Rekor Systems (REKR) 10-K30 Mar 202019 FY Annual reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Mar. 30, 2020	Jun. 30, 2019
Document And Entity Information
Entity Registrant Name	Rekor Systems, Inc.
Entity Central Index Key	0001697851
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38338
Entity Common Stock, Shares Outstanding		22,768,757
Entity Public Float			$ 18,500,000
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 1,180	$ 2,069
Restricted cash and cash equivalents	461	609
Accounts receivable, net	4,831	2,976
Inventory	302	73
Other current assets, net	230	167
Current assets held for sale	3,226	2,636
Total current assets	10,230	8,530
Property and equipment, net	483	462
Right-of-use lease assets, net	782	0
Goodwill	6,336	1,402
Intangible assets, net	8,244	3,456
Deposits and other long-term assets	11	51
Long- term assets held for sale	2,906	4,154
Total assets	28,992	18,055
CURRENT LIABILITIES
Accounts payable and accrued expenses	4,971	3,437
Short-term borrowings	1,894	566
Notes payable, current portion	0	2,469
Lease liability, short term	302	0
Contract liabilities	749	207
Current liabilities held for sale	2,416	1,895
Total current liabilities	10,332	8,574
Notes payable	20,409	875
Lease liability, long term	667	0
Deferred rent	0	8
Contract liabilities, long term	775	0
Deferred tax liability	10	0
Long term liabilities held for sale	30	90
Total liabilities	32,223	9,547
Series A Cumulative Convertible Redeemable Preferred stock, $0.0001 par value, 505,000 shares authorized and 502,327 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively	5,804	5,052
Commitment and Contingencies
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock, $0.0001 par value, 30,000,000 shares authorized, 21,595,653 and 18,767,619 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively	2	2
Preferred stock, $0.0001 par value, 2,000,000 authorized, 505,000 shares designated as Series A and 240,861 shares designated as Series B as of December 31, 2019 and December 31, 2018, respectively	0	0
Series B Cumulative Convertible Preferred stock, $0.0001 par value, 240,861 shares authorized, issued and outstanding as of December 31, 2019 and December 31, 2018, respectively	0	0
Additional paid-in capital	19,371	15,518
Accumulated deficit	(28,408)	(12,064)
Total stockholders' (deficit) equity	(9,035)	3,456
Total liabilities and stockholders' (deficit) equity	$ 28,992	$ 18,055

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, issued	240,861	240,861
Preferred stock, outstanding	240,861	240,861
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	30,000,000	30,000,000
Common stock, issued	21,595,653	18,767,619
Common stock, outstanding	21,595,653	18,767,619
Series A
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	505,000	505,000
Preferred stock, issued	502,327	502,327
Preferred stock, outstanding	502,327	502,327
Series B
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	240,861	240,861
Preferred stock, issued	240,861	240,861
Preferred stock, outstanding	240,861	240,861

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Total revenue	$ 19,320	$ 20,054
Cost of revenue:
Total cost of revenue	9,058	9,978
Gross profit:
Gross profit	10,262	10,076
OPERATING EXPENSES:
General and administrative expenses	14,151	13,310
Selling and marketing expenses	2,222	1,758
Research and development expenses	1,429	131
Impairment of intangible assets	1,549	0
Operating expenses	19,351	15,199
Loss from operations	(9,089)	(5,123)
Other income (expense)
Loss on extinguishment of debt	(1,158)	0
Interest expense	(4,098)	(492)
Other expense	(20)	(65)
Total other expense	(5,276)	(557)
Loss before income taxes	(14,365)	(5,680)
Income tax provision	(47)	(29)
Net loss from continuing operations	(14,412)	(5,709)
Income (loss) from operations held for sale (including goodwill impairment of $1,022,000 in 2019)	(1,472)	6
Income tax provision from operations held for sale	0	0
Net income (loss) from operations held for sale	(1,472)	6
Net loss	$ (15,884)	$ (5,703)
Loss per common share from continuing operations - basic and diluted	$ (.78)	$ (0.44)
Income (loss) per common share from operations held for sale - basic and diluted	(.07)	0
Loss per common share - basic and diluted	$ (.85)	$ (0.44)
Weighted average shares outstanding
Basic and diluted	20,033,023	15,409,014
Technology
Revenue:
Total revenue	$ 5,469	$ 3,522
Cost of revenue:
Total cost of revenue	1,652	1,642
Gross profit:
Gross profit	3,817	1,880
Professional Services
Revenue:
Total revenue	13,851	16,532
Cost of revenue:
Total cost of revenue	7,406	8,336
Gross profit:
Gross profit	$ 6,445	$ 8,196

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Series B Preferred Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2017	14,463,364	240,861
Beginning balance, amount at Dec. 31, 2017	$ 1	$ 0	$ 12,343	$ (5,834)	$ 6,510
Adjustment to adopt new accounting guidance revenue recognition				(67)	(67)
Beginning balance, shares at January 1, 2018	14,463,364	240,861
Beginning balance, amounts at January 1, 2018	$ 1	$ 0	12,343	(5,901)	6,443
Stock-based compensation			465		465
Issuance of warrants			123		123
Issues of common stock, net of costs, shares	4,125,000
Issues of common stock, net of costs, amount	$ 1		2,796		2,797
Issuance of common stock for the extinguishment of warrants, shares	96,924
Issuance of common stock for the extinguishment of warrants, amount			134		134
Net common stock issued in Secure Education Consultants acquisition, shares	33,333
Net common stock issued in Secure Education Consultants acquisition, amount			163		163
Issuance related to note payable, shares	35,000
Issuance related to note payable, amount			126		126
Issuance upon exercise of stock options, shares	13,998
Issuance upon exercise of stock options, amount			23		23
Preferred stock dividends				(460)	(460)
Accretion of Series A preferred stock			(655)		(655)
Net loss				(5,703)	(5,703)
Ending balance, shares at Dec. 31, 2018	18,767,619	240,861
Ending balance, amount at Dec. 31, 2018	$ 2	$ 0	15,518	(12,064)	3,456
Stock-based compensation			446		446
Issuance of warrants in conjunction with notes payable			706		706
Exercise of cashless warrants in exchange for common stock, shares	815,290
Exercise of warrants in exchange for common stock, shares	116,376
Exercise of warrants in exchange for common stock, amount			103		103
Common stock issued in OpenALPR Technology acquisition, shares	600,000
Common stock issued in OpenALPR Technology acquisition, amount			397		397
Issuance of common stock pursuant to at the market offering net, shares	1,292,730
Issuance of common stock pursuant to at the market offering net, amount			2,949		2,949
Exercise of warrants related to series A preferred stock, shares	3,638
Exercise of warrants related to series A preferred stock, amount			4		4
Preferred stock dividends				(460)	(460)
Accretion of Series A preferred stock			(752)		(752)
Net loss				(15,884)	(15,884)
Ending balance, shares at Dec. 31, 2019	21,595,653	240,861
Ending balance, amount at Dec. 31, 2019	$ 2	$ 0	$ 19,371	$ (28,408)	$ (9,035)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations	$ (14,412)	$ (5,709)
Net income (loss) from operations held for sale	(1,472)	6
Net loss	(15,884)	(5,703)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	348	309
Amortization of right-of-use lease asset	211	0
Share-based compensation	446	465
Amortization of financing costs	1,101	94
Warrant expense	0	134
Deferred rent	0	(11)
Change in fair value of derivative liability	0	(78)
Amortization of intangible assets	1,308	738
Impairment of intangible assets	1,549	0
Impairment of investment	0	262
Allowance for other receivables	0	135
Loss on extinguishment of debt	1,158	0
Loss on abandonment of lease	70	0
Provision for deferred taxes	10	0
Loss on sale of Secure Education Consultants	3	0
Changes in operating assets and liabilities:
Accounts receivable	(5,101)	733
Inventory	(229)	83
Deposits and other long-term assets	40	(16)
Other current assets, net	(50)	52
Accounts payable and accrued expenses	954	(289)
Contract liabilities	929	22
Lease liability	(102)	0
Net cash used in operating activities continuing operations	(11,767)	(3,076)
Net cash (used in) provided by operating activities, held for sale operations	(9,565)	1,025
Net cash used in operating activities	(21,332)	(2,051)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of note receivable	0	1,475
Proceeds from sale of Secure Consultants	250	0
Capital expenditures	(806)	(1,003)
Net cash (used in) provided by investing activities, continuing operations	(556)	472
Net cash used in investing activities - held for sale operations	(7)	(77)
Net cash (used in) provided by investing activities	(563)	395
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	5,463	41,168
Repayments of short-term borrowings	(611)	(43,171)
Net proceeds from notes payable	3,839	2,000
Net proceeds from exercise of options	0	23
Net proceeds from exercise of warrants	103	0
Net proceeds from exercise of warrants associated to series A preferred stock	4	0
Net proceeds from issuance of common stock	0	2,797
Net proceeds from at-the-market agreement	2,949	0
Payment of preferred dividends	(108)	(345)
Payment of financing costs	0	(63)
Net cash provided by financing activities continuing operations	11,639	2,409
Net cash provided by financing activities held for sale operations	9,354	58
Net cash provided by financing activities	20,993	2,467
Net decrease in cash, cash equivalents and restricted cash, continuing operations	(684)	(195)
Net increase in cash, cash equivalents and restricted cash and cash equivalents held for sale operations	(218)	1,006
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents	(902)	811
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period	2,768	1,957
Cash, cash equivalents and restricted cash and cash equivalents at end of period	1,866	2,768
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents:
Cash and cash equivalents at end of period - continuing operations	1,180	2,069
Restricted cash and cash equivalents at end of period - continuing operations	461	609
Cash and cash equivalents at end of period held for sale operations	225	90
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$ 1,866	$ 2,768

