Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | OMNIQ Corp. | ||
Entity Central Index Key | 0000278165 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15,081,894 | ||
Entity Common Stock, Shares Outstanding | 4,684,718 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 4,594 | $ 1,615 |
Accounts receivable, net | 9,661 | 6,694 |
Inventory | 1,507 | 1,889 |
Prepaid expenses | 670 | 362 |
Other current assets | 10 | 65 |
Total current assets | 16,442 | 10,625 |
Property and equipment, net of accumulated depreciation of 600 and 2,195, respectively | 289 | 463 |
Goodwill | 14,695 | 13,921 |
Trade name, net of accumulated amortization of 3,362 and 2,932, respectively | 1,028 | 1,458 |
Customer relationships, net of accumulated amortization of 8,111 and 6,578, respectively | 4,479 | 6,012 |
Other intangibles, net of accumulated amortization of 382 and 185, respectively | 1,042 | 1,138 |
Cash, restricted | 533 | 533 |
Right of Use asset | 76 | 131 |
Other assets | 74 | 172 |
Total assets | 38,658 | 34,453 |
Current liabilities | ||
Accounts payable and accrued liabilities | 26,811 | 18,694 |
Line of credit | 4,914 | 1,365 |
Accrued payroll and sales tax | 1,717 | 1,556 |
Notes payable, related parties - current portion | 433 | 1,025 |
Notes payable - current portion | 6,449 | 6,497 |
Lease liability - current portion | 31 | 54 |
Other current liabilities | 1,412 | 1,599 |
Total current liabilities | 41,767 | 30,790 |
Long term liabilities | ||
Notes payable, related party, less current portion | 683 | 1,172 |
Accrued interest and accrued liabilities, related party | 56 | 76 |
Notes payable, less current portion | 1 | 143 |
Lease liability, less current portion | 48 | 80 |
Other long term liabilities | 1,146 | 384 |
Total liabilities | 43,701 | 32,615 |
Stockholders' equity (Deficit) | ||
Common stock; 0.001 par value; 15,000,000 shares authorized; 4,684,736 and 3,960,405 shares issued and outstanding, respectively. | 5 | 4 |
Additional paid-in capital | 51,842 | 46,861 |
Accumulated (deficit) | (56,726) | (45,063) |
Accumulated other comprehensive loss | (166) | (1) |
Total stockholders' equity | (5,043) | 1,808 |
Total liabilities and stockholders' equity (deficit) | 38,658 | 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 | 2 | 5 |
Total stockholders' equity | $ 2 | $ 5 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accumulated depreciation of fixed assets | $ 600 | $ 2,195 |
Accumulated amortization | $ (11,855) | $ (9,695) |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 4,684,736 | 3,960,405 |
Common stock, shares outstanding | 4,684,736 | 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 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 2,145,030 | 4,828,530 |
Preferred stock, shares outstanding | 2,145,030 | 4,828,530 |
Trade Names [Member] | ||
Accumulated amortization | $ 3,362 | $ 2,932 |
Customer Relationships [Member] | ||
Accumulated amortization | 8,111 | 6,578 |
Other Intangible Assets [Member] | ||
Accumulated amortization | $ 382 | $ 185 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | ||
Total Revenues, net | $ 55,209 | $ 57,199 |
Cost of goods sold | ||
Cost of goods sold | 44,293 | 43,165 |
Gross profit | 10,916 | 14,034 |
Operating expenses | ||
Research and development | 1,805 | 1,063 |
Selling, General and Administrative | 15,802 | 13,682 |
Depreciation | 178 | 151 |
Intangible amortization | 2,114 | 2,002 |
Total operating expenses | 19,899 | 16,898 |
Loss from operations | (8,983) | (2,864) |
Other income (expenses): | ||
Interest expense | (2,628) | (2,555) |
Other (expenses) income | 112 | (23) |
Total other expense | (2,516) | (2,578) |
Net loss before income taxes | (11,499) | (5,442) |
(Provision) benefit for Income Taxes | ||
Current | (5) | (14) |
Deferred | ||
Total income tax benefit (provision) | (5) | (14) |
Net loss from continuing operations | (11,504) | (5,456) |
Less: Preferred stock - series C dividend | (191) | (146) |
Net loss attributable to the common stockholders | (11,313) | (5,310) |
Foreign currency translation adjustment | (167) | |
Other comprehensive income (loss) | $ (11,150) | $ (5,310) |
Net loss per share - basic | $ (2.46) | $ (1.37) |
Net loss per share - diluted | $ (2.66) | $ (1.37) |
Weighted average number of common shares outstanding - basic and diluted | 4,322,303 | 3,889,478 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Shares Repurchased [Member] | Accumulated Deficit [Member] | Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 5 | $ 4 | $ 42,266 | $ (230) | $ (39,753) | $ 1 | $ 2,523 |
Beginning balance, shares at Dec. 31, 2018 | 4,829,000 | 3,597,000 | |||||
Dividend on Class C Shares | 146 | 146 | |||||
ESPP Stock Issuance | 1 | 1 | |||||
ESPP Stock Issuance, shares | |||||||
Stock-based compensation - options, warrants, issuances | 1,267 | 1,267 | |||||
Stock-based compensation - options, warrants, issuances, shares | 78,000 | ||||||
Stock and warrant issuances, net of issuance costs | $ 1 | 3,406 | 3,407 | ||||
Stock and warrant issuances, net of issuance costs, shares | 833,000 | ||||||
Purchase price adjustment - shares to be received | $ (1) | 1 | |||||
Purchase price adjustment - shares to be received, shares | (555,000) | ||||||
Stock redemption | (230) | 230 | (230) | ||||
Stock redemption, shares | (25,000) | ||||||
Conversion of debt | 150 | 150 | |||||
Conversion of debt, shares | 32,000 | ||||||
Net (loss) | (5,456) | (5,456) | |||||
Ending balance at Dec. 31, 2019 | $ 5 | $ 4 | 46,861 | (45,063) | 1 | 1,808 | |
Ending balance, shares at Dec. 31, 2019 | 4,829,000 | 3,960,000 | |||||
Dividend on Class C Shares | (191) | (191) | |||||
ESPP Stock Issuance | $ 1 | $ 1 | |||||
ESPP Stock Issuance, shares | |||||||
Stock-based compensation - options, warrants, issuances | $ 2,012 | $ 2,012 | |||||
Stock-based compensation - options, warrants, issuances, shares | |||||||
Stock and warrant issuance for services | $ 1 | $ 1,639 | $ 1,640 | ||||
Stock and warrant issuance for services, shares | 302,000 | ||||||
Stock and warrant issued for Acquisition | $ 504 | $ 504 | |||||
Stock and warrant issued for Acquisition, shares | 80 | ||||||
Cumulative translation adjustment | (167) | (167) | |||||
Exercise of stock options and warrants | |||||||
Exercise of stock options and warrants, shares | 91,000 | ||||||
Conversion of Equity | $ (3) | 3 | |||||
Conversion of Equity, shares | (2,684,000) | 134,000 | |||||
Other | 32 | 32 | |||||
Conversion of debt | 822 | 822 | |||||
Conversion of debt, shares | 118,000 | ||||||
Net (loss) | (11,504) | (11,504) | |||||
Ending balance at Dec. 31, 2020 | $ 2 | $ 5 | $ 51,842 | $ (56,726) | $ (166) | $ (5,043) | |
Ending balance, shares at Dec. 31, 2020 | 2,145,000 | 4,685,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operations | ||
Net loss | $ (11,504) | $ (5,456) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Early extinguishment of debt | (948) | |
Stock-based compensation | 2,012 | 1,267 |
Stock and warrant issued for services | 1,640 | |
Depreciation and amortization | 2,292 | 2,154 |
Amortization of ROU asset | 55 | 93 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,953) | 5,568 |
Prepaid expenses | (313) | (271) |
Inventory | 381 | (178) |
Other assets | 84 | (11) |
Accounts payable and accrued liabilities | 8,062 | 2,011 |
Accrued interest and accrued liabilities, related party | (20) | 43 |
Accrued payroll and sales taxes payable | 161 | (617) |
Lease liability | (55) | (89) |
Other liabilities | 686 | (259) |
Net cash (used in) provided by operating activities | (420) | 4,255 |
Cash flows from investing activities | ||
Purchase of property and equipment | (4) | (134) |
Other assets | 98 | (117) |
Net cash provided by (used in) investing activities | 94 | (251) |
Cash flows from financing activities | ||
Proceeds from ESPP stock issuance | 1 | 1 |
Proceeds from sale of common stock | 3,770 | |
Payments on notes/loans payable | (1,023) | (3,369) |
Proceeds from the issuance of notes/loans payable | 898 | |
Proceeds from (payments on) line of credit | 3,549 | (3,169) |
Due to Owner | ||
Net cash (used in) provided by financing activities | 3,425 | (2,767) |
Net increase in cash | 3,099 | 1,237 |
Foreign currency translation adjustment | (120) | |
Cash, beginning of year | 1,615 | 378 |
Cash, end of year | 4,594 | 1,615 |
Net increase (decrease) in restricted cash | 1 | |
Cash paid for interest | 2,404 | 2,167 |
Cash paid for taxes | 196 | 47 |
Supplementary for non-cash flow information: | ||
Stock issued for services | 2,012 | 274 |
Accounts payable converted to notes payable | ||
Debt conversion | 822 | 550 |
Equity Conversion | 3 | |
Change in terms of accounts payable | $ (8,115) | $ (801) |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | NOTE 1 – NATURE OF OPERATIONS OMNIQ Corp., a Delaware corporation, formerly Quest Solution, Inc., together with its wholly owned subsidiaries, referred to herein as “we,” “us,” and “our” (“OMNIQ” or the “Company”), was incorporated in 1973. Since its incorporation, the Company has been involved in various lines of business. From 2008 and to 2013, we were in the business of developing oil and gas reserves. In January 2014, we determined it was in the best interest of our stockholders to focus on operating companies with a track record of positive cash flows and larger existing revenue bases. Our strategy developed into leveraging management’s relationships in the business world for investments for the Company. Since 2014, we have made the following acquisitions resulting in us becoming a leading provider of computerized and machine vision image processing solutions: ● Quest Solutions, Inc. (January 2014) ● Bar Code Specialties, Inc. (November 2014) ● ViascanQdata, Inc (October 2015 – later sold in September 2016) ● HTS Image Processing, Inc. (October 2018) ● EyepaxIT Consulting LLC. (February 2020) We use patented and proprietary artificial intelligence (AI) technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management and access control applications. The technology and services we provide helps our clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. We offer end-to-end solutions that include hardware, software, communications, and full lifecycle management services. We are an established manufacturer and distributor of barcode labels, tags, and ribbons, as well as RFID labels and tags. Our highly tenured team of professionals has the knowledge and expertise to simplify the integration process for our customers, and our team delivers proven problem-solving solutions backed by numerous customer references. We offer comprehensive packaged and configurable software and we are a leading provider of best-in-class mobile and wireless equipment. Our customers include government agencies and leading Fortune 500 companies from diverse sectors, including healthcare, food and beverage, manufacturing, retail, distribution, transportation and logistics, and oil, gas, and chemicals. COVID-19 The outbreak of the COVID-19 pandemic continues to affect the United States of America and the world, including in the primary regions we operate. Many State Governors issued temporary Executive Orders in 2020, that, among other stipulations, effectively limited in-person work activities for most industries and businesses having the effect of suspending or severely curtailing operations. Many of these orders are in the process of being lifted.. To date, we have not incurred any significant interruptions to our day-to-day operations or supply chain, except some of our employees have or are working remotely. In response to the COVID-19 pandemic, we proactively implemented certain measures to strengthen cash flow, manage costs, strengthen liquidity and enhance employee safety. These measures included the reduction of payroll costs, a reduction in capital expenditures and other discretionary spending, the elimination of most business travel and restriction of visitors to our corporate office, enhanced cleaning and disinfection procedures at our corporate office and branch locations, promotion of social distancing and the wearing of face coverings (masks) at our corporate office and branch locations, and requirements for employees to work from home where possible. As the impact of COVID-19 became more widespread in March 2020, our sales volumes began to decline from previous years. Our total revenues for the year ended December 31, 2020, were 3.48% lower than those of the year ended December 31, 2019. COVID-19 had a more significant impact on our gross margin. Total gross margin percentage dropped 5% for the year ended December 31, 2020 compared to 2019. The timing and the extent of the continued recovery in our sales volumes cannot be reasonably estimated at this time. As such, the extent of the ultimate impact of the pandemic on the Company’s operational and financial performance will depend on various developments, including the duration and spread of the outbreak, the impact on capital and financial markets, governmental limitations on business operations generally, and its and their impact on potential customers, employees, vendors and distribution partners, all of which cannot be reasonably predicted at this time. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation Our consolidated financial statements include the financial position and results of operations of OMNIQ Corp. and its wholly owned subsidiaries Quest Marketing, Inc., Quest Exchange Ltd., and HTS Image Processing, Inc., collectively referred to herein as “we” or “us” or “our” or the “Company.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. Use of Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates. Cash, Cash Equivalents and Restricted Cash Cash consists of petty cash, checking, savings, and money market accounts. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2020 and 2019. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has restricted cash on deposit with a federally insured bank in the amount of $533 thousand at December 31, 2020 and 2019, respectively. Accounts Receivable We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) Accounting Standards Codification Topic 326, Credit Losses (Topic 326 We believe concentration of credit risk, with respect to our receivables, is limited because our customer base is comprised of a number of geographically diverse customers. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Pursuant to Topic 326 for our accounts receivables, we maintain an allowance for doubtful accounts that reflects our estimate of our expected credit losses. Our allowance is estimated using a loss rate model based on delinquency. The estimated loss rate is based on our historical experience with specific customers, our understanding of our current economic circumstances, reasonable and supportable forecasts, and our own judgment as to the likelihood of ultimate payment based upon available data. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance for doubtful accounts. Based on management’s evaluation, accounts receivable has a balance in the allowance for doubtful accounts of $28 thousand and $36 thousand for the years ended December 31, 2020 and 2019, respectively. Inventory Substantially all inventory consists of raw materials and finished goods and are valued at the lower of actual cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. Property and Equipment Property and equipment are recorded at cost and depreciated using both straight-line over the estimated useful lives. Ordinary repair and maintenance costs are included in sales, general and administrative (“SG&A”) expenses on our consolidated statements of operations. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the statements of operations in gains from sales of property and equipment, net. We periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the remaining term of the lease, whichever is shorter. Depreciation expense for the years ended December 31, 2020 and 2019 was $178 thousand and $151 thousand, respectively. Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Furniture and fixtures Computer equipment Office equipment Software Leasehold improvements 5 to 7 years 3 to 5 years 3 to 10 year 3 years 15 years Fair Value of Financial Instruments Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. The carrying amounts of certain financial instruments, such as cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Goodwill and Intangibles We have made acquisitions in the past that resulted in the recognition of goodwill. Goodwill is the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment annually or more frequently, if triggering events occur or other impairment indicators arise which might impair recoverability. Application of the goodwill impairment test requires judgment. We performed a Step 1 quantitative assessment of goodwill impairment as of December 31, 2020, our annual impairment test date. We compared the carrying value inclusive of goodwill and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach, as further described below. Based on this quantitative test, we determined there was no impairment as of the December 31, 2020. For purposes of performing the quantitative impairment test described above, we estimate the fair value by utilizing fair value techniques consistent with the income approach and market approach. When performing the income approach for each reporting unit, we use a discounted cash flow analysis based on our internal projected results of operations, weighted average cost of capital (“WACC”) and terminal value assumptions. Our cash flow projections are based on five-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capital to support anticipated revenue growth. The WACC is an estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise and represents the expected cost of new capital likely to be used by market participants. The WACC is used to discount our combined future cash flows. