Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | BALLANTYNE STRONG, INC. | |
Entity Central Index Key | 0000946454 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,790,374 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,026 | $ 4,951 |
Restricted cash | 352 | 351 |
Accounts receivable (net of allowance for doubtful accounts of $783 and $1,291, respectively) | 6,115 | 12,898 |
Inventories, net | 2,816 | 2,879 |
Current assets of discontinued operations | 320 | |
Other current assets | 1,735 | 1,624 |
Total current assets | 18,044 | 23,023 |
Property, plant and equipment (net of accumulated depreciation of $11,363 and $10,030, respectively) | 9,028 | 10,069 |
Operating lease right-of-use assets | 4,705 | 5,581 |
Finance lease right-of-use assets | 2,465 | 2,563 |
Investments | 22,006 | 13,311 |
Intangible assets, net | 1,214 | 1,534 |
Goodwill | 895 | 919 |
Long-term assets of discontinued operations | 585 | |
Other assets | 31 | 48 |
Total assets | 58,388 | 57,633 |
Current liabilities: | ||
Accounts payable | 3,448 | 2,969 |
Accrued expenses | 3,464 | 4,416 |
Short-term debt | 2,972 | 3,080 |
Current portion of long-term debt | 1,055 | 998 |
Current portion of operating lease obligations | 743 | 846 |
Current portion of finance lease obligations | 1,820 | 1,586 |
Deferred revenue and customer deposits | 4,198 | 2,706 |
Current liabilities of discontinued operations | 704 | |
Total current liabilities | 17,700 | 17,305 |
Long-term debt, net of current portion and debt issuance costs | 2,617 | 3,019 |
Operating lease obligations, net of current portion | 4,107 | 4,662 |
Finance lease obligations, net of current portion | 3,111 | 3,988 |
Deferred income taxes | 3,053 | 2,649 |
Long-term liabilities of discontinued operations | 147 | |
Other long-term liabilities | 120 | 154 |
Total liabilities | 30,708 | 31,924 |
Commitments, contingencies and concentrations (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 17,584 and 17,410 shares at September 30, 2020 and December 31, 2019, respectively; outstanding 14,790 and 14,616 shares at September 30, 2020 and December 31, 2019, respectively | 176 | 174 |
Additional paid-in capital | 43,311 | 42,589 |
Retained earnings | 7,472 | 6,001 |
Less 2,794 of common shares in treasury, at cost | (18,586) | (18,586) |
Accumulated other comprehensive loss | (4,693) | (4,469) |
Total stockholders' equity | 27,680 | 25,709 |
Total liabilities and stockholders' equity | $ 58,388 | $ 57,633 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 783 | $ 1,291 |
Accumulated depreciation of property, plant and equipment | $ 11,363 | $ 10,030 |
Preferred stock par value | $ .01 | $ .01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | ||
Common stock par value | $ .01 | $ .01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 17,584,000 | 17,410,000 |
Common stock, shares outstanding | 14,790,000 | 14,616,000 |
Common shares in treasury, shares | 2,794,000 | 2,794,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total net revenues | $ 9,907 | $ 15,550 | $ 28,488 | $ 41,897 |
Total cost of revenues | 6,660 | 10,349 | 19,639 | 28,961 |
Gross profit | 3,247 | 5,201 | 8,849 | 12,936 |
Selling and administrative expenses: | ||||
Selling | 678 | 956 | 2,234 | 2,986 |
Administrative | 2,914 | 4,055 | 10,119 | 11,709 |
Total selling and administrative expenses | 3,592 | 5,011 | 12,353 | 14,695 |
Loss on disposal of assets | (18) | (3) | (18) | (67) |
(Loss) income from operations | (363) | 187 | (3,522) | (1,826) |
Other income (expense): | ||||
Interest income | 1 | 3 | ||
Interest expense | (254) | (263) | (794) | (568) |
Fair value adjustment to notes receivable | (845) | (2,153) | ||
Foreign currency transaction (loss) gain | (173) | 66 | 12 | (154) |
Other income, net | 2,749 | 416 | 2,873 | 650 |
Total other income (expense) | 2,322 | (625) | 2,091 | (2,222) |
Income (loss) from continuing operations before income taxes and equity method investment loss | 1,959 | (438) | (1,431) | (4,048) |
Income tax expense | (526) | (731) | (1,022) | (1,295) |
Equity method investment loss | (460) | (496) | (580) | (1,223) |
Net income (loss) from continuing operations | 973 | (1,665) | (3,033) | (6,566) |
Net income (loss) from discontinued operations (Note 3) | 4,673 | (123) | 4,504 | (2,790) |
Net income (loss) | $ 5,646 | $ (1,788) | $ 1,471 | $ (9,356) |
Basic net income (loss) per share | ||||
Continuing operations | $ 0.07 | $ (0.11) | $ (0.21) | $ (0.46) |
Discontinued operations | 0.31 | (0.01) | 0.31 | (0.19) |
Basic net income (loss) per share | 0.38 | (0.12) | 0.10 | (0.65) |
Diluted net income (loss) per share | ||||
Continuing operations | 0.07 | (0.11) | (0.21) | (0.46) |
Discontinued operations | 0.31 | (0.01) | 0.31 | (0.19) |
Diluted net income (loss) per share | $ 0.38 | $ (0.12) | $ 0.10 | $ (0.65) |
Weighted-average shares used in computing net income (loss) per share: | ||||
Basic | 14,789,000 | 14,494,000 | 14,699,000 | 14,476,000 |
Diluted | 14,906,000 | 14,494,000 | 14,699,000 | 14,476,000 |
Product [Member] | ||||
Total net revenues | $ 4,460 | $ 9,192 | $ 13,095 | $ 20,840 |
Total cost of revenues | 3,564 | 5,603 | 10,119 | 17,526 |
Service [Member] | ||||
Total net revenues | 5,447 | 6,358 | 15,393 | 21,057 |
Total cost of revenues | $ 3,096 | $ 4,746 | $ 9,520 | $ 11,435 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 5,646 | $ (1,788) | $ 1,471 | $ (9,356) |
Adjustment to postretirement benefit obligation | (8) | (13) | 2 | |
Unrealized gain (loss) on available-for-sale securities of equity method investments, net of tax | 166 | (75) | 407 | |
Currency translation adjustment: | ||||
Unrealized net change arising during period | 379 | (26) | (136) | 324 |
Total other comprehensive income (loss) | 371 | 140 | (224) | 733 |
Comprehensive income (loss) | $ 6,017 | $ (1,648) | $ 1,247 | $ (8,623) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2018 | $ 172 | $ 41,471 | $ 13,319 | $ (18,586) | $ (5,378) | $ 30,998 |
Balance, shares at Dec. 31, 2018 | 17,237,000 | |||||
Net income (loss) | (4,150) | (4,150) | ||||
Net other comprehensive income (loss) | 168 | 168 | ||||
Cumulative effect of adoption of ASC 842 | 2,785 | 2,785 | ||||
Vesting of restricted stock | $ 1 | (1) | ||||
Vesting of restricted stock, shares | 76,000 | |||||
Stock-based compensation expense | 243 | 243 | ||||
Balance at Mar. 31, 2019 | $ 173 | 41,713 | 11,954 | (18,586) | (5,210) | 30,044 |
Balance, shares at Mar. 31, 2019 | 17,313,000 | |||||
Balance at Dec. 31, 2018 | $ 172 | 41,471 | 13,319 | (18,586) | (5,378) | 30,998 |
Balance, shares at Dec. 31, 2018 | 17,237,000 | |||||
Net income (loss) | (9,356) | |||||
Balance at Sep. 30, 2019 | $ 173 | 42,268 | 6,748 | (18,586) | (4,645) | 25,958 |
Balance, shares at Sep. 30, 2019 | 17,313,000 | |||||
Balance at Mar. 31, 2019 | $ 173 | 41,713 | 11,954 | (18,586) | (5,210) | 30,044 |
Balance, shares at Mar. 31, 2019 | 17,313,000 | |||||
Net income (loss) | (3,418) | (3,418) | ||||
Net other comprehensive income (loss) | 425 | 425 | ||||
Stock-based compensation expense | 221 | 221 | ||||
Balance at Jun. 30, 2019 | $ 173 | 41,934 | 8,536 | (18,586) | (4,785) | 27,272 |
Balance, shares at Jun. 30, 2019 | 17,313,000 | |||||
Net income (loss) | (1,788) | (1,788) | ||||
Net other comprehensive income (loss) | 140 | 140 | ||||
Stock-based compensation expense | 334 | 334 | ||||
Balance at Sep. 30, 2019 | $ 173 | 42,268 | 6,748 | (18,586) | (4,645) | 25,958 |
Balance, shares at Sep. 30, 2019 | 17,313,000 | |||||
Balance at Dec. 31, 2019 | $ 174 | 42,589 | 6,001 | (18,586) | (4,469) | 25,709 |
Balance, shares at Dec. 31, 2019 | 17,410,000 | |||||
Net income (loss) | (447) | (447) | ||||
Net other comprehensive income (loss) | (1,285) | (1,285) | ||||
Vesting of restricted stock | ||||||
Vesting of restricted stock, shares | 35,000 | |||||
Stock-based compensation expense | 273 | 273 | ||||
Balance at Mar. 31, 2020 | $ 174 | 42,862 | 5,554 | (18,586) | (5,754) | 24,250 |
Balance, shares at Mar. 31, 2020 | 17,445,000 | |||||
Balance at Dec. 31, 2019 | $ 174 | 42,589 | 6,001 | (18,586) | (4,469) | 25,709 |
Balance, shares at Dec. 31, 2019 | 17,410,000 | |||||
Net income (loss) | 1,471 | |||||
Balance at Sep. 30, 2020 | $ 176 | 43,311 | 7,472 | (18,586) | (4,693) | 27,680 |
Balance, shares at Sep. 30, 2020 | 17,584,000 | |||||
Balance at Mar. 31, 2020 | $ 174 | 42,862 | 5,554 | (18,586) | (5,754) | 24,250 |
Balance, shares at Mar. 31, 2020 | 17,445,000 | |||||
Net income (loss) | (3,728) | (3,728) | ||||
Net other comprehensive income (loss) | 690 | 690 | ||||
Vesting of restricted stock | $ 2 | (2) | ||||
Vesting of restricted stock, shares | 107,000 | |||||
Stock-based compensation expense | 212 | 212 | ||||
Balance at Jun. 30, 2020 | $ 176 | 43,072 | 1,826 | (18,586) | (5,064) | 21,424 |
Balance, shares at Jun. 30, 2020 | 17,552,000 | |||||
Net income (loss) | 5,646 | 5,646 | ||||
Net other comprehensive income (loss) | 371 | 371 | ||||
Vesting of restricted stock | ||||||
Vesting of restricted stock, shares | 32,000 | |||||
Stock-based compensation expense | 239 | 239 | ||||
Balance at Sep. 30, 2020 | $ 176 | $ 43,311 | $ 7,472 | $ (18,586) | $ (4,693) | $ 27,680 |
Balance, shares at Sep. 30, 2020 | 17,584,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||||
Net loss from continuing operations | $ 973 | $ (1,665) | $ (3,033) | $ (6,566) | |
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities: | |||||
Provision for (recovery of) doubtful accounts | 397 | (509) | |||
Provision for obsolete inventory | 41 | 245 | |||
Provision for warranty | 14 | 24 | |||
Depreciation and amortization | 2,634 | 2,214 | |||
Amortization and accretion of operating leases | 814 | 788 | |||
Fair value adjustment to notes receivable | 845 | 2,153 | |||
Equity method investment loss | 460 | 496 | 580 | 1,223 | |
Loss on disposal of assets | 18 | 3 | 18 | 67 | |
Gain on business interruption claim settlement | (789) | ||||
Deferred income taxes | 72 | (129) | |||
Stock-based compensation expense | 724 | 798 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 4,793 | 776 | |||
Inventories | (28) | (96) | |||
Current income taxes | 269 | 229 | |||
Other assets | 35 | (130) | |||
Accounts payable and accrued expenses | 1,024 | (2,000) | |||
Deferred revenue and customer deposits | 1,469 | 797 | |||
Operating lease obligations | (857) | (875) | |||
Net cash provided by (used in) operating activities from continuing operations | 8,159 | (991) | |||
Net cash provided by operating activities from discontinued operations | 598 | 1,407 | |||
Net cash provided by operating activities | 8,757 | 416 | |||
Cash flows from investing activities: | |||||
Proceeds from sale of property, plant and equipment | 121 | ||||
Investment in Firefly Systems, Inc. (Note 7) | (4,000) | ||||
Capital expenditures | (729) | (1,717) | |||
Net cash used in investing activities from continuing operations | (4,729) | (1,596) | |||
Cash flows from financing activities: | |||||
Proceeds from issuance of long-term debt | 237 | ||||
Principal payments on short-term debt | (450) | (323) | |||
Principal payments on long-term debt | (427) | (725) | |||
Proceeds from borrowing under credit facility | 5,040 | ||||
Repayments of borrowings under credit facility | (5,040) | ||||
Proceeds from Paycheck Protection Program Loan | 3,174 | ||||
Repayment of Paycheck Protection Program Loan | (3,174) | ||||
Payments on capital lease obligations | (420) | (282) | (1,195) | (420) | |
Net cash used in financing activities from continuing operations | (2,072) | (1,231) | |||
Effect of exchange rate changes on cash and cash equivalents | 120 | 46 | |||
Net increase (decrease) in cash and cash equivalents and restricted cash from continuing operations | 1,478 | (3,772) | |||
Net increase in cash and cash equivalents and restricted cash from discontinued operations | 598 | 1,407 | |||
Net increase (decrease) in cash and cash equivalents and restricted cash | 2,076 | (2,365) | |||
Cash and cash equivalents and restricted cash at beginning of period | 5,302 | 7,048 | 7,048 | ||
Cash and cash equivalents and restricted cash at end of period | 7,378 | 4,683 | 7,378 | 4,683 | 5,302 |
Components of cash and cash equivalents and restricted cash: | |||||
Cash and cash equivalents | 7,026 | 4,333 | 7,026 | 4,333 | 4,951 |
Restricted cash | 352 | 350 | 352 | 350 | $ 351 |
Total cash and cash equivalents and restricted cash | $ 7,378 | $ 4,683 | 7,378 | 4,683 | |
Supplemental disclosure of non-cash investing and financing activities: | |||||
Term loan borrowings to finance equipment purchases | 82 | 364 | |||
Finance lease obligations for property and equipment | 553 | 710 | |||
Short-term borrowings to finance insurance | 142 | 114 | |||
