Vislink Technologies, Inc 10-K for FY2021

Vislink Technologies, Inc. (VISL)

10-K 2022-03-31 For: 2021-12-31

Added on April 06, 2026

About this 10-K

Vislink Technologies, Inc filed this 10-K on March 31, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $33.88M; up 48.1% from $22.88M a year earlier
Net loss: $16.39M; compared with a net loss of $17.58M a year earlier

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Delaware		20-5856795
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class:		Name of each exchange on which registered:
Common Stock, par value $0.00001		The Nasdaq Capital Market

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	29
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Reserved	30
Item 7.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 8.	Financial Statements and Supplementary Data	41
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	41
Item 9A.	Controls and Procedures	42
Item 9B.	Other Information	43
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	43
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	44
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	44
Item 13.	Certain Relationships and Related Transactions, and Director Independence	44
Item 14.	Principal Accountant Fees and Services	44
PART IV
Item 15.	Exhibits, Financial Statement Schedules	45
SIGNATURES		49
FINANCIAL STATEMENTS		F-1

	●	Live video encoding, stream adaptation, decode and production solutions
	●	Remote production workflows
	●	Wireless cameras
	●	AI-driven automated production
	●	Ability to contribute video over:
	●	Bonded cellular (3G and 4G)
	●	Satellite
	●	Fiber
	●	Emerging networks, including 5G and Starlink

	●	Live internet video traffic is growing fast: from 2016 to 2021, there was a 15-fold increase in live video internet traffic (71.9% CAGR);
	●	The acceleration towards cloud-based remote production;
	●	The increasing demand for enhanced video content formats such as 4K, 8K, and 360-degree video; and
	●	The proliferation of new video transport capable networks such as 5G and Starlink.

	●	Self-Organizing Networks;
	●	R.F. Modulation;
	●	Compression (protocols, payload, signaling, etc.);
	●	Modulators/Demodulators;
	●	Antennas/Shielding;
	●	Wired and Wireless Networks;
	●	Media Access Control Protocols;
	●	Interference Mitigation;
	●	Cognition enabling over the air protocols (MAC layer);
	●	Wireless data compression;
	●	Dynamic Spectrum Access (DSA);
	●	Quality of Service; and
	●	Digital Broadcasting over Microwave Links.

	●	wear face-masks at all times while on company property,
	●	implemented temperature taking protocols,
	●	increased hygiene, cleaning, and sanitizing procedures at all locations,
	●	implemented social-distancing,
	●	implemented restrictions on visitors to our facilities,
	●	and we are limiting in-person meetings and other gatherings.

	●	Our financial statements included a disclosure regarding our liquidity and financial condition due to recurring operating losses and cash used from operations.
	●	If we cannot comply with Nasdaq’s applicable continued listing requirements or standards, Nasdaq could delist our Common Stock.
	●	We face risks related to COVID-19, which could significantly disrupt our operations and have a material adverse impact on us and our business.
	●	We may require additional capital in the future to develop and market new products. If we do not obtain any such additional financing, our business prospects, financial condition, and operating results will be adversely affected if required.
	●	Our industry is highly competitive, and we may not compete effectively.
	●	Defects or errors in our products and services or products made by our suppliers could harm our brand and relations with our customers and expose us to liability. If we experience product recalls, we may incur significant expenses and experience decreased demand for our products.
	●	We acknowledge material weaknesses in the controls and procedures of our financial reporting. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations, including timeliness, or result in material misstatements of our financial statements.
	●	We rely on key executive officers, and their knowledge of our business and technical expertise would be difficult to replace.
	●	We purchase some components, subassemblies, and products from a limited number of suppliers. The loss of these suppliers may substantially disrupt our ability to obtain orders and fulfill sales as we design and qualify new components.
	●	Our intellectual property protections may be insufficient to safeguard our technology appropriately.
	●	We may be subject to claims of intellectual property infringement or invalidity. Expenses incurred concerning monitoring, protecting, and defending our intellectual property rights could adversely affect our business.
	●	Enforcement of our intellectual property rights abroad, particularly in China, is limited, and it is often difficult to protect and enforce such rights.
	●	The intellectual property rights of others may prevent us from developing new products or entering new markets.
	●	We may be subject to infringement claims in the future.
	●	If our technology did not work and planned or were unsuccessful in developing and selling new products or penetrating new markets, our business and operating results would suffer.
	●	Demand for our defense-related products and products for emergency response services depends on government spending.
	●	Regulation of the telecommunications industry could harm our operating results and impending prospects.
	●	New regulations or standards or changes in existing laws or standards in the United States or internationally related to our products may result in unanticipated costs or liabilities, which could have a material adverse effect on our business, results of operations, and future sales, and could place additional burdens on the operations of our business.
	●	Our industry is subject to rapid technological change, and we must make substantial investments in new products, services, and technologies to compete successfully.
	●	At several of our annual stockholder meetings we failed to obtain ratification by our stockholders of specific proposals submitted for approval of our stockholders at prior annual meetings, which could be deemed defective corporate acts.