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Changes in assumptions or estimates could materially affect the estimate of a reporting unit’s fair value, and therefore could affect the likelihood and amount of potential impairment. Under the market approach, we compare the reporting units to selected reasonably similar (or “guideline”) publicly-traded companies. Under this method, valuation multiples are: (i) derived from the operating data of selected guideline companies; (ii) evaluated and adjusted based on the strengths and weaknesses of our reporting unit relative to the selected guideline companies; and (iii) applied to the operating data of our reporting unit to arrive at an indication of value. The application of the market approach results in an estimate of the price reasonably expected to be realized from a sale of the Company. Identifiable intangible assets are stated at cost, net of accumulated amortization. The assets are being amortized on the straight-line method over useful lives ranging from 3 to 11 years. Leases We adopted ASU 2016-02, Leases (Topic 842): Our lease portfolio is substantially comprised of operating leases related to leases of real estate and improvements. From time to time, we may also lease various types of small equipment and vehicles. Operating lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR”) at the commencement date in determining the present value of lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease. Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Our leases can include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when such renewal options and/or termination options are reasonably certain of exercise. A ROU asset is subject to the same impairment guidance as assets categorized as plant, property, and equipment. As such, any impairment loss on ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets. A lease modification is a change to the terms and conditions of a contract that change the scope or consideration of a lease. For example, a change to the terms and conditions to the contract that adds or terminates the right to use one or more underlying assets, or extends or shortens the contractual lease term, is a modification. Depending on facts and circumstances, a lease modification may be accounted as either: (1) the original lease plus the lease of a separate asset(s) or (2) a modified lease. A lease will be remeasured if there are changes to the lease contract that do not give rise to a separate lease. Purchase Accounting and Business Combinations We account for our business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. The valuation and allocation processes rely on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when we receive updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. Revenue Recognition. When entering into contracts with our customers, we review follow the five steps outline in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) i. Identify the contract with our customer. ii. Identify the performance obligations in the contract. iii. Determine the transaction price. iv. Allocate the transaction price to the performance obligations. And v. Evaluate the satisfaction of the performance obligations, We account for contracts, with our customers, when we have approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. We evaluate, in accordance with Topic 606, whether we meet the criteria to be a principal or an agent and record the revenue on a gross or net basis. We are considered a principal if we obtain control of any one of the following: i. A good or another asset from another party that we then transfer to our customer. ii. A right to a service to be performed by another party, which gives the us the ability to direct that party to provide the service to the customer on our behalf, and iii. A good or service from another party that we then combine with other goods or services in providing the specified good or service to our customer. We have certain relationships with manufacturers and suppliers to sell us products or provide services. Our contracts may transfer to our customer a right to a future service or product to be provided by our manufacturer or supplier. When a specified good or service is a right to a good or service is provided by a manufacturer or supplier, we evaluate whether we control the right to the goods or services before that right is transferred to the customer rather than whether we control the underlying goods or services. Indicators that we control the specified good or service before it is transferred to the customer (and we are therefore a principal) include, but are not limited to, the following: i. We are responsible for fulfilling the promise to provide the specified good or service. This typically includes responsibility for the acceptability of the specified good or service. If we are primarily responsible for fulfilling the promise to provide the specified good or service, this may indicate that the other party involved in providing the specified good or service is acting on our behalf. Often, we provide value added services (combining hardware, integrating hardware to software, etc.) to the products and services purchased from our manufacturers and suppliers. ii. We have inventory risk before the specified good or service has been transferred to a customer. Our purchases of products or services from our manufactures and suppliers is evidenced by our issuing a binding purchase order contract with the negotiated terms including specifications, pricing, delivery among other things. Our obligation for purchased products and services is mutually exclusive of our customers’ performance (failure to take acceptance, make payment, etc. iii. We have sole discretion in establishing our price for the specified good or service. Establishing the price our customer pays for a specified good or service may indicate we have the ability to direct the use of that good or service and obtain substantially all of the remaining benefits. We control and set the pricing for the product or services to be provided to our customers. If the terms of a transaction do not indicate we are acting as a principal in the transaction, we are then considered acting as an agent and the associated revenues would be recognized on a net basis. As principal, when (or as) we satisfy a performance obligation, we recognize revenue in the gross amount of consideration which we expect to be entitled in exchange for the specified good or service transferred. We are an agent if our performance obligation is to arrange for the provision of the specified good or service by another party. As an agent, we do not control the specified good or service provided by another party before that good or service is transferred to our customer. As an agent, when (or as) we satisfy a performance obligation, we recognize revenue in the amount of any fee or commission which we expect to be entitled in exchange for arranging for the specified goods or services to be provided by another party to our customer. Under Topic 606, we recognize revenue (on either a gross or net basis previously discussed) only when we satisfy a performance obligation by transferring a promised good or service to our customer. A good or service is considered to be transferred when the customer obtains control. The standard defines control as an entity’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. We recognize revenue (either gross or net) once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: i. We have a right to payment for the product or service, ii. The customer has legal title to the product, iii. We have transferred physical possession of the product to the customer, iv. The customer has the risk and rewards of ownership of the product, and v. The customer has accepted the product. Revenue Recognition for Hardware. Manufacturers and suppliers, from whom we purchase hardware, often provide their warranties only providing assurance the products and services will conform to their specifications. These assurance type warranties are not sold separately and are not considered separate performance obligations. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. We consider these warranties to be separate performance obligations from the underlying product. For warranties, where we are arranging those services be provided by a third-party, we are acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Software. As explained above, we evaluate whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering: i. If the software provides its original intended functionality to the customer without the updates, ii. If the customer would ascribe a higher value to the upgrades versus the up-front deliverable, iii. If the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and iv. If the customer chooses to not delay or always install upgrades. If we determine the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. We consider these warranties to be separate performance obligations from the underlying product. For warranties, where we are arranging those services be provided by a third-party, we are acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Services. Revenues from the sale of professional and support services, provided by us, are recognized over the period the service is provided. As the customer receives the benefit of the service each month, we recognize the respective revenue on a gross basis as we are acting as a principal in the transaction. Additionally, we manage services team provides project support to customers that are billed on a fixed fee basis. We are acting as the principal in the transaction and recognize revenue on a gross basis based on the total number of hours incurred for the period over the total expected hours for the project. Total expected hours to complete the project is updated for each period and best represents the transfer of control of the service to the customer. Freight Costs. Reverse Stock Split Effective November 20, 2019, we implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. As a result of the Reverse Split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by the Company and outstanding immediately prior to the Effective Time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, Preferred stock, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares authorized for future grant under the Company’s equity incentive/compensation plans immediately prior to the Effective Time was reduced proportionately. Stock-Based Compensation We periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. We account for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by Financial Accounting Standards Board (the “FASB”) where the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. We record stock-based compensation expense according to the provisions of ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under the provisions of ASC Topic 718, the Company determines the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the expected volatility and expected option life assumption consistent with ASC Topic 718, Compensation – Stock Compensation. The expected volatility of the Company’s common stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates consistent with the expected life of each stock option grant. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. Compensation expense is recorded for all stock options expected to vest based on the amortization of the fair value at the date of grant on a straightline basis primarily over the vesting period of the options. In August 2020, the Board of Directors approved our 2020 Equity Incentive Plan and later amended it. In September 2020, our shareholders adopted and ratified the 2020 Equity Incentive Plan. The total number of shares of Common Stock authorized for issuance under the 2020 Plan is 1,000,000. Equity instruments issued to parties other than employees for acquiring goods or services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”). Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Warrants The fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management’s judgment. Expected volatilities used in the valuation model are based on the average volatility of the Company’s stock. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve in effect at the time of grant. Advertising The Company expenses marketing and advertising costs as incurred. During 2020 and 2019, the Company spent $283 thousand and $224 thousand, respectively, on marketing, trade show and store front expense and advertising, net of co-operative rebates. The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense. Foreign Currency Translation Our consolidated financial statements are presented in U.S. dollars. The functional currency for the Company is U.S. dollars. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. All of our continuing operations are conducted in U.S. dollars except its subsidiary located in Israel. The records of the Israeli operation were maintained in the local currency and re-measured to the functional currency as follows: monetary assets and liabilities are converted using the balance sheet period-end date exchange rate, while the non-monetary assets and liabilities are converted using the historical exchange rate. Expenses and income items are converted using the weighted average exchange rates for the reporting period. Foreign transaction gains and losses are reported on the consolidated statement of operations and were included in the amount of loss from comprehensive income. Income Taxes We account for our income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. We also follow the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Our income is subject to taxation in both the U.S. and a foreign jurisdiction, Israel. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company establishes reserves for income tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the we believe positions do not meet the more-likely-than-not recognition threshold. We adjust uncertain tax liabilities in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of uncertain tax liabilities and changes in liabilities that are considered appropriate. Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Our other comprehensive income (loss) is composed of foreign currency translation adjustments. Net Loss Per Common Share See NOTE 14 regarding our 1-for-20 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented. Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 – GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. As of December 31, 2020, we had a working capital deficit of $25.3 million and an accumulated deficit of $56.7 million. These facts and others raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis. Management’s plan to eliminate the going concern situation includes, but is not limited to, the following: ● The continuation of improving cash flow by maintaining moderate cost reductions (subsequent to aggressive cost reduction actions implemented in previous years); ● Increasing the accounts receivable factoring line of credit; ● Negotiating lower interest rates on outstanding debt; ● Potential issuances of additional common stock; ● The creation of additional sales and profits across its product lines, and the obtaining of sufficient financing to restructure current debt in a manner more in line with the Company’s improving cash flow and cost reduction successes; ● In our portfolio of products, we have a computer vision technology that is based on AI and machine learning concepts. These solutions have a higher gross profit that will provide an increase in cashflow on a consolidated basis going forward. The Company has an operating facility with the ability for light manufacturing and assembling components, which helps reduce the cost of goods and increase profit margins; ● In April 2019, the Company raised approximately $5.0 million in gross proceeds from the sale of 833,333 shares of the Company’s common stock. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisition | NOTE 4 – BUSINESS ACQUISITION In February 2020, (the “Closing Date”), we entered into an Asset Purchase Agreement (the “Eyepax Agreement”), with Eyepax IT Consulting, LLC (the “Seller”); whereby, we 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. Pursuant to the terms of the Eyepax Agreement, the purchase price paid was to be paid as follows: 1. $100,000 was paid on the Closing Date, less $5,000 previously paid as an advance payment, accordingly the remaining balance paid in cash on Closing Date was $95,000. 2. $25,000 per month for three months to 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 to be paid in ten (10) monthly installments. 4. 80,000 shares of the Company’s common stock in the name of the Seller, were issued during 45 days from Closing Date at $5.50 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 vest in equal quarterly periods, expiring in February 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 13 Software (intangible) 100 Liabilities assumed (113 ) Net assets acquired at fair value 1 Total purchase price 775 Goodwill recognized 774 We 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%. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 5 – ACCOUNTS RECEIVABLE Accounts receivable consisted of the following as of December 31: In thousands 2020 2019 Trade Accounts Receivable $ 9,689 $ 6,730 Less Allowance for doubtful accounts (28 ) (36 ) Total Accounts Receivable (net) $ 9,661 $ 6,694 For the years ended December 31, 2020 and 2019, one customer accounted for 37.2% and 12.3%, respectively, of the Company’s revenues. Accounts receivable at December 31, 2020 and 2019 are made up of trade receivables due from customers in the ordinary course of business. One customer represented 35.4% of the balance of accounts receivable at December 31, 2020 and two customers made up 20.9% of the accounts receivable balance at December 31 for 2019, which represented greater than 10% of total accounts receivable at December 31, 2020 and 2019, respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 6 – INVENTORY Inventory consisted of the following as of December 31: In thousands 2020 2019 Raw Materials 946 1,055 Work in process - 44 Finished goods (less Allowance) 561 790 Total inventories $ 1,507 $ 1,889 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 7 – GOODWILL AND INTANGIBLE ASSETS We have made acquisitions in the past that resulted in the recognition of goodwill. Based on our analysis there have been no impairment charges recorded against goodwill in 2020 and 2019. Identifiable intangible assets are stated at cost, net of accumulated amortization. The assets are being amortized on the straight-line method over the estimated useful lives ranging from 3 to 11 years. Amortization expense for the years ended December 31, 2020 and 2019 was $2.1 million and $2.0 million, respectively. Goodwill and Intangible assets consisted of the following as of December 31: In thousands 2020 2019 Goodwill $ 14,695 $ 13,921 Trade Names 4,390 4,390 Customer Relationships 12,590 12,590 Intellectual property 1,424 1,323 Accumulated amortization (11,855 ) (9,695 ) Intangibles, net $ 21,244 $ 22,529 The future amortization expense on the Customer Relationships, and IP are as follows: In thousands Years ending December 31, 2021 2,133 2022 1,507 2023 934 2024 487 2025 472 Thereafter 1,056 Total $ 6,589 Goodwill is not amortized but is evaluated for impairment annually or when indicators of a potential impairment are present. The impairment testing of goodwill is performed separately from our impairment testing of intangibles. The annual evaluation for impairment of goodwill and intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans. None of the goodwill is deductible for income tax purposes. Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated, and the remaining carrying value is amortized over the new shorter useful life. No impairments were identified or changes to estimated useful lives have been recorded as of December 31, 2020 and 2019. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable are made up of payables due to vendors in the ordinary course of business at December 31, 2020 and 2019. One vendor made up 92.4% and 83.0% of our accounts payable in 2020 and 2019, respectively, which represented greater than 10% of total accounts payable at December 31, 2020 and 2019, respectively. |
Credit Facilities and Line of C
Credit Facilities and Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Line of Credit | NOTE 9 – CREDIT FACILITIES AND LINE OF CREDIT We maintain operating lines of credit, factoring and revolving credit facilities with banks and finance companies to provide us working capital. In July 2016, we entered into a Factoring and Security Agreement (the “FASA”) with Action Capital Corporation (“Action”) to establish a sale of accounts receivable credit facility, whereby we may obtain short-term financing by selling and assigning acceptable accounts receivable to Action. Pursuant to the FASA, the outstanding principal amount of advances made by Action at any time shall not exceed $5.0 million. Action reserves and withholds to 5% of the face amount of each account purchased in a reserve account. As of December 31, 2020 and 2019, the balance outstanding was $4,914 thousand and $1,365 thousand, respectively. The annual interest rate with respect to the daily average balance of unpaid advances outstanding under the FASA (computed on a monthly basis) is equal to the “Prime Rate” of Wells Fargo Bank N.A. plus 2.0%, plus a monthly fee equal to 0.75% of the average outstanding balance. we also pay all other costs incurred by Action under the FASA, including all bank fees. The FASA continues in full force and effect unless terminated by either party upon 30 days’ prior written notice. The FASA credit facility is collateralized with a security interest in certain assets of the Company. The FASA includes customary representations and warranties and default provisions for transactions of this type. |
Related Party Notes Payable
Related Party Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Related Party Notes Payable | NOTE 10 – RELATED PARTY NOTES PAYABLE Related party notes payable, consisted of the following as of December 31: 2020 2019 In thousands Note payable –Marin $ 660 $ 900 Note payable –Thomet 413 563 Note payable –Zicman - 135 Note payable–Shareholder Convertible Note 43 150 Note payable - RWCC - 449 Total notes payable 1,116 2,197 Less current portion 433 1,025 Long-term portion $ 683 $ 1,172 For the years ended December 31, 2020 and December 31, 2019, the Company recorded interest expense in connection with these notes in the amount of $15 thousand and $49 thousand, respectively. Note Payable -Marin In December 2017, we entered into a $660 thousand, 1.89% annual interest rate note payable (the “Marin Note”) with two individuals from whom we previously acquired their company (in 2014). The Marin Note is payable in 60 monthly principal payments of $20 thousand beginning in October 2018. Accrued interest payable as of December 31, 2020, was $56 thousand. Accrued interest is payable at maturity. Note Payable – Thomet In December 2017, we entered into a $750 thousand, zero percent annual interest rate note payable (the “Thomet Note”) with an individual from whom we previously acquired his company (in 2014). The Thomet Note is payable in 60 monthly principal payments of $13 thousand beginning in October 2018. Note Payable – Zicman In February 2018, we entered into a $180 thousand note payable Zicman. In May 2020, the Company and Zicman entered into a conversion agreement (the “Conversion Agreement”) whereby Zicman agreed to convert the principal outstanding on the note as of May 2020, into OMNIQ common stock ($0.001 par value). The total principal and interest outstanding as of May 2020 was $168 thousand which was converted, in accordance with the Conversion Agreement, into 24,000 shares of OMNIQ common stock. Note Payable – Shareholder Convertible Note In October 2018, we entered into a $700 thousand, 6% annual interest rate convertible note payable (the “Shareholder Convertible Note”) with Walefar and Campbeltown (collectively the “Holders”), in connection with the HTS Image Processing, Inc. Mr Shai Lustgarten, our Chief executive Officer and Director is the principal shareholder in Walefar. Mr. Carlos J. Nissensohn, a consultant and significant shareholder in OMNIQ, is the principal shareholder in Campbeltown. The Shareholder Convertible Note provided Holders a right , at any time on or after the loan origination date, to convert all or any portion of the then outstanding and unpaid principal amount and interest (including any Default Interest) into fully paid and non-assessable shares of OMNIQ’scommon stock.The number of conversion shares to be issued upon each conversion of the note shall be determined by dividing the conversion amount by the applicable conversion price then in effect on the date specified in the notice of conversion delivered us by the Holder. The conversion rate was set at $4.72 per share. In April 2019, and in accordance with the Convertible Shareholder Note, the Holders converted $400 thousand ($200 thousand each) of unpaid principal outstanding. The Holders received 87,476 (42,373 each) common stock shares and 87,476 (42,373 each) in common stock warrants. In September 2019, and in accordance with the terms of the Convertible Shareholder Note, the Holders, exercised the right to convert $150 thousand ($75 thousand each) in unpaid principal balance into fully paid and non-assessable shares of our common stock at a conversion price of $4.72. Accordingly, the Company issued 31,780 common shares (15,890 shareseach) to the Holders. Note payable – RWCC We acquired the Note Payable – RWCC (“RWCC Note”) 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%. As of December 3, 2020, this note is paid off. The RWCC Note was 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 to the Chief Financial Officer. The repayment of the notes payable, related parties as of December 31, 2020, is as follows for the years ending December 31, 2020: In thousands 2021 433 2022 390 2023 293 2024 Thereafter - Total $ 1,116 |
Other Notes Payable
Other Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Other Notes Payable | NOTE 11 – OTHER NOTES PAYABLE Other notes payable consists of the following as of December 31, 2020: In thousands 2020 2019 Note Payable - Secured Supplier Note $ 6,443 $ 6,490 Notes Payable - other 7 150 Total 6,450 6,640 Less current portion 6,449 6,497 Long Term Notes Payable $ 1 $ 143 Future maturities of notes payable are as follows for the years ending December 31, 2020: In thousands 2021 $ 6,449 2022 1 Thereafter - Total $ 6,450 Paycheck Protection Program Note Payable In May 2020, we entered into a Loan Agreement with Zions Bank corporation, NA (“Zions”) whereby we borrowed $887,500 from Zions under the Small Business Administration’s (the “SBA”) Paycheck Protection Program. In October 2020, OMNIQ applied for and was granted forgiveness of the full amount owed (including accrued interest) by Zions on behalf of the SBA. We recognized a gain on forgiveness of debt of $887,500; included in early other (expenses) income on the consolidated statements of operations. Supplier Secured Note Payable In July 2016, we and a supplier entered into a secured promissory note (the “Secured Supplier Note”), in the principal amount of $12.5 million and interest at 12% per annum. The Secured Supplier Note was to be paid in six consecutive monthly installments of a minimum principal amount of $250 thousand each principal and accrued interest, , with any remaining principal and accrued interest due and payable on December 31, 2016. From November 2016 through March 2019, the Secured Supplier Note was amended six times (the “Amendments”), each time adjusting the payment terms and maturity date. In April 2019, we entered into a seventh amendment extending the maturity date to July 31, 2019. This amendment requires we make three installment payments as follows: ● First, a minimum payment in the amount $350 thousand plus all accrued interest on the principal due by May 15, 2019; ● Second, a minimum payment in the amount of $500 thousand plus all accrued interest on the principal through such payment date, shall be due by June 15, 2019 ● Third, a minimum payment in the amount of $750 thousand plus all accrued interest on the principal through such payment date, shall be due by July 15, 2019; and ● Any remaining principal and interest due at maturity. We have made partial payments towards the required monthly installments under the terms of this amendment. As has been the case with each previous amendment, we are in continual negotiations with the holder of the Secured Supplier Note to extend the maturity date and establish a new schedule of payments. Note Payable - Other 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. On June 5, 2020, the Company reached an agreement with the noteholder to convert an aggregate of $261 thousand in principal, unpaid interest, and penalties into an aggregate of 37,270 shares of Common Stock at a conversion price of $7.00 per share, which was based on the closing price on June 3, 2020. The balance on this loan at December 31, 2020 and December 31, 2019 was $0 and $137 thousand, respectively, all of which was classified as long-term |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | NOTE 12 – OTHER LIABILITIES At December 31, 2020 and 2019, other liabilities consisted of the following: In thousands 2020 2019 Other vendor payable $ 801 801 Dividend payable 253 344 Bonus payable 27 385 Others 1,477 453 Total other liabilities 2,558 1,983 Less Current Portion (1,412 ) (1,599 ) Total long term other liabilities $ 1,146 $ 384 In prior years, we purchased key man life insurance policies for some of our executives to insure against risk of loss of an executive. As of December 31, 2020, we had $332 thousand in accrued obligations other liabilities related to the key man insurance policies. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES Profit Sharing Plan We maintain a contributory profit-sharing plan covering substantially all fulltime employees within the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). In 2016, the Safe Harbor element was removed from the plan and the employer may make a discretionary matching contribution equal to a uniform percentage or dollar amount of participants’ elective deferrals for each Plan Year. In 2015, we were required to make a safe harbor non-elective contribution equal to 3 percent of a participant’s compensation. The plan also includes a 401(k) savings plan feature that allows substantially all employees to make voluntary contributions and provides for discretionary matching contributions determined annually by the Board of Directors. For the years ending December 31, 2020, and 2019, the Company elected to forgo the match. Operating Leases As of December 31, 2020, we had two Operating leases as follows: ● Office space in Akron, Ohio, with monthly payments of $3 thousand and an incremental borrowing rate of 14.55%. As of December 31, 2020, we had 29 months remaining on the lease. ● A vehicle with monthly payments of less than $1 thousand. As of December 31, 2020, the Company had 13 months remaining on the lease. Effective January 1, 2019 we adopted Topic 842. Targeted Improvements. As of December 31, 2020 we had two operating leases for office and assembly space and no financing leases. We elected the practical expedient ASU 2018-11, Leases (Topic 842): Targeted Improvements Beginning January 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. As none of our leases included an implicit rate of return, we used our incremental borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. The impact of ASU No. 2016-02 on our consolidated balance sheet beginning January 1, 2019 was through the recognition of ROU assets and lease liabilities for operating leases. Amounts recognized at January 1 and December 31, 2019 for operating leases are as follows: In thousands January 1, 2019 December 31, 2019 ROU assets $ 235 $ 131 Lease liability $ 235 $ 134 On January 1, 2019, we had three operating leases for office and/or warehouse space and one operating lease for a vehicle as follows: ● We were leasing approximately 7,000 sf of office space in Eugene, Oregon, with monthly payments of $4 thousand and an incremental borrowing rate of 15.06%. This lease was terminated in December 2019. ● We were leasing a small office space in Akron, Ohio, with monthly payments of $3 thousand and an incremental borrowing rate of 14.55%. As of December 31, 2019, we had 41 months remaining on the lease with a lease liability of $96 thousand. ● We were leasing a small office and warehouse in Anaheim, California, with monthly payments of $2 thousand and an incremental borrowing rate of 14.83%. As of December 31, 2019, we had 12 months remaining on the lease with a lease liability of $28 thousand. ● We were leasing a vehicle with monthly payments of less than $1 thousand and an incremental borrowing rate of 14.83%. As of December 31, 2019, the Company had 25 months remaining on the lease with a lease liability of $9 thousand. Other information related to our operating leases is as follows: In thousands ROU asset - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (93 ) ROU asset - December 31, 2019 $ 131 Lease liability - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (90 ) Lease liability - December 31, 2019 $ 134 In thousands ROU asset - January 1, 2020 $ 131 Decrease $ - Amortization $ (55 ) ROU asset - December 31, 2020 $ 76 Lease liability - January 1, 2020 $ 134 Decrease $ - Amortization $ (55 ) Lease liability - December 31, 2020 $ 79 In thousands December 31, 2020 Lease liability Short term $ 31 Long term $ 48 Total $ 79 As of December 31, 2020, our operating leases had a weighted average remaining lease term of 39.97 months and a weighted average discount rate of 14.57%. The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2020: In thousands Year Minimum lease payments 2021 $ 41 2022 $ 38 2023 $ 16 Thereafter $ - Total $ 95 Less interest $ (16 ) Present value of future minimum lease payments $ 79 Less current obligations $ (31 ) Long term lease obligations $ 48 LITIGATION Our subsidiary, OMNIQ Vision, Inc. (f/k/a HTS (USA), Inc.), was previously in litigation with a former employee who claimed that he was owed wages and commissions. As of March 31, 2020, the case had been resolved. While the terms of the resolution are confidential, management has determined that the amounts involved in resolving the case are immaterial to the financial statements taken as a whole. The Company recently was named a defendant in a Mississippi state lawsuit that is directly related to the RedLPR case (the “Mississippi case”). The Mississippi case also names RedLPR, LLC as a defendant. The Mississippi case was brought by Riverland Park Technologies (“Riverland”). Riverland is also a party to the RedLPR case. The Mississippi case was filed in the Circuit Court of Rankin County, Mississippi on September 21, 2020. The Company