Investment in Firefly Systems, Inc. (Note 3) | $ 5,284 | $ 3,614 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. 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 entertainment and retail 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 (“SDM”) design, integrate and install technology solutions for a broad range of applications; develop and deliver out-of-home messaging and communications; manufacture projection screens; and provide managed services including monitoring of networked equipment to our customers. In August 2020, the Company completed the sale of its Strong Outdoor business segment. As a result of the divestiture, the Company has presented Strong Outdoor’s operating results as a discontinued operation for all periods presented. See Note 3 for additional details. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. 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, 2019. The condensed consolidated balance sheet as of December 31, 2019 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. Certain prior period balances have been reclassified to conform to current period presentation. The results for interim periods are not necessarily indicative of trends or results expected for a full year. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report on Form 10-Q are to, and amounts are presented in, U.S. dollars. Use of Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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. There is significant ongoing uncertainty surrounding the COVID-19 global pandemic and the extent and duration of the impacts that it may have on the Company, as well as its customers, suppliers, and employees. There is heightened potential for future reserves against trade receivables, inventory write downs and impairments of long-lived assets, goodwill, intangible assets and investments. In the current environment, assumptions about future financial and operational performance, supply chain pricing and availability and customer creditworthiness have greater variability than normal, which could in the future significantly affect the valuation of the Company’s assets, both financial and non-financial. As an understanding of the longer-term impacts of COVID-19 on the Company’s customers and business develops, there is heightened potential for changes in these views over the remainder of 2020, and potentially beyond. 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. Since many of Strong Entertainment’s customers have been negatively impacted by COVID-19, the Company recorded $0.5 million of bad debt expense during the first nine months of 2020 as a result of the increased uncertainty related to collection of trade accounts receivable from these customers. Investments The Company applies the equity method of accounting to investments when it has 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 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. Investments in nonmarketable unconsolidated entities in which the Company is not able to exercise significant influence (“Cost Method Investments”) are accounted for at the Company’s initial cost, minus any impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Dividends on cost method investments received are recorded as income. 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 investees as of September 30, 2020 and determined that the Company’s proportionate economic interest in the investees indicate that the investments were not other than temporarily impaired. The carrying value of our equity method and cost method investments is reported as “investments” on the condensed consolidated balance sheets. Notes 3 and 7 contain additional information on our equity method and cost 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 September 30, 2020 and December 31, 2019. Fair values measured on a recurring basis at September 30, 2020 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 7,026 $ - $ - $ 7,026 Restricted cash 352 - - 352 Notes receivable - - - - Total $ 7,378 $ - $ - $ 7,378 Fair values measured on a recurring basis at December 31, 2019 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,951 $ - $ - $ 4,951 Restricted cash 351 - - 351 Notes receivable - - - - Total $ 5,302 $ - $ - $ 5,302 The following table reconciles the beginning and ending balance of the Company’s notes receivable at fair value (in thousands): Nine Months Ended September 30, 2020 2019 Notes receivable balance, beginning of period $ - $ 3,965 Fair value adjustment - (2,153 ) Notes receivable balance, end of period $ - $ 1,812 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%. In connection with this transaction, the Company also entered into an agreement with one of its customers, pursuant to which the Company is obligated to provide up to $1.1 million of credits against any amounts due to the Company from the customer based on cash collected on the notes receivable. In the event the Company does not have any outstanding balances due from the customer, the Company would be obligated to remit up to the first $1.1 million collected on the notes receivable directly to the customer. The notes receivable are recorded at estimated fair value. The significant unobservable inputs used in the fair value measurement of the Company’s notes receivable are the discount rate and percentage of default. Significant increases (decreases) in any of these inputs in isolation would result in significantly lower (higher) fair value measurements. Adjustments to the fair value of the notes receivable are included in other (expense) income on the Company’s condensed consolidated statements of operations. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During the year ended December 31, 2019, the Company adjusted the carrying value of the notes receivable to $0 based on management’s review of the debtor’s financial statements and changes in the underlying trend of historical and projected cash flows available to service the notes. The related $1.1 million contingent liability was also adjusted during the year ended December 31, 2019, based on the Company’s expectation that cash flow from the notes receivable will not be available. As of September 30, 2020, management estimated the fair value of the notes receivable to be $0. The Company’s short-term and long-term debt is recorded at historical cost. As of September 30, 2020, the Company’s long-term debt, including current maturities, had a carrying value of $3.7 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at September 30, 2020 was $3.4 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 7 includes fair value information related to our equity and cost 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 and nine months ended September 30, 2020 or 2019. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles- Goodwill and Other- Internal Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” This ASU requires customers in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize or expense. The standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2020 did not have an impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU improves the effectiveness of fair value measurement disclosures by eliminating, adding and modifying certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2020 did not have an impact on the Company’s consolidated financial statements and related disclosures. 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 was initially effective for the Company for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” which, among other things, defers the effective date of ASU 2016-13 for public filers that are considered smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted. The Company believes the adoption of this ASU will not significantly impact its results of operations and financial position. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. The effective date of the standard will be for annual periods beginning after December 15, 2020, with early adoption permitted. The various amendments in the standard are applied on a retrospective basis, modified retrospective basis and prospective basis, depending on the amendment. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815.” This ASU clarifies the interaction between accounting standards related to equity securities, equity method investments and certain derivatives. The effective date of the standard will be for annual periods beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of the new standard on its condensed consolidated financial statements and related disclosures. In April 2020, the FASB issued a question-and-answer document to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of the COVID-19 pandemic. The guidance will allow concessions related to the timing of payments, where the total consideration has not changed, to not be accounted for as lease modifications. Instead, any such concessions can be accounted for as if no change was made to the contract or as variable lease payments. As a result of the COVID-19 pandemic, the Company received certain lease concessions in the form of rent deferrals during 2020. The Company chose to implement the policy election provided by the FASB to record rent concessions as if no modifications to leases contracts were made, and thus no changes to the lease obligations were recorded in respect to these concessions. As of September 30, 2020, the Company had outstanding deferred rent of $0.1 million, the majority of which will be paid over the remaining term of the leases. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 3. Discontinued Operations As part of transactions in May 2019 and August 2020, the Company divested its Strong Outdoor business segment. The Company’s Strong Outdoor business segment provided outdoor advertising and experiential marketing to advertising agencies and corporate accounts, primarily in New York City. On May 21, 2019, SDM entered into a Taxicab Advertising Collaboration Agreement (the “Commercial Agreement”) and a Unit Purchase Agreement (the “Unit Purchase Agreement”) with Firefly Systems, Inc. (“Firefly”), pursuant to which SDM agreed to make available to Firefly 300 digital taxi tops and the parties agreed to coordinate the fulfilling of SDM’s agreements with the Metropolitan Taxicab Board of Trade, Inc. (“MTBOT”) and Creative Mobile Media, LLC (“CMM”), each dated February 8, 2018. Firefly agreed to fulfill the digital taxi top advertising obligations under the MTBOT agreement and CMM agreement, and SDM agreed to fulfill the non-digital taxi top advertising obligations under the MTBOT agreement and CMM agreement. The Company is a party to the Unit Purchase Agreement and agreed to guarantee the payment obligations of SDM under the Commercial Agreement. As consideration for entering into these agreements, the Company received $4.8 million of Firefly’s Series A-2 preferred shares (“Firefly Shares”). The Firefly Shares, including those subsequently issued pursuant to an earn-out provision, were subject to a repurchase option for a period of three years to cover SDM’s indemnity obligations and other post-closing covenants under the Commercial Agreement and the Unit Purchase Agreement. As part of the Asset Purchase Agreement (as defined and described below), Firefly no longer has an option to repurchase any of the Series A-2 preferred shares issued to SDM. The 300 digital tops the Company has made available to Firefly are subject to a master equipment lease agreement the Company entered into during 2017. Pursuant to the master lease agreement and the Unit Purchase Agreement, the Company will remain the primary obligor until such time as the lease expires. In addition, of the $4.8 million of Firefly Shares received, $1.2 million were eligible for repurchase by Firefly if the Company did not exercise the purchase option contained within the master lease agreement. Accordingly, the Company had deferred recognizing an investment related to these Firefly Shares eligible for repurchase until such time it was reasonably certain the Company would exercise the purchase option. The transaction, in effect, transferred control of the underlying asset to Firefly. As additional consideration for the right to use the digital taxi tops, Firefly agreed to pay for certain of Company’s operating expenses associated with the non-digital taxi tops. The Company concluded the payments that Firefly made on its behalf were considered variable payments and were not included in the calculation of the selling profit. Therefore, the Company recorded the benefit and the related operating expenses in the period when the changes in facts and circumstances on which the variable lease payments were based occured. As part of the Asset Purchase Agreement (as defined and described below) the Taxicab Advertising Collaboration Agreement dated May 21, 2019 was terminated, which relieved the Company of its obligation to exercise the purchase option contained within the master lease agreement. As a result, the Company recognized an additional $1.2 million investment at September 30, 2020 related to the Firefly Shares that were previously eligible for repurchase by Firefly. The Unit Purchase Agreement contained an earnout provision pursuant to which SDM obtained additional Firefly Shares. The earnout period was from May 22, 2019 through June 30, 2020. SDM was eligible to earn additional Firefly Shares equivalent to the cash collections under certain digital top contracts that were in place at the closing of the transaction. The Company received the shares earned pursuant to the earnout provision on August 3, 2020. In connection with the additional Firefly Shares that were received, the Company recorded an additional $0.1 million and $0.7 million gain on the Firefly transaction during the three and nine months ended September 30, 2020, respectively. On August 3, 2020, SDM entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Firefly, pursuant to which SDM agreed to sell substantially all of the assets primarily related to its Strong Outdoor operating business to Firefly and continue to make available 300 digital taxi tops to Firefly. SDM retained certain accounts receivable as well as liabilities other than executory obligations under transferred contracts to the extent such liabilities are required to be performed following closing or constitute certain deferred revenue. The transaction closed on the same day. As consideration for entering into the Asset Purchase Agreement, SDM received approximately $0.6 million in cash consideration and approximately $3.2 million of Firefly’s Series A-3 preferred shares. In connection with the closing of the transactions contemplated by the Asset Purchase Agreement, (i) SDM received approximately $1.1 million of Firefly’s Series A-2 preferred shares, which constituted the remaining shares to be issued pursuant to the Unit Purchase Agreement, (ii) Firefly no longer has an option to repurchase any of the Series A-2 preferred shares issued to SDM, (iii) accounts payable to Firefly were cancelled and forgiven, and (iv) the Taxicab Advertising Collaboration Agreement dated May 21, 2019 was terminated, which relieved the Company of its obligation to exercise the purchase option contained within the master lease agreement. The Company recorded a gain of approximately $5.3 million during the third quarter of 2020 as a result of the transaction. As of September 30, 2020, SDM held approximately $5.7 million of Firefly Series A-2 preferred shares, which included the shares issued to SDM as part of the May 2019 transaction. As contemplated by the Asset Purchase Agreement, the newly issued Series A-2 preferred shares of Firefly will be held by SDM, and the previously issued Series A-2 preferred shares of Firefly held by Fundamental Global Venture Partners, LP (“FGVP”), an investment fund managed by Fundamental Global Investors, LLC in which SDM is the sole limited partner, were transferred to SDM. The Asset Purchase Agreement includes customary representations and warranties. SDM is indemnifying Firefly for excluded liabilities related to the transferred business. Convergent entered into a Master Services Agreement (the “Master Services Agreement”) with Firefly, pursuant to which Convergent agreed to provide certain support services to Firefly, including remote equipment monitoring and diagnostics of screens until no later than December 31, 2022 and transition advertising instruction and integration services, content management services, ad-hoc reporting and analysis, wireless service, advertising content management services, and mapping data until no later than six months from closing. As consideration for entering into the Master