BUSINESS AND SIGNIFICANT ACCOUN

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2019
Accounting Policies [Abstract]
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	Rekor Systems, Inc. (the “Company” or “Rekor”), formally known as Novume Solutions, Inc. (Novume), was formed in February 2017 to effectuate the mergers of, and become a holding company for KeyStone Solutions, Inc. (“KeyStone”) and Rekor Recognition Systems, Inc. (“Rekor Recognition”), formally known as Brekford Traffic Safety, Inc. (“Brekford”). On February 28, 2019, the Company renamed Brekford to Rekor Recognition Systems, Inc. For narrative purposes, all references to Brekford before February 28, 2019 are to Brekford Traffic Safety, Inc. and to Rekor Recognitions Systems, Inc. on and after February 28, 2019. Rekor is a leader in the field of vehicle identification and management systems driven by leading edge advances in artificial intelligence “AI”. In development for over five years using AI processes, including machine learning algorithms, the Company’s core software enables the creation of more powerful and capable vehicle recognition systems that can be deployed at a fraction of the cost of traditional vehicle recognition systems. The software enables a wider field of view, greater light sensitivity, recognitions at faster speeds and the ability to identify the color, make and type of a vehicle as well as direction of travel. These capabilities are particularly useful in solving a wide variety of real-world roadway and vehicle related challenges. In addition, the reductions in cost have opened up a number of new uses for vehicle recognition technology that were not previously cost effective. The Company currently provides products and services for governmental organizations, for large and small businesses and for individuals throughout the world. Customers are currently using the Company’s products or services in over 70 countries, with offerings for smart cities, public safety, security, transportation, parking and logistics. Currently, the Company’s business activities also include providing professional services in the government contracting, aviation and aerospace industries. As part of the development of a new line of products for the public safety and security markets, the Company acquired industry leading vehicle recognition software in March 2019. In connection with this acquisition, the Company determined that its resources are best concentrated on vehicle recognition products and services and have reorganized and retooled its product development, business development and administrative resources, with increasing emphasis on the technology area. The Board of Directors has also authorized management to explore opportunities for the sale of the Company’s professional services businesses. In keeping with the shift in resources and strategic direction that this represents, the Company has reorganized its financial reporting into two business segments: the Technology Segment and the Professional Services Segment. This reporting segmentation reflects the Company’s separate focus on and expectations for technology products and services versus professional services. On March 29, 2019, the Company announced that its Board of Directors approved changing the Company’s name to Rekor Systems, Inc. This name change was a result of the Company’s increased focus on technology products and services, and aligns with the renaming of Brekford Traffic Safety, Inc. to Rekor Recognition Systems, Inc. In connection with this name change, the Company changed: ● the ticker symbol for the Company’s common stock on the Nasdaq Stock Market to “REKR” and the CUSIP number for the common stock to 759419 104; ● the ticker symbol for Company’s Series A Preferred Stock on the OTC Markets OTCQB exchange to “REKRP” and the CUSIP number for Company’s Series A Preferred Stock to 759419 203; and ● the ticker symbol for warrants on the OTC Markets OTCQB exchange to “REKRW” and the CUSIP number for the warrants to 759419 112. Technology Segment. Since the OpenALPR Technology Acquisition, the Company has expanded its vehicle recognition product and service lines into a much broader range of customer segments, starting with public safety. The Company shifted from a perpetual licensing model to a subscription-based model, rebranded the software suites as “Watchman” and “Car-Check” and released several packaged hardware and software solutions with preloaded versions of each of these vehicle recognition engines. By the end of 2019, the Company had a portfolio of more than ten products, permitting it to offer full-scale vehicle recognition services for nearly any large or small public agency, commercial or residential setting. Rekor’s software currently has the capability to analyze multi-spectral images and/or video streams produced by nearly any Internet Protocol security camera and concurrently extract license plate data by state from more than 70 countries, in addition to the vehicle’s make, color, type and direction of travel. When combined with speed optimized code, parallel processing capability and best-in-class accessories, such as cameras and communications modules, the software captures license plate data and vehicle characteristics at extremely high vehicle speeds with a high degree of accuracy, even in unusually difficult conditions, such as low lighting, poor weather, extreme camera viewing angles, and obstructions. Prior to the development of the Company’s vehicle identification software, highly accurate results were not available using a typical Internet Protocol camera. The Company believes that the ability to use less expensive hardware will change the dynamics of the existing public safety market, enabling the creation of increasingly robust networks with cameras at more locations. In addition, the Company expects the cost advantages and high degree of accuracy to create competitive advantages in tolling systems and logistics operations that currently rely on complex radio frequency identification (“RFID”) systems. The Company also expects the lower costs, superior distance and field of view capabilities and the ability to capture additional vehicle information, such as direction, color, make and type of vehicle, to open opportunities in other market segments, such as parking operations, school safety and retail customer loyalty programs; and particularly smart cities and smart roadways. Smart roadway systems, sometimes referred to as smart transport or intelligent transport systems (“ITS”), inclusive of parking management and guidance, passenger The Company’s vision is “AI with a Purpose.” The Company intends to evolve beyond vehicle recognition for public safety markets into the recognition and analysis of vehicle activities (inclusive of motion and behaviors), to develop systems to identify unsafe situations (e.g. wrong way driving, pedestrian on roadway, etc.) and optimize traffic flows, and develop numerous other data driven applications centered around vehicle knowledge. Professional Services Segment. Basis of Consolidation The consolidated financial statements include the accounts of Rekor Systems, Inc., the parent company, and its wholly owned subsidiaries AOC Key Solutions, Inc., Rekor Recognition Systems, Inc., Novume Media, Inc., Firestorm Solutions, LLC, Firestorm Franchising, LLC, Global Technical Services, Inc., Global Contract Professionals, Inc. and OpenALPR Software Solutions, LLC (collectively, the “Company”). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission (“SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the prior year's financial statements have been reclassified to conform to the current year's presentation. Beginning in the second quarter of 2019, sales and marketing expenses and research and development expenses have been presented separately from general and administrative expenses on the consolidated statements of operations, whereas in prior periods these amounts were included in one caption titled selling, general and administrative expenses. Amounts for the period ending December 31, 2018, have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments necessary for a fair presentation for the periods presented have been reflected as required by Regulation S-X, Rule 10-01. All necessary adjustments are of a normal, recurring nature. Held for Sale Operations During the third quarter of 2019, the Company began to separately report the results of Global Technical Services, Inc. and Global Contract Professionals, Inc. (together “Global”), the Company’s wholly owned subsidiaries, including substantially all of the assets and liabilities comprising Global, as operations held for sale. The Company is reporting the operating results and cash flows of Global as operations held for sale, and thus they have been excluded from continuing operations and segment results for all periods presented. Prior to the third quarter of 2019, the operating results for Global were presented in the Professional Services Segment. The assets and liabilities of Global are presented as current and long-term assets and liabilities held for sale in the consolidated balance sheets and its results are presented as income (loss) from operations held for sale in the consolidated statement of operations. In cases where the carrying value amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Due to the held for sale classification of Global, certain amounts have been reclassified in order to conform to the current period presentation. Interest on debt that is expected to be assumed by the buyer as a result of the sale transaction has be allocated to operations that are classified as held for sale. The Company does not expect to assume debt as a result of the sale of Global. For the years ended December 31, 2019 and 2018 interest allocated to operations held for sale was $294,000 and $117,000, respectively. Long-lived assets and intangible assets to be sold will be recovered through sale and not through future operations. Therefore, long-lived assets are not depreciated or amortized once they are classified as held for sale. See Note 3 for additional information regarding the Company's held for sale operations. Going Concern Assessment Beginning with the year ended December 31, 2018 and all annual and interim periods thereafter, management will assess going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans and external bank lines of credit, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems it probable that those implementations can be achieved and that management has the proper authority to execute them within the look-forward period. The Company has generated losses since its inception in February 2017 and has relied on cash on hand, external bank lines of credit, the sale of a note, proceeds from common stock, debt financing and a public offering of its common stock to support cashflow from operations. The Company attributes losses to merger costs, public company corporate overhead and non-capital expenditures consequent to the Company’s change in strategic direction.. As of and for the year ended December 31, 2019, the Company had a net loss from continuing operations of $14,412,000 and a working capital deficit of $912,000. The Company's net cash position was decreased by $902,000 for the year ended December 31, 2019 due to the net loss from operations, offset by the net proceeds of $3,839,000 from senior secured notes, the net proceeds of $2,949,000 from the At-the-Market Agreement and the net proceeds from the secured borrowing arrangement of $5,463,000. Management believes that based on relevant conditions and events that are known and reasonably knowable, its current forecasts and projections, for one year from the date of the filing of the consolidated financial statements in this Annual Report on Form 10-K, indicate the Company’s ability to continue operations as a going concern for that one-year period. The Company is actively monitoring its operations, the cash on hand and working capital. Additionally, as of December 31, 2019, the Company believes it has access to raise up to $11,727,000 through the At Market Issuance Sales Agreement (the “Sales Agreement”) he The Company’s ability to generate positive operating results and complete the execution of its business strategy will depend on (i) its ability to maintain timely collections from existing customers in, as well as continue the growth of, its Technology Segment, (ii) timely completion of the disposition of the businesses in its Professional Services Segment, (iii) the continued performance of its contractors, subcontractors and vendors, (iv) its ability to maintain and build good relationships with its lenders and financial intermediaries, (v) its ability to meet debt covenants or obtain waivers in case of noncompliance and (vi) the stability of the world economy and global financial markets. To the extent that events outside of the Company’s control have a significant negative impact on economic and/or market conditions, they could affect payments from customers, services and supplies from vendors, its ability to continue to secure new business, raise capital, complete the sale of its assets held for sale in a timely fashion and otherwise, depending on the severity of such impact, materially adversely affect its operating results. Rounding Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000, unless otherwise indicated. Concentration of Risk The Company places its temporary cash investments with higher rated quality financial institutions located in the United States (“U.S.”). As of December 31, 2019, and 2018, the Company had deposits from continuing operations totaling $1,641,000 and $2,678,000, respectively, in one and three U.S. financial institutions that were federally insured up to $250,000 per account, respectively. The Company has a market concentration of revenue and accounts receivable, from continuing operations, in its Professional Services Segment related to its customer base. Company A accounted for 20% and 19% of the Company’s total revenues for the years ended December 31, 2019 and 2018, respectively. Company B accounted for 17% and less than 10% of the Company’s total revenues for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, accounts receivable from Company A and Company B totaled $81 of the consolidated accounts receivable balance. As of December 31, 2018, Company A and Company B accounted for $1,043,000, or 35%, and $483,000, or 16%, respectively, of the consolidated accounts receivable balance. No other single customer accounted for more than 10% of the Company’s consolidated revenue for the year ended December 31, 2019 or consolidated accounts receivable balance as of December 31, 2019. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with the maturity of three months or less to be cash equivalents. Cash subject to contractual restrictions and not readily available for use is classified as restricted cash and cash equivalents. The Company’s restricted cash balances are primarily made up of cash collected on behalf of certain client jurisdictions. Restricted cash and cash equivalents for these client jurisdictions as of December 31, 2019 and 2018 were $461,000 and $609,000, respectively, and correspond to equal amounts of related accounts payable and are presented as part of accounts payable and accrued expenses in the accompanying consolidated balance sheets. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its clients’ financial condition, and the Company generally does not require collateral. The Company maintains an allowance for doubtful accounts at an amount estimated to be sufficient to cover the risk of collecting less than full payment of the receivables. At each balance sheet date, the Company evaluates its receivables and assess the allowance for doubtful accounts based on specific customer collection issues and historical write-off trends. After all reasonable attempts to collect an account receivable have failed, the amount of the receivable is written off against the allowance. Based on the information available, the Company determined that an allowance for loss of $48,000 and $24,000 was required at December 31, 2019 and 2018, respectively. Inventory Inventory principally consists of parts held temporarily until installed for service. Inventory is valued at the lower of cost or market value. The cost is determined by the lower of first-in, first-out (“FIFO”) method, while market value is determined by replacement cost for components and replacement parts. Property and Equipment Property and equipment are stated at cost or fair value at acquisition date for assets obtained through business combinations, less accumulated depreciation. Depreciation expense is classified within the corresponding operating expense categories on the consolidated statements of operations. Depreciation is recorded on the straight-line basis over the following estimated lives: Class of assets Useful life Furniture and fixtures 2 - 10 years Office equipment 2 - 5 years Leasehold improvements Shorter of asset life or lease term Automobiles 3 - 5 years Camera systems 3 years Repairs and maintenance are expensed as incurred. Expenditures for additions, improvements and replacements are capitalized. Software Development Costs Research and development costs to develop software to be sold, leased or marketed are expensed as incurred up to the point of technological feasibility for the related software product. Capitalized internally developed software costs, net, not yet placed in service were $966,000 and $829,000 as of December 31, 2019 and 2018, respectively. In 2019, the Company placed in service $232,000 of capitalized development costs related to software to be sold, leased or marketed. Software developed for internal use, with no substantive plans to market such software at the time of development, are capitalized and included in intangible assets, net in the consolidated balance sheets. Costs incurred during the preliminary planning and evaluation and post implementation stages of the project are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. In 2019, the Company capitalized $91,000 of development costs related to internal use software. In 2018, capitalized costs related to software developed for internal use were immaterial. Leases On January 1, 2019 the Company adopted Accounting Standard Codification (“ASC”) Topic 842, Leases ("ASC 842"), using the optional transition method whereby the Company applied the new lease requirements under Accounting Standards Update (“ASU”) 2016-02 through a cumulative-effect adjustment, which after completing the Company’s implementation analysis, resulted in no adjustment to its January 1, 2019 beginning retained earnings balance. On January 1, 2019, the Company recognized $921,000 of right of use (“ROU”) operating lease assets and $951,000 of operating lease liabilities, including noncurrent operating lease liabilities of $778,000, as a result of adopting this standard. The difference between ROU operating lease assets and operating lease liabilities was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. The new standard provides several optional practical expedients for use in transition. The Company elected to use what the Financial Accounting Standard Board ("FASB") has deemed the “package of practical expedients,” which allows the Company not to reassess the Company’s previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. The ASU also provided several optional practical expedients for the ongoing accounting for leases. The Company has elected the short-term lease recognition exemption for all leases that qualify, meaning that for leases with terms of twelve months or less, the Company will not recognize ROU assets or lease liabilities on the Company’s consolidated balance sheets. Additionally, the Company has elected to use the practical expedient to not separate lease and non-lease components for leases of real estate, meaning that for these leases, the non-lease components are included in the associated ROU asset and lease liability balances on the Company’s consolidated balance sheets. The comparative periods have not been restated for the adoption of ASU 2016-02. The Company determines if an arrangement contains a lease and the classification of that lease, if applicable, at inception. Operating leases are included in operating lease ROU assets, operating lease liabilities and operating lease liabilities (net of current portion) in the consolidated balance sheets. The Company does not currently have any finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments under the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The implicit rate within the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determined the incremental borrowing rate for each lease using the Company’s current borrowing rate, adjusted for various factors including level of collateralization and term to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments, offset by lease incentives. Certain of the Company’s leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain the Company will exercise that option. An option to terminate is considered unless it is reasonably certain the Company will not exercise the option. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Business Combination Management conducts a valuation analysis on the tangible and intangible assets acquired and liabilities assumed at the acquisition date thereof. During the measurement period, which may be up to one year from the Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The Company allocates a portion of the purchase price to the fair value of identifiable intangible assets. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management. The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill. Goodwill and Other Intangibles Goodwill represents the excess of the fair value of consideration transferred in a business combination over the fair value of tangible and intangible assets acquired, net of the fair value of liabilities assumed. Goodwill is tested for impairment within one year of acquisitions or annually as of October 1, and whenever indicators of impairment exist. In testing goodwill for impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, the Company will perform a two-step impairment test. The Company will test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on the Company’s best estimate of future net sales and operating expenses, based primarily on expected growth and general economic conditions. Based on the annual impairment test the Company concluded that the fair value of each of its reporting units exceeded its respective carrying value. Identifiable intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Identifiable intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Except for goodwill, the Company does not have any intangible assets with indefinite useful lives. During the second quarter of 2019 the Company wrote-off $1,549,000 of intangible assets associated with the Company's wholly owned subsidiaries Firestorm Solutions, LLC, Firestorm Franchising LLC, Secure Education Consultants and BC Management, Inc. (collectively, “Firestorm”). In the fourth quarter of 2019, the Company recorded non-deductible goodwill impairment charge of $1,022,000, related to the Company’s Global subsidiaries, which are classified as operations held for sale. The impairment charges were non-cash in nature and did not affect the Company’s liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company’s debt agreements. See Note 8 “Intangible Assets” for information regarding the Company’s goodwill impairment charges. Revenue Recognition The Company derives its revenues substantially from two sources: (1) license and subscription fees for software and related products and services, and (2) professional services to clients. Revenue is recognized upon transfer of control of promised products and services to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. If the consideration promised in the contract includes a variable amount, for example maintenance fees, the Company includes an estimate of the amount it expects to receive for the total transaction price, if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through application of the following steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The following table presents a summary of revenue: Year ended December 31, 2019 2018 Technology Automated traffic safety enforcement $ 3,403 $ 3,413 Licensing and subscription revenue 2,066 - Other revenue - 109 Total Technology revenue 5,469 3,522 Professional Services Consulting and technical support services 13,827 16,435 Franchising Services 24 97 Total Professional Services revenue 13,851 16,532 Total revenue $ 19,320 $ 20,054 Technology Revenues The revenues for technology products and services are from fees that provide customers with software licenses and related support and service fees for various public safety services. In March 2019, the Company acquired substantially all of the assets of a software development company, OpenALPR Technologies, Inc. The software acquired from this acquisition and subsequently developed by the Company have provided the basis for the Company’s licensing and subscription revenue. Licensing and subscription, include services which operate in many installations with a high accuracy rate, include a web server, self-managed database, and access to a powerful, cross-platform application programming interface. The software employs a convolutional neural network architecture to classify images and features include seamless video analysis and data analytics. Current customers include law enforcement agencies, highway authorities, parking system operators, private security companies, and wholesale and retail operations supporting logistics and customer loyalty programs. During the second quarter of 2019, the Company changed its method of selling in the Technology Segment from perpetual software licenses, with associated maintenance services, to service subscriptions of limited duration. These subscriptions give the customer a license to use the latest version of the software only during the term of the subscription. Revenue is generally recognized ratably over the contract term. This change is expected to impact the Company's revenue in the short term. However, the amount of contract revenue received over the long-term impact is expected to be relatively consistent. The Company’s subscription services arrangements are non-cancelable and do not contain refund-type provisions. Revenue is recognized ratably over the licensing or subscription term. Automated traffic safety enforcement arrangements provide traffic safety systems to a number of municipalities in North America. These systems include hardware that identifies red light and school safety zone traffic violations and software that captures and records forensic images, analyses the images to provide data and supports citation management services. The Company also provides an enterprise parking enforcement solution that the Company licenses to parking management companies and municipalities. Revenue is recognized monthly based on the number of camera systems that are operated, or the number of citations issued by the relevant municipality. Professional Services Revenues Consulting and Technical Support Services is primarily comprised of government contracting support services that assist government contractors with critical aspects of their business. These services include market intelligence and opportunity identification; capture and strategic advisory; proposal strategy and development; teaming support; and managed human capital services. The Company’s services also help commercially focused firms gain entry into the government contracting market. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts, or ratably over the contract term for fixed price contracts with subscription services. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price, which is determined based on the Company’s overall pricing objectives, taking into consideration market conditions and other factors. A performance obligation is a promise in a contract with a customer to transfer services that are distinct. The performance obligations that are not yet s

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	12 Months Ended
BUSINESS ACQUISITIONS	Dec. 31, 2019
Business Combinations [Abstract]
BUSINESS ACQUISITIONS	Secure Education Consultants Acquisition On January 1, 2018, the Company completed its acquisition of certain assets of Secure Education Consultants through Firestorm. Consideration paid as part of this acquisition included: $100,000 in cash; 33,333 shares of Rekor common stock valued at $163,000; warrants to purchase 33,333 shares of Rekor common stock, exercisable over a period of five years, at an exercise price of $5.44 per share, valued at $66,000; and warrants to purchase 33,333 of Rekor common stock, exercisable over a period of five years, at an exercise price of $6.53 per share, valued at $57,000. The Company recorded $386,000 of customer relationships to intangible assets. The table below shows the final breakdown related to the Secure Education Consultants acquisition (dollars in thousands): Cash paid $ 100 Common stock issued 163 Warrants issued, at $5.44 66 Warrants issued, at $6.53 57 Total consideration 386 Less intangible and intellectual property (386 ) Net goodwill recorded $ - On June 1, 2019, the Company sold all its interest in Secure Education Consultants for consideration of $250,000. As a result of the Secure Education Consultants sale, the Company disposed of $249,000 of net intangible assets, $58,000 of accounts receivables, and $54,000 of accounts payables. This resulted in a loss of $3,000 that is presented as part of general and administrative expenses in the accompanying consolidated statement of operations. OpenALPR Technology Acquisition On March 12, 2019, the Company completed the acquisition of certain assets and assumed certain liabilities of OpenALPR Technology, Inc. (the “OpenALPR Technology Acquisition”). Consideration paid as part of the OpenALPR Technology Acquisition was: $7,000,000 in cash, subject to adjustment after closing; 600,000 shares of Rekor common stock, valued at $397,000; and $5,000,000 of the 2019 Promissory Notes (see Note 9) principal amount, together with an accompanying warrant to purchase 625,000 shares of Rekor common stock, exercisable over a period of five years, at an exercise price of $0.74 per share, valued at $208,000 (see Note 14). The purchase price allocation to the assets acquired and liabilities assumed based on fair values as of the acquisition date. Since the OpenALPR Technology Acquisition occurred on March 12, 2019, the results of operations including the OpenALPR Technology Acquisition from the date of acquisition have been included in the Company’s consolidated statement of operations for the year ended December 31, 2019. The final purchase price allocation of the OpenALPR Technology Acquisition is as follows: intangible assets of $7,436,000 and goodwill of $4,934,000 along with net assets acquired of $415,000, and contract obligations assumed of $388,000. The table below shows the breakdown related to the final purchase price allocation for the OpenALPR Technology Acquisition (dollars in thousands): Accounts receivable, net $ 381 Other current assets, net 13 Property and equipment, net 21 Contract liabilities (388 ) Net assets acquired 27 Less intangible assets 7,436 Consideration paid (12,397 ) Net goodwill recorded $ 4,934 Cash consideration $ 7,000 Note payable 5,000 Common stock consideration 397 Total acquisition consideration $ 12,397 During the year ended December 31, 2019, $2,055,000 of revenue was attributed to the OpenALPR Technology Acquisition, which was reported in the consolidated income statement under the Technology Segment. Hill Employment Agreement On November 14, 2018, concurrent with the execution of the OpenALPR Purchase Agreement, the Company entered into an employment agreement with Matthew Hill (the “Hill Employment Agreement”) which became effective as of March 12, 2019, the closing date of the OpenALPR Technology Acquisition. Operations of Combined Entities The following unaudited pro forma combined financial information gives effect to the OpenALPR Technology Acquisition as if it was consummated as of January 1, 2018. This unaudited pro forma financial information is presented for information purposes only and is not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2018 or to project potential operating results as of any future date or for any future periods. Year Ended December 31, 2019 2018 (Dollars in thousands, except per share data) Revenue: Technology $ 6,438 $ 5,235 Professional Services 13,851 16,532 Total revenue from continuing operations 20,289 21,767 Net loss from continuing operations (13,604 ) (4,721 ) Basic and diluted earnings (loss) per share $ (0.74 ) $ (0.36 ) Basic and diluted number of shares 20,129,985 16,009,014

OPERATIONS HELD FOR SALE

OPERATIONS HELD FOR SALE	12 Months Ended
OPERATIONS HELD FOR SALE	Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	In September 2019, the Company determined that the Global business met the criteria for held for sale accounting because it expects to complete the sale of Global during the next 12 months. Historically, Global has been presented as part of the Professional Services Segment. The pending dispositions are a result of the Company’s strategic decision to concentrate resources on the development of its Technology Segment and will result in material changes in the Company's operations and financial results. As a consequence, the Company is reporting the operating results and cash flows of Global as held for sale, including for all prior periods reflected in consolidated financial statements and these notes. Pursuant to ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations, the results of operations from Global for the year ended December, 2019 and 2018 has been classified as held for sale and presented as part of income (loss) from operations held for sale in the accompanying consolidated statements of operations presented herein. The assets and liabilities also have been classified as held for sale under the line captions of current assets held for sale and current liabilities held for sale in the accompanying consolidated balance sheets as of December 31, 2019 and December 31, 2018. The assets and liabilities classified as held for sale operations in the accompanying consolidated financial statements as of December 31, 2019 and December 31, 2018 are shown below (dollars in thousands): Year Ended December 31, 2019 2018 ASSETS Cash and cash equivalents $ 225 $ 90 Accounts receivable, net 2,763 2,289 Other current assets, net 238 257 Current assets held for sale 3,226 2,636 Property and equipment, net 113 176 Right-of-use lease assets, net 130 - Goodwill 669 1,691 Intangible assets, net 1,994 2,208 Deposits and other long-term assets - 79 Total long-term assets held for sale 2,906 4,154 Total assets held for sale $ 6,132 $ 6,790 LIABILITIES Accounts payable and accrued expenses $ 461 $ 800 Short-term borrowings 1,842 1,095 Lease liability, short-term 113 - Total current liabilities held for sale 2,416 1,895 Other long-term liabilities - 90 Lease liability, long-term 30 - Total long-term liabilities held for sale 30 90 Total liabilities held for sale $ 2,446 $ 1,985 The major components of the operations held for sale, net of tax, are presented in the consolidated statements of operations below (dollars in thousands): Year Ended December 31, 2019 2018 Revenue $ 26,207 $ 28,508 Cost of revenue 22,680 24,788 Gross profit 3,527 3,720 Operating expenses: General and administrative expenses 3,481 3,634 Selling and marketing expenses 170 - Impairment of intangibles 1,022 - Operating expenses 4,673 3,634 Income (loss) from operations (1,146 ) 86 Other income (expense) Loss on extinguishment of debt (31 ) - Interest expense (294 ) (117 ) Other income (expense) (1 ) 37 Total other expense (326 ) (80 ) Income (loss) from operations held for sale (1,472 ) 6 Income tax provision from operations held for sale - - Net income (loss) from operations held for sale $ (1,472 ) $ 6

SUPPLEMENTAL DISCLOSURES OF CAS

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	12 Months Ended
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	Dec. 31, 2019
Supplemental Cash Flow Information [Abstract]
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	Supplemental disclosures of cash flow information for the years ended December 31, 2019 and 2018 was as follows (dollars in thousands): Year Ended December 31, 2019 2018 Cash paid for interest - continuing operations $ 2,331 $ 362 Cash paid for interest - held for sale operations 325 117 Cash paid for taxes - continuing operations - - Cash paid for taxes - held for sale operations 12 14 Notes payable for equipment purchase - held for sale operations - 32 Proceeds from short-term borrowing arrangement transfer to settle line of credit 312 - Issuance of common stock for the extinguishment of warrants - 134 Common stock issued in connection with note payable - 126 Business combinations, net of cash: Current assets 415 - Intangible assets 7,436 386 Goodwill 4,934 - Current liabilities (388 ) - Cash paid acquisition of OpenALPR Technology (7,000 ) - Note issued acquisition of OpenALPR Technology (5,000 ) Issuance of common stock (397 ) (163 ) Issuance of common stock warrants - (123 ) Sale of Secure Consultants: Current assets (58 ) - Intangible assets sold (249 ) - Current liabilities 54 - Loss on sale 3 - Financing: Notes payable - continuing operations 21,000 - Debt discount financing costs (2,599 ) - Extinguishment of debt (1,113 ) - Repayment of notes payable and interest expense, net of debt discount (2,515 ) - Investment in OpenALPR Technology (12,000 ) - Issuance of warrants in conjunction with notes payable 706 - Accounts Payable 360 - Proceeds from notes payable 3,839 - Adoption of ASC-842 Lease Accounting: Right-of-use lease asset 1,286 - Deferred rent 31 - Lease liability $ (1,317 ) $ -

INVENTORY

INVENTORY	12 Months Ended
INVENTORY	Dec. 31, 2019
Inventory Disclosure [Abstract]
INVENTORY	As of December 31, 2019 and December 31, 2018, inventory consisted entirely of parts of $302,000 and $73,000, respectively.

