 340 208 Bonuses 40 25 Commissions 1,073 1,024 Total 2,856 2,855 |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | NOTE 11 – LITIGATION Our subsidiary, HTS (USA), Inc., was previously in litigation with Sagy Amit, a former employee, who claimed that he was owed wages and commissions. As of March 31, 2020, the case has been resolved. 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 – RELATED PARTY TRANSACTIONS Related party transactions are discussed in Note 8. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 13 – LEASES The Company accounts for leases in accordance with ASC Topic 842, “Leases,” which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet and expands disclosures about leasing arrangements for both lessees and lessors, among other items, for most lease arrangements. In accordance with the adoption of ASC 842 on January 1, 2019, we recorded operating lease right-of-use (“ROU”) assets, which represent our right to use an underlying asset for the lease term, and operating lease liabilities which represent our obligation to make lease payments. Generally, we enter into operating lease agreements for facilities. Finance lease assets are recorded within property and equipment, net of accumulated depreciation. The amount of operating lease liabilities due within 12 months are recorded in other current liabilities, with the remaining operating lease liabilities recorded as non-current liabilities in our consolidated balance sheet based on their contractual due dates. Finance lease liabilities are classified according to contractual due dates. The operating lease ROU assets and liabilities are recognized as of the lease commencement date at the present value of the lease payments over the lease term. Most of our leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate which was between 13.16% and 15.06% for all operating leases. Our operating lease agreements may include options to extend the lease term or terminate it early. We have included options to extend in the operating lease ROU assets and liabilities when we are reasonably certain that we will exercise such options. The weighted average remaining lease terms and discount rates for our operating leases were approximately 2.64 years and 14.6% at March 31, 2020. We did not have finance leases at March 31, 2020. Operating lease expense is recognized as rent expense on a straight-line basis over the lease term. We evaluate ROU assets for impairment consistent with our property and equipment policy disclosure included in our 2019 Form 10-K. As of March 31, 2020, operating lease ROU assets were $118 thousand and operating lease liabilities were $122 thousand, of which $73 thousand were classified as noncurrent. Future minimum lease commitments at March 31, 2020 were as follows: Year ending December 31, Operating Leases (In thousands) 2020 (excluding the three months ended March 31, 2020) $ 53 2021 41 2022 38 2023 and thereafter 16 Total lease payments 148 Less imputed interest (26 ) Total $ 122 Supplemental cash flow information related to leases was as follows: (In thousands) Three Months Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Cash flows from operating activities - operating leases $ 17 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ - |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS PAYCHECCK PROTECTION PROGRAM On April 30, 2020, the Company received an unsecured loan (the “PPP Loan”) in the amount of $888 thousand, under the Paycheck Protection Program (the “PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average 2019 monthly payroll expenses. The PPP Loan was made through Zions First National Bank (the “Lender”) and the Company entered into a U.S. Small Business Administration Paycheck Protection Program Note (“Note”) with the Lender evidencing the PPP Loan. The term of the PPP Loan is two years. Interest will accrue on the outstanding principal balance of the PPP Loan at a fixed rate of 1.0%, which shall be deferred for the first six months of the term of the PPP Loan. Monthly payments will be due and payable beginning in November 2020 and continue each month thereafter until maturity of the PPP Loan. The Company may prepay principal of the PPP Loan at any time in any amount without penalty. The Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties or provisions of the PPP Loan. The Company may apply to the Lender for forgiveness of the PPP Loan, and the amount which may be forgiven will be equal to the sum of the payroll and benefit costs and covered rent and utility payments incurred by the Company during the eight-week period beginning on April 30, 2020, as calculated in accordance with the terms of the CARES Act. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part, but the Company intends to use the proceeds in accordance with the PPP Loan program. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS The Company has evaluated recent pronouncements and believes that none of them will have a material effect on the Company’s financial statements. |