Services Agreement, Convergent received $2.0 million in cash consideration. The components of the gain on the sale of the Strong Outdoor business to Firefly during the three months ended September 30, 2020 are as follows (in thousands): Firefly Series A-3 preferred shares received $ 3,200 Cash received 571 Removal of Firefly's share repurchase option related to digital top lease 1,171 Forgiven accounts payable to Firefly 739 Book value of liabilities transferred to Firefly 191 Book value of assets transferred to Firefly (608 ) Net gain from sale of discontinued operations $ 5,264 The major line items constituting the net income (loss) from discontinued operations are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net revenues $ 148 $ 1,296 $ 1,587 $ 3,524 Cost of revenues 160 684 1,487 4,769 Gross profit (12 ) 612 100 (1,245 ) Selling and administrative expenses 515 733 1,498 1,725 Loss on disposal of assets (64 ) - (64 ) (38 ) (Loss) income from operations (591 ) (121 ) (1,462 ) (3,008 ) Other income (expense) - - - - (Loss) income from discontinued operations (591 ) (121 ) (1,462 ) (3,008 ) Gain on Firefly transaction 5,264 (2 ) 5,966 218 Income tax expense - - - - Total net income (loss) from discontinued operations $ 4,673 $ (123 ) $ 4,504 $ (2,790 ) Strong Outdoor’s assets and liabilities are reflected as assets and liabilities of discontinued operations for all periods presented. The major classes of assets and liabilities included as part of discontinued operations are as follows (in thousands): September 30, December 31, 2020 2019 Accounts receivable $ - $ - Other current assets - 320 Total current assets of discontinued operations - 320 Property, plant and equipment - 491 Other long-term assets - 94 Total long-term assets of discontinued operations - 585 Total assets of discontinued operations $ - $ 905 Accounts payable $ - $ 304 Current portion of operating lease obligation - 125 Deferred revenue and customer deposits - 275 Total current liabilities of discontinued operations - 704 Operating lease obligation, net of current portion - 147 Total long-term liabilities of discontinued operations - 147 Total liabilities of discontinued operations $ - $ 851 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 4. 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; and ● 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 or 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. 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 September 30, 2020 or December 31, 2019. The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2020 (in thousands): Three Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Screen system sales $ 1,631 $ - $ - $ 1,631 Digital equipment sales 2,192 322 - 2,514 Extended warranty sales 110 - - 110 Other product sales 205 - - 205 Total product sales 4,138 322 - 4,460 Field maintenance and monitoring services 875 3,808 - 4,683 Installation services 186 216 - 402 Other service revenues 61 - 301 362 Total service revenues 1,122 4,024 301 5,447 Total $ 5,260 $ 4,346 $ 301 $ 9,907 Nine Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Screen system sales $ 5,566 $ - $ - $ 5,566 Digital equipment sales 4,529 1,725 - 6,254 Extended warranty sales 418 - - 418 Other product sales 857 - - 857 Total product sales 11,370 1,725 - 13,095 Field maintenance and monitoring services 3,030 10,517 - 13,547 Installation services 518 694 - 1,212 Other service revenues 123 18 493 634 Total service revenues 3,671 11,229 493 15,393 Total $ 15,041 $ 12,954 $ 493 $ 28,488 The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2019 (in thousands): Three Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Screen system sales $ 4,441 $ - $ - $ 4,441 Digital equipment sales 3,282 757 - 4,039 Extended warranty sales 197 - - 197 Other product sales 515 - - 515 Total product sales 8,435 757 - 9,192 Field maintenance and monitoring services 1,972 3,145 - 5,117 Installation services 473 611 - 1,084 Other service revenues 48 19 90 157 Total service revenues 2,493 3,775 90 6,358 Total $ 10,928 $ 4,532 $ 90 $ 15,550 Nine Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Screen system sales $ 10,370 $ - $ - $ 10,370 Digital equipment sales 6,396 2,248 - 8,644 Extended warranty sales 582 - - 582 Other product sales 1,238 6 - 1,244 Total product sales 18,586 2,254 - 20,840 Field maintenance and monitoring services 6,060 8,704 - 14,764 Installation services 1,540 4,194 - 5,734 Other service revenues 219 52 288 559 Total service revenues 7,819 12,950 288 21,057 Total $ 26,405 $ 15,204 $ 288 $ 41,897 Screen system sales The Company typically 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. For contracts that are long-term in nature, the Company believes that the use of the percentage-of-completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues, and contract costs. Under the percentage-of-completion method, revenue is recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract. 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 Entertainment and Convergent customers. In the Strong Entertainment 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 ratably over the term of the agreement. The Company also performs discrete time and materials-based maintenance and repair work for customers in the Strong Entertainment and Convergent segments. Revenue related to time and materials-based maintenance and repair work is recognized at the point in time when the performance obligation has been fully satisfied. Installation services The Company performs installation services for both its Strong Entertainment and Convergent customers and recognizes revenue upon completion of the installations. Extended warranty sales The Company sells extended warranties to its Strong Entertainment customers. When the Company is the primary obligor, revenue is recognized on a gross basis ratably over the term of 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. Timing of Revenue Recognition The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2020 (in thousands): Three Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Point in time $ 4,532 $ 767 $ - $ 5,299 Over time 728 3,579 301 4,608 Total $ 5,260 $ 4,346 $ 301 $ 9,907 Nine Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Point in time $ 12,326 $ 2,987 $ 6 $ 15,319 Over time 2,715 9,967 487 13,169 Total $ 15,041 $ 12,954 $ 493 $ 28,488 The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2019 (in thousands): Three Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Point in time $ 9,364 $ 1,518 $ - $ 10,882 Over time 1,564 3,014 90 4,668 Total $ 10,928 $ 4,532 $ 90 $ 15,550 Nine Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Point in time $ 21,746 $ 6,918 $ - $ 28,664 Over time 4,659 8,286 288 13,233 Total $ 26,405 $ 15,204 $ 288 $ 41,897 At September 30, 2020, 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 $2.9 million. The Company expects to recognize $1.4 million of unearned revenue amounts throughout the rest of 2020, $0.8 million during 2021 and $0.7 million during 2022. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Common Share | 5. Income (Loss) Per Common Share Basic income (loss) per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income per share has been calculated using the weighted-average number of shares of common stock outstanding and potentially dilutive during the period, using the treasury stock method. 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 from continuing operations for the nine months ended September 30, 2020 and the three and nine months ended September 30, 2019, there were no differences between average shares used to compute basic and diluted loss per share. The following table summarizes the weighted average shares used to compute basic and diluted income (loss) per share (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted average shares outstanding: Basic weighted average shares outstanding 14,789 14,494 14,699 14,476 Dilutive effect of stock options and certain non-vested restricted stock units 117 - - - Diluted weighted average shares outstanding 14,906 14,494 14,699 14,476 Options to purchase 884,500 and 772,000 shares of common stock were outstanding as of September 30, 2020 and September 30, 2019, respectively, but were not included in the computation of diluted loss per share as the options’ exercise prices were greater than the average market price of the common shares for each period. An additional 165,206 and 146,461 common stock equivalents related to options and restricted stock awards were excluded for the three and nine months ended September 30, 2019, respectively, as their inclusion would be anti-dilutive, thereby decreasing the net losses per share. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventories consist of the following (in thousands): September 30, 2020 December 31, 2019 Raw materials and components $ 1,632 $ 1,584 Work in process 269 211 Finished goods 915 1,084 $ 2,816 $ 2,879 The inventory balances are net of reserves of approximately $0.7 million and $0.9 million as of September 30, 2020 and December 31, 2019, respectively. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | 7. Investments The following summarizes our investments (dollars in thousands): September 30, 2020 December 31, 2019 Carrying Amount Economic Interest Carrying Amount Economic Interest Equity Method Investments 1347 Property Insurance Holdings, Inc. $ 6,379 21.0 % $ 6,897 17.2 % Itasca Capital Ltd. 2,729 32.3 % 2,800 32.3 % Total Equity Method Investments 9,108 9,697 Cost Method Investment Firefly Systems, Inc. 12,898 3,614 Total Investments $ 22,006 $ 13,311 Equity Method Investments The following summarizes the (loss) income of equity method investees reflected in the condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Entity 1347 Property Insurance Holdings, Inc. $ (440 ) $ (783 ) $ (443 ) $ (622 ) Itasca Capital Ltd. (20 ) 287 (137 ) (601 ) Total $ (460 ) $ (496 ) $ (580 ) $ (1,223 ) 1347 Property Insurance Holdings, Inc. (“PIH”) is a publicly traded company that is implementing business plans to operate as a diversified holding company of insurance, reinsurance and investment management businesses. On September 15, 2020, PIH entered into an agreement pursuant to which PIH purchased 1.1 million shares of its outstanding common stock from an existing shareholder. The purchase of the 1.1 million shares decreased the number of outstanding shares of PIH and increased the Company’s ownership interest to approximately 21%. The Company’s Chairman and former Chief Executive Officer is the chairman of the board of directors of PIH, and the Company’s Co-Chairman is co-chairman of the board of directors of PIH. As of September 30, 2020, they controlled entities that, when combined with the Company’s ownership in PIH, own greater than 50% of PIH. Since PIH does not depend on the Company for continuing financial support to maintain operations, the Company has determined that PIH is not a variable interest entity, and therefore, the Company is not required to consolidate PIH. The equity method loss from PIH during the three and nine months ended September 30, 2020 was primarily the result of PIH’s non-cash losses associated with the change in fair value of its investment in the common stock of FedNat Holding Company (Nasdaq: FNHC). The Company did not receive dividends from PIH during the three and nine months ended September 30, 2020 or 2019. Based on quoted market prices, the market value of the Company’s ownership in PIH was $4.0 million at September 30, 2020. Itasca Capital Ltd. (“Itasca”) is a publicly traded Canadian company that is an investment vehicle seeking transformative strategic investments. The Company’s Chairman and former Chief Executive Officer is chairman of the board of directors of Itasca, and the Company’s Co-Chairman is also a member of the board of directors of Itasca. These board seats, 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 and nine months ended September 30, 2020 or 2019. Based on quoted market prices, the market value of the Company’s ownership in Itasca was $3.4 million at September 30, 2020. As of September 30, 2020, the Company’s retained earnings included an accumulated deficit from its equity method investees of approximately $1.9 million. The summarized financial information presented below reflects the financial information of the Company’s equity method investees for the nine months ended June 30, 2020 and 2019, consistent with the Company’s recognition of the results of its equity method investments on a one-quarter lag (in thousands): For the nine months ended June 30, 2020 2019 Revenue (1) $ (4,883 ) $ 1,086 Operating (loss) income $ (7,845 ) $ 898 Net loss $ (3,020 ) $ (5,489 ) (1) PIH records realized and unrealized gains and losses on investments in net investment income (loss), which is included in the revenue line above. Cost Method Investment The Company received preferred shares of Firefly in connection with the transactions with Firefly in May 2019 and August 2020. See Note 3 for additional details. In addition, on August 3, 2020, Strong/MDI entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Firefly, pursuant to which MDI agreed to purchase $4.0 million of Firefly’s Series A-3 preferred shares at the initial closing, which took place on the same day, and the Company or its affiliated entities may purchase an additional $2.0 million of Firefly’s Series A-3 preferred shares at a second closing subject to certain conditions. As contemplated by the Stock Purchase Agreement and ancillary investment agreements, the Company and its affiliated entities will have the right to designate a director to be elected to the board of directors of Firefly, subject to holding, together with its affiliates, approximately $7.2 million of Firefly’s Series A-3 preferred shares and other conditions. The Company and its affiliated entities currently hold $7.2 million of Series A-3 preferred shares and have designated Kyle Cerminara, Chairman of the Company’s board of directors and a principal of the Company’s largest shareholder, to Firefly’s board of directors. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. Intangible Assets Intangible assets consisted of the following as of September 30, 2020 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 250 $ - $ 250 Intangible assets subject to amortization: Software in service 5 2,404 (1,478 ) 926 Product formulation 10 458 (420 ) 38 Total $ 3,112 $ (1,898 ) $ 1,214 Intangible assets consisted of the following as of December 31, 2019 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 203 $ - $ 203 Intangible assets subject to amortization: Software in service 5 2,362 (1,087 ) 1,275 Product formulation 10 471 (415 ) 56 Total $ 3,036 $ (1,502 ) $ 1,534 Amortization expense relating to intangible assets was $0.2 million during each of the three months ended September 30, 2020 and 2019 and $0.6 million during each of the nine months ended September 30, 2020 and 2019. 