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET	12 Months Ended
PROPERTY AND EQUIPMENT, NET	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	Property and equipment, net consisted of the following (dollars in thousands): December 31, 2019 2018 Furniture and fixtures $ 62 $ 158 Office equipment 300 545 Camera systems 772 635 Vehicles 36 36 Leasehold improvements 120 16 Total 1,290 1,390 Less: accumulated depreciation and amortization (807 ) (928 ) Property and equipment, net from continuing operations 483 462 Property and equipment, net from operation held for sale 113 176 Property and equipment, net $ 596 $ 638 Depreciation and amortization related to property and equipment, net from continuing operations for the years ended December 31, 2019 and 2018 was $348,000 and $309,000, respectively. During the year ended December 31, 2019, the Company disposed of property and equipment with a book value of $469,000 that was fully depreciated at the time of disposal. Depreciation and amortization related to property and equipment, net from operations held for sale for the years ended December 31, 2019 and 2018 was $38,000 and $33,000, respectively. For property and equipment that is classified as held for sale, the Company ceases depreciation at the time of the held for sale classifications as the assets are deemed to be held at fair value.

LEASES

LEASES	12 Months Ended
LEASES	Dec. 31, 2019
Leases [Abstract]
LEASES	We have operating leases for office facilities in various locations throughout the United States. The Company’s leases have remaining terms of one to five years. Cash paid for amounts included in the measurement of operating lease liabilities from continuing operations was $163,000 for the year ended December 31, 2019. Included in this amount is $13,000 related to prepaid rent for one of the Company’s leased properties. Cash paid for amounts included in the measurement of operating lease liabilities from operations held for sale was $131,000 for the year ended December 31, 2019. Included in this amount is $10,000 related to prepaid rent for one of the Company’s leased properties. During the third quarter of 2019 the Company performed an assessment and determined that one of its operating leases met the criteria to be classified as a lease abandonment. For the year ended December 31, 2019 the Company recognized $70,000 of expense related to the loss of lease abandonment which is included in other expenses in the consolidated statement of operations. Operating lease expense from continuing operations , respectively, and is part of general and administrative expenses in the accompanying consolidated statement of operations. Operating lease expense from operations held for sale , respectively, and is part of income (loss) for operations held for sale in the accompanying consolidated statement of operations. Supplemental balance sheet information related to leases as of December 31, 2019 was as follows (dollars in thousands): Operating lease right-of-use lease assets from continuing operations $ 782 Operating lease right-of-use lease assets from operations held for sale 130 Total operating lease right-of-use assets $ 912 Lease liability, short-term $ 302 Lease liability, long-term 667 Lease liability from operations held for sale 143 Total operating lease liabilities $ 1,112 Weighted Average Remaining Lease Term - operating leases from continuing operations 3.4 Weighted Average Discount Rate - operating leases 9 % Maturities of operating lease liabilities for continuing operations and operations held for sale at December 31, 2019 were as follows (dollars in thousands): 2020 $ 498 2021 337 2022 177 2023 178 2024 100 Total lease payments 1,290 Less imputed interest (178 ) Maturities of lease liabilities $ 1,112

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
INTANGIBLE ASSETS	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	Goodwill Changes in the carrying amount of goodwill by reportable business segment for the year ended December 31, 2019 were as follows (dollars in thousands): Segment December 31, 2018 OpenALPR Technology Acquisition Impairment December 31, 2019 Goodwill from continuing operations Technology $ 1,402 $ 4,934 $ - $ 6,336 Goodwill from held for sale operations Professional Services 1,691 - (1,022 ) 669 Total goodwill $ 3,093 $ 4,934 $ (1,022 ) $ 7,005 In the fourth quarter of 2019 the Company operations that are presented as held for sale, Global, incurred an impairment charge as it was determined by the Company that its carrying value was below its implied fair value. As a result of the determination to classify Global as held for sale, the Company performed an impairment analysis with respect to the carrying value of goodwill in Global in connection with the preparation of the Company’s financial statements for the year ended December 31, 2019. The results of the goodwill impairment analysis indicated that the estimated fair value of Global was less than its carrying value; therefore, the Company applied Step 2 of the goodwill impairment test. The results of Step 2 indicated that the carrying value of the goodwill associated with Global exceeded its implied fair value, resulting in a $1,022,000 non-deductible goodwill impairment charge which is recorded as part of operation held for sale within the consolidated statements of operations. The impairment charge was non-cash in nature and did not affect the Company’s current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company’s existing debt agreements. Intangible Assets Subject to Amortization The following summarizes the change in intangible assets from December 31, 2018 to December 31, 2019 (dollars in thousands): December 31, 2018 Additions Amortization Impairment Sale of Secure Education Consultants December 31, 2019 Intangible assets subject to amortization from continuing operations Customer relationships $ 2,475 $ 90 $ (371 ) $ (1,549 ) $ (249 ) $ 396 Marketing related 69 223 (62 ) - - 230 Technology based 83 7,123 (811 ) - - 6,395 Internally developed capitalized software 829 458 (64 ) - - 1,223 Intangible assets subject to amortization from continuing operations 3,456 7,894 (1,308 ) (1,549 ) (249 ) 8,244 Intangible assets subject to amortization from held for sale operations 2,208 - (214 ) - - 1,994 Total intangible assets subject to amortization $ 5,664 $ 7,894 $ (1,522 ) $ (1,549 ) $ (249 ) $ 10,238 The following provides a breakdown of identifiable intangible assets as of December 31, 2019 (dollars in thousands) Customer Relationships Marketing Related Technology Based Internally Developed Capitalized Software Total Identifiable intangible assets $ 461 $ 327 $ 7,206 $ 1,290 $ 9,284 Accumulated amortization (65 ) (97 ) (811 ) (67 ) (1,040 ) Identifiable intangible assets from continuing operations, net 396 230 6,395 1,223 8,244 Identifiable intangible assets from operations held for sale, net 1,685 309 - - 1,994 Identifiable intangible assets, net $ 2,081 $ 539 $ 6,395 $ 1,223 $ 10,238 With the OpenALPR Technology Acquisition, the Company identified technology-based intangible assets of $7,123,000, marketing-related intangible assets of $223,000, customer-related intangible assets of $90,000 and goodwill of $4,934,000 along with net assets acquired of $27,000. These intangible assets are being amortized on a straight-line basis over their weighted average estimated useful life of 6.3 years. Amortization expense attributable to continuing operations for the year ended December 31, 2019 and 2018 was $1,308,000 and $ , respectively, and is presented as part of general and administrative expenses in the accompanying consolidated statements of operations. Amortization expense attributable to operations held for sale for the year ended December 31, 2019 and 2018 was $214,000 and $286,000, respectively, and is presented as part of income (loss) from operations held for sale in the accompanying consolidated statements of operations. Firestorm, the Company's wholly owned subsidiary, provided services related to crisis management, crisis communications, emergency response, and business continuity and other emergency, crisis and disaster preparedness initiatives. Its fully owned subsidiary, BC Management was an executive search firm for business continuity, disaster recovery, crisis management and risk management professionals and a provider of business continuity research with annual studies covering compensation assessments, program maturity effectiveness, event impact management reviews, IT resiliency and critical supply analyses. Its other wholly owned subsidiary, Secure Education Consultants was comprised of an expert team of highly trained, former U.S. Secret Service Agents and assists clients by designing customized plans, conducting security assessments, delivering training, and responding to critical incidents. On June 1, 2019, the Company completed the sale of Secure Education Consultants, which included $249,000 of intangible assets (see Note 2). On June 28, 2019 the Company discontinued the operations of BC Management , resulting in an impairment of $242,000 of intangible assets related to its acquisition in December 2018. BC Management was previously included as part of the Company’s Professional Services Segment. The discontinued operation of does not constitute a significant strategic shift that will have a material impact on the Company’s ongoing operations and financial results and accordingly are not reported separately from the Company’s continuing operations. On June 30, 2019, the Company recorded an intangible asset impairment of $1,307,000 of customer relationship intangible assets from the Firestorm acquisition. In the second quarter of 2019, the Company evaluated the performance of all the franchisees of Firestorm Franchising, LLC and notified them of the termination of their agreements on the basis of non-performance. Firestorm Franchising is included as part of the Company’s Professional Services Segment. The discontinued operation of Firestorm Franchising, LLC does not constitute a significant strategic shift that will have a material impact on the Company's ongoing operations and financial results. As of December 31, 2019, the estimated annual amortization expense for each of the next five fiscal years and thereafter is as follows (dollars in thousands): 2020 $ 1,265 2021 1,254 2022 1,173 2023 1,096 2024 1,060 Thereafter 1,450 Capitalized software not yet placed in service 946 Total $ 8,244

DEBT

DEBT	12 Months Ended
DEBT	Dec. 31, 2019
Debt Disclosure [Abstract]
DEBT	Short-Term Borrowings On August 9, 2019, AOC Key Solutions entered into an agreement with LSQ Funding Group, L.C. (“LSQ”), as an unrelated third party, pursuant to which AOC Key Solutions sells its accounts receivable to LSQ and LSQ advances AOC Key Solutions 90% of the value of the receivable. AOC Key Solutions can advance up to $5,000,000 at one time. The term of the agreement is for 12 months and automatically renews for additional 12-month periods. The agreement is presented as secured borrowings, as the accounts receivable are sold with recourse back to the Company, meaning that AOC Key Solutions bears the risk of non-payment by the account debtor. The funded amount of accounts receivables that LSQ has provided to AOC Key Solutions was $1,894,000 as of December 31, 2019 and is presented as part of secured borrowings on the consolidated balance sheets. To secure its obligations to LSQ, AOC Key Solutions has granted a first priority security interest in the AOC Key Solutions accounts receivable and proceeds thereof. As of December 31, 2019, there were approximately $2,714,000 of receivables that are subject to collateral as part of this agreement. The receivables held as collateral are presented as part of accounts receivable, net on the consolidated balance sheets. On August 9, 2019, Global, entered an agreement with an unrelated third party, LSQ, pursuant to which Global sells its accounts receivable to LSQ and LSQ advances Global 90% of the value of the receivable. Global can advance up to $10,000,000 at one time. The term of the agreement is for 12 months and automatically renews for additional 12-month periods. The agreement is presented as secured borrowings, as the accounts receivable are sold with recourse back to Global, meaning that Global bears the risk of non-payment by the account debtor. The funded amount of accounts receivables that LSQ has provided to Global was $1,842,000 as of December 31, 2019 and is presented as part of current liabilities held for sale on the consolidated balance sheets. To secure its obligations to LSQ, Global has granted a first priority security interest in Global’s accounts receivable and proceeds thereof. As of December 31, 2019, there were approximately $2,455,000 of receivables that are subject to collateral as part of this agreement. The receivables held as collateral are presented in assets held for sale on the consolidated balance sheets. During the year ended December 31, 2019, the Company recorded $112,000, in interest expense from continuing operations, related to the agreement with LSQ. Additionally, during the year ended December 31, 2019, the Company recorded $169,000 in interest expense from operations held for sale, related to the agreement with LSQ. In November 2017, AOC Key Solutions, entered into an Account Purchase Agreement and related agreements (the “AOC Wells Agreement”) with Wells Fargo Bank National Association (“WFB”) (“Wells Fargo Credit Facilities”). Pursuant to the AOC Wells Agreement, AOC Key Solutions agreed to sell and assign to WFB all of its Accounts (as such term is defined in Article 9 of the Uniform Commercial Code), constituting accounts arising out of sales of Goods (as such term is defined in Article 9 of the Uniform Commercial Code) or rendition of services that WFB deemed to be eligible for borrowing under the AOC Wells Agreement. WFB agreed to advance to AOC Key Solutions 90% of all eligible accounts with a maximum facility amount of $3,000,000. Interest was payable under the AOC Wells Agreement at a monthly rate equal to the Daily One Month LIBOR, (as such term was defined under the AOC Wells Agreement), in effect from time to time plus 5%. The AOC Wells Agreement also provided for a deficit interest rate equal to the then applicable interest rate plus 50% and a default interest rate equal to the then applicable interest rate or deficit interest rate, plus 50%. The initial term of the AOC Wells Agreement ran through December 31, 2018 (the “Initial Term”), with automatic renewal terms of 12 months (the “Renewal Term”), commencing on the first day after the last day of the Initial Term. The current term of the AOC Wells Agreement ran through December 31, 2019. AOC Key Solutions was able to terminate the AOC Wells Agreement upon at least 60 days’ prior written notice, but no more than 120 days’ written notice, prior to and effective as of the last day of the Initial Term or the Renewal Term, as the case may be. In August 2019, AOC Key Solutions entered in a payoff and termination agreement with WFB in which AOC Key Solutions paid WFB $341,000 to retire all indebtedness and obligation to WFB. As part of payoff of the debt AOC Key Solutions recognized $45,000 of costs in excess of the net carrying amount of the outstanding debt, which is presented in the loss on extinguishment of debt on the consolidated statement of operations. The principal balance as of December 31, 2019 and 2018 was $0 and $566,000, respectively. Global had revolving lines of credit with Wells Fargo Bank National Association (“WFB”) (“Wells Fargo Credit Facilities”). WFB agreed to advance to Global 90% of all eligible accounts with a maximum facility amount of $5,000,000. Interest was payable under the Wells Fargo Credit Facilities at a monthly rate equal to the Three-Month LIBOR, (as such term is defined under the Wells Fargo Credit Facilities), in effect from time to time plus 3%, plus an additional margin of 3%. Payment of the revolving lines of credit was secured by the account receivables of Global. The term of the Wells Fargo Credit Facilities was through December 31, 2019, with automatic renewal terms of 12 months. In August 2019, Global entered in a payoff and termination agreement with WFB in which Global paid WFB $1,477,000 to retire all indebtedness and obligation to WFB. As part of payoff of the debt Global recognized $31,000 of costs in excess of the net carrying amount of the outstanding debt, which is presented as loss from operations held for sale on the consolidated statement of operations. The principal balance as of December 31, 2019 and 2018 was $0 and $1,095,000, respectively. Long-Term Debt On March 16, 2016, the Company entered into a Subordinated Note and Warrant Purchase Agreement (the “Avon Road Note Purchase Agreement”) pursuant to which $500,000 in subordinated debt (the "Avon Road Note") was issued by the Company to Avon Road Partners, L.P. (“Avon Road”), an affiliate of Robert Berman, the Company’s President and CEO and a member of the Company’s Board of Directors. On March 12, 2019, the $500,000 balance due on the Avon Road Note was retired in its entirety in exchange for an equivalent principal amount of the 2019 Promissory Notes (see below). On January 25, 2017, pursuant to the terms of its acquisition of Firestorm, the Company issued $1,000,000 in the aggregate form of four unsecured, subordinated promissory notes with interest payable over five years. The principal amount of one of the notes payable is $500,000 payable at an interest rate of 2% and the remaining three notes are evenly divided over the remaining $500,000 and payable at an interest rate of 7%. The notes mature on January 25, 2022. The aggregate balance of these notes payable was $961,000 and $938,000, net of unamortized interest, as of December 31, 2019 and December 31, 2018, respectively, to reflect the amortized fair value of the notes issued due to the difference in interest rates of $39,000 and $62,000, respectively. On April 3, 2018, the Company entered into a transaction pursuant to which an institutional investor (the “2018 Lender”) loaned $2,000,000 to the Company (the “2018 Promissory Note”). The loan was originally due and payable on May 1, 2019 and bore interest at 15% per annum, with a minimum of 15% interest payable if the loan was repaid prior to May 1, 2019. In addition, the Company issued 35,000 shares of common stock to the 2018 Lender, which shares contained piggy-back registration rights. If the shares were not registered on the next selling shareholder registration statement, the Company would have been obligated to issue an additional 15,000 shares to the 2018 Lender. Upon the sale of Rekor Recognition Systems, Inc. (“Rekor Recognition”), the company’s wholly owned subsidiary, or its assets, the 2018 Lender was entitled to receive 7% of any proceeds received by the Company or Rekor Recognition in excess of $5,000,000 (the “Lender’s Participation”). In addition, commencing January 1, 2020, the 2018 Lender was to be paid 7% of Rekor Recognition’s earnings before interest, taxes, depreciation and amortization, less any capital expenditures, which amount was to be credited for any payments that might ultimately be paid to the 2018 Lender as its Lender’s Participation, if any. On April 3, 2018, the fair value of shares issued was $126,000. On October 24, 2018, the Company and Rekor Recognition entered a note amendment with the 2018 Lender by which the maturity date of the note was extended to May 1, 2020 (the “2018 Promissory Note Amendment”). The 2018 Promissory Note Amendment further provided for payment of interest through May 1, 2019, if the principal was repaid before May 1, 2019. On October 24, 2018, an additional $62,500 fee was paid as consideration for extending the maturity date to May 1, 2020 and designated as financing costs related to the 2018 Promissory Note Amendment. Amortized financing cost for the year ended December 31, 2019 and 2018 was determined to be $31,000 and $96,000, respectively. Amortized financing cost is presented as part of interest expense in the accompanying consolidated statement of operations. The 2018 Promissory Note had an effective interest rate of 19.5%. On March 12, 2019, the $2,000,000 balance due on the 2018 Promissory Note was retired in its entirety in exchange for an equivalent principal amount of the 2019 Promissory Notes (see below). In addition, Rekor paid to the 2018 Lender $1,050,000 of consideration for the re-acquisition by the Company of the Lender’s Participation and $75,000 of interest due through May 1, 2019. All amounts paid were obtained from the proceeds of the 2019 Promissory Notes. The 2018 Lender consideration of $1,050,000 for the Lender’s Participation and unamortized financing costs of $63,000 are recorded as costs in connection with the loss on the extinguishment of debt of $1,113,000 for the year ended December 31, 2019. On March 12, 2019, the Company entered into a note purchase agreement pursuant to which investors, including OpenALPR Technology, Inc. (see Note 2) (the “2019 Lenders”) loaned $20,000,000 to the Company (the “2019 Promissory Notes”) and the Company issued to the 2019 Lenders warrants to purchase 2,500,000 shares of Rekor common stock (the “March 2019 Warrants”). The loan is due and payable on March 11, 2021 and bears interest at 16% per annum, of which at least 10% per annum is required to be paid in cash. Any remaining interest accrues to be paid at maturity or earlier redemption. The notes also require a $1,000,000 exit fee due at maturity, or a premium if paid before the maturity date, and compliance with affirmative, negative and financial covenants, including a fixed charge coverage ratio, minimum liquidity and maximum capital expenditures. As of December 31, 2019, the Company had a waiver in place for the fixed charge coverage ratio covenant related to this note until May 31, 2020. Transaction costs included $403,000 for a work fee payable over 10 months, $290,000 in legal fees and a $200,000 closing fee. The loan is secured by a security interest in substantially all of the assets of Rekor. The March 2019 Warrants are exercisable over a period of five years, at an exercise price of $0.74 per share, and were valued at $706,000, at the time of issuance. The warrants were exercisable commencing March 12, 2019 and expire on March 12, 2024. Amortized financing costs for the year ended December 31, 2019 were $1,047,000 and are included in interest expense on the consolidated statement of operations. The 2019 Promissory Notes have an effective interest rate of 24.87%. The principal amounts due for long-term notes payable described above are shown below as of December 31, 2019 (dollars in thousands): 2020 $ - 2021 21,000 2022 1,000 2023 - 2024 - Thereafter - Total 22,000 Less unamortized interest (39 ) Less unamortized financing costs (1,552 ) Notes payable $ 20,409

