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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2019	May 08, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	CREATIVE REALITIES, INC.
Entity Central Index Key	0001356093
Amendment Flag	false
Document Type	10-Q
Trading Symbol	CREX
Current Fiscal Year End Date	--12-31
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		9,724,826

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 2,248	$ 2,718
Accounts receivable, net of allowance of $651 and $583, respectively	8,024	6,479
Unbilled receivables	145	1,202
Work-in-process and inventories, net of reserve of $196 and $207, respectively	665	379
Prepaid expenses and other current assets	958	1,581
Total current assets	12,040	12,359
Operating lease right-of-use assets	2,122
Property and equipment, net	1,329	1,230
Intangibles, net	4,904	5,060
Goodwill	18,900	18,900
Other assets	170	179
TOTAL ASSETS	39,465	37,728
CURRENT LIABILITIES
Accounts payable	2,390	1,995
Accrued expenses	5,266	3,847
Deferred revenues	5,430	6,454
Customer deposits	1,491	2,687
Short-term seller note payable	2,303
Current maturities of operating leases	662
Current maturities of finance leases	31
Warrant liability	22	21
Total current liabilities	17,595	15,004
Long-term related party loans payable, net of $875 and $1,031 discount, respectively	3,389	3,233
Long-term seller note payable		2,303
Long-term obligations under operating leases	1,466
Long-term obligations under finance leases	16
Deferred tax liabilities	147	128
Other long-term liabilities	3	239
TOTAL LIABILITIES	22,616	20,907
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 200,000 shares authorized; 9,725 and 9,725 shares issued and outstanding, respectively	97	97
Additional paid-in capital	53,616	53,575
Accumulated deficit	(36,864)	(36,851)
Total shareholders' equity	16,849	16,821
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 39,465	$ 37,728

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance receivable, net	$ 651	$ 583
Reserve net	196	207
Loans payable, net	$ 875	$ 1,031
Common stock, par value	$ .01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	9,725	9,725
Common stock, shares outstanding	9,725	9,725

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Sales
Hardware	$ 1,641	$ 1,231
Services and other	7,843	2,835
Total sales	9,484	4,066
Cost of sales
Hardware	1,405	1,100
Services and other	4,398	1,457
Total cost of sales	5,803	2,557
Gross profit	3,681	1,509
Operating expenses:
Sales and marketing expenses	697	503
Research and development expenses	373	321
General and administrative expenses	2,290	1,703
Depreciation and amortization expense	286	327
Lease termination expense		474
Total operating expenses	3,646	3,328
Operating income/(loss)	35	(1,819)
Other income (expenses):
Interest expense	(204)	(574)
Change in fair value of warrant liability	(1)	197
Gain on settlement of obligations	7
Other income/(expense)		4
Total other income/(expense)	(198)	(373)
Income/(loss) before income taxes	(163)	(2,192)
Provision for income taxes	(21)	(46)
Net income/(loss)	(184)	(2,238)
Dividends on preferred stock		(111)
Net income/(loss) attributable to common shareholders	$ (183)	$ (2,349)
Basic earnings/(loss) per common share	$ (0.02)	$ (0.81)
Diluted earnings/(loss) per common share	$ (0.02)	$ (0.85)
Weighted average shares outstanding - basic	9,725	2,753
Weighted average shares outstanding - diluted	9,725	2,753

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities:
Net income/(loss)	$ (184)	$ (2,238)
Adjustments to reconcile net income/(loss) to net cash in operating activities
Depreciation and amortization	277	327
Amortization of debt discount	156	345
Stock-based compensation	41	64
Change in warrant liability	1	(197)
Deferred tax provision	19	40
Allowance for doubtful accounts	68	19
Increase in notes due to in-kind interest		22
Charge for lease termination		474
Gain on settlement of obligations	(7)
Changes to operating assets and liabilities:
Accounts receivable and unbilled receivables	(556)	596
Inventories	(286)	81
Prepaid expenses and other current assets	623	(285)
Operating lease right-of-use assets, net	141
Other assets	9	23
Accounts payable	402	(489)
Deferred revenue	(1,024)	(114)
Accrued expenses	1,419	227
Deposits	(1,196)	29
Other non-current liabilities	(135)	(36)
Net cash provided by/(used) in operating activities	(232)	(1,112)
Investing activities
Purchases of property and equipment	(230)	(149)
Net cash used in investing activities	(230)	(149)
Financing activities
Proceeds from related party loans		1,000
Principal payments on finance leases	(8)
Net cash provided by/(used in) financing activities	(8)	1,000
Increase/(decrease) in Cash and Cash Equivalents	(470)	(261)
Cash and Cash Equivalents, beginning of period	2,718	1,003
Cash and Cash Equivalents, end of period	$ 2,248	$ 742

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Stock	Additional paid in capital	Accumulated (Deficit)	Total
Balance at Dec. 31, 2017	$ 28	$ 30,555	$ (26,231)	$ 4,352
Balance, Shares at Dec. 31, 2017	2,752,742
Stock-based compensation		64		64
Issuance of warrants with debt extension		266		266
Net loss			(2,238)	(2,238)
Balance at Mar. 31, 2018	$ 28	30,885	(28,469)	2,444
Balance, Shares at Mar. 31, 2018	2,752,742
Balance at Dec. 31, 2018	$ 97	53,575	(36,851)	16,821
Balance, Shares at Dec. 31, 2018	9,724,826
Adoption of ASU 2016-02			171	171
Stock-based compensation		41		41
Net loss			(184)	(184)
Balance at Mar. 31, 2019	$ 97	$ 53,616	$ (36,864)	$ 16,849
Balance, Shares at Mar. 31, 2019	9,724,826

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Nature of Organization and Operations

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF ORGANIZATION AND OPERATIONS

NOTE 1: NATURE OF ORGANIZATION AND OPERATIONS

Unless the context otherwise indicates, references in these Notes to the accompanying condensed consolidated financial statements to “we,” “us,” “our” and “the Company” refer to Creative Realities, Inc. and its subsidiaries.

Nature of the Company’s Business

Creative Realities, Inc. is a Minnesota corporation that provides innovative digital marketing technology and solutions to retail companies, individual retail brands, enterprises and organizations throughout the United States and in certain international markets. The Company has expertise in a broad range of existing and emerging digital marketing technologies, as well as the related media management and distribution software platforms and networks, device management, product management, customized software service layers, systems, experiences, workflows, and integrated solutions. Our technology and solutions include: digital merchandising systems and omni-channel customer engagement systems, interactive digital shopping assistants, advisors and kiosks, and other interactive marketing technologies such as mobile, social media, point-of-sale transactions, beaconing and web-based media that enable our customers to transform how they engage with consumers. We have expertise in a broad range of existing and emerging digital marketing technologies, as well as the following related aspects of our business: content, network management, and connected device software and firmware platforms; customized software service layers; hardware platforms; digital media workflows; and proprietary processes and automation tools. We believe we are one of the world’s leading interactive marketing technology companies that focuses on the retail shopper experience by helping retailers and brands use the latest technologies to create better shopping experiences.

On November 20, 2018, we closed on our acquisition of Allure Global Solutions, Inc. (the “Allure Acquisition”). While the Allure Acquisition expanded our operations, geographical footprint and customer base and also enhanced our current product offerings, the core business of Allure is consistent with the operations of Creative Realties, Inc. and we are not adding different operating activities to our business.

Our main operations are conducted directly through Creative Realities, Inc., and under our wholly owned subsidiaries Allure Global Solutions, Inc., Creative Realities Canada, Inc., and ConeXus World Global, LLC, a Kentucky limited liability company. Our other wholly owned subsidiary Creative Realities, LLC, a Delaware limited liability company, has been effectively dormant since October 2015, the date of the merger with ConeXus World Global, LLC.

Liquidity and Financial Condition

The accompanying Condensed Consolidated Financial Statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties.

We have incurred net losses for the years ended December 31, 2018 and 2017 and have negative cash flows from operating activities as of December 31, 2018. For the three months ended March 31, 2019 and 2018 we have incurred net losses of $184 and $2,238, respectively. As of March 31, 2019, we had cash and cash equivalents of $2,248 and working capital deficit of $5,555, which includes $662 representing current maturities of operating leases brought onto the consolidated balance sheet January 1, 2019 upon adoption of Accounting Standards Update (“ASU”) 2016-02.

On November 9, 2018, Slipstream Communications, LLC, (“Slipstream”) a related party (see Note 9), extended the maturity date of our term loan and revolving loan to August 16, 2020. Our intent is to refinance our term loan and revolving loan with an unrelated third party in the first half of 2019. In conjunction with the extension of the maturity date of our term loan, we agreed that the cash portion of the interest rate would conditionally increase from 8.0% per annum to 10.0% per annum effective July 1, 2019 if we have not successfully completed such refinancing activity by June 30, 2019.

Management believes that, based on (i) the extension of the maturity date on our term loan and revolving loans, (ii) our operational forecast through 2020, and (iii) the execution of our planned capital raise, we can continue as a going concern through at least May 15, 2020. However, given our net losses, cash used in operating activities and working capital deficit, we obtained a continued support letter from Slipstream through May 15, 2020. We can provide no assurance that our ongoing operational efforts will be successful which could have a material adverse effect on our results of operations and cash flows.

See Note 9 to the Condensed Consolidated Financial Statements for a discussion of the Company’s debt obligations.

Acquisitions

Acquisition of Allure Global Solutions, Inc.

On September 20, 2018, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Christie Digital Systems, Inc. (“Seller”) to acquire the capital stock of Allure, a wholly owned subsidiary of the Seller (the “Allure Acquisition”). Allure is an enterprise software development company providing software solutions, a suite of complementary services, and ongoing support for an array of digital media and POS solutions. Allure provides a wide range of products for the theatre, restaurant, convenience store, theme park, and retail spaces and works to create, develop, deploy, and maintain enterprise software solutions including those designed specifically to integrate, manage, and power ambient client-owned networks. Those networks manage data and marketing content that has been designed and proven to influence consumer purchase behavior. The Allure Acquisition closed on November 20, 2018.

Subject to the terms and conditions of the Purchase Agreement, upon the closing of the Allure Acquisition, we acquired ownership of all of Allure’s issued and outstanding capital shares in consideration for a total purchase price of approximately $8,450, subject to a post-closing working capital adjustment. Of this purchase price amount, we paid $6,300 in cash. Of the remaining purchase price amount, approximately $1,250 is to be paid to former management of Allure, and approximately $900 due from Allure to the Seller, under an existing Seller Note which was amended and restated for this reduced amount. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest only through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.

The promissory note is convertible into shares of Creative Realities common stock, at the Seller’s option on or after May 19, 2019, at an initial conversion price of $8.40 per share, subject to customary equitable adjustments. Conversion of all amounts owing under the promissory note will be mandatory if the 30-day volume-weighted average price of our common stock exceeds 200% of the common stock trading price at the closing of the Allure Acquisition. We will grant the Seller customary registration rights for the shares of our common stock issuable upon conversion of the promissory note.

The Purchase Agreement contemplates additional consideration of $2,000 to be paid by us to Seller in the event that Allure’s revenue exceeds $13,000, wherein revenues from one specifically-named customer add only 70% of their gross value to the total, for any of (i) the 12-month period ending December 31, 2019, or (ii) any of the next following trailing 12-month periods ending on each of March 31, June 30, September 30 and December 31, 2020.

See Note 5 to the Condensed Consolidated Financial Statements for further discussion of the Company’s Allure Acquisition.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2019.

The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. It is the opinion of management that all necessary adjustments for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.

2. Revenue Recognition

We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which we adopted effective January 1, 2018, using the modified retrospective method. See further discussion of the impact of adoption and our revenue recognition policy in Note 4.