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 of 2020 $ 140 2021 523 2022 244 2023 57 2024 - Thereafter - Total $ 964 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 9. Goodwill The following represents a summary of changes in the Company’s carrying amount of goodwill for the nine months ended September 30, 2020 (in thousands): Balance as of December 31, 2019 $ 919 Foreign currency translation adjustment (24 ) Balance as of September 30, 2020 $ 895 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt The Company’s debt consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Short-term debt: Strong/MDI installment loan $ 2,830 $ 3,080 Insurance note payable 142 - Current portion of long-term debt 1,055 998 Total short-term debt 4,027 4,078 Long-term debt: Equipment term loans 3,683 4,031 Total principal balance of long-term debt 3,683 4,031 Less: current portion (1,055 ) (998 ) Less: unamortized debt issuance costs (11 ) (14 ) Total long-term debt 2,617 3,019 Total short-term and long-term debt $ 6,644 $ 7,097 Equipment Term Loans On May 22, 2018, 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. In each of December 2018 and June 2019, Convergent entered into additional installment payment agreements with other financing companies in order to purchase additional media players and related equipment, with each round of financing totaling approximately $0.6 million and $0.2 million, respectively. Installment payments under each contract are due monthly for a period of 60 months. The financing under each of the agreements is secured by the respective equipment. The borrowings under the agreements are recorded as long-term debt on the Company’s consolidated balance sheet. Collectively, the Company had $3.7 million of outstanding borrowings under equipment term loan agreements at September 30, 2020, which bore interest at a weighted-average fixed rate of 7.7%. Strong/MDI Installment Loan and Revolving Credit Facility On September 5, 2017, the Company’s Canadian subsidiary, Strong/MDI, entered into a demand credit agreement, as amended and restated May 15, 2018, 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 bear interest at the prime rate established by the lender. Amounts outstanding under the installment loans 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$3.8 million, or approximately $2.8 million, of principal outstanding on the 20-year installment loan as of September 30, 2020, which bears variable interest at 2.95%. There was no balance outstanding on Strong/MDI’s revolving credit facility as of September 30, 2020. Strong/MDI was in compliance with its debt covenants as of September 30, 2020. Scheduled repayments are as follows for the Company’s long-term debt outstanding as of September 30, 2020 (in thousands): Remainder of 2020 $ 257 2021 1,080 2022 1,151 2023 1,165 2024 30 Thereafter - Total $ 3,683 Paycheck Protection Program On April 14, 2020, the Company entered into a promissory note evidencing a loan of $3.2 million (the “Loan”) under the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) of the CARES Act. The Company intended to use the Loan for qualifying payroll, rent and utility expenses in accordance with the terms of the CARES Act. At the time the Company applied for the Loan, the Company believed it qualified to receive the funds pursuant to the PPP. On April 23, 2020, the SBA, in consultation with the Department of Treasury, issued new guidance that created additional uncertainty regarding the qualification requirements for a PPP loan for public companies. The Company has less than 300 employees and continues to be severely impacted by the disruption to the cinema, theme park and advertising industries as a result of COVID-19. However, out of an abundance of caution and in light of the new guidance, the Company repaid the full amount of the Loan plus accrued interest to the lender on May 5, 2020. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | 11. 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 (dollars in thousands): Lease cost Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 420 $ 282 $ 1,195 $ 420 Interest on lease liabilities 154 142 473 184 Operating lease cost 372 421 1,163 1,751 Short-term lease cost 12 12 42 21 Sublease income (92 ) (120 ) (297 ) (313 ) Net lease cost $ 866 $ 737 $ 2,576 $ 2,063 Other information Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 154 $ 142 $ 473 $ 184 Operating cash flows from operating leases $ 289 $ 333 $ 857 $ 875 Financing cash flows from finance leases $ 420 $ 282 $ 1,195 $ 420 Right-of-use assets obtained in exchange for new finance lease liabilities $ 231 $ 902 $ 553 $ 1,613 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ 109 $ 644 Derecognition of right-of-use asset in connection with Firefly transaction $ - $ - $ - $ 3,394 As of September 30, 2020 Weighted-average remaining lease term - finance leases (years) 2.7 Weighted-average remaining lease term - operating leases (years) 7.1 Weighted-average discount rate - finance leases 12.1 % Weighted-average discount rate - operating leases 4.9 % The following table presents a maturity analysis of the Company’s finance and operating lease liabilities as of September 30, 2020 (in thousands): Operating Leases Finance Leases Remainder of 2020 $ 253 $ 580 2021 944 2,320 2022 812 2,114 2023 660 499 2024 669 235 Thereafter 2,447 75 Total lease payments 5,785 5,823 Less: Amount representing interest (935 ) (892 ) Present value of lease payments 4,850 4,931 Less: Current maturities (743 ) (1,820 ) Lease obligations, net of current portion $ 4,107 $ 3,111 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 Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. 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 September 30, 2020 and December 31, 2019. The Tax Cuts and Jobs Act of 2017 provides for a territorial tax system, which began in 2018. It includes the global intangible low-taxed income (“GILTI”) provision. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. As a result of the GILTI provisions, the Company’s inclusion of taxable income was incorporated into the overall net operating loss and valuation allowance for the three and nine months ended September 30, 2020 and September 30, 2019, as well as December31, 2019. Changes in tax laws may affect recorded deferred tax assets and liabilities and the Company’s effective tax rate in the future. On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The CARES Act made significant changes to Federal tax laws, including certain changes that are retroactive to the prior year. The effects of these changes relate to deferred tax assets and net operating losses; all of which are offset by valuation allowance. The Company is subject to possible examinations not yet initiated for Federal purposes for fiscal years 2016 through 2019. 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 Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | 13. 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 was $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $0.7 million and $0.8 million for the nine months ended September 30, 2020 and 2019, 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. On December 17, 2019, the Company’s stockholders approved the amendment and restatement of the 2017 Plan to (i) increase the number of shares of the Company’s common stock authorized for issuance under the 2017 Plan by 1,975,000 shares and (ii) extend the expiration date of the 2017 Plan by approximately two years, until October 27, 2029. As of September 30, 2020, 2,589,278 shares were available for issuance under the amended and restated 2017 Plan. Stock Options The following table summarizes stock option activity for the nine months ended September 30, 2020: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2019 1,107,000 $ 4.47 7.9 $ 148 Granted - Exercised - Forfeited (100,500 ) 4.76 Expired (122,000 ) 5.27 Outstanding at Spetember 30, 2020 884,500 $ 4.33 7.2 $ - Exercisable at September 30, 2020 386,000 $ 4.77 6.6 $ - 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 September 30, 2020, 498,500 stock option awards were non-vested. Unrecognized compensation cost related to non-vested stock options was approximately $0.6 million, which is expected to be recognized over a weighted average period of 2.7 years. Restricted Stock Shares and Restricted Stock Units The Company granted a total of 200,634 and 417,378 restricted stock units during the nine months ended September 30, 2020 and 2019, respectively. 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. The following table summarizes restricted stock share activity for the nine months ended September 30, 2020: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 23,334 $ 6.50 Granted - Shares vested (23,334 ) 6.50 Shares forfeited - Non-vested at September 30, 2020 - The following table summarizes restricted stock unit activity for the nine months ended September 30, 2020: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 522,379 $ 3.14 Granted 200,634 1.57 Shares vested (174,954 ) 2.73 Shares forfeited (3,334 ) 2.89 Non-vested at September 30, 2020 544,725 $ 2.51 As of September 30, 2020, the total unrecognized compensation cost related to non-vested restricted stock unit awards was approximately $1.1 million, which is expected to be recognized over a weighted average period of 1.9 years. |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 14. 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 62% and 57% of consolidated net revenues during the three and nine months ended September 30, 2020, respectively. Trade accounts receivable from these customers represented approximately 37% of net consolidated receivables at September 30, 2020. In addition, the Company had one customer account for more than 10% of both its consolidated net revenues during the three and nine months ended September 30, 2020. 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 the impact of COVID-19 on its customers, 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. 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. During the third quarter of 2020, the Company reached a settlement with its insurance company which resolved all contingencies related to its business interruption claim. Through September 30, 2020, the Company has received insurance proceeds of $5.0 million, which included $2.0 million related to the property and casualty claim and $3.0 million related to our business interruption claim. Any additional future claims payments associated with the Company’s property and casualty losses are at the discretion of the insurance carrier based on its continuing claims analysis. The Company received an additional $1.9 million during the third quarter of 2020 associated with the final settlement of the business interruption claim, which combined with the $0.8 million of proceeds previously received and deferred, resulted in an insurance recovery gain of approximately $2.7 million during the third quarter of 2020. Consulting Agreement On May 19, 2020, the Company entered into a Financial and Consulting Services Agreement (the “Itasca Financial Agreement”) with Itasca Financial LLC (“Itasca Financial”), pursuant to which Itasca Financial agreed to advise the Company on aspects of its strategic direction. In exchange for Itasca Financial’s services, the Company agreed to pay Itasca Financial a retainer fee of $50,000, payable in two installments of $25,000, and a monthly fee of $20,000. The Itasca Financial Agreement may not be terminated for a period of three months from May 19, 2020, after which time it may be terminated by either party at any time with prior written notice of at least 30 calendar days. During the nine months ended September 30, 2020, the Company paid $130,000 to Itasca Financial, and the parties have agreed to suspend the Itasca Financial Agreement indefinitely. Upon termination of the Itasca Financial Agreement by either party, the Company has agreed to pay Itasca Financial a termination fee of $100,000, which can be payable in a combination of cash and stock at the Company’s discretion, and if any such fee is paid in stock, then the Company has agreed to grant Itasca Financial unlimited piggyback registration rights for such stock. The Itasca Financial Agreement also includes expense reimbursement provisions and indemnification provisions in favor of Itasca Financial and its affiliates. This description of the Itasca Financial Agreement is a summary only and is qualified by reference to full text of the Itasca Financial Agreement, which is filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q filed with the Commission on August 12, 2020. Fundamental Global Investors, LLC, with its affiliates (collectively, “Fundamental Global”), is the controlling stockholder of the Company. D. Kyle Cerminara, the Chief Executive Officer, Co-Founder and Partner of Fundamental Global Investors, LLC, is the Chairman of the Company’s board of directors and former Chief Executive Officer of the Company, and Lewis M. Johnson, the President, Co-Founder and Partner of Fundamental Global Investors, LLC, is Co-Chairman of the Company’s board of directors. Fundamental Global is the controlling stockholder of PIH, and Larry G. Swets, Jr. serves as Interim Chief Executive Officer and principal executive officer of PIH and as a member of PIH’s Board of Directors. In addition, Mr. Swets founded and serves as the managing member of Itasca Financial, which provides services to the Company, as described above, as well as to other companies affiliated with Fundamental Global. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | 15. Business Segment Information Subsequent to the disposal of its Strong Outdoor business segment, the Company conducts its operations through two primary business segments: Strong Entertainment (formerly known as Strong Cinema) and Convergent. The Strong Entertainment segment name change is to the name only and had no impact on the Company’s historical financial position, results of operations, cash flow or segment level results previously reported. Strong Entertainment 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. The Company’s operating segments were determined based on the manner in which management organizes segments for making operating decisions and assessing performance. Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) (in thousands) Net revenues Strong Entertainment $ 5,260 $ 10,928 $ 15,041 $ 26,405 Convergent 4,346 4,532 12,954 15,204 Other 301 90 493 288 Total net revenues 9,907 15,550 28,488 41,897 Gross profit (loss) Strong Entertainment 889 3,669 2,769 8,621 Convergent 2,083 1,469 5,668 4,622 Other 275 63 412 (307 ) Total gross profit 3,247 5,201 8,849 12,936 Operating (loss) income Strong Entertainment (79 ) 2,230 (894 ) 4,646 Convergent 1,059 394 2,508 1,467 Other 52 (233 ) (225 ) (1,197 ) Total segment operating income 1,032 2,391 1,389 4,916 Unallocated administrative expenses (1,377 ) (2,204 ) (4,893 ) (6,742 ) Unallocated loss on disposal of assets (18 ) - (18 ) - (Loss) income from operations (363 ) 187 (3,522 ) (1,826 ) Other income (expense), net 2,322 (625 ) 2,091 (2,222 ) Income (loss) before income taxes and equity method investment loss $ 1,959 $ (438 ) $ (1,431 ) $ (4,048 ) (In thousands) September 30, 2020 December 31, 2019 Identifiable assets Strong Entertainment $ 18,616 $ 18,135 Convergent 10,304 15,797 Corporate assets 29,468 22,796 Discontinued operations - 905 Total $ 58,388 $ 57,633 Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2020 2019 2020 2019 Net revenues United States $ 8,566 $ 12,395 $ 24,699 $ 34,995 Canada 645 1,111 1,708 2,664 China 507 633 775 1,763 Mexico - 65 78 70 Latin America - 275 328 574 Europe 38 521 262 1,058 Asia (excluding China) 24 348 337 515 Other 127 202 301 258 Total $ 9,907 $ 15,550 $ 28,488 $ 41,897 (In thousands) September 30, 2020 December 31, 2019 Identifiable assets United States $ 37,052 $ 37,508 Canada 21,336 20,125 Total $ 58,388 $ 57,633 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) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | 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, 2019. The condensed consolidated balance sheet as of December 31, 2019 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. Certain prior period balances have been reclassified to conform to current period presentation. The results for interim periods are not necessarily indicative of trends or results expected for a full year. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report on Form 10-Q are to, and amounts are presented in, U.S. dollars. |
