0001213900-20-036611 | 10-Q | XBRL Viewer

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Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2020	Nov. 11, 2020
Document Information Line Items
Entity Registrant Name	CREATIVE REALITIES, INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		10,924,287
Amendment Flag	false
Entity Central Index Key	0001356093
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	001-33169
Entity Incorporation, State or Country Code	MN
Entity Interactive Data Current	Yes

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 855	$ 2,534
Accounts receivable, net of allowance of $1,318 and $617, respectively	3,468	4,663
Unbilled receivables	57	86
Work-in-process and inventories, net of reserve of $108 and $134, respectively	2,662	379
Prepaid expenses and other current assets	419	320
Total current assets	7,461	7,982
Operating lease right-of-use assets	730	1,728
Property and equipment, including depreciable software, net	1,454	1,553
Intangibles, net	3,929	4,407
Goodwill	7,525	18,171
Other assets	2	135
TOTAL ASSETS	21,101	33,976
CURRENT LIABILITIES
Short-term seller note payable	1,637	1,637
Short-term related party convertible loans payable, at fair value	2,825	2,000
Short-term related party loans payable, net of $253 and $0 discount, respectively	4,244
Accounts payable	1,948	1,849
Accrued expenses	2,087	2,751
Deferred revenues	1,016	772
Customer deposits	875	755
Current maturities of operating leases	345	646
Current maturities of finance leases	7	21
Total current liabilities	14,984	10,431
Long-term Paycheck Protection Program loans payable	1,552
Long-term related party loans payable, net of $0 and $507 discount, respectively		3,757
Long-term obligations under operating leases	385	1,100
Long-term obligations under finance leases	1
Deferred tax and other long-term liabilities		180
TOTAL LIABILITIES	16,922	15,468
SHAREHOLDERS’ EQUITY
Common stock, $0.01 par value, 200,000 shares authorized; 10,443 and 9,775 shares issued and outstanding, respectively	104	98
Additional paid-in capital	55,944	54,052
Accumulated deficit	(51,869)	(35,642)
Total shareholders’ equity	4,179	18,508
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 21,101	$ 33,976

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance receivable, net	$ 1,318	$ 617
Reserve net	108	134
Loans payable, net	253	0
Related party loans payable, net	$ 0	$ 507
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in Shares)	200,000	200,000
Common stock, shares issued (in Shares)	10,443	9,775
Common stock, shares outstanding (in Shares)	10,443	9,775

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Sales
Hardware	$ 2,850	$ 2,034	$ 5,818	$ 5,329
Services and other	2,257	4,689	6,649	20,192
Total sales	5,107	6,723	12,467	25,521
Cost of sales
Hardware	1,882	1,484	4,161	4,200
Services and other	781	1,933	2,438	10,106
Total cost of sales	2,663	3,417	6,599	14,306
Gross profit	2,444	3,306	5,868	11,215
Operating expenses:
Sales and marketing expenses	411	523	1,209	1,830
Research and development expenses	229	306	787	1,073
General and administrative expenses	1,849	2,113	7,170	6,824
Depreciation and amortization expense	377	278	1,123	872
Goodwill impairment			10,646
Total operating expenses	2,866	3,220	20,935	10,599
Operating income/(loss)	(422)	86	(15,067)	616
Other income/(expenses):
Interest expense	(265)	(199)	(752)	(616)
Change in fair value of warrant liability				21
Change in fair value of Special Loan			(702)
Gain on settlement of obligations	114	406	155	419
Loss on disposal of assets	(13)		(13)
Total other income/(expense)	(164)	207	(1,312)	(176)
Income/(loss) before income taxes	(586)	293	(16,379)	440
Benefit from / (provision for) income taxes	1	(51)	152	35
Net income/(loss)	$ (585)	$ 242	$ (16,227)	$ 475
Basic earnings/(loss) per common share (in Dollars per share)	$ (0.06)	$ 0.02	$ (1.63)	$ 0.05
Diluted earnings/(loss) per common share (in Dollars per share)	$ (0.06)	$ 0.02	$ (1.63)	$ 0.05
Weighted average shares outstanding - basic (in Shares)	10,312	9,756	9,977	9,739
Weighted average shares outstanding - diluted (in Shares)	10,312	9,756	9,977	9,739

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating Activities:
Net income/(loss)	$ (16,227)	$ 475
Adjustments to reconcile net income/(loss) to net cash provided by operating activities
Depreciation and amortization	1,123	847
Amortization of debt discount	254	419
Stock-based compensation	442	395
Change in warrant liability		(21)
Change in fair value of Special Loan	702
Deferred tax benefit	(175)	(29)
Allowance for doubtful accounts	701	194
Increase in notes due to in-kind interest	356
Loss on goodwill impairment	10,646
Loss on disposal of assets	13
Gain on settlement of obligations	(135)	(419)
Changes to operating assets and liabilities:
Accounts receivable and unbilled revenues	523	1,739
Inventories	(2,283)	(212)
Prepaid expenses and other current assets	(99)	1,295
Operating lease right of use asset, net	411	409
Other assets	133	23
Accounts payable	214	(235)
Deferred revenue	244	(5,527)
Accrued expenses	(664)	2,491
Deposits	120	(990)
Operating lease liabilities	(409)	(395)
Other liabilities		(3)
Net cash provided by/(used in) operating activities	(4,110)	456
Investing activities
Purchases/additions of property and equipment and software development	(559)	(652)
Proceeds from net working capital settlement		210
Net cash used in investing activities	(559)	(442)
Financing activities
Principal payments on finance leases	(18)
Proceeds from Payroll Protection Program loan	1,552
Proceeds from issuance of common stock via at-the-market offering	1,335	30
Proceeds from warrant holder exercise of common stock	121
Repayment of seller note		(498)
Other financing activities, net, including principal payments on finance leases		(24)
Net cash provided by / (used in) financing activities	2,990	(492)
Increase/(decrease) in Cash and Cash Equivalents	(1,679)	(478)
Cash and Cash Equivalents, beginning of period	2,534	2,718
Cash and Cash Equivalents, end of period	$ 855	$ 2,240

Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional paid in capital	Accumulated (Deficit)	Total
Balance at Dec. 31, 2018	$ 97	$ 53,575	$ (36,851)	$ 16,821
Balance (in Shares) at Dec. 31, 2018	9,724,826
Adoption of ASU 2016-02			171	171
Shares issued for services		30		30
Shares issued for services (in Shares)	17,960
Shares issued to directors as compensation	$ 1	31		32
Shares issued to directors as compensation (in Shares)	13,590
Stock-based compensation		113		113
Vesting of performance shares previously granted to CEO		250		250
Net income/Loss			475	475
Balance at Sep. 30, 2019	$ 98	53,999	(36,205)	17,892
Balance (in Shares) at Sep. 30, 2019	9,756,376
Balance at Jun. 30, 2019	$ 97	53,937	(36,447)	17,587
Balance (in Shares) at Jun. 30, 2019	9,742,786
Shares issued to directors as compensation	$ 1	31		32
Shares issued to directors as compensation (in Shares)	13,590
Stock-based compensation		31		31
Net income/Loss			242	242
Balance at Sep. 30, 2019	$ 98	53,999	(36,205)	17,892
Balance (in Shares) at Sep. 30, 2019	9,756,376
Balance at Dec. 31, 2019	$ 98	54,052	(35,642)	18,508
Balance (in Shares) at Dec. 31, 2019	9,774,546
Shares issued to directors as compensation		74		74
Shares issued to directors as compensation (in Shares)	62,521
Stock-based compensation		368		368
Shares issued through at-the-market offering	$ 6	1,329		1,335
Shares issued through at-the-market offering (in Shares)	578,183
Exercise of warrants		121		121
Exercise of warrants (in Shares)	27,600
Net income/Loss			(16,227)	(16,227)
Balance at Sep. 30, 2020	$ 104	55,944	(51,869)	4,179
Balance (in Shares) at Sep. 30, 2020	10,442,850
Balance at Jun. 30, 2020	$ 98	54,342	(51,284)	3,156
Balance (in Shares) at Jun. 30, 2020	9,854,623
Shares issued to directors as compensation		25		25
Shares issued to directors as compensation (in Shares)	10,044
Stock-based compensation		248		248
Shares issued through at-the-market offering	$ 6	1,329		1,335
Shares issued through at-the-market offering (in Shares)	578,183
Net income/Loss			(585)	(585)
Balance at Sep. 30, 2020	$ 104	$ 55,944	$ (51,869)	$ 4,179
Balance (in Shares) at Sep. 30, 2020	10,442,850

Nature of Organization and Operations

9 Months Ended

Sep. 30, 2020

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.

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 existing operations of Creative Realties, Inc. and as a result of the Allure Acquisition we did not add 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., a Georgia corporation, and Creative Realities Canada, Inc., a Canadian corporation. Our other wholly owned subsidiaries, Creative Realities, LLC, a Delaware limited liability company, and ConeXus World Global, LLC, a Kentucky limited liability company, are effectively dormant.

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 produced net income for the year ended December 31, 2019 but incurred a net loss for the year ended December 31, 2018 and had negative cash flows from operating activities for both the year-ended December 31, 2019 and the nine months ended September 30, 2020.

For the three and nine months ended September 30, 2020 we incurred net losses of $585 and $16,227, respectively. As of September 30, 2020, we had cash and cash equivalents of $855 and working capital deficit of $7,523. Excluding debt classified as current liabilities based on having maturity dates within twelve months of the Condensed Consolidated Balance Sheet date, we have a working capital surplus of $1,183 as of September 30, 2020.

While our outlook for the digital signage industry over the long term remains strong, we have experienced rapid and immediate deterioration in our short term core digital signage business as a result of the COVID-19 pandemic, generating increased uncertainty across our customer base in many of our key vertical markets. The elective and forced closures of businesses across the United States and Canada has resulted in reduced demand for our services, which primarily assist business in engaging with their end customers in a physical space through digital technology. The elimination and minimizing of public gatherings have materially impacted demand for products and services in our movie theater, sports arena and large entertainment markets. These conditions have resulted in downward revisions of our internal forecasts on current and future projected earnings and cash flows. The effective halting of pending and anticipated projects caused our projected incoming cash to be delayed, and consequently cash flows have slowed, including a slowdown in payments by customers for previously completed projects, which has further limited cash collections. We have implemented various cost cutting measures, including slowing our payments of accounts payable and accrued liabilities, negotiated extensions for certain currently and past due payments to key vendors, and implemented compensation reductions for most personnel retained following the reduction-in-force activities taken by the Company in mid-March 2020.