3. Inventories

Inventories are stated at the lower of cost or market (net realizable value), determined by the first-in, first-out (FIFO) method, and consist of the following:

	March 31,		December 31,
	2019		2018
Raw materials, net of reserve of $196 and $207, respectively	$	241	$	220
Work-in-process		424		159
Total inventories	$	665	$	379

4. Impairment of Long-Lived Assets

We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets. Under ASC 360, impairment losses are recorded whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

If the impairment tests indicate that the carrying value of the asset is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized. The impairment loss is determined as the amount by which the carrying value of such asset exceeds its fair value. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate. Assets to be disposed of are carried at the lower of their carrying value or fair value less costs to sell. Considerable management judgment is necessary to estimate the fair value of assets, and accordingly, actual results could vary significantly from such estimates.

5. Basic and Diluted Income/(Loss) per Common Share

Basic and diluted income/(loss) per common share for all periods presented is computed using the weighted average number of common shares outstanding. Basic weighted average shares outstanding includes only outstanding common shares. Diluted weighted average shares outstanding includes outstanding common shares and potential dilutive common shares outstanding in accordance with the treasury stock method. Shares reserved for outstanding stock options and warrants totaling approximately 5,320,162 and 1,615,976 at March 31, 2019 and 2018, respectively, were excluded from the computation of loss per share as they are anti-dilutive. Net loss attributable to common shareholders for the three months ended March 31, 2019 and 2018 is after dividends on convertible preferred stock of $0 and $111, respectively.

6. Income Taxes

Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in basis of intangibles, stock-based compensation, reserves for uncollectible accounts receivable and inventory, differences in depreciation methods, and accrued expenses. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions utilizing an established recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We had no uncertain tax positions as of March 31, 2019 and December 31, 2018.

7. Goodwill and Definite-Lived Intangible Assets

We follow the provisions of ASC 350, Goodwill and Other Intangible Assets. Pursuant to ASC 350, goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment at least annually. The Company uses a measurement date of September 30. There was no impairment loss recognized on goodwill or definite-lived intangible assets during the three months ended March 31, 2019 and 2018 (see Note 8).

8. Use of Estimates

The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting periods. Our significant estimates include: the allowance for doubtful accounts, recognition of revenue, right-of-use assets and related lease liabilities, deferred taxes, deferred revenue, the fair value of acquired assets and liabilities, valuation of warrants and other stock-based compensation and other assumptions and estimates used to evaluate the recoverability of long-lived assets, goodwill and other intangible assets and the related amortization methods and periods. Actual results could differ from those estimates.

9. Reverse Stock Split

On October 17, 2018, the Company effectuated a l-for-30 reverse stock split of its outstanding common stock. The accompanying financial statements and notes to the financial statements give effect to the reverse stock split for all periods presented. The shares of common stock retained a par value of $0.01 per share. Accordingly, the stockholders’ equity for the three-months ended March 31, 2018 reflects the reverse stock split by reclassifying from “common stock” to “additional paid-in capital” an amount equal to the par value of the decreased shares resulting from the reverse stock split.

10. Business Combinations

Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Refer to Note 5, “Business Combination” for a discussion of the accounting for the Allure Acquisition.

11. Leases

On January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842), as amended, which supersedes the lease accounting guidance under ASC 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. For information regarding the impact of Topic 842 adoption, see Note 17— Leases.

Lease accounting results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under Topic 840.

We elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract was or contains a lease, and our initial direct costs for any leases that existed prior to January 1, 2019. We also elected to combine our lease and non-lease components. We have no leases with an initial term of 12 months or less.

Upon adoption, we recognized total ROU assets of $2,319, with corresponding liabilities of $2,319 on the condensed consolidated balance sheets. This included $54 of pre-existing finance lease ROU assets previously reported in computer equipment within property and equipment, net. The ROU assets include adjustments for prepayments and accrued lease payments. The net effect of the adoption resulted in an insignificant cumulative effect adjustment to retained earnings on January 1, 2019 but did not impact our prior year consolidated statements of income, statements of cash flows, or statements of shareholders’ equity.

Under Topic 842, we determine if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is a hypothetical rate based on our understanding of what our credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

Operating leases are included in operating lease right-of-use assets, current maturities of operating leases, and long-term obligations under operating leases on our condensed consolidated balance sheets. Finance leases are included in property and equipment, net, current maturities of financing leases, and long-term obligations under financing leases on our condensed consolidated balance sheets

Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

NOTE 3: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Recently adopted

On January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842), as amended. For information regarding the impact of Topic 842 adoption, see Note 2 – Summary of Significant Accounting Policies and Note 17— Leases.

In October 2018, the FASB issued ASU No. 2018-16 (“ASU 2018-16”), Derivatives and Hedging. ASU 2018-16 expands the permissible benchmark interest rates to include the Secured Overnight Financing Rate (SOFR) to be eligible as a U.S. benchmark interest rate for purposes of applying hedge accounting under Topic 815, Derivatives and Hedging. The Company adopted this ASU effective January 1, 2019 on a prospective basis for qualifying or redesignated hedging relationships entered on or after the date of adoption. As we previously adopted the amendments in Update 2017-12, and as the benchmark rate on our term loan debt does not utilize the SOFR, the adoption of this amendment had no effect on the Company’s results of operations, financial position and cash flows.

On January 1, 2019, we adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, which amended certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. We have updated our Condensed Consolidated Financial Statements to include a reconciliation of the beginning balance to the ending balance of stockholders’ equity for each period for which a statement of comprehensive income is filed.

On January 1, 2019, we adopted ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which aimed to address concerns over the cost and complexity of the two-step goodwill impairment test by removing the second step of the test. Prior to adoption, an entity was required to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compared the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performed Step 2 by comparing the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. As a result of adoption, in completing our annual impairment testing of goodwill as of September 30, 2019, we will apply a one-step quantitative test and record the amount of goodwill impairment, if any, as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. There was no impact on our condensed consolidated financial statements as the result of adoption.

Not yet adopted

In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The amendments in this update provide guidance on evaluating the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this ASU is permitted, including adoption in any interim period, for all entities. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

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 standard modifies the disclosure requirements for fair value measurements by removing the requirements to disclose: (i) amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (ii) timing of recognizing transfers between levels within the fair value hierarchy; and (iii) valuation processes used for Level 3 fair value measurements. Additionally, the standard now requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of each reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity is permitted to early adopt all of the disclosure changes or early adopt only the removed disclosure requirements and delay adoption of the additional disclosures until the effective date of this amendment. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses. The main objective is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables and loans, entities will be required to estimate lifetime expected credit losses. The amendments are effective for public business entities for fiscal years and interim periods beginning after December 15, 2019. The Company is evaluating the impact that adoption will have on its consolidated financial statements.

Revenue Recognition

3 Months Ended

Mar. 31, 2019

Revenue Recognition and Deferred Revenue [Abstract]

REVENUE RECOGNITION

NOTE 4: REVENUE RECOGNITION

On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts not completed as of the date of adoption. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Under this method, we concluded that the cumulative effect of applying this guidance was not material to the financial statements and no adjustment to the opening balance of accumulated deficit was required on the adoption date.

Under ASC 606, the Company accounts for revenue using the following steps:

●

Identify the contract, or contracts, with a customer

●

Identify the performance obligations in the contract

●

Determine the transaction price

●

Allocate the transaction price to the identified performance obligations

●

Recognize revenue when, or as, the Company satisfies the performance obligations

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach.

The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. The Company receives variable consideration in very few instances.

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 when one is not available. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation.

Deferred contract acquisition costs were evaluated for inclusion in other assets; however, the Company elected to use the practical expedient for recording an immediate expense for those incremental costs of obtaining contracts, including certain design/engineering services, commissions, incentives and payroll taxes, as these incremental and recoverable costs have terms that do not exceed one year.

The Company provides innovative digital marketing technology and solutions to retail companies, individual retail brands, enterprises and organizations throughout the United States and in certain international markets. The Company’s technology and solutions include: digital merchandising systems and omni-channel customer engagement systems, interactive digital shopping assistants, advisors and kiosks, and other interactive marketing technologies such as mobile, social media, point-of-sale transactions, beaconing and web-based media that enable our customers to transform how they engage with consumers.

We typically generate revenue through the following sources:

●

Hardware:

○

System hardware sales – displays, computers and peripherals

●

Services and Other:

○

Professional implementation and installation services

○

Software design and development services

○

Software as a service, including content management

○

Maintenance and support services

The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2019:

(in thousands)	Three Months Ended March 31, 2019
Hardware	$	1,641

Services:
Installation Services		2,372
Software Development Services		3,976
Managed Services		1,495
Total Services		7,843

Total Hardware and Services	$	9,484

System hardware sales

System hardware revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer in instances in which the sale of hardware is the sole performance obligation. Shipping charges billed to customers are included in hardware sales and the related shipping costs are included in hardware cost of sales. 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. System hardware revenues are classified as “Hardware” within our disaggregated revenue.

Installation services

The Company performs outsourced installation services for customers and recognizes revenue upon completion of the installations. Installation services also includes engineering services performed as part of an installation project.

When system hardware sales include installation services to be performed by the Company, the goods and services in the contract are not distinct, so the arrangement is accounted for as a single performance obligation. Our customers control the work-in-process and can make changes to the design specifications over the contract term. Revenues are recognized over time as the installation services are completed based on the relative portion of labor hours completed as a percentage of the budgeted hours for the installation. Installation services revenues are classified as “Installation Services” within our disaggregated revenue.

The aggregate amount of the transaction price allocated to installation service performance obligations that are partially unsatisfied as of March 31, 2019 were $0.

Software design and development services

Software and software license sales are revenue when a fixed fee order has been received and delivery has occurred to the customer. Revenue is recognized generally upon customer acceptance (point-in-time) of the software product and verification that it meets the required specifications. Software is delivered to customers electronically. Software design and development revenues are classified as “Software Development Services” within our disaggregated revenue.

Software as a service

Software as a service includes revenue from software licensing and delivery in which software is licensed on a subscription basis and is centrally hosted. These services often include software updates which provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period. Contracts for these services are generally 12-36 months in length. We account for revenue from these services in accordance with ASC 985-20-15-5 and recognize revenue ratably over the performance period. Software as a service revenues are classified as “Managed Services” within our disaggregated revenue.

Maintenance and support services

The Company sells support services which include access to technical support personnel for software and hardware troubleshooting. The Company offers a hosting service through our network operations center, or NOC, allowing the ability to monitor and support its customers’ networks 7 days a week, 24 hours a day. These contracts are generally 12-36 months in length. Revenue is recognized over the term of the agreement in proportion to the costs incurred in fulfilling performance obligations under the contract. Maintenance and Support revenues are classified as “Managed Services” within our disaggregated revenue.

Maintenance and support fees are based on the level of service provided to end customers, which can range from monitoring the health of a customer’s network to supporting a sophisticated web-portal to managing the end-to-end hardware and software of a digital marketing system. These agreements are renewable by the customer. Rates for maintenance and support, including subsequent renewal rates, are typically established based upon a fee per location, per device, or a specified percentage of net software license fees as set forth in the arrangement. These contracts are generally 12-36 months in length. Revenue is recognized ratably and evenly over the service period.

The Company also performs time and materials-based maintenance and repair work for customers. Revenue is recognized at a point in time when the performance obligation has been fully satisfied.

In addition to changes in the timing of when we record variable consideration, ASC 606 provided clarification about the classification of certain costs relating to revenue arrangements with customers. As a result of our analysis, we did not identify any components of our revenue transactions which required reclassification between gross and net presentation.