Use of Management Estimates | Use of Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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. There is significant ongoing uncertainty surrounding the COVID-19 global pandemic and the extent and duration of the impacts that it may have on the Company, as well as its customers, suppliers, and employees. There is heightened potential for future reserves against trade receivables, inventory write downs and impairments of long-lived assets, goodwill, intangible assets and investments. In the current environment, assumptions about future financial and operational performance, supply chain pricing and availability and customer creditworthiness have greater variability than normal, which could in the future significantly affect the valuation of the Company’s assets, both financial and non-financial. As an understanding of the longer-term impacts of COVID-19 on the Company’s customers and business develops, there is heightened potential for changes in these views over the remainder of 2020, and potentially beyond. |
Restricted Cash | Restricted Cash Restricted cash represents amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program. |
Accounts Receivable | 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. Since many of Strong Entertainment’s customers have been negatively impacted by COVID-19, the Company recorded $0.5 million of bad debt expense during the first nine months of 2020 as a result of the increased uncertainty related to collection of trade accounts receivable from these customers. |
Investments | Investments The Company applies the equity method of accounting to investments when it has 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 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. Investments in nonmarketable unconsolidated entities in which the Company is not able to exercise significant influence (“Cost Method Investments”) are accounted for at the Company’s initial cost, minus any impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Dividends on cost method investments received are recorded as income. 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 investees as of September 30, 2020 and determined that the Company’s proportionate economic interest in the investees indicate that the investments were not other than temporarily impaired. The carrying value of our equity method and cost method investments is reported as “investments” on the condensed consolidated balance sheets. Notes 3 and 7 contain additional information on our equity method and cost method investments. |
Fair Value of Financial Instruments | 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 September 30, 2020 and December 31, 2019. Fair values measured on a recurring basis at September 30, 2020 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 7,026 $ - $ - $ 7,026 Restricted cash 352 - - 352 Notes receivable - - - - Total $ 7,378 $ - $ - $ 7,378 Fair values measured on a recurring basis at December 31, 2019 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,951 $ - $ - $ 4,951 Restricted cash 351 - - 351 Notes receivable - - - - Total $ 5,302 $ - $ - $ 5,302 The following table reconciles the beginning and ending balance of the Company’s notes receivable at fair value (in thousands): Nine Months Ended September 30, 2020 2019 Notes receivable balance, beginning of period $ - $ 3,965 Fair value adjustment - (2,153 ) Notes receivable balance, end of period $ - $ 1,812 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%. In connection with this transaction, the Company also entered into an agreement with one of its customers, pursuant to which the Company is obligated to provide up to $1.1 million of credits against any amounts due to the Company from the customer based on cash collected on the notes receivable. In the event the Company does not have any outstanding balances due from the customer, the Company would be obligated to remit up to the first $1.1 million collected on the notes receivable directly to the customer. The notes receivable are recorded at estimated fair value. The significant unobservable inputs used in the fair value measurement of the Company’s notes receivable are the discount rate and percentage of default. Significant increases (decreases) in any of these inputs in isolation would result in significantly lower (higher) fair value measurements. Adjustments to the fair value of the notes receivable are included in other (expense) income on the Company’s condensed consolidated statements of operations. In order to estimate the fair value, the Company reviews the financial position and estimated cash flows of the debtor of the notes receivable. During the year ended December 31, 2019, the Company adjusted the carrying value of the notes receivable to $0 based on management’s review of the debtor’s financial statements and changes in the underlying trend of historical and projected cash flows available to service the notes. The related $1.1 million contingent liability was also adjusted during the year ended December 31, 2019, based on the Company’s expectation that cash flow from the notes receivable will not be available. As of September 30, 2020, management estimated the fair value of the notes receivable to be $0. The Company’s short-term and long-term debt is recorded at historical cost. As of September 30, 2020, the Company’s long-term debt, including current maturities, had a carrying value of $3.7 million. Based on discounted cash flows using current quoted interest rates (Level 2 of the fair value hierarchy), the estimated fair value at September 30, 2020 was $3.4 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 7 includes fair value information related to our equity and cost 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 and nine months ended September 30, 2020 or 2019. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles- Goodwill and Other- Internal Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” This ASU requires customers in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize or expense. The standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2020 did not have an impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU improves the effectiveness of fair value measurement disclosures by eliminating, adding and modifying certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2020 did not have an impact on the Company’s consolidated financial statements and related disclosures. |
Recently Issued Accounting Pronouncements | 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 was initially effective for the Company for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” which, among other things, defers the effective date of ASU 2016-13 for public filers that are considered smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted. The Company believes the adoption of this ASU will not significantly impact its results of operations and financial position. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. The effective date of the standard will be for annual periods beginning after December 15, 2020, with early adoption permitted. The various amendments in the standard are applied on a retrospective basis, modified retrospective basis and prospective basis, depending on the amendment. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815.” This ASU clarifies the interaction between accounting standards related to equity securities, equity method investments and certain derivatives. The effective date of the standard will be for annual periods beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of the new standard on its condensed consolidated financial statements and related disclosures. In April 2020, the FASB issued a question-and-answer document to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of the COVID-19 pandemic. The guidance will allow concessions related to the timing of payments, where the total consideration has not changed, to not be accounted for as lease modifications. Instead, any such concessions can be accounted for as if no change was made to the contract or as variable lease payments. As a result of the COVID-19 pandemic, the Company received certain lease concessions in the form of rent deferrals during 2020. The Company chose to implement the policy election provided by the FASB to record rent concessions as if no modifications to leases contracts were made, and thus no changes to the lease obligations were recorded in respect to these concessions. As of September 30, 2020, the Company had outstanding deferred rent of $0.1 million, the majority of which will be paid over the remaining term of the leases. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measured Financial Assets and Liabilities | Fair values measured on a recurring basis at September 30, 2020 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 7,026 $ - $ - $ 7,026 Restricted cash 352 - - 352 Notes receivable - - - - Total $ 7,378 $ - $ - $ 7,378 Fair values measured on a recurring basis at December 31, 2019 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4,951 $ - $ - $ 4,951 Restricted cash 351 - - 351 Notes receivable - - - - Total $ 5,302 $ - $ - $ 5,302 |
Summary of Notes Receivable Reconciliation | The following table reconciles the beginning and ending balance of the Company’s notes receivable at fair value (in thousands): Nine Months Ended September 30, 2020 2019 Notes receivable balance, beginning of period $ - $ 3,965 Fair value adjustment - (2,153 ) Notes receivable balance, end of period $ - $ 1,812 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Components for Gain on Sale of Business | The components of the gain on the sale of the Strong Outdoor business to Firefly during the three months ended September 30, 2020 are as follows (in thousands): Firefly Series A-3 preferred shares received $ 3,200 Cash received 571 Removal of Firefly's share repurchase option related to digital top lease 1,171 Forgiven accounts payable to Firefly 739 Book value of liabilities transferred to Firefly 191 Book value of assets transferred to Firefly (608 ) Net gain from sale of discontinued operations $ 5,264 |
Schedule of Financial Results of Discontinued Operations | The major line items constituting the net income (loss) from discontinued operations are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net revenues $ 148 $ 1,296 $ 1,587 $ 3,524 Cost of revenues 160 684 1,487 4,769 Gross profit (12 ) 612 100 (1,245 ) Selling and administrative expenses 515 733 1,498 1,725 Loss on disposal of assets (64 ) - (64 ) (38 ) (Loss) income from operations (591 ) (121 ) (1,462 ) (3,008 ) Other income (expense) - - - - (Loss) income from discontinued operations (591 ) (121 ) (1,462 ) (3,008 ) Gain on Firefly transaction 5,264 (2 ) 5,966 218 Income tax expense - - - - Total net income (loss) from discontinued operations $ 4,673 $ (123 ) $ 4,504 $ (2,790 ) Strong Outdoor’s assets and liabilities are reflected as assets and liabilities of discontinued operations for all periods presented. The major classes of assets and liabilities included as part of discontinued operations are as follows (in thousands): September 30, December 31, 2020 2019 Accounts receivable $ - $ - Other current assets - 320 Total current assets of discontinued operations - 320 Property, plant and equipment - 491 Other long-term assets - 94 Total long-term assets of discontinued operations - 585 Total assets of discontinued operations $ - $ 905 Accounts payable $ - $ 304 Current portion of operating lease obligation - 125 Deferred revenue and customer deposits - 275 Total current liabilities of discontinued operations - 704 Operating lease obligation, net of current portion - 147 Total long-term liabilities of discontinued operations - 147 Total liabilities of discontinued operations $ - $ 851 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Major Source [Member] | |
