Rekor Systems (REKR) 10-K12 Mar 212020 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, 2020	Mar. 12, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Registrant Name	Rekor Systems, Inc.
Entity Central Index Key	0001697851
Document Type	10-K
Document Period End Date	Dec. 31, 2020
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		40,804,219
Entity Public Float			$ 58,600,000
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 20,595	$ 1,075
Restricted cash and cash equivalents	412	461
Accounts receivable, net	1,038	776
Inventory	1,264	302
Note receivable, current portion	340	0
Other current assets, net	469	175
Current assets of discontinued operations	2	7,441
Total current assets	24,120	10,230
Property and equipment, net	1,047	442
Right-of-use lease assets, net	426	283
Goodwill	6,336	6,336
Intangible assets, net	7,038	8,244
Investments in unconsolidated companies	75	0
Note receivable, long-term	1,360	0
Long- term assets of discontinued operations	0	3,457
Total long-term assets	16,282	18,762
Total assets	40,402	28,992
CURRENT LIABILITIES
Accounts payable and accrued expenses	3,898	3,678
Loan payable, current portion	517	0
Lease liability, short-term	253	148
Contract liabilities	1,126	749
Current liabilities of discontinued operations	124	5,757
Total current liabilities	5,918	10,332
Notes payable, long-term	980	20,409
Loan payable, long-term	469	0
Lease liability, long term	188	161
Contract liabilities, long term	958	775
Deferred tax liability	24	10
Long term liabilities of discontinued operations	5	536
Total long-term liabilities	2,624	21,891
Total liabilities	8,542	32,223
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, 2020 and December 31, 2019, respectively	6,669	5,804
Commitment and Contingencies
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock, $0.0001 par value, 100,000,000 and 30,000,000 shares authorized, 33,013,271 and 21,595,653 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	3	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, 2020 and December 31, 2019, respectively	0	0
Series B Cumulative Convertible Preferred stock, $0.0001 par value, 240,861 shares authorized, issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	0	0
Additional paid-in capital	68,238	19,371
Accumulated deficit	(43,050)	(28,408)
Total stockholders' (deficit) equity	25,191	(9,035)
Total liabilities and stockholders' (deficit) equity	$ 40,402	$ 28,992

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, issued	743,188	743,188
Preferred stock, outstanding	743,188	743,188
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	100,000,000	30,000,000
Common stock, issued	33,013,271	21,595,653
Common stock, outstanding	33,013,271	21,595,653
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, 2020	Dec. 31, 2019
Revenue:
Total revenue	$ 9,234	$ 5,469
Cost of revenue:
Total cost of revenue	3,533	1,652
Gross profit:
Gross profit	5,701	3,817
OPERATING EXPENSES:
General and administrative expenses	12,117	8,276
Selling and marketing expenses	2,247	1,646
Research and development expenses	3,185	1,429
Operating expenses	17,549	11,351
Loss from operations	(11,848)	(7,534)
Other income (expense)
Loss on extinguishment of debt	(3,281)	(1,113)
Interest expense	(2,503)	(3,909)
Other income	62	198
Gain on sale of business	3,631	0
Total other expense	(2,091)	(4,824)
Loss before income taxes	(13,939)	(12,358)
Income tax provision	(23)	(47)
Net loss from continuing operations	(13,962)	(12,405)
Net loss from discontinued operations	(220)	(3,479)
Net loss	$ (14,182)	$ (15,884)
Loss per common share from continuing operations - basic and diluted	$ (0.63)	$ (0.68)
Loss per common share discontinued operations - basic and diluted	(0.01)	(0.17)
Loss per common share - basic and diluted	$ (0.64)	$ (0.85)
Weighted average shares outstanding
Basic and diluted	24,192,680	20,033,023

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, 2018	18,767,619	240,861
Beginning 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)
Stock-based compensation			796		796
Issuance of common stock pursuant to Exchange Agreement, shares	4,349,497
Issuance of common stock pursuant to Exchange Agreement, amount	$ 0		17,325		17,325
Issuance upon exercise of stock options, shares	298,392
Issuance upon exercise of stock options, amount	$ 0		701		701
Exercise of cashless warrants in exchange for common stock, shares	265,563
Exercise of warrants in exchange for common stock, shares	1,189,375
Exercise of warrants in exchange for common stock, amount	$ 0		880		880
Issuance of common stock pursuant to at the market offering net, shares	5,216,562
Issuance of common stock pursuant to at the market offering net, amount	$ 1		29,929		29,930
Exercise of warrants related to series A preferred stock, shares	98,229
Exercise of warrants related to series A preferred stock, amount	$ 0		101		101
Preferred stock dividends				(460)	(460)
Accretion of Series A preferred stock			(865)		(865)
Net loss				(14,182)	(14,182)
Ending balance, shares at Dec. 31, 2020	33,013,271	240,861
Ending balance, amount at Dec. 31, 2020	$ 3	$ 0	$ 68,238	$ (43,050)	$ 25,191

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations	$ (13,962)	$ (12,405)
Net income (loss) from operations held for sale	(220)	(3,479)
Net loss	(14,182)	(15,884)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense	36	0