	●	the duration and scope of the pandemic,
	●	the disruption of the national and global economy,
	●	the span of the economic downturn,
	●	the laws, programs, actions, and vaccine mandate that federal, state, and local governments will enact or take,
	●	the possibility to which our clients’ businesses contract or fail,
	●	the applicability to which new regulations intended to help small and medium-sized businesses,
	●	the extent to which our operations are impacted by facility closures, remote work and/or infections,
	●	and how quickly and to what time normal economic and operating conditions can resume.

	●	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

	●	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements following generally accepted accounting principles and that receipts and expenditures of the Company are being made only by authorizations of its management and Board; and

	●	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on its financial statements.

	●	We did not perform an adequate risk assessment or monitor internal controls over financial reporting.

	●	With the acquisitions of IMT, Vislink, and MVP, there are risks related to the timing and accuracy of integrating information from various accounting and ERP systems. The Company has experienced delays in receiving information promptly from its subsidiaries.

	●	The COVID-19 pandemic delayed integrating the accounting and finance functions, enacted workforce reduction, and limited essential accounting personnel.

	●	additional review procedures within our accounting and finance department,
	●	the hiring of additional accounting and compliance staff when financial resources permit,
	●	implement application controls in our accounting system,
	●	engaging consultants to assist us in documenting and improving our system of internal controls, and
	●	implementing a suitable accounting framework.

	●	authorizing the Board to issue, without stockholder approval, preferred stock with rights senior to those of our Common Stock;
	●	limiting the persons who may call special meetings of stockholders; and
	●	they require advance notification of stockholder nominations and proposals.

	●	failure of the acquired business to achieve expected results, as well as the potential impairment of the acquired assets if operating results decline after acquisition;
	●	diversion of management’s attention;
	●	additional financing, if necessary and available, which could increase leverage and costs, dilute equity, or both;
	●	the potential adverse effect on our financial statements from the increase in goodwill and other intangibles;
	●	difficulties in integrating the operations, systems, technologies, products, and personnel of acquired companies;
	●	initial dependence on unfamiliar supply chains or relatively small supply partners;
	●	the potential loss of key employees, customers, distributors, vendors, and other business partners of the companies we acquire after the acquisition;
	●	the high cost and expenses of identifying, negotiating, and completing acquisitions;
	●	the integration of acquisitions requires significant time and resources; and
	●	risks associated with unanticipated events or liabilities.

	For the Years Ended
	December 31,
	2021			2020
Revenue	$	33,882		$	22,882
Cost of revenue and operating expenses
Cost of components and personnel		15,164			13,867
Inventory valuation adjustments		843			415
General and administrative expenses		22,039			17,024
Gain on lease termination		—			(21	)
Research and development		3,051			2,698
Loss on the abandonment of property and equipment		—			680
Impairment of inventory		—			3,801
Impairment of right-of-use assets		—			895
Impairment of goodwill		9,189			—
Amortization and depreciation		1,343			1,411
Total cost of revenue and operating expenses		51,629			40,770
Loss from operations		(17,747	)		(17,888	)
Other income (expenses)
Changes in fair value of derivative liabilities		22			8
Gain on settlement of related party obligations		—			331
Gain on settlement of debt		1,362			90
Other income		—			5
Interest expense, net		(29	)		(121	)
Total other income (expenses)		1,355			313
Net loss	$	(16,392)		$	(17,575	)

		Year Ended December 31, 2021				Year Ended December 31, 2020
Cash		$	36,231			$	5,190

	Year Ended December 31, 2021			Year Ended December 31, 2020
Net cash used in operating activities	$	(9,601	)	$	(14,354	)
Net cash used provided by in investment activities		(17,547	)		(258	)
Net cash provided by financing activities		58,312			17,998
Effect of exchange rate changes on cash		(123	)		67
Net increase in cash	$	31,041		$	3,453

	●	Due to our size and limited resources, we currently do not employ the appropriate number of accounting personnel to ensure (a) we maintain proper segregation of duties, (b) conduct a tolerable risk assessment; and

	●	Due to our size and limited resources, we have not adequately documented a complete assessment of the effectiveness of the design and operation of our internal control over financial reporting.

