Filed: 15 May 19

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Mar. 31, 2019Apr. 30, 2019
Document And Entity Information
Entity Registrant NameBALLANTYNE STRONG, INC.
Entity Central Index Key0000946454
Document Type10-Q
Document Period End DateMar. 31,
2019
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Filer CategoryNon-accelerated Filer
Entity Small Business Flagtrue
Entity Emerging Growth Companyfalse
Entity Ex Transition Periodfalse
Entity Common Stock, Shares Outstanding14,518,756
Trading SymbolBTN
Document Fiscal Period FocusQ1
Document Fiscal Year Focus2019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Current assets:
Cash and cash equivalents $ 4,989 $ 6,698
Restricted cash350 350
Accounts receivable (net of allowance for doubtful accounts of $1,624 and $1,832 respectively)12,394 13,841
Inventories, net3,615 3,490
Recoverable income taxes735 281
Other current assets1,876 1,663
Total current assets23,959 26,323
Property, plant and equipment (net of accumulated depreciation of $8,687 and $9,046, respectively)10,298 14,483
Operating lease right-of-use assets9,588
Finance lease right-of-use assets839 692
Equity method investments10,450 11,167
Intangible assets, net1,748 1,795
Goodwill894 875
Notes receivable3,455 3,965
Other assets326 337
Total assets61,557 59,637
Current liabilities:
Accounts payable4,092 4,724
Accrued expenses2,709 2,782
Short-term debt3,340 3,152
Current portion of long-term debt923 1,094
Current portion of operating lease obligations1,833
Current portion of finance lease obligations181 160
Deferred revenue and customer deposits2,323 2,310
Total current liabilities15,401 14,222
Long-term debt, net of current portion and debt issuance costs3,645 10,053
Operating lease obligations, net of current portion8,042
Finance lease obligations, net of current portion590 427
Deferred revenue and customer deposits, net of current portion1,171 1,167
Deferred income taxes2,577 2,516
Other accrued expenses, net of current portion87 254
Total liabilities31,513 28,639
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, par value $.01 per share; authorized 1,000 shares, none outstanding
Common stock, par value $.01 per share; authorized 25,000 shares; issued 17,313 and 17,237 shares at March 31, 2019 and December 31, 2018, respectively; outstanding 14,519 and 14,443 shares at March 31, 2019 and December 31, 2018, respectively169 169
Additional paid-in capital41,717 41,474
Accumulated other comprehensive income (loss):
Foreign currency translation(5,051)(5,308)
Postretirement benefit obligations127 125
Unrealized loss on available-for-sale securities of equity method investment(286)(195)
Retained earnings11,954 13,319
Stockholder's equity before treasury stock48,630 49,584
Less 2,794 of common shares in treasury, at cost(18,586)(18,586)
Total stockholders' equity30,044 30,998
Total liabilities and stockholders' equity $ 61,557 $ 59,637

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts $ 1,624 $ 1,832
Property, plant and equipment, accumulated depreciation $ 8,687 $ 9,046
Preferred stock par value$ .01$ .01
Preferred stock, shares authorized1,000,000 1,000,000
Preferred stock, shares outstanding
Common stock par value$ .01$ .01
Common stock, shares authorized25,000,000 25,000,000
Common stock, shares issued17,313,000 17,237,000
Common stock, shares outstanding14,519,000 14,443,000
Common shares in treasury, shares2,794,000 2,794,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Total net revenues $ 14,306 $ 15,828
Total cost of revenues11,661 12,978
Gross profit2,645 2,850
Selling and administrative expenses:
Selling1,228 1,225
Administrative3,929 4,709
Total selling and administrative expenses5,157 5,934
Loss on disposal of assets(64)
Loss from operations(2,576)(3,084)
Other income (expense):
Interest expense(119)(45)
Fair value adjustment to notes receivable(510)(42)
Foreign currency transaction (loss) gain(143)104
Other income (expense), net36 (10)
Total other (expense) income(736)7
Loss before income taxes and equity method investment loss(3,312)(3,077)
Income tax expense141 698
Equity method investment loss(697)(10)
Net loss $ (4,150) $ (3,785)
Basic loss per share $ (0.29) $ (0.26)
Diluted loss per share $ (0.29) $ (0.26)
Weighted-average shares used in computing net loss per share:
Basic14,438 14,341
Diluted14,438 14,341
Product [Member]
Total net revenues $ 5,579 $ 8,639
Total cost of revenues3,523 5,812
Service [Member]
Total net revenues8,727 7,189
Total cost of revenues $ 8,138 $ 7,166

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net loss $ (4,150) $ (3,785)
Adjustment to postretirement benefit obligation2 9
Unrealized loss on available-for-sale securities of equity method investments, net of tax(91)(52)
Currency translation adjustment:
Unrealized net change arising during period257 (467)
Total other comprehensive income (loss)168 (510)
Comprehensive loss $ (3,982) $ (4,295)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in ThousandsCommon Stock [Member]Additional Paid-In Capital [Member]Retained Earnings [Member]Treasury Stock [Member]Accumulated Other Comprehensive Income (Loss) [Member]Total
Balance at Dec. 31, 2017 $ 169 $ 40,565 $ 25,570 $ (18,586) $ (3,596) $ 44,122
Net loss (3,785) (3,785)
Net other comprehensive income (loss) (510)(510)
Cumulative effect of adoption of ASC 606 76 76
Stock-based compensation expense 255 255
Balance at Mar. 31, 2018169 40,820 21,861 (18,586)(4,106)40,158
Balance at Dec. 31, 2018169 41,474 13,319 (18,586)(5,378)30,998
Net loss (4,150) (4,150)
Net other comprehensive income (loss) 168 168
Cumulative effect of adoption of ASC 842 2,785 2,785
Stock-based compensation expense 243 243
Balance at Mar. 31, 2019 $ 169 $ 41,717 $ 11,954 $ (18,586) $ (5,210) $ 30,044

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Cash flows from operating activities:
Net loss $ (4,150) $ (3,785)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts, net of recoveries(310)103
Provision for obsolete inventory53 44
Provision for warranty67 79
Depreciation and amortization795 524
Amortization and accretion of operating leases579
Fair value adjustment to notes receivable510 42
Equity method investment loss697 10
Recognition of contract acquisition costs 57
Loss on disposal of assets64
Deferred income taxes50 87
Stock-based compensation expense243 255
Changes in operating assets and liabilities:
Accounts receivable1,819 (178)
Inventories(145)537
Other current assets2 5
Accounts payable(592)256
Accrued expenses(13)429
Operating lease obligations(590)
Deferred revenue and customer deposits11 704
Current income taxes(444)36
Other assets(71)(796)
Net cash used in operating activities(1,425)(1,591)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment86
Dividends received from investee in excess of cumulative earnings 23
Capital expenditures(257)(356)
Net cash used in investing activities(171)(333)
Cash flows from financing activities:
Proceeds from issuance of long-term debt237
Principal payments on short-term debt(79)
Principal payments on long-term debt(245)(16)
Payments on capital lease obligations(49)(53)
Net cash used in financing activities(136)(69)
Effect of exchange rate changes on cash and cash equivalents23 471
Net decrease in cash and cash equivalents and restricted cash(1,709)(1,522)
Cash and cash equivalents and restricted cash at beginning of period7,048 4,870
Cash and cash equivalents and restricted cash at end of period5,339 3,348
Components of cash and cash equivalents and restricted cash:
Cash and cash equivalents4,989 3,348
Restricted cash350
Total cash and cash equivalents and restricted cash5,339 3,348
Supplemental disclosure of non-cash investing and financing activities:
Term loan borrowings to finance equipment purchases198
Capital lease obligations for property and equipment232
Short-term borrowings to finance insurance $ 202

Nature of Operations

Nature of Operations3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations1. Nature of Operations Ballantyne Strong, Inc.
(“Ballantyne” or the “Company”), a Delaware corporation, is a holding company with diverse business activities
focused on serving the cinema, retail, financial, advertising and government markets. The Company, and its wholly owned subsidiaries
Strong Technical Services, Inc., Strong/MDI Screen Systems, Inc. (“Strong/MDI”), Convergent Media Systems Corporation
(“Convergent”) and Strong Digital Media, LLC design, integrate and install technology solutions for a broad range
of applications; develop and deliver out-of-home messaging, advertising and communications; manufacture projection screens; and
provide managed services including monitoring of networked equipment to our customers.