Depreciation	382	323
Amortization of right-of-use lease asset	211	83
Provision for deferred taxes	14	10
Share-based compensation	796	446
Amortization of financing costs	657	1,101
Amortization of intangible assets	1,368	971
Loss on extinguishment of debt	3,281	1,113
Gain on sale of AOC Key Solutions	(2,619)	0
Gain on sale of TeamGlobal	(1,012)	0
Loss on sale of Secure Education Consultants	0	3
Changes in operating assets and liabilities:
Accounts receivable	(298)	(867)
Inventory	(962)	(229)
Other current assets, net	(294)	(42)
Accounts payable and accrued expenses	889	1,283
Contract liabilities	560	1,011
Lease liability	(222)	(57)
Net cash used in operating activities continuing operations	(11,175)	(7,256)
Net cash (used in) provided by operating activities, held for sale operations	(3,888)	(14,076)
Net cash used in operating activities	(15,063)	(21,332)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,037)	(798)
Proceeds from sale of Secure Consultants	0	250
Proceeds from sale of AOC Key Solutions	3,400	0
Proceeds from sale of TeamGlobal	2,300	0
Investment in equity investment	(75)	0
Proceeds from AOC Key Solutions note receivable	600	0
Net cash (used in) provided by investing activities, continuing operations	5,188	(548)
Net cash used in investing activities - held for sale operations	0	(15)
Net cash (used in) provided by investing activities	5,188	(563)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from PPP loans	874	0
Payment of stock issuance costs associated with the Note Exchange transaction	73	0
Repayments of notes payable	(7,266)	0
Net proceeds from notes payable	0	3,839
Net proceeds from exercise of options	701	0
Net proceeds from exercise of warrants	880	103
Net proceeds from exercise of warrants associated to series A preferred stock	101	4
Net proceeds from at-the-market agreement	29,930	2,949
Payment of preferred dividends	0	(108)
Payment of debt modification costs	(300)	0
Net cash provided by financing activities continuing operations	24,847	6,787
Net cash provided by financing activities held for sale operations	4,171	14,206
Net cash provided by financing activities	29,018	20,993
Net increase (decrease) in cash, cash equivalents and restricted cash, continuing operations	18,860	(1,017)
Net increase in cash, cash equivalents and restricted cash and cash equivalents discontinued operations	283	115
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents	19,143	(902)
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period	1,866	2,768
Cash, cash equivalents and restricted cash and cash equivalents at end of period	21,009	1,866
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents:
Cash and cash equivalents at end of period - continuing operations	20,595	1,075
Restricted cash and cash equivalents at end of period - continuing operations	412	461
Cash and cash equivalents at end of period - discontinued operations	2	330
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$ 21,009	$ 1,866

BUSINESS AND SIGNIFICANT ACCOUN

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2020
Accounting Policies [Abstract]
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	Rekor Systems, Inc. (“Rekor”) (formerly Novume Solutions, Inc.) was formed in February 2017 to effectuate the mergers of, and become a holding company for KeyStone Solutions, Inc. (“KeyStone”) and Brekford Traffic Safety, Inc. (“Brekford”). On March 29, 2019, the Company announced that its Board of Directors approved changing the Company’s name to Rekor Systems, Inc. On April 26, 2019, the Company changed its name from Novume Solutions, Inc. to Rekor Systems, Inc. The consolidated financial statements include the accounts of Rekor, the parent company, and its wholly owned subsidiaries Rekor Recognition Systems, Inc. and OpenALPR Software Solutions, LLC (collectively, the “Company”). The Company is a leader in the emerging market for intelligent roadway systems developed to take advantage of recent developments in artificial intelligence ("AI"). The Company has developed advanced vehicle recognition systems that can extract more accurate and complete data from existing cameras and sensors. Rekor’s systems have also been designed to take full advantage of the latest technological advances in new cameras and sensors, edge processing and cloud computing. The Company has also developed platforms that enable the data its systems collect to be analyzed in combination with other sources and distributed to multiple end users in real time as actionable intelligence or data collected for long range planning purposes in full compliance with the security and privacy requirements of each end user. These capabilities are particularly useful to governmental entities and businesses in solving a wide variety of real-world vehicle-related operational challenges. The Company’s ability to enhance the results provided by existing Internet Protocol (“IP”) connected cameras has enabled significant new uses for vehicle recognition technology that were not previously available or cost effective. The Company currently provides products and services for governmental organizations and large and small businesses throughout the world. Customers currently use the Company’s products or services in approximately 80 countries in applications that include public