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 “Reverse Split”). The par value of common stock and the number of authorized shares were not adjusted as a result of the Reverse 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 the Reverse 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 Reverse Split, 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 Reverse Split was reduced proportionately. |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS 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 three months ended March 31, 2020 and March 31, 2019 was $501 thousand and $501 thousand, respectively. |
Net Loss Per Common Share | NET LOSS PER COMMON SHARE 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 three months ended March 31, 2020 and 2019 were 3,984,006 and 3,584,076, 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. Dilutive securities are excluded from the computation of diluted net loss per share because such securities have anti-dilutive impact due to losses reported. 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, as of March 31: (In thousands) 2020 2019 Options to purchase common stock 717 792 Convertible preferred stock 241 241 Warrants to purchase common stock 225 275 Potential shares excluded from diluted net loss per share 1,183 1,308 |
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 and each of its subsidiaries (“Quest US entities”), except HTS Ltd., is U.S. dollars. The functional currency of HTS Ltd. is the Israeli Shekel. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. For the Company’s U.S. entities, continuing operations are conducted in U.S. dollars. The Company owns a non-operating subsidiary in Canada, from which it has had no activity since October 1, 2016. For HTS Ltd., continuing operations are conducted in Israeli Shekel. |
Reclassifications and Adjustments | Reclassifications and adjustments |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, as of March 31: (In thousands) 2020 2019 Options to purchase common stock 717 792 Convertible preferred stock 241 241 Warrants to purchase common stock 225 275 Potential shares excluded from diluted net loss per share 1,183 1,308 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Purchase Price | The purchase price was measured at fair value on the Closing Date as follows: (In thousands) Cash payments to Seller 245 Subscribed common stock 440 Stock purchase options 91 Total 776 |
Schedule of Recognized Fair Values of Assets Acquired and Liabilities Assumed | The assets acquired and liabilities assumed have been recognized at the Closing date and were measured at fair value as follows: (In thousands) Accounts receivable 14 Software (intangible) 100 Liabilities assumed (113 ) Net assets acquired at fair value 1 Total purchase price 776 Goodwill recognized 775 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | At March 31, 2020 and December 31, 2019, other liabilities consisted of the following: (In thousands) March 31, 2020 December 31, 2019 Other vendor payable $ 801 $ 801 Dividend payable 417 344 Bonus payable 128 385 Others 508 453 Total other liabilities 1,854 1,983 Less Current Portion (1,410 ) (1,599 ) Total long term other liabilities $ 444 $ 384 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable at March 31, 2020 and December 31, 2019, consists of the following: (In thousands) March 31, 2020 December 31, 2019 Supplier Note Payable $ 6,443 $ 6,490 All Other 149 150 Total 6,592 6,640 Less current portion (6,450 ) (6,497 ) Long Term Notes Payable $ 142 $ 143 |
Schedule of Future Maturities of Note Payable | Future maturities of notes payable as of March 31, 2020 are as follows; 2019 $ 6,448 2020 6 2021 138 2022 - 2023 - Total $ 6,592 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable, Related Parties | Notes and loans payable, related parties consisted of the following: (In thousands) March 31, 2020 December 31, 2019 Note payable – debt restructure Marin $ 840 $ 900 Note payable – debt restructure Thomet 525 563 Note payable – debt restructure Zicman 125 135 Convertible note payable – shareholders 150 150 Note payable – RWCC 215 449 Total notes payable, related parties 1,855 2,197 Less current portion 790 1,025 Long-term portion $ 1,065 $ 1,172 |
Schedule of Future Maturities of Notes Payable, Related Parties | The repayment of the notes payable, related parties at March 31, 2020 is as follows: (In thousands) 2020 $ 685 2021 426 2022 426 2023 319 Thereafter - Total $ 1,856 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Warrants | The following table summarizes information about warrants granted during the three-month periods ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Number of warrants Weighted Average Exercise Price Number of warrants Weighted Average Exercise Price Balance, beginning of period 1,166,667 $ 6.42 275,000 $ 4.60 Warrants granted 25,000 11.60 - - Warrants expired - - - - Warrants cancelled, forfeited - - - - Warrants exercised - - - - Balance, end of period 1,191,667 $ 6.53 275,000 $ 4.60 Exercisable warrants 1,191,667 $ 6.53 275,000 $ 4.60 |