On April 28, 2020, we announced the joint launch of an AI-integrated non-contact temperature inspection kiosk known as the Thermal Mirror with our partner, InReality, LLC (“InReality”), for use by businesses as COVID-19 related workplace restrictions are reduced or eliminated. Although we have experience in providing customers digital integration solutions, our launch of the Thermal Mirror involves the development, marketing and sale of a new product to new customers involving a joint effort with InReality. The product also uses hardware and technologies that have not been used with our other customers. Although we believe this product and our launch will be successful, there are a number of risks involved in such launch, including investing significant time and resources in the launch, which may ultimately not be successful. While market response has been encouraging, we remain in the early stages of this product launch as of the date of this report, as the hardware and software solution, in addition to the related services, continue to evolve based on customer feedback and requests. Revenue recognized from the sale of hardware and services associated with the Thermal Mirror product, including software activation, configuration, and software-as-a-service (“SaaS”) revenues generated via software subscriptions to the platform, were approximately $2,033 and $2,560 for the three and nine months ended September 30, 2020, respectively.

On June 19, 2020, the Company entered into a Sales Agreement (the “Agreement”) with Roth Capital Partners, LLC (“Roth”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.01 per share (the “Common Stock”), having an aggregate offering price of up to $8,000,000 through Roth as the Company’s sales agent. Roth may sell the Common Stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended. Subject to the terms of the Agreement, Roth will use its commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company or Roth may suspend the offering of the Common Stock being made through Roth under the Agreement upon proper notice to the other party. The Company will pay Roth a commission of 3.0% of the gross sales proceeds of any Common Stock sold through Roth under the Agreement, and also has provided Roth with customary indemnification rights. The sale of Common Stock under the Agreement is registered on a Form S-3 registration statement (Registration No. 333-238275) and related prospectus supplement filed with the SEC on June 19, 2020, and pursuant to the “baby shelf” rules that apply to such registration statement, we cannot sell our common stock in a public primary offering (including under the Agreement) with a value exceeding more than one-third of our public float in any 12 calendar month period so long as our public float remains below $75.0 million.

The Company is not obligated to make any sales of Common Stock under the Agreement. The offering of shares of Common Stock pursuant to the Agreement will terminate upon the earlier of (i) the sale of all Common Stock subject to the Agreement or (ii) termination of the Agreement in accordance with its terms.

Through September 30, 2020, the Company received gross proceeds under the Agreement of $1,336 from the issuance of 578,183 shares of our common stock, and paid an aggregate of $38 to Roth in commissions, yielding net proceeds of $1,298 after commissions and net proceeds of $1,158 after other offering-related expenses.

Through November 11, 2020, the Company received gross proceeds under the Agreement of $1,831 from the issuance of 1,034,068 shares of our common stock, and paid an aggregate of $53 to Roth in commissions, yielding net proceeds of $1,778 after commissions, and net proceeds of $1,636 after other offering-related expenses.

On April 27, 2020, the Company entered into a Promissory Note with Old National Bank (the “Promissory Note”), which provided for an unsecured loan of $1,552 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note has a term of two years with a 1% per annum interest rate. While the Promissory Note currently has a two-year term, the amended law permits the Company to request a five-year maturity from Old National Bank. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amount outstanding after the determination of amounts forgiven will be repaid on a monthly basis. The Company is in process of finalizing their calculation of amounts forgivable in accordance with guidance issued by the Small Business Administration and anticipates applying for forgiveness during the fourth quarter of 2020. No assurance is provided that we will be able to obtain forgiveness of the Promissory Note in whole or in part.

On November 6, 2019, Slipstream Communications, LLC (“Slipstream”) extended the maturity date of our term loan and revolver loan to June 30, 2021 through the Sixth Amendment to the Loan and Security Agreement, aligning the maturity date of our term loan and revolver loan with the Secured Disbursed Escrow Promissory Note.

On December 30, 2019, we entered into the Secured Convertible Special Loan Promissory Note (“Special Loan”) as part of the Seventh Amendment of the Loan and Security Agreement with Slipstream, under which we obtained $2,000, with interest thereon at 8% per annum payable 6% in cash and 2% via the issuance of paid-in-kind (“SLPIK”) interest, provided however that upon occurrence of an event of default the interest rate shall automatically be increased by 6% per annum payable in cash. The entry into the Seventh Amendment adjusted the interest rate on the Company’s Term Loan and Revolving Loan to 8% per annum, provided, however, at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan exceeds $4,100 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 PIK.

Upon the earlier to occur of an Event of Default or October 1, 2020, if any of the principal amount of the Special Loan is then outstanding, the principal and accrued but unpaid interest of the Special Loan and the outstanding SLPIK shall be automatically converted into shares of a new series of Senior Convertible Preferred Stock of CRI (“New Preferred”) having an Appraised Value equal to three times the then outstanding principal amount and accrued but unpaid interest of the Special Loan and the outstanding SLPIK and having the following terms and conditions, as reasonably determined by CRI and the Lender, the New Preferred shall:

●

be the most senior equity security of CRI, including with respect to the payment of dividends and other distributions;

●

be on substantially the same terms and conditions as CRI’s Series A-1 6% Convertible Preferred Stock as set forth in its Certificate of Designation immediately before the same was cancelled pursuant to a Certificate of Cancellation dated as of March 13, 2019;

●

not be subject to a right of redemption upon the part of a holder thereof;

●

accrue and pay quarterly dividends at the rate of twelve percent (12%) per annum which shall be payable in cash;

●

have a Stated Value that is an amount mutually agreed by CRI and the Lender at the time of issuance;

●

Conversion Price shall be an amount equal to 80% of the average for the 30-day period ending two days prior to the required conversion date of the daily average of the range of CRI’s common stock (calculated pursuant to information on The Wall Street Journal Online Edition), subject to appropriate adjustments; and

●

neither section 6(e) of the Series A-1 Certificate of Designation nor any similar provision shall apply to the New Preferred.

On April 1, 2020, the Company entered into an Eighth Amendment to Loan and Security Agreement (the “Eighth Amendment”) with its subsidiaries and Slipstream to amend the terms of the payments and interest accruing on the Company’s Term Loan, Secured Revolving Promissory Note, and Special Loan. The Eighth Amendment increased the interest rates of these loans from 8% to 10%, effective April 1, 2020. Until January 1, 2021, rather than cash payments of accrued interest under the term and revolving loans, interest will be paid by the issuance of and treated as additional principal thereunder. Commencing January 2, 2021, such interest will be payable in cash. Interest on the special loan will no longer be paid in cash, but by the issuance of and treated as additional principal thereunder.

On September 29, 2020, the Company entered into a Ninth Amendment to Loan and Security Agreement (the “Ninth Amendment”) with its subsidiaries and Slipstream to amend the automatic conversion date of the Special Loan. The Ninth Amendment changed the automatic conversion date of the Special Loan into the defined new class of senior preferred stock of the Company from October 1, 2020 to November 30, 2020 (or upon an earlier event of default). The Company paid no fees in exchange for this extension.

Management believes that, based on (i) our receipt of approximately $1,552 of funding through the Paycheck Protection Program on April 27, 2020, of which a significant portion we believe will ultimately be forgiven, (ii) our operational forecast through 2021, (iii) our access to capital markets through the Agreement with Roth, and (iv) a commitment of continued support from Slipstream, we can continue as a going concern through at least November 12, 2021. However, given our history of net losses, cash used in operating activities and working capital deficit, each of which continued as of and for the nine months ended September 30, 2020, we can provide no assurance that our ongoing operational efforts or ability to access the public markets for capital will be successful, particularly in consideration of the business interruptions and uncertainty generated as a result of the COVID-19 pandemic ,which has materially adversely affected our results of operations and cash flows.

See Note 8 Loans Payable to the Consolidated Financial Statements for an additional discussion of the Company’s debt obligations.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the preparation of the accompanying Condensed Consolidated Financial Statements follows:

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the applicable instructions to Form 10-Q and 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, 2019, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2020.

The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented.

2. Revenue Recognition

We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, applying the five-step model.

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.

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, typically ranging between thirty and ninety days. 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.

The Company uses the practical expedient for recording an immediate expense for 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.

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:

	September 30,		December 31,
	2020		2019
Raw materials, net of reserve of $108 and $134, respectively	$	2,157	$	200
Inventory on consignment with distributors		336		-
Work-in-process		169		179
Total inventories	$	2,662	$	379

Inventories on consignment with distributors are relieved from inventory and recognized in revenue when sold by distributors to their customers, not at time of shipment or delivery to the distributor.

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, including stock options with performance restricted vesting, and warrants totaling approximately 7,229,998 and 5,021,888 at September 30, 2020 and 2019, respectively were excluded from the computation of income/(loss) per share as all options and warrants were anti-dilutive due to the net loss in each period. In calculating diluted earnings per share for the three and nine months ended September 30, 2020, in accordance with ASC 260 Earnings per share, we excluded the dilutive effect of the potential issuance of common stock upon an assumed conversion of the Special Loan.

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 September 30, 2020 and December 31, 2019.

7. Goodwill

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 (see Note 7 Intangible Assets and Goodwill).

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, valuation allowances related to deferred taxes, the fair value of acquired assets and liabilities, the fair value of liabilities reliant upon the appraised fair value of the Company, valuation of stock-based compensation awards 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. Leases

We account for leases in accordance with ASU No. 2016-02, Leases (Topic 842), as amended.

We determine if an arrangement is a lease at inception. Right of use (“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

9 Months Ended

Sep. 30, 2020

Accounting Standards Update and Change in Accounting Principle [Abstract]

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

NOTE 3: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Recently adopted

On January 1, 2020, we adopted ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which 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 adoption of this guidance had no material impact on our Condensed Consolidated Financial Statements.

On January 1, 2020, we adopted ASU No. 2018-13, Changes to Disclosure Requirements for Fair Value Measurements (Topic 820), which improved the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removed, modified, and added certain disclosure requirements. The adoption of this guidance had no material impact on our Condensed Consolidated Financial Statements.