Summary of Significant Accounti

Summary of Significant Accounting Policies3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies2. Summary of Significant Accounting Policies Basis of Presentation and Principles
of Consolidation The condensed consolidated
financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries.
All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated
financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do
not include all of the disclosures normally required by accounting principles generally accepted in the United States of America
(also referred to as “GAAP”) for annual reporting purposes or those made in the Company’s Annual Report on Form
10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements
and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The condensed consolidated
balance sheet as of December 31, 2018 was derived from the Company’s audited consolidated balance sheet as of that date.
All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect
all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of
operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of
trends or results expected for a full year. Use of Management Estimates The preparation of consolidated
financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position
in future periods. Restricted Cash Restricted cash represents
amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program. Accounts Receivable Trade accounts receivable
are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based
on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects
the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt
expense to be adjusted accordingly. Equity Method Investments We apply the equity method
of accounting to investments when we have significant influence, but not controlling interest, in the investee. Judgment regarding
the level of influence over each equity method investment includes considering key factors such as ownership interest, representation
on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s
proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity
method investment income (loss)” in our condensed consolidated statements of operations. The carrying value of our equity
method investments is reported in “equity method investments” in the condensed consolidated balance sheets. The Company’s
equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income
or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one quarter
lag for all equity method investments. The Company classifies distributions received from equity method investments using the cumulative
earnings approach on the condensed consolidated statements of cash flows. The Company assesses investments for impairment whenever
events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Management reviewed
the underlying net assets of the equity investments during the three month period ended March 31, 2019 and determined that the
Company’s proportionate economic interest in the investments indicate that the investments were not other than temporarily
impaired. Note 6 contains additional information on our equity method investments. Fair Value of Financial Instruments Assets and liabilities
measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an
asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing
the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified
and disclosed in one of the following three categories:
● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities
● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present
the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair
value measurements are classified, as of March 31, 2019 and December 31, 2018. Fair values measured on
a recurring basis at March 31, 2019 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 4,989 $ - $ - $ 4,989
Restricted cash 350 - - 350
Notes receivable - - 3,455 3,455
Total $ 5,339 $ - $ 3,455 $ 8,794 Fair values measured on
a recurring basis at December 31, 2018 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 6,698 $ - $ - $ 6,698
Restricted cash 350 - 350
Notes receivable - - 3,965 3,965
Total $ 7,048 $ - $ 3,965 $ 11,013 The following table reconciles
the beginning and ending balance of the Company’s notes receivable at fair value (in thousands):
Three Months Ended March 31,
2019 2018
Notes receivable balance, beginning of period $ 3,965 $ 2,815
Fair value adjustment (510 ) (42 )
Notes receivable balance, end of period $ 3,455 $ 2,773 Quantitative information
about the Company’s level 3 fair value measurements at March 31, 2019 is set forth below (in thousands):
Fair value at March 31, 2019 Valuation technique Unobservable input Value
Notes receivable $ 3,455 Discounted cash flow Default percentage 39 %
Discount rate 18 % During 2011, the Company
entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of
digital projection equipment. The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular
year is added to the principal and also accrues interest at 15%. The notes receivable are recorded at estimated fair value. In
order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes
receivable on a quarterly basis. The Company recorded decreases to the fair value of the notes receivable of approximately $0.5
million and $42 thousand, respectively, recorded in other expense in the Company’s condensed consolidated statement of operations
during the three months ended March 31, 2019 and 2018, respectively. The significant unobservable
inputs used in the fair value measurement of the Company’s notes receivable are discount rate and percentage of default.
Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value
measurement. The Company’s short-term
and long-term debt is recorded at historical cost. As of March 31, 2019, the Company’s long-term debt, including current
maturities, had a carrying value of $4.6 million. Based on discounted cash flows using current quoted interest rates (Level 2 of
the fair value hierarchy), the estimated fair value at March 31, 2019 was $4.1 million. The carrying values of
all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt,
reported in the condensed consolidated balance sheets equal or approximate their fair values due to the short-term nature of these
instruments. Note 6 includes fair value information related to our equity method investments. All non-financial assets that are
not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived
assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). The Company did
not have any significant non-recurring measurements of non-financial assets or liabilities during the three months ended March
31, 2019 or 2018. Recently Adopted Accounting Pronouncements In February 2016, the Financial
Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases (Topic 842),” which was further clarified
by ASU 2018-11, “Leases – Targeted Improvements,” issued in July 2018. ASU 2016-02 requires lessees to recognize
a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months,
on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018 and initially required a modified
retrospective transition method under which entities would initially apply Topic 842 at the beginning of the earliest period presented
in the financial statements. ASU 2018-11 added an additional optional transition method allowing entities to apply Topic 842 as
of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of
adoption. The Company adopted Topic 842 using the optional transition method from ASU 2018-11 as of January 1, 2019. Upon adoption,
the Company recorded a balance sheet gross-up of approximately $4.7 million to record operating lease liabilities and related right-of-use
assets. In addition, the sale-leaseback of the Company’s Alpharetta, Georgia office facility in June 2018, which did not
qualify for sale-leaseback accounting under the previous lease accounting standard, qualified for sale-leaseback accounting under
Topic 842, as Topic 842 eliminated the concept of continuing involvement by the seller-lessee precluding sale-leaseback accounting.
Upon adoption, the Company recorded a cumulative effect adjustment increasing retained earnings by approximately $2.8 million,
which represents the gain on the sale of the facility. The Company also derecognized approximately $4.0 million of net land and
building assets and approximately $6.8 million of debt associated with the previous accounting as a failed sale-leaseback, and
recorded approximately $5.0 million of operating lease right-of-use assets and liabilities for the leaseback under Topic 842. See
Note 11 for more information about the Company’s leases. In August 2018, the Securities
and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update
and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or
superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for
interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented
in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning
balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule
is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly
reports, the SEC did not object to filers deferring the presentation of changes in stockholders’ equity in their quarterly
reports on Forms 10-Q until the quarter beginning after November 5, 2018. The Company elected to provide the required disclosure
in a separate statement of stockholders’ equity beginning with this Form 10-Q. In January 2017, the FASB
issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The
new guidance eliminates Step 2 of the goodwill impairment testing which requires the fair value of individual assets and liabilities
of a reporting unit to be determined when measuring goodwill impairment. The new guidance may result in different amounts of impairment
that could be recognized compared to existing guidance. In addition, failing step 1 of the impairment test may not result in impairment
under existing guidance. However, under the revised guidance, failing step 1 will always result in a goodwill impairment. ASU 2017-04
is to be applied prospectively for goodwill impairment testing performed in years beginning after December 15, 2019 with early
adoption permitted. The Company adopted ASU 2017-04 in the first quarter of 2019. Adoption of ASU 2017-04 did not significantly
impact the Company’s results of operations or financial position. Recently Issued Accounting Pronouncements In June 2016, the FASB
issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments.” This ASU will require the measurement of all expected credit losses for financial assets, including trade
receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.
The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal
years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial
position.

Revenue

Revenue3 Months Ended
Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Revenue3. Revenue The Company accounts for revenue using the following
steps:
● Identify the contract, or contracts, with a customer
● Identify the performance obligations in the contract
● Determine the transaction price
● Allocate the transaction price to the identified performance obligations
● Recognize revenue when, or as, the Company satisfies the performance obligations The Company combines contracts
with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time
and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or
the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items
are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there
is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the
identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone
selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated
selling price using a cost plus margin approach. The Company estimates the amount of total contract consideration it expects to
receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected
quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some
or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being
performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. As discussed in more detail
below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is
measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.
The Company does not have any material extended payment terms as payment is due at or shortly after the time of the sale. Observable
prices are used to determine the standalone selling price of separate performance obligations, or a cost plus margin approach is
used when observable prices are not available. Sales, value-added and other taxes collected concurrently with revenue producing
activities are excluded from revenue. The Company recognizes
contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients.
Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration.
A contract liability is recognized as deferred revenue when the Company invoices clients in advance of performing the related services
under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance
obligation. Deferred contract acquisition
costs are included in other assets. The Company defers costs to acquire contracts, including commissions, incentives and payroll
taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred
contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges
from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less
than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of March 31, 2019 or
December 31, 2018. The following table disaggregates
the Company’s revenue by major source for the three months ended March 31, 2019 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Screen system sales $ 2,819 $ - $ - $ - $ - $ 2,819
Digital equipment sales 1,484 628 - - (3 ) 2,109
Field maintenance and monitoring services 2,218 2,773 - - (252 ) 4,739
Installation services 670 2,118 - - - 2,788
Extended warranty sales 234 - - - - 234
Advertising - - 1,080 - - 1,080
Other 428 19 13 123 (46 ) 537
Total $ 7,853 $ 5,538 $ 1,093 $ 123 $ (301 ) $ 14,306 The following table disaggregates
the Company’s revenue by major source for the three months ended March 31, 2018 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Screen system sales $ 4,018 $ - $ - $ - $ - $ 4,018
Digital equipment sales 3,158 832 - - (216 ) 3,774
Field maintenance and monitoring services 2,944 2,376 - - (139 ) 5,181
Installation services 328 1,360 - - - 1,688
Extended warranty sales 342 - - - - 342
Advertising - - 62 - - 62
Other 660 39 - 64 - 763
Total $ 11,450 $ 4,607 $ 62 $ 64 $ (355 ) $ 15,828 Screen system sales The Company recognizes
revenue on the sale of its screen systems when control of the screen is transferred to the customer, usually at time of shipment.
However, revenue is recognized upon delivery for certain international shipments with longer shipping transit time because control
does not transfer to the customer until delivery. The cost of freight and shipping to the customer is recognized in cost of sales
at the time of transfer of control to the customer. Digital equipment sales The Company recognizes
revenue on sales of digital equipment when the control of the equipment is transferred, which occurs at the time of shipment from
the Company’s warehouse or drop-shipment from a third party. The cost of freight and shipping to the customer is recognized
in cost of sales at the time of transfer of control to the customer. Field maintenance and monitoring services The Company sells service
contracts that provide maintenance and monitoring services to Strong Cinema and Convergent customers. In the Strong Cinema segment,
these contracts are generally 12 months in length, while the term for service contracts in the Convergent segment can be for multiple
years. Revenue related to service contracts is recognized over the term of the agreement in proportion to the costs incurred in
fulfilling performance obligations under the contract. The Company also performs
time and materials-based maintenance and repair work for customers in the Strong Cinema and Convergent segments. Revenue related
to time and materials-based maintenance and repair work is recognized at a point in time when the performance obligation has been
fully satisfied. Installation services The Company performs installation
services for both its Strong Cinema and Convergent customers and recognizes revenue upon completion of the installations. Extended warranty sales The Company sells extended
warranties to its Strong Cinema customers. When the Company is the primary obligor, revenue is recognized on a gross basis over
the term of the extended warranty in proportion to the costs incurred in fulfilling performance obligations under the extended
warranty. In third party extended warranty sales, the Company is not the primary obligor, and revenue is recognized on a net basis
at the time of the sale. Advertising Strong Outdoor sells advertising
space on top of taxicabs. Advertising revenue is recognized ratably over the contracted advertising periods. Timing of Revenue Recognition The following table disaggregates
the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31,
2019 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Point in time $ 6,297 $ 2,995 $ 13 $ - $ (255 ) $ 9,050
Over time 1,556 2,543 1,080 123 (46 ) 5,256
Total $ 7,853 $ 5,538 $ 1,093 $ 123 $ (301 ) $ 14,306 The following table disaggregates
the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31,
2018 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Point in time $ 9,599 $ 2,467 $ - $ - $ (355 ) $ 11,711
Over time 1,851 2,140 62 64 - 4,117
Total $ 11,450 $ 4,607 $ 62 $ 64 $ (355 ) $ 15,828 At March 31, 2019, the
unearned revenue amount associated with maintenance and monitoring services, extended warranty sales and advertising services
in which the Company is the primary obligor was $0.8 million. The Company expects to recognize $0.7 million of unearned revenue
amounts throughout the rest of 2019 and immaterial amounts each year from 2020 through 2023.

Loss Per Common Share

Loss Per Common Share3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]
Loss Per Common Share4. Loss Per Common Share Basic loss per share
has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted loss per share would
be computed on the basis of the weighted average number of shares of common stock outstanding after giving effect to potential
common shares from dilutive stock options and certain non-vested shares of restricted stock and restricted stock units. However,
because the Company reported losses in both periods presented, there were no differences between average shares used to compute
basic and diluted loss per share for either of the three month periods ended March 31, 2019 and 2018. The following table summarizes
the weighted average shares used to compute basic and diluted loss per share:
Three Months Ended March 31,
2019 2018
Weighted average shares outstanding:
Basic weighted average shares outstanding 14,438 14,341
Dilutive effect of stock options and certain non-vested restricted stock awards - -
Diluted weighted average shares outstanding 14,438 14,341 Options to purchase
833,500 and 490,000 shares of common stock were outstanding as of March 31, 2019 and 2018, respectively, but were not included
in the computation of diluted loss per share as the option’s exercise price was greater than the average market price of
the common shares for each period. An additional 20,994 and 129,525 common stock equivalents related to options and restricted
stock awards were excluded for the three months ended March 31, 2019 and 2018, respectively, as their inclusion would be anti-dilutive,
thereby decreasing the net losses per share.

Inventories

Inventories3 Months Ended
Mar. 31, 2019
Inventory Disclosure [Abstract]
Inventories5. Inventories Inventories consist of the following (in thousands):
March 31, 2019 December 31, 2018
Raw materials and components $ 1,372 $ 1,422
Work in process 187 -
Finished goods 2,056 2,068
$ 3,615 $ 3,490 The inventory balances
are net of reserves of approximately $1.6 million and $1.4 million as of March 31, 2019 and December 31, 2018, respectively.