Schedule of Outstanding Warrants | Outstanding warrants as of March 31, 2020 are as follows: Range of Exercise Prices Weighted Average residual life span (in years) Outstanding Warrants Weighted Average Exercise Price Exercisable Warrants Weighted Average Exercise Price $ 2.20 1.34 75,000 $ 2.20 75,000 $ 2.20 $ 4.00 0.75 150,000 $ 4.00 150,000 $ 4.00 $ 5.60 0.24 10,000 $ 5.60 10,000 $ 5.60 $ 7.00 4.52 891,667 $ 7.00 891,667 $ 7.00 $ 8.00 1.91 10,000 $ 8.00 10,000 $ 8.00 $ 10.00 1.53 25,000 $ 10.00 25,000 $ 10.00 $ 12.00 0.53 15,000 $ 12.00 15,000 $ 12.00 $ 14.00 0.91 15,000 $ 14.00 15,000 $ 14.00 $ 2.20 to 14.00 3.63 1,191,667 $ 6.53 1,191,667 $ 6.53 |
Schedule of Warrants Outstanding, Expiry Date and Exercise Prices | Warrants outstanding at March 31, 2020 and 2019 have the following expiry date and exercise prices: Expiry Date Exercise Prices March 31, 2020 March 31, 2019 June 26, 2020 $ 5.60 10,000 10,000 October 10, 2020 $ 12.00 15,000 15,000 December 30, 2020 $ 4.00 150,000 150,000 February 27, 2021 $ 14.00 15,000 - August 2, 2021 $ 2.20 75,000 75,000 October 10, 2021 $ 10.00 25,000 25,000 February 27, 2022 $ 8.00 10,000 - October 6, 2024 $ 7.00 891,667 - 1,191,667 275,000 |
Schedule of Stock Options Granted | The following table summarizes information about stock options granted during the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Number of stock options Weighted Average Exercise Price Number of stock options Weighted Average Exercise Price Balance, beginning of period 1,133,550 $ 4.00 1,006,050 $ 4.80 Stock options granted 20,000 5.00 - - Stock options expired 30,250 3.98 - - Stock options cancelled, forfeited - - - - Stock options exercised - - - - Balance, end of period 1,123,300 $ 4.01 1,006,050 $ 4.80 Exercisable stock options 986,925 $ 3.88 792,050 $ 4.80 |
Schedule of Outstanding Stock Options | Outstanding stock options as of March 31, 2020 are as follows: Range of Exercise Prices Weighted Average residual life span (in years) Outstanding Stock Options Weighted Average Exercise Price Exercisable Stock Options Weighted Average Exercise Price $ 1.50 to 1.80 1.88 114,050 $ 1.70 114,050 $ 1.70 $ 2.20 1.34 175,000 $ 2.20 175,000 $ 2.20 $ 5.00 3.28 147,500 $ 5.00 50,313 $ 5.00 $ 10.00 4.64 125,000 $ 10.00 125,000 $ 10.00 $ 2.40 2.93 335,000 $ 2.40 335,000 $ 2.40 $ 4.40 3.59 93,000 $ 4.40 69,750 $ 4.40 $ 5.40 3.67 133,750 $ 5.40 117,813 $ 5.40 $ 1.50 to 10.00 2.95 1,123,300 $ 4.01 986,926 $ 3.88 |
Schedule of Stock Options, Expiry Date and Exercise Prices | Stock options outstanding at March 31, 2020, and 2019 have the following expiration date and exercise prices: Expiration Date Exercise Prices March 31, 2020 March 31, 2019 August 2, 2021 $ 2.20 175,000 175,000 February 17, 2022 $ 1.50 38,017 38,017 February 17, 2022 $ 1.80 76,033 76,033 March 5, 2023 $ 2.40 335,000 340,000 July 31, 2023 $ 5.00 127,500 - October 31, 2023 $ 4.40 93,000 108,250 November 30, 2023 $ 5.40 133,750 143,750 November 20, 2024 $ 5.00 125,000 125,000 February 28, 2023 $ 5.00 20,000 - 1,123,300 1,006,050 |
Salary and Employee Benefits (T
Salary and Employee Benefits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Salary and Employee Benefits | Salary and employee benefits for the three months ended March 31, 2020 and March 31, 2019 consists of the following: (In thousands) 2020 2019 Stock compensation 123 323 Salaries (except R&D) 1,280 1,275 R&D salaries 340 208 Bonuses 40 25 Commissions 1,073 1,024 Total 2,856 2,855 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Commitments | Future minimum lease commitments at March 31, 2020 were as follows: Year ending December 31, Operating Leases (In thousands) 2020 (excluding the three months ended March 31, 2020) $ 53 2021 41 2022 38 2023 and thereafter 16 Total lease payments 148 Less imputed interest (26 ) Total $ 122 |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information related to leases was as follows: (In thousands) Three Months Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Cash flows from operating activities - operating leases $ 17 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ - |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Nov. 20, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2016 |
Reverse stock split | one-for-20 reverse stock split | |||
Amortization expense | $ 501 | $ 501 | ||
Weighted average number of common shares outstanding | 3,984,006 | 3,584,076 | ||
Minimum [Member] | ||||
Finite-lived intangible asset, useful life | 3 years | |||
Maximum [Member] | ||||
Finite-lived intangible asset, useful life | 11 years | |||
Bar Code Specialties Inc. [Member] | ||||
Percentage of shares acquired | 100.00% |
Principles of Consolidation and
Principles of Consolidation and Summary of Significant Accounting Policies - Schedule of Anti Dilutive Securities Excludes from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Potential shares excluded from diluted net loss per share | 1,183,000 | 1,308,000 |