was named a defendant in a case involving a former employee who claims he is owed approximately $60 thousand in unpaid commissions. The Company’s position is that the former employee’s claims have no apparent factual basis and appear to be designed to force a quick “nuisance value” settlement. This case was filed in the Superior Court of the State of California, County of San Diego on October 21, 2020. The company is not a party to any other pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 14 – STOCKHOLDERS’ EQUITY PREFERRED STOCK Series A As of December 31, 2020 and 2019, there were 1,000,000 Series A preferred shares authorized and zero Series A preferred shares outstanding. The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. Series B As of December 31, 2020 and 2019, there was one (1) preferred share authorized and zero preferred shares outstanding. Series C As of December 31, 2020 and 2019, there were 5,000,000 Series C Preferred Shares (“Series C”) authorized with 2,145,030 and 4,828,530 issued and outstanding, respectively. The Series C shares have preferential rights above common shares and the Series B Preferred Shares and is entitled to receive a quarterly dividend at a rate of $0.06 per share per annum and have a liquidation preference of $1 per share. Series C shares outstanding are convertible into common stock at the rate of 20 preferred shares to one share of common stock. As of December 31, 2020 and 2019, the accrued dividends on the Series C Preferred Stock was $253 thousand and $344 thousand, respectively. In June 2020, certain holders of Series C Shares elected to convert $2.7 million or 2,683,500 Series C shares and $283 thousand in accrued dividends in exchange for 190,365 OMNIQ common stock shares. The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company’s common stock has a closing price of $30 per share for 20 consecutive trading days. COMMON STOCK In August 2020, OMNIQ’ Board of Directors adopted an Equity Incentive Plan (the “Plan”), as an incentive to retain in the employ of and attract new employees, directors, officers, consultants, advisors and employees to the Company. Pursuant to the Plan, one million (1,000,000) shares of the Company’s common stock, par value $0.001 (the “Shares”), were set aside and reserved for issuance. The Plan approved by our stockholders at the September 2020, shareholders’ meeting. For the year ending December 31, 2020, we issued 336,146 shares ( $1.6 million) to consultants and advisors for services rendered. In December 2015, our Board of Directors approved the OMNIQ. Employee Stock Purchase Plan (the “ESPP”). For the years ending December 31, 2020 and 2019, employees purchased 302 ($1 thousand) shares and 287 ($1 thousand) shares of commons stock. For the years ending December 31, 2020 and 2019, 216,750 and zero, respectively, in stock options and stock warrants were exercised in exchange for 90,691 shares of OMNIQ common stock. In April 2020 and in conjunction with the Eyepax acquisition, we issued the former owner 80,000 share of OMNIQ common stock. In September 2020 and pursuant to the 2020 Equity Incentive Plan, we granted options to purchase an aggregate of 745,000 shares of our common stock to certain of our employees, officers and directors. Included in the total shares granted are options to purchase 230,000 shares of its common stock to Mr. Shai Lustgarten, our Chief Executive Officer, options to purchase 40,000 shares of its common stock to Mr. Neev Nissenson, our Chief Financial Officer, options to purchase 150,000 shares of its common stock to Mr. Carlos J. Nissensohn, a consultant and principal stockholder, and options to purchase 10,000 shares of its common stock to our Directors Andy MacMillan and Yaron Shalem, respectively. The remaining 305,000 granted options are for other employees and consultants. The exercise price of all of the options granted was $4.40 per share, which was the closing price of the Company’s common stock on September 29, 2020, the day prior to the grant, except for the options granted to Shai Lustgarten and Carlos J. Nissensohn, which have an exercise price of $4.84 per share. The options granted to Shai Lustgarten and Carlos J. Nissensohn have a term of five (5) years and the balance of the options have a term of ten (10) years. Effective November 11, 2019, we implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. In September 2019, and in accordance with the terms of the Convertible Promissory Note, Walefar and Campbeltown each exercised the right to convert $75 thousand in unpaid principal balance into fully paid and non-assessable shares of the Company’s common stock at a conversion price of $0.236. Accordingly, we issued 317,796 shares to each of Walefar and Campbeltown. In September 2019, we entered into a letter agreement with Shai Lustgarten, the Company’s Chief Executive Officer, pursuant to which we and Mr. Lustgarten agreed to extend the term of Mr. Lustgarten’s employment agreement for an additional two (2) years. As consideration and in light of the Company’s achievements under the leadership of Mr. Lustgarten, the Company, pursuant to its 2018 Equity Incentive Plan, issued to Mr. Lustgarten 50,000 shares of the OMNIQ common stock valued at $250 thousand. In September 2019, we entered into a letter agreement with Mr. Carlos J. Nissensohn and/or an entity under his control, a consultant to the Company and principal stockholder, pursuant to which they agreed to extend the term of Mr. Nissensohn’s and/or an entity under his control’s consulting agreement for an additional two (2) years. As consideration and in light of Mr. Nissensohn’s and/or an entity under his control’s past consulting services which we believe were essential to its recent achievements, we, pursuant to the 2018 Equity Incentive Plan, issued to Mr. Nissensohn and/or an entity under his control 27,500 shares of the Company’s common stock, valued at $138 thousand. In April 2019, we entered into a form of Securities Purchase Agreement (the “Securities Purchase Agreement”) with accredited investors (the “Purchasers”). Pursuant to the Securities Purchase Agreement, on April 9, 2019 (the “Closing Date”), the Company sold an aggregate, with the Conversions included, of $5.0 million of units (the “Units”) resulting in gross proceeds of $5.0 million, before deducting placement agent fees and offering expenses (the “Offering”). The individual Unit purchase price was $6.00. Each Unit is comprised of one share of the Company’s common stock, $0.001 par value per share (the “Common Stock”), and a warrant to purchase one share of Common Stock, and, as a result of the Offering, the Company issued 833,333 shares of Common Stock (the “Shares”) and warrants (the “Warrants”) to purchase 833,333 shares of Common Stock (the “Warrant Shares”) at an exercise price equal to $7.00 per Warrant Share, which Warrants are exercisable for a period of five and one-half years from the issuance date. Both Shai Lustgarten, the Company’s Chief Executive Officer, and Carlos J. Nissensohn, a consultant to and principal stockholder of the Company, participated in the Offering by converting $200 thousand each of unpaid principal owed to them from the HTS acquisition (the “Conversions”), by the Company in exchange for Shares and Warrants on the same terms as all other Purchasers. With the Conversions included, the Offering resulted in gross proceeds of $5.0 million. As a result of the Conversions, a principal amount of $150 thousand is owed to each Walefar and Campbeltown respectively under the note issued to them as partial consideration in the sale of HTS Image Processing to the Company on October 5, 2018. Warrants and Stock Options In connection with the April 2019 Securities Purchase Agreement previously described, we issued warrants to purchase 891,667 shares of our common stock at an exercise price equal to $7.00 per Warrant Share, which warrants are exercisable for a period of five and one-half years from the issuance date. The warrants were valued at $2.9 million. Also during 2019, we issued options to purchase 128,000 valued at $564 thousand. These options and warrants were valued at the grant date using the Black-Scholes valuation methodology. The Company determines the assumptions used in the valuation of warrants and option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options and warrants granted throughout the year. The valuation assumptions used to determine the fair value of each option/warrants award on the date of grant were: expected stock price volatility 156.0% - 157.0%; expected term in years 4.0-5.5; and risk-free interest rate 1.40% - 2.31%. The following table summarizes information about warrants granted during the years ended December 31,: 2020 2019 Number of Weighted Number of Weighted Balance, beginning of year 1,166,667 $ 6.42 275,000 $ 4.55 Warrants granted 375,000 - 891,667 7.00 Warrants expired 25,000 - - - Warrants cancelled, forfeited - - - - Warrants exercised 150,000 - - - Balance, end of year 1,366,667 $ 7.19 1,166,667 $ 6.42 Exercisable warrants 1,200,001 $ 7.14 1,166,667 $ 6.42 Outstanding warrants as of December 31, 2020 are as follows: Weighted Average Weighted Weighted Range of residual life Average Average Exercise span Outstanding Exercise Exercisable Exercise Prices (in years) Warrants Price Warrants Price 2.20 0.59 75,000 $ 2.20 75,000 $ 2.20 7.00 3.77 891,667 7.00 891,667 7.00 7.50 5.68 250,000 7.50 83,334 7.50 8.00 1.16 10,000 8.00 10,000 8.00 10.00 2.22 125,000 10.00 125,000 10.00 14.00 0.16 15,000 14.00 15,000 14.00 2.20 to 14.00 3.93 1,366,667 $ 8.12 1,200,001 $ 8.12 Warrants outstanding have the following expiry date and exercise prices as of the year ended December 31, 2020: Exercise Expiry Date Prices 2020 2019 June 26, 2020 $ 5.60 - 10,000 October 10, 2020 12.00 - 15,000 December 30, 2020 4.00 - 150,000 February 02, 2021 14.00 15,000 - August 02, 2021 2.20 75,000 75,000 October 10, 2021 10.00 25,000 25,000 February 27, 2022 8.00 10,000 - May 18, 2023 10.00 50,000 - October 14, 2023 10.00 50,000 - October 06, 2024 7.00 891,667 891,667 September 01, 2025 7.50 83,334 - June 04, 2026 7.50 83,333 - December 04, 2027 7.50 83,333 - $ 8.37 1,366,667 1,166,667 We have a stock option plan whereby the Board of Directors, may grant to directors, officers, employees, or consultants of the Company options to acquire common shares. The Board of Directors of the Company has the authority to determine the terms, limits, restrictions and conditions of the grant of options, to interpret the plan and make all decisions relating thereto. The plan was adopted by the Company’s Board of Directors on November 17, 2014 in order to provide an inducement and serve as a long-term incentive program. The maximum number of common shares that may be reserved for issuance was set at 500,000. The option exercise price is established by the Board of Directors and may not be lower than the market price of the common shares at the time of grant. The options may be exercised during the option period determined by the Board of Directors, which may vary, but will not exceed ten years from the date of the grant. There are 500,000 of the Company’s common shares which may be issued pursuant to the exercise of share options granted under the Plan.. Stock Options 2020 2019 Number of Weighted Number of Weighted Balance, beginning of year 1,133,550 $ 4.00 1,006,050 $ 3.80 Stock options granted 775,000 - 127,500 5.00 Stock options expired - - - - Stock options cancelled, forfeited 30,250 - - - Stock options exercised 66,750 - - - Balance, end of year 1,811,550 4.32 1,133,550 4.00 Exercisable stock options 999,988 $ 4.05 952,425 $ 3.94 Outstanding stock options as of December 31, 2020, are as follows: Weighted Average Weighted Range of residual life Average Weighted Exercise span Outstanding Exercise Exercisable Average Prices (in years) Stock Options Price Stock Options Exercise Price 1.70 1.13 114,050 $ 1.70 114,050 $ 1.70 2.20 0.59 175,000 2.20 175,000 2.20 2.40 2.18 272,000 2.40 272,000 2.40 4.20 4.30 10,000 4.20 5,000 4.20 4.40 8.39 454,250 4.40 88,000 4.40 4.84 9.75 380,000 4.84 - 4.84 5.00 2.52 147,500 5.00 87,188 5.00 5.40 2.92 133,750 5.40 133,750 5.40 10.00 3.89 125,000 10.00 125,000 10.00 1.7 to 10 5.32 1,811,550 $ 4.05 999,988 $ 5.32 Stock options outstanding at the end of the year have the following expiry date and exercise prices: Exercise Expiry Date Prices 31-Dec-20 31-Dec-19 August 02, 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 February 28, 2023 5.00 20,000 - March 05, 2023 2.40 272,000 340,000 July 31, 2023 5.00 127,500 127,500 October 31, 2023 4.40 89,250 108,250 November 30, 2023 5.40 133,750 143,750 November 20, 2024 10.00 125,000 125,000 April 20, 2025 4.20 10,000 - September 30, 2030 4.40 365,000 - September 30, 2030 4.84 380,000 - $ 4.26 1,811,550 1,133,550 We recorded stock compensation expense relating to the vesting of stock options and warrants as follows for the years ended December 31, 2020 and 2019; 2020 2019 In thousands Stock compensation $ - $ 388 Stock Option vesting 709 879 Total $ 709 $ 1,267 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS In February 2020 we amended the consulting agreement with Mr. Carlos J. Nissensohn, a principal shareholder of the Company and a family member of a Director of the Company. The terms and condition of the contract are as follows: ● 48-month term with 90 day termination notice by the Company ● A monthly fee of $30 thousand. ● If we procure debt financing during the term of Mr. Nissensohn’s agreement, without any equity component, Mr. Nissensohn shall be entitled to 3% of the gross funds raised, however if we are required to pay a success fee to another external entity, then Mr. Nissensohn shall be entitled to only 2% of the gross funds raised. ● In addition to the above, in the event of an equity financing resulting in gross proceeds of at least $3 million to us within 24 months of the date the contract, Mr. Nissensohn shall further be entitled to certain warrants to be granted by us which upon their exercise pursuant to their terms, Mr. Nissensohn shall be entitled to receive OMNIQ shares which represent 3% of the OMNIQ issued share capital immediately prior to the consummation of such investment. The warrants will carry an exercise price per warrant/share representing 100% of the closing price per share as closed in the equity financing. This section and the issue of the warrant by OMNIQ are subject to the approval of the Board of Directors of OMNIQ. However, if the Board does not approve the issuance of warrants; then Mr. Nissensohn will be entitled to a fee with the equivalent value based on a Black Scholes valuation ● In addition to the above, Mr. Nissensohn will be entitled to a $80 thousand one-time payment which shall be paid on the 1 st ● In addition to the aforementioned, in the event that we close any M&A transaction with a third party target, Mr. Nissensohn shall be entitled to a success fee in the amount equal to 5% of the total transaction price, in any combination of cash and shares that will be determined by OMNIQ Additional related party transactions are discussed in Notes 10. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 16 – INCOME TAX For the year ended December 31, 2020, the Company has $5 thousand of current income tax provision (US State & Local and Foreign) and no deferred income tax provision. The tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December 31, In thousands Deferred tax assets 2020 2019 Reserves and deferred revenue $ 258 $ 238 163(J) Limitation 1,446 664 Stock options 0 - Net operating loss 7,240 5,319 Total gross deferred tax assets 8,944 6,221 Less: Valuation Allowance (8,325 ) (5,414 ) Net deferred tax assets 619 807 Deferred tax liabilities Amortization of intangible assets and depreciation (619 ) (807 ) Total deferred tax liabilities (619 ) (807 ) Net deferred tax assets $ - $ - Components of net deferred tax assets, including a valuation allowance, are as follows as of December 31: 2020 2019 Deferred tax assets $ 8,325 $ 5,414 Valuation allowance (8,325 ) (5,414 ) Total deferred tax assets $ - $ - The valuation allowance for deferred tax assets as of December 31, 2020 and 2019 was $8.3 million and $5.4 million, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management has recorded a 100% Valuation Allowance, against its Net Deferred Tax Assets, since Management believes it is more likely than not that it will not be realized at the date of this statement. The Company will continue to monitor the potential utilization of this asset. Should factors and evidence change to aid in this assessment, a potential adjustment to the valuation allowance in future periods may occur. The Company records any penalties and interest as a component of operating expenses. The reconciliation between statutory rate and effective rate is as follows as of December 31, 2020 and 2019: 2020 2019 Federal statutory tax rate 21 % 21.0 % State taxes 4.42 % 1.41 % Foreign income taxes - % - % Nondeductible items (1.89 )% (11.52 )% Acquisition accounting adjustments - % - % Change in valuation allowance (29.71 )% 13.48 % Return to provision adjustments 1.66 % (25.33 )% Rate Change 4.03 % - % Other .44 % 0.56 % Effective tax rate (.06 )% (0.40 )% The Company reported no uncertain tax liability as of December 31, 2020 and expects no significant change to the uncertain tax liability over the next twelve months. The Company’s 2014, 2015, 2016, 2017, and 2018 federal and state income tax returns are open for examination by the applicable governmental authorities. As of December 31, 2019, the Company had a net operating loss (NOL) carryforward of approximately $22.1 million. The NOL carryforward begins to expire in 2024. Under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC Section 382”), a corporation that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income. Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine unrelated shareholders that do not individually own 5% or more of the corporation’s stock into one or more “public groups” that may be treated as 5-percent shareholder) increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years). In general, the annual use limitation equals the aggregate value of common stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The Company has not completed a study as to whether there is a 382 limitation on its NOLs that will limit or possibly eliminate the use of its NOLs in the future. Company’s Management has recorded a 100% valuation allowance on the entire NOL as it believes that it is more likely than not that the deferred tax asset associated with the NOLs will not be realized regardless of whether or not an “ownership change” has occurred. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17 – SUBSEQUENT EVENTS In accordance with ASC 855, “Subsequent Events”, the Company has evaluated all subsequent events through the date of this filing. No other significant events have occurred besides the events disclosed in the Notes to the Financial Statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Our consolidated financial statements include the financial position and results of operations of OMNIQ Corp. and its wholly owned subsidiaries Quest Marketing, Inc., Quest Exchange Ltd., and HTS Image Processing, Inc., collectively referred to herein as “we” or “us” or “our” or the “Company.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. |