Business Combination

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

BUSINESS COMBINATION

NOTE 5: BUSINESS COMBINATION

On November 20, 2018, the Company completed the Allure Acquisition. Pursuant to the Stock Purchase Agreement, the total purchase price was $8,450, which was primarily funded using cash from the Company’s public offering closed on November 19, 2018. The difference between the total purchase price and the net consideration transferred is driven by the cash acquired in the acquisition. The preliminary purchase price of Allure consisted of the following items:

(in thousands)	Consideration
Cash consideration for stock		$ 6,300	⁽¹⁾
Payable to former Allure management		1,021	⁽²⁾
Seller note payable		900	⁽³⁾
Earnout liability		250	⁽⁴⁾
Total consideration		8,471
Cash acquired		(26)	⁽⁵⁾
Net consideration transferred	$	8,445

(1)	Cash consideration for outstanding shares of Allure common stock per Stock Purchase Agreement.

(2)	Represents a payable due to two former members of the Allure management team for a total of $1,250 as a result of the acquisition; 30% due in November 2018 and 70% due in November 2019. The fair value of the payable as of the acquisition date was deemed to be $1,021.

(3)	Represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated for this amount through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the stock purchase agreement. As of the acquisition date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller. The Seller Note thereby increased from $900 per the Stock Purchase Agreement to $2,303 at the opening balance sheet. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.

(4)	The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement. The fair value of the earnout liability was determined to be $250 at the time of acquisition.

(5)	Represents the Allure cash balance acquired at acquisition.

The Company accounted for the Allure Acquisition using the acquisition method of accounting. The preliminary allocation of the purchase price is based on estimates of the fair value of assets acquired and liabilities assumed as of November 20, 2018. The Company is continuing to obtain information to determine the acquired assets and liabilities, including tax assets, liabilities and other attributes. The components of the preliminary purchase price allocation are as follows:

(in thousands)	Total
Accounts receivable	$	2,477
Unbilled receivables		221
Inventory		142
Prepaid expenses & other current assets		18
Property and equipment		177
Other assets		7
Identified intangible assets:
Definite-lived trade names		340
Developed technology		1,770
Customer relationships		2,870
Goodwill		3,911
Accounts payable		(331	)
Accrued expenses		(975	)
Customer deposits		(503	)
Deferred revenues		(276	)
Accounts payable converted into Seller Note		(1,403	)
Net consideration transferred	$	8,445

The preliminary fair value of the customer relationship intangible asset has been estimated using the income approach through a discounted cash flow analysis with the cash flow projections discounted using a rate of 26.0%. The cash flows are based on estimates used to price the Allure Acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the Company’s pricing model and the weighted average cost of capital.

The definite-lived trade name represents the Allure brand name as marketed primarily in the sports & entertainment, large venue and quick service restaurant verticals of the digital signage industry. The Company applied the income approach through an excess earnings analysis to determine the preliminary fair value of the trade name asset. The Company identified this asset as definite-lived as opposed to indefinite-lived as the Company plans to utilize the Allure trade name as a product name as opposed to go-to-market company name. The Company applied the income approach through a relief-from-royalty analysis to determine the preliminary fair value of this asset.

The developed technology assets are primarily comprised of know-how and functionality embedded in Allure’s proprietary content management application which drives currently marketed products and services. The Company applied the income approach through a relief-from-royalty analysis to determine the preliminary fair value of this asset.

The Company is amortizing the identifiable intangible assets on a straight-line basis over the weighted average lives ranging from 5 to 15 years.

The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets:

(in thousands)	Preliminary Valuation		Amortization Period
Identifiable intangible assets:
Definite-lived trade names	$	340	5 years
Developed technology		1,770	7 years
Customer relationships		2,870	15 years
Total	$	4,980

The Company estimated the preliminary fair value of the acquired property, plant and equipment using a combination of the cost and market approaches, depending on the component. The preliminary fair value of property, plant and equipment of $177.

The excess of the purchase price over the preliminary estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as goodwill and is subject to change upon final valuation. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Allure Acquisition. These benefits include a comprehensive portfolio of iconic customer brands, complementary product offerings, enhanced national footprint, and attractive synergy opportunities and value creation. None of the goodwill is expected to be deductible for income tax purposes.

The following unaudited pro forma information presents the combined financial results for the Company and Allure, adjusted for Allure’s fiscal year ended March 31, as if the Allure Acquisition had been completed January 1, 2017. Prior to the Allure Acquisition, Allure had a fiscal year reporting from April 1 to March 31 annually. The pro forma financial information set forth below for the three months ended March 31, 2019 and 2018 includes Allure’s pro forma information for the three month period January 1, 2018 through March 31, 2018.

	Three Months Ended March 31,
(in thousands, except earnings per common share)	2019			2018
	(unaudited)
Net sales	$	9,484		$	6,434
Net loss	$	(184	)	$	(2,513	)
Loss per common share	$	(0.02	)	$	(0.91	)

Fair Value Measurement

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

NOTE 6: FAIR VALUE MEASUREMENT

We measure certain financial assets, including cash equivalents, at fair value on a recurring basis. In accordance with ASC 820-10-30, fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820-10-35 establishes a three-level hierarchy that prioritizes the inputs used in measuring fair value. The three hierarchy levels are defined as follows:

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets.

Level 2 — Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing.

The following table presents information about the Company’s warrant liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value. See Note 14 for the inputs used for the probability weighted Black Scholes valuations at March 31, 2019.

			Quote Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	Fair Value		(Level 1)		(Level 2)		(Level 3)
Warrant liabilities at December 31, 2018	$	21		-		-	$	21
Warrant liabilities at March 31, 2019	$	22		-		-	$	22

The change in level 3 fair value is as follows:

Warrant liability as of December 31, 2018							$	21
New warrant liabilities								-
Increase in fair value of warrant liability								1
Ending warrant liability as of March 31, 2019							$	22

As part of the Allure Acquisition, the Stock Purchase Agreement contemplated additional consideration of $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement, for any of the trailing twelve-month periods measured as of December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020. The fair value of the earnout liability was determined to be $250 at the time of acquisition. There were no changes to the assumptions nor adjustments recorded to the fair value of the earnout liability as of March 31, 2019 given limited passage of time in the measurement period and performance in-line with those estimates utilized in developing the initial estimate.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Supplemental Cash Flow Statement Information

3 Months Ended

Mar. 31, 2019

Supplemental Cash Flow Statement Information [Abstract]

SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

NOTE 7: SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

	Three Months Ended
	March 31,
	2019		2018
Supplemental Cash Flow Information
Non-cash Investing and Financing Activities
Issuance of warrants with term loan extensions / revolver draws	$	-	$	266
Cash paid during the period for:
Interest	$	80	$	168
Income taxes, net	$	-	$	-

Intangible Assets

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 8: INTANGIBLE ASSETS

Intangible Assets

Intangible assets consisted of the following at March 31, 2019 and December 31, 2018:

	March 31,				December 31,
	2019				2018
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	4,635		2,957	$	4,635		2,895
Customer relationships		5,330		2,536		5,330		2,477
Trademarks and trade names		1,020		588		1,020		553
		10,985		6,081		10,985		5,925
Accumulated amortization		6,081				5,925
Net book value of amortizable intangible assets	$	4,904			$	5,060

For the three months ended March 31, 2019 and 2018, amortization of intangible assets charged to operations was $156 and $232, respectively.

Loans Payable

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

LOANS PAYABLE

NOTE 9: LOANS PAYABLE

The outstanding debt with detachable warrants, as applicable, are shown in the table below. Further discussion of the notes follows.

Debt Type	Issuance Date	Principal			Maturity Date	Warrants		Interest Rate Information
A	6/30/2018	$	264		6/30/2021		-	0.0% interest ⁽¹⁾
B	1/16/2018		1,000		8/16/2020		61,729	8.0% interest ⁽²⁾
C	8/17/2016		3,000		8/16/2020		588,236	8.0% interest ⁽²⁾
D	11/19/2018		2,303		2/15/2020		-	3.5% interest ⁽³⁾
		$	6,567				649,965
	Debt discount		(875	)
	Total debt	$	5,692

A – Secured Disbursed Escrow Promissory Note with related party

B – Revolving Loan with related party

C – Term Loan with related party

D – Amended and Restated Seller Note from acquisition of Allure

(1) 0.0% interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000 in principal (disregarding paid-in-kind (“PIK”) interest); 8.0% cash, when total borrowing under the term and revolver loans, in aggregate, exceed $4,000 in principal (disregarding PIK interest)

(2) 8.0% cash interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000 in principal (disregarding PIK interest); 8.0% cash, 2.0% PIK when total borrowing under the term and revolver loans, in aggregate, exceed $4,000 in principal (disregarding PIK interest). If the Company does not successfully refinance the term loan debt facility (C above) with a third party by June 30, 2019, the cash portion of the interest rate will increase from 8.0% to 10.0% per annum.

(3) 3.5% simple cash interest per annum; interest payable quarterly with the first payment due on December 31, 2018 with payments of accrued interest continuing quarterly thereafter until the maturity date of February 20, 2020.

Obligations under the secured convertible promissory notes are secured by a grant of collateral security in all of the tangible assets of the co-makers pursuant to the terms of an amended and restated security agreement.

Term Notes and Secured Disbursed Escrow Promissory Note

On August 17, 2016, we entered into a Loan and Security Agreement with Slipstream, and obtained a $3.0 million term loan, with interest thereon at 8% per annum. The term loan contains certain customary restrictions including, but not limited to, restrictions on mergers and consolidations with other entities, cancellation of any debt or incurring new debt (subject to certain exceptions), and other customary restrictions.

On January 16, 2018, we entered into the Third Amendment to the Loan and Security Agreement with Slipstream and obtained a $1.0 million revolving loan, with interest thereon at 8% per annum, maturing on January 16, 2019, which was amended to August 16, 2020 in conjunction with the Fifth Amendment to the Loan and Security Agreement. In connection with the loan, we issued Slipstream a five-year warrant to purchase up to 61,729 shares of Creative Realities’ common stock at a per share price of $8.10 (subject to adjustment and subsequently adjusted to $8.09 in April 2018). The fair value of the warrants was $266, which was accounted for as an additional debt discount and is being amortized over the remaining life of the loan.

On April 27, 2018, we entered into the Fourth Amendment to the Loan and Security Agreement with Slipstream, under which we obtained a $1.1 million revolving loan, with interest thereon at 8% per annum, provided, however, at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan (excluding the additional principal added pursuant to this proviso) exceeds $4,000 then the Loan Rate shall be 10%, of which eight percent 8% shall be payable in cash and 2% shall be paid by the issuance of and treated as additional principal of the Term Loan (“PIK”); provided, further, however, that the Loan Rate with respect to the Disbursed Escrow Loan shall be 0%. The revolving loan was originally set to mature on January 16, 2019, which was amended to August 16, 2020 in conjunction with the Fifth Amendment to the Loan and Security Agreement. In connection with the loan, we issued the lender a five-year warrant to purchase up to 143,791 shares of Creative Realities’ common stock at a per share price of $7.65 (subject to adjustment). The fair value of the warrants was $543, which was accounted for as an additional debt discount and is being amortized over the remaining life of the loan.

The Fourth Amendment to the Loan and Security Agreement included entry into a Secured Disbursed Escrow Promissory Note between the Company and Slipstream, and, effective June 30, 2018 we drew $264 in conjunction with our exit from a previously leased operating facility. The principal amount of the Secured Disbursed Escrow Promissory Note will bear simple interest at the 8%; provided, further, however, that the Loan Rate with respect to the Secured Disbursed Escrow Promissory Note shall be 0% at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan (excluding the additional principal added pursuant to this proviso) is at or below $4,000.