Not yet adopted

In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. We are currently evaluating the impact of the new guidance on our Condensed 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 that qualify as smaller reporting companies for fiscal years and interim periods beginning after December 15, 2022. We are currently evaluating the disclosure requirements related to adopting this guidance.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue Recognition [Abstract]

REVENUE RECOGNITION

NOTE 4: REVENUE RECOGNITION

The Company applies ASC 606 for revenue recognition. The following table disaggregates the Company’s revenue by major source for the three and nine months ended September 30, 2020 and 2019:

(in thousands)	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Hardware	$	2,850	$	2,034	$	5,818	$	5,329

Services:
Installation Services		674		2,143		2,006		6,306
Software Development Services		248		695		427		8,930
Managed Services		1,335		1,851		4,216		4,956
Total Services		2,257		4,689		6,649		20,192

Total Hardware and Services	$	5,107	$	6,723	$	12,467	$	25,521

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 September 30, 2020 and 2019 were $0 and $1,428, respectively.

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.

Fair Value Measurement

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

NOTE 5: 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 Company previously recorded warrant liabilities that were measured at fair value on a recurring basis using a binomial option pricing model. The fair value of the warrant liabilities had decreased to $0 as of June 30, 2019. All of the Company’s outstanding warrants classified as liabilities expired during the three months ended September 30, 2019.

As part of the Allure Acquisition, the Purchase Agreement contemplated additional consideration of $2,000 to be paid by us to Christie Digital Systems, USA (“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. As part of our finalization of opening balance sheet accounting at the close of the measurement period in November 2019, we recorded an adjustment to reflect the earnout liability to $0. The fair value estimate remains at $0 as of September 30, 2020. The liability is deemed to be Level 3 as the valuation is based on revenue projections and estimates developed by management as informed by historical results.

As discussed in Note 7 Intangible Assets, Including Goodwill, the calculation of the weighted average cost of capital and management’s forecast of future financial performance utilized within our discounted cash flow model for the impairment of goodwill contains inputs which are unobservable and involve management judgment and are considered Level 3 estimates.

As discussed in Note 8 Loans Payable, the Special Loan is reported at fair value. This liability is deemed to be a Level 3 valuation. As of September 30, 2020, we updated our fair value analysis of the Special Loan, which was originally evaluated at March 31, 2020 utilizing the assistance of a third-party valuation specialist, resulting in recognition of a $0 and $702 loss during the three and nine months ended September 30, 2020, respectively, from the change in fair value of the liability and a corresponding increase in the debt balance recorded in the Condensed Consolidated Balance Sheet.

- 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

9 Months Ended

Sep. 30, 2020

Supplemental Cash Flow Statement Information [Abstract]

SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

NOTE 6: SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

	Nine Months Ended
	September 30,
	2020		2019
Supplemental Cash Flow Information
Non-cash Investing and Financing Activities
Right of offset settlement of Amended and Restated Seller Note	$	-	$	498
Cash paid during the period for:
Interest	$	-	$	108
Income taxes, net	$	17	$	-

Intangible Assets, Including Goodwill

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, INCLUDING GOODWILL

NOTE 7: INTANGIBLE ASSETS, INCLUDING GOODWILL

Intangible Assets

Intangible assets consisted of the following at September 30, 2020 and December 31, 2019:

	September 30,				December 31,
	2020				2019
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	4,635		3,337	$	4,635		3,147
Customer relationships		5,330		2,822		5,330		2,679
Trademarks and trade names		1,020		897		1,020		752
		10,985		7,056		10,985		6,578
Accumulated amortization		7,056				6,578
Net book value of amortizable intangible assets	$	3,929			$	4,407

For the three months ended September 30, 2020 and 2019, amortization of intangible assets charged to operations was $161 and $147, respectively. For the nine months ended September 30, 2020 and 2019 amortization of intangible assets charged to operations was $478 and $451, respectively.

Goodwill

The following is a rollforward of the Company’s goodwill since December 31, 2019:

	Total
Balance as of December 31, 2019	$	18,171
Adjustments due to impairment loss		(10,646	)
Balance as of September 30, 2020	$	7,525

Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is subject to an impairment review at a reporting unit level, on an annual basis as of the end of September of each fiscal year, or when an event occurs, or circumstances change that would indicate potential impairment. The Company has only one reporting unit, and therefore the entire goodwill is allocated to that reporting unit.

Interim Impairment Assessment – March 31, 2020

Despite the excess fair value identified in our 2019 annual impairment assessment, we determined that the reduced cash flow projections and the significant decline in our market capitalization as a result of the COVID-19 pandemic during the three months ended March 31, 2020 indicated that an impairment loss may have been incurred during the first quarter. Therefore, we qualitatively assessed whether it was more likely than not that the goodwill was impaired as of March 31, 2020. We reviewed our previous forecasts and assumptions based on our current projections that are subject to various risks and uncertainties, including: (1) forecasted revenues, expenses and cash flows, including the duration and extent of impact to our business and our alliance partners from the COVID-19 pandemic, (2) current discount rates, (3) the reduction in our market capitalization, (5) changes to the regulatory environment and (6) the nature and amount of government support that will be provided. As a result of this qualitative assessment, we concluded that indicators of impairment were present and that a quantitative interim impairment assessment of our goodwill was necessary as of March 31, 2020.

As a result of the adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment the impairment test consists solely of comparing the carrying value of the reporting unit with its fair value and recording impairment, if identified.

The fair value of the reporting unit was estimated via the income approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for our industry. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and by analyzing published rates relevant to our business to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. We utilized a discount rate of 15.3% in our valuation completed as of March 31, 2020.

While our outlook for the digital signage industry over the long term remains strong, we have experienced rapid and immediate deterioration in our short term business as a result of the COVID-19 pandemic, generating increased uncertainty across our customer base in many of our key vertical markets. The elective and forced closures of businesses across the United States has resulted in reduced demand for our services, which primarily assist business in engaging with their end customers in a physical space through digital technology. The elimination and minimization of public gatherings has materially impacted demand for products and services in our movie theater, sports arena and large entertainment markets. These conditions resulted in downward revisions of our internal forecasts on current and future projected earnings and cash flows, leading to an implied fair value of goodwill substantially below the carrying value. Therefore, during the three months ended March 31, 2020, we recorded a non-cash impairment loss of $10,646. We recorded the estimated impairment losses in the caption “Goodwill impairment” in our Condensed Consolidated Statement of Operations. Following the impairment loss, there remained $7,525 goodwill as of March 31, 2020.

Interim Impairment Assessment – June 30, 2020

As of June 30, 2020, we performed a qualitative impairment assessment in accordance with ASU 2011-08 Testing Goodwill for Impairment to determine whether any indicators of impairment of intangible assets were present as of the balance sheet date. Our analysis included evaluating events and circumstances impacting the Company, including the continued closure of numerous businesses through the second quarter as a result of the COVID-19 pandemic and the Company’s previously goodwill impairment. As a result of our analysis, we concluded that the Company’s actual and forecasted financial results remain in-line with estimates made during our impairment assessment as of March 31, 2020 and that the factors analyzed support an assertion that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount. As a result, no further impairment was recorded during the three months ended June 30, 2020.

Annual Impairment Assessment – September 30, 2020

The Company assessed the carrying value of goodwill at the reporting unit level based on an estimate of the fair value of the respective reporting unit. Fair value of the reporting unit was estimated using a discounted cash flow analyses consisting of various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business prospects and economic or market trends that may occur, specifically, the Company gave significant consideration to actual historic financial results, including revenue growth rates in the preceding three years. Based on the Company’s assessment, we determined that the fair value of our reporting unit exceeds its carrying value, and accordingly, the goodwill associated with the reporting unit is not considered to be impaired at September 30, 2020.

Given the proximity in time to the most recent goodwill impairment, which marked the Company’s goodwill balance down to fair value, the Company anticipated its analysis would result in a thin margin in the percentage of excess fair value over carrying value as of the assessment date. Through the analysis performed as of September 30, 2020, the excess fair value over carrying value was approximately 10%. The Company recognizes that any changes in our projected 2020 or 2021 results could potentially have a material impact on our assessment of goodwill impairment. The Company will continue to monitor the actual performance of its operations against expectations and assess further indicators of possible impairment. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity. Should any indicators of impairment occur in subsequent periods, the Company will be required to perform an analysis in order to determine whether goodwill is impaired.

Loans Payable

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

LOANS PAYABLE

NOTE 8: 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

6/30/2018

264

6/30/2021

0.0% interest

1/16/2018

1,059

6/30/2021

61,729

10.0% interest ⁽¹⁾

8/17/2016

3,174

6/30/2021

588,236

10.0% interest ⁽¹⁾

11/19/2018

1,637

2/15/2020

3.5% interest

12/30/2019

2,123

6/30/2021

10.0% interest ⁽²⁾

4/27/2020

1,552

4/27/2022

1.0% interest ⁽³⁾

Total debt, gross

9,809

649,965

Fair value (E)

702

Total debt, gross

10,511

Debt discount

(253

)

Total debt, net

10,258

Less current maturities

(8,706

)

Long term debt

1,552

A – Secured Disbursed Escrow Promissory Note with related party

B – Secured Revolving Promissory Note with related party

C – Term Loan with related party

D – Amended and Restated Seller Note from acquisition of Allure

E – Secured Convertible Special Loan Promissory Note, at fair value

F – Paycheck Protection Program Loan from Small Business Administration

(1)	8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date.

(2)	8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of September 30, 2020 is $2,123; however, fair value accounting for the convertible debt instrument results in an additional $702 of debt recorded on the Condensed Consolidated Balance Sheet as of September 30, 2020 related to this instrument.

(3)	1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amounts outstanding after the determination of amounts forgiven will be repaid on a monthly basis.

SBA Paycheck Protection Program Loan

Loan and Security Agreement

On August 17, 2016, the Company entered into a Loan and Security Agreement with Slipstream (“Loan and Security Agreement”). Since the initial entry into the Loan and Security Agreement in 2016, the Company has entered into several financing arrangements with varying interest rates, maturity dates, and number of associated detachable warrants, each entered within the structure of the Loan and Security Agreement. The debt instruments outstanding under the Loan and Security Agreement as of March 31, 2020 include the Term Loan, Secured Revolving Promissory Note, Secured Disbursed Escrow Promissory Note, and the Special Loan.