Use of Estimates | Use of Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash consists of petty cash, checking, savings, and money market accounts. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2020 and 2019. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has restricted cash on deposit with a federally insured bank in the amount of $533 thousand at December 31, 2020 and 2019, respectively. |
Accounts Receivable | Accounts Receivable We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) Accounting Standards Codification Topic 326, Credit Losses (Topic 326 We believe concentration of credit risk, with respect to our receivables, is limited because our customer base is comprised of a number of geographically diverse customers. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Pursuant to Topic 326 for our accounts receivables, we maintain an allowance for doubtful accounts that reflects our estimate of our expected credit losses. Our allowance is estimated using a loss rate model based on delinquency. The estimated loss rate is based on our historical experience with specific customers, our understanding of our current economic circumstances, reasonable and supportable forecasts, and our own judgment as to the likelihood of ultimate payment based upon available data. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance for doubtful accounts. Based on management’s evaluation, accounts receivable has a balance in the allowance for doubtful accounts of $28 thousand and $36 thousand for the years ended December 31, 2020 and 2019, respectively. |
Inventory | Inventory Substantially all inventory consists of raw materials and finished goods and are valued at the lower of actual cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using both straight-line over the estimated useful lives. Ordinary repair and maintenance costs are included in sales, general and administrative (“SG&A”) expenses on our consolidated statements of operations. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the statements of operations in gains from sales of property and equipment, net. We periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the remaining term of the lease, whichever is shorter. Depreciation expense for the years ended December 31, 2020 and 2019 was $178 thousand and $151 thousand, respectively. Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Furniture and fixtures Computer equipment Office equipment Software Leasehold improvements 5 to 7 years 3 to 5 years 3 to 10 year 3 years 15 years |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. The carrying amounts of certain financial instruments, such as cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. |
Goodwill and Intangibles | Goodwill and Intangibles We have made acquisitions in the past that resulted in the recognition of goodwill. Goodwill is the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment annually or more frequently, if triggering events occur or other impairment indicators arise which might impair recoverability. Application of the goodwill impairment test requires judgment. We performed a Step 1 quantitative assessment of goodwill impairment as of December 31, 2020, our annual impairment test date. We compared the carrying value inclusive of goodwill and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach, as further described below. Based on this quantitative test, we determined there was no impairment as of the December 31, 2020. For purposes of performing the quantitative impairment test described above, we estimate the fair value by utilizing fair value techniques consistent with the income approach and market approach. When performing the income approach for each reporting unit, we use a discounted cash flow analysis based on our internal projected results of operations, weighted average cost of capital (“WACC”) and terminal value assumptions. Our cash flow projections are based on five-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capital to support anticipated revenue growth. The WACC is an estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise and represents the expected cost of new capital likely to be used by market participants. The WACC is used to discount our combined future cash flows. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Changes in assumptions or estimates could materially affect the estimate of a reporting unit’s fair value, and therefore could affect the likelihood and amount of potential impairment. Under the market approach, we compare the reporting units to selected reasonably similar (or “guideline”) publicly-traded companies. Under this method, valuation multiples are: (i) derived from the operating data of selected guideline companies; (ii) evaluated and adjusted based on the strengths and weaknesses of our reporting unit relative to the selected guideline companies; and (iii) applied to the operating data of our reporting unit to arrive at an indication of value. The application of the market approach results in an estimate of the price reasonably expected to be realized from a sale of the Company. Identifiable intangible assets are stated at cost, net of accumulated amortization. The assets are being amortized on the straight-line method over useful lives ranging from 3 to 11 years. |
Leases | Leases We adopted ASU 2016-02, Leases (Topic 842): Our lease portfolio is substantially comprised of operating leases related to leases of real estate and improvements. From time to time, we may also lease various types of small equipment and vehicles. Operating lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR”) at the commencement date in determining the present value of lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease. Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Our leases can include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when such renewal options and/or termination options are reasonably certain of exercise. A ROU asset is subject to the same impairment guidance as assets categorized as plant, property, and equipment. As such, any impairment loss on ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets. A lease modification is a change to the terms and conditions of a contract that change the scope or consideration of a lease. For example, a change to the terms and conditions to the contract that adds or terminates the right to use one or more underlying assets, or extends or shortens the contractual lease term, is a modification. Depending on facts and circumstances, a lease modification may be accounted as either: (1) the original lease plus the lease of a separate asset(s) or (2) a modified lease. A lease will be remeasured if there are changes to the lease contract that do not give rise to a separate lease. |
Purchase Accounting and Business Combinations | Purchase Accounting and Business Combinations We account for our business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. The valuation and allocation processes rely on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when we receive updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. |
Revenue Recognition | Revenue Recognition. When entering into contracts with our customers, we review follow the five steps outline in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) i. Identify the contract with our customer. ii. Identify the performance obligations in the contract. iii. Determine the transaction price. iv. Allocate the transaction price to the performance obligations. And v. Evaluate the satisfaction of the performance obligations, We account for contracts, with our customers, when we have approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. We evaluate, in accordance with Topic 606, whether we meet the criteria to be a principal or an agent and record the revenue on a gross or net basis. We are considered a principal if we obtain control of any one of the following: i. A good or another asset from another party that we then transfer to our customer. ii. A right to a service to be performed by another party, which gives the us the ability to direct that party to provide the service to the customer on our behalf, and iii. A good or service from another party that we then combine with other goods or services in providing the specified good or service to our customer. We have certain relationships with manufacturers and suppliers to sell us products or provide services. Our contracts may transfer to our customer a right to a future service or product to be provided by our manufacturer or supplier. When a specified good or service is a right to a good or service is provided by a manufacturer or supplier, we evaluate whether we control the right to the goods or services before that right is transferred to the customer rather than whether we control the underlying goods or services. Indicators that we control the specified good or service before it is transferred to the customer (and we are therefore a principal) include, but are not limited to, the following: i. We are responsible for fulfilling the promise to provide the specified good or service. This typically includes responsibility for the acceptability of the specified good or service. If we are primarily responsible for fulfilling the promise to provide the specified good or service, this may indicate that the other party involved in providing the specified good or service is acting on our behalf. Often, we provide value added services (combining hardware, integrating hardware to software, etc.) to the products and services purchased from our manufacturers and suppliers. ii. We have inventory risk before the specified good or service has been transferred to a customer. Our purchases of products or services from our manufactures and suppliers is evidenced by our issuing a binding purchase order contract with the negotiated terms including specifications, pricing, delivery among other things. Our obligation for purchased products and services is mutually exclusive of our customers’ performance (failure to take acceptance, make payment, etc. iii. We have sole discretion in establishing our price for the specified good or service. Establishing the price our customer pays for a specified good or service may indicate we have the ability to direct the use of that good or service and obtain substantially all of the remaining benefits. We control and set the pricing for the product or services to be provided to our customers. If the terms of a transaction do not indicate we are acting as a principal in the transaction, we are then considered acting as an agent and the associated revenues would be recognized on a net basis. As principal, when (or as) we satisfy a performance obligation, we recognize revenue in the gross amount of consideration which we expect to be entitled in exchange for the specified good or service transferred. We are an agent if our performance obligation is to arrange for the provision of the specified good or service by another party. As an agent, we do not control the specified good or service provided by another party before that good or service is transferred to our customer. As an agent, when (or as) we satisfy a performance obligation, we recognize revenue in the amount of any fee or commission which we expect to be entitled in exchange for arranging for the specified goods or services to be provided by another party to our customer. Under Topic 606, we recognize revenue (on either a gross or net basis previously discussed) only when we satisfy a performance obligation by transferring a promised good or service to our customer. A good or service is considered to be transferred when the customer obtains control. The standard defines control as an entity’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. We recognize revenue (either gross or net) once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: i. We have a right to payment for the product or service, ii. The customer has legal title to the product, iii. We have transferred physical possession of the product to the customer, iv. The customer has the risk and rewards of ownership of the product, and v. The customer has accepted the product. Revenue Recognition for Hardware. Manufacturers and suppliers, from whom we purchase hardware, often provide their warranties only providing assurance the products and services will conform to their specifications. These assurance type warranties are not sold separately and are not considered separate performance obligations. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. We consider these warranties to be separate performance obligations from the underlying product. For warranties, where we are arranging those services be provided by a third-party, we are acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Software. As explained above, we evaluate whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering: i. If the software provides its original intended functionality to the customer without the updates, ii. If the customer would ascribe a higher value to the upgrades versus the up-front deliverable, iii. If the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and iv. If the customer chooses to not delay or always install upgrades. If we determine the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. In some transactions, a third-party will provide the customer with an extended warranty. These extended warranties are sold separately and provide the customer with a service in addition to assurance that the product will function as expected. We consider these warranties to be separate performance obligations from the underlying product. For warranties, where we are arranging those services be provided by a third-party, we are acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue Recognition for Services. Revenues from the sale of professional and support services, provided by us, are recognized over the period the service is provided. As the customer receives the benefit of the service each month, we recognize the respective revenue on a gross basis as we are acting as a principal in the transaction. Additionally, we manage services team provides project support to customers that are billed on a fixed fee basis. We are acting as the principal in the transaction and recognize revenue on a gross basis based on the total number of hours incurred for the period over the total expected hours for the project. Total expected hours to complete the project is updated for each period and best represents the transfer of control of the service to the customer. Freight Costs. |
Reverse Stock Split | Reverse Stock Split Effective November 20, 2019, we implemented a one-for-20 reverse stock split of the Company’s common stock. The par value of common stock and the number of authorized shares were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. As a result of the Reverse Split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by the Company and outstanding immediately prior to the Effective Time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, Preferred stock, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares authorized for future grant under the Company’s equity incentive/compensation plans immediately prior to the Effective Time was reduced proportionately. |