	●	may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
	●	may apply standards of materiality that differ from those of a reasonable investor; and
	●	were made only as specified dates in the agreements and subject to subsequent developments and changed circumstances.

Exhibit Number		Description of Exhibit
1.1		Sales Agreement, dated May 5, 2020, by and between Vislink Technologies, Inc. and A.G.P./Alliance Global Partners⁽¹⁾
3.1(i)		Amended & Restated Certificate of Incorporation ⁽²⁾
3.1(i)(a)		Amendment to Certificate of Incorporation filed June 11, 2014 ⁽³⁾
3.1 (i)(b)		Amendment to Certificate of Incorporation filed July 10, 2015 ⁽⁴⁾
3.1(i)(c)		Amended and Restated Certificate of Designation of Series B Convertible Preferred Stock ⁽⁵⁾
3.1(i)(d)		Certificate of Designation of Series C Convertible Preferred Stock ⁽⁶⁾
3.1(i)(e)		Certificate of Designation of Series D Convertible Preferred Stock ⁽⁷⁾
3.1(i)(f)		Certificate of Elimination for Series C Convertible Preferred Stock ⁽⁵⁾
3.1(i)(g)		Certificate of Elimination for Series B Convertible Preferred Stock ⁽⁸⁾
3.1(i)(h)		Amendment to Certificate of Incorporation filed June 10, 2016 ⁽⁸⁾
3.1(i)(i)		Certificate of Designation of Series E Convertible Preferred Stock ⁽⁹⁾
3.1(i)(j)		Certificate of Amendment to Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on February 11, 2019⁽¹⁰⁾
3.1(i)(h)		Certificate of Amendment to the Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on July 31, 2020⁽¹¹⁾
3.1(ii)		Third Amended & Restated Bylaws ⁽¹²⁾
4.1		Form of Common Stock Certificate of the Registrant ⁽¹³⁾
4.2		Form of Warrant Agreement by and between the Registrant and Continental Stock Transfer & Trust Company and Form of Warrant Certificate for the offering closed July 24, 2013 and August 19, 2013 ⁽¹⁴⁾
4.3		Form of Warrant ⁽¹⁵⁾
4.4		Form of Vislink Promissory Note ⁽¹⁶⁾
4.5		Form of Underwriters’ Warrant for February 2017 Offering ⁽¹⁷⁾
4.6		Form of Warrant for August 2017 Offering ⁽¹⁸⁾
4.7		Form of 6% Senior Secured Convertible Debenture⁽¹⁹⁾
4.8		Form of Common Stock Purchase Warrant⁽¹⁹⁾
4.9		Form of Amended and Restated 6% Senior Secured Debenture⁽²⁰⁾
4.10		Warrant Agreement, including Form of Common Warrant and Form of Pre-Funded Warrant from July 2019 Offering⁽²¹⁾
4.11*		Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
10.1		2013 Long Term Incentive Plan ⁽²²⁾
10.2		Forms of Agreement Under 2013 Long Term Incentive Plan ⁽²²⁾