Options to Purchase Common Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 717,000 | 792,000 |
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 | 275,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital deficit | $ (22,500) | |
Accumulated deficit | $ (47,994) | $ (45,063) |
Concentrations (Details Narrati
Concentrations (Details Narrative) - One Customer [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue [Member] | ||
Concentration risk, percentage | 32.50% | 12.30% |
Accounts Receivable [Member] | ||
Concentration risk, percentage | 36.60% | 29.60% |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Number of options granted to purchase common stock | 20,000 | ||
Weighted average exercise price, stock options granted | $ 5 | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | |||
Cash purchase price | $ 100 | ||
Advance payment | $ 5 | ||
Number of options granted to purchase common stock | 20,000 | ||
Weighted average exercise price, stock options granted | $ 5 | ||
Stock options, expiration date | Feb. 28, 2023 | ||
Stock options, volatility | 269.42% | ||
Stock options, expected life | 36 months | ||
Stock options, risk-free interest rate | 1.16% | ||
Stock options, dividend yield | 0.00% | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | Remaining Balance to be Paid [Member] | |||
Cash purchase price | $ 95 | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | Ramaining Balance to be Paid [Member] | Monthly Payments For First Three Months [Member] | |||
Cash purchase price | 25 | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | Ramaining Balance to be Paid [Member] | Fourth Payment [Member] | |||
Cash purchase price | 20 | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | 10 Monthly Installments [Member] | |||
Advance payment | $ 5 | ||
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | During 45 Days from Closing Date [Member] | |||
Number of shares will be issued | 80,000 | ||
Share price | $ 5 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Fair Value of Purchase Price (Details) - Asset Purchase Agreement [Member] - Eyepax IT Consulting, LLC [Member] $ in Thousands | Feb. 28, 2020USD ($) |
Cash payments to Seller | $ 245 |
Subscribed common stock | 440 |
Stock purchase options | 91 |
Total | $ 776 |
Business Acquisition - Schedu_2
Business Acquisition - Schedule of Recognized Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Feb. 28, 2020 | Dec. 31, 2019 |
Goodwill recognized | $ 14,695 | $ 13,921 | |
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | |||
Accounts receivable | $ 14 | ||
Software (intangible) | 100 | ||
Liabilities assumed | (113) | ||
Net assets acquired at fair value | 1 | ||
Total purchase price | 776 | ||
Goodwill recognized | $ 775 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Other vendor payable | $ 801 | $ 801 |
Dividend payable | 417 | 344 |
Bonus payable | 128 | 385 |
Others | 508 | 453 |
Total other liabilities | 1,854 | 1,983 |
Less Current Portion | (1,410) | (1,599) |
Total long term other liabilities | $ 444 | $ 384 |
Credit Facilities and Line of_2
Credit Facilities and Line of Credit (Details Narrative) - USD ($) $ in Thousands | Jul. 01, 2016 | Mar. 31, 2020 | Dec. 31, 2019 |
Line of credit, balance | $ 5,000 | $ 1,400 | |
Action Capital Corporation [Member] | Factoring and Security Agreement [Member] | |||
Line of credit maximum borrowing capacity | $ 5,000 | ||
Percentage of reserve account | 5.00% | ||
Percentage of average outstanding balance | 0.75% | ||
Action Capital Corporation [Member] | Factoring and Security Agreement [Member] | Prime Rate [Member] | |||
Percentage of average outstanding balance | 2.00% |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | Apr. 30, 2019 | Sep. 07, 2018 | Jul. 18, 2016 | Oct. 31, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Notes payable | $ 6,592 | $ 6,640 | ||||
BCS Acquisition [Member] | ||||||
Debt instruments periodic payment | $ 5 | |||||
Debt instruments interest rate | 8.00% | |||||
Notes payable | $ 138 | $ 138 | ||||
Secured Promissory Note [Member] | ||||||
Debt instruments periodic payment | $ 250 | |||||
Debt instruments interest rate | 12.00% | |||||
Debt instrument face amount | $ 12,500 | |||||
Debt instrument due date | Dec. 31, 2016 | |||||
Secured Promissory Note [Member] | Sixth Amendment Agreement [Member] | ||||||
Debt instrument face amount | $ 8,700 | |||||
Debt instrument due date | Jan. 31, 2019 | |||||
Debt instrument, increase, accrued interest | $ 6,800 | |||||
Secured Promissory Note [Member] | Sixth Amendment Agreement [Member] | First Three Monthly Payments [Member] | ||||||
Debt instruments periodic payment | 300 | |||||
Secured Promissory Note [Member] | Sixth Amendment Agreement [Member] | Last Two Monthly Payments [Member] | ||||||
Debt instruments periodic payment | $ 500 | |||||
Secured Promissory Note [Member] | Seventh Amendment Agreement [Member] | ||||||