On November 19, 2018, we used proceeds from our public offering to repay Slipstream $1,283, inclusive of $125 of accrued interest, to reduce borrowings under the Loan and Security Agreement to an aggregate of $4,264, comprised of $3,000 term loan, $1,000 revolving loan and $264 secured disbursed escrow promissory note. The condensed consolidated balance sheet includes $27 of accrued interest as of March 31, 2019 representing one month’s interest at 8.0% on the $4,000 outstanding balance.

On November 9, 2018, Slipstream, extended the maturity date of our term loan and revolver loan to August 16, 2020 through the Fifth Amendment to the Loan and Security Agreement. Our intent is to refinance our term loan with an unrelated third party in the first half of 2019. In conjunction with the extension of the maturity date of our term loan, we agreed that the interest rate would conditionally increase from 8.0% per annum to 10.0% per annum effective July 1, 2019 if we have not successfully completed such refinancing activity by June 30, 2019.

See Note 14 for the Black Scholes inputs used to calculate the fair value of the warrants.

Convertible Promissory Notes

On October 29, 2018, the holder of convertible promissory notes, Slipstream, agreed to convert $4,955 of outstanding principal, including paid-in-kind interest and all accrued interest thereon into shares of our common stock and warrants at a conversion price equal to the lower of $7.65, or 80% of the price at which shares of common stock were sold in the Public Offering. The conversion was contingent upon (i) the conversion of the Company’s Series A Preferred Stock, and (ii) the successful completion of a Public Offering of at least $10 million, each of which were successfully completed on November 19, 2018. In exchange for participation in the Public Offering, subject to a minimum participation requirement as agreed between the underwriters and the Company, and Slipstream’s execution of a lock-up agreement, Slipstream received, as a one-time incentive, additional common stock and warrants in such number that decreased the effective conversion price of the convertible notes to 70% of the lowest of those scenarios outlined above. Upon completion of the Company’s Public Offering on November 19, 2018, the convertible promissory notes were converted into shares of the Company’s common stock. The Company issued 653,062 shares of common stock at the stated conversion rate and an additional 1,386,090 shares of common stock in exchange for conversion of the convertible promissory notes as a result of the one-time incentive. The lock-up agreement applied to all shares of common stock and warrants issued to Slipstream.

Amended and Restated Seller Note from acquisition of Allure

The Amended and Restated Seller Note represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated to a reduced amount of $900 through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the Stock Purchase Agreement. As of the balance sheet date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller, resulting in a Seller Note of $2,303. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest only through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. The condensed consolidated balance sheet includes $29 of accrued interest as of March 31, 2019 representing all interest accrued under the note since close of the Allure Acquisition. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.

The promissory note is convertible into shares of Creative Realities common stock, at the seller’s option on or after May 19, 2019, at an initial conversion price of $8.40 per share, subject to customary equitable adjustments. Conversion of all amounts owing under the promissory note will be mandatory if the 30-day volume-weighted average price of our common stock exceeds 200% of the common stock trading price at the closing of the acquisition. We granted the seller customary registration rights for the shares of our common stock issuable upon conversion of the promissory note.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10: COMMITMENTS AND CONTINGENCIES

Lease termination

On August 10, 2017, we announced the planned closure of our office facilities located at 22 Audrey Place, Fairfield, New Jersey 07004 which housed our previous operations center and ceased use of the facilities in February 2018. In ceasing use of these facilities, we recorded a one-time non-cash charge of $474 to accrue for the remaining rent under the lease term, net of anticipated subtenant rental income.

Settlement of obligations

During the three months ended March 31, 2019, the Company wrote off obligations of $7 and recognized a gain of $7. There were no such settlements in the three months ended March 31, 2018.

Litigation

The Company is involved in various legal proceedings incidental to the operations of its business. The Company believes that the outcome of all such other pending legal proceedings in the aggregate will not have a material adverse effect on its business, financial condition, liquidity, or operating results.

Termination benefits

On December 21, 2018, the Company announced certain restructuring activities following completion of its acquisition of Allure and accrued one-time termination benefits related to severance to the affected employees of $386, $31 of which was paid prior to the year end date. During the three-months ended March 31, 2019, cash payments for termination benefits of $92 were paid and a liability of $263 remains included in accrued expenses on the condensed consolidated balance sheet.

Related Party Transactions

3 Months Ended

Mar. 31, 2019

RELATED PARTY TRANSACTIONS

NOTE 11: RELATED PARTY TRANSACTIONS

In addition to the financing transactions with Slipstream, a related party, discussed in Note 9, we have the following related party transactions.

On August 14, 2018, we entered into a payment agreement with 33 Degrees Convenience Connect, Inc., a related party that is approximately 17.5% owned by a member of our senior management (“33 Degrees”) outlining terms for repayment of $2,567 of aged accounts receivable as of that date. The payment agreement stipulates a simple interest rate of 12% on aged accounts receivable to be paid on the tenth day of each month through the maturity date of December 31, 2019. Remaining payments due under the agreement as of March 31, 2019 were $1,317, $300 of which has been paid subsequent to the reporting date as of the date of this filing. Remaining payments of $150 are to be paid on the first day of each month beginning June 1, 2019 through the maturity date, or December 31, 2019. All amounts under this note are included in accounts receivable in current assets as all amounts are expected to be collected within one year of the balance sheet date. Since inception of this agreement up to and through the filing date, all payments due under this agreement have been received from 33 Degrees timely, including monthly interest payments and payments for ongoing services.

Since the Company entered into the payment agreement with 33 Degrees, 33 Degrees has continued to purchase additional hardware and services from the Company, on a prepaid basis, in addition to making payments under the payment agreement. In aggregate, 33 Degrees has paid $433 to the Company for new hardware and services above and beyond their contractual obligations under the payment agreement, primarily from 33 Degrees Menu Services, LLC (33 Degrees MS), a wholly-owned subsidiary of 33 Degrees.

On March 12, 2019 the Company entered into a security agreement and promissory note with 33 Degrees MS providing a line of credit of $300 for hardware, installation and SaaS services. Under the agreement, product will be shipped and installed by the Company upon evidence of a valid purchase order from the ultimate payer being provided as collateral.

For the three months ended March 31, 2019 and 2018, the Company had sales to 33 Degrees of $195, or 2.1%, and $417, or 10.3%, respectively, of consolidated revenue. Accounts receivable due from 33 Degrees was $1,516, or 17.3%, and $1,933, or 30.0% of consolidated accounts receivable at March 31, 2019 and December 31, 2018, respectively.

On January 16, 2018, we entered into the Third Amendment to the Loan and Security Agreement with Slipstream Communications, LLC, a related party investor, under which we obtained a $1.0 million revolving loan, with interest thereon at 8% per annum, maturing on January 16, 2019 (subsequently extended to August 2020). In connection with the loan, we issued the lender a five-year warrant to purchase up to 61,729 shares of Creative Realities’ common stock at a per share price of $8.10 (subject to adjustment and subsequently adjusted to $6.09 in November 2019). The fair value of the warrants was $266, which is accounted for as an additional debt discount and amortized over the remaining life of the loan.

Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 12: INCOME TAXES

Our deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs). We have substantial NOLs that are limited in its usage by IRC Section 382. IRC Section 382 generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership within a statutory testing period. We have performed a preliminary analysis of the annual NOL carryforwards and limitations that are available to be used against taxable income. Based on the history of losses of the Company, there continues to be a full valuation allowance against the net deferred tax assets of the Company with a definite life.

For the three months ended March 31, 2019, we reported tax expense of $21. The net deferred tax liability at March 31, 2019 of $147 represents the liability relating to indefinite lived assets. This indefinite lived deferred tax liability is used as a source of taxable income to more likely than not realize some of the Company’s indefinite lived deferred tax assets.

Convertible Preferred Stock

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

CONVERTIBLE PREFERRED STOCK

NOTE 13: CONVERTIBLE PREFERRED STOCK

The Series A Convertible Preferred Stock (the “preferred stock”) entitled its holders to a 6% dividend, payable semi-annually in cash or in kind through the three-year anniversary of the original issue date, and from and after such three-year anniversary in duly authorized, validly issued, fully paid and non-assessable shares of common stock. The three-year anniversary of the initial investment date occurred during the second half of 2017 for $5.2 million and the first quarter of 2018 for the remaining $0.3 million originally issued preferred stock and therefore dividends on those investments will be paid via issuance of common shares at all future dividend dates.

On November 5, 2018, the shareholders of preferred stock agreed to convert the entire class of preferred stock into common stock at an exchange ratio of $7.65 per share. The conversion was contingent upon a successful Public Offering of at least $10 million, which the Company completed on November 19, 2018.

Holders of preferred stock received common stock at the stated conversion rate of $7.65 per share, or 723,561 shares of common stock. Those holders of preferred stock who executed a customary lock-up agreement for a period continuing for 90 days after the consummation of the public offering were issued, as a one-time incentive, additional common stock and warrants, in such number as defined in underlying agreements. The Company issued an additional 1,123,367 shares of common stock in exchange for execution of such lock-up agreements. The lock-up agreements applied to all shares of common stock issued to convert the holder’s preferred stock, and the additional shares of common stock and warrants, and underlying warrant shares, issued by the Company in exchange for the holder’s execution of the lock-up agreement and participation in the public offering. As a result of this conversion, there remained no Series A Preferred Stock outstanding as of December 31, 2018.

On March 18, 2019, we filed Statements of Cancellation with the Secretary of State of the State of Minnesota that, effective upon filing, eliminated from the Company’s Articles of Incorporation all matters set forth in the Certificates of Designation of Preferences, Rights and Limitations with respect to the Series A Convertible Preferred Stock and Series A-1 Convertible Preferred Stock of the Company. No shares of Series A Convertible Preferred Stock or Series A-1 Convertible Preferred Stock were issued or outstanding at the time of the filing of the Statements of Cancellation. A copy of the Statements of Cancellation were attached as Exhibit 3.1 and 3.2 to Form 8-K filed the same date.

As of March 31, 2018, the pro rata portion of earned dividends to be distributed as of June 30, 2018 were the equivalent of 3,822 Series A Preferred Stock, which represents 12,369 equivalent common shares based on the volume-weighted adjusted price utilized for conversion. The fair value of these shares are reflected at fair value as a dividend on preferred stock in the condensed consolidated statement of operations and do not impact net loss for the period. During the quarter ended March 31, 2018, there were no conversions of Convertible Preferred Stock into common stock.

Warrants

3 Months Ended

Mar. 31, 2019

Warrants [Abstract]

WARRANTS

NOTE 14: WARRANTS

On January 16, 2018, we entered into the Third Amendment to the Loan and Security Agreement with Slipstream, under which we obtained a $1.0 million revolving loan, with interest thereon at 8% per annum, maturing on January 16, 2019 (subsequently extended to August 2020). In connection with the loan, we issued the lender a five-year warrant to purchase up to 61,729 shares of Creative Realities’ common stock at a per share price of $8.10 (subject to adjustment and subsequently adjusted to $6.09 in November 2018). The fair value of the warrants on the issuance date was $266, which is accounted for as an additional debt discount and amortized over the remaining life of the loan.

Listed below are the inputs used for the probability weighted Black Scholes option pricing model valuation for warrants issued during the three months ended March 31, 2019 and 2018.

Issuance Date		Expected Term at Issuance Date				Risk Free Interest Rate at Date of Issuance				Volatility at Date of Issuance				Stock Price at Date of Issuance
1/16/2018			5.00				2.36	%			65.07	%		$	7.80

Listed below are the inputs used for the probability weighted Black Scholes option pricing model valuation for those warrants classified in the condensed consolidated balance sheet as liabilities as of March 31, 2019.