Exhibit Number		Description of Exhibit
10.3		2015 Employee Stock Purchase Plan ⁽²³⁾
10.4		2015 Incentive Compensation Plan ⁽²³⁾
10.5		2016 Employee Stock Purchase Plan ⁽²⁴⁾
10.6		2016 Incentive Compensation Plan ⁽²⁴⁾
10.7		Amendment to 2016 Employee Stock Purchase Plan⁽²⁵⁾
10.8		Amendment to 2016 Incentive Compensation Plan⁽²⁶⁾
10.9		2017 Incentive Compensation Plan⁽²⁷⁾
10.10		Securities Purchase Agreement, dated August 15, 2017, between the Company and the Purchasers thereto ^(18)**
10.11		Form of Securities Purchase Agreement, dated May 29, 2018, by and among the Company and the purchaser signatories thereto^(19)**
10.12		Form of Security Agreement, dated May 29, 2018, by and among the Company and each of the secured parties thereto^(19)**
10.13		Form of Subsidiary Guarantee, dated May 29, 2018, by and among the Company, the purchasers under the Securities Purchase Agreement, and each of the Company’s subsidiaries^(19)**
10.14		Form of Registration Rights Agreement, dated May 29, 2018, by and among the Company and the purchasers under the Securities Purchase Agreement^(19)**
10.15		Form of Voting Agreement, each dated May 29, 2018, between the Company and each purchaser under the Securities Purchase Agreement ^(19)**
10.16		Employment Agreement by and between the Company and Carleton Miller, dated as of January 22, 2020⁽²⁸⁾
10.17		Notice of Grant of Stock Option for Time-Vested Options and Stock Option Agreement by and between the Company and Carleton Miller, dated as of January 22, 2020⁽²⁸⁾
10.18		Notice of Grant of Stock Option for Performance-Vested Options and Stock Option Agreement by and between the Company and Carleton Miller, dated as of January 22, 2020⁽²⁸⁾
10.19		Form of Separation Agreement to be executed by the Company and John Payne upon the conclusion of John Payne’s employment⁽²⁹⁾
10.20		Employment Agreement by and between the Company and Michael Bond, dated as of February 27, 2020(30)
10.21		Form of Separation Agreement to be executed by the Company and Roger G. Branton upon the conclusion of Roger G. Branton’s employment⁽³⁰⁾
10.22		Form of Indemnification Agreement by and between the Company and its officers and directors(31)
10.23		Non-Employee Director Compensation Policy⁽³²⁾
10.24		Form of Non-Employee Director Restricted Shares Agreement⁽³²⁾
14.1		Code of Ethics(33)
21.1		Subsidiaries of the Registrant⁽³⁴⁾
23.1*		Consent of Marcum LLP
31.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Schema
101.CAL		Inline XBRL Taxonomy Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Definition Linkbase
101.LAB		Inline XBRL Taxonomy Label Linkbase
101.PRE		Inline XBRL Taxonomy Presentation Linkbase
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*		Filed herewith
(1)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 5, 2020.
(2)		Filed as an Exhibit on Form S-1 with the SEC on October 23, 2013.
(3)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on June 13, 2014.
(4)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on July 20, 2015.
(5)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 10, 2016.
(6)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 26, 2015.
(7)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on April 27, 2016
(8)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 7, 2016.
(9)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on December 27, 2016.
(10)		Filed an Exhibit on Current Report on Form 8-K with the SEC on February 26, 2019.
(11)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 5, 2020.
(12)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 20, 2021.
(13)		Filed as an Exhibit on Form S-1/A with the SEC on May 21, 2013.
(14)		Filed as an Exhibit on Current Report to Form 8-K with the SEC on August 19, 2013.
(15)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 13, 2016.
(16)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 6, 2017.
(17)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 10, 2017.
(18)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on August 16, 2017.
(19)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on May 29, 2018.
(20)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on October 11, 2018.
(21)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on July 16, 2019.
(22)		Filed as an Exhibit on Form S-1 with the SEC on March 7, 2013.
(23)		Filed as an Exhibit on Annual Report on Form 10-K with the SEC on April 14, 2016.
(24)		Filed as an Exhibit on Form S-1 with the SEC on June 27, 2016
(25)		Filed as Appendix D on Definitive Schedule 14A with the SEC on May 22, 2017
(26)		Filed as Appendix E on Definitive Schedule 14A with the SEC on May 22, 2017
(27)		Filed as Appendix F on Definitive Schedule 14A with the SEC on May 22, 2017
(28)		Filed as an Exhibit on Current Report on Form 8-K/A with the SEC on January 24, 2020.
(29)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 27, 2020.
(30)		Filed as an Exhibit on Current Report on Form 8-K with the SEC on February 28, 2020.
(31)		Filed as an Exhibit on Annual Report on Form 10-K with the SEC on April 1, 2020.
(32)		Filed as an Exhibit on Quarterly Report on Form 10-Q with the SEC on November 12, 2020.
(33)		Filed as an Exhibit on Annual Report on Form 10-K with the SEC on March 6, 2014.
(34)		Filed as an Exhibit on Form S-1/A with the SEC on October 30, 2019.

	VISLINK TECHNOLOGIES, INC.