Schedule of Disaggregation of Revenue | The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2020 (in thousands): Three Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Screen system sales $ 1,631 $ - $ - $ 1,631 Digital equipment sales 2,192 322 - 2,514 Extended warranty sales 110 - - 110 Other product sales 205 - - 205 Total product sales 4,138 322 - 4,460 Field maintenance and monitoring services 875 3,808 - 4,683 Installation services 186 216 - 402 Other service revenues 61 - 301 362 Total service revenues 1,122 4,024 301 5,447 Total $ 5,260 $ 4,346 $ 301 $ 9,907 Nine Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Screen system sales $ 5,566 $ - $ - $ 5,566 Digital equipment sales 4,529 1,725 - 6,254 Extended warranty sales 418 - - 418 Other product sales 857 - - 857 Total product sales 11,370 1,725 - 13,095 Field maintenance and monitoring services 3,030 10,517 - 13,547 Installation services 518 694 - 1,212 Other service revenues 123 18 493 634 Total service revenues 3,671 11,229 493 15,393 Total $ 15,041 $ 12,954 $ 493 $ 28,488 The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2019 (in thousands): Three Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Screen system sales $ 4,441 $ - $ - $ 4,441 Digital equipment sales 3,282 757 - 4,039 Extended warranty sales 197 - - 197 Other product sales 515 - - 515 Total product sales 8,435 757 - 9,192 Field maintenance and monitoring services 1,972 3,145 - 5,117 Installation services 473 611 - 1,084 Other service revenues 48 19 90 157 Total service revenues 2,493 3,775 90 6,358 Total $ 10,928 $ 4,532 $ 90 $ 15,550 Nine Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Screen system sales $ 10,370 $ - $ - $ 10,370 Digital equipment sales 6,396 2,248 - 8,644 Extended warranty sales 582 - - 582 Other product sales 1,238 6 - 1,244 Total product sales 18,586 2,254 - 20,840 Field maintenance and monitoring services 6,060 8,704 - 14,764 Installation services 1,540 4,194 - 5,734 Other service revenues 219 52 288 559 Total service revenues 7,819 12,950 288 21,057 Total $ 26,405 $ 15,204 $ 288 $ 41,897 |
Timing of Transfer [Member] | |
Schedule of Disaggregation of Revenue | The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2020 (in thousands): Three Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Point in time $ 4,532 $ 767 $ - $ 5,299 Over time 728 3,579 301 4,608 Total $ 5,260 $ 4,346 $ 301 $ 9,907 Nine Months Ended September 30, 2020 Strong Entertainment Convergent Other Total Point in time $ 12,326 $ 2,987 $ 6 $ 15,319 Over time 2,715 9,967 487 13,169 Total $ 15,041 $ 12,954 $ 493 $ 28,488 The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2019 (in thousands): Three Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Point in time $ 9,364 $ 1,518 $ - $ 10,882 Over time 1,564 3,014 90 4,668 Total $ 10,928 $ 4,532 $ 90 $ 15,550 Nine Months Ended September 30, 2019 Strong Entertainment Convergent Other Total Point in time $ 21,746 $ 6,918 $ - $ 28,664 Over time 4,659 8,286 288 13,233 Total $ 26,405 $ 15,204 $ 288 $ 41,897 |
Income (Loss) Per Common Share
Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Weighted Average Between Basic and Diluted Earnings Per Share | The following table summarizes the weighted average shares used to compute basic and diluted income (loss) per share (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted average shares outstanding: Basic weighted average shares outstanding 14,789 14,494 14,699 14,476 Dilutive effect of stock options and certain non-vested restricted stock units 117 - - - Diluted weighted average shares outstanding 14,906 14,494 14,699 14,476 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): September 30, 2020 December 31, 2019 Raw materials and components $ 1,632 $ 1,584 Work in process 269 211 Finished goods 915 1,084 $ 2,816 $ 2,879 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Investments | The following summarizes our investments (dollars in thousands): September 30, 2020 December 31, 2019 Carrying Amount Economic Interest Carrying Amount Economic Interest Equity Method Investments 1347 Property Insurance Holdings, Inc. $ 6,379 21.0 % $ 6,897 17.2 % Itasca Capital Ltd. 2,729 32.3 % 2,800 32.3 % Total Equity Method Investments 9,108 9,697 Cost Method Investment Firefly Systems, Inc. 12,898 3,614 Total Investments $ 22,006 $ 13,311 |
Summary of Income (Loss) of Equity Method Investees | The following summarizes the (loss) income of equity method investees reflected in the condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Entity 1347 Property Insurance Holdings, Inc. $ (440 ) $ (783 ) $ (443 ) $ (622 ) Itasca Capital Ltd. (20 ) 287 (137 ) (601 ) Total $ (460 ) $ (496 ) $ (580 ) $ (1,223 ) |
Summarized Financial Information | The summarized financial information presented below reflects the financial information of the Company’s equity method investees for the nine months ended June 30, 2020 and 2019, consistent with the Company’s recognition of the results of its equity method investments on a one-quarter lag (in thousands): For the nine months ended June 30, 2020 2019 Revenue (1) $ (4,883 ) $ 1,086 Operating (loss) income $ (7,845 ) $ 898 Net loss $ (3,020 ) $ (5,489 ) (1) PIH records realized and unrealized gains and losses on investments in net investment income (loss), which is included in the revenue line above. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following as of September 30, 2020 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 250 $ - $ 250 Intangible assets subject to amortization: Software in service 5 2,404 (1,478 ) 926 Product formulation 10 458 (420 ) 38 Total $ 3,112 $ (1,898 ) $ 1,214 Intangible assets consisted of the following as of December 31, 2019 (dollars in thousands): Useful life Gross Accumulated Amortization Net (Years) Intangible assets not yet subject to amortization: Software in development $ 203 $ - $ 203 Intangible assets subject to amortization: Software in service 5 2,362 (1,087 ) 1,275 Product formulation 10 471 (415 ) 56 Total $ 3,036 $ (1,502 ) $ 1,534 |
Schedule of Intangible Assets Future Amortization Expense | 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 of 2020 $ 140 2021 523 2022 244 2023 57 2024 - Thereafter - Total $ 964 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following represents a summary of changes in the Company’s carrying amount of goodwill for the nine months ended September 30, 2020 (in thousands): Balance as of December 31, 2019 $ 919 Foreign currency translation adjustment (24 ) Balance as of September 30, 2020 $ 895 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Short-term debt: Strong/MDI installment loan $ 2,830 $ 3,080 Insurance note payable 142 - Current portion of long-term debt 1,055 998 Total short-term debt 4,027 4,078 Long-term debt: Equipment term loans 3,683 4,031 Total principal balance of long-term debt 3,683 4,031 Less: current portion (1,055 ) (998 ) Less: unamortized debt issuance costs (11 ) (14 ) Total long-term debt 2,617 3,019 Total short-term and long-term debt $ 6,644 $ 7,097 |
Schedule of Long-Term Debt Maturities | Scheduled repayments are as follows for the Company’s long-term debt outstanding as of September 30, 2020 (in thousands): Remainder of 2020 $ 257 2021 1,080 2022 1,151 2023 1,165 2024 30 Thereafter - Total $ 3,683 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Costs and Other Lease Information | The following tables present the Company’s lease costs and other lease information (dollars in thousands): Lease cost Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 420 $ 282 $ 1,195 $ 420 Interest on lease liabilities 154 142 473 184 Operating lease cost 372 421 1,163 1,751 Short-term lease cost 12 12 42 21 Sublease income (92 ) (120 ) (297 ) (313 ) Net lease cost $ 866 $ 737 $ 2,576 $ 2,063 Other information Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 154 $ 142 $ 473 $ 184 Operating cash flows from operating leases $ 289 $ 333 $ 857 $ 875 Financing cash flows from finance leases $ 420 $ 282 $ 1,195 $ 420 Right-of-use assets obtained in exchange for new finance lease liabilities $ 231 $ 902 $ 553 $ 1,613 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ 109 $ 644 Derecognition of right-of-use asset in connection with Firefly transaction $ - $ - $ - $ 3,394 As of September 30, 2020 Weighted-average remaining lease term - finance leases (years) 2.7 Weighted-average remaining lease term - operating leases (years) 7.1 Weighted-average discount rate - finance leases 12.1 % Weighted-average discount rate - operating leases 4.9 % |
Schedule of Future Minimum Lease Payments | The following table presents a maturity analysis of the Company’s finance and operating lease liabilities as of September 30, 2020 (in thousands): Operating Leases Finance Leases Remainder of 2020 $ 253 $ 580 2021 944 2,320 2022 812 2,114 2023 660 499 2024 669 235 Thereafter 2,447 75 Total lease payments 5,785 5,823 Less: Amount representing interest (935 ) (892 ) Present value of lease payments 4,850 4,931 Less: Current maturities (743 ) (1,820 ) Lease obligations, net of current portion $ 4,107 $ 3,111 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options Activities | The following table summarizes stock option activity for the nine months ended September 30, 2020: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2019 1,107,000 $ 4.47 7.9 $ 148 Granted - Exercised - Forfeited (100,500 ) 4.76 Expired (122,000 ) 5.27 Outstanding at Spetember 30, 2020 884,500 $ 4.33 7.2 $ - Exercisable at September 30, 2020 386,000 $ 4.77 6.6 $ - |
Summary of Restricted Stock Activity | The following table summarizes restricted stock share activity for the nine months ended September 30, 2020: Number of Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 23,334 $ 6.50 Granted - Shares vested (23,334 ) 6.50 Shares forfeited - Non-vested at September 30, 2020 - |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes restricted stock unit activity for the nine months ended September 30, 2020: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 522,379 $ 3.14 Granted 200,634 1.57 Shares vested (174,954 ) 2.73 Shares forfeited (3,334 ) 2.89 Non-vested at September 30, 2020 544,725 $ 2.51 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Summary by Business Segments Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) (in thousands) Net revenues Strong Entertainment $ 5,260 $ 10,928 $ 15,041 $ 26,405 Convergent 4,346 4,532 12,954 15,204 Other 301 90 493 288 Total net revenues 9,907 15,550 28,488 41,897 Gross profit (loss) Strong Entertainment 889 3,669 2,769 8,621 Convergent 2,083 1,469 5,668 4,622 Other 275 63 412 (307 ) Total gross profit 3,247 5,201 8,849 12,936 Operating (loss) income Strong Entertainment (79 ) 2,230 (894 ) 4,646 Convergent 1,059 394 2,508 1,467 Other 52 (233 ) (225 ) (1,197 ) Total segment operating income 1,032 2,391 1,389 4,916 Unallocated administrative expenses (1,377 ) (2,204 ) (4,893 ) (6,742 ) Unallocated loss on disposal of assets (18 ) - (18 ) - (Loss) income from operations (363 ) 187 (3,522 ) (1,826 ) Other income (expense), net 2,322 (625 ) 2,091 (2,222 ) Income (loss) before income taxes and equity method investment loss $ 1,959 $ (438 ) $ (1,431 ) $ (4,048 ) |
Reconciliation of Assets from Segment to Consolidated | (In thousands) September 30, 2020 December 31, 2019 Identifiable assets Strong Entertainment $ 18,616 $ 18,135 Convergent 10,304 15,797 Corporate assets 29,468 22,796 Discontinued operations - 905 Total $ 58,388 $ 57,633 |
Schedule of Segment Reporting Information by Geographic Area | Summary by Geographical Area Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2020 2019 2020 2019 Net revenues United States $ 8,566 $ 12,395 $ 24,699 $ 34,995 Canada 645 1,111 1,708 2,664 China 507 633 775 1,763 Mexico - 65 78 70 Latin America - 275 328 574 Europe 38 521 262 1,058 Asia (excluding China) 24 348 337 515 Other 127 202 301 258 Total $ 9,907 $ 15,550 $ 28,488 $ 41,897 |
Summary of Identifiable Assets by Geographical Area | (In thousands) September 30, 2020 December 31, 2019 Identifiable assets United States $ 37,052 $ 37,508 Canada 21,336 20,125 Total $ 58,388 $ 57,633 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2011 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Bad debt expense | $ 397 | $ (509) | ||||
Fair value adjustment of notes receivable | $ (845) | $ (2,153) | ||||
Fair value adjustment to contingent liability | 1,100 | |||||
Fair value of notes receivable | ||||||
Long-term debt | 3,683 | 3,683 | $ 4,031 | |||
Estimated fair value of long term debt | 3,400 | 3,400 | ||||
Outstanding deferred rent | $ 100 | $ 100 | ||||
Unsecured Notes Receivable Arrangements [Member] | CDF2 Holdings, LLC [Member] | ||||||
Percentage of notes receivable accrue interest rate | 15.00% | |||||
Description of accrued interest rate | 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%. | |||||
Amount obligated to customer | $ 1,100 | |||||
Amount obligated to remit from customer | $ 1,100 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fair Value Measured Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | $ 7,026 | $ 4,951 | |
Restricted cash | 352 | 351 | $ 350 |
Notes receivable | |||
Total | 7,378 | 5,302 | |
Level 1 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 7,026 | 4,951 | |
Restricted cash | 352 | 351 | |
Notes receivable | |||
Total | 7,378 | 5,302 | |
Level 2 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | |||
Restricted cash | |||
Notes receivable | |||
Total | |||
Level 3 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | |||
Restricted cash | |||
Notes receivable | |||
Total |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Notes Receivable Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||||
Notes receivable balance, beginning of period | $ 3,965 | $ 3,965 | |||
Fair value adjustment | $ (845) | (2,153) | |||
Notes receivable balance, end of period | $ 1,812 | $ 1,812 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | Aug. 03, 2020 | May 21, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Investment | $ 22,006 | $ 22,006 | $ 13,311 | ||
Firefly Series A-2 Preferred Shares [Member] | |||||
Number of shares hold, value | 5,700 | ||||
Master Services Agreement [Member] | |||||
Cash consideration amount | 2,000 | ||||
Firefly Systems, Inc. [Member] | |||||
Gain on Firefly transaction | 100 | 700 | |||
Firefly Systems, Inc. [Member] | Taxicab Advertising Collaboration Agreement [Member] | Series A-2 Preferred Shares [Member] | |||||
Consideration received for agreement | $ 4,800 | ||||
Firefly Systems, Inc. [Member] | Master Lease Agreement [Member] | |||||
Investment | 1,200 | $ 1,200 | |||
Firefly Systems, Inc. [Member] | Master Lease Agreement [Member] | Series A-2 Preferred Shares [Member] | |||||
Number of shares repurchased, value | $ 1,200 | ||||
Strong Digital Media, LLC [Member] | Asset Purchase Agreement [Member] | |||||
Cash consideration amount | $ 600 | ||||
Gain on asset purchase transaction | $ 5,300 | ||||
Strong Digital Media, LLC [Member] | Asset Purchase Agreement [Member] | Series A-2 Preferred Shares [Member] | |||||
Cash consideration amount | 1,100 | ||||
Strong Digital Media, LLC [Member] | Asset Purchase Agreement [Member] | Series A-3 Preferred Shares [Member] | |||||