Remaining Expected
Term at
March 31, 2019 (Years)

Risk Free Interest

Rate at March 31,
2019

Volatility at
March 31,
2019

Stock Price at
March 31,
2019

0.39

2.42

120.11

2.71

A summary of outstanding liability and equity warrants is included below:

	Warrants (Equity)						Warrants (Liability)
	Amount		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Amount		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance January 1, 2019		4,815,047	$	4.90		4.34		216,255	$	7.34		0.64
Warrants issued		-		-		-		-		-		-
Warrants expired		-		-		-		-		-		-
Balance March 31, 2019		4,815,047	$	4.90		4.09		216,255	$	7.34		0.39

Stock-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 15: STOCK-BASED COMPENSATION

A summary of outstanding options is included below:

			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$5.40 - $19.50		287,341		6.79	$	8.35		215,048	$	8.66
$19.51 - $23.70		1,000		4.79		23.70		1,000	$	23.70
$23.71 - $367.50		519		3.33		112.30		519	$	112.30
		288,860		6.78	$	8.59		216,567

	Options		Weighted Average Exercise
	Outstanding		Price
Balance, December 31, 2018		288,860	$	8.59
Granted		-		-
Exercised		-		-
Forfeited or expired		-		-
Balance, March 31, 2019		288,860	$	8.59

The weighted average remaining contractual life for options exercisable is 6.26 years as of March 31, 2019.

Stock Compensation Expense Information

ASC 718-10, Stock Compensation, requires measurement and recognition of compensation expense for all stock-based payments including warrants, stock options, restricted stock grants and stock bonuses based on estimated fair values. Under the Amended and Restated 2006 Equity Incentive Plan, the Company reserved 1,720,000 shares for purchase by the Company’s employees and under the Amended and Restated 2006 Non-Employee Director Stock Option Plan the Company reserved 700,000 shares for purchase by the Company’s employees. There are 12,186 options outstanding under the 2006 Equity Incentive Plan.

In October 2014, the Company’s shareholders approved the 2014 Stock Incentive Plan, under which 7,390,355 shares were reserved for purchase by the Company’s employees. In August 2018, a special meeting of shareholders was held in which the shareholders voted to amend the Company’s 2014 Stock Incentive Plan to increase the reserve of shares authorized for issuance thereunder, from 7,390,355 shares to 18,000,000 shares. There are 276,674 options outstanding under the 2014 Stock Incentive Plan.

Compensation expense recognized for the issuance of stock options for the three months ended March 31, 2019 and 2018 was as follows:

	Three Months Ended
	March 31,
	2019		2018
Stock-based compensation costs included in:
Costs of sales	$	-	$	(6	)
Sales and marketing expense		-		6
General and administrative expense		41		64
Total stock-based compensation expense	$	41	$	64

At March 31, 2019, there was approximately $488 of total unrecognized compensation expense related to unvested share-based awards. Generally, this expense will be recognized over the next three years and will be adjusted for any future forfeitures as they occur.

Stock-based compensation expense is based on awards ultimately expected to vest. ASC 718-10-55 allows companies to either estimate forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates or elect to account for forfeitures as they occur by reversing compensation cost when the award is forfeited. Our accounting policy is to account for forfeitures as they occur by recording a cumulative-effect adjustment in the period in which forfeitures occur.

On September 20, 2018, the Compensation Committee of the Board of Directors proposed, and the Board of Directors approved, an aggregate award of 166,667 shares of common stock to our current CEO in light of performance and growth of certain key customer relationships. Of those shares granted, 133,334 were deemed to be awarded and fully vested as of such date, with the remaining 33,333 shares restricted to vest upon the Company’s recognition in accordance with GAAP of approximately $6,200 of revenue which is currently deferred on the Company’s balance sheet. During the three-months ended September 30, 2018, the Company recorded compensation expense for those vested awards based on the grant-date close price of the Company’s common stock, or $7.50, resulting in a non-cash, non-recurring compensation expense in the period of $1,000. The remaining expense to be recognized upon vesting of the restricted shares is $250. The conditions have not been met as of March 31, 2019 for those remaining shares to vest and no compensation expense has been recorded.

Significant Customers

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

SIGNIFICANT CUSTOMERS

NOTE 16: SIGNIFICANT CUSTOMERS

Major Customers

We had 3 customers that in the aggregate accounted for 44% and 40% of accounts receivable as of March 31, 2019 and December 31, 2018, respectively, which includes transactions with 33 Degrees for both periods.

We had 2 and 4 customers that accounted for 42% and 66% of revenue for the three months ended March 31, 2019 and 2018, respectively, of which 33 Degrees represented 2.1% and 10.3% for the same periods, respectively.

Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

LEASES

NOTE 17: LEASES

We have entered into various non-cancelable operating lease agreements for certain of our offices and office equipment. Our leases have original lease periods expiring between 2019 and 2023. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows:

(in thousands)	Three Months Ended March 31, 2019
Finance lease cost
Amortization of right-of-use assets	$	8
Interest		2
Operating lease cost		197
Total lease cost	$	207

Weighted Average Remaining Lease Term
Operating leases		4.0 years
Finance leases		1.6 years

Weighted Average Discount Rate
Operating leases		10.0	%
Finance leases		13.3	%

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2019:

(in thousands)	Operating Leases			Finance Leases
The remainder of 2019	$	528		$	27
2020		681			22
2021		630			3
2022		377			-
2023		375			-
Thereafter		-			-
Total undiscounted cash flows		2,591			52
Less imputed interest		(463	)	$	(5	)
Present value of lease liabilities	$	2,128		$	47

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	191
Operating cash flows from finance leases	$	1
Financing cash flows from finance leases	$	8

Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	-
Finance leases	$	-

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

Revenue Recognition

2. Revenue Recognition

Inventories

3. Inventories

Inventories are stated at the lower of cost or market (net realizable value), determined by the first-in, first-out (FIFO) method, and consist of the following:

	March 31,		December 31,
	2019		2018
Raw materials, net of reserve of $196 and $207, respectively	$	241	$	220
Work-in-process		424		159
Total inventories	$	665	$	379

Impairment of Long-Lived Assets

4. Impairment of Long-Lived Assets

Basic and Diluted Income/(Loss) per Common Share

5. Basic and Diluted Income/(Loss) per Common Share

Income Taxes

6. Income Taxes

Goodwill and Definite-Lived Intangible Assets

7. Goodwill and Definite-Lived Intangible Assets

Use of Estimates

8. Use of Estimates

Reverse Stock Split

9. Reverse Stock Split

Business Combinations

10. Business Combinations

Leases

11. Leases

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Schedule of inventories

	March 31,		December 31,
	2019		2018
Raw materials, net of reserve of $196 and $207, respectively	$	241	$	220
Work-in-process		424		159
Total inventories	$	665	$	379

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Schedule of revenue by major source

(in thousands)	Three Months Ended March 31, 2019
Hardware	$	1,641

Services:
Installation Services		2,372
Software Development Services		3,976
Managed Services		1,495
Total Services		7,843

Total Hardware and Services	$	9,484

Business Combination (Tables)

3 Months Ended

Mar. 31, 2019

Schedule of purchase price allocation

(in thousands)	Total
Accounts receivable	$	2,477
Unbilled receivables		221
Inventory		142
Prepaid expenses & other current assets		18
Property and equipment		177
Other assets		7
Identified intangible assets:
Definite-lived trade names		340
Developed technology		1,770
Customer relationships		2,870
Goodwill		3,911
Accounts payable		(331	)
Accrued expenses		(975	)
Customer deposits		(503	)
Deferred revenues		(276	)
Accounts payable converted into Seller Note		(1,403	)
Net consideration transferred	$	8,445

Schedule of amortization period of identifiable intangible assets

(in thousands)	Preliminary Valuation		Amortization Period
Identifiable intangible assets:
Definite-lived trade names	$	340	5 years
Developed technology		1,770	7 years
Customer relationships		2,870	15 years
Total	$	4,980

Allure Acquisition [Member]

Schedule of purchase price allocation

(in thousands)	Consideration
Cash consideration for stock		$ 6,300	⁽¹⁾
Payable to former Allure management		1,021	⁽²⁾
Seller note payable		900	⁽³⁾
Earnout liability		250	⁽⁴⁾
Total consideration		8,471
Cash acquired		(26)	⁽⁵⁾
Net consideration transferred	$	8,445

(1)	Cash consideration for outstanding shares of Allure common stock per Stock Purchase Agreement.

(2)	Represents a payable due to two former members of the Allure management team for a total of $1,250 as a result of the acquisition; 30% due in November 2018 and 70% due in November 2019. The fair value of the payable as of the acquisition date was deemed to be $1,021.

(3)	Represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated for this amount through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the stock purchase agreement. As of the acquisition date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller. The Seller Note thereby increased from $900 per the Stock Purchase Agreement to $2,303 at the opening balance sheet. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.

(4)	The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement. The fair value of the earnout liability was determined to be $250 at the time of acquisition.

(5)	Represents the Allure cash balance acquired at acquisition.

Schedule of amortization period of identifiable intangible assets

	Three Months Ended March 31,
(in thousands, except earnings per common share)	2019			2018
	(unaudited)
Net sales	$	9,484		$	6,434
Net loss	$	(184	)	$	(2,513	)
Loss per common share	$	(0.02	)	$	(0.91	)

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of fair value measurement warrants

			Quote Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	Fair Value		(Level 1)		(Level 2)		(Level 3)
Warrant liabilities at December 31, 2018	$	21		-		-	$	21
Warrant liabilities at March 31, 2019	$	22		-		-	$	22

The change in level 3 fair value is as follows:

Warrant liability as of December 31, 2018							$	21
New warrant liabilities								-
Increase in fair value of warrant liability								1
Ending warrant liability as of March 31, 2019							$	22

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Supplemental Cash Flow Statement Information (Tables)

3 Months Ended

Mar. 31, 2019

Supplemental Cash Flow Statement Information [Abstract]

Schedule of supplemental cash flow information

	Three Months Ended
	March 31,
	2019		2018
Supplemental Cash Flow Information
Non-cash Investing and Financing Activities
Issuance of warrants with term loan extensions / revolver draws	$	-	$	266
Cash paid during the period for:
Interest	$	80	$	168
Income taxes, net	$	-	$	-

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	March 31,				December 31,
	2019				2018
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	4,635		2,957	$	4,635		2,895
Customer relationships		5,330		2,536		5,330		2,477
Trademarks and trade names		1,020		588		1,020		553
		10,985		6,081		10,985		5,925
Accumulated amortization		6,081				5,925
Net book value of amortizable intangible assets	$	4,904			$	5,060

Loans Payable (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of outstanding debt with detachable warrants

Debt Type	Issuance Date	Principal			Maturity Date	Warrants		Interest Rate Information
A	6/30/2018	$	264		6/30/2021		-	0.0% interest ⁽¹⁾
B	1/16/2018		1,000		8/16/2020		61,729	8.0% interest ⁽²⁾
C	8/17/2016		3,000		8/16/2020		588,236	8.0% interest ⁽²⁾
D	11/19/2018		2,303		2/15/2020		-	3.5% interest ⁽³⁾
		$	6,567				649,965
	Debt discount		(875	)
	Total debt	$	5,692

A – Secured Disbursed Escrow Promissory Note with related party

B – Revolving Loan with related party

C – Term Loan with related party

D – Amended and Restated Seller Note from acquisition of Allure

Warrants (Tables)

3 Months Ended

Mar. 31, 2019

Warrants [Abstract]