Date: March 31, 2022	By:	/s/ Carleton Miller
		Carleton Miller
		Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

Date: March 31, 2022	By:	/s/ Michael C. Bond
		Michael C. Bond
		Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

Signature	Title	Date

/s/ Carleton Miller	Chief Executive Officer	March 31, 2022
Carleton Miller	(Principal Executive Officer)

/s/ Michael C. Bond	Chief Financial Officer	March 31, 2022
Michael C. Bond	(Principal Financial and Accounting Officer)

/s/ Susan Swenson	Chairman of the Board of Directors	March 31, 2022
Susan Swenson

/s/ Jude T. Panetta	Director	March 31, 2022
Jude T. Panetta

/s/ James T. Conway	Director	March 31, 2022
James T. Conway

/s/ Ralph Faison	Director	March 31, 2022
Ralph Faison

/s/ Brian K. Krolicki	Director	March 31, 2022
Brian K. Krolicki

		Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688)		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations and Comprehensive Loss		F-4
Consolidated Statements of Changes in Stockholders’ Equity		F-5
Consolidated Statements of Cash Flows		F-6
Notes to Consolidated Financial Statements		F-8


											Accumulated
	Series D								Additional		Other
	Preferred Stock				Common Stock				Paid-In		Comprehensive			Treasury			Accumulated
	Shares		Amount		Shares		Amount		Capital		Income			Stock			Deficit			Total
Balance, December 31, 2019		—	$	—		3,594,548	$	—	$	261,871	$	207		$	(277	)	$	(252,572	)	$	9,229

Net loss		—		—		—		—		—		—			—			(17,575	)		(17,575	)

Unrealized loss on currency translation adjustment		—		—		—		—		—		(59	)		—			—			(59	)

Issuance of common stock in connection with:

Underwriting equity raises, net of offering costs		—		—		8,583,027		—		17,346		—			—			—			17,346

Exercise of common stock warrants		—		—		3,829,885		—		11		—			—			—			11

Exercise of cashless common stock warrants		—		—		5,225,913		—		—		—			—			—			—

Stock issuance commitments		—		—		148,917		—		330		—			—			—			330
Warrants issued in settlement agreement

Stock-based compensation		—		—		—		—		715		—			—			—			715

Balance, December 31, 2020		—	$	—		21,382,290	$	—	$	280,273	$	148		$	(277	)	$	(270,147	)	$	9,997

Net loss																		(16,392	)		(16,392	)

Unrealized loss on currency translation adjustment		—		—		—		—		—		(445	)		—			—			(445	)

Issuance of common stock in connection with:

Underwriting equity raises, net of offering costs		—		—		24,348,018		—		59,334		—			—			—			59,334

Exercise of common stock warrants		—		—		3,811		—		2		—			—			—			2

Exercise of cashless common stock warrants		—		—		6,250		—		—		—			—			—			—

Stock issuance commitments		—		—		87,720		—		200		—			—			—			200

Warrants issued in settlement agreement		—		—		—		—		74		—			—			—			74

Stock-based compensation		—		—		—		—		3,863		—			—			—			3,863

Balance, December 31, 2021		—	$	—		45,825,089	$	—	$	343,746	$	(297	)	$	(277	)	$	(286,539	)	$	56,633

	2021			2020
	Years Ended December 31,
	2021			2020
Cash flows used in operating activities
Net loss	$	(16,392	)	$	(17,575	)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on lease termination		—			(21	)
Gain on settlement of related party obligations		—			(331	)
Gain on settlement of debt		(1,362	)		(90	)
Loss on the abandonment of property and equipment		—			680
Stock-based compensation		3,863			715
Stock issuance commitments		200			330
Warrants issued in settlement agreement		74			—
Provision for bad debt		233			794
Recovery of bad debt		(310	)		—
Inventory valuation adjustments		843			415
Impairment of inventory		—			3,801
Amortization of right of use assets, operating assets		237			522
Impairment of right-of-use assets		—			895
Impairment of goodwill		9,189			—
Depreciation and amortization		1,343			1,411
Change in fair value of derivative liabilities		(22	)		(8	)
Changes in assets and liabilities
Accounts receivable		(3,611	)		1,539
Inventory		(3,187	)		(2,450	)
Prepaid expenses and other current assets		96			68
Accounts payable		(2,388	)		(2,747	)
Accrued expenses and interest expense		231			(315	)
Operating lease liabilities		(483	)		37
Deferred revenue and customer deposits		867			(1850	)
Deferred tax liabilities		978			—
Due to related parties		—			(174	)
Net cash used in operating activities		(9,601	)		(14,354	)
Cash flows used in investing activities
Cash acquired from MVP for acquisition		965			—
Cash used in MVP stock acquisition		(18,311	)		—
Cash used for property and equipment		(201	)		(258	)
Net cash used in investing activities		(17,547	)		(258	)
Cash flows provided in financing activities
Proceeds received from equity financings		62,914			18,546
Costs incurred in connection with equity financing		(3,580	)		(1,200	)
Proceeds from the exercise of common stock warrants		2			11
Principal payments in connection with working capital financing note		—			(108	)
Principal payments made on D & O notes payable		(1,024	)		(419	)
Proceeds received from PPP loan		—			1,168
Net cash provided in financing activities		58,312			17,998
Effect of exchange rate changes on cash		(123	)		67
Net increase in cash		31,041			3,453
Cash, beginning of the period		5,190			1,737
Cash, end of the period	$	36,231		$	5,190