Cash consideration amount | $ 3,200 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Components for Gain on Sale of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net gain from sale of discontinued operations | $ 4,673 | $ (123) | $ 4,504 | $ (2,790) |
Firefly Systems, Inc. [Member] | ||||
Firefly Series A-3 preferred shares received | 3,200 | |||
Cash received | 571 | |||
Removal of Firefly's share repurchase option related to digital top lease | 1,171 | |||
Forgiven accounts payable to Firefly | 739 | |||
Book value of liabilities transferred to Firefly | 191 | |||
Book value of assets transferred to Firefly | (608) | |||
Net gain from sale of discontinued operations | $ 5,264 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Financial Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Total net income (loss) from discontinued operations | $ 4,673 | $ (123) | $ 4,504 | $ (2,790) | |
Total current assets of discontinued operations | $ 320 | ||||
Total long-term assets of discontinued operations | 585 | ||||
Total current liabilities of discontinued operations | 704 | ||||
Total long-term liabilities of discontinued operations | 147 | ||||
Strong Outdoor [Member] | |||||
Net revenues | 148 | 1,296 | 1,587 | 3,524 | |
Cost of revenues | 160 | 684 | 1,487 | 4,769 | |
Gross profit | (12) | 612 | 100 | (1,245) | |
Selling and administrative expenses | 515 | 733 | 1,498 | 1,725 | |
Loss on disposal of assets | (64) | (64) | (38) | ||
(Loss) income from operations | (591) | (121) | (1,462) | (3,008) | |
Other income (expense) | |||||
(Loss) income from discontinued operations | (591) | (121) | (1,462) | (3,008) | |
Gain on Firefly transaction | 5,264 | (2) | 5,966 | 218 | |
Income tax expense | |||||
Total net income (loss) from discontinued operations | 4,673 | $ (123) | 4,504 | $ (2,790) | |
Accounts receivable | |||||
Other current assets | 320 | ||||
Total current assets of discontinued operations | 320 | ||||
Property, plant and equipment | 491 | ||||
Other long-term assets | 94 | ||||
Total long-term assets of discontinued operations | 585 | ||||
Total assets of discontinued operations | 905 | ||||
Accounts payable | 304 | ||||
Current portion of operating lease obligation | 125 | ||||
Deferred revenue and customer deposits | 275 | ||||
Total current liabilities of discontinued operations | 704 | ||||
Operating lease obligation, net of current portion | 147 | ||||
Total long-term liabilities of discontinued operations | 147 | ||||
Total liabilities of discontinued operations | $ 851 |
Revenue (Details Narrative)
Revenue (Details Narrative) $ in Thousands | Sep. 30, 2020USD ($) |
Unearned revenue | $ 2,900 |
Rest of 2020 [Member] | |
Unearned revenue | 1,400 |
2021 [Member] | |
Unearned revenue | 800 |
2022 [Member] | |
Unearned revenue | $ 700 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Major Source) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 9,907 | $ 15,550 | $ 28,488 | $ 41,897 |
Strong Entertainment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 5,260 | 10,928 | 15,041 | 26,405 |
Convergent [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,346 | 4,532 | 12,954 | 15,204 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 301 | 90 | 493 | 288 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,460 | 9,192 | 13,095 | 20,840 |
Product [Member] | Screen System Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 1,631 | 4,441 | 5,566 | 10,370 |
Product [Member] | Digital Equipment Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 2,514 | 4,039 | 6,254 | 8,644 |
Product [Member] | Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 110 | 197 | 418 | 582 |
Product [Member] | Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 205 | 515 | 857 | 1,244 |
Product [Member] | Strong Entertainment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,138 | 8,435 | 11,370 | 18,586 |
Product [Member] | Strong Entertainment [Member] | Screen System Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 1,631 | 4,441 | 5,566 | 10,370 |
Product [Member] | Strong Entertainment [Member] | Digital Equipment Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 2,192 | 3,282 | 4,529 | 6,396 |
Product [Member] | Strong Entertainment [Member] | Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 110 | 197 | 418 | |
Product [Member] | Strong Entertainment [Member] | Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 205 | 515 | 857 | 1,238 |
Product [Member] | Convergent [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 322 | 757 | 1,725 | 2,254 |
Product [Member] | Convergent [Member] | Screen System Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Convergent [Member] | Digital Equipment Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 322 | 757 | 1,725 | 2,248 |
Product [Member] | Convergent [Member] | Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Convergent [Member] | Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 6 | |||
Product [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Other [Member] | Screen System Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Other [Member] | Digital Equipment Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Other [Member] | Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Other [Member] | Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Product [Member] | Entertainment [Member] | Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 582 | |||
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 5,447 | 6,358 | 15,393 | 21,057 |
Service [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,683 | 5,117 | 13,547 | 14,764 |
Service [Member] | Installation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 402 | 1,084 | 1,212 | 5,734 |
Service [Member] | Other Service Revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 362 | 157 | 634 | 559 |
Service [Member] | Strong Entertainment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 1,122 | 2,493 | 3,671 | 7,819 |
Service [Member] | Strong Entertainment [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 875 | 1,972 | 3,030 | 6,060 |
Service [Member] | Strong Entertainment [Member] | Installation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 186 | 473 | 518 | 1,540 |
Service [Member] | Strong Entertainment [Member] | Other Service Revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 61 | 48 | 123 | 219 |
Service [Member] | Convergent [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,024 | 3,775 | 11,229 | 12,950 |
Service [Member] | Convergent [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 3,808 | 3,145 | 10,517 | 8,704 |
Service [Member] | Convergent [Member] | Installation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 216 | 611 | 694 | 4,194 |
Service [Member] | Convergent [Member] | Other Service Revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 19 | 18 | 52 | |
Service [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 301 | 90 | 493 | 288 |
Service [Member] | Other [Member] | Field Maintenance and Monitoring Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Service [Member] | Other [Member] | Installation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | ||||
Service [Member] | Other [Member] | Other Service Revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 301 | $ 90 | $ 493 | $ 288 |
Revenue - Schedule of Disaggr_2
Revenue - Schedule of Disaggregation of Revenue (Timing of Transfer) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 9,907 | $ 15,550 | $ 28,488 | $ 41,897 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 5,299 | 10,882 | 15,319 | 28,664 |
Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,608 | 4,668 | 13,169 | 13,233 |
Strong Entertainment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 5,260 | 10,928 | 15,041 | 26,405 |
Strong Entertainment [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,532 | 9,364 | 12,326 | 21,746 |
Strong Entertainment [Member] | Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 728 | 1,564 | 2,715 | 4,659 |
Convergent [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 4,346 | 4,532 | 12,954 | 15,204 |
Convergent [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 767 | 1,518 | 2,987 | 6,918 |
Convergent [Member] | Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 3,579 | 3,014 | 9,967 | 8,286 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 301 | 90 | 493 | 288 |
Other [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 6 | |||
Other [Member] | Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 301 | $ 90 | $ 487 | $ 288 |
Income (Loss) Per Common Shar_2
Income (Loss) Per Common Share (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Options to Purchase [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 884,500,000 | 772,000,000 |
Common Stock Equivalents [Member] | ||
Anti dilutive securities excluded from computation of earnings per share | 165,206,000 | 146,461,000 |
Income (Loss) Per Common Shar_3
Income (Loss) Per Common Share - Schedule of Reconciliation Weighted Average Between Basic and Diluted Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 14,789,000 | 14,494,000 | 14,699,000 | 14,476,000 |
Dilutive effect of stock options and certain non-vested restricted stock units | 117,000 | |||
Diluted weighted average shares outstanding | 14,906,000 | 14,494,000 | 14,699,000 | 14,476,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 700 | $ 900 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 1,632 | $ 1,584 |
Work in process | 269 | 211 |
Finished goods | 915 | 1,084 |
Inventories net | $ 2,816 | $ 2,879 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) $ in Thousands | Sep. 15, 2020 | Aug. 03, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | |||||||
Accumulated deficit | $ 7,472 | $ 7,472 | $ 6,001 | ||||
Investment | 22,006 | 22,006 | $ 13,311 | ||||
Equity Method Investees [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Accumulated deficit | $ 1,900 | $ 1,900 | |||||
Stock Purchase Agreement [Member] | Series A-2 Preferred Shares [Member] | Board of Directors [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of shares hold, value | $ 7,200 | ||||||
1347 Property Insurance Holdings, Inc. [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Number of shares of common stock | 1,100,000 | ||||||
Decreased number of outstanding shares | 1,100,000 | ||||||
Equity method ownership percentage | 21.00% | 21.00% | 21.00% | 17.20% | |||
Dividend received | |||||||
Quoted fair value of the company's ownership | $ 4,000 | $ 4,000 | |||||
1347 Property Insurance Holdings, Inc. [Member] | Minimum [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Combined equity ownership percentage | 50.00% | 50.00% | |||||
Itasca Capital, Ltd. [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method ownership percentage | 32.30% | 32.30% | 32.30% | ||||
Dividend received | |||||||
Quoted fair value of the company's ownership | $ 3,400 | $ 3,400 | |||||
Firefly Systems, Inc. [Member] | Stock Purchase Agreement [Member] | Series A-3 Preferred Shares [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Purchase of preferred stock | 4,000 | ||||||
Additional purchase of preferred stock | $ 2,000 | ||||||
Purchase transaction description | The Stock Purchase Agreement and ancillary investment agreements, the Company and its affiliated entities will have the right to designate a director to be elected to the board of directors of Firefly, subject to holding, together with its affiliates, approximately $7.2 million of Firefly's Series A-3 preferred shares and other conditions. |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 15, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments, Carrying Amount | $ 9,108 | $ 9,697 | |
Total Investments | 22,006 | 13,311 | |
1347 Property Insurance Holdings, Inc. [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments, Carrying Amount | $ 6,379 | $ 6,897 | |
Equity method investments, Economic Interest | 21.00% | 21.00% | 17.20% |
Itasca Capital, Ltd. [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments, Carrying Amount | $ 2,729 | $ 2,800 | |
Equity method investments, Economic Interest | 32.30% | 32.30% | |
Firefly Systems, Inc. [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Cost method investment, Carrying Amount | $ 12,898 | $ 3,614 |
Investments - Summary of Income
Investments - Summary of Income (Loss) of Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment income (loss) | $ (460) | $ (496) | $ (580) | $ (1,223) |
1347 Property Insurance Holdings, Inc. [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment income (loss) | (440) | (783) | (443) | (622) |
Itasca Capital, Ltd. [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment income (loss) | $ (20) | $ 287 | $ (137) | $ (601) |
Investments - Summarized Financ
Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Equity Method Investments and Joint Ventures [Abstract] | |||
Revenue | [1] | $ (4,883) | $ 1,086 |
Operating (loss) income | (7,845) | 898 | |
Net loss | $ (3,020) | $ (5,489) | |
[1] | PIH records realized and unrealized gains and losses on investments in net investment income (loss), which is included in the revenue line above. |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 200 | $ 200 | $ 600 | $ 600 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 3,112 | $ 3,036 |
Intangible assets, Accumulated amortization | (1,898) | (1,502) |
Intangible assets, Net | $ 1,214 | $ 1,534 |
Software in Service [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful life | 5 years | 5 years |
Intangible assets, Gross | $ 2,404 | $ 2,362 |
Intangible assets, Accumulated amortization | (1,478) | (1,087) |
Intangible assets, Net | $ 926 | $ 1,275 |
Product Formulation [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful life | 10 years | 10 years |
Intangible assets, Gross | $ 458 | $ 471 |
Intangible assets, Accumulated amortization | (420) | (415) |
Intangible assets, Net | 38 | 56 |
Software in Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | 250 | 203 |
Intangible assets, Accumulated amortization | ||
Intangible assets, Net | $ 250 | $ 203 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total | $ 1,214 | $ 1,534 |
Intangible Assets [Member] | ||
Remainder of 2020 | 140 | |
2021 | 523 | |
2022 | 244 | |
2023 | 57 | |
2024 | ||
Thereafter | ||
Total | $ 964 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 919 |
Foreign currency translation adjustment | (24) |
Ending balance | $ 895 |
Debt (Details Narrative)
Debt (Details Narrative) $ in Thousands, $ in Thousands | Apr. 23, 2020 | Apr. 14, 2020USD ($) | May 22, 2018USD ($) | Apr. 24, 2018USD ($) | Sep. 05, 2017CAD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020CAD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 3,683 | $ 4,031 | ||||||||