Schedule of range of inputs used for the Black Scholes option pricing model valuations

Issuance Date		Expected Term at Issuance Date				Risk Free Interest Rate at Date of Issuance				Volatility at Date of Issuance				Stock Price at Date of Issuance
1/16/2018			5.00				2.36	%			65.07	%		$	7.80

Remaining Expected
Term at
March 31, 2019 (Years)

Risk Free Interest

Rate at March 31,
2019

Volatility at
March 31,
2019

Stock Price at
March 31,
2019

0.39

2.42

120.11

2.71

Schedule of outstanding liability and equity warrants

	Warrants (Equity)						Warrants (Liability)
	Amount		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Amount		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance January 1, 2019		4,815,047	$	4.90		4.34		216,255	$	7.34		0.64
Warrants issued		-		-		-		-		-		-
Warrants expired		-		-		-		-		-		-
Balance March 31, 2019		4,815,047	$	4.90		4.09		216,255	$	7.34		0.39

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock options outstanding

			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$5.40 - $19.50		287,341		6.79	$	8.35		215,048	$	8.66
$19.51 - $23.70		1,000		4.79		23.70		1,000	$	23.70
$23.71 - $367.50		519		3.33		112.30		519	$	112.30
		288,860		6.78	$	8.59		216,567

Schedule of stock option activity

	Options		Weighted Average Exercise
	Outstanding		Price
Balance, December 31, 2018		288,860	$	8.59
Granted		-		-
Exercised		-		-
Forfeited or expired		-		-
Balance, March 31, 2019		288,860	$	8.59

Schedule of compensation expense

	Three Months Ended
	March 31,
	2019		2018
Stock-based compensation costs included in:
Costs of sales	$	-	$	(6	)
Sales and marketing expense		-		6
General and administrative expense		41		64
Total stock-based compensation expense	$	41	$	64

Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Components of lease costs, lease term and discount rate

(in thousands)	Three Months Ended March 31, 2019
Finance lease cost
Amortization of right-of-use assets	$	8
Interest		2
Operating lease cost		197
Total lease cost	$	207

Weighted Average Remaining Lease Term
Operating leases		4.0 years
Finance leases		1.6 years

Weighted Average Discount Rate
Operating leases		10.0	%
Finance leases		13.3	%

Maturities of lease liabilities

(in thousands)	Operating Leases			Finance Leases
The remainder of 2019	$	528		$	27
2020		681			22
2021		630			3
2022		377			-
2023		375			-
Thereafter		-			-
Total undiscounted cash flows		2,591			52
Less imputed interest		(463	)	$	(5	)
Present value of lease liabilities	$	2,128		$	47

Schedule of cash flow information related to leases

	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	191
Operating cash flows from finance leases	$	1
Financing cash flows from finance leases	$	8

Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	-
Finance leases	$	-

Nature of Organization and Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Sep. 20, 2018	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Nature of Organization and Operations (Textual)
Cash and cash equivalents		$ 2,248	$ 742	$ 2,718	$ 1,003
Working capital deficit		5,555
Net loss		(184)	$ (2,238)
Current maturities of operating leases		$ 662
Slipstream Communications, LLC [Member]
Nature of Organization and Operations (Textual)
Maturity date, description		On November 9, 2018, Slipstream Communications, LLC, ("Slipstream") a related party (see Note 9), extended the maturity date of our term loan and revolving loan to August 16, 2020. Our intent is to refinance our term loan and revolving loan with an unrelated third party in the first half of 2019. In conjunction with the extension of the maturity date of our term loan, we agreed that the cash portion of the interest rate would conditionally increase from 8.0% per annum to 10.0% per annum effective July 1, 2019 if we have not successfully completed such refinancing activity by June 30, 2019.
Allure Global Solutions, Inc. [Member]
Nature of Organization and Operations (Textual)
Maturity date, description	The Purchase Agreement contemplates additional consideration of $2,000 to be paid by us to Seller in the event that Allure's revenue exceeds $13,000, wherein revenues from one specifically-named customer add only 70% of their gross value to the total, for any of (i) the 12-month period ending December 31, 2019, or (ii) any of the next following trailing 12-month periods ending on each of March 31, June 30, September 30 and December 31, 2020.
Purchase Agreement, description	We acquired ownership of all of Allure's issued and outstanding capital shares in consideration for a total purchase price of approximately $8,450, subject to a post-closing working capital adjustment. Of this purchase price amount, we paid $6,300 in cash. Of the remaining purchase price amount, approximately $1,250 is to be paid to former management of Allure, and approximately $900 due from Allure to the Seller, under an existing Seller Note which was amended and restated for this reduced amount. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum.
Maturity date	Feb. 19, 2020
Initial conversion price	$ 8.40
Description of conversion of all amounts	Conversion of all amounts owing under the promissory note will be mandatory if the 30-day volume-weighted average price of our common stock exceeds 200% of the common stock trading price at the closing of the Allure Acquisition.

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Raw materials, net of reserve of $196 and $207, respectively	$ 241	$ 220
Work-in-process	424	159
Total inventories	$ 665	$ 379

Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Oct. 17, 2018	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Summary of Significant Accounting Policies (Textual)
Reverse stock split	The Company effectuated a l-for-30 reverse stock split of its outstanding common stock, which was approved by the Company's board of directors on October 17, 2018. The accompanying financial statements and notes to the financial statements give retroactive effect to the reverse stock split for all periods presented. The shares of common stock retained a par value of $0.01 per share.
Reserve net		$ 196		$ 207
Finance lease, description		Upon adoption, we recognized total ROU assets of $2,319, with corresponding liabilities of $2,319 on the condensed consolidated balance sheets. This included $54 of pre-existing finance lease ROU assets previously reported in computer equipment within property and equipment, net.
Series A Convertible Preferred Stock [Member]
Summary of Significant Accounting Policies (Textual)
Common stock dividends		$ 0	$ 111
Stock options and warrants [Member]
Summary of Significant Accounting Policies (Textual)
Outstanding stock options and warrants		5,320,162	1,615,976

Revenue Recognition (Details) $ in Thousands	3 Months Ended
Revenue Recognition (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Hardware	$ 1,641
Total Services	7,843
Total Hardware and Services	9,484
Installation Services [Member]
Total Services	2,372
Software Development Services [Member]
Total Services	3,976
Managed Services [Member]
Total Services	$ 1,495

Revenue Recognition (Details Textual)	3 Months Ended
Revenue Recognition (Details Textual)	Mar. 31, 2019
Revenue Recognition and Deferred Revenue [Abstract]
Installation service performance obligations, description	The aggregate amount of the transaction price allocated to installation service performance obligations that are partially unsatisfied as of March 31, 2019 were $0.

Business Combination (Details) - Allure Global Solutions, Inc. [Member]
$ in Thousands

Nov. 20, 2018

USD ($)

Cash consideration for stock

$ 6,300

^[1]

Payable to former Allure management

1,021

^[2]

Seller note payable

900

^[3]

Earnout liability

250

^[4]

Total consideration

8,471

Cash acquired

(26)

^[5]

Net consideration transferred

$ 8,445

[1]	Cash consideration for outstanding shares of Allure common stock per Stock Purchase Agreement.
[2]	Represents a payable due to two former members of the Allure management team for a total of $1,250 as a result of the acquisition; 30% due in November 2018 and 70% due in November 2019. The fair value of the payable as of the acquisition date was deemed to be $1,021.
[3]	Represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated for this amount through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the stock purchase agreement. As of the acquisition date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller. The Seller Note thereby increased from $900 per the Stock Purchase Agreement to $2,303 at the opening balance sheet. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.
[4]	The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement. The fair value of the earnout liability was determined to be $250 at the time of acquisition.
[5]	Represents the Allure cash balance acquired at acquisition.

Business Combination (Details 1) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Nov. 20, 2018
Identified intangible assets:
Goodwill	$ 18,900	$ 18,900
Allure Global Solutions, Inc. [Member]
Accounts receivable			$ 2,477
Unbilled receivables			221
Inventory			142
Prepaid expenses & other current assets			18
Property and equipment			177
Other assets			7
Identified intangible assets:
Definite-lived trade names			340
Developed technology			1,770
Customer relationships			2,870
Goodwill			3,911
Accounts payable			(331)
Accrued expenses			(975)
Customer deposits			(503)
Deferred revenues			(276)
Accounts payable converted into Seller Note			(1,403)
Net consideration transferred			$ 8,445

Business Combination (Details 2) $ in Thousands	1 Months Ended
Business Combination (Details 2) $ in Thousands	Nov. 20, 2018 USD ($)
Preliminary valuation of identifiable intangible assets	$ 4,980
Definite-lived trade names [Member]
Preliminary valuation of identifiable intangible assets	$ 340
Amortization period for identifiable intangible assets	5 years
Developed technology [Member]
Preliminary valuation of identifiable intangible assets	$ 1,770
Amortization period for identifiable intangible assets	7 years
Customer relationships [Member]
Preliminary valuation of identifiable intangible assets	$ 2,870
Amortization period for identifiable intangible assets	15 years

Business Combination (Details 3) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Combinations [Abstract]
Net sales	$ 9,484	$ 6,434
Net loss	$ (184)	$ (2,513)
Loss per common share	$ (0.02)	$ (0.91)

Business Combination (Details Textual)
$ in Thousands

1 Months Ended

Nov. 20, 2018

USD ($)

Members

Mar. 31, 2019

USD ($)

Dec. 31, 2018

USD ($)

Long term seller note payable

$ 3,389

$ 3,233

Allure Global Solutions, Inc. [Member]

Purchase Agreement, description

Pursuant to the Stock Purchase Agreement, the total purchase price was $8,450, which was primarily funded using cash from the Company's public offering closed on November 19, 2018.

Retention bonus due

$ 1,250

Number of members | Members

Retention bonus due percentage, description

30% due in November 2018 and 70% due in November 2019. The fair value of the payable as of the acquisition date was deemed to be $1,021.

Estimated net working capital deficit

$ 801

Accounts payable to seller for outsourced services

1,403

2,204

Long term seller note payable

$ 2,303

Seller note payable

^[1]

$ 900

Maturity date, description

The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement.

Fair value of the earnout liability

^[2]

$ 250

Cash flow projections discounted percent

26.00%

Fair value of property, plant and equipment

$ 177

Promissory note accruing interest percent

3.50%

Maturity date

Feb. 19, 2020

Allure Global Solutions, Inc. [Member] | Minimum [Member]

Identifiable intangible assets weighted average lives

5 years

Allure Global Solutions, Inc. [Member] | Maximum [Member]

Identifiable intangible assets weighted average lives

15 years

[1]

Represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated for this amount through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the stock purchase agreement. As of the acquisition date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller. The Seller Note thereby increased from $900 per the Stock Purchase Agreement to $2,303 at the opening balance sheet. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note will require us to make quarterly payments of interest through February 19, 2020, on which date the promissory note will mature and all remaining amounts owing thereunder will be due. We are able to prepay in whole or in part amounts owing under the promissory note, without penalty, at our option, at any time and from time to time.

[2]

The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement. The fair value of the earnout liability was determined to be $250 at the time of acquisition.