INCOME TAXES

INCOME TAXES	12 Months Ended
INCOME TAXES	Dec. 31, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. In determining the need for a valuation allowance, the Company reviewed both positive and negative evidence pursuant to the requirements of ASC Topic 740, including current and historical results of operations, future income projections and the overall prospects of the Company’s business. The expense from income taxes for the years ended December 31, 2019 and 2018 consists of the following (dollars in thousands): Year Ended December 31, 2019 2018 Current: State $ 37 $ 29 Deferred: Federal 10 83 State - (83 ) Expense from income taxes $ 47 $ 29 The components of deferred income tax assets and liabilities are as follows at December 31, 2019 and 2018 (dollars in thousands): Year Ended December 31, 2019 2018 Deferred tax assets: Amortizable start-up costs $ - $ 34 Accrual and others 322 241 Lease Liabilities 246 - Interest expense carryforward 1,079 147 Net operating loss carryforward 4,724 2,518 Valuation allowance (5,813 ) (2,308 ) Total deferred tax assets 558 632 Deferred tax liabilities: Goodwill and Intangibles (328 ) (551 ) Right-of-Use Asset (202 ) - Fixed assets (38 ) (81 ) Total deferred tax assets (liabilities), net $ (10 ) $ - The difference between the income tax provision computed at the U.S. Federal statutory rate and the effective tax rate is as follows for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 U.S. statutory federal rate 21.0 % 21.0 % (Decrease) increase in taxes resulting from: State income tax rate, net of U.S. Federal benefit 1.5 % 2.9 % Impact of changes in tax rates 0.0 % (0.1 )% True-ups (0.1 )% (5.7 )% Other (0.6 )% (1.6 )% Valuation allowance (22.1 )% (17.0 )% Effective tax rate (0.3 )% (0.5 )% The Company files income tax returns in the United States and in various state and foreign jurisdictions. No U.S. Federal, state or foreign income tax audits were in process as of December 31, 2019. The Company evaluated the recoverability of the net deferred income tax assets and the level of the valuation allowance required with respect to such net deferred income tax assets. After considering all available facts, the Company fully reserved for its net deferred tax assets, outside of the deferred tax liability related to the indefinite lived intangible, because the Company believes that it is not more likely than not that their benefits will be realized in future periods. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s net deferred income tax assets satisfy the realization standard, the valuation allowance will be reduced accordingly. At December 31, 2019, Rekor had gross federal and state net operating loss carryforwards of $19,192,000 and $11,952,000, respectively, and a valuation allowance of $5,813,000 recorded against its net deferred tax assets. At December 31, 2019, Rekor had net federal and state net operating loss carryforwards of $4,030,000 and $693,000 respectively. These NOLs are scheduled to begin to expire in 2034 and $4,724,000 are grandfathered under the Tax Cuts and Jobs Act; thus, these NOLs are not subject to the 80 percent limitation. NOLs generated in 2019 and 2018 of $10,249,000 and $4,195,000, respectively, will be carried forward indefinitely and are subject to the annual 80 percent limitation. At December 31, 2018, Rekor had gross federal and state net operating loss carryforwards of $9,733,000 and $474,000, respectively, and a valuation allowance of $2,308,000 recorded against its net deferred tax assets. At December 31, 2018, Rekor had net federal and state net operating loss carryforwards of $2,044,000 and $474,000 respectively. For the years ended December 31, 2019 and 2018, the Company did not record any interest or penalties related to unrecognized tax benefits. It is the Company’s policy to record interest and penalties related to unrecognized tax benefits as part of income tax expense. The 2016 through 2018 tax years remain subject to examination by the IRS.

RESTRUCTURING

RESTRUCTURING	12 Months Ended
RESTRUCTURING	Dec. 31, 2019
Restructuring and Related Activities [Abstract]
RESTRUCTURING	In June 2019, the Company implemented a new organizational structure and plan to improve operating results by reducing operating costs by eliminating redundant positions, and the Company initiated restructuring and transition activities to improve operational efficiency, reduce costs and better position the Company to drive future revenue growth. For the year ended December 31, 2019, the Company recorded $333,000 of charges, related to one-time employee termination benefits, in connection with these activities. These charges were related to the Professional Services Segment and are included as part of general and administrative expenses in the accompanying consolidated statement of operations. As of December 31, 2019, the remaining liability related to the restructuring activities was $155,000 and is presented as part of accounts payable and accrued expenses in the accompanying consolidated balance sheets. The amounts due are expected to be paid within the next 12 months.

EMPLOYEE BENEFIT PLAN

EMPLOYEE BENEFIT PLAN	12 Months Ended
EMPLOYEE BENEFIT PLAN	Dec. 31, 2019
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]
EMPLOYEE BENEFIT PLAN	AOC Key Solutions had a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “Code”) (the “AOC 401(k) Plan”) which was amended on January 1, 2013, as required by the Code. Pursuant to the amended AOC 401(k) Plan, AOC Key Solutions would make nondiscretionary “safe harbor” matching contributions for all participants of 100% of the participant’s salary deferrals up to 3%, and 50% of deferrals up to the next 2%, of the participant’s compensation. Rekor Recognition had a defined contribution savings plan under Section 401(k) of the Code (the “Rekor Recognition 401(k) Plan”). The Rekor Recognition 401(k) Plan was a defined contribution plan, which covered substantially all U.S.-based employees who had completed three months of service. The Rekor Recognition 401(k) Plan provided that Rekor Recognition would match 50% of the participant salary deferrals up to 3% of a participant’s compensation for all participants. Global also maintained a 401(k) plan (the “Global 401(k) Plan”), which was amended September 15, 2014. However, Global had not historically made matching contributions to the Global 401(k) Plan. On January 1, 2019, Rekor established the Rekor Systems, Inc. 401(k) Plan (the “Rekor 401(k) Plan”), a Qualified Automatic Contribution Arrangement (QACA) safe harbor plan, and the AOC 401(k) Plan, the Rekor Recognition 401(k) Plan, and the GCP 401(k) Plan were amended and merged into the Rekor 401(k) Plan. Employees that satisfied the eligibility requirements became participants in the Rekor 401(k) Plan. Rekor contributes an amount equal to the sum of 100% of a participant’s elective deferrals that do not exceed 1% of participant’s compensation, plus 50% of the participant’s elective deferrals that exceed 1% of the participants compensation, but do not exceed 6% of the participant’s compensation. Employee contributions are fully vested, and matching contributions are subject to a two-year service vesting schedule. The amount of contributions recorded by the Company under these plans during the years ended December 31, 2019 and 2018 were $515,000 and $159,000, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	On August 19, 2019, the Company filed suit in the United States District Court for the Southern District of New York against three former executives of the Company and Firestorm (the Firestorm Principals). The Complaint alleges that the Firestorm Principals fraudulently induced the execution of the Membership Interest Purchase Agreement pursuant to which Firestorm was acquired by the Company, and seeks rescission of the Membership Interest Purchase Agreement and certain transactions contemplated thereby, including the issuance of notes and warrants to the Firestorm Principals. On October 9, 2019, the Company filed an Amended Complaint. On November 13, 2019, the Firestorm Principals filed an answer to the Amended Complaint and asserted counterclaims against the Company, Firestorm, and certain executives of the Company. On December 16, the Firestorm Principals filed a Motion for Judgment on the Pleadings. On January 30, 2020, the Company filed a Second Amended Complaint. The Firestorm Principals responded to the Second Amended Complaint on February 28, 2020. The Company’s deadline for responding to the Firestorm Principals’ counterclaims is March 30, 2020. The Company intends to vigorously litigate this action and believes that the Firestorm Principals’ counterclaims are without merit. In addition, from time to time, the Company is named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company’s business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will not be material to the Company’s consolidated financial statements as a whole.

STOCKHOLDERS' (DEFICIT) EQUITY

STOCKHOLDERS' (DEFICIT) EQUITY	12 Months Ended
STOCKHOLDERS' (DEFICIT) EQUITY	Dec. 31, 2019
Stockholders' Equity Attributable to Parent [Abstract]
STOCKHOLDERS' (DEFICIT) EQUITY	Common Stock As of December 31, 2019, the Company is authorized to issue 30,000,000 shares of common stock, $0.0001 par value. As of December 31, 2019, and December 31, 2018, the issued and outstanding common shares of Rekor were 21,595,653 and 18,767,619, respectively. In January 2018, the Company issued 33,333 shares of Rekor common stock as consideration as part of its acquisition of Secure Education Consultants. In April 2018, the Company issued 35,000 shares of Rekor common stock as additional consideration to the Lender in connection with the 2018 Promissory Note. On November 1, 2018, the Company issued 4,125,000 shares of common stock through an underwritten public offering at a public offering price of $0.80 per share. Net proceeds to the Company was approximately $2,797,000. In addition, the Company granted underwriters a 45-day option to purchase up to 618,750 additional shares of common stock to cover over-allotment, if any. The underwriters did not exercise this option and the options were cancelled. As part of the consideration to the underwriters, the Company issued to the underwriters warrants to purchase an aggregate of 206,250 shares of common stock, exercisable over a period of five years, at an exercise price of $1.00 per share. The underwriter warrants became exercisable commencing April 27, 2019 and expire on October 29, 2023. For the year ended December 31, 2019 and 2018, the Company issued 0 and 13,998 shares of Rekor common stock related to the exercise of common stock options, respectively. On February 15, 2019, the Company entered into Amendment No. 1 to the OpenALPR Purchase Agreement, pursuant to which the Company agreed to issue 600,000 shares of Rekor common stock as partial consideration for the OpenALPR Technology Acquisition. On March 12, 2019, the Company issued 600,000 shares of Rekor common stock as part of the consideration for the OpenALPR Technology Acquisition. For the year ended December 31, 2019 and 2018, the Company issued 2,828,034 and 4,304,255 shares of Rekor common stock, respectively. Of the shares issued in the year ended December 31, 2019, 931,666 shares of Rekor common stock were issued in exchange for cash and cashless exercise of 1,152,938 warrants, 600,000 shares were issued in connection with the OpenALPR Technology Acquisition, 3,638 shares were issued as part of the exercise of warrants related to series A preferred stock and 1,292,730 shares were issued in connection with the Sales Agreement. At-the-Market Offering On August 14, 2019, the Company entered into the Sales Agreement with B. Riley FBR, Inc. (“B. Riley FBR”) to create an at-the-market equity program under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of up to $15,000,000, through or to B. Riley FBR. Subject to the terms and conditions of the Sales Agreement, B. Riley FBR will use its commercially reasonable efforts to sell the shares of the Company’s common stock from time to time, based upon the Company’s instructions. B. Riley FBR will be entitled to a commission equal to 3.0% of the gross proceeds from each sale. The Company incurred issuance costs of approximately $226,000 related to legal, accounting, and other fees in connection with the Sales Agreement. These costs were charged against the gross proceeds of the Sales Agreement and presented as a reduction to additional paid-in capital on the consolidated balance sheets. Sales of the Company’s common stock under the Sales Agreement are to be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No 333-224423), previously filed with the Securities and Exchange Commission (“SEC”) on April 24, 2018 and declared effective by the SEC on April 30, 2018. For the year ended December 31, 2019, based on settlement date, the Company sold 1,292,730 shares of common stock at a weighted-average selling price of $2.53 per share in accordance with the Sales Agreement. Net cash provided from the Sales Agreement was $2,949,000 after paying $226,000 related to the issuance costs stated above, as well as, 3.0% or $98,000 related to cash commissions provided to B. Riley FBR. As of December 31, 2019, $11,727,000 remained available for sale under the Sales Agreement. Preferred Stock The Company is authorized to issue up to 2,000,000 shares of preferred stock, $0.0001 par value. The Company’s preferred stock may be entitled to preference over the common stock with respect to the distribution of assets of the Company in the event of liquidation, dissolution or winding-up of the Company, whether voluntarily or involuntarily, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of the winding-up of its affairs. The authorized but unissued shares of the preferred stock may be divided into, and issued in, designated series from time to time by one or more resolutions adopted by the Board of Directors of the Company. The Board of Directors of the Company, in its sole discretion, has the power to determine the relative powers, preferences and rights of each series of preferred stock Series A Cumulative Convertible Redeemable Preferred Stock Of the 2,000,000 authorized shares of preferred stock, 505,000 shares are designated as $0.0001 par value Series A Cumulative Convertible Redeemable Preferred Stock (the “Series A Preferred Stock”). The holders of Series A Preferred Stock are entitled to quarterly dividends of 7.0% per annum per share. The holders of Series A Preferred Stock have a right to convert each share into common stock at an initial conversion price and a specified conversion price which increases annually based on the passage of time beginning in November 2019. The holders of Series A Preferred Stock also have a put right after 60 months from the issuance date to redeem any or all of the Series A Preferred Stock at a redemption price of $15.00 per share plus any accrued but unpaid dividends. The Company has a call right after 36 months from the issuance date to redeem all of the Series A Preferred Stock at a redemption price which increases annually based on the passage of time beginning in November 2019. The Series A Preferred Stock contains an automatic conversion feature based on a qualified initial public offering in excess of $30,000,000 or a written agreement by at least two-thirds of the holders of Series A Preferred Stock at an initial conversion price and a specified price which increases annually based on the passage of time beginning in November 2016. Rekor adjusts the value of the Series A Preferred Stock to redemption value at the end of each reporting period. The adjustment to the redemption value is recorded through additional paid in capital of $752,000 and $655,000 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, and 2018, 502,327 shares of Series A Preferred Stock were issued and outstanding. The holders of Series A Preferred Stock are entitled to quarterly cash dividends of $0.175 (7% per annum) per share. Dividends accrue quarterly and dividend payments for declared dividends are due within five business days following the end of a quarter. F or the year ended December 31, 2019 and 2018, the Company paid cash dividends of $0 and $264,000, respectively, to shareholders of record of Series A Preferred Stock . Accrued dividends payable to Series A Preferred Stock shareholders were $551,000 and $176,000 as of December 31, 2019 and 2018, respectively, and are presented as part of the accounts payable and accrued expenses on the accompanying consolidated balance sheets. Series B Cumulative Convertible Preferred Stock Of the 2,000,000 authorized shares of preferred stock, 240,861 shares are designated as $0.0001 par value Rekor Series B Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"). As part of the Global Merger, the Company issued 240,861 shares of $0.0001 par value Series B Preferred Stock. All Series B Preferred Stock was issued at a price of $10.00 per share as part of the acquisition of the Global Merger. The Series B Preferred Stock has a conversion price of $5.00 per share. Each Series B Preferred Stock has an automatic conversion feature based on the share price of Rekor. The Series B Preferred Stock is entitled to quarterly cash dividends of 1.121% (4.484% per annum) per share. Dividends accrue quarterly and dividend payments for declared dividends are due within five business days following the end of a quarter. F or the year ended December 31, 2019 and 2018, the Company paid cash dividends of $108,000 and $81,000, respectively, to shareholders of record of Series B Preferred Stock . Accrued dividends payable to Series B Preferred Stock shareholders were $54,000 as of December 31, 2019 and 2018 and are presented as part of the accounts payable and accrued expenses on the accompanying consolidated balance sheets. Warrants The Company had warrants outstanding that are exercisable into a total of 2,251,232 and 1,214,491 shares of Rekor common stock as of December 31, 2019 and December 31, 2018, respectively. As part of its acquisition of Brekford on August 29, 2017, the Company assumed Brekford’s obligations with respect to the Brekford Warrants. The exercise price for the Warrants was $7.50 and they expired on March 31, 2020. Effective October 16, 2018, the Company entered into exchange agreements with holders of the Warrants pursuant to which the Company issued to the holders an aggregate of 96,924 shares of common stock in exchange for the return of the warrants to the Company for cancellation. As of December 31, 2019, and December 31, 2018, no Warrants were outstanding. As part of a Regulation A Offering in fiscal year 2016 and 2017, the Company issued warrants to the holders of Series A Preferred Stock. The exercise price for these warrants is $1.03 and they are exercisable into a total of 240,017 and 243,655 shares of Rekor common stock as of December 31, 2019 and December 31, 2018, respectively. The warrants expire on November 23, 2023. As part of the acquisition of Firestorm on January 24, 2017, the Company issued: warrants to purchase 315,627 shares of its common stock, exercisable over a period of five years, at an exercise price of $2.5744 per share; and warrants to purchase 315,627 shares of its common stock, exercisable over a period of five years, at an exercise price of $3.6083 per share (the “Firestorm Warrants”). The expiration date of the Firestorm Warrants is January 24, 2022. As of December 31, 2019, and December 31, 2018, there were 631,254 Firestorm Warrants outstanding. Pursuant to its acquisition of BC Management on December 31, 2017, the Company issued: warrants to purchase 33,333 shares of its common stock, exercisable over a period of five years, at an exercise price of $5.44 per share; and warrants to purchase 33,333 shares of its common stock, exercisable over a period of five years, at an exercise price of $6.53 per share (the “BC Management Warrants”). The expiration date of the BC Management Warrants was December 31, 2022. As of December 31, 2018, there were 66,666 BC Management Warrants outstanding. The BC Management Warrants were surrendered on May 17, 2019, due to the discontinuance of operations of BC Management, and as of December 31, 2019 there were no BC Management Warrants outstanding. Pursuant to its acquisition of Secure Education Consultants on January 1, 2018, the Company issued: warrants to purchase 33,333 shares of its common stock, exercisable over a period of five years, at an exercise price of $5.44 per share; and warrants to purchase 33,333 shares of its common stock, exercisable over a period of five years, at an exercise price of $6.53 per share (the “Secure Education Warrants”). The expiration date of the Secure Education Warrants is January 1, 2023. As of December 31, 2019, and December 31, 2018, there were 66,666 Secure Education Warrants outstanding. On November 1, 2018, in connection with an underwritten public offering of its common stock, the Company issued to the underwriters warrants to purchase 206,250 shares of its common stock, exercisable over a period of five years, at an exercise price of $1.00 per share. These warrants are exercisable commencing April 27, 2019 and expire on October 29, 2023. During the year ended December 31, 2019, 189,813 warrants were exercised in cash and cashless transactions resulting in the issuance of 148,279 shares of common stock. As of December 31, 2019, and December 31, 2018, 16,437 and 206,250 warrants related to the 2018 underwritten public offering remain outstanding, respectively. On March 12, 2019, in connection with the 2019 Promissory Notes, the Company issued warrants to purchase 2,500,000 shares of its common stock, which are immediately exercisable at an exercise price of $0.74 per share, to certain individuals and entities. Of the were issued During the year ended December 31, 2019, 963,125 warrants were exercised in cash and cashless transactions resulting in the issuance of 783,387 shares of common stock.