The Loan and Security Agreement 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. Obligations under the loan and security agreement are secured by a grant of collateral security in all of the tangible assets of Creative Realities, Inc. and each of its wholly owned subsidiaries.

Ninth Amendment; Modification of Conversion Date of Special Loan under Loan and Security Agreement

Eighth Amendment; Modification of Interest Rates under Loan and Security Agreement

Upon entry into the Eighth Amendment, the Company completed an analysis of the changes in the Loan and Security Agreement within ASC 470 Debt, concluding that the changes represent a modification to the existing debt that was not a troubled debt restructuring and will account for the modified terms prospectively as yield adjustments, based on the revised terms.

Seventh Amendment; Entry into Secured Convertible Special Loan Promissory Note

On December 30, 2019, we entered into the Special Loan as part of the Seventh Amendment under which we obtained $2,000, with interest thereon at 8% per annum payable 6% in cash and 2% via the issuance of SLPIK interest, provided however that upon occurrence of an event of default the interest rate shall automatically be increased by 6% per annum payable in cash. The entry into the Seventh Amendment adjusted the interest rate on the Company’s Term Loan and Revolving Loan to 8% per annum, provided, however, at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan exceeds $4,100 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 PIK.

●

be the most senior equity security of CRI, including with respect to the payment of dividends and other distributions;

●

not be subject to a right of redemption upon the part of a holder thereof;

●

accrue and pay quarterly dividends at the rate of twelve percent (12%) per annum which shall be payable in cash;

●

have a Stated Value that is an amount mutually agreed by CRI and the Lender at the time of issuance;

●

neither section 6(e) of the Series A-1 Certificate of Designation nor any similar provision shall apply to the New Preferred.

In entering the Seventh Amendment and Special Loan, pursuant to ASC 825-10-25-1, Fair Value Option, we made an irrevocable election to report the Special Loan at fair value, with changes in fair value recorded through the Company’s consolidated statements of operations in each reporting period. For the three and nine months ended September 30, 2020, we utilized the assistance of a third-party valuation specialist to assist in updating our fair value analysis of the Special Loan, resulting in recognition of a $0 and $702 loss, respectively, from the change in fair value of the liability.

Sixth Amendment; Extension of Maturity Dates

On November 6, 2019, Slipstream extended the maturity date of our term loan and revolver loan to June 30, 2021 through the Sixth Amendment to the Loan and Security Agreement, aligning the maturity date of our Term Loan and Secured Revolving Promissory Note with the Secured Disbursed Escrow Promissory Note.

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 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, 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 requires us to make quarterly payments of interest only through February 19, 2020, on which date the promissory note matured and all remaining amounts owing thereunder became due.

The promissory note is convertible into shares of Creative Realities common stock, at the seller’s option on or after the 180th day after issuance, 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.

On February 20, 2020, the Company and Allure filed a demand for arbitration against Seller for (1) breach of contract, (2) indemnification, and (3) fraudulent misrepresentation under the Allure Purchase Agreement. This demand included a claim for the right to offset the amounts owing under the Amended and Restated Seller Note due February 20, 2020. We have not paid, nor do we intend to pay, the Amended and Restated Seller Note, which is now past its maturity date, without resolution of our demand for arbitration. On February 27, 2020, Seller sent the Company a notice of breach for failure to pay the Amended and Restated Seller Note on the maturity date of February 20, 2020 and demanding immediate payment. The Company continues to accrue interest on the Amended and Restated Seller Note and have included $43 in accrued expenses in the Condensed Consolidated Financial Statements as of September 30, 2020. See Note 9 Commitments and Contingencies for further discussion.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 9: COMMITMENTS AND CONTINGENCIES

Litigation

On August 2, 2019, the Company filed suit in Jefferson Circuit Court, Kentucky, against a supplier of Allure for breach of contract, breach of warranty, and negligence with respect to equipment installations performed by such supplier for an Allure customer. This case remains in the early stages of litigation, in part due to delays resulting from the COVID-19 pandemic, and, as a result, the outcome of each case is unclear, so the Company is unable to reasonably estimate the possible recovery, or range of recovery, if any.

On October 10, 2019, the Allure customer that is the basis of our claim above sent a demand to the Company for payment of $3,200 as settlement for an alleged breach of contract related to hardware failures of equipment installations performed by Allure between November 2017 and August 2018. The suits filed by and against Allure have been adjoined in the Jefferson Circuit Court, Kentucky in January 2020. This suit remains in the early stages of litigation and, as a result, the outcome of the suit and the allocation of liability, if any, remain unclear, so the Company is unable to reasonably estimate the possible liability, recovery, or range of magnitude for either the liability or recover, if any, at the time of this filing.

The Company has notified its insurance company on notice of potential claims and continues to evaluate both the claim made by the customer and potential avenues for recovery against third parties should the customer prevail.

On February 20, 2020, the Company and Allure filed a demand for arbitration against Seller for breach of contract, indemnification, and fraudulent misrepresentation under the Allure Purchase Agreement. This demand included a claim for the right to offset the amounts owing under the Amended and Restated Seller Note due February 20, 2020. We have not paid the Amended and Restated Seller Note which is now past its maturity date. On February 27, 2020, Seller sent the Company a notice of breach for failure to pay the Amended and Restated Seller Note on the maturity date of February 20, 2020 and demanding immediate payment.

Except as noted above, the Company is not party to any other material legal proceedings, other than ordinary routine litigation incidental to the business, as of November 11, 2020, and there were no other such proceedings pending during the period covered by this Report.

Employee-related Expenses

We implemented cost-control measures in light of the effect of the COVID-19 pandemic on our business, including employment compensation reductions designed to achieve preliminary cost savings. On March 19, 2020, the Company’s Board of Directors approved a six-month reduction of the salaries of our Chief Executive Officer and Chief Financial Officer by twenty percent (20%), thereby reducing the salaries payable to such officers in 2020 to $297,000 and $224,100, respectively. The reduction of the salaries of our Chief Executive Officer and Chief Financial Officer remain active as of the date of this report.

On March 20, 2020, we completed a reduction-in-force and accrued one-time termination benefits related to severance to the affected employees of $135, the total of which was paid during the three months ended June 30, 2020 with $0 remaining in accrued expenses on the Condensed Consolidated Balance Sheet as of September 30, 2020.

Related Party Transactions

9 Months Ended

Sep. 30, 2020

RELATED PARTY TRANSACTIONS

NOTE 10: RELATED PARTY TRANSACTIONS

In addition to the financing transactions with Slipstream, a related party, discussed in Note 8 Loans Payable, 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 stipulated 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. As of December 31, 2019, 33 Degrees paid the note in full.

Following repayment of the note, 33 Degrees has continued to purchase additional hardware and services from the Company under normal payment terms.

For the three and nine months ended September 30, 2020, the Company had sales to 33 Degrees of $131, or 2.6%, and $922, or 7.4%, respectively, of consolidated revenue. For the three and nine months ended September 30, 2019, the Company had sales to 33 Degrees of $279, or 4.2%, and $750, or 2.9%, respectively, of consolidated revenue.

Accounts receivable due from 33 Degrees was $5, or 0.1%, and $1, or 0.0% of consolidated accounts receivable at September 30, 2020 and December 31, 2019, respectively.

Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11: 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 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 and nine months ended September 30, 2020, we reported tax benefit of $1 and $152, respectively. As of September 30, 2020, the net deferred tax assets totaled $0 after valuation allowance, as compared to $175 at December 31, 2019. The reduction is primarily the result of the impairment to goodwill, which resulted in adjusting the deferred tax impact associated with indefinite lived goodwill from a deferred tax liability to a deferred tax asset. As the indefinite-lived intangibles can no longer provide a source of income, a full valuation allowance was placed against the deferred tax assets.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Warrants

9 Months Ended

Sep. 30, 2020

Warrant Disclosure [Abstract]

WARRANTS

NOTE 12: WARRANTS

A summary of outstanding equity warrants is included below:

	Warrants (Equity)
	Amount			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance January 1, 2020		4,733,028		$	4.83		3.41
Warrants issued		-			-		-
Warrants exercised		(27,600	)		4.38		-
Warrants expired		(89,238	)		9.49		-
Balance September 30, 2020		4,616,190		$	4.71		2.72

Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 13: STOCK-BASED COMPENSATION

A summary of outstanding options is included below:

Time Vesting Options			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$0.01 - $3.00		1,525,000		9.66	$	2.52		-	$	-
$3.01 - $7.50		184,830		5.60	$	6.72		168,163	$	6.64
$7.51+		103,979		4.70		11.74		94,396	$	12.05
		1,813,809		8.97	$	3.48		262,559

Performance Vesting Options			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$0.01 - $3.00		800,000		9.67	$	2.53		-	$	-
$3.01 - $7.50		-		-	$	-		-	$	-
$7.51+		-		-	$	-		-	$	-
		800,000		9.67	$	2.53		-

	*Time Vesting Options*					*Performance Vesting Options*
				Weighted				Weighted
				Average				Average
	Options			Exercise		Options		Exercise
Date/Activity	Outstanding			Price		Outstanding		Price
Balance, December 31, 2019		313,860		$	8.06		-	$	-
Granted		1,580,000			2.53		800,000		2.53
Exercised		-			-		-		-
Forfeited or expired		(80,051	)		2.76		-		-
Balance, September 30, 2020		1,813,809			3.48		800,000	$	2.53

The weighted average remaining contractual life for options exercisable is 5.0 years as of September 30, 2020.

Valuation Information for Stock-Based Compensation

For purposes of determining estimated fair value under FASB ASC 718-10, Stock Compensation, the Company computed the estimated fair values of stock options using the Black-Scholes model.

On June 1, 2020 the Board of Directors of the Company granted 10-year options to purchase an aggregate of 2,380,000 shares of its common stock to employees of the Company subject to shareholder approval of an increase in the reserve of shares authorized for issuance under the Company’s 2014 Stock Incentive Plan (the “Plan”). On July 10, 2020, the Company held a special meeting of the Company’s shareholders at which the shareholders approved the amendment to the Plan, which increased the reserve of shares authorized for issuance thereunder to 6,000,000 shares.