Fair Value Measurement (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Quote Prices In Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities, Beginning balance
Warrant liabilities, Ending balance
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities, Beginning balance
Warrant liabilities, Ending balance
Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities, Beginning balance	21
Warrant liabilities, Ending balance	22
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities, Beginning balance	21
Warrant liabilities, Ending balance	$ 22

Fair Value Measurement (Details 1) - Level 3 Fair Value [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability as of December 31, 2018	$ 21
New warrant liabilities
Decrease in fair value of warrant liability	1
Ending warrant liability as of March 31, 2019	$ 22

Fair Value Measurement (Details Textual)	3 Months Ended
Fair Value Measurement (Details Textual)	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Stock purchase agreement, description	The Stock Purchase Agreement contemplated additional consideration of $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement, for any of the trailing twelve-month periods measured as of December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020. The fair value of the earnout liability was determined to be $250 at the time of acquisition. There were no changes to the assumptions nor adjustments recorded to the fair value of the earnout liability as of March 31, 2019 given limited passage of time in the measurement period and performance in-line with those estimates utilized in developing the initial estimate.

Supplemental Cash Flow Statement Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Non-cash Investing and Financing Activities
Issuance of warrants with term loan extensions / revolver draws		$ 266
Cash paid during the period for:
Interest	80	168
Income taxes, net

Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 10,985	$ 10,985
Accumulated Amortization	6,081	5,925
Net book value of amortizable intangible assets	4,904	5,060
Technology platform [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,635	4,635
Accumulated Amortization	2,957	2,895
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,330	5,330
Accumulated Amortization	2,536	2,477
Trademarks and trade names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,020	1,020
Accumulated Amortization	$ 588	$ 553

Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Intangible Assets (Textual)
Amortization of intangible assets	$ 156	$ 232

Loans Payable (Details)
$ in Thousands

3 Months Ended

Mar. 31, 2019

USD ($)

Schedule of outstanding debt with detachable warrants

$ 6,567

649,965

$ (875)

$ 5,692

Schedule of outstanding debt with detachable warrants

Debt Type

Secured Disbursed Escrow Promissory Note with related party

Jun. 30, 2018

$ 264

Jun. 30, 2021

Interest Rate Information

0.0% interest

^[1]

1/16/2018 [Member]

Schedule of outstanding debt with detachable warrants

Debt Type

Revolving Loan with related party

Jan. 16, 2018

$ 1,000

Aug. 16, 2020

61,729

Interest Rate Information

8.0% interest

^[2]

8/17/2016 [Member]

Schedule of outstanding debt with detachable warrants

Debt Type

Term Loan with related party

Aug. 17, 2016

$ 3,000

Aug. 16, 2020

588,236

Interest Rate Information

8.0% interest

^[2]

11/19/2018 [Member]

Schedule of outstanding debt with detachable warrants

Debt Type

Amended and Restated Seller Note from acquisition of Allure

Nov. 19, 2018

$ 2,303

Feb. 15, 2020

Interest Rate Information

3.5% interest

^[3]

[1]	0.0% interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000 in principal (disregarding paid-in-kind (?PIK?) interest); 8.0% cash, when total borrowing under the term and revolver loans, in aggregate, exceed $4,000 in principal (disregarding PIK interest)
[2]	8.0% cash interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000 in principal (disregarding PIK interest); 8.0% cash, 2.0% PIK when total borrowing under the term and revolver loans, in aggregate, exceed $4,000 in principal (disregarding PIK interest). If the Company does not successfully refinance the term loan debt facility (C above) with a third party by June 30, 2019, the cash portion of the interest rate will increase from 8.0% to 10.0% per annum.
[3]	3.5% simple cash interest per annum; interest payable quarterly with the first payment due on December 31, 2018 with payments of accrued interest continuing quarterly thereafter until the maturity date of February 20, 2020.

Loans Payable (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands

1 Months Ended

3 Months Ended

Nov. 09, 2018

Jan. 16, 2018

Nov. 20, 2018

Nov. 19, 2018

Oct. 29, 2018

Apr. 30, 2018

Apr. 27, 2018

Mar. 31, 2019

Mar. 31, 2018

Dec. 31, 2018

Jun. 30, 2018

Aug. 17, 2016

Debt discount amortized

$ 156

$ 345

Convertible promissory note, description

(1) 0.0% interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000,000 in principal (disregarding paid-in-kind ("PIK") interest); 8.0% cash, when total borrowing under the term and revolver loans, in aggregate, exceed $4,000,000 in principal (disregarding PIK interest) (2) 8.0% cash interest per annum when total borrowings under the term and revolver loans, in aggregate, are below $4,000,000 in principal (disregarding PIK interest); 8.0% cash, 2.0% PIK when total borrowing under the term and revolver loans, in aggregate, exceed $4,000,000 in principal (disregarding PIK interest). If the Company does not successfully refinance the term loan debt facility (C above) with a third party by June 30, 2019, the cash portion of the interest rate will increase from 8.0% to 10.0% per annum.(3) 3.5% simple cash interest per annum; interest payable quarterly with the first payment due on December 31, 2018 with payments of accrued interest continuing quarterly thereafter until the maturity date of February 20, 2020.

Fair value of warrants on the issuance

$ 1

$ (197)

Conversions of common stock

1,386,090

Issuance of common stock shares

653,062

Long term seller note payable

3,389

$ 3,233

Accrued interest

$ 263

Slipstream Communications, LLC [Member] | Secured Disbursed Escrow Promissory Note [Member]

Interest rate, description

The principal amount of the Secured Disbursed Escrow Promissory Note will bear simple interest at the 8%; provided, further, however, that the Loan Rate with respect to the Secured Disbursed Escrow Promissory Note shall be 0% at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan (excluding the additional principal added pursuant to this proviso) is at or below $4,000.

Leased operating facility

$ 264

Loan and Security Agreement [Member] | Slipstream Communications, LLC [Member]

Principal amount

$ 4,955

Borrowed loan

$ 3,000

Term loan interest percentage

8.00%

Terms of warrant

5 years

Maturity date

Jan. 16, 2019

Warrants to purchase common stock

61,729

143,791

Share price per share

$ 7.65

Fair value of warrants

$ 266

$ 543

Interest rate, description

The aggregate outstanding principal amount of the Term Loan and the Revolving Loan (excluding the additional principal added pursuant to this proviso) exceeds $4,000 then the Loan Rate shall be 10%, of which eight percent 8% shall be payable in cash and 2% shall be paid by the issuance of and treated as additional principal of the Term Loan ("PIK"); provided, further, however, that the Loan Rate with respect to the Disbursed Escrow Loan shall be 0%.

The principal amount of the Secured Disbursed Escrow Promissory Note will bear simple interest at the 8%; provided, further

Convertible promissory note, description

Extended the maturity date of our term loan and revolver loan to August 16, 2020 through the Fifth Amendment to the Loan and Security Agreement. Our intent is to refinance our term loan with an unrelated third party in the first half of 2019. In conjunction with the extension of the maturity date of our term loan, we agreed that the interest rate would conditionally increase from 8.0% per annum to 10.0% per annum effective July 1, 2019 if we have not successfully completed such refinancing activity by June 30, 2019.

We used proceeds from our public offering to repay Slipstream $1,283, inclusive of $125 of accrued interest, to reduce borrowings under the Loan and Security Agreement to an aggregate of $4,264, comprised of $3,000 term loan, $1,000 revolving loan and $264 secured disbursed escrow promissory note. The consolidated balance sheet includes $27 of accrued interest as of March 31, 2019 representing one month's interest at 8.0% on the $4,000 outstanding balance.

The conversion was contingent upon (i) the conversion of the Company's Series A Preferred Stock, and (ii) the successful completion of a Public Offering of at least $10 million, each of which were successfully completed on November 19, 2018. In exchange for participation in the Public Offering, subject to a minimum participation requirement as agreed between the underwriters and the Company, and Slipstream's and execution of a lock-up agreement, Slipstream received, as a one-time incentive, additional common stock and warrants in such number that decreased the effective conversion price of the convertible notes to 70% of the lowest of those scenarios outlined above.

Adjusted per share price value

$ 8.10

$ 8.09

Interest on convertible promissory note

8.00%

Share conversion price, description

Common stock and warrants at a conversion price equal to the lower of $7.65, or 80% of the price at which shares of common stock were sold in the Public Offering.

Leased operating facility

$ 264

Revolving loan

$ 1,000

$ 1,100

Allure Global Solutions, Inc. [Member]

Maturity date

Feb. 19, 2020

Seller note payable

^[1]

$ 900

Estimated net working capital deficit

801

Accounts payable to seller for outsourced services

$ 1,403

$ 2,204

Long term seller note payable

$ 2,303

Promissory note accruing interest percent

3.50%

Initial conversion price

$ 8.40

Description of conversion of all amounts

Conversion of all amounts owing under the promissory note will be mandatory if the 30-day volume-weighted average price of our common stock exceeds 200% of the common stock trading price at the closing of the acquisition.

Accrued interest

$ 29

[1]

Commitments and Contingencies (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended
	Aug. 10, 2017	Dec. 21, 2018	Mar. 31, 2019
Commitments and Contingencies (Textual)
Accrue for the remaining rent under the lease term, net	$ 474
Recognized a gain			$ 7
Accrued liability			263
Wrote off debt			7
Severance expense		$ 386
Cash payments for termination benefits			$ 92
Prior severance		$ 31

Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		3 Months Ended
	Aug. 14, 2018	Jan. 16, 2018	Oct. 29, 2018	Jan. 16, 2018	Mar. 31, 2019	Mar. 31, 2018	Mar. 12, 2019
Related Party Transactions (Textual)
Related party entity, description	The payment agreement stipulates a simple interest rate of 12% on aged accounts receivable to be paid on the tenth day of each month through the maturity date of December 31, 2019.
Common stock issued shares			653,062
Convertible preferred stock, shares issued upon conversion			1,386,090
33 Degrees Menu Services, LLC [Member]
Related Party Transactions (Textual)
Related party entity, description					The Company had sales to 33 Degrees of $195, or 2.1%, and $417, or 10.3%, respectively, of consolidated revenue. Accounts receivable due from 33 Degrees was $1,516, or 17.3%, and $1,933, or 30.0% of consolidated accounts receivable at March 31, 2019 and December 31, 2018, respectively.	The Company had sales to 33 Degrees of $195, or 2.1%, and $417, or 10.3%, respectively, of consolidated revenue. Accounts receivable due from 33 Degrees was $1,516, or 17.3%, and $1,933, or 30.0% of consolidated accounts receivable at March 31, 2019 and December 31, 2018, respectively.
Payment for hardware and services	$ 433
Line of credit							$ 300
33 Degrees Convenience Connect, Inc., [Member]
Related Party Transactions (Textual)
Related party entity owned percentage	17.50%
Related party entity, description	Remaining payments due under the agreement as of March 31, 2019 were $1,317, $300 of which has been paid subsequent to the reporting date as of the date of this filing. Remaining payments of $150 are to be paid on the first day of each month beginning June 1, 2019 through the maturity date, or December 31, 2019. All amounts under this note are included in accounts receivable in current assets as all amounts are expected to be collected within one year of the balance sheet date.
Repayment amount of related party transactions	$ 2,567
Slipstream Communications, Llc [Member]
Related Party Transactions (Textual)
Price per share		$ 8.10		$ 8.10
Slipstream Communications, Llc [Member] \| Loan and Security Agreement [Member]
Related Party Transactions (Textual)
Term of warrant		5 years
Maturity date		Jan. 16, 2019
Warrants to purchase common stock		61,729		61,729
Price per share		$ 8.10		$ 8.10
Common stock at a per share price				Subject to adjustment and subsequently adjusted to $6.09 in November 2019
Revolving loan		$ 1,000
Interest rate per annum		8.00%		8.00%
Fair value of warrants		$ 266		$ 266

Income Taxes (Details) $ in Thousands	3 Months Ended
Income Taxes (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Income Tax Disclosure [Abstract]
Tax expense benefit	$ 21
Net deferred liability	$ 147

Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Nov. 05, 2018	Oct. 29, 2018	Mar. 31, 2019	Mar. 31, 2018
Convertible Preferred Stock (Textual)
Preferred stock dividend entitles			6.00%
Preferred stock dividend, payable semi-annually, description			The three-year anniversary of the initial investment date occurred during the second half of 2017 for $5.2 million and the first quarter of 2018 for the remaining $0.3 million originally issued preferred stock and therefore dividends on those investments will be paid via issuance of common shares at all future dividend dates.
Convertible preferred stock, shares issued upon conversion		1,386,090
Series A Convertible Preferred Stock [Member]
Convertible Preferred Stock (Textual)
Convertible preferred stock, shares issued upon conversion				12,369
Converted shares of stock conversion			723,561
Common stock at the conversion rate			$ 7.65
Charge of conversion of stock				$ 3,822
Additional common stock and warrant, description			Those holders of preferred stock who executed a customary lock-up agreement for a period continuing for 90 days after the consummation of the public offering were issued, as a one-time incentive, additional common stock and warrants, in such number as defined in underlying agreements. The Company issued an additional 1,123,367 shares of common stock in exchange for execution of such lock-up agreements.
Common Stock [Member]
Convertible Preferred Stock (Textual)
Common stock at the conversion rate	$ 7.65
Public offering cost	$ 10,000

Warrants (Details) - Warrant [Member] - $ / shares	3 Months Ended
Warrants (Details) - Warrant [Member] - $ / shares	Mar. 31, 2019	Mar. 31, 2018
1/16/2018 [Member]
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model
Stock Price at Date of Issuance	$ 7.80	$ 7.80
January Sixteen Two Thousand And Eighteen [Member]
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model
Expected Term at Issuance Date	5 years	5 years
Risk Free Interest Rate at Date of Issuance	2.36%	2.36%
Volatility at Date of Issuance	65.07%	65.07%

Warrants (Details 1) - Warrant [Member] - Issuance Date [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares
Schedule of warrant liabilities valuation is based on the Black-Scholes option pricing model
Remaining Expected Term	4 months 20 days
Risk Free Interest Rate	2.42%
Volatility	120.11%
Stock Price	$ 2.71

Warrants (Details 2)	3 Months Ended
Warrants (Details 2)	Mar. 31, 2019 $ / shares shares
Warrant [Member]
Class of Warrant or Right [Line Items]
Number of Shares, Warrants, Beginning Balance \| shares	4,815,047
Number of Shares, Warrants issued \| shares
Number of Shares, Warrants expired \| shares
Number of Shares, Warrants, Ending Balance \| shares	4,815,047
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 4.90
Weighted Average Exercise Price, Warrants issued \| $ / shares
Weighted Average Exercise Price, Warrants expired \| $ / shares
Weighted Average Exercise Price, Ending Balance \| $ / shares	$ 4.90
Weighted Average Remaining Contractual Life, Beginning Balance	4 years 4 months 2 days
Weighted Average Remaining Contractual Life, Ending Balance	4 years 1 month 2 days
Warrant Liability [Member]
Class of Warrant or Right [Line Items]
Number of Shares, Warrants, Beginning Balance \| shares	216,255
Number of Shares, Warrants issued \| shares
Number of Shares, Warrants expired \| shares
Number of Shares, Warrants, Ending Balance \| shares	216,255
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 7.34
Weighted Average Exercise Price, Warrants issued \| $ / shares
Weighted Average Exercise Price, Warrants expired \| $ / shares
Weighted Average Exercise Price, Ending Balance \| $ / shares	$ 7.34
Weighted Average Remaining Contractual Life, Beginning Balance	7 months 21 days
Weighted Average Remaining Contractual Life, Ending Balance	4 months 20 days

Warrants (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 16, 2018	Mar. 31, 2019	Mar. 31, 2018	Nov. 30, 2018
Warrants (Textual)
Fair value of warrants on the issuance		$ 1	$ (197)
Slipstream Communications, LLC [Member]
Warrants (Textual)
Price per share	$ 8.10
Slipstream Communications, LLC [Member] \| Loan and Security Agreement [Member]
Warrants (Textual)
Revolving loan	$ 1,000
Interest rate per annum	8.00%
Maturity date	Jan. 16, 2019
Term of warrant	5 years
Warrant to purchase common stock	61,729
Price per share	$ 8.10
Fair value of warrants on the issuance	$ 266
Price per share subject to subsequent adjustment				$ 6.09

Stock-Based Compensation (Details)	3 Months Ended
Stock-Based Compensation (Details)	Mar. 31, 2019 $ / shares shares
Schedule of stock options outstanding and exercisable
Number Outstanding \| shares	288,860
Weighted Average Remaining Contractual Life	6 years 9 months 11 days
Weighted Average Exercise Price	$ 8.59
Options Exercisable \| shares	216,567
Range One [Member]
Schedule of stock options outstanding and exercisable
Range of Exercise Prices Between, Lower Limit	$ 5.40
Range of Exercise Prices between, Upper Limit	$ 19.50
Number Outstanding \| shares	287,341
Weighted Average Remaining Contractual Life	6 years 9 months 14 days
Weighted Average Exercise Price	$ 8.35
Options Exercisable \| shares	215,048
Weighted Average Exercise Price	$ 8.66
Range Two [Member]
Schedule of stock options outstanding and exercisable
Range of Exercise Prices Between, Lower Limit	19.51
Range of Exercise Prices between, Upper Limit	$ 23.70
Number Outstanding \| shares	1,000
Weighted Average Remaining Contractual Life	4 years 9 months 14 days
Weighted Average Exercise Price	$ 23.70
Options Exercisable \| shares	1,000
Weighted Average Exercise Price	$ 23.70
Range Three [Member]
Schedule of stock options outstanding and exercisable
Range of Exercise Prices Between, Lower Limit	23.71
Range of Exercise Prices between, Upper Limit	$ 367.50
Number Outstanding \| shares	519
Weighted Average Remaining Contractual Life	3 years 3 months 29 days
Weighted Average Exercise Price	$ 112.30
Options Exercisable \| shares	519
Weighted Average Exercise Price	$ 112.30

Stock-Based Compensation (Details 1)	3 Months Ended
Stock-Based Compensation (Details 1)	Mar. 31, 2019 $ / shares shares
Schedule of stock option activity
Options Outstanding, Beginning balance \| shares	288,860
Options Outstanding, Granted \| shares
Options Outstanding, Exercised \| shares
Options Outstanding, Forfeited or expired \| shares
Options Outstanding, Ending balance \| shares	288,860
Weighted Average Exercise Price, Beginning balance \| $ / shares	$ 8.59
Weighted Average Exercise Price, Granted \| $ / shares
Weighted Average Exercise Price, Exercised \| $ / shares
Weighted Average Exercise Price, Forfeited or expired \| $ / shares
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 8.59

Stock-Based Compensation (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock-based compensation costs included in:
Total stock-based compensation expense	$ 41	$ 64
Costs of sales [Member]
Stock-based compensation costs included in:
Total stock-based compensation expense		(6)
Sales and marketing expense [Member]
Stock-based compensation costs included in:
Total stock-based compensation expense		6
General and administrative expense [Member]
Stock-based compensation costs included in:
Total stock-based compensation expense	$ 41	$ 64

Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended
	Sep. 20, 2018	Aug. 31, 2018	Oct. 31, 2014	Mar. 31, 2019	Sep. 30, 2018	Dec. 31, 2018
Stock-Based Compensation (Textual)
Weighted average remaining contractual life				6 years 3 months 4 days
Options outstanding				288,860		288,860
Stock option expense recognize period				3 years
Unrecognized compensation expense				$ 488
Deferred revenue				$ 5,430		$ 6,454
Deemed granted shares
2014 Stock Incentive Plan [Member]
Stock-Based Compensation (Textual)
Shares reserved for company's employees			7,390,355
Options outstanding			276,674
2014 Stock Incentive Plan [Member] \| Maximum [Member]
Stock-Based Compensation (Textual)
Issuance of shares authorized		18,000,000
2014 Stock Incentive Plan [Member] \| Minimum [Member]
Stock-Based Compensation (Textual)
Issuance of shares authorized		7,390,355
2006 Non-Employee Director Stock Option Plan [Member]
Stock-Based Compensation (Textual)
Shares reserved for company's employees				700,000
2006 Equity Incentive Plan [Member]
Stock-Based Compensation (Textual)
Shares reserved for company's employees				1,720,000
Options outstanding				12,186
CEO [Member]
Stock-Based Compensation (Textual)
Restricted Shares	33,333
Non-recurring compensation expense					$ 1,000
Deemed granted shares	133,334
Recognized compensation expenses	$ 250
Aggregate award shares of common stock	166,667
Exercise price					$ 7.50
Recognition in accordance with GAAP	$ 6,200

Significant Customers (Details) - Customers	3 Months Ended		12 Months Ended
Significant Customers (Details) - Customers	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Accounts Receivable [Member]
Segment Information and Significant Customers (Textual)
Percent from major customers	44.00%		40.00%
Number of major customers	3		3
Sales Revenue, Net [Member]
Segment Information and Significant Customers (Textual)
Percent from major customers	42.00%	66.00%
Number of major customers	2	4
Sales Revenue, Net [Member] \| 33 Degrees Convenience Connect Inc [Member]
Segment Information and Significant Customers (Textual)
Percent from major customers	2.10%	10.30%

Leases (Details) $ in Thousands	3 Months Ended
Leases (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Finance lease cost
Amortization of right-of-use assets	$ 8
Interest	2
Operating lease cost	197
Total lease cost	$ 207
Weighted Average Remaining Lease Term, Operating leases	4 years
Weighted Average Remaining Lease Term, Finance leases	1 year 7 months 6 days
Weighted Average Discount Rate, Operating leases	10.00%
Weighted Average Discount Rate, Finance leases	13.30%

Leases (Details 1) $ in Thousands	3 Months Ended
Leases (Details 1) $ in Thousands	Mar. 31, 2019 USD ($)
Maturities of lease liabilities
Operating Leases, The remainder of 2019	$ 528
Operating Leases, 2020	681
Operating Leases, 2021	630
Operating Leases, 2022	377
Operating Leases, 2023	375
Operating Leases, Thereafter
Operating Leases, Total undiscounted cash flows	2,591
Operating Leases, Less imputed interest	(463)
Operating Leases, Present value of lease liabilities	2,128
Finance Leases, The remainder of 2019	27
Finance Leases, 2020	22
Finance Leases, 2021	3
Finance Leases, 2022
Finance Leases, 2023
Finance Leases, Thereafter
Total undiscounted cash flows	52
Finance Leases, Less imputed interest	(5)
Finance Leases, Present value of lease liabilities	$ 47

Leases (Details 2) $ in Thousands	3 Months Ended
Leases (Details 2) $ in Thousands	Mar. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 191
Operating cash flows from finance leases	1
Financing cash flows from finance leases	8
Lease liabilities arising from obtaining right-of-use assets:
Operating leases
Finance leases

Stock-Based Compensation (Details 1)	3 Months Ended
Stock-Based Compensation (Details 1)	Mar. 31, 2019 $ / shares shares
Schedule of stock option activity
Options Outstanding, Beginning balance \| shares	288,860
Options Outstanding, Granted \| shares
Options Outstanding, Exercised \| shares
Options Outstanding, Forfeited or expired \| shares
Options Outstanding, Ending balance \| shares	288,860
Weighted Average Exercise Price, Beginning balance \| $ / shares	$ 8.59
Weighted Average Exercise Price, Granted \| $ / shares
Weighted Average Exercise Price, Exercised \| $ / shares
Weighted Average Exercise Price, Forfeited or expired \| $ / shares
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 8.59