EQUITY INCENTIVE PLAN

EQUITY INCENTIVE PLAN	12 Months Ended
EQUITY INCENTIVE PLAN	Dec. 31, 2019
Equity [Abstract]
EQUITY INCENTIVE PLAN	In August 2017, the Company approved and adopted the 2017 Equity Award Plan (the “2017 Plan”) which replaced the 2016 Equity Award Plan (the “2016 Plan”). The 2017 Plan permits the granting of stock options, stock appreciation rights, restricted and unrestricted stock awards, phantom stock, performance awards and other stock-based awards for the purpose of attracting and retaining quality employees, directors and consultants. Maximum awards available under the 2017 Plan were initially set at 3,000,000 shares. Stock Options Stock options granted under the 2017 Plan may be either incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”). ISOs may be granted to employees and NSOs may be granted to employees, directors, or consultants. Stock options are granted at exercise prices as determined by the Board of Directors. The vesting period is generally three to four years with a contractual term of ten years. The 2017 Plan is administered by the Administrator, which is currently the Board of Directors of the Company. The Administrator has the exclusive authority, subject to the terms and conditions set forth in the 2017 Plan, to determine all matters relating to awards under the 2017 Plan, including the selection of individuals to be granted an award, the type of award, the number of shares of Rekor common stock subject to an award, and all terms, conditions, restrictions and limitations, if any, including, without limitation, vesting, acceleration of vesting, exercisability, termination, substitution, cancellation, forfeiture, or repurchase of an award and the terms of any instrument that evidences the award. Rekor has also designed the 2017 Plan to include a number of provisions that Rekor’s management believes promote best practices by reinforcing the alignment of equity compensation arrangements for nonemployee directors, officers, employees, consultants and stockholders’ interests. These provisions include, but are not limited to, the following: No Discounted Awards No Repricing Without Stockholder Approval No Evergreen Provision No Automatic Grants No Transferability. No Tax Gross-Ups. No Liberal Change-in-Control Definition. “Double-trigger” Change in Control Vesting. No Dividends on Unearned Performance Awards Limitation on Amendments. Clawbacks. When making an award under the 2017 Plan, the Administrator may designate the award as “qualified performance-based compensation,” which means that performance criteria must be satisfied in order for an employee to be paid the award. Qualified performance-based compensation may be made in the form of restricted common stock, restricted stock units, common stock options, performance shares, performance units or other stock equivalents. The 2017 Plan includes the performance criteria the Administrator has adopted, subject to stockholder approval, for a “qualified performance-based compensation” award. A summary of stock option activity under the Company’s 2017 Plan for the years ended December 31, 2019 and 2018 is as follows: Number of Shares Subject to Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding Balance at January 1, 2018 1,695,375 $ 2.19 9.26 Granted 48,499 0.73 9.85 Exercised (13,998 ) 1.68 9.50 Forfeited (450,633 ) 1.82 8.71 Expired (51,686 ) 1.36 8.53 Outstanding Balance at December 31, 2018 1,227,557 2.13 8.39 - Granted 870,549 1.03 8.76 Forfeited (111,537 ) 1.95 - Canceled (331,186 ) 2.05 - Outstanding Balance at December 31, 2019 1,655,383 $ 1.68 8.33 $ 3,256 Exercisable at December 31, 2019 999,831 $ 1.84 6.66 $ 1,684 Stock compensation expense for the year ended December 31, 2019 and 2018 was $446,000 and $465,000, respectively, and is included in general and administrative expenses in the accompanying consolidated statements of operations. The weighted average grant date fair value of options granted for the years ended December 31, 2019 and 2018 was $0.52 and $0.73, respectively. The intrinsic value of the stock options granted during the years ended December 31, 2019 and 2018, was $2,172,000 and $0, respectively. The total fair value of shares that became vested after grant during the years ended December 31, 2019 and 2018 was $408,000 and $325,000, respectively. As of December 31, 2019, there was $486,000 of unrecognized stock compensation expense related to unvested stock options granted under the 2017 Plan that will be recognized over a weighted average period of 1.64 years.

LOSS PER SHARE

LOSS PER SHARE	12 Months Ended
LOSS PER SHARE	Dec. 31, 2019
Earnings Per Share [Abstract]
LOSS PER SHARE	The following table provides information relating to the calculation of loss per common share (dollars in thousands, except per share data): Year Ended December 31, 2019 2019 2018 Basic and diluted loss per share Net loss from continuing operations $ (14,412 ) $ (5,709 ) Less: preferred stock accretion (752 ) (655 ) Less: preferred stock dividends (460 ) (460 ) Net loss attributable to shareholders from continuing operations (15,624 ) (6,824 ) Net income (loss) from operations held for sale (1,472 ) 6 Net loss attributable to shareholders $ (17,096 ) $ (6,818 ) Weighted average common shares outstanding - basic and diluted 20,033,023 15,409,014 Basic and diluted loss per share from continuing operations $ (0.78 ) $ (0.44 ) Basic and diluted (loss) earnings per share from operations held for sale (0.07 ) - Basic and diluted loss per share $ (0.85 ) $ (0.44 ) Common stock equivalents excluded due to anti-dilutive effect 5,602,841 3,898,257 As the Company had a net loss for the year ended December 31, 2019, the following 5,602,841 potentially dilutive securities were excluded from diluted loss per share: 2,491,249 for outstanding warrants, 974,487 related to the Series A Preferred Stock, 481,722 related to the Series B Preferred Stock and 1,655,383 related to outstanding options. As the Company had a net loss for the year ended December 31, 2018, the following 3,898,257 potentially dilutive securities were excluded from diluted loss per share as the Company had a net loss: 1,214,491 for outstanding warrants, 974,487 related to the Series A Preferred Stock, 481,722 related to the Series B Preferred Stock and 1,227,557 related to outstanding options. (Loss) Earnings Per Share under Two – Class Method The Series A Preferred Stock and Series B Preferred Stock have the non-forfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and, as such, is considered a participating security. The Series A Preferred Stock and Series B Preferred Stock are included in the computation of basic and diluted loss per share pursuant to the two-class method. Holders of the Series A Preferred Stock and Series B Preferred Stock do not participate in undistributed net losses because they are not contractually obligated to do so.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	12 Months Ended
BUSINESS SEGMENTS	Dec. 31, 2019
Segment Reporting [Abstract]
BUSINESS SEGMENTS	FASB ASC Topic 280, Segment Reporting The Company provides general corporate services to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These services are reported under “Corporate Services” below and these include costs associated with executive management, financing activities and public company compliance. Transfer prices between the operating segments were determined on current market values or cost plus markup of the seller’s business segment. Summarized financial information concerning the Company’s reportable segments is presented below (dollars in thousands): Technology Professional Services Corporate Services Elimination Consolidated Year Ended December 31, 2019 Revenues $ 5,469 $ 13,874 $ - $ (23 ) $ 19,320 Gross profit 3,817 6,468 - (23 ) 10,262 Loss from operations* (2,259 ) (1,560 ) (5,293 ) 23 (9,089 ) Loss from operations held for sale (including impairment of goodwill of $1,022,000) - (1,146 ) - - (1,146 ) * Including intangible assets impairment - 1,549 - - 1,549 Year Ended December 31, 2018 Revenues $ 3,522 $ 16,532 $ - $ - $ 20,054 Gross profit 1,880 8,196 - - 10,076 Loss from operations (832 ) (381 ) (3,910 ) - (5,123 ) Income from operations held for sale - 86 - - 86 Information about the Company’s Year ended December 31, 2019 2018 2019 2018 Technology Professional Services United States $ 4,052 $ 3,449 $ 13,851 $ 16,357 Canada 654 73 - 78 Other 763 - - 97 Total Revenue $ 5,469 $ 3,522 $ 13,851 $ 16,532 Except for the United States and Canada, total revenue in any single country was less than 10% of consolidated revenue. Additional information relating to the Company’s December 31, 2019 2018 Assets: Technology $ 16,625 $ 4,294 Professional services 5,726 5,510 Corporate services 509 1,461 Total assets from continuing operations 22,860 11,265 Assets from operations held for sale 6,132 6,790 Total assets $ 28,992 $ 18,055 Information about the Company’s December 31, 2019 2018 United States $ 1,220 $ 1,320 Canada 70 70 Accumulated Depreciation (807 ) (928 ) Total property and equipment, net $ 483 $ 462 Long-lived assets by segment is as follows (dollars in thousands): December 31, 2019 2018 Technology $ 14,875 $ 3,122 Professional Services 540 2,195 Corporate 430 3 Consolidated $ 15,845 $ 5,320 Total net additions to long-lived assets by segment are as follows (dollars in thousands): Year ended December 31, 2019 2018 Technology $ 12,998 $ 1,013 Professional Services 701 376 Corporate 564 - Consolidated $ 14,263 $ 1,389 Depreciation and amortization expense are allocated to all segments based on usage. Total depreciation and amortization expense, by segment, is as follows (dollars in thousands): Year ended December 31, 2019 2018 Technology $ 1,245 $ 322 Professional Services 485 725 Corporate 137 - Consolidated $ 1,867 $ 1,047

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Issuance of Additional Stock As of March 30, 2020, the Company sold an additional 536,730 shares of common stock through its At-the-Market Sales Agreement Held for Sale Operations Subsequent to year-end, the Board of Directors approved the plan to sale . As such, the Company determined that the business met the criteria for held for sale accounting because it expects to complete the sale of during the next 12 months. Historically, has been presented as part of the Professional Services Segment. As of December 31, 2019, has been presented as part of continuing operations. This pending disposition is a result of the Company’s strategic decision to concentrate resources on the development of its Technology Segment and will result in material changes in the Company's operations and financial results. On March 16, 2020, the Company received an offer of $4M to purchase . The offer has been made by current management. The offer is currently being evaluated by members of the Company’s board of Directors who are not related parties. The Company cannot assure that this transaction will be closed in a timely fashion or at all. Increase in the Authorized Number of Shares of the Company’s Common Stock The Company has adopted and approved an amendment to increase the number of authorized shares of common stock from 30,000,000 to 100,000,000, which was effective March 18, 2020. The rights and privileges terms of the additional authorized shares of common stock will be identical to those of the currently outstanding shares of common stock. However, because the holders of common stock do not have preemptive rights to purchase or subscribe for any new issuances of common stock, the subsequent potential issuance of additional shares of common stock will reduce the current stockholders’ percentage ownership interest in the total outstanding shares of common stock. The Amendment and the creation of additional shares of authorized common stock will not alter current stockholders’ relative rights and limitations. Commitments and Contingencies Subsequent to Year-end Vigilant Solutions, LLC, a subsidiary of Motorola Solutions, Inc., filed a complaint on February 21, 2020 against the Company and certain of its subsidiaries in the US District Court for the District of Maryland. The complaint alleges that certain of the Company’s products violate a patent held by Vigilant. The Company has retained counsel to investigate the claims made in the complaint and the investigation into these matters is ongoing. Nevertheless, based on a review of the complaint, the Company believes that it has substantial defenses to the allegations contained in the complaint and that the validity of the patent underlying the complaint is subject to challenge. The Company intends to vigorously defend the allegations of the Vigilant complaint. On January 31, 2020, the Company’s wholly owned subsidiary, OpenALPR filed a complaint in the US District Court for the Western District of Pennsylvania against a former customer, Plate Capture Solutions, Inc. (“PCS”) for breach of software license agreements pursuant to which software to was licensed to PCS. On February 19, 2020 PCS filed an answer, counterclaim and joinder in the case, among other things, seeking to join the Company as a party to the litigation and making counterclaims for defamation, fraud and intentional interference with existing and future business relationships. The Company believe that it has substantial defenses to the counterclaims and intend to vigorously defend the allegations of the counterclaims. 2019 Promissory Notes In March 2020, the Company extended the maturity date of the 2019 Promissory Notes, from March 11, 2021 to June 12, 2021. Additionally, in March 2020, the Company received a waiver to defer the fixed charge coverage ratio covenant related to the 2019 Promissory Notes until May 31, 2020. Other Items The spread of a novel strain of coronavirus (COVID-19) around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations.