Of the 2,380,000 options awarded, 1,580,000 vest over 3 years and have an exercise price of $2.53, the market value of the Company’s common stock on the grant date. The fair value of the options on the grant date was $1.87 and was determined using the Black-Scholes model. These values were calculated using the following weighted average assumptions:

Risk-free interest rate	0.66	%
Expected term	6.25 years
Expected price volatility	89.18	%
Dividend yield	0	%

The remaining 800,000 options awarded vest in equal installments over a three-year period subject to satisfying the Company revenue target and earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the applicable year. In each of calendar years 2020, 2021 and 2022, one-third of the total shares may vest (if the revenue and EBITDA targets are met), and the shares that are subject to vesting each year are allocated equally to each of the revenue and EBITDA targets for such year.

These performance options include a catch-up provision, where any options that did not vest during a prior year due to the Company’s failure to meet a prior revenue or EBITDA target may vest in a subsequent vesting year if the revenue or EBITDA target, as applicable, is met in the future year. The revenue and EBITDA targets for the following three years are as follows:

Calendar Year	Revenue Target	EBITDA Target
2020	$32 million	$2.2 million
2021	$35 million	$3.1 million
2022	$38 million	$3.5 million

The exercise price of the foregoing options is $2.53 per share, the closing price of the Company’s common stock on the date of issuance. The options were issued from the Company’s 2014 Stock Incentive Plan. The fair value of the options on the grant date was $1.87 and was determined using the Black-Scholes model. These values were calculated using the same weighted average assumptions as the time vesting options issued. Performance against the identified revenue and EBITDA targets will be assessed quarterly by the Company in order to determine whether any compensation expense should be recorded. As of September 30, 2020, the Company had recorded no compensation expense in the Consolidated Statement of Operations with respect to these awards.

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 12,135 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. Following a 1-for-30 reverse stock split, the shares authorized for issuance under the Company’s 2014 Stock Incentive Plan was reduced to 600,000. On July 10, 2020, the Company’s shareholders approved an amendment to the Company’s 2014 Stock Incentive Plan to increase the reserve of authorized for issuance thereunder to 6,000,000. There are 2,601,674 options outstanding under the 2014 Stock Incentive Plan.

Compensation expense recognized for the issuance of common stock and amortization of stock option awards for the three and nine months ended September 30, 2020 of $273 and $442, respectively, was included in general and administrative expense in the Condensed Consolidated Financial Statements. Compensation expense recognized for the issuance of common stock and amortization of stock option awards for the three and nine months ended September 30, 2019 of $63 and $395, respectively, was included in general and administrative expense in the Condensed Consolidated Financial Statements. Amounts recorded include stock compensation expense for awards granted to directors of the Company in exchange for services at fair value, including $25 and $74, respectively, for the three and nine months ended September 30, 2020 and $32 and $32, respectively, for the three and nine months ended September 30, 2019.

At September 30, 2020, there was approximately $2,617 and $1,499 of total unrecognized compensation expense related to unvested share-based awards with time vesting and performance vesting criteria, respectively. Generally, expense related to the time vesting options will be recognized over the next three years and will be adjusted for any future forfeitures as they occur. Compensation expense related to performance vesting options will be recognized if it becomes probable that the Company will achieve the identified performance metrics.

Significant Customers/vendors

9 Months Ended

Sep. 30, 2020

Significant Customers Disclosure [Abstract]

SIGNIFICANT CUSTOMERS/VENDORS

NOTE 14: SIGNIFICANT CUSTOMERS/VENDORS

Significant Customers

We had two (2) and one (1) customers that in the aggregate accounted for 22.5% and 18.5% of accounts receivable as of September 30, 2020 and December 31, 2019, respectively.

We had one (1) and two (2) customers that accounted for 11.3% and 23.2% of revenue for the three months ended September 30, 2020 and 2019, respectively. We had one (1) and two (2) customers that accounted for 11.5% and 22.5% of revenue for the nine months ended September 30, 2020 and 2019, respectively.

Significant Vendors

We had one (1) vendor that accounted for 14% and 50% of outstanding accounts payable at September 30, 2020 and December 31, 2019, respectively.

Leases

9 Months Ended

Sep. 30, 2020

Disclosure Text Block [Abstract]

LEASES

NOTE 15: 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 2020 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.

During the three months ended September 30, 2020, the Company renegotiated the terms of certain of its operating lease agreements resulting in the elimination of approximately $587 in future commitments for payments previously included in our calculations of operating right of use assets and liabilities on the Condensed Consolidated Balance Sheet. These were accounted for as non-cash adjustments to the Condensed Consolidated Balance Sheet during the three months ended September 30, 2020.

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

(in thousands)	Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019
Finance lease cost
Amortization of right-of-use assets	$	17		$	25
Interest		2			4
Operating lease cost		512			565
Total lease cost	$	531		$	594

Weighted Average Remaining Lease Term
Operating leases		3.2 years			3.6 years
Finance leases		0.9 years			1.2 years

Weighted Average Discount Rate
Operating leases		10.0	%		10.0	%
Finance leases		14.0	%		13.5	%

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2020:

(in thousands)	Operating Leases			Finance Leases
The remainder of 2020	$	106		$	4
2021		310			4
2022		214			1
2023		210			-
Thereafter		-			-
Total undiscounted cash flows		840			9
Less imputed interest		(110	)	$	(1	)
Present value of lease liabilities	$	730		$	8

Supplemental cash flow information related to leases are as follows:

(in thousands)	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	512	$	551
Operating cash flows from finance leases		2		1
Financing cash flows from finance leases		17		23

Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2020

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:

	September 30,		December 31,
	2020		2019
Raw materials, net of reserve of $108 and $134, respectively	$	2,157	$	200
Inventory on consignment with distributors		336		-
Work-in-process		169		179
Total inventories	$	2,662	$	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

7. Goodwill

Use of Estimates

8. Use of Estimates

Leases

9. Leases

We account for leases in accordance with ASU No. 2016-02, Leases (Topic 842), as amended.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of inventories

	September 30,		December 31,
	2020		2019
Raw materials, net of reserve of $108 and $134, respectively	$	2,157	$	200
Inventory on consignment with distributors		336		-
Work-in-process		169		179
Total inventories	$	2,662	$	379

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2020

Revenue Recognition [Abstract]

Schedule of revenue by major source

(in thousands)	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Hardware	$	2,850	$	2,034	$	5,818	$	5,329

Services:
Installation Services		674		2,143		2,006		6,306
Software Development Services		248		695		427		8,930
Managed Services		1,335		1,851		4,216		4,956
Total Services		2,257		4,689		6,649		20,192

Total Hardware and Services	$	5,107	$	6,723	$	12,467	$	25,521

Supplemental Cash Flow Statement Information (Tables)

9 Months Ended

Sep. 30, 2020

Supplemental Cash Flow Statement Information [Abstract]

Schedule of supplemental cash flow information

	Nine Months Ended
	September 30,
	2020		2019
Supplemental Cash Flow Information
Non-cash Investing and Financing Activities
Right of offset settlement of Amended and Restated Seller Note	$	-	$	498
Cash paid during the period for:
Interest	$	-	$	108
Income taxes, net	$	17	$	-

Intangible Assets, Including Goodwill (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	September 30,				December 31,
	2020				2019
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	4,635		3,337	$	4,635		3,147
Customer relationships		5,330		2,822		5,330		2,679
Trademarks and trade names		1,020		897		1,020		752
		10,985		7,056		10,985		6,578
Accumulated amortization		7,056				6,578
Net book value of amortizable intangible assets	$	3,929			$	4,407

Schedule of goodwill

	Total
Balance as of December 31, 2019	$	18,171
Adjustments due to impairment loss		(10,646	)
Balance as of September 30, 2020	$	7,525

Loans Payable (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of outstanding debt with detachable warrants

Debt Type

Issuance
Date

Principal

Maturity
Date

Warrants

Interest Rate Information

6/30/2018

264

6/30/2021

0.0% interest

1/16/2018

1,059

6/30/2021

61,729

10.0% interest ⁽¹⁾

8/17/2016

3,174

6/30/2021

588,236

10.0% interest ⁽¹⁾

11/19/2018

1,637

2/15/2020

3.5% interest

12/30/2019

2,123

6/30/2021

10.0% interest ⁽²⁾

4/27/2020

1,552

4/27/2022

1.0% interest ⁽³⁾

Total debt, gross

9,809

649,965

Fair value (E)

702

Total debt, gross

10,511

Debt discount

(253

)

Total debt, net

10,258

Less current maturities

(8,706

)

Long term debt

1,552

(1)	8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date.

(2)	8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of September 30, 2020 is $2,123; however, fair value accounting for the convertible debt instrument results in an additional $702 of debt recorded on the Condensed Consolidated Balance Sheet as of September 30, 2020 related to this instrument.

(3)	1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amounts outstanding after the determination of amounts forgiven will be repaid on a monthly basis.