Stock-Based Compensation | Stock-Based Compensation We periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. We account for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by Financial Accounting Standards Board (the “FASB”) where the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. We record stock-based compensation expense according to the provisions of ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under the provisions of ASC Topic 718, the Company determines the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the expected volatility and expected option life assumption consistent with ASC Topic 718, Compensation – Stock Compensation. The expected volatility of the Company’s common stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates consistent with the expected life of each stock option grant. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. Compensation expense is recorded for all stock options expected to vest based on the amortization of the fair value at the date of grant on a straightline basis primarily over the vesting period of the options. In August 2020, the Board of Directors approved our 2020 Equity Incentive Plan and later amended it. In September 2020, our shareholders adopted and ratified the 2020 Equity Incentive Plan. The total number of shares of Common Stock authorized for issuance under the 2020 Plan is 1,000,000. Equity instruments issued to parties other than employees for acquiring goods or services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”). Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. Warrants The fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management’s judgment. Expected volatilities used in the valuation model are based on the average volatility of the Company’s stock. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve in effect at the time of grant. |
Advertising | Advertising The Company expenses marketing and advertising costs as incurred. During 2020 and 2019, the Company spent $283 thousand and $224 thousand, respectively, on marketing, trade show and store front expense and advertising, net of co-operative rebates. The Company received rebates on advertising from co-operative advertising agreements with several vendors and suppliers. These rebates have been recorded as a reduction to the related advertising and marketing expense. |
Foreign Currency Translation | Foreign Currency Translation Our consolidated financial statements are presented in U.S. dollars. The functional currency for the Company is U.S. dollars. Transactions in currencies other than the functional currency are recorded using the appropriate exchange rate at the time of the transaction. All of our continuing operations are conducted in U.S. dollars except its subsidiary located in Israel. The records of the Israeli operation were maintained in the local currency and re-measured to the functional currency as follows: monetary assets and liabilities are converted using the balance sheet period-end date exchange rate, while the non-monetary assets and liabilities are converted using the historical exchange rate. Expenses and income items are converted using the weighted average exchange rates for the reporting period. Foreign transaction gains and losses are reported on the consolidated statement of operations and were included in the amount of loss from comprehensive income. |
Income Taxes | Income Taxes We account for our income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. We also follow the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Our income is subject to taxation in both the U.S. and a foreign jurisdiction, Israel. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company establishes reserves for income tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the we believe positions do not meet the more-likely-than-not recognition threshold. We adjust uncertain tax liabilities in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of uncertain tax liabilities and changes in liabilities that are considered appropriate. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Our other comprehensive income (loss) is composed of foreign currency translation adjustments. |
Net Loss Per Common Share | Net Loss Per Common Share See NOTE 14 regarding our 1-for-20 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented. Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the years ended December 31, 2020 and December 31, 2019 were 4,322,303 and 3,889,478, respectively. Diluted net loss per share of common stock is the same as basic net loss per share of common stock because the effects of potentially dilutive securities are antidilutive. The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported: In thousands 2020 2019 Options to purchase common stock 1,553 737 Convertible preferred stock - 242 Warrants to purchase common stock 75 225 Potential shares excluded from diluted net loss per share 1,628 1,204 |
Reclassifications and Comparability | Reclassifications and Comparability Certain amounts in the financial statements of prior years have been reclassified to conform to the current year presentation for comparative purposes. This had no effect on total assets or net income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncements Not Yet Adopted In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The guidance removes the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. ASU 2019-12 became effective on January 1, 2021 and is not expected to have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. We intend to continue to monitor the developments with respect to the planned phase-out out of LIBOR after 2021 and work with our lenders to seek to ensure any transition away from LIBOR will have minimal impact on our financial condition. However, we can provide no assurances regarding the impact of the discontinuation of LIBOR as there can be no assurances as to whether such replacement or alternative base rate will be more or less favorable than LIBOR. Our exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on balances outstanding under our Credit Facility. The potential impact from the cessation of LIBOR as a reference rate, as well as the applicability of ASU 2020-04, is not currently estimable. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2020, we adopted Accounting Standards Codification Topic 326, Credit Losses (Topic 326). This standard establishes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, we recognize an allowance for our estimate of expected credit losses over the entire contractual term of our receivables from the date of initial recognition of the financial instrument. Measurement of expected credit losses are based on relevant forecasts that affect collectability. Topic 326 applies to trade receivables from certain revenue transactions including receivables from equipment sales, parts and service sales. Under Accounting Standard Codification Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that these trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The adoption of Topic 326 did not have a material impact on our consolidated financial statements and related disclosures or our existing internal controls because accounts receivable are of short duration and there is not a material difference between incurred losses and expected losses. On January 1, 2020, we adopted ASU No. 2018-13, Fair Value Measurement - Disclosure Framework. ASU 2018-13 modifies the disclosure requirements for fair value measurements. Entities are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of ASU 2018-13 did not have a material impact on our consolidated financial statements and footnotes. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Furniture and fixtures Computer equipment Office equipment Software Leasehold improvements 5 to 7 years 3 to 5 years 3 to 10 year 3 years 15 years |
Schedule of Anti Dilutive Securities Excludes from Computation of Earnings Per Share | The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported: In thousands 2020 2019 Options to purchase common stock 1,553 737 Convertible preferred stock - 242 Warrants to purchase common stock 75 225 Potential shares excluded from diluted net loss per share 1,628 1,204 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 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 13 Software (intangible) 100 Liabilities assumed (113 ) Net assets acquired at fair value 1 Total purchase price 775 Goodwill recognized 774 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable Net | Accounts receivable consisted of the following as of December 31: In thousands 2020 2019 Trade Accounts Receivable $ 9,689 $ 6,730 Less Allowance for doubtful accounts (28 ) (36 ) Total Accounts Receivable (net) $ 9,661 $ 6,694 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of December 31: In thousands 2020 2019 Raw Materials 946 1,055 Work in process - 44 Finished goods (less Allowance) 561 790 Total inventories $ 1,507 $ 1,889 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill and Intangible assets consisted of the following as of December 31: In thousands 2020 2019 Goodwill $ 14,695 $ 13,921 Trade Names 4,390 4,390 Customer Relationships 12,590 12,590 Intellectual property 1,424 1,323 Accumulated amortization (11,855 ) (9,695 ) Intangibles, net $ 21,244 $ 22,529 |
Schedule of Finite-lived Intangible Assets, Future Amortization Expense | The future amortization expense on the Customer Relationships, and IP are as follows: In thousands Years ending December 31, 2021 2,133 2022 1,507 2023 934 2024 487 2025 472 Thereafter 1,056 Total $ 6,589 |
Related Party Notes Payable (Ta
Related Party Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable, Related Parties | Related party notes payable, consisted of the following as of December 31: 2020 2019 In thousands Note payable –Marin $ 660 $ 900 Note payable –Thomet 413 563 Note payable –Zicman - 135 Note payable–Shareholder Convertible Note 43 150 Note payable - RWCC - 449 Total notes payable 1,116 2,197 Less current portion 433 1,025 Long-term portion $ 683 $ 1,172 |
Schedule of Future Maturities of Notes Payable, Related Parties | The repayment of the notes payable, related parties as of December 31, 2020, is as follows for the years ending December 31, 2020: In thousands 2021 433 2022 390 2023 293 2024 Thereafter - Total $ 1,116 |
Other Notes Payable (Tables)
Other Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Other Notes Payable | Other notes payable consists of the following as of December 31, 2020: In thousands 2020 2019 Note Payable - Secured Supplier Note $ 6,443 $ 6,490 Notes Payable - other 7 150 Total 6,450 6,640 Less current portion 6,449 6,497 Long Term Notes Payable $ 1 $ 143 |
Schedule of Future Maturities of Note Payable | Future maturities of notes payable are as follows for the years ending December 31, 2020: In thousands 2021 $ 6,449 2022 1 Thereafter - Total $ 6,450 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | At December 31, 2020 and 2019, other liabilities consisted of the following: In thousands 2020 2019 Other vendor payable $ 801 801 Dividend payable 253 344 Bonus payable 27 385 Others 1,477 453 Total other liabilities 2,558 1,983 Less Current Portion (1,412 ) (1,599 ) Total long term other liabilities $ 1,146 $ 384 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease | Amounts recognized at January 1 and December 31, 2019 for operating leases are as follows: In thousands January 1, 2019 December 31, 2019 ROU assets $ 235 $ 131 Lease liability $ 235 $ 134 |
Schedule of Other Information Related to Operating Lease | Other information related to our operating leases is as follows: In thousands ROU asset - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (93 ) ROU asset - December 31, 2019 $ 131 Lease liability - January 1, 2019 $ 235 Decrease $ (11 ) Amortization $ (90 ) Lease liability - December 31, 2019 $ 134 In thousands ROU asset - January 1, 2020 $ 131 Decrease $ - Amortization $ (55 ) ROU asset - December 31, 2020 $ 76 Lease liability - January 1, 2020 $ 134 Decrease $ - Amortization $ (55 ) Lease liability - December 31, 2020 $ 79 In thousands December 31, 2020 Lease liability Short term $ 31 Long term $ 48 Total $ 79 |
Schedule of Future Minimum Rental Payments for Operating Leases | The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2020: In thousands Year Minimum lease payments 2021 $ 41 2022 $ 38 2023 $ 16 Thereafter $ - Total $ 95 Less interest $ (16 ) Present value of future minimum lease payments $ 79 Less current obligations $ (31 ) Long term lease obligations $ 48 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrants Activity | The following table summarizes information about warrants granted during the years ended December 31,: 2020 2019 Number of Weighted Number of Weighted Balance, beginning of year 1,166,667 $ 6.42 275,000 $ 4.55 Warrants granted 375,000 - 891,667 7.00 Warrants expired 25,000 - - - Warrants cancelled, forfeited - - - Warrants exercised 150,000 - - - Balance, end of year 1,366,667 $ 7.19 1,166,667 $ 6.42 Exercisable warrants 1,200,001 $ 7.14 1,166,667 $ 6.42 |
Schedule of Outstanding Warrants | Outstanding warrants as of December 31, 2020 are as follows: Weighted Average Weighted Weighted Range of residual life Average Average Exercise span Outstanding Exercise Exercisable Exercise Prices (in years) Warrants Price Warrants Price 2.20 0.59 75,000 $ 2.20 75,000 $ 2.20 7.00 3.77 891,667 7.00 891,667 7.00 7.50 5.68 250,000 7.50 83,334 7.50 8.00 1.16 10,000 8.00 10,000 8.00 10.00 2.22 125,000 10.00 125,000 10.00 14.00 0.16 15,000 14.00 15,000 14.00 2.20 to 14.00 3.93 1,366,667 $ 8.12 1,200,001 $ 8.12 |
Schedule of Warrants Outstanding, Expiry Date and Exercise Prices | Warrants outstanding have the following expiry date and exercise prices as of the year ended December 31, 2020: Exercise Expiry Date Prices 2020 2019 June 26, 2020 $ 5.60 10,000 October 10, 2020 12.00 15,000 December 30, 2020 4.00 150,000 February 02, 2021 14.00 15,000 August 02, 2021 2.20 75,000 75,000 October 10, 2021 10.00 25,000 25,000 February 27, 2022 8.00 10,000 - May 18, 2023 10.00 50,000 - October 14, 2023 10.00 50,000 - October 06, 2024 7.00 891,667 891,667 September 01, 2025 7.50 83,334 - June 04, 2026 7.50 83,333 - December 04, 2027 7.50 83,333 - $ 8.37 1,366,667 1,166,667 |
Schedule of Stock Options Granted | Stock Options 2020 2019 Number of Weighted Number of Weighted Balance, beginning of year 1,133,550 $ 4.00 1,006,050 $ 3.80 Stock options granted 775,000 - 127,500 5.00 Stock options expired - - - - Stock options cancelled, forfeited 30,250 - - - Stock options exercised 66,750 - - - Balance, end of year 1,811,550 4.32 1,133,550 4.00 Exercisable stock options 999,988 $ 4.05 952,425 $ 3.94 |
Schedule of Outstanding Stock Options | Outstanding stock options as of December 31, 2020, are as follows: Weighted Average Weighted Range of residual life Average Weighted Exercise span Outstanding Exercise Exercisable Average Prices (in years) Stock Options Price Stock Options Exercise Price 1.70 1.13 114,050 $ 1.70 114,050 $ 1.70 2.20 0.59 175,000 2.20 175,000 2.20 2.40 2.18 272,000 2.40 272,000 2.40 4.20 4.30 10,000 4.20 5,000 4.20 4.40 8.39 454,250 4.40 88,000 4.40 4.84 9.75 380,000 4.84 - 4.84 5.00 2.52 147,500 5.00 87,188 5.00 5.40 2.92 133,750 5.40 133,750 5.40 10.00 3.89 125,000 10.00 125,000 10.00 1.7 to 10 5.32 1,811,550 $ 4.05 999,988 $ 5.32 |
Schedule of Stock Options, Expiry Date and Exercise Prices | Stock options outstanding at the end of the year have the following expiry date and exercise prices: Exercise Expiry Date Prices 31-Dec-20 31-Dec-19 August 02, 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 February 28, 2023 5.00 20,000 - March 05, 2023 2.40 272,000 340,000 July 31, 2023 5.00 127,500 127,500 October 31, 2023 4.40 89,250 108,250 November 30, 2023 5.40 133,750 143,750 November 20, 2024 10.00 125,000 125,000 April 20, 2025 4.20 10,000 - September 30, 2030 4.40 365,000 - September 30, 2030 4.84 380,000 - $ 4.26 1,811,550 1,133,550 |
Summary of Stock Compensation Expense | We recorded stock compensation expense relating to the vesting of stock options and warrants as follows for the years ended December 31, 2020 and 2019; 2020 2019 In thousands Stock compensation $ - $ 388 Stock Option vesting 709 879 Total $ 709 $ 1,267 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows as of December 31, In thousands Deferred tax assets 2020 2019 Reserves and deferred revenue $ 258 $ 238 163(J) Limitation 1,446 664 Stock options 0 - Net operating loss 7,240 5,319 Total gross deferred tax assets 8,944 6,221 Less: Valuation Allowance (8,325 ) (5,414 ) Net deferred tax assets 619 807 Deferred tax liabilities Amortization of intangible assets and depreciation (619 ) (807 ) Total deferred tax liabilities (619 ) (807 ) Net deferred tax assets $ - $ - |
Schedule of Deferred Tax Assets and Valuation Allowances | Components of net deferred tax assets, including a valuation allowance, are as follows as of December 31: 2020 2019 Deferred tax assets $ 8,325 $ 5,414 Valuation allowance (8,325 ) (5,414 ) Total deferred tax assets $ - $ - |
Schedule of Reconciliation of Statutory Rate and Effective Tax Rate | The reconciliation between statutory rate and effective rate is as follows as of December 31, 2020 and 2019: 2020 2019 Federal statutory tax rate 21 % 21.0 % State taxes 4.42 % 1.41 % Foreign income taxes - % - % Nondeductible items (1.89 )% (11.52 )% Acquisition accounting adjustments - % - % Change in valuation allowance (29.71 )% 13.48 % Return to provision adjustments 1.66 % (25.33 )% Rate Change 4.03 % - % Other .44 % 0.56 % Effective tax rate (.06 )% (0.40 )% |
Nature of Operations (Details N
Nature of Operations (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Gross margin percentage | 5.00% |
Revenue [Member] | |
Revenue percentage | 3.48% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Nov. 20, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2020 |
Cash equivalents | ||||
Restricted cash | 533 | 533 | ||
Allowance for doubtful accounts | 28 | 36 | ||
Depreciation expense | 178 | 151 | ||
Impairment of goodwill | ||||
Reverse stock split | one-for-20 reverse stock split | |||
Common stock, shares authorized | 15,000,000 | 15,000,000 | ||
Advertising expense | $ 283 | $ 224 | ||
Income tax likelihood, description | Greater than 50% | |||
Weighted average number of common shares outstanding | 4,322,303 | 3,889,478 | ||