Equity Method Investments

Equity Method Investments3 Months Ended
Mar. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]
Equity Method Investments6. Equity Method Investments The following summarizes
our equity method investments (dollars in thousands):
March 31, 2019 December 31, 2018
Entity Carrying Amount Economic Interest Carrying Amount Economic Interest
1347 Property Insurance Holdings, Inc. $ 7,791 17.3 % $ 7,738 17.3 %
Itasca Capital, Ltd. 2,659 32.3 % 3,429 32.3 %
Total $ 10,450 $ 11,167 The following summarizes
the income (loss) of equity method investees reflected in the condensed consolidated statements of operations (in thousands):
Three Months Ended March 31,
Entity 2019 2018
1347 Property Insurance Holdings, Inc. $ 144 $ 241
Itasca Capital, Ltd. (841 ) 103
BK Technologies Corporation - (354 )
Total $ (697 ) $ (10 ) 1347 Property Insurance
Holdings, Inc. (“PIH”) is a publicly traded company that provides property and casualty insurance in the States of
Louisiana, Texas and Florida. The Company’s Chief Executive Officer is chairman of the board of directors of PIH, and controls
entities that, when combined with the Company’s ownership in PIH, own greater than 20% of PIH, providing the Company with
significant influence over PIH, but not controlling interest. The Company did not receive dividends from PIH during the three month
periods ended March 31, 2019 or 2018. On February 25, 2019, PIH announced a definitive agreement pursuant to which FedNat Holding
Company will acquire substantially all of PIH’s homeowners’ insurance operations. PIH intends to maintain its Nasdaq
listing and utilize the proceeds from the transaction to launch a new growth strategy focused on reinsurance, investment management
and new investment opportunities. PIH intends to provide additional details on the rollout of this strategy prior to the expected
closing of the transaction in the second quarter of 2019. Based on quoted market prices, the market value of the Company’s
ownership in PIH was $5.5 million at March 31, 2019. Itasca Capital, Ltd. (“Itasca”)
is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Company’s
Chief Executive Officer is chairman of the board of directors of Itasca. This board seat, combined with the Company’s 32.3%
ownership of Itasca, provide the Company with significant influence over Itasca, but not controlling interest. The Company did
not receive dividends from Itasca during the three month periods ended March 31, 2019 or 2018. Based on quoted market prices, the
market value of the Company’s ownership in Itasca was $1.8 million at March 31, 2019. BK Technologies Corporation
(“BKTI”) is a publicly traded holding company that, through its wholly-owned operating subsidiary BK Technologies,
Inc., designs, manufactures and markets two-way land mobile radios, repeaters, base stations and related components and subsystems.
BK Technologies Corporation became the parent company of BK Technologies, Inc. following the completion of a holding company reorganization
on March 28, 2019. On September 9, 2018, the Company entered into an agreement with Fundamental Global Investors, LLC (“FGI”),
a related party, where the Company sold its shares of common stock of BKTI to FGI. Due to the Company’s significant influence,
but not controlling interest, in BKTI, the Company’s investment in BKTI was accounted for using the equity method. Prior
to the sale of the BKTI common stock, the Company received dividends of $23 thousand during the three month periods ended March
31, 2018. As of March 31, 2019, the
Company’s retained earnings included accumulated deficit from its equity method investees of $0.4 million. The summarized financial
information presented below reflects the financial information of the Company’s equity method investees for the three months
ended December 31, 2018 and 2017, consistent with the Company’s recognition of the results of its equity method investments
on a one-quarter lag.
2018 2017
For the three months ended December 31,
Revenue $ 15,979 $ 20,576
Operating income (loss) $ 246 $ (2,034 )
Net loss $ (1,791 ) $ (2,557 )

Intangible Assets

Intangible Assets3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets7. Intangible Assets Intangible assets consisted
of the following at March 31, 2019 (dollars in thousands):
Useful life Gross Accumulated Amortization Net
(Years)
Intangible assets not yet subject to amortization:
Software in development $ 159 $ - $ 159
Intangible assets subject to amortization:
Software in service 5 2,226 (711 ) 1,515
Product formulation 10 457 (383 ) $ 74
Total $ 2,842 $ (1,094 ) $ 1,748 Intangible assets consisted
of the following at December 31, 2018 (dollars in thousands):
Useful life Gross Accumulated Amortization Net
(Years)
Intangible assets not yet subject to amortization:
Software in development $ 119 $ - $ 119
Intangible assets subject to amortization:
Software in service 5 2,188 (595 ) 1,593
Product formulation 10 447 (364 ) 83
Total $ 2,754 $ (959 ) $ 1,795 Amortization expense relating
to intangible assets was $0.2 million for each of the three months ended March 31, 2019 and 2018. The following table shows
the Company’s estimated future amortization expense related to intangible assets currently subject to amortization for the
next five years (in thousands):
Remainder 2019 $ 373
2020 489
2021 450
2022 224
2023 53
Thereafter -
Total $ 1,589

Goodwill

Goodwill3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill8. Goodwill The following represents
a summary of changes in the Company’s carrying amount of goodwill for the three months ended March 31, 2019 (in thousands):
Balance as of December 31, 2018 $ 875
Foreign currency translation 19
Balance as of March 31, 2019 $ 894

Warranty Reserves

Warranty Reserves3 Months Ended
Mar. 31, 2019
Guarantees and Product Warranties [Abstract]
Warranty Reserves9. Warranty Reserves In most instances, the
Company’s digital projection products are covered by the manufacturing firm’s original warranty; however, for certain
customers the Company may grant warranties in excess of the manufacturer’s warranty. In addition, the Company provides warranty
coverage on screens it manufactures. The Company accrues for these costs at the time of sale. The following table summarizes warranty
activity for the three months ended March 31, 2019 and 2018 (in thousands):
Three Months Ended March 31,
2019 2018
Warranty accrual at beginning of period $ 350 $ 521
Charged to expense 67 84
Claims paid, net of recoveries (33 ) (30 )
Foreign currency adjustment 6 (11 )
Warranty accrual at end of period $ 390 $ 564

Debt

Debt3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]
Debt10. Debt The Company’s debt
consists of the following (in thousands):
March 31, 2019 December 31, 2018
Short-term debt:
Strong/MDI installment loan $ 3,162 $ 3,152
Insurance note payable 178 -
Current portion of long-term debt 923 1,094
Total short-term debt 4,263 4,246
Long-term debt:
Sale-leaseback financing - 6,769
Equipment term loans 4,587 4,398
Total principal balance of long-term debt 4,587 11,167
Less: current portion (923 ) (1,094 )
Less: unamortized debt issuance costs (19 ) (20 )
Total long-term debt 3,645 10,053
Total short-term and long-term debt $ 7,908 $ 14,299 Equipment Term Loans On May 22, 2018, the Company’s
subsidiary, Convergent, entered into an installment payment agreement with an equipment financing company in order to purchase
media players and related equipment in an aggregate amount of up to approximately $4.4 million. Installment payments under each
contract for purchase of the equipment are due monthly for a period of 60 months. The financing provided in the agreement is secured
by the equipment, and the obligations under the agreement are recorded as long-term debt on the Company’s condensed consolidated
balance sheet. In December 2018, Convergent entered into additional installment payment agreements with other financing companies
in order to purchase additional media players and related equipment. This round of financing totaled approximately $0.6 million.
Installment payments under each contract are due monthly for a period of 60 months. The financing under the agreements is secured
by the equipment. The borrowings under the agreements are recorded as long-term debt on the Company’s consolidated balance
sheet. Collectively, the Company had $4.6 million of outstanding borrowings under equipment term loan agreements at March 31, 2019,
which bear interest at a weighted-average fixed rate of 7.4%. Strong/MDI Installment Loan On September 5, 2017, the
Company’s Canadian subsidiary, Strong/MDI, entered into a demand credit agreement with a bank consisting of a revolving line
of credit for up to CDN$3.5 million subject to a borrowing base requirement, a 20-year installment loan for up to CDN$6.0 million
and a 5-year installment loan for up to CDN$500,000. Amounts outstanding under the line of credit are payable on demand and will
bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans will bear interest at
the lender’s prime rate plus 0.5% and are payable in monthly installments, including interest, over their respective borrowing
periods. The lender may also demand repayment of the installment loans at any time. The Strong/MDI credit facilities are secured
by a lien on Strong/MDI’s Quebec, Canada facility and substantially all of Strong/MDI’s assets. The credit agreement
requires Strong/MDI to maintain a ratio of liabilities to “effective equity” (tangible stockholders’ equity,
less amounts receivable from affiliates and equity method investments) not exceeding 2 to 1, a current ratio (excluding amounts
due from related parties) of at least 1.5 to 1 and minimum “effective equity” of CDN$8.0 million. On April 24, 2018,
the Company borrowed CDN$3.5 million on the 20-year installment loan. There was CDN$4.2 million of principal outstanding on the
20-year installment loan as of March 31, 2019, which bears variable interest at 4.45%. Strong/MDI was in compliance with its debt
covenants as of March 31, 2019. Sale-leaseback Financing On June 29, 2018 the Company
and Convergent completed a sale-leaseback of Convergent’s Alpharetta, Georgia office facility. The transaction did not qualify
for sale-leaseback accounting under the previous lease accounting standard and was accounted for as a financing liability. Upon
adoption of ASC 842 during the first quarter of 2019, the Company derecognized approximately $6.8 million of debt associated with
the previous accounting as a failed sale-leaseback. See Note 2 for additional details. Scheduled repayments are
as follows for the Company’s long-term debt outstanding as of March 31, 2019 (in thousands):
Remainder of 2019 $ 683
2020 969
2021 1,041
2022 1,120
2023 762
Thereafter 12
Total $ 4,587

Leases

Leases3 Months Ended
Mar. 31, 2019
Leases [Abstract]
Leases11. Leases The Company and its subsidiaries
lease plant and office facilities and equipment under operating and finance leases expiring through 2028. The Company determines
if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract
conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of
the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use
of the asset and (b) the right to direct the use of the asset. Right-of-use assets and
liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement
date. Certain of the leases contain extension options; however, the Company has not included such options as part of its right-of-use
assets and lease liabilities because it does not expect to extend the leases. The Company measures and records a right-of-use asset
and lease liability based on the discount rate implicit in the lease, if known. In cases where the discount rate implicit in the
lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company’s
estimated incremental borrowing rate for loans with similar collateral and duration. The Company elected to
not apply the recognition requirements of Topic 842 to leases of all classes of underlying assets that, at the commencement date,
have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably
certain to exercise. Instead, lease payments for such short-term leases are recognized in profit or loss on a straight-line basis
over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The Company elected, as
a lessee, for all classes of underlying assets, to not separate nonlease components from lease components and instead to account
for each separate lease component and the nonlease components associated with that lease component as a single lease component. The following tables present
the Company’s lease costs and other lease information as of and for the three months ended March 31, 2019 (dollars in thousands):
Lease cost
Finance lease cost:
Amortization of right-of-use assets $ 49
Interest on lease liabilities 19
Operating lease cost 687
Short-term lease cost 6
Sublease income (86 )
Net lease cost $ 675
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases $ 19
Operating cash flows from operating leases $ 590
Financing cash flows from finance leases $ 49
Right-of-use assets obtained in exchange for new finance lease liabilities $ 232
Right-of-use assets obtained in exchange for new operating lease liabilities $ 644
Weighted-average remaining lease term - finance leases (years) 4.3
Weighted-average remaining lease term - operating leases (years) 6.2
Weighted-average discount rate - finance leases 12.4 %
Weighted-average discount rate - operating leases 7.8 % The following table presents
a maturity analysis of the Company’s finance and operating lease liabilities as of March 31, 2019 (in thousands):
Finance Leases Operating Leases
Remainder 2019 $ 216 $ 1,912
2020 202 2,385
2021 202 2,287
2022 202 1,787
2023 187 656
Thereafter 6 3,117
Total lease payments 1,015 12,144
Less: Amount representing interest (244 ) (2,269 )
Present value of lease payments 771 9,875
Less: Current maturities (181 ) (1,833 )
Lease obligations, net of current portion $ 590 $ 8,042 The Company subleases certain
office and warehouse space to third parties. Sublease income is included in net service revenues in the condensed consolidated
statements of operations. The following table presents a maturity analysis of the Company’s long-term subleases (in thousands):
Remainder 2019 $ 161
2020 163
2021 137
2022 23
2023 -
Thereafter -
Total sublease payments $ 484 The Company leases certain
equipment to customers as a component of its Digital Signage as a Service (“DSaaS”) offering. Under DSaaS, the Company
provides support, maintenance and content management services in addition to the use of a media player to the customer. The Company
elected, as a lessor, for all classes of underlying assets, to not separate nonlease components from lease components and, instead,
to account for each separate lease component and the nonlease components associated with that lease component as a single component
if the nonlease components otherwise would be accounted for under Accounting Standards Codification Topic 606 on revenue from
contracts with customers, and both of the following conditions are met: 1) the timing and pattern of transfer for the lease component
and nonlease components associated with that lease component are the same and 2) the lease component, if accounted for separately,
would be classified as an operating lease in accordance with Topic 842. The combined component is accounted for as a single performance
obligation under Topic 606 if the nonlease component or components are the predominant component(s) of the combined component.
Otherwise, if the lease component is the predominant component, the combined component is accounted for as an operating lease
under ASC 842. In the case of the Company’s DSaaS contracts, the nonlease components are predominant; therefore, revenue
from DSaaS contracts is accounted for under Topic 606 and is included in net service revenues in the condensed consolidated statements
of operations.