Warrants (Tables)

9 Months Ended

Sep. 30, 2020

Warrant Disclosure [Abstract]

Schedule of outstanding equity warrants

	Warrants (Equity)
	Amount			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance January 1, 2020		4,733,028		$	4.83		3.41
Warrants issued		-			-		-
Warrants exercised		(27,600	)		4.38		-
Warrants expired		(89,238	)		9.49		-
Balance September 30, 2020		4,616,190		$	4.71		2.72

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of stock options outstanding

Time Vesting Options			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$0.01 - $3.00		1,525,000		9.66	$	2.52		-	$	-
$3.01 - $7.50		184,830		5.60	$	6.72		168,163	$	6.64
$7.51+		103,979		4.70		11.74		94,396	$	12.05
		1,813,809		8.97	$	3.48		262,559

Performance Vesting Options			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Options		Exercise
Prices between	Outstanding		Life		Price		Exercisable		Price
$0.01 - $3.00		800,000		9.67	$	2.53		-	$	-
$3.01 - $7.50		-		-	$	-		-	$	-
$7.51+		-		-	$	-		-	$	-
		800,000		9.67	$	2.53		-

Schedule of stock option activity

	*Time Vesting Options*					*Performance Vesting Options*
				Weighted				Weighted
				Average				Average
	Options			Exercise		Options		Exercise
Date/Activity	Outstanding			Price		Outstanding		Price
Balance, December 31, 2019		313,860		$	8.06		-	$	-
Granted		1,580,000			2.53		800,000		2.53
Exercised		-			-		-		-
Forfeited or expired		(80,051	)		2.76		-		-
Balance, September 30, 2020		1,813,809			3.48		800,000	$	2.53

Schedule of fair value of the options

Risk-free interest rate	0.66	%
Expected term	6.25 years
Expected price volatility	89.18	%
Dividend yield	0	%

Schedule of revenue and EBITDA targets

Calendar Year	Revenue Target	EBITDA Target
2020	$32 million	$2.2 million
2021	$35 million	$3.1 million
2022	$38 million	$3.5 million

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Disclosure Text Block [Abstract]

Schedule of components of lease costs, lease term and discount rate

(in thousands)	Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019
Finance lease cost
Amortization of right-of-use assets	$	17		$	25
Interest		2			4
Operating lease cost		512			565
Total lease cost	$	531		$	594

Weighted Average Remaining Lease Term
Operating leases		3.2 years			3.6 years
Finance leases		0.9 years			1.2 years

Weighted Average Discount Rate
Operating leases		10.0	%		10.0	%
Finance leases		14.0	%		13.5	%

Schedule of maturities of lease liabilities

(in thousands)	Operating Leases			Finance Leases
The remainder of 2020	$	106		$	4
2021		310			4
2022		214			1
2023		210			-
Thereafter		-			-
Total undiscounted cash flows		840			9
Less imputed interest		(110	)	$	(1	)
Present value of lease liabilities	$	730		$	8

Schedule of cash flow information related to leases

(in thousands)	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	512	$	551
Operating cash flows from finance leases		2		1
Financing cash flows from finance leases		17		23

Nature of Organization and Operations (Details) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended
	Nov. 11, 2020	Jun. 19, 2020	Dec. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Apr. 27, 2020	Dec. 31, 2019	Dec. 31, 2018
Nature of Organization and Operations (Details) [Line Items]
Net loss				$ (585)	$ 242	$ (16,227)	$ 475
Cash and cash equivalents				855	$ 2,240	855	$ 2,240		$ 2,534	$ 2,718
Working capital deficit				7,523		7,523
Working capital surplus				1,183		1,183
Proceeds from the sale of hardware and services				2,033		$ 2,560
Description of special loan agreement						(i) our receipt of approximately $1,552 of funding through the Paycheck Protection Program on April 27, 2020, of which a significant portion we believe will ultimately be forgiven, (ii) our operational forecast through 2021, (iii) our access to capital markets through the Agreement with Roth, and (iv) a commitment of continued support from Slipstream, we can continue as a going concern through at least November 12, 2021. However, given our history of net losses, cash used in operating activities and working capital deficit, each of which continued as of and for the nine months ended September 30, 2020, we can provide no assurance that our ongoing operational efforts or ability to access the public markets for capital will be successful, particularly in consideration of the business interruptions and uncertainty generated as a result of the COVID-19 pandemic ,which has materially adversely affected our results of operations and cash flows.
Business acquisition description	Through November 11, 2020, the Company received gross proceeds under the Agreement of $1,831 from the issuance of 1,034,068 shares of our common stock, and paid an aggregate of $53 to Roth in commissions, yielding net proceeds of $1,778 after commissions, and net proceeds of $1,636 after other offering-related expenses.					Through September 30, 2020, the Company received gross proceeds under the Agreement of $1,336 from the issuance of 578,183 shares of our common stock, and paid an aggregate of $38 to Roth in commissions, yielding net proceeds of $1,298 after commissions and net proceeds of $1,158 after other offering-related expenses.
Promissory note term						2 years
Promissory note interest rate						1.00%
Dividend rate						12.00%
Conversion price percentage						80.00%
Consolidated Entities [Member]
Nature of Organization and Operations (Details) [Line Items]
Net loss				$ 585		$ 16,227
Slipstream Communications, Llc [Member] \| Seventh Amendment of Loan and Security Agreement [Member]
Nature of Organization and Operations (Details) [Line Items]
Description of special loan agreement			On December 30, 2019, we entered into the Secured Convertible Special Loan Promissory Note (“Special Loan”) as part of the Seventh Amendment of the Loan and Security Agreement with Slipstream, under which we obtained $2,000, with interest thereon at 8% per annum payable 6% in cash and 2% via the issuance of paid-in-kind (“SLPIK”) interest, provided however that upon occurrence of an event of default the interest rate shall automatically be increased by 6% per annum payable in cash. The entry into the Seventh Amendment adjusted the interest rate on the Company’s Term Loan and Revolving Loan to 8% per annum, provided, however, at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan exceeds $4,100 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 PIK.
Promissory Note [Member]
Nature of Organization and Operations (Details) [Line Items]
Unsecured loan								$ 1,552
Sales Agreement [Member]
Nature of Organization and Operations (Details) [Line Items]
Description of special loan agreement		the Company entered into a Sales Agreement (the “Agreement”) with Roth Capital Partners, LLC (“Roth”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.01 per share (the “Common Stock”), having an aggregate offering price of up to $8,000,000 through Roth as the Company’s sales agent. Roth may sell the Common Stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended. Subject to the terms of the Agreement, Roth will use its commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company or Roth may suspend the offering of the Common Stock being made through Roth under the Agreement upon proper notice to the other party. The Company will pay Roth a commission of 3.0% of the gross sales proceeds of any Common Stock sold through Roth under the Agreement, and also has provided Roth with customary indemnification rights. The sale of Common Stock under the Agreement is registered on a Form S-3 registration statement (Registration No. 333-238275) and related prospectus supplement filed with the SEC on June 19, 2020, and pursuant to the “baby shelf” rules that apply to such registration statement, we cannot sell our common stock in a public primary offering (including under the Agreement) with a value exceeding more than one-third of our public float in any 12 calendar month period so long as our public float remains below $75.0 million.
Eighth Amendment Loan and Security Agreement [Member] \| Minimum [Member]
Nature of Organization and Operations (Details) [Line Items]
Amendment interest rates						8.00%
Eighth Amendment Loan and Security Agreement [Member] \| Maximum [Member]
Nature of Organization and Operations (Details) [Line Items]
Amendment interest rates						10.00%
Series A Convertible Preferred Stock [Member]
Nature of Organization and Operations (Details) [Line Items]
Convertible preferred stock percentage						6.00%

Summary of Significant Accounting Policies (Details) - shares	Sep. 30, 2020	Sep. 30, 2019
Stock options and warrants [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Outstanding stock options and warrants	7,229,998	5,021,888

Summary of Significant Accounting Policies (Details) - Schedule of inventories - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Schedule of inventories [Abstract]
Raw materials, net of reserve of $108 and $134, respectively	$ 2,157	$ 200
Inventory on consignment with distributors	336
Work-in-process	169	179
Total inventories	$ 2,662	$ 379

Summary of Significant Accounting Policies (Details) - Schedule of inventories (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Schedule of inventories [Abstract]
Reserve net	$ 108	$ 134

Revenue Recognition (Details)	9 Months Ended
Revenue Recognition (Details)	Sep. 30, 2020
Revenue Recognition [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 September 30, 2020 and 2019 were $0 and $1,428, respectively.

Revenue Recognition (Details) - Schedule of revenue by major source - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items]
Hardware	$ 2,850	$ 2,034	$ 5,818	$ 5,329
Total Services	2,257	4,689	6,649	20,192
Total Hardware and Services	5,107	6,723	12,467	25,521
Installation Services [Member]
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items]
Total Services	674	2,143	2,006	6,306
Software Development Services [Member]
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items]
Total Services	248	695	427	8,930
Managed Services [Member]
Revenue Recognition (Details) - Schedule of revenue by major source [Line Items]
Total Services	$ 1,335	$ 1,851	$ 4,216	$ 4,956

Fair Value Measurement (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2020	Jun. 30, 2019
Fair Value Measurement (Details) [Line Items]
Fair value estimate	$ 0	$ 0	$ 0
Stock purchase agreement, description		the Purchase Agreement contemplated additional consideration of $2,000 to be paid by us to Christie Digital Systems, USA (“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. As part of our finalization of opening balance sheet accounting at the close of the measurement period in November 2019, we recorded an adjustment to reflect the earnout liability to $0.
Loss from special loan	0	$ 702
Fair Value, Inputs, Level 3 [Member]
Fair Value Measurement (Details) [Line Items]
Fair value estimate	$ 0	0
Loss from special loan		$ 702

Supplemental Cash Flow Statement Information (Details) - Schedule of supplemental cash flow information - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Non-cash Investing and Financing Activities
Right of offset settlement of Amended and Restated Seller Note		$ 498
Cash paid during the period for:
Interest		108
Income taxes, net	$ 17

Intangible Assets, Including Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Intangible Assets, Including Goodwill (Details) [Line Items]
Amortization of intangible assets	$ 161		$ 147	$ 478	$ 451
Discount rate		15.30%
Non-cash impairment loss		$ 7,525
Excess fair value over carrying value				10.00%
Goodwill impairment [Member]
Intangible Assets, Including Goodwill (Details) [Line Items]
Non-cash impairment loss		$ 10,646

Intangible Assets, Including Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 10,985	$ 10,985
Accumulated Amortization	7,056	6,578
Accumulated amortization	7,056	6,578
Net book value of amortizable intangible assets	3,929	4,407
Technology platform [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,635	4,635
Accumulated Amortization	3,337	3,147
Accumulated amortization	3,337	3,147
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,330	5,330
Accumulated Amortization	2,822	2,679
Accumulated amortization	2,822	2,679
Trademarks and trade names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,020	1,020
Accumulated Amortization	897	752
Accumulated amortization	$ 897	$ 752

Intangible Assets, Including Goodwill (Details) - Schedule of goodwill $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Schedule of goodwill [Abstract]
Balance as of December 31, 2019	$ 18,171
Balance as of September 30, 2020	7,525
Adjustments due to impairment loss	$ (10,646)