safety, transportation, parking, security, customer experience, operational efficiency and logistics. Previously, the Company provided professional services and staffing solutions to the government contracting and the aerospace and aviation industries through the Company’s Professional Services Segment. The Professional Services Segment included the Company’s wholly owned subsidiaries AOC Key Solutions Inc. (“AOC Key Solutions”), Global Technical Services, Inc. (“GTS” or “TeamGlobal”), Firestorm Solutions, LLC (Firestorm Solutions”) and Firestorm Franchising, LLC (“Firestorm Franchising” and, together with Firestorm Solutions, “Firestorm”). As part of the development of a new line of products for the public safety and security markets, the Company determined that its resources were best concentrated on vehicle recognition products and services and began to consider dispositions in our Professional Services Segment. Concurrently, the Company reorganized and retooled its product development, business development and administrative resources to better serve the Company’s direction. On April 2, 2020, the Company sold AOC Key Solutions. As of June 29, 2020, the Company sold Team Global and determined that all the remaining operations that comprised its Professional Services Segment met the criteria to be presented as discontinued. The Company’s continuing operations are conducted by its wholly owned subsidiary, Rekor Recognition Systems, Inc. (“Rekor Recognition”). In connection with the development of several new public safety products, we acquired substantially all the assets of OpenALPR Technology, Inc. in March 2019. This acquisition (the “OpenALPR Technology Acquisition”) transferred vehicle recognition software and associated licenses and proprietary rights to OpenALPR Software Solutions, LLC (“OpenALPR”), a new wholly owned subsidiary of Rekor Recognition. OpenALPR’s vehicle recognition platform, already operating on approximately 6,800 cameras in approximately 80 countries worldwide that cover approximately 14,000 lanes of roadway, has laid the groundwork for expansion, enabling multiple deployment mechanisms for our products and services. Rekor’s mission is to enable “AI driven decisions” by enhancing the capabilities in the governmental and commercial sectors with actionable, real-time insights. We seek to deliver these insights through an expanding software portfolio that not only addresses the challenges our customers are currently facing but empowers them to effectively deal with their evolving needs. Basis of Consolidation 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 prior year amounts have been reclassified to conform with the current year presentation. Amounts for the year ended December 31, 2019, have been reclassified to conform to the current year presentation. Due to the sale of TeamGlobal, the sale of AOC Key Solutions, and the discontinuance of all professional services activities, certain amounts have been reclassified in order to conform to the current period presentation. As a result of these reclassifications there was no impact on the ending balances in the consolidated balance sheets or consolidated statements of operations. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the extensive use of management's estimates. Management uses estimates and assumptions in preparing consolidated 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, income taxes and evaluation of standalone selling prices in contracts with customers that contain multiple performance obligations. 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. Liquidity For all annual and interim periods, 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, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period”, as defined in U.S. 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. These assumptions including among other factors, the expected timing and nature of the Company’s programs and projected cash expenditures, its ability to delay or curtail these expenditures or programs and its ability to raise additional capital, if necessary, to the extent management has the proper authority to execute them and considers it probable that those implementations can be achieved 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 the sale of common stock, proceeds from the private sale of the Company’s non-core subsidiaries, proceeds from note receivables, debt financings and a public offering of its common stock to support cashflow from operations. The Company attributes losses to public company corporate overhead and non-capital expenditures related to the scaling and development of new products and service offerings in connection with the focus on the technology of the Company. As of and for the year ended December 31, 2020, the Company had a net loss from continuing operations of $13,962,000 and working capital of $18,324,000. The Company's net cash position was increased by $18,860,000 for the year ended December 31, 2020 primarily due to the net proceeds of $29,930,000 from the At Market Issuance Sales Agreement (the "Sales Agreement") and the net cash proceeds of $6,300,000 from the sale of AOC Key Solutions and TeamGlobal, which includes the repayment of the $600,000 AOC Key Solutions Subordinate Note, offset by the net loss from operations in the period. As of September 21, 2020, the Company voluntarily terminated the Sales Agreement (see Note 14). 