Income Taxes

Income Taxes3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income Taxes12. Income Taxes In assessing the realizability
of deferred tax assets, the Company 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.
The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning
strategies in making this assessment. A cumulative loss in a particular tax jurisdiction in recent years is a significant piece
of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence, including
recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance should be recorded
against all of the Company’s U.S. tax jurisdiction deferred tax assets as of March 31, 2019 and December 31, 2018. The Company is subject
to possible examinations not yet initiated for Federal purposes for fiscal years 2015 through 2017. In most cases, the Company
is subject to possible examinations by state or local jurisdictions based on the particular jurisdiction’s statute of limitations.

Stock Compensation

Stock Compensation3 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Stock Compensation13. Stock Compensation The Company recognizes
compensation expense for all stock-based payment awards made to employees and directors based on estimated grant date fair values.
Stock-based compensation expense included in selling and administrative expenses approximated $0.2 million and $0.3 million for
the three month periods ended March 31, 2019 and 2018, respectively. The Company’s 2017
Omnibus Equity Compensation Plan (“2017 Plan”) was approved by the Company’s stockholders and provides the Compensation
Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted
stock units, performance shares, performance units and other stock-based awards and cash-based awards. Vesting terms vary with
each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares authorized
for issuance under the 2017 Plan is 1,371,189 shares, with 1,082,656 shares remaining available for grant at March 31, 2019. Options The Company did not grant
options during the three month period ended March 31, 2019 and granted a total of 387,500 options during the three month period
ended March 31, 2018. Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the
common stock on the date of grant. The weighted average grant
date fair value of stock options granted during the three month period ended March 31, 2018 was $1.82. The fair value of each stock
option granted was estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions:
2018
Expected dividend yield at date of grant 0.00 %
Risk-free interest rate 2.49 %
Expected stock price volatility 35.65 %
Expected life of options (in years) 6.0 The risk-free interest
rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on
historical daily price changes of the Company’s stock for six years prior to the date of grant. The expected life of options
is the average number of years the Company estimates that options will be outstanding. The following table summarizes
stock option activity for the three months ended March 31, 2019:
Number of Options
Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2018 867,000 $ 5.06 8.3 $ -
Granted - -
Exercised - -
Forfeited (27,500 ) 5.19
Expired (6,000 ) 5.03
Outstanding at March 31, 2019 833,500 $ 5.06 8.0 $ -
Exercisable at March 31, 2019 287,500 $ 5.12 7.5 $ - The aggregate intrinsic
value in the table above represents the total that would have been received by the option holders if all in-the-money options had
been exercised and sold on the date indicated. As of March 31, 2019, 546,000
stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $1.0 million,
which is expected to be recognized over a weighted average period of 3.3 years. Restricted Stock The Company estimates the
fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of March
31, 2019, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.7 million,
which is expected to be recognized over a weighted average period of 1.6 years. The following table summarizes
restricted stock share activity for the three months ended March 31, 2019:
Number of Restricted Stock Shares Weighted Average Grant Date Fair Value
Non-vested at December 31, 2018 46,667 $ 6.50
Granted - -
Shares vested (23,333 ) 6.50
Shares forfeited - -
Non-vested at March 31, 2019 23,334 $ 6.50 The following table summarizes
restricted stock unit activity for the three months ended March 31, 2019:
Number of Restricted Stock Units Weighted Average Grant Date Fair Value
Non-vested at December 31, 2018 277,498 $ 3.33
Granted - -
Shares vested (75,833 ) 3.87
Shares forfeited - -
Non-vested at March 31, 2019 201,665 $ 3.12

Commitments, Contingencies and

Commitments, Contingencies and Concentrations3 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments, Contingencies and Concentrations14. Commitments, Contingencies and Concentrations Litigation The Company is involved,
from time to time, in certain legal disputes in the ordinary course of business operations. No such disputes, individually or in
the aggregate, are expected to have a material effect on the Company’s business or financial condition. Concentrations The Company’s top
ten customers accounted for approximately 52% of total consolidated net revenues for the three months ended March 31, 2019. Trade
accounts receivable from these customers represented approximately 42% of net consolidated receivables at March 31, 2019. The Company
had one customer account for more than 10% of its net revenues during the three months ended March 31, 2019. In addition, the Company
had one customer account for more than 10% of net consolidated receivables at March 31, 2019. While the Company believes its relationships
with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant
decrease or interruption in business from the Company’s significant customers could have a material adverse effect on the
Company’s business, financial condition and results of operations. The Company could also be adversely affected by such factors
as changes in foreign currency rates and weak economic and political conditions in each of the countries in which the Company sells
its products. Financial instruments that
potentially expose the Company to a concentration of credit risk principally consist of accounts receivable. The Company sells
product to a large number of customers in many different geographic regions. To minimize credit risk, the Company performs ongoing
credit evaluations of its customers’ financial condition. Insurance Recoveries During February 2019, one
portion of Strong/MDI’s Quebec, Canada facility sustained damage as a result of inclement weather. In connection with the
damage to the facility, during the three months ended March 31, 2019, the Company incurred costs of (i) $0.1 million to write off
the net book value of property and equipment and inventories and (ii) $0.3 million of salaries, debris removal, temporary facilities
and other incremental operating expenses. The Company has property and casualty and business interruption insurance and has been
working with its insurance carrier with regard to the insurance claims for reimbursement of incurred costs of the affected portion
of the facility and compensation for the Company’s business interruption losses. The insurance company has
informed the Company that is has established preliminary loss reserves for both property and casualty claims and business interruption
claims totaling in excess of CDN$5.0 million. Those claims reserves are estimates based on preliminary information and are subject
to change as the insurance carrier completes its analyses and continues their claims review process over the next several months.
The ultimate amount of insurance proceeds to be received by the Company could be significantly different than the insurance company’s
reserve estimates. During the quarter ended March, 31, 2019, the insurance carrier advanced $0.2 million of insurance proceeds
to the Company. The insurance carrier has also informed the Company that a second advance payment of CDN$1.5 million is in process,
which the Company expects to receive in the second quarter of 2019. For the three months ended
March 31, 2019, the Company recorded total insurance recoveries of its incurred costs totaling $0.4 million, of which $0.2 million
had been received prior to March 31, 2019 and $0.2 million which was included in Accounts Receivable on our condensed consolidated
balance sheet. Those recoveries offset the operating costs detailed above, and effectively offset the incremental costs incurred
by the Company in the first quarter. Recovery of lost revenue and profit under the business interruption coverage will be reflected
in future periods as contingencies are resolved and the amounts are confirmed and received from the insurer.