BUSINESS AND SIGNIFICANT ACCO_2

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2019
Accounting Policies [Abstract]
Basis of Consolidation	The consolidated financial statements include the accounts of Rekor Systems, Inc., the parent company, and its wholly owned subsidiaries AOC Key Solutions, Inc., Rekor Recognition Systems, Inc., Novume Media, Inc., Firestorm Solutions, LLC, Firestorm Franchising, LLC, Global Technical Services, Inc., Global Contract Professionals, Inc. and OpenALPR Software Solutions, LLC (collectively, the “Company”). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission (“SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the prior year's financial statements have been reclassified to conform to the current year's presentation. Beginning in the second quarter of 2019, sales and marketing expenses and research and development expenses have been presented separately from general and administrative expenses on the consolidated statements of operations, whereas in prior periods these amounts were included in one caption titled selling, general and administrative expenses. Amounts for the period ending December 31, 2018, have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments necessary for a fair presentation for the periods presented have been reflected as required by Regulation S-X, Rule 10-01. All necessary adjustments are of a normal, recurring nature.
Held for Sale Operations	During the third quarter of 2019, the Company began to separately report the results of Global Technical Services, Inc. and Global Contract Professionals, Inc. (together “Global”), the Company’s wholly owned subsidiaries, including substantially all of the assets and liabilities comprising Global, as operations held for sale. The Company is reporting the operating results and cash flows of Global as operations held for sale, and thus they have been excluded from continuing operations and segment results for all periods presented. Prior to the third quarter of 2019, the operating results for Global were presented in the Professional Services Segment. The assets and liabilities of Global are presented as current and long-term assets and liabilities held for sale in the consolidated balance sheets and its results are presented as income (loss) from operations held for sale in the consolidated statement of operations. In cases where the carrying value amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Due to the held for sale classification of Global, certain amounts have been reclassified in order to conform to the current period presentation. Interest on debt that is expected to be assumed by the buyer as a result of the sale transaction has be allocated to operations that are classified as held for sale. The Company does not expect to assume debt as a result of the sale of Global. For the years ended December 31, 2019 and 2018 interest allocated to operations held for sale was $294,000 and $117,000, respectively. Long-lived assets and intangible assets to be sold will be recovered through sale and not through future operations. Therefore, long-lived assets are not depreciated or amortized once they are classified as held for sale. See Note 3 for additional information regarding the Company's held for sale operations.
Going Concern Assessment	Beginning with the year ended December 31, 2018 and all annual and interim periods thereafter, management will assess going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans and external bank lines of credit, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems it probable that those implementations can be achieved and that management has the proper authority to execute them within the look-forward period. The Company has generated losses since its inception in February 2017 and has relied on cash on hand, external bank lines of credit, the sale of a note, proceeds from common stock, debt financing and a public offering of its common stock to support cashflow from operations. The Company attributes losses to merger costs, public company corporate overhead and non-capital expenditures consequent to the Company’s change in strategic direction.. As of and for the year ended December 31, 2019, the Company had a net loss from continuing operations of $14,412,000 and a working capital deficit of $912,000. The Company's net cash position was decreased by $902,000 for the year ended December 31, 2019 due to the net loss from operations, offset by the net proceeds of $3,839,000 from senior secured notes, the net proceeds of $2,949,000 from the At-the-Market Agreement and the net proceeds from the secured borrowing arrangement of $5,463,000. Management believes that based on relevant conditions and events that are known and reasonably knowable, its current forecasts and projections, for one year from the date of the filing of the consolidated financial statements in this Annual Report on Form 10-K, indicate the Company’s ability to continue operations as a going concern for that one-year period. The Company is actively monitoring its operations, the cash on hand and working capital. Additionally, as of December 31, 2019, the Company believes it has access to raise up to $11,727,000 through the At Market Issuance Sales Agreement (the “Sales Agreement”) he The Company’s ability to generate positive operating results and complete the execution of its business strategy will depend on (i) its ability to maintain timely collections from existing customers in, as well as continue the growth of its Technology Segment, (ii) timely completion of the disposition of the businesses in its Professional Services Segment, (iii) the continued performance of its contractors, subcontractors and vendors, (iv) its ability to maintain and build good relationships with its lenders and financial intermediaries, (v) its ability to meet debt covenants or obtain waivers in case of noncompliance and (vi) the stability of the world economy and global financial markets. To the extent that events outside of the Company’s control have a significant negative impact on economic and/or market conditions, they could affect payments from customers, services and supplies from vendors, its ability to continue to secure new business, raise capital, complete the sale of its assets held for sale in a timely fashion and otherwise, depending on the severity of such impact, materially adversely affect its operating results.
Rounding	Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000, unless otherwise indicated.
Concentrations of Risk	The Company places its temporary cash investments with higher rated quality financial institutions located in the United States (“U.S.”). As of December 31, 2019, and 2018, the Company had deposits from continuing operations totaling $1,641,000 and $2,678,000, respectively, in one and three U.S. financial institutions that were federally insured up to $250,000 per account, respectively. The Company has a market concentration of revenue and accounts receivable, from continuing operations, in its Professional Services Segment related to its customer base. Company A accounted for 20% and 19% of the Company’s total revenues for the years ended December 31, 2019 and 2018, respectively. Company B accounted for 17% and less than 10% of the Company’s total revenues for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, accounts receivable from Company A and Company B totaled $81 of the consolidated accounts receivable balance. As of December 31, 2018, Company A and Company B accounted for $1,043,000, or 35%, and $483,000, or 16%, respectively, of the consolidated accounts receivable balance. No other single customer accounted for more than 10% of the Company’s consolidated revenue for the year ended December 31, 2019 or consolidated accounts receivable balance as of December 31, 2019.
Cash Equivalents	The Company considers all highly liquid debt instruments purchased with the maturity of three months or less to be cash equivalents. Cash subject to contractual restrictions and not readily available for use is classified as restricted cash and cash equivalents. The Company’s restricted cash balances are primarily made up of cash collected on behalf of certain client jurisdictions. Restricted cash and cash equivalents for these client jurisdictions as of December 31, 2019 and 2018 were $461,000 and $609,000, respectively, and correspond to equal amounts of related accounts payable and are presented as part of accounts payable and accrued expenses in the accompanying consolidated balance sheets.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its clients’ financial condition, and the Company generally does not require collateral. The Company maintains an allowance for doubtful accounts at an amount estimated to be sufficient to cover the risk of collecting less than full payment of the receivables. At each balance sheet date, the Company evaluates its receivables and assess the allowance for doubtful accounts based on specific customer collection issues and historical write-off trends. After all reasonable attempts to collect an account receivable have failed, the amount of the receivable is written off against the allowance. Based on the information available, the Company determined that an allowance for loss of $48,000 and $24,000 was required at December 31, 2019 and 2018, respectively.
Inventory	Inventory principally consists of parts held temporarily until installed for service. Inventory is valued at the lower of cost or market value. The cost is determined by the lower of first-in, first-out (“FIFO”) method, while market value is determined by replacement cost for components and replacement parts.
Property and Equipment	Property and equipment are stated at cost or fair value at acquisition date for assets obtained through business combinations, less accumulated depreciation. Depreciation expense is classified within the corresponding operating expense categories on the consolidated statements of operations. Depreciation is recorded on the straight-line basis over the following estimated lives: Class of assets Useful life Furniture and fixtures 2 - 10 years Office equipment 2 - 5 years Leasehold improvements Shorter of asset life or lease term Automobiles 3 - 5 years Camera systems 3 years Repairs and maintenance are expensed as incurred. Expenditures for additions, improvements and replacements are capitalized.
Software Development Costs	Research and development costs to develop software to be sold, leased or marketed are expensed as incurred up to the point of technological feasibility for the related software product. Capitalized internally developed software costs, net, not yet placed in service were $966,000 and $829,000 as of December 31, 2019 and 2018, respectively. In 2019, the Company placed in service $232,000 of capitalized development costs related to software to be sold, leased or marketed. Software developed for internal use, with no substantive plans to market such software at the time of development, are capitalized and included in intangible assets, net in the consolidated balance sheets. Costs incurred during the preliminary planning and evaluation and post implementation stages of the project are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. In 2019, the Company capitalized $91,000 of development costs related to internal use software. In 2018, capitalized costs related to software developed for internal use were immaterial.
Leases	On January 1, 2019 the Company adopted Accounting Standard Codification (“ASC”) Topic 842, Leases ("ASC 842"), using the optional transition method whereby the Company applied the new lease requirements under Accounting Standards Update (“ASU”) 2016-02 through a cumulative-effect adjustment, which after completing the Company’s implementation analysis, resulted in no adjustment to its January 1, 2019 beginning retained earnings balance. On January 1, 2019, the Company recognized $921,000 of right of use (“ROU”) operating lease assets and $951,000 of operating lease liabilities, including noncurrent operating lease liabilities of $778,000, as a result of adopting this standard. The difference between ROU operating lease assets and operating lease liabilities was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. The new standard provides several optional practical expedients for use in transition. The Company elected to use what the Financial Accounting Standard Board ("FASB") has deemed the “package of practical expedients,” which allows the Company not to reassess the Company’s previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. The ASU also provided several optional practical expedients for the ongoing accounting for leases. The Company has elected the short-term lease recognition exemption for all leases that qualify, meaning that for leases with terms of twelve months or less, the Company will not recognize ROU assets or lease liabilities on the Company’s consolidated balance sheets. Additionally, the Company has elected to use the practical expedient to not separate lease and non-lease components for leases of real estate, meaning that for these leases, the non-lease components are included in the associated ROU asset and lease liability balances on the Company’s consolidated balance sheets. The comparative periods have not been restated for the adoption of ASU 2016-02. We determine if an arrangement contains a lease and the classification of that lease, if applicable, at inception. Operating leases are included in operating lease ROU assets, operating lease liabilities and operating lease liabilities (net of current portion) in the consolidated balance sheets. The Company does not currently have any finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments under the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The implicit rate within the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determined the incremental borrowing rate for each lease using the Company’s current borrowing rate, adjusted for various factors including level of collateralization and term to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments, offset by lease incentives. Certain of the Company’s leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain the Company will exercise that option. An option to terminate is considered unless it is reasonably certain the Company will not exercise the option. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease.
Business Combination	Management conducts a valuation analysis on the tangible and intangible assets acquired and liabilities assumed at the acquisition date thereof. During the measurement period, which may be up to one year from the Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The Company allocates a portion of the purchase price to the fair value of identifiable intangible assets. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management. The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill.
Goodwill and Other Intangibles	Goodwill represents the excess of the fair value of consideration transferred in a business combination over the fair value of tangible and intangible assets acquired, net of the fair value of liabilities assumed. Goodwill is tested for impairment within one year of acquisitions or annually as of October 1, and whenever indicators of impairment exist. In testing goodwill for impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, the Company will perform a two-step impairment test. The Company will test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on the Company’s best estimate of future net sales and operating expenses, based primarily on expected growth and general economic conditions. Based on the annual impairment test the Company concluded that the fair value of each of its reporting units exceeded its respective carrying value. Identifiable intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Identifiable intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Except for goodwill, the Company does not have any intangible assets with indefinite useful lives. During the second quarter of 2019 the Company wrote-off $1,549,000 of intangible assets associated with the Company's wholly owned subsidiaries Firestorm Solutions, LLC, Firestorm Franchising LLC, Secure Education Consultants and BC Management, Inc. (collectively, “Firestorm”). In the fourth quarter of 2019, the Company recorded non-deductible goodwill impairment charge of $1,022,000, related to the Company’s Global subsidiaries, which are classified as operations held for sale. The impairment charges were non-cash in nature and did not affect the Company’s liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company’s debt agreements. S
Revenue Recognition	The Company derives its revenues substantially from two sources: (1) license and subscription fees for software and related products and services, and (2) professional services to clients. Revenue is recognized upon transfer of control of promised products and services to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. If the consideration promised in the contract includes a variable amount, for example maintenance fees, the Company includes an estimate of the amount it expects to receive for the total transaction price, if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through application of the following steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The following table presents a summary of revenue: Year ended December 31, 2019 2018 Technology Automated traffic safety enforcement $ 3,403 $ 3,413 Licensing and subscription revenue 2,066 - Other revenue - 109 Total Technology revenue 5,469 3,522 Professional Services Consulting and technical support services 13,827 16,435 Franchising Services 24 97 Total Professional Services revenue 13,851 16,532 Total revenue $ 19,320 $ 20,054 Technology Revenues The revenues for technology products and services are from fees that provide customers with software licenses and related support and service fees for various public safety services. In March 2019, the Company acquired substantially all of the assets of a software development company, OpenALPR Technologies, Inc. The software acquired from this acquisition and subsequently developed by the Company have provided the basis for the Company’s licensing and subscription revenue. Licensing and subscription, include services which operate in many installations with a high accuracy rate, include a web server, self-managed database, and access to a powerful, cross-platform application programming interface. The software employs a convolutional neural network architecture to classify images and features include seamless video analysis and data analytics. Current customers include law enforcement agencies, highway authorities, parking system operators, private security companies, and wholesale and retail operations supporting logistics and customer loyalty programs. During the second quarter of 2019, the Company changed its method of selling in the Technology Segment from perpetual software licenses, with associated maintenance services, to service subscriptions of limited duration. These subscriptions give the customer a license to use the latest version of the software only during the term of the subscription. Revenue is generally recognized ratably over the contract term. This change is expected to impact the Company's revenue in the short term. However, the amount of contract revenue received over the long-term impact is expected to be relatively consistent. The Company’s subscription services arrangements are non-cancelable and do not contain refund-type provisions. Revenue is recognized ratably over the licensing or subscription term. Automated traffic safety enforcement arrangements provide traffic safety systems to a number of municipalities in North America. These systems include hardware that identifies red light and school safety zone traffic violations and software that captures and records forensic images, analyses the images to provide data and supports citation management services. The Company also provides an enterprise parking enforcement solution that the Company licenses to parking management companies and municipalities. Revenue is recognized monthly based on the number of camera systems that are operated, or the number of citations issued by the relevant municipality. Professional Services Revenues Consulting and Technical Support Services is primarily comprised of government contracting support services that assist government contractors with critical aspects of their business. These services include market intelligence and opportunity identification; capture and strategic advisory; proposal strategy and development; teaming support; and managed human capital services. The Company’s services also help commercially focused firms gain entry into the government contracting market. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts, or ratably over the contract term for fixed price contracts with subscription services. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price, which is determined based on the Company’s overall pricing objectives, taking into consideration market conditions and other factors. A performance obligation is a promise in a contract with a customer to transfer services that are distinct. The performance obligations that are not yet satisfied or partially satisfied are performance obligations that are expected to be recognized as revenue in the future for a contract with a customer which was executed as of a particular date. At December 31, 2019, the Company had approximately $10,102,000 of remaining performance obligations not yet satisfied or partially satisfied related to its Technology Segment. The Company expects to recognize approximately 46% of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the next two to four years thereafter. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled accounts receivables, and contract liabilities on the consolidated balance sheets. Billed and unbilled accounts receivable are presented as part of accounts receivable, net on the consolidated balance sheets. When billings occur after the work has been performed, such unbilled amounts will generally be billed and collected within 60 to 120 days but typically no longer than over the next twelve months. Unbilled accounts receivables of $488,000 and $295,000 were included in accounts receivable, net, in the consolidated balance sheets as of December 31, 2019 and December 31, 2018, respectively. Additionally, unbilled accounts receivables of $298,000 and $830,000 were included in current assets held for sale in the consolidated balance sheets as of December 31, 2019 and December 31, 2018, respectively. When the Company advance bills clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within the next six months to five years, depending on the subscription or licensing period. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the year ended December 31, 2019 were not materially impacted by any other factors. Contract liabilities from the year ended December 31, 2019 and December 31, 2018 were $1,524,000 and $207,000, respectively. All contract liabilities as of December 31, 2019 and December 31, 2018 were attributable to continued operations. During the year ended December 31, 2019 all of the contract liabilities balance as of December 31, 2018 was recognized as revenue. The services due for contract liabilities described above are shown below as of December 31, 2019 (dollars in thousands): 2020 $ 774 2021 243 2022 219 2023 191 2024 97 Total $ 1,524 Practical Expedients Election Costs to Obtain and Fulfill a Contract
Advertising	The Company expenses all non-direct-response advertising costs as incurred. Advertising costs for the years ended December 31, 2019 and 2018 were $350,000 and $248,000, respectively, and are included in sales and marketing expense in the consolidated statement of operations.
Use of Estimates	The preparation of financial statements in conformity with GAAP requires the extensive use of management's estimates. Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual amounts may differ from these estimates. On an on-going basis, the Company evaluates its estimates, including those related to collectability of accounts receivable, fair value of debt and equity instruments and income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions.
Income Taxes	Income tax expense consists of U.S. federal and state income taxes. The Company is required to pay income taxes in certain state jurisdictions. Historically, AOC Key Solutions and Global initially elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, neither AOC Key Solutions nor Global paid federal corporate income tax, and in most instances state income tax, on its taxable income. AOC Key Solutions revoked its S-Corporation election upon the March 15, 2016 merger with KeyStone and Global revoked its S Corporation election upon the acquisition by Rekor, and are therefore, subject to corporate income taxes. Firestorm is a single-member LLC with KeyStone as the sole member. The Company uses the liability method of accounting for income taxes as set forth in the authoritative guidance for accounting for income taxes. This method requires an asset and liability approach for the recognition of deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company evaluates the recoverability of the net deferred income tax assets and the level of the valuation allowance required with respect to such net deferred income tax assets. After considering all available facts, the Company fully reserved for its net deferred tax assets, outside of the deferred tax liability related to the indefinite lived intangible, because management believes that it is not more likely than not that their benefits will be realized in future periods. The Company will continue to evaluate its net deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s net deferred income tax assets satisfy the realization standard, the valuation allowance will be reduced accordingly. The tax effects of uncertain tax positions are recognized in the consolidated financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized. It is the Company’s accounting policy to account for ASC 740-10-related penalties and interest as a component of the income tax provision in the consolidated statements of operations and comprehensive loss. As of December 31, 2019, and 2018, the Company’s evaluation revealed no uncertain tax positions that would have a material impact on the financial statements. The 2016 through 2018 tax years remain subject to examination by the IRS, as of December 31, 2019. The Company does not believe that any reasonably possible changes will occur within the next twelve months that will have a material impact on the financial statements.
Equity-Based Compensation	The Company recognizes equity-based compensation based on the grant-date fair value of the award on a straight-line basis over the requisite service period, net of estimated forfeitures. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires the use of subjective assumptions, including the fair value and projected volatility of the underlying common stock and the expected term of the award. The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option pricing model with the following assumptions during the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Risk-free interest rate 1.35-3.03% 3.03% Expected term 5-6 years 5 years Volatility 80.4-89.8% 88.5% Dividend yield 0% 0% Estimated annual forfeiture rate at time of grant 0-30% 0% Risk-Free Interest Rate – Expected Term – Expected Volatility – Dividend Yield – Forfeiture Rate –
Series A Cumulative Convertible Redeemable Preferred Stock	The Company’s Series A Preferred Stock has certain embedded features including; a Company put right to convert each share into common stock at an initial conversion price and a specified price which increases annually based on the passage of time beginning in November 2019, the Series A Preferred Stock holder put right after 60 months from the issuance date to redeem any or all of the Series A Preferred Stock at a redemption price of $15 per share plus any accrued but unpaid dividends, the Company call right after 36 months from the issuance date to redeem all of the Series A Preferred Stock at a redemption price which increases annually based on the passage of time beginning in November 2019, and the Series A Preferred Stock automatic conversion feature based on a qualified initial public offering in excess of $30,000,000 or a written agreement by at least two thirds of the Series A Preferred Stock holders at an initial conversion price and a specified price which increases annually based on the passage of time beginning in November 2016. The Company determined that the shares of Preferred Stock should be classified as mezzanine equity since they are contingently redeemable. The Company determined that it is probable that the Series A Preferred Stock will become redeemable, thus the Company will recognize changes in the redemption value immediately as they occur at the end of each reporting period as if it were also the redemption date for the interest and adjust the carrying amount of the Series A Preferred Stock to the redemption value.
Long-Term Debt with Detachable Warrants	When the Company issues debt with warrants, the Company determines the value of the warrants using the Black-Scholes Option Pricing Model using the stock price on the date of issuance, the risk free interest rate associated with the life of the debt, and the estimated volatility of the Company’s stock. T he Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as interest expense in the consolidated statements of operations.
Fair Value of Financial Instruments	The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and cash equivalents, inventory, accounts receivable and accounts payable approximate fair value as of December 31, 2019 and December 31, 2018 because of the relatively short-term maturity of these financial instruments. The carrying amount reported for long-term debt approximates fair value as of December 31, 2019 and December 31, 2018 given management’s evaluation of the instrument’s current rate compared to market rates of interest and other factors. The determination of fair value is based upon the fair value framework established by ASC Topic 820, Fair Value Measurements and Disclosures Level 1 – Level 2 – Level 3 – Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s goodwill and other intangible assets are measured at fair value at the time of acquisition and analyzed on a recurring and non-recurring basis for impairment, respectively, using Level 2 and Level 3 inputs. The Company has concluded that its Series A Preferred Stock is a Level 3 financial instrument and that the fair value approximates the carrying value, which includes the accretion of the discounted interest component through December 31, 2019. There were no changes in levels during the years ended December 31, 2019 and 2018.
Earnings per Share	Basic earnings per share, or EPS, is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and potentially dilutive securities outstanding during the period, except for periods of net loss for which no potentially dilutive securities are included because their effect would be anti-dilutive. Potentially dilutive securities consist of common stock issuable upon exercise of stock options or warrants using the treasury stock method. Potentially dilutive securities issuable upon conversion of the Series A Preferred Stock are calculated using the if-converted method. The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. Participating securities consist of preferred stock that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common stockholders.
Segment Reporting	The FASB ASC Topic 280, Segment Reporting Beginning with the first quarter of 2019, the Company changed its operating and reportable segments from one segment to two segments : the Technology Segment and the Professional Services Segment. The Technology Segment is responsible for the activities in developing technology and distributing and licensing products and services with vehicle recognition features. In connection with this effort in March 2019, the Company acquired OpenALPR Technology. The Professional Services Segment is responsible for the activities that provide professional services for government contracting market, as well as staffing services for the aerospace and aviation markets.
New Accounting Pronouncements	New Accounting Pronouncements Effective in the Year Ended December 31, 2019 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Leases (Topic 842): Targeted Improvements allowing entities to not apply the new standard in the comparative periods they present in their financial statements in the year of adoption. The Company has included the impact of this standard as part of its leasing accounting policy above. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting periods beginning after December 15, 2018 and In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. New Accounting Pronouncements Effective in Future Periods In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments There are currently no other accounting standards that have been issued, but not yet adopted, that could have a significant impact on the Company’s consolidated financial position, results of operations or cash flows upon adoption.