Debt instrument due date | Jul. 31, 2019 | |||||
Debt instrument, increase, accrued interest | $ 350 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total notes payable | $ 6,592 | $ 6,640 |
Less: current portion | 6,450 | 6,497 |
Long Term Notes Payable | 142 | 143 |
Supplier Secured Note Payable [Member] | ||
Total notes payable | 6,443 | 6,490 |
All Other [Member] | ||
Total notes payable | $ 149 | $ 150 |
Notes Payable - Schedule of Fut
Notes Payable - Schedule of Future Maturities of Note Payable (Details) - Notes Payable [Member] $ in Thousands | Mar. 31, 2020USD ($) |
2019 | $ 6,440 |
2020 | 6 |
2021 | 138 |
2022 | |
2023 | |
Total | $ 6,592 |
Notes Payable, Related Partie_2
Notes Payable, Related Parties (Details Narrative) $ / shares in Units, $ in Thousands | Feb. 27, 2020USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | May 29, 2019USD ($)shares | Oct. 05, 2018USD ($)TradingDays$ / sharesshares | Feb. 28, 2018USD ($) | Feb. 28, 2018USD ($)shares | Mar. 31, 2020USD ($)shares | Dec. 31, 2018 | Dec. 31, 2014USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) |
Notes payable related party, balance | $ 1,856 | $ 2,197 | |||||||||
Number of shares issued for common stock | shares | 64,000 | ||||||||||
Number of common stock value issued | $ 354 | ||||||||||
Promissory note | $ 6,592 | $ 6,640 | |||||||||
Series C Preferred Stock [Member] | |||||||||||
Number of restricted common stock shares | shares | |||||||||||
Campbeltown Consulting, Inc [Member] | |||||||||||
Debt instrument face amount | $ 75 | ||||||||||
Number of shares issued for common stock | shares | 15,890 | ||||||||||
Debt convertible price per share | $ / shares | $ 4.72 | ||||||||||
Debt instrument conversion of shares amount | $ 75 | ||||||||||
Promissory note | 150 | ||||||||||
Walefar Investments, Ltd [Member] | |||||||||||
Debt instrument face amount | 75 | ||||||||||
Number of shares issued for common stock | shares | 15,890 | ||||||||||
Debt convertible price per share | $ / shares | $ 4.72 | ||||||||||
Debt instrument conversion of shares amount | $ 75 | ||||||||||
Promissory note | 150 | ||||||||||
Note Payable - RWCC [Member] | |||||||||||
Debt monthly payment | $ 85 | ||||||||||
Debt due year | April 2020 | ||||||||||
Notes payable related party, balance | $ 215 | $ 449 | |||||||||
Debt instruments interest rate | 5.00% | ||||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | |||||||||||
Debt instrument face amount | $ 11,000 | ||||||||||
Debt owed amount | 1,200 | ||||||||||
Forgiveness of debt | $ 9,500 | ||||||||||
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. 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. | ||||||||||
Number of monthly installments | 60 monthly payments | ||||||||||
Debt monthly payment | $ 20 | ||||||||||
Reduction in debt default amount | $ 2,000 | ||||||||||
Debt due year | Due in 2023 | ||||||||||
Notes payable related party, balance | $ 940 | ||||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | Scansource, Inc [Member] | |||||||||||
Debt instrument face amount | $ 6,000 | $ 6,000 | |||||||||
Marin Settlement Agreement I [Member] | David Marin [Member] | Owed Amount [Member] | |||||||||||
Debt owed amount | $ 10,700 | ||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | |||||||||||
Debt instrument description | October 26, 2018 or (ii) the date when the Company's obligation under its promissory note with Scansource, Inc. is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. | ||||||||||
Number of monthly installments | 60 monthly payments of $3 thousand each commencing the earlie | ||||||||||
Debt due year | Due in 2023 | ||||||||||
Notes payable related party, balance | $ 525 | ||||||||||
Aggregate indebtness | 5,400 | $ 5,400 | |||||||||
Number of restricted common stock shares | shares | 25,000 | ||||||||||
Date of agreement | Dec. 30, 2017 | ||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | Series C Preferred Stock [Member] | |||||||||||
Number of shares issued for common stock | shares | 1,000,000 | ||||||||||
Settlement Agreement [Member] | Kurt Thomet [Member] | Scansource, Inc [Member] | |||||||||||
Debt instrument face amount | 6,000 | $ 6,000 | |||||||||
Reduction in debt default amount | 2,000 | ||||||||||
Settlement Agreement [Member] | George Zicman [Member] | |||||||||||
Debt instrument description | October 26, 2018 or (ii) the date when the Company's obligation under its promissory note with Scansource, Inc. is satisfied and all amounts currently due under the credit agreement with Scansource (currently approximately $6.0 million) is reduced to $2.0 million. | ||||||||||
Number of monthly installments | 60 monthly payments of $3 thousand each commencing the earlier | ||||||||||
Aggregate indebtness | 1,300 | $ 1,300 | |||||||||
Date of agreement | Dec. 30, 2017 | ||||||||||
Settlement Agreement [Member] | George Zicman [Member] | Scansource, Inc [Member] | |||||||||||
Debt instrument face amount | $ 6,000 | $ 6,000 | |||||||||
Reduction in debt default amount | $ 2,000 | ||||||||||