Business Segment Information

Business Segment Information3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]
Business Segment Information15. Business Segment Information The Company conducts its
operations through three primary business segments: Strong Cinema, Convergent and Strong Outdoor. Strong Cinema is one of the largest
manufacturers of premium projection screens and also manufactures customized screen support systems, distributes other products
and provides technical support services to the cinema, amusement park and other markets. Convergent delivers digital signage solutions
and related services to large multi-location organizations in the United States and Canada. Strong Outdoor provides outdoor advertising
and experiential marketing to corporate customers. The Company’s operating segments were determined based on the manner in
which management organizes segments for making operating decisions and assessing performance. During the fourth quarter 2018, the
Company separated its former Digital Media segment into separate Convergent and Strong Outdoor segments. All prior periods have
been recast in our segment reporting to reflect the current segment organization. Summary by Business Segments
Three Months Ended March 31,
2019 2018
(in thousands)
Net revenues
Strong Cinema $ 7,853 $ 11,450
Convergent 5,538 4,607
Strong Outdoor 1,093 62
Other 123 64
Total segment net revenues 14,607 16,183
Eliminations (301 ) (355 )
Total net revenues 14,306 15,828
Gross profit (loss)
Strong Cinema 2,415 3,385
Convergent 1,569 666
Strong Outdoor (1,416 ) (1,265 )
Other 123 64
Total segment gross profit 2,691 2,850
Eliminations (46 ) -
Total gross profit 2,645 2,850
Operating income (loss)
Strong Cinema 1,159 2,325
Convergent 752 (1,025 )
Strong Outdoor (2,012 ) (1,497 )
Other (237 ) (87 )
Total segment operating loss (338 ) (284 )
Unallocated administrative expenses (2,238 ) (2,800 )
Loss from operations (2,576 ) (3,084 )
Other (expense) income, net (736 ) 7
Loss before income taxes and equity method investment loss $ (3,312 ) $ (3,077 )
(In thousands) March 31, 2019 December 31, 2018
Identifiable assets
Strong Cinema $ 24,764 $ 27,009
Convergent 14,290 14,024
Strong Outdoor 6,516 3,454
Corporate assets 15,987 15,150
Total $ 61,557 $ 59,637 Summary by Geographical Area
Three Months Ended March 31,
(In thousands) 2019 2018
Net revenue
United States $ 12,864 $ 12,830
Canada 798 1,400
China 212 541
Mexico 3 556
Latin America 29 270
Europe 280 158
Asia (excluding China) 58 73
Other 62 -
Total $ 14,306 $ 15,828
(In thousands) March 31, 2019 December 31, 2018
Identifiable assets
United States $ 46,038 $ 42,780
Canada 15,519 16,857
Total $ 61,557 $ 59,637 Net revenues by business
segment are to unaffiliated customers. Net revenues by geographical area are based on destination of sales. Identifiable assets
by geographical area are based on location of facilities.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation and Principles of ConsolidationBasis of Presentation and Principles
of Consolidation The condensed consolidated
financial statements include the accounts of the Company and all majority owned and controlled domestic and foreign subsidiaries.
All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated
financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do
not include all of the disclosures normally required by accounting principles generally accepted in the United States of America
(also referred to as “GAAP”) for annual reporting purposes or those made in the Company’s Annual Report on Form
10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements
and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The condensed consolidated
balance sheet as of December 31, 2018 was derived from the Company’s audited consolidated balance sheet as of that date.
All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect
all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of
operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of
trends or results expected for a full year.
Use of Management EstimatesUse of Management Estimates The preparation of consolidated
financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial
position in future periods.
Restricted CashRestricted Cash Restricted cash represents
amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program.
Accounts ReceivableAccounts Receivable Trade accounts receivable
are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts based
on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects
the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt
expense to be adjusted accordingly.
Equity Method InvestmentsEquity Method Investments We apply the equity method
of accounting to investments when we have significant influence, but not controlling interest, in the investee. Judgment regarding
the level of influence over each equity method investment includes considering key factors such as ownership interest, representation
on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s
proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity
method investment income (loss)” in our condensed consolidated statements of operations. The carrying value of our equity
method investments is reported in “equity method investments” in the condensed consolidated balance sheets. The Company’s
equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s
income or loss and dividend paid, if any. The Company’s share of the investee’s income or loss is recorded on a one
quarter lag for all equity method investments. The Company classifies distributions received from equity method investments using
the cumulative earnings approach on the condensed consolidated statements of cash flows. The Company assesses investments for
impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.
Management reviewed the underlying net assets of the equity investments during the three month period ended March 31, 2019 and
determined that the Company’s proportionate economic interest in the investments indicate that the investments were not
other than temporarily impaired. Note 6 contains additional information on our equity method investments.
Fair Value of Financial InstrumentsFair Value of Financial Instruments Assets and liabilities
measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an
asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing
the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified
and disclosed in one of the following three categories:
● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities
● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present
the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair
value measurements are classified, as of March 31, 2019 and December 31, 2018. Fair values measured on
a recurring basis at March 31, 2019 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 4,989 $ - $ - $ 4,989
Restricted cash 350 - - 350
Notes receivable - - 3,455 3,455
Total $ 5,339 $ - $ 3,455 $ 8,794 Fair values measured on
a recurring basis at December 31, 2018 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 6,698 $ - $ - $ 6,698
Restricted cash 350 - 350
Notes receivable - - 3,965 3,965
Total $ 7,048 $ - $ 3,965 $ 11,013 The following table reconciles
the beginning and ending balance of the Company’s notes receivable at fair value (in thousands):
Three Months Ended March 31,
2019 2018
Notes receivable balance, beginning of period $ 3,965 $ 2,815
Fair value adjustment (510 ) (42 )
Notes receivable balance, end of period $ 3,455 $ 2,773 Quantitative information
about the Company’s level 3 fair value measurements at March 31, 2019 is set forth below (in thousands):
Fair value at March 31, 2019 Valuation technique Unobservable input Value
Notes receivable $ 3,455 Discounted cash flow Default percentage 39 %
Discount rate 18 % During 2011, the Company
entered into certain unsecured notes receivable arrangements with CDF2 Holdings, LLC pertaining to the sale and installation of
digital projection equipment. The notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular
year is added to the principal and also accrues interest at 15%. The notes receivable are recorded at estimated fair value. In
order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes
receivable on a quarterly basis. The Company recorded decreases to the fair value of the notes receivable of approximately $0.5
million and $42 thousand, respectively, recorded in other expense in the Company’s condensed consolidated statement of operations
during the three months ended March 31, 2019 and 2018, respectively. The significant unobservable
inputs used in the fair value measurement of the Company’s notes receivable are discount rate and percentage of default.
Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value
measurement. The Company’s short-term
and long-term debt is recorded at historical cost. As of March 31, 2019, the Company’s long-term debt, including current
maturities, had a carrying value of $4.6 million. Based on discounted cash flows using current quoted interest rates (Level 2 of
the fair value hierarchy), the estimated fair value at March 31, 2019 was $4.1 million. The carrying values of
all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt,
reported in the condensed consolidated balance sheets equal or approximate their fair values due to the short-term nature of these
instruments. Note 6 includes fair value information related to our equity method investments. All non-financial assets that are
not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived
assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). The Company did
not have any significant non-recurring measurements of non-financial assets or liabilities during the three months ended March
31, 2019 or 2018.
Recently Adopted Accounting PronouncementsRecently Adopted Accounting Pronouncements In February 2016, the Financial
Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases (Topic 842),” which was further clarified
by ASU 2018-11, “Leases – Targeted Improvements,” issued in July 2018. ASU 2016-02 requires lessees to recognize
a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months,
on its balance sheet. This ASU is effective in fiscal years beginning after December 15, 2018 and initially required a modified
retrospective transition method under which entities would initially apply Topic 842 at the beginning of the earliest period presented
in the financial statements. ASU 2018-11 added an additional optional transition method allowing entities to apply Topic 842 as
of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of
adoption. The Company adopted Topic 842 using the optional transition method from ASU 2018-11 as of January 1, 2019. Upon adoption,
the Company recorded a balance sheet gross-up of approximately $4.7 million to record operating lease liabilities and related right-of-use
assets. In addition, the sale-leaseback of the Company’s Alpharetta, Georgia office facility in June 2018, which did not
qualify for sale-leaseback accounting under the previous lease accounting standard, qualified for sale-leaseback accounting under
Topic 842, as Topic 842 eliminated the concept of continuing involvement by the seller-lessee precluding sale-leaseback accounting.
Upon adoption, the Company recorded a cumulative effect adjustment increasing retained earnings by approximately $2.8 million,
which represents the gain on the sale of the facility. The Company also derecognized approximately $4.0 million of net land and
building assets and approximately $6.8 million of debt associated with the previous accounting as a failed sale-leaseback, and
recorded approximately $5.0 million of operating lease right-of-use assets and liabilities for the leaseback under Topic 842. See
Note 11 for more information about the Company’s leases. In August 2018, the Securities
and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, “Disclosure Update
and Simplification,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or
superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for
interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented
in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning
balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule
is effective for all filings made on and after November 5, 2018. Given the effective date and proximity to most filers’ quarterly
reports, the SEC did not object to filers deferring the presentation of changes in stockholders’ equity in their quarterly
reports on Forms 10-Q until the quarter beginning after November 5, 2018. The Company elected to provide the required disclosure
in a separate statement of stockholders’ equity beginning with this Form 10-Q. In January 2017, the FASB
issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.”
The new guidance eliminates Step 2 of the goodwill impairment testing which requires the fair value of individual assets and liabilities
of a reporting unit to be determined when measuring goodwill impairment. The new guidance may result in different amounts of impairment
that could be recognized compared to existing guidance. In addition, failing step 1 of the impairment test may not result in impairment
under existing guidance. However, under the revised guidance, failing step 1 will always result in a goodwill impairment. ASU
2017-04 is to be applied prospectively for goodwill impairment testing performed in years beginning after December 15, 2019 with
early adoption permitted. The Company adopted ASU 2017-04 in the first quarter of 2019. Adoption of ASU 2017-04 did not significantly
impact the Company’s results of operations or financial position.
Recently Issued Accounting PronouncementsRecently Issued Accounting Pronouncements In June 2016, the FASB
issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments.” This ASU will require the measurement of all expected credit losses for financial assets, including trade
receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.
The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal
years. The Company believes its adoption will not significantly impact the Company’s results of operations and financial
position.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Schedule of Fair Value Measured Financial Assets and LiabilitiesFair values measured on
a recurring basis at March 31, 2019 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 4,989 $ - $ - $ 4,989
Restricted cash 350 - - 350
Notes receivable - - 3,455 3,455
Total $ 5,339 $ - $ 3,455 $ 8,794 Fair values measured on
a recurring basis at December 31, 2018 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 6,698 $ - $ - $ 6,698
Restricted cash 350 - 350
Notes receivable - - 3,965 3,965
Total $ 7,048 $ - $ 3,965 $ 11,013
Summary of Notes Receivable ReconciliationThe following table reconciles
the beginning and ending balance of the Company’s notes receivable at fair value (in thousands):
Three Months Ended March 31,
2019 2018
Notes receivable balance, beginning of period $ 3,965 $ 2,815
Fair value adjustment (510 ) (42 )
Notes receivable balance, end of period $ 3,455 $ 2,773
Summary of Quantitative Information About Company's Level 3 Fair Value MeasurementsQuantitative information
about the Company’s level 3 fair value measurements at March 31, 2019 is set forth below (in thousands):
Fair value at March 31, 2019 Valuation technique Unobservable input Value
Notes receivable $ 3,455 Discounted cash flow Default percentage 39 %
Discount rate 18 %

Revenue (Tables)

Revenue (Tables)3 Months Ended
Mar. 31, 2019
Major Source [Member]
Schedule of Disaggregation of RevenueThe following table disaggregates
the Company’s revenue by major source for the three months ended March 31, 2019 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Screen system sales $ 2,819 $ - $ - $ - $ - $ 2,819
Digital equipment sales 1,484 628 - - (3 ) 2,109
Field maintenance and monitoring services 2,218 2,773 - - (252 ) 4,739
Installation services 670 2,118 - - - 2,788
Extended warranty sales 234 - - - - 234
Advertising - - 1,080 - - 1,080
Other 428 19 13 123 (46 ) 537
Total $ 7,853 $ 5,538 $ 1,093 $ 123 $ (301 ) $ 14,306 The following table disaggregates
the Company’s revenue by major source for the three months ended March 31, 2018 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Screen system sales $ 4,018 $ - $ - $ - $ - $ 4,018
Digital equipment sales 3,158 832 - - (216 ) 3,774
Field maintenance and monitoring services 2,944 2,376 - - (139 ) 5,181
Installation services 328 1,360 - - - 1,688
Extended warranty sales 342 - - - - 342
Advertising - - 62 - - 62
Other 660 39 - 64 - 763
Total $ 11,450 $ 4,607 $ 62 $ 64 $ (355 ) $ 15,828
Timing of Transfer [Member]
Schedule of Disaggregation of RevenueThe following table disaggregates
the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31,
2019 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Point in time $ 6,297 $ 2,995 $ 13 $ - $ (255 ) $ 9,050
Over time 1,556 2,543 1,080 123 (46 ) 5,256
Total $ 7,853 $ 5,538 $ 1,093 $ 123 $ (301 ) $ 14,306 The following table disaggregates
the Company’s revenue by the timing of transfer of goods or services to the customer for the three months ended March 31,
2018 (in thousands):
Strong Cinema Convergent Strong Outdoor Other Eliminations Total
Point in time $ 9,599 $ 2,467 $ - $ - $ (355 ) $ 11,711
Over time 1,851 2,140 62 64 - 4,117
Total $ 11,450 $ 4,607 $ 62 $ 64 $ (355 ) $ 15,828

Loss Per Common Share (Tables)

Loss Per Common Share (Tables)3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]
Schedule of Reconciliation Weighted Average Between Basic and Diluted Earnings Per ShareThe following table
summarizes the weighted average shares used to compute basic and diluted loss per share:
Three Months Ended March 31,
2019 2018
Weighted average shares outstanding:
Basic weighted average shares outstanding 14,438 14,341
Dilutive effect of stock options and certain non-vested restricted stock awards - -
Diluted weighted average shares outstanding 14,438 14,341

Inventories (Tables)

Inventories (Tables)3 Months Ended
Mar. 31, 2019
Inventory Disclosure [Abstract]
Schedule of InventoriesInventories consist of the following
(in thousands):
March 31, 2019 December 31, 2018
Raw materials and components $ 1,372 $ 1,422
Work in process 187 -
Finished goods 2,056 2,068
$ 3,615 $ 3,490

Equity Method Investments (Tabl

Equity Method Investments (Tables)3 Months Ended
Mar. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]
Summary of Equity Method InvestmentsThe following summarizes
our equity method investments (dollars in thousands):
March 31, 2019 December 31, 2018
Entity Carrying Amount Economic Interest Carrying Amount Economic Interest
1347 Property Insurance Holdings, Inc. $ 7,791 17.3 % $ 7,738 17.3 %
Itasca Capital, Ltd. 2,659 32.3 % 3,429 32.3 %
Total $ 10,450 $ 11,167
Summary of Income (Loss) of Equity Method InvesteesThe following summarizes
the income (loss) of equity method investees reflected in the condensed consolidated statements of operations (in thousands):
Three Months Ended March 31,
Entity 2019 2018
1347 Property Insurance Holdings, Inc. $ 144 $ 241
Itasca Capital, Ltd. (841 ) 103
BK Technologies Corporation - (354 )
Total $ (697 ) $ (10 )
Summarized Financial InformationThe summarized financial
information presented below reflects the financial information of the Company’s equity method investees for the three months
ended December 31, 2018 and 2017, consistent with the Company’s recognition of the results of its equity method investments
on a one-quarter lag.
2018 2017
For the three months ended December 31,
Revenue $ 15,979 $ 20,576
Operating income (loss) $ 246 $ (2,034 )
Net loss $ (1,791 ) $ (2,557 )

Intangible Assets (Tables)