20-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan term | 20 years | 20 years | 20 years | |||||||
Proceeds from issuance of debt | $ 2,800 | |||||||||
Debt bearing interest fixed rate | 2.95% | |||||||||
Canadian Dollar [Member] | 20-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | $ 3,500 | $ 3,800 | ||||||||
Installment Payment Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 4,400 | |||||||||
Debt description | In each of December 2018 and June 2019, Convergent entered into additional installment payment agreements with other financing companies in order to purchase additional media players and related equipment, with each round of financing totaling approximately $0.6 million and $0.2 million, respectively. Installment payments under each contract are due monthly for a period of 60 months. | |||||||||
Debt installment payments | $ 200 | $ 600 | ||||||||
Number of installment payments | 60 months | |||||||||
Equipment Term Loans [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 3,700 | |||||||||
Weighted average fixed rate | 7.70% | |||||||||
Demand Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description on effective equity | 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. | |||||||||
Maximum liabilities to effective equity | 200.00% | |||||||||
Minimum current ratio | 150.00% | |||||||||
Demand Credit Agreement [Member] | Prime Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate on lender of installment loans | 0.50% | |||||||||
Demand Credit Agreement [Member] | 20-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan term | 20 years | |||||||||
Demand Credit Agreement [Member] | 5-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan term | 5 years | |||||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum effective equity | $ 8,000 | |||||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 20-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 6,000 | |||||||||
Demand Credit Agreement [Member] | Canadian Dollar [Member] | 5-year Installment Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 500 | |||||||||
Demand Credit Agreement [Member] | Line of Credit [Member] | Canadian Dollar [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 3,500 | |||||||||
Paycheck Protection Program [Member] | Small Business Administration [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description on paycheck protection program | The SBA, in consultation with the Department of Treasury, issued new guidance that created additional uncertainty regarding the qualification requirements for a PPP loan for public companies. The Company has less than 300 employees and continues to be severely impacted by the disruption to the cinema, theme park and advertising industries as a result of COVID-19. However, out of an abundance of caution and in light of the new guidance, the Company repaid the full amount of the Loan plus accrued interest to the lender on May 5, 2020. | |||||||||
Paycheck Protection Program [Member] | Loan [Member] | Small Business Administration [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | $ 3,200 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Strong/MDI installment loan | $ 2,972 | $ 3,080 |
Insurance note payable | 142 | |
Current portion of long-term debt | 1,055 | 998 |
Total short-term debt | 4,027 | 4,078 |
Total principal balance of long-term debt | 3,683 | 4,031 |
Less: current portion | (1,055) | (998) |
Less: unamortized debt issuance costs | (11) | (14) |
Total long-term debt | 2,617 | 3,019 |
Total short-term and long-term debt | 6,644 | 7,097 |
Strong/MDI Installment Loan [Member] | ||
Debt Instrument [Line Items] | ||
Strong/MDI installment loan | 2,830 | 3,080 |
Equipment Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Total principal balance of long-term debt | $ 3,683 | $ 4,031 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Remainder of 2020 | $ 257 | |
2021 | 1,080 | |
2022 | 1,151 | |
2023 | 1,165 | |
2024 | 30 | |
Thereafter | ||
Total | $ 3,683 | $ 4,031 |
Leases (Details Narrative)
Leases (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating lease expire, term | Expiring through 2028. |
Finance lease, expire term | Expiring through 2028. |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs And Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Finance lease cost: Amortization of right-of-use assets | $ 420 | $ 282 | $ 1,195 | $ 420 |
Finance lease cost: Interest on lease liabilities | 154 | 142 | 473 | 184 |
Operating lease cost | 372 | 421 | 1,163 | 1,751 |
Short-term lease cost | 12 | 12 | 42 | 21 |
Sublease income | (92) | (120) | (297) | (313) |
Net lease cost | 866 | 737 | 2,576 | 2,063 |
Operating cash flows from finance leases | 154 | 142 | 473 | 184 |
Operating cash flows from operating leases | 289 | 333 | 857 | 875 |
Financing cash flows from finance leases | 420 | 282 | 1,195 | 420 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 231 | 902 | 553 | 1,613 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 109 | 644 | ||
Derecognition of right-of-use asset in connection with Firefly transaction | $ 3,394 | |||
Weighted-average remaining lease term - finance leases (years) | 2 years 8 months 12 days | 2 years 8 months 12 days | ||
Weighted-average remaining lease term - operating leases (years) | 2 years 1 month 6 days | 2 years 1 month 6 days | ||
Weighted-average discount rate - finance leases | 12.10% | 12.10% | ||
Weighted-average discount rate - operating leases | 4.90% | 4.90% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating Leases, Remainder of 2020 | $ 253 | |
Operating Leases, 2021 | 944 | |
Operating Leases, 2022 | 812 | |
Operating Leases, 2023 | 660 | |
Operating Leases, 2024 | 669 | |
Operating Leases, Thereafter | 2,447 | |
Operating Leases, Total lease payments | 5,785 | |
Less: Amount representing interest | (935) | |
Present value of lease payments | 4,850 | |
Less: Current maturities | (743) | $ (846) |
Lease obligations, net of current portion | 4,107 | 4,662 |
Finance Leases, Remainder of 2020 | 580 | |
Finance Leases, 2021 | 2,320 | |
Finance Leases, 2022 | 2,114 | |
Finance Leases, 2023 | 499 | |
Finance Leases, 2024 | 235 | |
Finance Leases, Thereafter | 75 | |
Finance Leases, Total lease payments | 5,823 | |
Less: Amount representing interest | (892) | |
Present value of lease payments | 4,931 | |
Less: Current maturities | (1,820) | (1,586) |
Lease obligations, net of current portion | $ 3,111 | $ 3,988 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) $ in Thousands | Dec. 17, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Restricted Stock Shares and Restricted Stock Units [Member] | |||||
Compensation cost expected to be recognized, weighted average period | 1 year 10 months 25 days | ||||
Number of stock granted, shares | 200,634 | 417,378 | |||
Unrecognized for restricted stock, value | $ 1,100 | $ 1,100 | |||
Stock Options [Member] | |||||
Share-based compensation arrangement by share-based payment award, options, non-vested, number | 498,500 | 498,500 | |||
Total unrecognized compensation cost related to stock option awards | $ 600 | $ 600 | |||
Compensation cost expected to be recognized, weighted average period | 2 years 8 months 12 days | ||||
Year 2017 Plan [Member] | |||||
Number of shares authorized for issuance | 1,975,000 | ||||
Share based compensation extended expiration date | Oct. 27, 2029 | ||||
Share based compensation arrangement by share based payment award number of shares available for grant | 2,589,278 | 2,589,278 | |||
Selling and Administrative Expenses [Member] | |||||
Share based compensation expense | $ 200 | $ 300 | $ 700 | $ 800 |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Options Activities (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options, Outstanding Beginning Balance | shares | 1,107,000 |
Number of Options, Granted | shares | |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | (100,500) |
Number of Options, Expired | shares | (122,000) |
Number of Options, Outstanding Ending Balance | shares | 884,500 |
Number of Options, Exercisable | shares | 386,000 |
Weighted Average Exercise Price Per Share, Outstanding Beginning Balance | $ / shares | $ 4.47 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | |
Weighted Average Exercise Price Per Share, Forfeited | $ / shares | 4.76 |
Weighted Average Exercise Price Per Share, Expired | $ / shares | 5.27 |
Weighted Average Exercise Price Per Share, Outstanding Ending Balance | $ / shares | 4.33 |
Weighted Average Exercise Price Per Share, Exercisable | $ / shares | $ 4.77 |
Weighted Average Remaining Contractual Term (Years), Beginning Balance | 7 years 10 months 25 days |
Weighted Average Remaining Contractual Term (Years), Ending Balance | 7 years 2 months 12 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 6 years 7 months 6 days |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 148 |
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] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Restricted Stock, Non-vested beginning balance | shares | 23,334 |
Number of Restricted Stock, Granted | shares | |
Number of Restricted Stock, Shares vested | shares | (23,334) |
Number of Restricted Stock, Shares forfeited | shares | |
Number of Restricted Stock, Non-vested ending balance | shares | |
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, Shares vested | $ / shares | 6.50 |
Weighted Average Grant Date Fair Value, Shares forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Restricted Stock, Non-vested beginning balance | shares | 522,379 |
Number of Restricted Stock, Granted | shares | 200,634 |
Number of Restricted Stock, vested | shares | (174,954) |
Number of Restricted Stock, forfeited | shares | (3,334) |
Number of Restricted Stock, Non-vested ending balance | shares | 544,725 |
Weighted Average Grant Date Fair Value, Non-vested beginning balance | $ / shares | $ 3.14 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 1.57 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 2.73 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 2.89 |
Weighted Average Grant Date Fair Value, Non-vested ending balance | $ / shares | $ 2.51 |
Commitments, Contingencies an_2
Commitments, Contingencies and Concentrations (Details Narrative) - USD ($) $ in Thousands | May 19, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 |
Strong/MDI's Quebec [Member] | ||||
Concentration Risk [Line Items] | ||||
Proceeds from insurance | $ 5,000 | |||
Strong/MDI's Quebec [Member] | Property and Casualty Claim [Member] | ||||
Concentration Risk [Line Items] | ||||
Proceeds from insurance | 2,000 | |||
Strong/MDI's Quebec [Member] | Business Interruption Claim [Member] | ||||
Concentration Risk [Line Items] | ||||
Proceeds from insurance | 3,000 | |||
Settlement of business interruption claim | $ 1,900 | $ 800 | ||
Insurance recovery gain | $ 2,700 | |||
Itasca Financial LLC [Member] | Itasca Financial Agreement [Member] | ||||
Concentration Risk [Line Items] | ||||
Retainer fee | $ 50 | |||
Two installment amount | 25 | |||
Monthly fee | 20 | |||
Repayment of related party debt | $ 130 | |||
Termination fee | $ 100 | |||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Top 10 Customers [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 62.00% | 57.00% | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | One Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.00% | 10.00% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Top 10 Customers [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 37.00% |
Business Segment Information (D
Business Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2020Segments | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Business Segment Information -
Business Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 9,907 | $ 15,550 | $ 28,488 | $ 41,897 |
Total gross profit | 3,247 | 5,201 | 8,849 | 12,936 |
Total segment operating income | 1,032 | 2,391 | 1,389 | 4,916 |
Unallocated administrative expenses | (1,377) | (2,204) | (4,893) | (6,742) |
Unallocated loss on disposal of assets | (18) | (18) | ||
(Loss) income from operations | (363) | 187 | (3,522) | (1,826) |
Other income (expense), net | 2,322 | (625) | 2,091 | (2,222) |
Income (loss) before income taxes and equity method investment loss | 1,959 | (438) | (1,431) | (4,048) |
Strong Entertainment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 5,260 | 10,928 | 15,041 | 26,405 |
Total gross profit | 889 | 3,669 | 2,769 | 8,621 |
Total segment operating income | (79) | 2,230 | (894) | 4,646 |
Convergent [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 4,346 | 4,532 | 12,954 | 15,204 |
Total gross profit | 2,083 | 1,469 | 5,668 | 4,622 |
Total segment operating income | 1,059 | 394 | 2,508 | 1,467 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 301 | 90 | 493 | 288 |
Total gross profit | 275 | 63 | 412 | (307) |
Total segment operating income | $ 52 | $ (233) | $ (225) | $ (1,197) |
Business Segment Information _2
Business Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Identifiable assets | $ 58,388 | $ 57,633 |
Strong Entertainment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Identifiable assets | 18,616 | 18,135 |
Convergent [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Identifiable assets | 10,304 | 15,797 |
Corporate Assets [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Identifiable assets | 29,468 | 22,796 |
Discontinued Operations [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Identifiable assets | $ 905 |
Business Segment Information _3
Business Segment Information - Schedule of Segment Reporting Information by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 9,907 | $ 15,550 | $ 28,488 | $ 41,897 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 8,566 | 12,395 | 24,699 | 34,995 |
Canada [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 645 | 1,111 | 1,708 | 2,664 |
China [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 507 | 633 | 775 | 1,763 |
Mexico [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 65 | 78 | 70 | |
Latin America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 275 | 328 | 574 | |
Europe [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 38 | 521 | 262 | 1,058 |
Asia (Excluding China) [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 24 | 348 | 337 | 515 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 127 | $ 202 | $ 301 | $ 258 |
Business Segment Information _4
Business Segment Information - Summary of Identifiable Assets by Geographical Area (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 58,388 | $ 57,633 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 37,052 | 37,508 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 21,336 | $ 20,125 |