Notes payable related party, balance | $ 126 | ||||||||||
Beneficiary percentage of common stock | 10.00% | ||||||||||
Settlement Agreement [Member] | Goerge Zicman [Member] | Series C Preferred Stock [Member] | |||||||||||
Number of shares issued for common stock | shares | 600,000 | ||||||||||
Purchase Agreement [Member] | HTS Image Processing, Inc [Member] | |||||||||||
Purchased percentage of capital stock | 100.00% | ||||||||||
Purchase Agreement [Member] | Convertible Promissory Note [Member] | |||||||||||
Debt instrument face amount | $ 700 | ||||||||||
Debt convertible price per share | $ / shares | $ 4.72 | ||||||||||
HTS Purchase Agreement [Member] | |||||||||||
Number of acquisition shares reduced | shares | 568,415 | ||||||||||
Number of shares issued for acquisition, shares | shares | 1,122,648 | ||||||||||
Number of shares issued for acquisition reduced | $ 2,700 | ||||||||||
Number of shares issued for acquisition | 5,300 | ||||||||||
Debt instrument conversion of shares amount | $ 400 | ||||||||||
HTS Purchase Agreement [Member] | Campbeltown Consulting, Inc [Member] | |||||||||||
Number of shares in cancelation | shares | 277,116 | ||||||||||
HTS Purchase Agreement [Member] | Walefar Investments, Ltd [Member] | |||||||||||
Number of shares in cancelation | shares | 277,116 | ||||||||||
Common Stock [Member] | |||||||||||
Number of restricted common stock shares | shares | 65 | ||||||||||
Common Stock [Member] | Shai Lustgarten [Member] | |||||||||||
Number of shares issued for common stock | shares | 561,324 | ||||||||||
Common Stock [Member] | Carlos Jaime Nissenson [Member] | |||||||||||
Number of shares issued for common stock | shares | 561,324 | ||||||||||
Common Stock [Member] | Purchase Agreement [Member] | |||||||||||
Debt instrument description | The common stock for the 20 days' preceding the agreement (the "Per Share Value"), (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. | ||||||||||
Number of shares issued for common stock | shares | 1,122,648 | ||||||||||
Number of common stock value issued | $ 5,300 | ||||||||||
Debt instrument, convertible, consecutive trading days | TradingDays | 20 | ||||||||||
Cash amount | $ 300 | ||||||||||
Debt instruments interest rate | 6.00% |
Notes Payable, Related Partie_3
Notes Payable, Related Parties - Schedule of Notes Payable, Related Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Total notes payable, related parties | $ 1,856 | $ 2,197 | |
Less current portion | 790 | 1,025 | |
Long-term portion | 1,065 | 1,172 | |
Note Payable - Debt Restructure Marin [Member] | |||
Total notes payable, related parties | 840 | 900 | |
Note Payable - Debt Restructure Thomet [Member] | |||
Total notes payable, related parties | 525 | 563 | |
Note Payable - Debt Restructure Zicman [Member] | |||
Total notes payable, related parties | 126 | 135 | |
Convertible Note Payable - Shareholders [Member] | |||
Total notes payable, related parties | 150 | $ 150 | |
Note Payable - RWCC [Member] | |||
Total notes payable, related parties | $ 215 | $ 449 |
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 | Mar. 31, 2020USD ($) |
2020 | $ 685 |
2021 | 426 |
2022 | 426 |
2023 | 319 |
Thereafter | |
Total | $ 1,856 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 27, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 31, 2018 | Dec. 30, 2017 | Nov. 17, 2014 |
Stock issued during the period, shares | 64,000 | ||||||
Stock issued during the period | $ 354 | ||||||
Common stock, shares outstanding | 4,024,837 | 3,960,405 | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Common stock, shares issued | 4,024,837 | 3,960,405 | |||||
Stock options, granted | 20,000 | ||||||
Stock compensation expense | $ 123 | $ 323 | |||||
Warrants and Stock Options [Member] | |||||||
Common stock, par value | $ 0.001 | ||||||
Warrants and Stock Options [Member] | Maximum [Member] | |||||||
Common stock, shares authorized | 500 | ||||||
Warrants and Stock Options [Member] | Minimum [Member] | |||||||
Common stock, shares authorized | 800 | ||||||
2014 Stock Option Plan [Member] | |||||||
Maximum number of common shares reserved for issuance | 500,000 | ||||||
2018 Stock Option Plan [Member] | |||||||
Common stock shares subscribed | 709,250 | ||||||
Common stock, shares issued | 90,750 | ||||||
Settlement Agreement [Member] | |||||||
Dividend rate per annum | $ 0.06 | ||||||
Debt settlement effective shares issued | 1,685,000 | ||||||
Board of Directors [Member] | |||||||
Preferred stock voting rights | The board of directors of the Company (the "Board") had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares. | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred stock shares designated | 1,000,000 | 1,000,000 | |||||
Preferred stock shares outstanding | 0 | 0 | |||||
Series B Preferred Stock [Member] | |||||||
Preferred stock shares designated | 1 | 1 | |||||
Preferred stock shares outstanding | 0 | 0 | |||||
Series C Preferred Stock [Member] | |||||||