Intangible Assets (Tables)3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible AssetsIntangible assets consisted
of the following at March 31, 2019 (dollars in thousands):
Useful life Gross Accumulated Amortization Net
(Years)
Intangible assets not yet subject to amortization:
Software in development $ 159 $ - $ 159
Intangible assets subject to amortization:
Software in service 5 2,226 (711 ) 1,515
Product formulation 10 457 (383 ) $ 74
Total $ 2,842 $ (1,094 ) $ 1,748 Intangible assets consisted
of the following at December 31, 2018 (dollars in thousands):
Useful life Gross Accumulated Amortization Net
(Years)
Intangible assets not yet subject to amortization:
Software in development $ 119 $ - $ 119
Intangible assets subject to amortization:
Software in service 5 2,188 (595 ) 1,593
Product formulation 10 447 (364 ) 83
Total $ 2,754 $ (959 ) $ 1,795
Schedule of Intangible Assets Future Amortization ExpenseThe following table shows
the Company’s estimated future amortization expense related to intangible assets currently subject to amortization for the
next five years (in thousands):
Remainder 2019 $ 373
2020 489
2021 450
2022 224
2023 53
Thereafter -
Total $ 1,589

Goodwill (Tables)

Goodwill (Tables)3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Changes in Carrying Amount of GoodwillThe following represents
a summary of changes in the Company’s carrying amount of goodwill for the three months ended March 31, 2019 (in thousands):
Balance as of December 31, 2018 $ 875
Foreign currency translation 19
Balance as of March 31, 2019 $ 894

Warranty Reserves (Tables)

Warranty Reserves (Tables)3 Months Ended
Mar. 31, 2019
Guarantees and Product Warranties [Abstract]
Schedule of Product Warranty LiabilityThe following table summarizes
warranty activity for the three months ended March 31, 2019 and 2018 (in thousands):
Three Months Ended March 31,
2019 2018
Warranty accrual at beginning of period $ 350 $ 521
Charged to expense 67 84
Claims paid, net of recoveries (33 ) (30 )
Foreign currency adjustment 6 (11 )
Warranty accrual at end of period $ 390 $ 564

Debt (Tables)

Debt (Tables)3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]
Schedule of DebtThe Company’s debt
consists of the following (in thousands):
March 31, 2019 December 31, 2018
Short-term debt:
Strong/MDI installment loan $ 3,162 $ 3,152
Insurance note payable 178 -
Current portion of long-term debt 923 1,094
Total short-term debt 4,263 4,246
Long-term debt:
Sale-leaseback financing - 6,769
Equipment term loans 4,587 4,398
Total principal balance of long-term debt 4,587 11,167
Less: current portion (923 ) (1,094 )
Less: unamortized debt issuance costs (19 ) (20 )
Total long-term debt 3,645 10,053
Total short-term and long-term debt $ 7,908 $ 14,299
Schedule of Long-term Debt MaturitiesScheduled repayments are
as follows for the Company’s long-term debt outstanding as of March 31, 2019 (in thousands):
Remainder of 2019 $ 683
2020 969
2021 1,041
2022 1,120
2023 762
Thereafter 12
Total $ 4,587

Leases (Tables)

Leases (Tables)3 Months Ended
Mar. 31, 2019
Leases [Abstract]
Schedule of Lease Costs and Other Lease InformationThe following tables present
the Company’s lease costs and other lease information as of and for the three months ended March 31, 2019 (dollars in thousands):
Lease cost
Finance lease cost:
Amortization of right-of-use assets $ 49
Interest on lease liabilities 19
Operating lease cost 687
Short-term lease cost 6
Sublease income (86 )
Net lease cost $ 675
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases $ 19
Operating cash flows from operating leases $ 590
Financing cash flows from finance leases $ 49
Right-of-use assets obtained in exchange for new finance lease liabilities $ 232
Right-of-use assets obtained in exchange for new operating lease liabilities $ 644
Weighted-average remaining lease term - finance leases (years) 4.3
Weighted-average remaining lease term - operating leases (years) 6.2
Weighted-average discount rate - finance leases 12.4 %
Weighted-average discount rate - operating leases 7.8 %
Schedule of Future Minimum Lease PaymentsThe following table presents
a maturity analysis of the Company’s finance and operating lease liabilities as of March 31, 2019 (in thousands):
Finance Leases Operating Leases
Remainder 2019 $ 216 $ 1,912
2020 202 2,385
2021 202 2,287
2022 202 1,787
2023 187 656
Thereafter 6 3,117
Total lease payments 1,015 12,144
Less: Amount representing interest (244 ) (2,269 )
Present value of lease payments 771 9,875
Less: Current maturities (181 ) (1,833 )
Lease obligations, net of current portion $ 590 $ 8,042
Schedule of Maturity Analysis of Long-term SubleasesThe following table presents
a maturity analysis of the Company’s long-term subleases (in thousands):
Remainder 2019 $ 161
2020 163
2021 137
2022 23
2023 -
Thereafter -
Total sublease payments $ 484

Stock Compensation (Tables)

Stock Compensation (Tables)3 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the PeriodThe fair value of each
stock option granted was estimated on the date of grant using a Black-Scholes valuation model with the following weighted average
assumptions:
2018
Expected dividend yield at date of grant 0.00 %
Risk-free interest rate 2.49 %
Expected stock price volatility 35.65 %
Expected life of options (in years) 6.0
Summary of Stock Options ActivitiesThe following table summarizes
stock option activity for the three months ended March 31, 2019:
Number of Options
Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2018 867,000 $ 5.06 8.3 $ -
Granted - -
Exercised - -
Forfeited (27,500 ) 5.19
Expired (6,000 ) 5.03
Outstanding at March 31, 2019 833,500 $ 5.06 8.0 $ -
Exercisable at March 31, 2019 287,500 $ 5.12 7.5 $ -
Summary of Restricted Stock ActivityThe following table summarizes
restricted stock share activity for the three months ended March 31, 2019:
Number of Restricted Stock Shares Weighted Average Grant Date Fair Value
Non-vested at December 31, 2018 46,667 $ 6.50
Granted - -
Shares vested (23,333 ) 6.50
Shares forfeited - -
Non-vested at March 31, 2019 23,334 $ 6.50
Schedule of Nonvested Restricted Stock Units ActivityThe following table summarizes
restricted stock unit activity for the three months ended March 31, 2019:
Number of Restricted Stock Units Weighted Average Grant Date Fair Value
Non-vested at December 31, 2018 277,498 $ 3.33
Granted - -
Shares vested (75,833 ) 3.87
Shares forfeited - -
Non-vested at March 31, 2019 201,665 $ 3.12

Business Segment Information (T

Business Segment Information (Tables)3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]
Schedule of Segment Reporting Information by SegmentSummary by Business Segments
Three Months Ended March 31,
2019 2018
(in thousands)
Net revenues
Strong Cinema $ 7,853 $ 11,450
Convergent 5,538 4,607
Strong Outdoor 1,093 62
Other 123 64
Total segment net revenues 14,607 16,183
Eliminations (301 ) (355 )
Total net revenues 14,306 15,828
Gross profit (loss)
Strong Cinema 2,415 3,385
Convergent 1,569 666
Strong Outdoor (1,416 ) (1,265 )
Other 123 64
Total segment gross profit 2,691 2,850
Eliminations (46 ) -
Total gross profit 2,645 2,850
Operating income (loss)
Strong Cinema 1,159 2,325
Convergent 752 (1,025 )
Strong Outdoor (2,012 ) (1,497 )
Other (237 ) (87 )
Total segment operating loss (338 ) (284 )
Unallocated administrative expenses (2,238 ) (2,800 )
Loss from operations (2,576 ) (3,084 )
Other (expense) income, net (736 ) 7
Loss before income taxes and equity method investment loss $ (3,312 ) $ (3,077 )
Reconciliation of Assets from Segment to Consolidated(In thousands) March 31, 2019 December 31, 2018
Identifiable assets
Strong Cinema $ 24,764 $ 27,009
Convergent 14,290 14,024
Strong Outdoor 6,516 3,454
Corporate assets 15,987 15,150
Total $ 61,557 $ 59,637
Schedule of Segment Reporting Information by Geographic AreaSummary by Geographical Area
Three Months Ended March 31,
(In thousands) 2019 2018
Net revenue
United States $ 12,864 $ 12,830
Canada 798 1,400
China 212 541
Mexico 3 556
Latin America 29 270
Europe 280 158
Asia (excluding China) 58 73
Other 62 -
Total $ 14,306 $ 15,828
Summary of Identifiable Assets by Geographical Area(In thousands) March 31, 2019 December 31, 2018
Identifiable assets
United States $ 46,038 $ 42,780
Canada 15,519 16,857
Total $ 61,557 $ 59,637

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in ThousandsDec. 31, 2011Mar. 31, 2019Mar. 31, 2018Jan. 02, 2019Dec. 31, 2018
Fair value adjustment of notes receivable $ (510) $ (42)
Long-term debt4,587 $ 11,167
Estimated fair value of long term debt4,100
Operating lease, right-of-use asset9,588
Operating lease, liability9,875
Cumulative effect adjustment increasing retained earnings2,785
Derecognized debt6,800
ASU 2016-02 [Member]
Operating lease, right-of-use asset5,000 $ 4,700
Operating lease, liability5,000 $ 4,700
Derecognized land and building assets net4,000
Derecognized debt $ 6,800
Unsecured Notes Receivable Arrangements [Member] | CDF2 Holdings, LLC [Member]
Percentage of notes receivable accrue interest rate15.00%
Description of accrues interest rateThe notes receivable accrue interest at a rate of 15% per annum. Interest not paid in any particular year is added to the principal and also accrues interest at 15%.

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018Mar. 31, 2018
Cash and cash equivalents $ 4,989 $ 6,698
Restricted cash350 350
Notes receivable3,455 3,965
Total8,794 11,013
Level 1 [Member]
Cash and cash equivalents4,989 6,698
Restricted cash350 350
Notes receivable
Total5,339 7,048
Level 2 [Member]
Cash and cash equivalents
Restricted cash
Notes receivable
Total
Level 3 [Member]
Cash and cash equivalents
Restricted cash
Notes receivable3,455 3,965
Total $ 3,455 $ 3,965

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Summary of Notes Receivable Reconciliation (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Accounting Policies [Abstract]
Notes receivable balance, beginning of period $ 3,965 $ 2,815
Fair value adjustment(510)(42)
Notes receivable balance, end of period $ 3,455 $ 2,773

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Summary of Quantitative Information About Company's Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Dec. 31, 2018
Note receivable $ 3,455 $ 3,965
Valuation TechniqueDiscounted cash flow
Default Percentage [Member]
Unobservable input39.00%
Discount Rate [Member]
Unobservable input18.00%

Revenue (Details Narrative)

Revenue (Details Narrative) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Dec. 31, 2018
Deferred contract costs
Unearned revenue800
Rest of 2019 [Member]
Unearned revenue700
2020 [Member]
Unearned revenue
2021 [Member]
Unearned revenue
2022 [Member]
Unearned revenue
2023 [Member]
Unearned revenue
Field Maintenance and Monitoring Services [Member]
Contract duration or term with field maintenance12 months
Minimum [Member]
Capitalized contract cost, amortization period1 year
Maximum [Member]
Capitalized contract cost, amortization period5 years