	Years Ended December 31
	2021			2020
Supplemental disclosure of cash payments:
Cash paid during the period for interest	$	56		$	120

Supplemental disclosure of non-cash information:
Notes payable recognized on D & O Insurance policy (Note 11)	$	1,098		$	213
Common stock issued in connection with:
Services previously accrued	$	200		$	330
Warrants issued in settlement agreement		74			—
ROU assets and operating lease obligations recognized (Note 13):
Operating lease assets recognized	$	522		$	1,102
Less: non-cash changes to operating lease assets amortization
amortization		(237	)		(522	)
lease termination		—			(904	)
impairments		—			(157	)
ROU assets and operating lease obligations recognized	$	285		$	(481	)

Operating lease liabilities recognized	$	531		$	1,102
Less: non-cash changes to operating lease liabilities
accretion		(483	)		(512	)
lease termination		—			(553	)
Operating lease liabilities recognized	$	48		$	37

	Warranty Reserve
December 31, 2019	$	335,000
Warranty reserve expense		8,000
Warranty claims settled and true-up of accrual		(60,000	)
December 31, 2020	$	283,000
Warranty reserve expense		—
Warranty claims settled and true-up of accrual		(152,000	)
December 31, 2021	$	131,000

	●	As of December 31, 2021 – £1.351043 to $1.00; €0.839362 to £1.00
	●	The average exchange rate for the year ended December 31, 2021 – £1.375369 to $1.00; €0.850858 to £1.00
	●	As of December 31, 2020 – British Pounds $1.364900 to US$ 1.00
	●	The average rate for the year ended December 31, 2020 – British Pounds $1.28336 to the US $1.00

	●	Level 1 is defined as observable inputs such as quoted prices in active markets.
	●	Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
	●	Level 3 is defined as unobservable inputs in which little or no market data exists, requiring an entity to develop its assumptions.

	Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Assets (non-recurring):
Impaired inventory	$	—	$	—	$	3,800,000	$	3,800,000
Abandonment of property and equipment						1,700,000		1,700,000
Abandonment of right-of-use operating leases						1,100,000		1,100,000
	$	—	$	—	$	6,600,000	$	6,600,000

Liabilities:
Derivative liability	$	—	$	—	$	22,000	$	22,000
	$	—	$	—	$	22,000	$	22,000

	As Initially Reported			Measurement Period Adjustments			As Adjusted

Fair value of consideration transferred:
Cash	$	18,311,000		$	—		$	18,311,000
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	965,000		$	—		$	965,000
Accounts receivable, net		911,000			—			911,000
Inventories, net		2,534,000			1,231,000			3,765,000
Prepaid expense and other assets		625,000			—			625,000
Property and equipment, net		149,000			(112,000	)		37,000
Accounts payable		(507,000	)		—			(507,000	)
Accrued expenses		(551,000	)		—			(551,000	)
Customer deposits and deferred revenue		(293,000	)		—			(293,000	)
Deferred tax liabilities					978,000			978,000
Total identifiable net assets	$	3,833,000		$	2,097,000		$	5,930,000
Consideration paid	$	18,311,000		$	—		$	18,311,000
Total identifiable assets acquired		3,833,000			2,097,000			5,930,000
Excess of consideration paid over net assets acquired	$	14,478,000		$	(2,097,000	)	$	12,381,000
Preliminary allocation of the consideration paid in excess of the net assets acquired:
Trade name	$	730,000		$	70,688		$	800,688
Proprietary technology		1,850,000			282,749			2,132,749
Customer relationship		3,723,000			(1,508,003	)		2,214,997
Goodwill		8,175,000			1,013,566			9,188,566
Total intangible assets acquired	$	14,478,000		$	4,053,000		$	14,337,000

Intangible Asset	Useful Life	Amortization Method

Tradename	15 Years	Straight-line
Proprietary Technology	5 Years	Straight-line
Customer Relationships	10 Years	Straight-line
Goodwill	Indefinite	N/A