Preferred stock shares designated | 15,000,000 | 15,000,000 | |||||
Preferred stock shares outstanding | 4,828,530 | 4,828,530 | |||||
Dividend rate per annum | $ 0.06 | ||||||
Preferred stock conversion, description | Series C preferred shares outstanding are convertible into common stock at the rate of 20 preferred shares for one common share. |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Number of warrants balance, beginning of period | 1,166,667 | 275,000 |
Number of warrants, granted | 25,000 | |
Number of warrants, expired | ||
Number of warrants, cancelled, forfeited | ||
Number of warrants, exercised | ||
Number of warrants, balance end of period | 1,191,667 | 275,000 |
Number of warrants, exercisable | 1,191,667 | 275,000 |
Weighted Average Exercise Price balance, beginning of period | $ 6.42 | $ 4.60 |
Weighted Average Exercise Price, granted | 11.60 | |
Weighted Average Exercise Price, expired | ||
Weighted Average Exercise Price, cancelled, forfeited | ||
Weighted Average Exercise Price, exercised | ||
Weighted Average Exercise Price balance, end of period | 6.53 | 4.60 |
Weighted Average Exercise Price, exercisable | $ 6.53 | $ 4.60 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Warrants (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Range of Exercise Prices, Upper Range Limit | $ 14 |
Weighted Average residual life span (in years) | 3 years 7 months 17 days |
Outstanding Warrants | shares | 1,191,667 |
Weighted Average Exercise Price | $ 6.53 |
Exercisable Warrants | shares | 1,191,667 |
Weighted Average Exercise Price | $ 6.53 |
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 4 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) | 9 months |
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) | 2 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 6 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 | $ 8 |
Weighted Average residual life span (in years) | 1 year 10 months 28 days |
Outstanding Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 8 |
Exercisable Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 8 |
Exercise Price Range 6 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 1 year 6 months 10 days |
Outstanding Warrants | shares | 25,000 |
Weighted Average Exercise Price | $ 10 |
Exercisable Warrants | shares | 25,000 |
Weighted Average Exercise Price | $ 10 |
Exercise Price Range 7 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 12 |
Weighted Average residual life span (in years) | 6 months 10 days |
Outstanding Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 12 |
Exercisable Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 12 |
Exercise Price Range 8 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 14 |
Weighted Average residual life span (in years) | 10 months 28 days |
Outstanding Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 14 |
Exercisable Warrants | shares | 15,000 |
Weighted Average Exercise Price | $ 14 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Warrants Outstanding, Expiry Date and Exercise Prices (Details) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
Warrant Outstanding | 1,191,667 | 275,000 |
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 |
December 30, 2020 [Member] | ||
Warrant Expiry Date | Dec. 30, 2020 | Dec. 30, 2020 |
Warrant Exercise Prices | $ 4 | $ 4 |
Warrant Outstanding | 150,000 | 150,000 |
February 27, 2021 [Member] | ||
Warrant Expiry Date | Feb. 27, 2021 | Feb. 27, 2021 |
Warrant Exercise Prices | $ 14 | $ 14 |
Warrant Outstanding | 15,000 | |
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 |
October 10, 2021 [Member] | ||
Warrant Expiry Date | Oct. 10, 2021 | Oct. 10, 2021 |
Warrant Exercise Prices | $ 10 | $ 10 |
Warrant Outstanding | 25,000 | 25,000 |
February 27, 2022 [Member] | ||
Warrant Expiry Date | Feb. 27, 2022 | Feb. 27, 2022 |
Warrant Exercise Prices | $ 8 | $ 8 |
Warrant Outstanding | 10,000 | 10,000 |
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 | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Number of stock options balance, beginning of period | 1,133,550 | 1,006,050 |
Number of stock options, granted | 20,000 | |
Number of stock options, expired | 30,250 | |
Number of stock options, cancelled, forfeited | ||
Number of stock options, exercised | ||
Number of stock options balance, end of period | 1,123,300 | 1,006,050 |
Number of stock options, exercisable | 986,925 | 792,050 |
Weighted average exercise price balance, beginning of period | $ 4 | $ 4.80 |
Weighted average exercise price, stock options granted | 5 | |
Weighted average exercise price, stock options expired | 3.98 | |
Weighted average exercise price, stock options cancelled, forfeited | ||
Weighted average exercise price, stock options exercised | ||
Weighted average exercise price balance, end of period | 4.01 | 4.80 |
Weighted average exercise price, exercisable | $ 3.88 | $ 4.80 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Outstanding Stock Options (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Range of Exercise Prices, Lower Range Limit | $ 1.50 |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 2 years 11 months 12 days |