Revenue - Schedule of Disaggreg

Revenue - Schedule of Disaggregation of Revenue (Major Source) (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Total net revenues $ 14,306 $ 15,828
Screen System Sales [Member]
Total net revenues2,819 4,018
Digital Equipment Sales [Member]
Total net revenues2,109 3,774
Field Maintenance and Monitoring Services [Member]
Total net revenues4,739 5,181
Installation Services [Member]
Total net revenues2,788 1,688
Extended Warranty Sales [Member]
Total net revenues234 342
Advertising [Member]
Total net revenues1,080 62
Other Revenue [Member]
Total net revenues537 763
Strong Cinema [Member]
Total net revenues7,853 11,450
Strong Cinema [Member] | Screen System Sales [Member]
Total net revenues2,819 4,018
Strong Cinema [Member] | Digital Equipment Sales [Member]
Total net revenues1,484 3,158
Strong Cinema [Member] | Field Maintenance and Monitoring Services [Member]
Total net revenues2,218 2,944
Strong Cinema [Member] | Installation Services [Member]
Total net revenues670 328
Strong Cinema [Member] | Extended Warranty Sales [Member]
Total net revenues234 342
Strong Cinema [Member] | Advertising [Member]
Total net revenues
Strong Cinema [Member] | Other Revenue [Member]
Total net revenues428 660
Convergent [Member]
Total net revenues5,538 4,607
Convergent [Member] | Screen System Sales [Member]
Total net revenues
Convergent [Member] | Digital Equipment Sales [Member]
Total net revenues628 832
Convergent [Member] | Field Maintenance and Monitoring Services [Member]
Total net revenues2,773 2,376
Convergent [Member] | Installation Services [Member]
Total net revenues2,118 1,360
Convergent [Member] | Extended Warranty Sales [Member]
Total net revenues
Convergent [Member] | Advertising [Member]
Total net revenues
Convergent [Member] | Other Revenue [Member]
Total net revenues19 39
Strong Outdoor [Member]
Total net revenues1,093 62
Strong Outdoor [Member] | Screen System Sales [Member]
Total net revenues
Strong Outdoor [Member] | Digital Equipment Sales [Member]
Total net revenues
Strong Outdoor [Member] | Field Maintenance and Monitoring Services [Member]
Total net revenues
Strong Outdoor [Member] | Installation Services [Member]
Total net revenues
Strong Outdoor [Member] | Extended Warranty Sales [Member]
Total net revenues
Strong Outdoor [Member] | Advertising [Member]
Total net revenues1,080 62
Strong Outdoor [Member] | Other Revenue [Member]
Total net revenues13
Other [Member]
Total net revenues123 64
Other [Member] | Screen System Sales [Member]
Total net revenues
Other [Member] | Digital Equipment Sales [Member]
Total net revenues
Other [Member] | Field Maintenance and Monitoring Services [Member]
Total net revenues
Other [Member] | Installation Services [Member]
Total net revenues
Other [Member] | Extended Warranty Sales [Member]
Total net revenues
Other [Member] | Advertising [Member]
Total net revenues
Other [Member] | Other Revenue [Member]
Total net revenues123 64
Eliminations [Member]
Total net revenues(301)(355)
Eliminations [Member] | Screen System Sales [Member]
Total net revenues
Eliminations [Member] | Digital Equipment Sales [Member]
Total net revenues(3)(216)
Eliminations [Member] | Field Maintenance and Monitoring Services [Member]
Total net revenues(252)(139)
Eliminations [Member] | Installation Services [Member]
Total net revenues
Eliminations [Member] | Extended Warranty Sales [Member]
Total net revenues
Eliminations [Member] | Advertising [Member]
Total net revenues
Eliminations [Member] | Other Revenue [Member]
Total net revenues $ (46)

Revenue - Schedule of Disaggr_2

Revenue - Schedule of Disaggregation of Revenue (Timing of Transfer) (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Total net revenues $ 14,306 $ 15,828
Transferred at Point in Time [Member]
Total net revenues9,050 11,711
Transferred Over Time [Member]
Total net revenues5,256 4,117
Strong Cinema [Member]
Total net revenues7,853 11,450
Strong Cinema [Member] | Transferred at Point in Time [Member]
Total net revenues6,297 9,599
Strong Cinema [Member] | Transferred Over Time [Member]
Total net revenues1,556 1,851
Convergent [Member]
Total net revenues5,538 4,607
Convergent [Member] | Transferred at Point in Time [Member]
Total net revenues2,995 2,467
Convergent [Member] | Transferred Over Time [Member]
Total net revenues2,543 2,140
Strong Outdoor [Member]
Total net revenues1,093 62
Strong Outdoor [Member] | Transferred at Point in Time [Member]
Total net revenues13
Strong Outdoor [Member] | Transferred Over Time [Member]
Total net revenues1,080 62
Other [Member]
Total net revenues123 64
Other [Member] | Transferred at Point in Time [Member]
Total net revenues
Other [Member] | Transferred Over Time [Member]
Total net revenues123 64
Eliminations [Member]
Total net revenues(301)(355)
Eliminations [Member] | Transferred at Point in Time [Member]
Total net revenues(255)(355)
Eliminations [Member] | Transferred Over Time [Member]
Total net revenues $ (46)

Loss Per Common Share (Details

Loss Per Common Share (Details Narrative) - shares3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Stock Option In Which Exercise Price Exceeds The Average Market Price of Common Shares [Member]
Anti dilutive securities excluded from computation of earnings per share833,500 490,000
Common Stock Equivalents [Member]
Anti dilutive securities excluded from computation of earnings per share20,994 129,525

Loss Per Common Share - Schedul

Loss Per Common Share - Schedule of Reconciliation Between Basic and Diluted Earnings Per Share (Details) - shares3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Earnings Per Share [Abstract]
Basic weighted average shares outstanding14,438 14,341
Dilutive effect of stock options and certain non-vested restricted stock award
Diluted weighted average shares outstanding14,438 14,341

Inventories (Details Narrative)

Inventories (Details Narrative) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Inventory Disclosure [Abstract]
Inventory valuation reserves $ 1,600 $ 1,400

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials and components $ 1,372 $ 1,422
Work in process187
Finished goods2,056 2,068
Inventories net $ 3,615 $ 3,490

Equity Method Investments (Deta

Equity Method Investments (Details Narrative) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018Dec. 31, 2018
Retained earnings undistributed earnings from our equity method investees $ 400
1347 Property Insurance Holdings Inc [Member]
Dividend received
Quoted market value of the company's ownership $ 5,500
Equity method ownership percentage17.30%17.30%
1347 Property Insurance Holdings Inc [Member] | Minimum [Member]
Combined equity ownership percentage20.00%
Itasca Capital Ltd [Member]
Dividend received
Quoted market value of the company's ownership $ 1,800
Equity method ownership percentage32.30%32.30%
BK Technologies, Inc. [Member]
Dividend received $ 23

Equity Method Investments - Sum

Equity Method Investments - Summary of Equity Method Investments (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Equity investment, Carrying Amount $ 10,450 $ 11,167
1347 Property Insurance Holdings Inc [Member]
Equity investment, Carrying Amount $ 7,791 $ 7,738
Equity investment, Economic Interest17.30%17.30%
Itasca Capital Ltd [Member]
Equity investment, Carrying Amount $ 2,659 $ 3,429
Equity investment, Economic Interest32.30%32.30%

Equity Method Investments - S_2

Equity Method Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Equity method investment income $ (697) $ (10)
Equity Method Investments [Member]
Equity method investment income(697)(10)
1347 Property Insurance Holdings Inc [Member] | Equity Method Investments [Member]
Equity method investment income144 241
Itasca Capital Ltd [Member] | Equity Method Investments [Member]
Equity method investment income(841)103
BK Technologies Corporation [Member] | Equity Method Investments [Member]
Equity method investment income $ (354)

Equity Method Investments - S_3

Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands3 Months Ended
Dec. 31, 2018Dec. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
Revenue $ 15,979 $ 20,576
Operating income (loss)246 (2,034)
Net income $ (1,791) $ 2,557

Intangible Assets (Details Narr

Intangible Assets (Details Narrative) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense $ 200 $ 200

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands3 Months Ended12 Months Ended
Mar. 31, 2019Dec. 31, 2018
Intangible assets, Gross $ 2,842 $ 2,754
Intangible assets, Accumulated amortization(1,094)(959)
Intangible assets, Net $ 1,748 $ 1,795
Software in Service [Member]
Intangible assets, Useful life5 years5 years
Intangible assets, Gross $ 2,226 $ 2,188
Intangible assets, Accumulated amortization(711)(595)
Intangible assets, Net $ 1,515 $ 1,593
Product Formulation [Member]
Intangible assets, Useful life10 years10 years
Intangible assets, Gross $ 457 $ 447
Intangible assets, Accumulated amortization(383)(364)
Intangible assets, Net74 83
Software in Development [Member]
Intangible assets, Gross159 119
Intangible assets, Accumulated amortization
Intangible assets, Net $ 159 $ 119

Intangible Assets - Schedule _2

Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Total $ 1,748 $ 1,795
Intangible Assets [Member]
Remainder 2019373
2020489
2021450
2022224
202353
Thereafter
Total $ 1,589

Goodwill - Summary of Changes i

Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands3 Months Ended
Mar. 31, 2019USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Balance $ 875
Foreign currency translation19
Balance $ 894

Warranty Reserves - Schedule of

Warranty Reserves - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Extended Product Warranty Disclosure [Abstract]
Warranty accrual at beginning of period $ 350 $ 521
Charged to expense67 79
Claims paid, net of recoveries(33)(30)
Foreign currency adjustment6 (11)
Warranty accrual at end of period $ 390 $ 564

Debt (Details Narrative)

Debt (Details Narrative) $ in Thousands, $ in ThousandsMay 22, 2018USD ($)Apr. 24, 2018CAD ($)Sep. 05, 2017CAD ($)Mar. 31, 2019USD ($)Mar. 31, 2019CAD ($)Dec. 31, 2018USD ($)
Long-term debt $ 4,587 $ 11,167
Derecognized debt $ 6,800
20-year Installment Loan [Member]
Loan term20 years20 years
Debt bearing interest fixed rate4.45%4.45%
Canadian Dollar [Member] | 20-year Installment Loan [Member]
Long-term debt $ 4,200
Proceeds from issuance of debt $ 3,500
Installment Payment Agreement [Member]
Line of credit facility, maximum borrowing capacity $ 4,400
Number of installment payments60 months
Debt descriptionInstallment payments under each contract for purchase of the equipment are due monthly for a period of 60 months. The financing provided in the agreement is secured by the equipment, and the obligations under the agreement are recorded as long-term debt on the Company's condensed consolidated balance sheet. In December 2018, Convergent entered into additional installment payment agreements with other financing companies in order to purchase additional media players and related equipment. This round of financing totaled approximately $0.6 million. Installment payments under each contract are due monthly for a period of 60 months.
Equipment Term Loans [Member]
Long-term debt $ 4,600
Weighted average fixed rate7.40%7.40%
Demand Credit Agreement [Member]
Description on effective equityThe credit agreement requires Strong/MDI to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity method investments) not exceeding 2 to 1, a current ratio (excluding amounts due from related parties) of at least 1.5 to 1 and minimum "effective equity" of CDN$8.0 million.
Maximum liabilities to effective equity200.00%
Minimum current ratio150.00%
Demand Credit Agreement [Member] | Prime Rate [Member]
Interest rate on lender of installment loans0.50%
Demand Credit Agreement [Member] | 20-year Installment Loan [Member]
Loan term20 years
Demand Credit Agreement [Member] | 5-year Installment Loan [Member]
Loan term5 years
Demand Credit Agreement [Member] | 5-year Installment Loan [Member] | Prime Rate [Member]
Interest rate on lender of installment loans0.50%
Demand Credit Agreement [Member] | Canadian Dollar [Member]
Minimum effective equity $ 8,000
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 20-year Installment Loan [Member]
Line of credit facility, maximum borrowing capacity6,000
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 5-year Installment Loan [Member]
Line of credit facility, maximum borrowing capacity500
Demand Credit Agreement [Member] | Line of Credit [Member] | Canadian Dollar [Member]
Line of credit facility, maximum borrowing capacity $ 3,500