Loans Payable (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended	9 Months Ended
	Apr. 27, 2020	Apr. 02, 2020	Dec. 30, 2019	Nov. 06, 2019	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Loans Payable (Details) [Line Items]
Convertible promissory note, description	the Company entered into a Promissory Note with Old National Bank (the “Promissory Note”), which provided for an unsecured loan of $1,552 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note has a term of two years with a 1% per annum interest rate. While the Promissory Note currently has a two-year term, the amended law permits the Company to request a five-year maturity from Old National Bank. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days					(1) 8.0% cash interest per annum through March 31, 2020. 10.0% paid-in-kind interest (“PIK”) interest per annum from April 1, 2020 through December 31, 2020. 8.0% cash interest per annum January 1, 2021 through the maturity date. (2) 8.0% cash interest per annum, comprised of 6.0% cash, 2.0% PIK through March 31, 2020. 10.0% PIK interest per annum through September 30, 2020. In an event of default, the interest rate increases by 6.0% to 16.0%. Debt is automatically convertible to a new class of senior preferred stock of the Company at the earlier of an event of default or November 30, 2020. The principal, including PIK interest, as of September 30, 2020 is $2,123; however, fair value accounting for the convertible debt instrument results in an additional $702 of debt recorded on the Condensed Consolidated Balance Sheet as of September 30, 2020 related to this instrument. (3) 1,0% cash interest per annum. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amounts outstanding after the determination of amounts forgiven will be repaid on a monthly basis. SBA Paycheck Protection Program Loan On April 27, 2020, the Company entered into a Promissory Note with Old National Bank (the “Promissory Note”), which provided for an unsecured loan of $1,552 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note has a term of two years with a 1% per annum interest rate. While the Promissory Note currently has a two-year term, the amended law permits the Company to request a five-year maturity from Old National Bank. Payments are deferred for six months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amount outstanding after the determination of amounts forgiven will be repaid on a monthly basis.
Convertible special loan, description						● be the most senior equity security of CRI, including with respect to the payment of dividends and other distributions; ● be on substantially the same terms and conditions as CRI’s Series A-1 6% Convertible Preferred Stock as set forth in its Certificate of Designation immediately before the same was cancelled pursuant to a Certificate of Cancellation dated as of March 13, 2019; ● not be subject to a right of redemption upon the part of a holder thereof; ● accrue and pay quarterly dividends at the rate of twelve percent (12%) per annum which shall be payable in cash; ● have a Stated Value that is an amount mutually agreed by CRI and the Lender at the time of issuance; ● Conversion Price shall be an amount equal to 80% of the average for the 30-day period ending two days prior to the required conversion date of the daily average of the range of CRI’s common stock (calculated pursuant to information on The Wall Street Journal Online Edition), subject to appropriate adjustments; and ● neither section 6(e) of the Series A-1 Certificate of Designation nor any similar provision shall apply to the New Preferred.
Loss from special loan					$ 0	$ 702
Description of conversion of all amounts						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.
Long term seller note payable							$ 3,757
Accrued expenses					43	$ 43
Allure Global Solutions, Inc. [Member]
Loans Payable (Details) [Line Items]
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.
Estimated net working capital deficit					801	$ 801
Accounts payable to seller for outsourced services					$ 1,403	$ 1,403
Promissory note accruing interest percent					3.50%	3.50%
Initial conversion price					$ 8.40	$ 8.40
Stock Purchase Agreement [Member] \| Allure Global Solutions, Inc. [Member]
Loans Payable (Details) [Line Items]
Accounts payable to seller for outsourced services					$ 2,204	$ 2,204
Long term seller note payable					$ 2,303	$ 2,303
Slipstream Communications, LLC [Member] \| Seventh Amendment Loan and Security Agreement[Member]
Loans Payable (Details) [Line Items]
Convertible promissory note, description		the Company entered into an Eighth Amendment to Loan and Security Agreement (the “Eighth Amendment”) with its subsidiaries and Slipstream to amend the terms of the payments and interest accruing on the Company’s Term Loan, Secured Revolving Promissory Note, and Special Loan. The Eighth Amendment increased the interest rates of these loans from 8% to 10%, effective April 1, 2020. Until January 1, 2021, rather than cash payments of accrued interest under the term and revolving loans, interest will be paid by the issuance of and treated as additional principal thereunder. Commencing January 2, 2021, such interest will be payable in cash. Interest on the special loan will no longer be paid in cash, but by the issuance of and treated as additional principal thereunder. Upon entry into the Eighth Amendment, the Company completed an analysis of the changes in the Loan and Security Agreement within ASC 470 Debt, concluding that the changes represent a modification to the existing debt that was not a troubled debt restructuring and will account for the modified terms prospectively as yield adjustments, based on the revised terms.
Convertible special loan, description			we entered into the Special Loan as part of the Seventh Amendment under which we obtained $2,000, with interest thereon at 8% per annum payable 6% in cash and 2% via the issuance of SLPIK interest, provided however that upon occurrence of an event of default the interest rate shall automatically be increased by 6% per annum payable in cash. The entry into the Seventh Amendment adjusted the interest rate on the Company’s Term Loan and Revolving Loan to 8% per annum, provided, however, at all times when the aggregate outstanding principal amount of the Term Loan and the Revolving Loan exceeds $4,100 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 PIK
Slipstream Communications, LLC [Member] \| Seventh Amendment Loan and Security Agreement[Member]
Loans Payable (Details) [Line Items]
Convertible special loan, description				On November 6, 2019, Slipstream extended the maturity date of our term loan and revolver loan to June 30, 2021 through the Sixth Amendment to the Loan and Security Agreement, aligning the maturity date of our Term Loan and Secured Revolving Promissory Note with the Secured Disbursed Escrow Promissory Note.

Loans Payable (Details) - Schedule of outstanding debt with detachable warrants shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) shares
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Total debt, gross	$ 9,809
Warrants \| shares	649,965
Fair value (E)	$ 702
Debt discount	(253)
Total debt, net	10,258
Less current maturities	(8,706)
Long term debt	$ 1,552
6/30/2018 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	A
Issuance Date	Jun. 30, 2018
Total debt, gross	$ 264
Maturity Date	Jun. 30, 2021
Warrants \| shares
Interest Rate Information	0.00%
1/16/2018 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	B
Issuance Date	Jan. 16, 2018
Total debt, gross	$ 1,059
Maturity Date	Jun. 30, 2021
Warrants \| shares	61,729
Interest Rate Information	10.00%
8/17/2016 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	C
Issuance Date	Aug. 17, 2016
Total debt, gross	$ 3,174
Maturity Date	Jun. 30, 2021
Warrants \| shares	588,236
Interest Rate Information	10.00%
11/19/2018 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	D
Issuance Date	Nov. 19, 2018
Total debt, gross	$ 1,637
Maturity Date	Feb. 15, 2020
Warrants \| shares
Interest Rate Information	3.50%
12/30/2019 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	E
Issuance Date	Dec. 30, 2019
Total debt, gross	$ 2,123
Maturity Date	Jun. 30, 2021
Warrants \| shares
Interest Rate Information	10.00%
4/27/2020 [Member]
Loans Payable (Details) - Schedule of outstanding debt with detachable warrants [Line Items]
Debt Type	F
Issuance Date	Apr. 27, 2020
Total debt, gross	$ 1,552
Maturity Date	Apr. 27, 2022
Warrants \| shares
Interest Rate Information	1.00%

Commitments and Contingencies (Details) - USD ($) $ in Thousands	1 Months Ended
	Mar. 20, 2020	Mar. 19, 2020	Oct. 10, 2019	Jun. 30, 2020
Commitments and Contingencies (Details) [Line Items]
Termination benefits, description		On March 19, 2020, the Company’s Board of Directors approved a six-month reduction of the salaries of our Chief Executive Officer and Chief Financial Officer by twenty percent (20%), thereby reducing the salaries payable to such officers in 2020 to $297,000 and $224,100, respectively.
Severance expense	$ 135
Accrued liability				$ 0
Allure [Member]
Commitments and Contingencies (Details) [Line Items]
Settlement for an alleged breach of contract			$ 3,200

Related Party Transactions (Details) - 33 Degrees [Member] - USD ($) $ in Thousands	1 Months Ended	9 Months Ended		12 Months Ended
	Aug. 14, 2018	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Related Party Transactions (Details) [Line Items]
Related party entity owned percentage	17.50%
Repayment amount of related party transactions	$ 2,567
Related party entity, description	The payment agreement stipulated 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. As of December 31, 2019, 33 Degrees paid the note in full.	For the three and nine months ended September 30, 2020, the Company had sales to 33 Degrees of $131, or 2.6%, and $922, or 7.4%, respectively, of consolidated revenue.	For the three and nine months ended September 30, 2019, the Company had sales to 33 Degrees of $279, or 4.2%, and $750, or 2.9%, respectively, of consolidated revenue.
Accounts receivable		$ 5		$ 1
Concentration credit risk percentage		0.10%		0.00%

Income Taxes (Details) - USD ($)	3 Months Ended	9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Reported tax benefit	$ 1	$ 152
Net deferred tax assets	$ 0	$ 0
Valuation allowance			$ 175

Warrants (Details) - Schedule of outstanding equity warrants	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Class of Warrant or Right [Line Items]
Number of Shares, Warrants exercised \| shares	(27,600)
Weighted Average Exercise Price, Warrants exercised \| $ / shares	$ 4.38
Warrant [Member]
Class of Warrant or Right [Line Items]
Number of Shares, Warrants, Beginning Balance \| shares	4,733,028
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 4.83
Weighted Average Remaining Contractual Life, Beginning Balance	3 years 149 days
Number of Shares, Warrants issued \| shares
Weighted Average Exercise Price, Warrants issued \| $ / shares
Number of Shares, Warrants expired \| shares	(89,238)
Weighted Average Exercise Price, Warrants expired \| $ / shares	$ 9.49
Number of Shares, Warrants, Ending Balance \| shares	4,616,190
Weighted Average Exercise Price, Ending Balance \| $ / shares	$ 4.71
Weighted Average Remaining Contractual Life, Ending Balance	2 years 262 days