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. Should access to funds be unavailable, the Company will need to seek out additional sources of funding. Furthermore, the Company has contingency plans to reduce or defer expenses and cash outlays should operations weaken in the look-forward period or additional financing, if needed, is not available. The Company's ability to generate positive operating results and complete the execution of its business strategy will depend on (i) its ability to continue the growth of its technology business, (ii) the continued performance of its contractors, subcontractors and vendors, (iii) its ability to maintain and build good relationships with its lenders and financial intermediaries, (iv) its ability to maintain timely collections from existing customers, and (v) the stabilization 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 and implement new business, raise capital, and otherwise, depending on the severity of such impact, materially adversely affect its operating results. The Company’s operations have been affected by the recent and ongoing outbreak of the coronavirus disease (“COVID-19”) which was declared a pandemic by the World Health Organization in March 2020. The impact has resulted in a slowdown in the Company’s rate of growth and includes disruptions in the delivery and installation of equipment, slower than expected contract approvals and implementation of projects by its customers, the need for employees to work remotely, restrictions on travel affecting the Company’s ability to attend meetings, conferences, consultations and installations and otherwise provide and market its products and services, and disruptions to its customers' operations which may affect its revenues. The Company benefited from the financing under the CARES Act. The Company continues to evaluate the potential impact of the pandemic and the ultimate disruption that may be caused by the outbreak is uncertain. Possible additional effects may include, but are not limited to, continuing disruption to the Company’s customers and revenue, absenteeism in the Company’s labor workforce, unavailability of products and supplies used in operations, and a decline in value of assets held by the Company. As a result, the pandemic may result in a material adverse impact on the Company’s financial position, operations and cash flow. Rounding Dollar amounts, except per share data, in the notes to these consolidated 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, 2020, and 2019, the Company had deposits from continuing operations totaling $21,007,000 and $1,536,000, respectively, in one U.S. financial institution that was federally insured up to $250,000 per account. The Company has a market concentration of revenue and accounts receivable from continuing operations related to its customer base. Company A accounted for 16% of the Company’s total revenues for the year ended December 31, 2020. Company B accounted for 17% of the Company’s total revenues for the year ended December 31, 2019. As of December 31, 2020, accounts receivable from Company C and Company D totaled $161 of the consolidated accounts receivable balance. As of December 31, 2019, Company D accounted for $198,000, or 26% 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, 2020 and 2019 or consolidated accounts receivable balance as of December 31, 2020 and 2019. Cash and 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, 2020 and 2019 were $412,000 and $461,000, 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 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 billing occurs after services have been provided, 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 $600,000 and $440,000 were included in accounts receivable, net, in the consolidated balance sheets as of December 31, 2020 and December 31, 2019, respectively. 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 will 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 $22,000 and $0 was required at December 31, 2020 and 2019, respectively. Note Receivables In connection with the sale of AOC Key Solutions in April 2020, the Company received a $600,000, five-year promissory note due March 2025, that carried an interest rate of 8%. Based on the general market conditions and the credit quality of the buyer at the time of the sale, the Company determined that the fixed interest rate approximated the current market rates. During fiscal year 2020, the full principal balance of the $600,000 note associated with the sale of AOC Key Solutions was paid in full. In connection with the sale of TeamGlobal in June 2020, the Company received a $1,700,000, five and a half year promissory note due December 2025, that carries an interest rate of 4% and is secured by a first priority security interest in the shares of TeamGlobal. Monthly principal payments on the promissory note will begin in 2021. Based on the general market conditions, the security interest held by the Company and the credit quality of the buyer at the time of the sale, the Company determined that the fixed interest rate approximates the current market rates. Interest income recognized for the year ended December 31, 2020 was $54,000 and is included as part of other income on the consolidated statement of operations. Interest income for the year ended December 31, 2019 was immaterial. Inventory Inventory principally consists of parts and finished goods held temporarily until installed for service. Inventory is valued at the lower of cost or net realizable value. The cost is determined by the first-in, first-out (“FIFO”) method. 