BUSINESS AND SIGNIFICANT ACCO_3

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	Dec. 31, 2019
Accounting Policies [Abstract]
Estimated useful lives	Class of assets Useful life Furniture and fixtures 2 - 10 years Office equipment 2 - 5 years Leasehold improvements Shorter of asset life or lease term Automobiles 3 - 5 years Camera systems 3 years
Summary of revenue	Year ended December 31, 2019 2018 Technology Automated traffic safety enforcement $ 3,403 $ 3,413 Licensing and subscription revenue 2,066 - Other revenue - 109 Total Technology revenue 5,469 3,522 Professional Services Consulting and technical support services 13,827 16,435 Franchising Services 24 97 Total Professional Services revenue 13,851 16,532 Total revenue $ 19,320 $ 20,054
Contract liabilities	2020 $ 774 2021 243 2022 219 2023 191 2024 97 Total $ 1,524
Assumptions for options granted	Year Ended December 31, 2019 2018 Risk-free interest rate 1.35-3.03% 3.03% Expected term 5-6 years 5 years Volatility 80.4-89.8% 88.5% Dividend yield 0% 0% Estimated annual forfeiture rate at time of grant 0-30% 0%

BUSINESS ACQUISITIONS (Tables)

BUSINESS ACQUISITIONS (Tables)	12 Months Ended
BUSINESS ACQUISITIONS (Tables)	Dec. 31, 2019
Business Combinations [Abstract]
Purchase price allocation	Secure Education Consultants Acquisition Cash paid $ 100 Common stock issued 163 Warrants issued, at $5.44 66 Warrants issued, at $6.53 57 Total consideration 386 Less intangible and intellectual property (386 ) Net goodwill recorded $ - OpenALPR Acquisition Accounts receivable, net $ 381 Other current assets, net 13 Property and equipment, net 21 Contract liabilities (388 ) Net assets acquired 27 Less intangible assets 7,436 Consideration paid (12,397 ) Net goodwill recorded $ 4,934 Cash consideration $ 7,000 Note payable 5,000 Common stock consideration 397 Total acquisition consideration $ 12,397
Pro-forma financial information	Year Ended December 31, 2019 2018 (Dollars in thousands, except per share data) Revenue: Technology $ 6,438 $ 5,235 Professional Services 13,851 16,532 Total revenue from continuing operations 20,289 21,767 Net loss from continuing operations (13,604 ) (4,721 ) Basic and diluted earnings (loss) per share $ (0.74 ) $ (0.36 ) Basic and diluted number of shares 20,129,985 16,009,014

OPERATIONS HELD FOR SALE (Table

OPERATIONS HELD FOR SALE (Tables)	12 Months Ended
OPERATIONS HELD FOR SALE (Tables)	Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]
Discontinued operations	Year Ended December 31, 2019 2018 ASSETS Cash and cash equivalents $ 225 $ 90 Accounts receivable, net 2,763 2,289 Other current assets, net 238 257 Current assets held for sale 3,226 2,636 Property and equipment, net 113 176 Right-of-use lease assets, net 130 - Goodwill 669 1,691 Intangible assets, net 1,994 2,208 Deposits and other long-term assets - 79 Total long-term assets held for sale 2,906 4,154 Total assets held for sale $ 6,132 $ 6,790 LIABILITIES Accounts payable and accrued expenses $ 461 $ 800 Short-term borrowings 1,842 1,095 Lease liability, short-term 113 - Total current liabilities held for sale 2,416 1,895 Other long-term liabilities - 90 Lease liability, long-term 30 - Total long-term liabilities held for sale 30 90 Total liabilities held for sale $ 2,446 $ 1,985 Year Ended December 31, 2019 2018 Revenue $ 26,207 $ 28,508 Cost of revenue 22,680 24,788 Gross profit 3,527 3,720 Operating expenses: General and administrative expenses 3,481 3,634 Selling and marketing expenses 170 - Impairment of intangibles 1,022 - Operating expenses 4,673 3,634 Income (loss) from operations (1,146 ) 86 Other income (expense) Loss on extinguishment of debt (31 ) - Interest expense (294 ) (117 ) Other income (expense) (1 ) 37 Total other expense (326 ) (80 ) Income (loss) from operations held for sale (1,472 ) 6 Income tax provision from operations held for sale - - Net income (loss) from operations held for sale $ (1,472 ) $ 6

SUPPLEMENTAL DISCLOSURES OF C_2

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)	12 Months Ended
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)	Dec. 31, 2019
Supplemental Cash Flow Information [Abstract]
Supplemental disclosures of cash flow information	Year Ended December 31, 2019 2018 Cash paid for interest - continuing operations $ 2,331 $ 362 Cash paid for interest - held for sale operations 325 117 Cash paid for taxes - continuing operations - - Cash paid for taxes - held for sale operations 12 14 Notes payable for equipment purchase - held for sale operations - 32 Proceeds from short-term borrowing arrangement transfer to settle line of credit 312 - Issuance of common stock for the extinguishment of warrants - 134 Common stock issued in connection with note payable - 126 Business combinations, net of cash: Current assets 415 - Intangible assets 7,436 386 Goodwill 4,934 - Current liabilities (388 ) - Cash paid acquisition of OpenALPR Technology (7,000 ) - Note issued acquisition of OpenALPR Technology (5,000 ) Issuance of common stock (397 ) (163 ) Issuance of common stock warrants - (123 ) Sale of Secure Consultants: Current assets (58 ) - Intangible assets sold (249 ) - Current liabilities 54 - Loss on sale 3 - Financing: Notes payable - continuing operations 21,000 - Debt discount financing costs (2,599 ) - Extinguishment of debt (1,113 ) - Repayment of notes payable and interest expense, net of debt discount (2,515 ) - Investment in OpenALPR Technology (12,000 ) - Issuance of warrants in conjunction with notes payable 706 - Accounts Payable 360 - Proceeds from notes payable 3,839 - Adoption of ASC-842 Lease Accounting: Right-of-use lease asset 1,286 - Deferred rent 31 - Lease liability $ (1,317 ) $ -

PROPERTY AND EQUIPMENT, NET (Ta

PROPERTY AND EQUIPMENT, NET (Tables)	12 Months Ended
PROPERTY AND EQUIPMENT, NET (Tables)	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Property and equipment	December 31, 2019 2018 Furniture and fixtures $ 62 $ 158 Office equipment 300 545 Camera systems 772 635 Vehicles 36 36 Leasehold improvements 120 16 Total 1,290 1,390 Less: accumulated depreciation and amortization (807 ) (928 ) Property and equipment, net from continuing operations 483 462 Property and equipment, net from operation held for sale 113 176 Property and equipment, net $ 596 $ 638

LEASES (Tables)

LEASES (Tables)	12 Months Ended
LEASES (Tables)	Dec. 31, 2019
Leases [Abstract]
Summary of operating lease	Operating lease right-of-use lease assets from continuing operations $ 782 Operating lease right-of-use lease assets from operations held for sale 130 Total operating lease right-of-use assets $ 912 Lease liability, short-term $ 302 Lease liability, long-term 667 Lease liability from operations held for sale 143 Total operating lease liabilities $ 1,112 Weighted Average Remaining Lease Term - operating leases from continuing operations 3.4 Weighted Average Discount Rate - operating leases 9 %
Maturities of lease liabilities	2020 $ 498 2021 337 2022 177 2023 178 2024 100 Total lease payments 1,290 Less imputed interest (178 ) Maturities of lease liabilities $ 1,112

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
INTANGIBLE ASSETS (Tables)	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Changes in the carrying amount of goodwill by reportable business segment	Segment December 31, 2018 OpenALPR Technology Acquisition Impairment December 31, 2019 Goodwill from continuing operations Technology $ 1,402 $ 4,934 $ - $ 6,336 Goodwill from held for sale operations Professional Services 1,691 - (1,022 ) 669 Total goodwill $ 3,093 $ 4,934 $ (1,022 ) $ 7,005
Change in intangible assets	December 31, 2018 Additions Amortization Impairment Sale of Secured Education Consultants December 31, 2019 Intangible assets subject to amortization from continuing operations Customer relationships $ 2,475 $ 90 $ (371 ) $ (1,549 ) $ (249 ) $ 396 Marketing related 69 223 (62 ) - - 230 Technology based 83 7,123 (811 ) - - 6,395 Internally developed capitalized software 829 458 (64 ) - - 1,223 Intangible assets subject to amortization from continuing operations 3,456 7,894 (1,308 ) (1,549 ) (249 ) 8,244 Intangible assets subject to amortization from held for sale operations 2,208 - (214 ) - - 1,994 Total intangible assets subject to amortization $ 5,664 $ 7,894 $ (1,522 ) $ (1,549 ) $ (249 ) $ 10,238
Schedule of intangible assets	Customer Relationships Marketing Related Technology Based Internally Developed Capitalized Software Total Identifiable intangible assets $ 461 $ 327 $ 7,206 $ 1,290 $ 9,284 Accumulated amortization (65 ) (97 ) (811 ) (67 ) (1,040 ) Identifiable intangible assets from continuing operations, net 396 230 6,395 1,223 8,244 Identifiable intangible assets from operations held for sale, net 1,685 309 - - 1,994 Identifiable intangible assets, net $ 2,081 $ 539 $ 6,395 $ 1,223 $ 10,238
Estimated annual amortization expense	2020 $ 1,265 2021 1,254 2022 1,173 2023 1,096 2024 1,060 Thereafter 1,450 Capitalized software not yet placed in service 946 Total $ 8,244

DEBT (Tables)

DEBT (Tables)	12 Months Ended
DEBT (Tables)	Dec. 31, 2019
Debt Disclosure [Abstract]
Schedule of debt	2020 $ - 2021 21,000 2022 1,000 2023 - 2024 - Thereafter - Total 22,000 Less unamortized interest (39 ) Less unamortized financing costs (1,552 ) Notes payable $ 20,409

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
INCOME TAXES (Tables)	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense	Year Ended December 31, 2019 2018 Current: State $ 37 $ 29 Deferred: Federal 10 83 State - (83 ) Expense from income taxes $ 47 $ 29
Deferred income tax assets and liabilities	Year Ended December 31, 2019 2018 Deferred tax assets: Amortizable start-up costs $ - $ 34 Accrual and others 322 241 Lease Liabilities 246 - Interest expense carryforward 1,079 147 Net operating loss carryforward 4,724 2,518 Valuation allowance (5,813 ) (2,308 ) Total deferred tax assets 558 632 Deferred tax liabilities: Goodwill and Intangibles (328 ) (551 ) Right-of-Use Asset (202 ) - Fixed assets (38 ) (81 ) Total deferred tax assets (liabilities), net $ (10 ) $ -
Effective tax rate	Year Ended December 31, 2019 2018 U.S. statutory federal rate 21.0 % 21.0 % (Decrease) increase in taxes resulting from: State income tax rate, net of U.S. Federal benefit 1.5 % 2.9 % Impact of changes in tax rates 0.0 % (0.1 )% True-ups (0.1 )% (5.7 )% Other (0.6 )% (1.6 )% Valuation allowance (22.1 )% (17.0 )% Effective tax rate (0.3 )% (0.5 )%

EQUITY INCENTIVE PLAN (Tables)

EQUITY INCENTIVE PLAN (Tables)	12 Months Ended
EQUITY INCENTIVE PLAN (Tables)	Dec. 31, 2019
Equity [Abstract]
Stock option activity	Number of Shares Subject to Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding Balance at January 1, 2018 1,695,375 $ 2.19 9.26 Granted 48,499 0.73 9.85 Exercised (13,998 ) 1.68 9.50 Forfeited (450,633 ) 1.82 8.71 Expired (51,686 ) 1.36 8.53 Outstanding Balance at December 31, 2018 1,227,557 2.13 8.39 - Granted 870,549 1.03 8.76 Forfeited (111,537 ) 1.95 - Canceled (331,186 ) 2.05 - Outstanding Balance at December 31, 2019 1,655,383 $ 1.68 8.33 $ 3,256 Exercisable at December 31, 2019 999,831 $ 1.84 6.66 $ 1,684

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	12 Months Ended
LOSS PER SHARE (Tables)	Dec. 31, 2019
Earnings Per Share [Abstract]
Loss per common share	Year Ended December 31, 2019 2019 2018 Basic and diluted loss per share Net loss from continuing operations $ (14,412 ) $ (5,709 ) Less: preferred stock accretion (752 ) (655 ) Less: preferred stock dividends (460 ) (460 ) Net loss attributable to shareholders from continuing operations (15,624 ) (6,824 ) Net income (loss) from operations held for sale (1,472 ) 6 Net loss attributable to shareholders $ (17,096 ) $ (6,818 ) Weighted average common shares outstanding - basic and diluted 20,033,023 15,409,014 Basic and diluted loss per share from continuing operations $ (0.78 ) $ (0.44 ) Basic and diluted (loss) earnings per share from operations held for sale (0.07 ) - Basic and diluted loss per share $ (0.85 ) $ (0.44 ) Common stock equivalents excluded due to anti-dilutive effect 5,602,841 3,898,257

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	12 Months Ended
BUSINESS SEGMENTS (Tables)	Dec. 31, 2019
Segment Reporting [Abstract]
Summary of segments	Summarized financial information concerning the Company’s reportable segments is presented below (dollars in thousands): Technology Professional Services Corporate Services Elimination Consolidated Year Ended December 31, 2019 Revenues $ 5,469 $ 13,874 $ - $ (23 ) $ 19,320 Gross profit 3,817 6,468 - (23 ) 10,262 Loss from operations* (2,259 ) (1,560 ) (5,293 ) 23 (9,089 ) Loss from operations held for sale (including impairment of goodwill of $1,022,000) - (1,146 ) - - (1,146 ) * Including intangible assets impairment - 1,549 - - 1,549 Year Ended December 31, 2018 Revenues $ 3,522 $ 16,532 $ - $ - $ 20,054 Gross profit 1,880 8,196 - - 10,076 Loss from operations (832 ) (381 ) (3,910 ) - (5,123 ) Income from operations held for sale - 86 - - 86 Information about the Company’s Year ended December 31, 2019 2018 2019 2018 Technology Professional Services United States $ 4,052 $ 3,449 $ 13,851 $ 16,357 Canada 654 73 - 78 Other 763 - - 97 Total Revenue $ 5,469 $ 3,522 $ 13,851 $ 16,532 Except for the United States and Canada, total revenue in any single country was less than 10% of consolidated revenue. Additional information relating to the Company’s December 31, 2019 2018 Assets: Technology $ 16,625 $ 4,294 Professional services 5,726 5,510 Corporate services 509 1,461 Total assets from continuing operations 22,860 11,265 Assets from operations held for sale 6,132 6,790 Total assets $ 28,992 $ 18,055 Information about the Company’s December 31, 2019 2018 United States $ 1,220 $ 1,320 Canada 70 70 Accumulated Depreciation (807 ) (928 ) Total property and equipment, net $ 483 $ 462 Long-lived assets by segment is as follows (dollars in thousands): December 31, 2019 2018 Technology $ 14,875 $ 3,122 Professional Services 540 2,195 Corporate 430 3 Consolidated $ 15,845 $ 5,320 Total net additions to long-lived assets by segment are as follows (dollars in thousands): Year ended December 31, 2019 2018 Technology $ 12,998 $ 1,013 Professional Services 701 376 Corporate 564 - Consolidated $ 14,263 $ 1,389 Depreciation and amortization expense are allocated to all segments based on usage. Total depreciation and amortization expense, by segment, is as follows (dollars in thousands): Year ended December 31, 2019 2018 Technology $ 1,245 $ 322 Professional Services 485 725 Corporate 137 - Consolidated $ 1,867 $ 1,047

BUSINESS AND SIGNIFICANT ACCO_4

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2019
Furniture and Fixtures \| Minimum
Estimated useful life	2 years
Furniture and Fixtures \| Maximum
Estimated useful life	10 years
Office Equipment \| Minimum
Estimated useful life	2 years
Office Equipment \| Maximum
Estimated useful life	5 years
Leasehold Improvements
Estimated useful life	Shorter of asset life or lease term
Automobiles \| Minimum
Estimated useful life	3 years
Automobiles \| Maximum
Estimated useful life	5 years
Camera systems
Estimated useful life	3 years

BUSINESS AND SIGNIFICANT ACCO_5

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue	$ 19,320	$ 20,054
Technology
Revenue	5,469	3,522
Technology \| Automated Traffic Safety Enforcement
Revenue	3,403	3,413
Technology \| Licensing and Subscription Revenue
Revenue	2,066	0
Technology \| Other Revenue
Revenue	0	109
Professional Services
Revenue	13,851	16,532
Professional Services \| Consulting and Technical Support Services
Revenue	13,827	16,435
Professional Services \| Franchising Services
Revenue	$ 24	$ 97

BUSINESS AND SIGNIFICANT ACCO_6

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) $ in Thousands	Dec. 31, 2019USD ($)
Accounting Policies [Abstract]
2020	$ 774
2021	243
2022	219
2023	191
2024	97
Total	$ 1,524

BUSINESS AND SIGNIFICANT ACCO_7

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 3)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 3)	Dec. 31, 2019	Dec. 31, 2018
Risk-free interest rate		3.03%
Expected term		5 years
Volatility		88.50%
Dividend yield	0.00%	0.00%
Estimated annual forfeiture rate at time of grant		0.00%
Minimum
Risk-free interest rate	1.35%
Expected term	5 years
Volatility	80.40%
Estimated annual forfeiture rate at time of grant	0.00%
Maximum
Risk-free interest rate	3.03%
Expected term	6 years
Volatility	89.80%
Estimated annual forfeiture rate at time of grant	30.00%

BUSINESS AND SIGNIFICANT ACCO_8

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Date of operation	Feb. 1, 2017
Interest allocated to operations held for sale	$ 294	$ 117
Net loss from continuing operations	(14,412)	(5,709)
Working capital deficit	(912)
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents	(902)	811
Net proceeds from notes payable	3,839	2,000
Net proceeds from at-the-market agreement	2,949	0
Proceeds from short-term borrowings	5,463	41,168
Deposits from continuing operations	1,641	2,678
Restricted cash	461	609
Allowance for doubtful accounts	48	24
Capitalized internally developed software costs	966	829
Capitalized internally developed software to be sold costs	232
Advertising expense	$ 350	$ 248

BUSINESS ACQUISITIONS (Details)

BUSINESS ACQUISITIONS (Details) - USD ($) $ in Thousands	12 Months Ended
BUSINESS ACQUISITIONS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Common stock issued	$ 397	$ 163
Secure Education
Cash paid	100
Common stock issued	163
Warrants issued, at $5.44	66
Warrants issued, at $6.53	57
Total consideration	386
Less intangible assets and intellectual property	(386)
Net goodwill recorded	$ 0

BUSINESS ACQUISITIONS (Details

BUSINESS ACQUISITIONS (Details 1) - OpenALPR Technology $ in Thousands	12 Months Ended
	Dec. 31, 2019USD ($)
Accounts receivable, net	$ 381
Other current assets, net	13
Property and equipment, net	21
Contract liabilities	(388)
Net assets acquired	27
Less intangible assets	7,436
Consideration paid (see below)	(12,397)
Goodwill recorded	4,934
Cash consideration	7,000
Notes payable	5,000
Common stock consideration	397
Total acquisition consideration	$ 12,397