Board of Directors [Member] | 2020 Plan [Member] | ||||
Common stock, reserved for future issuance | 1,000,000 | |||
Minimum [Member] | ||||
Finite-lived intangible asset, useful life | 3 years | |||
Maximum [Member] | ||||
Finite-lived intangible asset, useful life | 11 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Furniture And Fixtures [Member] | Minimum [Member] | |
Property and equipment, estimated useful lives | 5 years |
Furniture And Fixtures [Member] | Maximum [Member] | |
Property and equipment, estimated useful lives | 7 years |
Computer Equipment [Member] | Minimum [Member] | |
Property and equipment, estimated useful lives | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property and equipment, estimated useful lives | 5 years |
Office Equipment [Member] | Minimum [Member] | |
Property and equipment, estimated useful lives | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property and equipment, estimated useful lives | 10 years |
Software [Member] | |
Property and equipment, estimated useful lives | 3 years |
Leasehold Improvements [Member] | |
Property and equipment, estimated useful lives | 15 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Anti Dilutive Securities Excludes from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Potential shares excluded from diluted net loss per share | 1,628,000 | 1,204,000 |
Options to Purchase Common Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 1,553,000 | 737,000 |
Convertible Preferred Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 0 | 242,000 |
Warrants to Purchase Common Stock [Member] | ||
Potential shares excluded from diluted net loss per share | 75,000 | 225,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Working capital deficit | $ (25,300) | |
Accumulated deficit | (56,726) | $ (45,063) |
Proceeds from sale of common stock | $ 3,770 | |
April 2019 [Member] | ||
Proceeds from sale of common stock | $ 5,000 | |
Number of stock issued | 833,333 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of options granted to purchase common stock | 775,000 | 127,500 | |
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, 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 | $ 5.50 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Fair Value of Purchase Price (Details) - Asset Purchase Agreement [Member] - Eyepax IT Consulting, LLC [Member] $ in Thousands | 1 Months Ended |
Feb. 29, 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 | Dec. 31, 2020 | Apr. 30, 2020 | Dec. 31, 2019 |
Goodwill recognized | $ 14,695 | $ 13,921 | |
Asset Purchase Agreement [Member] | Eyepax IT Consulting, LLC [Member] | |||
Accounts receivable | $ 13 | ||
Software (intangible) | 100 | ||
Liabilities assumed | (113) | ||
Net assets acquired at fair value | 1 | ||
Total purchase price | 775 | ||
Goodwill recognized | $ 774 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue [Member] | ||
Percentage of concentration risk | 3.48% | |
Revenue [Member] | One Customer [Member] | ||
Percentage of concentration risk | 37.20% | 12.30% |
Accounts Receivable [Member] | One Customer [Member] | ||
Percentage of concentration risk | 35.40% | |
Accounts Receivable [Member] | Two Customers [Member] | ||
Percentage of concentration risk | 20.90% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Trade Accounts Receivable | $ 9,689 | $ 6,730 |
Less Allowance for doubtful accounts | (28) | (36) |
Total Accounts Receivable (net) | $ 9,661 | $ 6,694 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 946 | $ 1,055 |
Work in process | 44 | |
Finished goods (less Allowance) | 561 | 790 |
Total inventories | $ 1,507 | $ 1,889 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment charges | ||
Amortization expense | 2,114 | 2,002 |
Impairment of goodwill | ||
Minimum [Member] | ||
Finite useful lives of amortization period | 3 years | |
Maximum [Member] | ||
Finite useful lives of amortization period | 11 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accumulated amortization | $ (11,855) | $ (9,695) |
Intangibles, net | 21,244 | 22,529 |
Goodwill [Member] | ||
Intangibles gross | 14,695 | 13,921 |
Trade Names [Member] | ||
Intangibles gross | 4,390 | 4,390 |
Customer Relationships [Member] | ||
Intangibles gross | 12,590 | 12,590 |
Intellectual Property [Member] | ||
Intangibles gross | $ 1,424 | $ 1,323 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite-lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 2,133 |
2022 | 1,507 |
2023 | 934 |
2024 | 487 |
2025 | 472 |
Thereafter | 1,056 |
Total | $ 6,589 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Payable [Member] | One Vendor [Member] | ||
Percentage of concentration risk | 92.40% | 83.00% |
Credit Facilities and Line of_2
Credit Facilities and Line of Credit (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||
Jul. 31, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | |
Line of credit outstanding amount | $ 4,914 | $ 1,365 | |
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% |
Related party Notes Payable (De
Related party Notes Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Apr. 30, 2019 | Feb. 28, 2018 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 | |
Interest expense | $ 15 | $ 49 | |||||
Note payable, related parties | 1,116 | 2,197 | |||||
Accrued interest payable | 56 | 76 | |||||
Conversion of debt | 822 | 550 | |||||
Marin Note [Member] | |||||||
Note payable, related parties | $ 660 | ||||||
Debt instruments interest rate | 1.89% | ||||||
Monthly principal payments | $ 20 | ||||||
Accrued interest payable | 56 | ||||||
Thomet Note [Member] | |||||||
Note payable, related parties | $ 750 | ||||||
Debt instruments interest rate | 0.00% | ||||||
Monthly principal payments | $ 13 | ||||||
Zicman Note [Member] | |||||||
Note payable, related parties | $ 180 | ||||||
Conversion price per share | $ 0.001 | ||||||
Debt instruments periodic payment | $ 168 | ||||||
Conversion of debt, shares | 24,000 | ||||||
Note Payable - Shareholder Convertible Note [Member] | |||||||
Note payable, related parties | 43 | 150 | $ 700 | ||||
Debt instruments interest rate | 6.00% | ||||||
Conversion price per share | $ 4.72 | ||||||
Convertible Shareholder Note [Member] | |||||||
Conversion price per share | $ 4.72 | ||||||
Conversion of debt | $ 150 | $ 400 | |||||
Common stock shares | 31,780 | 87,476 | |||||
Common stock warrants | 87,476 | ||||||
Convertible Shareholder Note One [Member] | |||||||
Conversion of debt | $ 75 | $ 200 | |||||
Common stock shares | 15,890 | 42,373 | |||||
Common stock warrants | 42,373 | ||||||
Note Payable - RWCC [Member] | |||||||
Note payable, related parties | $ 449 | ||||||
Debt instruments interest rate | 5.00% |
Related party Notes Payable - S
Related party Notes Payable - Schedule of Notes Payable, Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 |
Total notes payable | $ 1,116 | $ 2,197 | |
Less: current portion | 433 | 1,025 | |
Long Term Notes Payable | 683 | 1,172 | |
Note Payable Marin [Member] | |||
Total notes payable | 660 | 900 | |
Note Payable Thomet [Member] | |||
Total notes payable | 413 | 563 | |
Note Payable Zicman [Member] | |||
Total notes payable | 135 | ||
Note Payable - Shareholder Convertible Note [Member] | |||
Total notes payable | 43 | 150 | $ 700 |
Note Payable - RWCC [Member] | |||
Total notes payable | $ 449 |
Related party Notes Payable -_2
Related party Notes Payable - Schedule of Future Maturities of Notes Payable, Related Parties (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 433 |
2022 | 390 |
2023 | 293 |
2024 | |
Thereafter | |
Total | $ 1,116 |
Other Notes Payable (Details Na
Other Notes Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2020 | May 31, 2020 | Apr. 30, 2019 | Jul. 31, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 |
Debt instrument conversion of shares amount | $ 822 | $ 550 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Notes payable other | $ 1 | $ 143 | |||||
Third Minimum Payment [Member] | |||||||
Debt instruments periodic payment | $ 750 | ||||||
First Minimum Payment [Member] | |||||||
Debt instruments periodic payment | 350 | ||||||
Second Minimum Payment [Member] | |||||||
Debt instruments periodic payment | $ 500 | ||||||
Secured Promissory Note [Member] | |||||||
Debt instrument face amount | $ 12,500 | ||||||
Debt instruments interest rate | 12.00% | ||||||
Debt instruments periodic payment | $ 250 | ||||||
Debt instrument due date | Dec. 31, 2016 | ||||||
Note Payable - Other [Member] | Bar Code Specialties, Inc [Member] | |||||||
Debt instruments interest rate | 8.00% | ||||||
Debt instruments periodic payment | $ 5 | ||||||
Debt instrument conversion of shares amount | $ 261 | ||||||
Debt instrument conversion of shares | 37,270 | ||||||
Common stock, par value | $ 7 | ||||||
Notes payable other | $ 0 | $ 137 | |||||
Loan Agreement [Member] | Zions Bank Corporation NA [Member] | Paycheck Protection Program [Member] | |||||||
Loan borrowed amount | $ 887,500 |
Other Notes Payable - Schedule
Other Notes Payable - Schedule of Other Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total notes payable | $ 6,450 | $ 6,640 |
Less: current portion | 6,449 | 6,497 |
Other Notes Payable | 1 | 143 |
Note Payable Secured Supplier Note [Member] | ||
Total notes payable | 6,443 | 6,490 |
Notes Payable Other [Member] | ||
Total notes payable | $ 7 | $ 150 |
Other Notes Payable - Schedul_2
Other Notes Payable - Schedule of Future Maturities of Note Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
2021 | $ 433 | |
2022 | 390 | |
Thereafter | ||
Total | 6,450 | $ 6,640 |
Other Notes Payable [Member] | ||
2021 | 6,449 | |
2022 | 1 | |
Thereafter | ||
Total | $ 6,450 |
Other Liabilities (Details Narr
Other Liabilities (Details Narrative) $ in Thousands | Dec. 31, 2020USD ($) |
Other Liabilities Disclosure [Abstract] | |
Accrued obligations | $ 332 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Other vendor payable | $ 801 | $ 801 |
Dividend payable | 253 | 344 |
Bonus payable | 27 | 385 |
Others | 1,477 | 453 |
Total other liabilities | 2,558 | 1,983 |
Less Current Portion | (1,412) | (1,599) |
Total long term other liabilities | $ 1,146 | $ 384 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) $ in Thousands | Jan. 02, 2019USD ($)ft² | Dec. 31, 2020USD ($) | Oct. 21, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Incremental borrowing rate | 14.57% | ||||
Remaining lease term | 39 years 11 months 19 days | ||||
Lease liability | $ 235 | $ 79 | $ 134 | $ 235 | |
Unpaid commissions | $ 60 | ||||
Vehicle Lease [Member] | |||||
Lease provides for monthly payments | $ 1 | $ 1 | |||
Incremental borrowing rate | 14.83% | ||||
Remaining lease term | 13 months | 25 months | |||
Lease liability | $ 9 | ||||
Akron [Member] | |||||
Lease provides for monthly payments | $ 3 | $ 3 | |||
Incremental borrowing rate | 14.55% | 14.55% | |||
Remaining lease term | 41 months | 29 months | |||
Lease liability | $ 96 | ||||
Eugene [Member] | |||||
Lease provides for monthly payments | $ 4 | ||||
Incremental borrowing rate | 15.06% | ||||
Square feet of office space | ft² | 7,000 | ||||
Anaheim [Member] | |||||
Lease provides for monthly payments | $ 2 | ||||
Incremental borrowing rate | 14.83% | ||||
Remaining lease term | 12 months | ||||
Lease liability | $ 28 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Operating Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||||
ROU assets | $ 76 | $ 131 | $ 235 | $ 235 |
Lease liability | $ 79 | $ 134 | $ 235 | $ 235 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Other Information Related to Operating Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
ROU asset, Beginning balance | $ 131 | $ 235 | |||
Decrease | (11) | ||||
Amortization | (55) | (93) | |||
ROU asset, Ending balance | 76 | 131 | |||
Lease liability, Beginning balance | 134 | 235 | |||
Decrease | (11) | ||||
Amortization | (55) | (90) | |||
Lease liability, Ending balance | 79 | 134 | |||
Lease liability: Short term | $ 31 | $ 54 | |||
Lease liability: Long term | 48 | 80 | |||
Total | $ 134 | $ 235 | $ 79 | $ 134 | $ 235 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||||
2021 | $ 41 | |||
2022 | 38 | |||
2023 | 16 | |||
Thereafter | ||||
Total | 95 | |||
Less interest | (16) | |||
Present value of future minimum lease payments | 79 | $ 134 | $ 235 | $ 235 |
Less current obligations | (31) | (54) | ||
Long term lease obligations | $ 48 | $ 80 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 29, 2020 | Nov. 20, 2019 | Nov. 11, 2019 | Sep. 30, 2019 | Apr. 09, 2019 | Sep. 30, 2020 | Aug. 31, 2020 | Jun. 30, 2020 | Apr. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 30, 2019 | Nov. 17, 2014 |
Value of stock converted during period | $ 822 | $ 150 | ||||||||||||
Common stock, price per share | $ 0.001 | $ 0.001 | ||||||||||||
Number of shares for services | ||||||||||||||
Number of shares for services, value | $ 1,640 | |||||||||||||
Stock issued under employee stock purchase plan, shares | ||||||||||||||
Value issued under employee stock purchase plan | $ 1 | $ 1 | ||||||||||||
Stock options exercised during period shares | 66,750 | |||||||||||||
Stock options granted exercise price per share | $ 5 | |||||||||||||
Reverse split description | one-for-20 reverse stock split | |||||||||||||
Debt instrument conversion of shares amount | $ 822 | $ 550 | ||||||||||||
Stock issued during the period, value | 3,407 | |||||||||||||
Aggregate gross proceeds from issuance of stock | $ 3,770 | |||||||||||||
Warrants exercise price | $ 8.37 | $ 8.37 | ||||||||||||
Number of common stock shares granted | 775,000 | 127,500 | ||||||||||||
Minimum [Member] | ||||||||||||||
Expected stock price volatility | 156.00% | |||||||||||||
Expected term | 4 years | |||||||||||||
Risk-free interest rate | 1.40% | |||||||||||||
Maximum [Member] | ||||||||||||||
Expected stock price volatility | 157.00% | |||||||||||||
Expected term | 5 years 6 months | |||||||||||||
Risk-free interest rate | 2.31% | |||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Common stock, price per share | $ 0.001 | |||||||||||||
Aggregate gross proceeds from issuance of stock | $ 5,000 | |||||||||||||
Purchase price unit | $ 6 | |||||||||||||
Number of warrants to purchase common stock | 833,333 | 891,667 | ||||||||||||
Warrants exercise price | $ 7 | $ 7 | ||||||||||||
Warrant term | 5 years 6 months | 5 years 6 months | ||||||||||||
Board of Directors [Member] | ||||||||||||||
Preferred stock voting rights | The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. | The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 13 common shares. | ||||||||||||
Board of Directors [Member] | Share Purchase Option Plan [Member] | ||||||||||||||
Maximum number of common shares reserved for issuance | 500,000 | |||||||||||||
Number of common stock shares granted | 500,000 | |||||||||||||
Mr. Lustgarten [Member] | Letter Agreement [Member] | ||||||||||||||
Reverse split description | Effective November 11, 2019, we implemented a one-for-20 reverse stock split of the Company's common stock. | |||||||||||||
Walefar [Member] | HTS [Member] | Convertible Note Payable [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 75 | |||||||||||||
Debt convertible price per share | $ 0.236 | $ 0.236 | ||||||||||||
Debt instrument conversion of shares | 317,796 | |||||||||||||
Campbeltown [Member] | HTS [Member] | Convertible Note Payable [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 75 | |||||||||||||
Debt convertible price per share | $ 0.236 | $ 0.236 | ||||||||||||
Debt instrument conversion of shares | 317,796 | |||||||||||||
Principal Stockholder [Member] | Securities Purchase Agreement [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 200 | |||||||||||||
Walefar and Campbeltown [Member] | ||||||||||||||
Debt instrument conversion of shares amount | $ 150 | |||||||||||||
2018 Equity Incentive Plan [Member] | Mr. Lustgarten [Member] | ||||||||||||||
Number of stock issued | 50,000 | |||||||||||||
Stock issued during the period, value | $ 250 | |||||||||||||
2018 Equity Incentive Plan [Member] | Mr. Nissensohn [Member] | ||||||||||||||
Number of stock issued | 27,500 | |||||||||||||
Stock issued during the period, value | $ 138 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Value of stock converted during period | ||||||||||||||
Stock converted during period shares | 190,365 | 118,000 | 32,000 | |||||||||||
Number of stock issued | 833,000 | |||||||||||||
Number of shares for services | 302,000 | |||||||||||||
Number of shares for services, value | $ 1 | |||||||||||||
Stock issued under employee stock purchase plan, shares | ||||||||||||||
Value issued under employee stock purchase plan | ||||||||||||||
Stock options exercised during period shares | 216,750 | 0 | ||||||||||||
Stock issued during the period, value | $ 1 | |||||||||||||
Common Stock [Member] | Eyepax IT Consulting, LLC [Member] | ||||||||||||||
Stock issued under business acquisition | 80,000 | |||||||||||||
Common Stock [Member] | Equity Incentive Plan [Member] | ||||||||||||||
Number of stock issued | 1,000,000 | |||||||||||||
Common stock, price per share | $ 0.001 | |||||||||||||
Common Stock [Member] | Equity Incentive Plan [Member] | Consultants and Advisors [Member] | ||||||||||||||
Number of shares for services | 336,146 | |||||||||||||
Number of shares for services, value | $ 1,600 | |||||||||||||
Common Stock [Member] | Employee Stock Purchase Plan [Member] | ||||||||||||||
Stock issued under employee stock purchase plan, shares | 302 | 287 | ||||||||||||
Value issued under employee stock purchase plan | $ 1 | $ 1 | ||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Employees, Officers and Directors [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 745,000 | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Mr. Shai Lustgarten [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 230,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.84 | $ 4.40 | ||||||||||||