Outstanding Stock Options | shares | 1,123,300 |
Weighted Average Exercise Price | $ 4.01 |
Exercisable Stock Options | shares | 986,926 |
Weighted Average Exercise Price | $ 3.88 |
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) | 1 year 10 months 17 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 4 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 3 months 11 days |
Outstanding Stock Options | shares | 147,500 |
Weighted Average Exercise Price | $ 5 |
Exercisable Stock Options | shares | 50,313 |
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 7 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) | 2 years 11 months 4 days |
Outstanding Stock Options | shares | 335,000 |
Weighted Average Exercise Price | $ 2.40 |
Exercisable Stock Options | shares | 335,000 |
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 7 months 2 days |
Outstanding Stock Options | shares | 93,000 |
Weighted Average Exercise Price | $ 4.40 |
Exercisable Stock Options | shares | 69,750 |
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 8 months 2 days |
Outstanding Stock Options | shares | 133,750 |
Weighted Average Exercise Price | $ 5.40 |
Exercisable Stock Options | shares | 117,813 |
Weighted Average Exercise Price | $ 5.40 |
Stockholders' Equity - Schedu_6
Stockholders' Equity - Schedule of Stock Options, Expiry Date and Exercise Prices (Details) - $ / shares | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock option exercise prices | $ 4.01 | $ 4.80 | $ 4 | $ 4.80 |
Stock option outstanding | 1,123,300 | 1,006,050 | 1,133,550 | 1,006,050 |
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 | $ 1.50 | $ 1.50 | ||
Stock option outstanding | 38,017 | 38,017 | ||
February 17, 2022 One [Member] | ||||
Stock option expiration date | Feb. 17, 2022 | Feb. 17, 2022 | ||
Stock option exercise prices | $ 1.80 | $ 1.80 | ||
Stock option outstanding | 76,033 | 76,033 | ||
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 | 335,000 | 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 | 93,000 | 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 | 133,750 | 143,750 | ||
November 20, 2024 [Member] | ||||
Stock option expiration date | Nov. 20, 2024 | Nov. 20, 2024 | ||
Stock option exercise prices | $ 5 | $ 5 | ||
Stock option outstanding | 125,000 | 125,000 | ||
February 28, 2023 [Member] | ||||
Stock option expiration date | Feb. 28, 2023 | Feb. 28, 2023 | ||
Stock option exercise prices | $ 5 | $ 5 | ||
Stock option outstanding | 20,000 |
Salary and Employee Benefits -
Salary and Employee Benefits - Schedule of Salary and Employee Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Stock compensation | $ 123 | $ 323 |
Salaries (except R&D) | 1,280 | 1,275 |
R&D salaries | 340 | 208 |
Bonuses | 40 | 25 |
Commissions | 1,073 | 1,024 |
Total | $ 2,856 | $ 2,855 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Weighted average remaining lease terms | 2 years 7 months 21 days | |
Weighted average remaining discount rates | 14.60% | |
Right-of-use assets | $ 118 | $ 131 |
Lease liabilities | 122 | |
Lease liabilities, noncurrent | $ 73 | $ 80 |
Minimum [Member] | ||
Incremental borrowing rate | 13.16% | |
Maximum [Member] | ||
Incremental borrowing rate | 15.06% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Commitments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 (excluding the three months ended March 31, 2020) | $ 53 |
2021 | 41 |
2022 | 38 |
2023 and thereafter | 16 |
Total lease payments | 148 |
Less imputed interest | (26) |
Total | $ 122 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Cash flows from operating activities - operating leases | $ 17 |
Right-of-use assets obtained in exchange for lease obligations: Operating leases |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - PPP Loan [Member] - CARES Act [Member] $ in Thousands | Apr. 30, 2020USD ($) |
Subsequent Event [Line Items] | |
Proceeds from loan | $ 888 |
Debt instrument description | The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), provides for loans to qualifying businesses for amounts up to 2.5 times of the average 2019 monthly payroll expenses. The PPP Loan was made through Zions First National Bank (the "Lender") and the Company entered into a U.S. Small Business Administration Paycheck Protection Program Note ("Note") with the Lender evidencing the PPP Loan. The term of the PPP Loan is two years. Interest will accrue on the outstanding principal balance of the PPP Loan at a fixed rate of 1.0%, which shall be deferred for the first six months of the term of the PPP Loan. Monthly payments will be due and payable beginning in November 2020 and continue each month thereafter until maturity of the PPP Loan. The Company may prepay principal of the PPP Loan at any time in any amount without penalty. The Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties or provisions of the PPP Loan. |