Debt - Schedule of Debt (Detail

Debt - Schedule of Debt (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Strong/MDI installment loan $ 3,340 $ 3,152
Insurance note payable178
Current portion of long-term debt923 1,094
Total short-term debt4,263 4,246
Total principal balance of long-term debt4,587 11,167
Less: current portion(923)(1,094)
Less: unamortized debt issuance costs(19)(20)
Total long-term debt3,645 10,053
Total short-term and long-term debt7,908 14,299
Strong/MDI Installment Loan [Member]
Strong/MDI installment loan3,162 3,152
Sale-leaseback Financing [Member]
Total principal balance of long-term debt 6,769
Equipment Term Loans [Member]
Total principal balance of long-term debt $ 4,587 $ 4,398

Debt - Schedule of Long-term De

Debt - Schedule of Long-term Debt Maturities (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Debt Disclosure [Abstract]
Remainder of 2019 $ 683
2020969
20211,041
20221,120
2023762
Thereafter12
Total $ 4,587 $ 11,167

Leases (Details Narrative)

Leases (Details Narrative)3 Months Ended
Mar. 31, 2019
Leases [Abstract]
Operating lease expire, termexpiring through 2028
Finance lease, expire termexpiring through 2028

Leases - Schedule of Lease Cost

Leases - Schedule of Lease Costs And Other Lease Information (Details) $ in Thousands3 Months Ended
Mar. 31, 2019USD ($)
Leases [Abstract]
Finance lease cost: Amortization of right-of-use assets $ 49
Finance lease cost: Interest on lease liabilities19
Operating lease cost687
Short-term lease cost6
Sublease income(86)
Net lease cost675
Operating cash flows from finance leases19
Operating cash flows from operating leases590
Financing cash flows from finance leases49
Right-of-use assets obtained in exchange for new finance lease liabilities232
Right-of-use assets obtained in exchange for new operating lease liabilities $ 644
Weighted-average remaining lease term - finance leases (years)4 years 3 months 19 days
Weighted-average remaining lease term - operating leases (years)6 years 2 months 12 days
Weighted-average discount rate - finance leases12.40%
Weighted-average discount rate - operating leases7.80%

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Leases [Abstract]
Finance Leases, Remainder 2019 $ 216
Finance Leases, 2020202
Finance Leases, 2021202
Finance Leases, 2022202
Finance Leases, 2023187
Finance Leases, Thereafter6
Finance Leases, Total lease payments1,015
Less: Amount representing interest(244)
Present value of lease payments771
Less: Current maturities(181) $ (160)
Lease obligations, net of current portion590 427
Operating Leases, Remainder 20191,912
Operating Leases, 20202,385
Operating Leases, 20212,287
Operating Leases, 20221,787
Operating Leases, 2023656
Operating Leases, Thereafter3,117
Operating Leases, Total lease payments12,144
Less: Amount representing interest(2,269)
Present value of lease payments9,875
Less: Current maturities(1,833)
Lease obligations, net of current portion $ 8,042

Leases - Schedule of Maturity A

Leases - Schedule of Maturity Analysis of Long-term Subleases (Details) $ in ThousandsMar. 31, 2019USD ($)
Leases [Abstract]
Remainder 2019 $ 161
2020163
2021137
202223
2023
Thereafter
Total sublease payments $ 484

Income Taxes (Details Narrative

Income Taxes (Details Narrative)3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income tax examination descriptionThe Company is subject to possible examinations not yet initiated for Federal purposes for fiscal years 2015 through 2017. In most cases, the Company is subject to possible examinations by state or local jurisdictions based on the particular jurisdiction's statute of limitations.

Stock Compensation (Details Nar

Stock Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Number of shares granted
Restricted Stock [Member]
Compensation cost expected to be recognized, weighted average period1 year 7 months 6 days
Unrecognized for restricted stock, value $ 700
Stock Options [Member]
Number of shares granted 387,500
Share based compensation arrangement by share based payment award options grants in period weighted average grant date fair value $ 1.82
Share-based compensation arrangement by share-based payment award, options, non-vested, number546,000
Total unrecognized compensation cost related to stock option awards $ 1,000
Compensation cost expected to be recognized, weighted average period3 years 3 months 19 days
Year 2017 Plan [Member]
Number of shares authorized for issuance1,371,189
Share based compensation arrangement by share based payment award number of shares available for grant1,082,656
Selling, General and Administrative Expenses [Member]
Share based compensation expense $ 200 $ 300

Stock Compensation - Schedule o

Stock Compensation - Schedule of Weighted Average Assumptions for Fair Value of Stock Options Granted During the Period (Details)3 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Expected dividend yield at date of grant0.00%
Risk-free interest rate2.49%
Expected stock price volatility35.65%
Expected life of options (in years)6 years

Stock Compensation - Summary of

Stock Compensation - Summary of Stock Options Activities (Details)3 Months Ended
Mar. 31, 2019USD ($)$ / sharesshares
Share-based Payment Arrangement [Abstract]
Number of Options, Outstanding Beginning Balance | shares867,000
Number of Options, Granted | shares
Number of Options, Exercised | shares
Number of Options, Forfeited | shares(27,500)
Number of Options, Expired | shares(6,000)
Number of Options, Outstanding Ending Balance | shares833,500
Number of Options, Exercisable | shares287,500
Weighted Average Exercise Price Per Share, Outstanding Beginning Balance | $ / shares $ 5.06
Weighted Average Exercise Price Per Share, Granted | $ / shares
Weighted Average Exercise Price Per Share, Exercised | $ / shares
Weighted Average Exercise Price Per Share, Forfeited | $ / shares5.19
Weighted Average Exercise Price Per Share, Expired | $ / shares5.03
Weighted Average Exercise Price Per Share, Outstanding Ending Balance | $ / shares5.06
Weighted Average Exercise Price Per Share, Exercisable | $ / shares $ 5.12
Weighted Average Remaining Contractual Term, Beginning Balance8 years 3 months 19 days
Weighted Average Remaining Contractual Term, Ending Balance8 years
Weighted Average Remaining Contractual Term, Exercisable7 years 6 months
Aggregate Intrinsic Value, Beginning Balance | $
Aggregate Intrinsic Value, Ending Balance | $
Aggregate Intrinsic Value, Exercisable | $

Stock Compensation - Summary _2

Stock Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock Shares [Member]3 Months Ended
Mar. 31, 2019$ / sharesshares
Number of Restricted Stock, Non-vested beginning balance | shares46,667
Number of Restricted Stock, Granted | shares
Number of Restricted Stock, Vested | shares(23,333)
Number of Restricted Stock, Forfeited | shares
Number of Restricted Stock, Non-vested ending balance | shares23,334
Weighted Average Grant Date Fair Value, Non-vested Beginning Balance | $ / shares $ 6.50
Weighted Average Grant Date Fair Value, Granted | $ / shares
Weighted Average Grant Date Fair Value, Vested | $ / shares6.50
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Weighted Average Grant Date Fair Value, Non-vested Ending Balance | $ / shares $ 6.50

Stock Compensation - Schedule_2

Stock Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member]3 Months Ended
Mar. 31, 2019$ / sharesshares
Number of Restricted Stock, Non-vested beginning balance | shares277,498
Number of Restricted Stock, Granted | shares
Number of Restricted Stock, vested | shares(75,833)
Number of Restricted Stock, forfeited | shares
Number of Restricted Stock, Non-vested ending balance | shares201,665
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares $ 3.33
Weighted Average Grant Date Fair Value, Granted | $ / shares
Weighted Average Grant Date Fair Value, Vested | $ / shares3.87
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares $ 3.12

Commitments, Contingencies an_2

Commitments, Contingencies and Concentrations (Details Narrative) $ in Thousands, $ in Thousands3 Months Ended
Mar. 31, 2019USD ($)Mar. 31, 2019CAD ($)
Strong/MDI's Quebec [Member]
Write off on net book value of property and equipment and inventories $ 100
Write off on salaries, debris removal, temporary facilities and other incremental operating expenses300
Proceeds from insurance200
Insurance recoveries400
Strong/MDI's Quebec [Member] | Accounts Receivable [Member]
Insurance recoveries200
Strong/MDI's Quebec [Member] | Prior to March 31, 2019 [Member]
Insurance recoveries $ 200
Strong/MDI's Quebec [Member] | Canadian Dollar [Member]
preliminary loss reserves for property, casualty claims and business interruption claims $ 5,000
Strong/MDI's Quebec [Member] | Canadian Dollar [Member] | Second Quarter 2019 [Member]
Proceeds from insurance $ 1,100
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Top 10 Customers [Member]
Concentration risk, percentage52.00%52.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | One Customer [Member]
Concentration risk, percentage10.00%10.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Top 10 Customers [Member]
Concentration risk, percentage42.00%42.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member]
Concentration risk, percentage10.00%10.00%

Business Segment Information (D

Business Segment Information (Details Narrative)3 Months Ended
Mar. 31, 2019Segments
Segment Reporting [Abstract]
Number of business segment3

Business Segment Information -

Business Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Segment Reporting Information [Line Items]
Total net revenues $ 14,306 $ 15,828
Total gross profit2,645 2,850
Loss from operations2,576 3,084
Other (expense) income, net36 (10)
Loss before income taxes and equity method investment loss3,312 3,077
Business Segments [Member]
Segment Reporting Information [Line Items]
Total segment net revenues14,607 16,183
Eliminations(301)(355)
Total net revenues14,306 15,828
Total segment gross profit2,691 2,850
Eliminations(46)
Total gross profit2,645 2,850
Total segment operating loss(338)(284)
Unallocated administrative expenses(2,238)(2,800)
Loss from operations(2,576)(3,084)
Other (expense) income, net(736)7
Loss before income taxes and equity method investment loss(3,312)(3,077)
Business Segments [Member] | Strong Cinema [Member]
Segment Reporting Information [Line Items]
Total segment net revenues7,853 11,450
Total segment gross profit2,415 3,385
Total segment operating loss1,159 2,325
Business Segments [Member] | Convergent [Member]
Segment Reporting Information [Line Items]
Total segment net revenues5,538 4,607
Total segment gross profit1,569 666
Total segment operating loss752 (1,025)
Business Segments [Member] | Strong Outdoor [Member]
Segment Reporting Information [Line Items]
Total segment net revenues1,093 62
Total segment gross profit(1,416)(1,265)
Total segment operating loss(2,012)(1,497)
Business Segments [Member] | Other [Member]
Segment Reporting Information [Line Items]
Total segment net revenues123 64
Total segment gross profit123 64
Total segment operating loss $ (237) $ (87)

Business Segment Information _2

Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Identifiable assets $ 61,557 $ 59,637
Business Segments [Member] | Strong Cinema [Member]
Identifiable assets24,764 27,009
Business Segments [Member] | Convergent [Member]
Identifiable assets14,290 14,024
Business Segments [Member] | Strong Outdoor [Member]
Identifiable assets6,516 3,454
Business Segments [Member] | Corporate Assets [Member]
Identifiable assets $ 15,987 $ 15,150

Business Segment Information _3

Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2019Mar. 31, 2018
Net revenue $ 14,306 $ 15,828
United States [Member]
Net revenue12,864 12,830
Canada [Member]
Net revenue798 1,400
China [Member]
Net revenue212 541
Mexico [Member]
Net revenue3 556
Latin America [Member]
Net revenue29 270
Europe [Member]
Net revenue280 158
Asia (Excluding China) [Member]
Net revenue58 73
Other [Member]
Net revenue $ 62

Business Segment Information _4

Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in ThousandsMar. 31, 2019Dec. 31, 2018
Identifiable assets $ 61,557 $ 59,637
United States [Member]
Identifiable assets46,038 42,780
Canada [Member]
Identifiable assets $ 15,519 $ 16,857