Stock options granted term | 5 years | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Mr. Neev Nissenson [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 40,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.40 | |||||||||||||
Stock options granted term | 10 years | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Mr. Carlos J. Nissenson [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 150,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.84 | $ 4.40 | ||||||||||||
Stock options granted term | 5 years | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Andy MacMillan [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 10,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.40 | |||||||||||||
Stock options granted term | 10 years | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Yaron Shalem [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 10,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.40 | |||||||||||||
Stock options granted term | 10 years | |||||||||||||
Common Stock [Member] | 2020 Equity Incentive Plan [Member] | Other Employees and Consultants [Member] | ||||||||||||||
Stock options granted to purchase common stock shares | 305,000 | |||||||||||||
Stock options granted exercise price per share | $ 4.40 | |||||||||||||
Stock options granted term | 10 years | |||||||||||||
Warrant [Member] | ||||||||||||||
Stock options exercised during period shares | 90,691 | 56,248 | ||||||||||||
Warrants and rights outstanding | $ 2,900 | |||||||||||||
Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||||||
Number of warrants to purchase common stock | 128,000 | |||||||||||||
Warrants and rights outstanding | $ 564 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock shares authorized | 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 shares authorized | 1 | 1 | ||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||
Preferred stock shares outstanding | 0 | 0 | ||||||||||||
Preferred stock conversion, description | The Series C Preferred Stock has a liquidation value and conversion price of $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) and automatically converts into Common Stock at $1.00 per share ($20.00 per 20 shares of preferred stock which convert to one share of common stock) in the event that the Company's common stock has a closing price of $30 per share for 20 consecutive trading days. | |||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | ||||||||||||
Preferred stock, shares issued | 2,145,030 | 4,828,530 | ||||||||||||
Preferred stock shares outstanding | 2,145,030 | 4,828,530 | ||||||||||||
Dividend rate per annum | $ 0.06 | $ 0.06 | ||||||||||||
Liquidation preference per share | $ 1 | $ 1 | ||||||||||||
Accrued dividends | $ 283 | $ 253 | $ 344 | |||||||||||
Value of stock converted during period | $ 2,700 | |||||||||||||
Stock converted during period shares | 2,683,500 | |||||||||||||
Preferred stock, conversion price per share | $ 1 | |||||||||||||
Preferred stock closing price per shares | $ 30 | |||||||||||||
Number of stock issued | ||||||||||||||
Number of shares for services | ||||||||||||||
Number of shares for services, value | ||||||||||||||
Stock issued under employee stock purchase plan, shares | ||||||||||||||
Value issued under employee stock purchase plan | ||||||||||||||
Stock issued during the period, value |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of warrants, Outstanding, Beginning of period | 1,166,667 | 275,000 |
Number of warrants, Warrants granted | 375,000 | 891,667 |
Number of warrants, Warrants expired | 25,000 | |
Number of warrants, Warrants cancelled, forfeited | ||
Number of warrants, Warrants exercised | 150,000 | |
Number of warrants, Outstanding, End of period | 1,366,667 | 1,166,667 |
Number of warrants, Exercisable warrants | 1,200,001 | 1,166,667 |
Weighted Average Exercise Price balance, Outstanding, Beginning of period | $ 6.42 | $ 4.55 |
Weighted Average Exercise Price, Warrants granted | 7 | |
Weighted Average Exercise Price, Warrants expired | ||
Weighted Average Exercise Price, Warrants cancelled, forfeited | ||
Weighted Average Exercise Price, Warrants exercised | ||
Weighted Average Exercise Price, Outstanding, End of period | 7.19 | 6.42 |
Weighted Average Exercise Price, Exercisable warrants | $ 7.14 | $ 6.42 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Warrants (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Range of Exercise Prices, Upper Range Limit | $ 14 |
Range of Exercise Prices, Lower Range Limit | $ 2.20 |
Weighted Average residual life span (in years) | 3 years 11 months 4 days |
Outstanding Warrants | shares | 1,366,667 |
Weighted Average Exercise Price | $ 8.12 |
Exercisable Warrants | shares | 1,200,001 |
Weighted Average Exercise Price | $ 8.12 |
Exercise Price Range 1 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.20 |
Weighted Average residual life span (in years) | 7 months 2 days |
Outstanding Warrants | shares | 75,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercisable Warrants | shares | 75,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercise Price Range 2 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 7 |
Weighted Average residual life span (in years) | 3 years 9 months 7 days |
Outstanding Warrants | shares | 891,667 |
Weighted Average Exercise Price | $ 7 |
Exercisable Warrants | shares | 891,667 |
Weighted Average Exercise Price | $ 7 |
Exercise Price Range 3 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 7.50 |
Weighted Average residual life span (in years) | 5 years 8 months 5 days |
Outstanding Warrants | shares | 250,000 |
Weighted Average Exercise Price | $ 7.50 |
Exercisable Warrants | shares | 83,334 |
Weighted Average Exercise Price | $ 7.50 |
Exercise Price Range 4 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 8 |
Weighted Average residual life span (in years) | 1 year 1 month 27 days |
Outstanding Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 8 |
Exercisable Warrants | shares | 10,000 |
Weighted Average Exercise Price | $ 8 |
Exercise Price Range 5 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 2 years 2 months 19 days |
Outstanding Warrants | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Exercisable Warrants | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Exercise Price Range 6 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 14 |
Weighted Average residual life span (in years) | 1 month 27 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 | Dec. 31, 2020 | Dec. 31, 2019 |
Warrant Exercise Prices | $ 8.37 | $ 8.37 |
Warrant Outstanding | 1,366,667 | 1,166,667 |
June 26, 2020 [Member] | ||
Warrant Expiry Date | Jun. 26, 2020 | Jun. 26, 2020 |
Warrant Exercise Prices | $ 5.60 | $ 5.60 |
Warrant Outstanding | 10,000 | |
October 10, 2020 [Member] | ||
Warrant Expiry Date | Oct. 10, 2020 | Oct. 10, 2020 |
Warrant Exercise Prices | $ 12 | $ 12 |
Warrant Outstanding | 15,000 | |
December 30, 2020 [Member] | ||
Warrant Expiry Date | Dec. 30, 2020 | Dec. 30, 2020 |
Warrant Exercise Prices | $ 4 | $ 4 |
Warrant Outstanding | 150,000 | |
February 02, 2021 [Member] | ||
Warrant Expiry Date | Feb. 2, 2021 | Feb. 2, 2021 |
Warrant Exercise Prices | $ 14 | $ 14 |
Warrant Outstanding | 15,000 | 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 | |
May 18, 2023 [Member] | ||
Warrant Expiry Date | May 18, 2023 | May 18, 2023 |
Warrant Exercise Prices | $ 10 | $ 10 |
Warrant Outstanding | 50,000 | |
October 14, 2023 [Member] | ||
Warrant Expiry Date | Oct. 14, 2023 | Oct. 14, 2023 |
Warrant Exercise Prices | $ 10 | $ 10 |
Warrant Outstanding | 50,000 | |
October 6, 2024 [Member] | ||
Warrant Expiry Date | Oct. 6, 2024 | Oct. 6, 2024 |
Warrant Exercise Prices | $ 7 | $ 7 |
Warrant Outstanding | 891,667 | |
September 1, 2025 [Member] | ||
Warrant Expiry Date | Sep. 1, 2025 | Sep. 1, 2025 |
Warrant Exercise Prices | $ 7.50 | $ 7.50 |
Warrant Outstanding | 83,334 | |
June 4, 2026 [Member] | ||
Warrant Expiry Date | Jun. 4, 2026 | Jun. 4, 2026 |
Warrant Exercise Prices | $ 7.50 | $ 7.50 |
Warrant Outstanding | 83,333 | |
December 4, 2027 [Member] | ||
Warrant Expiry Date | Dec. 4, 2027 | Dec. 4, 2027 |
Warrant Exercise Prices | $ 7.50 | $ 7.50 |
Warrant Outstanding | 83,333 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Stock Options Granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of stock options, Outstanding, Beginning of period | 1,133,550 | 1,006,050 |
Number of stock options, Stock options granted | 775,000 | 127,500 |
Number of stock options, Stock options expired | ||
Number of stock options, Stock options cancelled, forfeited | 30,250 | |
Number of stock options, Stock options exercised | 66,750 | |
Number of stock options, Outstanding, End of period | 1,811,550 | 1,133,550 |
Number of stock options, Exercisable stock options | 999,988 | 952,425 |
Weighted Average Exercise Price, Outstanding, Beginning of period | $ 4 | $ 3.80 |
Weighted Average Exercise Price, Stock options granted | 5 | |
Weighted Average Exercise Price, Stock options expired | ||
Weighted Average Exercise Price, Stock options cancelled, forfeited | ||
Weighted Average Exercise Price, Stock options exercised | ||
Weighted Average Exercise Price, Outstanding, End of period | 4.32 | 4 |
Weighted Average Exercise Price, Exercisable stock options | $ 4.05 | $ 3.94 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Outstanding Stock Options (Details) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Range of Exercise Prices, Lower Range Limit | $ 1.7 |
Weighted Average residual life span (in years) | 5 years 3 months 26 days |
Outstanding Stock Options | shares | 1,811,550 |
Weighted Average Exercise Price | $ 4.05 |
Exercisable Stock Options | shares | 999,988 |
Weighted Average Exercise Price | $ 5.32 |
Exercise Price Range 1 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 1.70 |
Weighted Average residual life span (in years) | 1 year 1 month 16 days |
Outstanding Stock Options | shares | 114,050 |
Weighted Average Exercise Price | $ 1.70 |
Exercisable Stock Options | shares | 114,050 |
Weighted Average Exercise Price | $ 1.70 |
Exercise Price Range 2 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.20 |
Weighted Average residual life span (in years) | 7 months 2 days |
Outstanding Stock Options | shares | 175,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercisable Stock Options | shares | 175,000 |
Weighted Average Exercise Price | $ 2.20 |
Exercise Price Range 3 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 2.40 |
Weighted Average residual life span (in years) | 2 years 2 months 5 days |
Outstanding Stock Options | shares | 272,000 |
Weighted Average Exercise Price | $ 2.40 |
Exercisable Stock Options | shares | 272,000 |
Weighted Average Exercise Price | $ 2.40 |
Exercise Price Range 4 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 4.20 |
Weighted Average residual life span (in years) | 4 years 3 months 19 days |
Outstanding Stock Options | shares | 10,000 |
Weighted Average Exercise Price | $ 4.20 |
Exercisable Stock Options | shares | 5,000 |
Weighted Average Exercise Price | $ 4.20 |
Exercise Price Range 5 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 4.40 |
Weighted Average residual life span (in years) | 8 years 4 months 20 days |
Outstanding Stock Options | shares | 454,250 |
Weighted Average Exercise Price | $ 4.40 |
Exercisable Stock Options | shares | 88,000 |
Weighted Average Exercise Price | $ 4.40 |
Exercise Price Range 6 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 4.84 |
Weighted Average residual life span (in years) | 9 years 9 months |
Outstanding Stock Options | shares | 380,000 |
Weighted Average Exercise Price | $ 4.84 |
Exercisable Stock Options | shares | |
Weighted Average Exercise Price | $ 4.84 |
Exercise Price Range 7 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 5 |
Weighted Average residual life span (in years) | 2 years 6 months 7 days |
Outstanding Stock Options | shares | 147,500 |
Weighted Average Exercise Price | $ 5 |
Exercisable Stock Options | shares | 87,188 |
Weighted Average Exercise Price | $ 5 |
Exercise Price Range 8 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 5.40 |
Weighted Average residual life span (in years) | 2 years 11 months 1 day |
Outstanding Stock Options | shares | 133,750 |
Weighted Average Exercise Price | $ 5.40 |
Exercisable Stock Options | shares | 133,750 |
Weighted Average Exercise Price | $ 5.40 |
Exercise Price Range 9 [Member] | |
Range of Exercise Prices, Upper Range Limit | $ 10 |
Weighted Average residual life span (in years) | 3 years 10 months 21 days |
Outstanding Stock Options | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Exercisable Stock Options | shares | 125,000 |
Weighted Average Exercise Price | $ 10 |
Stockholders' Equity - Schedu_6
Stockholders' Equity - Schedule of Stock Options, Expiry Date and Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock option exercise prices | $ 4.32 | $ 4 | $ 3.80 |
Stock option outstanding | 1,811,550 | 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 [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 | |
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 | ||
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 | 272,000 | 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 | 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 | 89,250 | 108,250 | |
November 30, 2023 [Member] | |||
Stock option expiration date | Nov. 30, 2023 | Nov. 30, 2023 | |
Stock option exercise prices | $ 5.40 | $ 5.40 | |
Stock option outstanding | 133,750 | 143,750 | |
November 20, 2024 [Member] | |||
Stock option expiration date | Nov. 20, 2024 | Nov. 20, 2024 | |
Stock option exercise prices | $ 10 | $ 10 | |
Stock option outstanding | 125,000 | 125,000 | |
April 20, 2025 [Member] | |||
Stock option expiration date | Apr. 20, 2025 | Apr. 20, 2025 | |
Stock option exercise prices | $ 4.20 | $ 4.20 | |
Stock option outstanding | 10,000 | ||
September 30, 2030 [Member] | |||
Stock option expiration date | Sep. 30, 2030 | Sep. 30, 2030 | |
Stock option exercise prices | $ 4.40 | $ 4.40 | |
Stock option outstanding | 365,000 | ||
September 30, 2030 [Member] | |||
Stock option expiration date | Sep. 30, 2030 | Sep. 30, 2030 | |
Stock option exercise prices | $ 4.84 | $ 4.84 | |
Stock option outstanding | 380,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Stock compensation | $ 388 | |
Stock Option vesting | 709 | 879 |
Total | $ 709 | $ 1,267 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - Consulting Agreement [Member] - Mr. Carlos J. Nissenson [Member] $ in Thousands | 2 Months Ended |
Feb. 28, 2020USD ($) | |
Debt monthly payment | $ 30 |
Equity component description | If we procure debt financing during the term of Mr. Nissensohn's agreement, without any equity component, Mr. Nissensohn shall be entitled to 3% of the gross funds raised, however if we are required to pay a success fee to another external entity, then Mr. Nissensohn shall be entitled to only 2% of the gross funds raised. |
Share capital percentage | 3.00% |
Proceeds from equity financing | $ 3,000 |
Warrant exercise price percentage | 100.00% |
Payment of financing | $ 80 |
Total transaction price percentage | 3.00% |
Income Tax (Details Narrative)
Income Tax (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current income tax provision | $ 5 | $ 14 |
Valuation allowance for deferred tax assets | $ 8,300 | 5,400 |
Net operating loss (NOL) carryforward | $ 22,100 | |
Description of (NOL) carryforward and ownership changes | The NOL carryforward begins to expire in 2024. Under Section 382 of the Internal Revenue Code of 1986, as amended ("IRC Section 382"), a corporation that undergoes an "ownership change" is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income. Within the meaning of IRC Section 382, an "ownership change" occurs when the aggregate stock ownership of certain stockholders (generally 5% shareholders, applying certain look-through rules and aggregation rules which combine unrelated shareholders that do not individually own 5% or more of the corporation's stock into one or more "public groups" that may be treated as 5-percent shareholder) increases by more than 50 percentage points over such stockholders' lowest percentage ownership during the testing period (generally three years). |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Reserves and deferred revenue | $ 258 | $ 238 |
163(J) Limitation | 1,446 | 664 |
Stock options | 0 | |
Net operating loss | 7,240 | 5,319 |
Total gross deferred tax assets | 8,944 | 6,221 |
Less: Valuation Allowance | (8,325) | (5,414) |
Net deferred tax assets | 619 | 807 |
Amortization of intangible assets and depreciation | (619) | (807) |
Total deferred tax liabilities | (619) | (807) |
Net deferred tax assets |
Income Tax - Schedule of Defe_2
Income Tax - Schedule of Deferred Tax Assets and Valuation Allowances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 8,325 | $ 5,414 |
Valuation allowance | (8,325) | (5,414) |
Net deferred tax assets |
Income Tax - Schedule of Reconc
Income Tax - Schedule of Reconciliation of Statutory Rate and Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory tax rate | 21.00% | 21.00% |
State taxes | 4.42% | 1.41% |
Foreign income taxes | 0.00% | 0.00% |
Nondeductible items | (1.89%) | (11.52%) |
Acquisition accounting adjustments | 0.00% | 0.00% |
Change in valuation allowance | (29.71%) | 13.48% |
Return to provision adjustments | 1.66% | (25.33%) |
Rate Change | 4.03% | 0.00% |
Other | 0.44% | 0.56% |
Effective tax rate | (0.06%) | (0.40%) |