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended		9 Months Ended
	Jul. 10, 2020	Jan. 02, 2020	Aug. 31, 2018	Oct. 14, 2014	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock-Based Compensation (Details) [Line Items]
Weighted average remaining contractual life							5 years
Purchase aggregate		the Board of Directors of the Company granted 10-year options to purchase an aggregate of 2,380,000 shares of its common stock to employees of the Company subject to shareholder approval of an increase in the reserve of shares authorized for issuance under the Company’s 2014 Stock Incentive Plan (the “Plan”). On July 10, 2020, the Company held a special meeting of the Company’s shareholders at which the shareholders approved the amendment to the Plan, which increased the reserve of shares authorized for issuance thereunder to 6,000,000 shares.
Stock option expense recognize period							10 years
Option awarded							2,380,000
Option awarded vest over					1,580,000		1,580,000
Options vesting period							3 years
Exercise price (in Dollars per share)					$ 2.53		$ 2.53
Fair value of options on grant date (in Dollars per share)							$ 1.87
Remaining options awarded vest							800,000
Issuance of shares authorized			600,000
Recognized compensation expenses (in Dollars)					$ 273	$ 63	$ 442	$ 395
Stock compensation expense for awards granted to directors (in Dollars)					25	$ 32	74	$ 32
Minimum [Member]
Stock-Based Compensation (Details) [Line Items]
Unrecognized compensation expense (in Dollars)					1,499		1,499
Maximum [Member]
Stock-Based Compensation (Details) [Line Items]
Unrecognized compensation expense (in Dollars)					$ 2,617		$ 2,617
2014 Stock Incentive Plan [Member]
Stock-Based Compensation (Details) [Line Items]
Exercise price (in Dollars per share)					$ 2.53		$ 2.53
Fair value of options on grant date (in Dollars per share)							$ 1.87
Shares reserved for company's employees				7,390,355
Options outstanding					2,601,674		2,601,674
Issuance of shares authorized	6,000,000
2014 Stock Incentive Plan [Member] \| Minimum [Member]
Stock-Based Compensation (Details) [Line Items]
Issuance of shares authorized			7,390,355
2014 Stock Incentive Plan [Member] \| Maximum [Member]
Stock-Based Compensation (Details) [Line Items]
Issuance of shares authorized			18,000,000
2006 Equity Incentive Plan [Member]
Stock-Based Compensation (Details) [Line Items]
Shares reserved for company's employees							1,720,000
Options outstanding					12,135		12,135
2006 Non-Employee Director Stock Option Plan [Member]
Stock-Based Compensation (Details) [Line Items]
Shares reserved for company's employees							700,000

Stock-Based Compensation (Details) - Schedule of stock options outstanding	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Range of Exercise Prices Between, Lower Limit	$ 3.01
	$ 3.01
Time Vesting Options
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Number Outstanding (in Shares) \| shares	1,813,809
Weighted Average Remaining Contractual Life	8 years 354 days
Weighted Average Exercise Price	$ 3.48
Options Exercisable (in Shares) \| shares	262,559
Time Vesting Options \| Range One [Member]
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Range of Exercise Prices Between, Lower Limit	$ 0.01
Range of Exercise Prices between, Upper Limit	$ 3.00
Number Outstanding (in Shares) \| shares	1,525,000
Weighted Average Remaining Contractual Life	9 years 240 days
Weighted Average Exercise Price	$ 2.52
Options Exercisable (in Shares) \| shares
Weighted Average Exercise Price
	0.01
Time Vesting Options \| Range Two [Member]
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Range of Exercise Prices Between, Lower Limit	3.01
Range of Exercise Prices between, Upper Limit	$ 7.50
Number Outstanding (in Shares) \| shares	184,830
Weighted Average Remaining Contractual Life	5 years 219 days
Weighted Average Exercise Price	$ 6.72
Options Exercisable (in Shares) \| shares	168,163
Weighted Average Exercise Price	$ 6.64
	3.01
Time Vesting Options \| Range Three [Member]
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Range of Exercise Prices	$ 7.51
Number Outstanding (in Shares) \| shares	103,979
Weighted Average Remaining Contractual Life	4 years 255 days
Weighted Average Exercise Price	$ 11.74
Options Exercisable (in Shares) \| shares	94,396
Weighted Average Exercise Price	$ 12.05
Performance Vesting Options [Member]
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Number Outstanding (in Shares) \| shares	800,000
Weighted Average Remaining Contractual Life	9 years 244 days
Weighted Average Exercise Price	$ 2.53
Options Exercisable (in Shares) \| shares
Performance Vesting Options [Member] \| Range One [Member]
Stock-Based Compensation (Details) - Schedule of stock options outstanding [Line Items]
Range of Exercise Prices Between, Lower Limit	$ 0.01
Range of Exercise Prices between, Upper Limit	$ 3.00
Number Outstanding (in Shares) \| shares	800,000
Weighted Average Remaining Contractual Life	9 years 244 days
Weighted Average Exercise Price	$ 2.53
Options Exercisable (in Shares) \| shares
Weighted Average Exercise Price
	$ 0.01

Stock-Based Compensation (Details) - Schedule of stock option activity	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Time Vesting Options [Member]
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items]
Options Outstanding, opening balance \| shares	313,860
Weighted Average Exercise Price, opening balance \| $ / shares	$ 8.06
Options Outstanding, Granted \| shares	1,580,000
Weighted Average Exercise Price, Granted \| $ / shares	$ 2.53
Options Outstanding, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Options Outstanding, Forfeited or expired \| shares	(80,051)
Weighted Average Exercise Price, Forfeited or expired \| $ / shares	$ 2.76
Options Outstanding, Ending balance \| shares	1,813,809
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 3.48
Performance Vesting Options [Member]
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items]
Options Outstanding, opening balance \| shares
Weighted Average Exercise Price, opening balance \| $ / shares
Options Outstanding, Granted \| shares	800,000
Weighted Average Exercise Price, Granted \| $ / shares	$ 2.53
Options Outstanding, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Options Outstanding, Forfeited or expired \| shares
Weighted Average Exercise Price, Forfeited or expired \| $ / shares
Options Outstanding, Ending balance \| shares	800,000
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 2.53

Stock-Based Compensation (Details) - Schedule of fair value of the options	9 Months Ended
	Sep. 30, 2020
Schedule of fair value of the options [Abstract]
Risk-free interest rate	0.66%
Expected term	6 years 3 months
Expected price volatility	89.18%
Dividend yield	0.00%

Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets $ in Millions	Sep. 30, 2020 USD ($)
Revenue Target [Member]
Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets [Line Items]
2020	$ 32,000,000.0
2021	35,000,000.0
2022	38,000,000.0
EBITDA Target [Member]
Stock-Based Compensation (Details) - Schedule of revenue and EBITDA targets [Line Items]
2020	2,200,000.0
2021	3,100,000.0
2022	$ 3,500,000.0

Significant Customers/vendors (Details)	3 Months Ended		9 Months Ended		12 Months Ended
Significant Customers/vendors (Details)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Accounts Receivable [Member]
Significant Customers/vendors (Details) [Line Items]
Number of major customers			2		1
Percentage from major customers			22.50%		18.50%
Revenue [Member]
Significant Customers/vendors (Details) [Line Items]
Number of major customers	1	2	1	2
Percentage from major customers	11.30%	23.20%	11.50%	22.50%
Accounts Payable [Member]
Significant Customers/vendors (Details) [Line Items]
Percentage from major customers			14.00%		50.00%
Number of major Vendor			1		1

Leases (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2020
Disclosure Text Block [Abstract]
Lease expiration period, description		Our leases have original lease periods expiring between 2020 and 2023.
Future commitments for payments	$ 587

Leases (Details) - Schedule of components of lease costs, lease term and discount rate - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Finance lease cost
Amortization of right-of-use assets	$ 17	$ 25
Interest	2	4
Operating lease cost	512	565
Total lease cost	$ 531	$ 594
Weighted Average Remaining Lease Term
Weighted Average Remaining Lease Term, Operating leases	3 years 73 days	3 years 219 days
Weighted Average Remaining Lease Term, Finance leases	328 days	1 year 73 days
Weighted Average Discount Rate
Weighted Average Discount Rate, Operating leases	10.00%	10.00%
Weighted Average Discount Rate, Finance leases	14.00%	13.50%

Leases (Details) - Schedule of maturities of lease liabilities $ in Thousands	Sep. 30, 2020 USD ($)
Operating Leases [Member]
Leases (Details) - Schedule of maturities of lease liabilities [Line Items]
Operating Leases, The remainder of 2020	$ 106
Operating Leases, 2021	310
Operating Leases, 2022	214
Operating Leases, 2023	210
Operating Leases, Thereafter
Operating Leases, Total undiscounted cash flows	840
Operating Leases, Less imputed interest	(110)
Operating Leases, Present value of lease liabilities	730
Finance Leases [Member]
Leases (Details) - Schedule of maturities of lease liabilities [Line Items]
Finance Leases, The remainder of 2020	4
Finance Leases, 2021	4
Finance Leases, 2022	1
Finance Leases, 2023
Finance Leases, Thereafter
Finance Leases, Total undiscounted cash flows	9
Finance Leases, Less imputed interest	(1)
Finance Leases, Present value of lease liabilities	$ 8

Leases (Details) - Schedule of cash flow information related to leases - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 512	$ 551
Operating cash flows from finance leases	2	1
Financing cash flows from finance leases	$ 17	$ 23

Stock-Based Compensation (Details) - Schedule of stock option activity	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Time Vesting Options [Member]
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items]
Options Outstanding, opening balance \| shares	313,860
Weighted Average Exercise Price, opening balance \| $ / shares	$ 8.06
Options Outstanding, Granted \| shares	1,580,000
Weighted Average Exercise Price, Granted \| $ / shares	$ 2.53
Options Outstanding, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Options Outstanding, Forfeited or expired \| shares	(80,051)
Weighted Average Exercise Price, Forfeited or expired \| $ / shares	$ 2.76
Options Outstanding, Ending balance \| shares	1,813,809
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 3.48
Performance Vesting Options [Member]
Stock-Based Compensation (Details) - Schedule of stock option activity [Line Items]
Options Outstanding, opening balance \| shares
Weighted Average Exercise Price, opening balance \| $ / shares
Options Outstanding, Granted \| shares	800,000
Weighted Average Exercise Price, Granted \| $ / shares	$ 2.53
Options Outstanding, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Options Outstanding, Forfeited or expired \| shares
Weighted Average Exercise Price, Forfeited or expired \| $ / shares
Options Outstanding, Ending balance \| shares	800,000
Weighted Average Exercise Price, Ending balance \| $ / shares	$ 2.53