BUSINESS ACQUISITIONS (Detail_2

BUSINESS ACQUISITIONS (Details 2) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenues	$ 20,289	$ 21,767
Net loss from continuing operations	$ (13,604)	$ (4,271)
Basic earnings (loss) per share	$ (.74)	$ (.36)
Diluted earnings (loss) per share	$ (.74)	$ (.36)
Basic number of shares	20,129,985	16,009,014
Diluted number of shares	20,129,985	16,009,014
Technology
Revenues	$ 6,438	$ 5,235
Professional Services
Revenues	$ 13,851	$ 16,532

OPERATIONS HELD FOR SALE (Detai

OPERATIONS HELD FOR SALE (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 225	$ 90
Accounts receivable, net	2,763	2,289
Other current assets, net	238	257
Current assets held for sale	3,226	2,636
Property and equipment, net	113	176
Right-of-use lease assets net	130	0
Goodwill	669	1,691
Intangible assets, net	1,994	2,208
Deposits and other long-term assets	0	79
Total long-term assets held for sale	2,906	4,154
Total assets held for sale	6,132	6,790
Liabilities
Accounts payable and accrued expenses	461	800
Short-term borrowings	1,842	1,095
Lease liability, short term	113	0
Total current liabilities held for sale	2,416	1,895
Other long-term liabilities	0	90
Lease liability, long term	30	0
Total long-term liabilities held for sale	30	90
Total liabilities held for sale	$ 2,446	$ 1,985

OPERATIONS HELD FOR SALE (Det_2

OPERATIONS HELD FOR SALE (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Revenue	$ 26,207	$ 28,508
Cost of revenue	22,680	24,788
Gross profit	3,527	3,720
Operating expenses
General and administrative expenses	3,481	3,634
Selling and marketing expenses	170	0
Impairment of intangibles	1,022	0
Operating expenses	4,673	3,634
Income (loss) from operations	(1,146)	86
Other income (expense)
Loss on extinguishment of debt	(31)	0
Interest expense	(294)	(117)
Other income (expense)	(1)	37
Total other expense	(326)	(80)
Income (loss) from operations held for sale	(1,472)	6
Income tax provision from operations held for sale	0	0
Net income (loss) from operations held for sale	$ (1,472)	$ 6

SUPPLEMENTAL DISCLOSURES OF C_3

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Supplemental Cash Flow Information [Abstract]
Cash paid for interest - continuing operations	$ 2,331	$ 362
Cash paid for interest - held for sale operations	325	117
Cash paid for taxes - continuing operations	0	0
Cash paid for taxes - held for sale operations	12	14
Notes payable for equipment purchase - held for sale operations	0	32
Proceeds from short-term borrowing arrangement transferred to settle line of credit	312	0
Issuance of common stock for the extinguishment of warrants	0	134
Common stock issued in connection with note payable	0	126
Business combinations, net of cash:
Current assets	415	0
Intangible assets	7,436	386
Goodwill	4,934	0
Current liabilities	(388)	0
Cash paid acquisition of OpenALPR Technology	(7,000)	0
Note issued acquisition of OpenALPR Technology	(5,000)	0
Issuance of common stock	(397)	(163)
Issuance of common stock warrants	0	(123)
Sale of Secure Consultants
Current assets	(58)	0
Intangible assets sold	(249)	0
Current liabilities	54	0
Loss on sale	3	0
Financing:
Notes payable - continuing operations	21,000	0
Debt discount financing costs	(2,599)	0
Extinguishment of debt	(1,113)	0
Repayment of notes payable and interest expense, net of debt discount	(2,515)	0
Investment in OpenALPR Technology	(12,000)	0
Issuance of warrants in conjunction with notes payable	706	0
Accounts payable	360	0
Proceeds from notes payable	3,839	0
Adoption of ASC-842 Lease Accounting:
Right-of-use lease asset	1,286	0
Deferred rent	31	0
Lease liability	$ (1,317)	$ 0

INVENTORY (Details Narrative)

INVENTORY (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Parts	$ 302	$ 73

PROPERTY AND EQUIPMENT, NET (De

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, gross	$ 1,290	$ 1,390
Less: accumulated depreciation and amortization	(807)	(928)
Property and equipment, net from continuing operations	483	462
Property and equipment, net from operation held for sale	113	176
Property and equipment, net	596	638
Furniture and Fixtures
Property and equipment, gross	62	158
Office Equipment
Property and equipment, gross	300	545
Camera Systems
Property and equipment, gross	772	635
Vehicles
Property and equipment, gross	36	36
Leasehold Improvements
Property and equipment, gross	$ 120	$ 16

PROPERTY AND EQUIPMENT, NET (_2

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation and amortization from continuing operations	$ 348	$ 309
Depreciation and amortization from operations held for sale	$ 38	$ 33

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease right-of-use lease assets from continuing operations	$ 782	$ 0
Operating lease right-of-use lease assets from operations held for sale	130
Total operating lease right-of-use assets	912
Lease liability, short term	302	0
Lease liability, long term	667	$ 0
Lease liability from operations held for sale	143
Total operating lease liabilities	$ 1,112
Weighted average remaining lease term - operating leases	3 years 4 months 24 days
Weighted average discount rate - operating leases	9.00%

LEASES (Details 1)

LEASES (Details 1) $ in Thousands	Dec. 31, 2019USD ($)
Leases [Abstract]
2020	$ 498
2021	337
2022	177
2023	178
2024	100
Total	1,290
Less imputed interest	(178)
Maturities of lease liabilities	$ 1,112

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Goodwill from continuing operations	$ 6,336	$ 1,402
Goodwill from held for sale operations	669	1,691
Total goodwill	7,005	$ 3,093
Open ALPR Acquisition
Goodwill from continuing operations	4,934
Goodwill from held for sale operations	0
Total goodwill	4,934
Impairment
Goodwill from continuing operations	0
Goodwill from held for sale operations	(1,022)
Total goodwill	$ (1,022)

INTANGIBLE ASSETS (Details 1)

INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Amortization	$ (1,308)	$ (738)
Impairment	(1,549)	0
Intangible assets, ending	8,244
Total Intangible Assets
Intangible assets, beginning	5,664
Additions	7,894
Amortization	(1,522)
Impairment	(1,549)
Sale of SEC	(249)
Intangible assets, ending	10,238	5,664
Continuing Operations
Intangible assets, beginning	3,456
Additions	7,894
Amortization	(1,308)
Impairment	(1,549)
Sale of SEC	(249)
Intangible assets, ending	8,244	3,456
Continuing Operations \| Customer Relationships
Intangible assets, beginning	2,475
Additions	90
Amortization	(371)
Impairment	(1,549)
Sale of SEC	(249)
Intangible assets, ending	396	2,475
Continuing Operations \| Marketing Related
Intangible assets, beginning	69
Additions	223
Amortization	(62)
Impairment	0
Sale of SEC	0
Intangible assets, ending	230	69
Continuing Operations \| Technology Based
Intangible assets, beginning	83
Additions	7,123
Amortization	(811)
Impairment	0
Sale of SEC	0
Intangible assets, ending	6,395	83
Continuing Operations \| Internally Developed Capitalized Software
Intangible assets, beginning	829
Additions	458
Amortization	(64)
Impairment	0
Sale of SEC	0
Intangible assets, ending	1,223	829
Held for Sale Operations
Intangible assets, beginning	2,208
Additions	0
Amortization	(214)
Impairment	0
Sale of SEC	0
Intangible assets, ending	$ 1,994	$ 2,208

INTANGIBLE ASSETS (Details 2)

INTANGIBLE ASSETS (Details 2) $ in Thousands	Dec. 31, 2019USD ($)
Identifiable intangible assets	$ 9,284
Accumulated amortization	(1,040)
Indentifiable intangible assets from continuing operations, net	8,244
identifiable intangible assets from operations held for sale, net	1,994
Identifiable intangible assets, net	10,238
Customer Relationships
Identifiable intangible assets	461
Accumulated amortization	(65)
Indentifiable intangible assets from continuing operations, net	396
identifiable intangible assets from operations held for sale, net	1,685
Identifiable intangible assets, net	2,081
Marketing Related
Identifiable intangible assets	327
Accumulated amortization	(97)
Indentifiable intangible assets from continuing operations, net	230
identifiable intangible assets from operations held for sale, net	309
Identifiable intangible assets, net	539
Technology Based
Identifiable intangible assets	7,206
Accumulated amortization	(811)
Indentifiable intangible assets from continuing operations, net	6,395
identifiable intangible assets from operations held for sale, net	0
Identifiable intangible assets, net	6,395
Internally Developed Capitalized Software
Identifiable intangible assets	1,290
Accumulated amortization	(67)
Indentifiable intangible assets from continuing operations, net	1,223
identifiable intangible assets from operations held for sale, net	0
Identifiable intangible assets, net	$ 1,223

INTANGIBLE ASSETS (Details 3)

INTANGIBLE ASSETS (Details 3) $ in Thousands	Dec. 31, 2019USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 1,265
2021	1,254
2022	1,173
2023	1,096
2024	1,060
Thereafter	1,450
Capitalized software not yet placed in service	946
Total	$ 8,244

DEBT (Details)

DEBT (Details) $ in Thousands	Dec. 31, 2019USD ($)
Debt Disclosure [Abstract]
2020	$ 0
2021	21,000
2022	1,000
2023	0
2024	0
Thereafter	0
Total	22,000
Less unamortized interest	(39)
Less unamortized financing costs	(1,552)
Notes payable	$ 20,409

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current:
State	$ 37	$ 29
Deferred:
Federal	10	83
State	0	(83)
Expense from income taxes	$ 47	$ 29

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Amortizable start-up costs	$ 0	$ 34
Accrual and others	322	241
Lease liabilities	246	0
Interest expense carryforward	1,079	147
Net operating loss carryforward	4,724	2,518
Valuation allowance	(5,813)	(2,308)
Deferred tax assets	558	632
Deferred tax liabilities:
Goodwill and Intangibles	(328)	(551)
Right-of-Use Asset	(202)	0
Fixed assets	(38)	(81)
Total deferred tax assets, net	$ (10)	$ 0

INCOME TAXES (Details 2)

INCOME TAXES (Details 2)	12 Months Ended
INCOME TAXES (Details 2)	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
U.S. statutory federal rate	21.00%	21.00%
(Decrease) increase in taxes resulting from:
State income tax rate, net of U.S. Federal benefit	1.50%	2.90%
Impact of changes in tax rates	0.00%	(0.10%)
True-ups	(0.10%)	(5.70%)
Other	(0.60%)	(1.60%)
Valuation allowance	(22.10%)	(17.00%)
Effective tax rate	(0.30%)	(0.50%)

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Valuation allowance	$ (5,813)	$ (2,308)
Federal
Net operating loss carryforwards	4,030	2,044
State
Net operating loss carryforwards	$ 693	$ 474

RESTRUCTURING (Details Narrativ

RESTRUCTURING (Details Narrative) $ in Thousands	12 Months Ended
RESTRUCTURING (Details Narrative) $ in Thousands	Dec. 31, 2019USD ($)
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 333

EMPLOYEE BENEFIT PLAN (Details

EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]
Contributions	$ 515	$ 159

STOCKHOLDERS' (DEFICIT) EQUITY

STOCKHOLDERS' (DEFICIT) EQUITY (Details Narrative) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, issued	240,861	240,861
Preferred stock, outstanding	240,861	240,861
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	30,000,000	30,000,000
Common stock, issued	21,595,653	18,767,619
Common stock, outstanding	21,595,653	18,767,619
Series A
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	505,000	505,000
Preferred stock, issued	502,327	502,327
Preferred stock, outstanding	502,327	502,327
Series B
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	240,861	240,861
Preferred stock, issued	240,861	240,861
Preferred stock, outstanding	240,861	240,861

EQUITY INCENTIVE PLAN (Details)

EQUITY INCENTIVE PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Number of options outstanding, beginning	1,227,557	1,695,375
Number of options, granted	870,549	48,499
Number of options, exercised		(13,998)
Number of options, forfeited	(111,537)	(450,633)
Number of options, expired		(51,686)
Number of options, cancelled	(331,186)
Number of options outstanding, ending	1,655,383	1,227,557
Number of options outstanding, exercisable	999,831
Weighted average exercise price outstanding, beginning	$ 2.13	$ 2.19
Weighted average exercise price, granted	1.03	.73
Weighted average exercise price, exercised		1.68
Weighted average exercise price, forfeited	1.95	1.82
Weighted average exercise price, expired		1.36
Weighted average exercise price, cancelled	2.05
Weighted average exercise price outstanding, ending	1.68	$ 2.13
Weighted average exercise price outstanding, exercisable	$ 1.84
Average remaining contractual term outstanding, beginning	8 years 3 months 20 days	9 years 3 months 4 days
Average remaining contractual term, granted	8 years 9 months 4 days	9 years 10 months 6 days
Average remaining contractual term, exercised		9 years 6 months
Average remaining contractual term, forfeited	0 years	8 years 8 months 16 days
Average remaining contractual term, expired		8 years 6 months 11 days
Average remaining contractual term, cancelled	0 years
Average remaining contractual term outstanding, ending	8 years 3 months 29 days	8 years 3 months 20 days
Average remaining contractual term, exercisable	6 years 7 months 28 days
Aggregate intrinsic value outstanding, beginning	$ 0
Aggregate intrinsic value outstanding, ending	3,256	$ 0
Aggregate intrinsic value outstanding, exercisable	$ 1,684

EQUITY INCENTIVE PLAN (Details

EQUITY INCENTIVE PLAN (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Stock compensation expense	$ 446	$ 465
Unrecognized stock compensation expense	$ 486
Unrecognized stock compensation expense, recognition period	1 year 7 months 20 days

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Basic and diluted loss per share
Net loss from continuing operations	$ (14,412)	$ (5,709)
Less: preferred stock accretion	(752)	(655)
Less: preferred stock dividends	(460)	(460)
Net loss attributable to shareholders from continuing operations	(15,624)	(6,824)
Net income (loss) from operations held for sale	(1,472)	6
Net loss attributable to shareholders	$ (17,096)	$ (6,818)
Weighted average common shares outstanding - basic and diluted	20,033,023	15,409,014
Basic and diluted loss per share from continuing operations	$ (.78)	$ (0.44)
Basic and diluted (loss) earnings per share from operations held for sale	(.07)	0
Basic and diluted loss per share	$ (.85)	$ (0.44)
Common stock equivalents excluded due to anti-dilutive effect	5,602,841	3,898,257

LOSS PER SHARE (Details Narrati

LOSS PER SHARE (Details Narrative) - shares	12 Months Ended
LOSS PER SHARE (Details Narrative) - shares	Dec. 31, 2019	Dec. 31, 2018
Potentially dilutive securities excluded from loss per share	5,602,841	3,898,257
Warrants
Potentially dilutive securities excluded from loss per share	2,491,249	1,214,491
Series A Preferred Stock
Potentially dilutive securities excluded from loss per share	974,487	974,487
Series B Preferred Stock
Potentially dilutive securities excluded from loss per share	481,722	481,722
Options
Potentially dilutive securities excluded from loss per share	1,655,383	1,227,557

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands	12 Months Ended
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Revenue	$ 19,320	$ 20,054
Gross profit	10,262	10,076
Loss from operations	(9,089)	(5,123)
Income (loss) from operations held for sale	(1,146)	86
Including intangible assets impairment	1,549
Technology
Revenue	5,469	3,522
Gross profit	3,817	1,880
Loss from operations	(2,259)	(832)
Income (loss) from operations held for sale	0	0
Including intangible assets impairment	0
Professional Services
Revenue	13,874	16,532
Gross profit	6,468	8,196
Loss from operations	(1,560)	(381)
Income (loss) from operations held for sale	(1,146)	86
Including intangible assets impairment	1,549
Corporate Services
Revenue	0	0
Gross profit	0	0
Loss from operations	(5,293)	(3,910)
Income (loss) from operations held for sale	0	0
Including intangible assets impairment	0
Elimination
Revenue	(23)	0
Gross profit	(23)	0
Loss from operations	23	0
Income (loss) from operations held for sale	0	$ 0
Including intangible assets impairment	$ 0

BUSINESS SEGMENTS (Details 1)

BUSINESS SEGMENTS (Details 1) - USD ($) $ in Thousands	12 Months Ended
BUSINESS SEGMENTS (Details 1) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Revenue	$ 19,320	$ 20,054
Technology
Revenue	5,469	3,522
Technology \| United States
Revenue	4,052	3,449
Technology \| Canada
Revenue	654	73
Technology \| Other
Revenue	763	0
Professional Services
Revenue	13,851	16,532
Professional Services \| United States
Revenue	13,851	16,357
Professional Services \| Canada
Revenue	0	78
Professional Services \| Other
Revenue	$ 0	$ 97

BUSINESS SEGMENTS (Details 2)

BUSINESS SEGMENTS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Total assets from continuing operations	$ 22,860	$ 11,265
Assets from operations held for sale	6,132	6,790
Total assets	28,992	18,055
Technology
Total assets from continuing operations	16,625	4,294
Professional Services
Total assets from continuing operations	5,726	5,510
Corporate Services
Total assets from continuing operations	$ 509	$ 1,461

BUSINESS SEGMENTS (Details 3)

BUSINESS SEGMENTS (Details 3) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, gross	$ 1,290	$ 1,390
Accumulated depreciation	(807)	(928)
Total property and equipment, net	483	462
United States
Property and equipment, gross	1,220	1,320
Canada
Property and equipment, gross	$ 70	$ 70

BUSINESS SEGMENTS (Details 4)

BUSINESS SEGMENTS (Details 4) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Long-lived assets	$ 15,845	$ 5,320
Technology
Long-lived assets	14,875	3,122
Professional Services
Long-lived assets	540	2,195
Corporate Services
Long-lived assets	$ 430	$ 3

BUSINESS SEGMENTS (Details 5)

BUSINESS SEGMENTS (Details 5) - USD ($) $ in Thousands	12 Months Ended
BUSINESS SEGMENTS (Details 5) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Total net additions to long-lived assets	$ 14,263	$ 1,389
Technology
Total net additions to long-lived assets	12,998	1,013
Professional Services
Total net additions to long-lived assets	701	376
Corporate Services
Total net additions to long-lived assets	$ 564	$ 0

BUSINESS SEGMENTS (Details 6)

BUSINESS SEGMENTS (Details 6) - USD ($) $ in Thousands	12 Months Ended
BUSINESS SEGMENTS (Details 6) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Depreciation and amortization expense	$ 1,867	$ 1,047
Technology
Depreciation and amortization expense	1,245	322
Professional Services
Depreciation and amortization expense	485	725
Corporate Services
Depreciation and amortization expense	$ 137	$ 0