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 - 5 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 $216,000 and $966,000 as of December 31, 2020 and 2019, respectively. For the year ended December 31, 2020 and 2019, the Company placed in service $730,000 and $232,000, respectively, 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 during the application phase 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 the year ended December 31, 2020 and 2019, the Company capitalized $162,000 and $91,000, respectively, of development costs related to internal use software. Intangible Assets Intangible assets include internally developed capitalized software and amounts recognized in connection with acquisitions, including customer relationships, technology and marketing related assets. Intangible assets, other than software development costs, are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Leases The Company accounts for its leases in accordance with Accounting Standard Codification (“ASC”) Topic 842, Leases ("ASC 842"). 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 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. ASU 2016-02 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 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. Equity Method Investments Investments in common stock of entities other than the Company’s consolidated subsidiaries are accounted for under the equity method in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures. In June of 2020, the Company announced a joint venture in which the Company would have a 50 percent equity interest in Roker Inc. In the third quarter of 2020, the Company contributed $75,000 for its 50 percent equity interest. This investment is accounted for under the equity method. In February 2017, the Company contributed substantially all of the assets and certain liabilities related to its vehicle services business to Global Public Safety (the “GPS Closing”). After the GPS Closing, the Company continues to own 19.9% of the units of Global Public Safety. This equity investment does not have a readily determinable fair value and the Company reports this investment at cost, less impairment. In 2018, the Company recorded an impairment of $262,000, related to the investment in Global Public Safety, effectively reducing the total investment value to $0. The carrying amount of the Company’s investments are included as part of investments in unconsolidated companies in the consolidated balance sheets. There were no distributions or earnings received from either investment in the year ended December 31, 2020 or 2019. Goodwill The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. The Company will assess goodwill for impairment annually, or more often if events or changes in circumstances indicate that it might be impaired, by comparing its carrying value to the reporting unit’s fair value. During the years ended December 31, 2020 and 2019, we had not recognized any impairment to goodwill from continuing operations. Revenue Recognition The Company derives its revenues substantially from license and subscription fees for software and related products and services. A portion of the subscription fees are generated through the Company’s eCommerce website rather than through in-person sales. In addition, the Company derives net revenues in connection with certain citation and collection services in connection with the Company’s automated traffic safety and parking enforcement services. 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 related to hardware, 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 (dollars in thousands): Year ended December 31, 2020 2019 Revenue Licensing and subscription revenue $ 6,207 $ 2,066 Automated traffic safety enforcement 3,027 3,403 Total revenue $ 9,234 $ 5,469 Information about the Company’s Year ended December 31, 2020 2019 Revenue United States $ 6,498 $ 4,052 Canada 910 654 Other 1,826 763 Total revenue $ 9,234 $ 5,469 For the year ended December 31, 2020, except for the United States, total revenue in any single country was less than 10% of consolidated revenue. Revenues Licensing and subscription revenue The Company's revenues are derived principally from fees for technology products and services, including software licenses and subscriptions, hardware leases and sales, and other related support 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 services include providing, through a web server, access to the Company’s proprietary vehicle recognition software, a self-managed database and a powerful, cross-platform application programming interface. The Company's proprietary software employs a convolutional neural network architecture to classify images and features that 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. Included in the licensing and subscription revenue is revenue that was recognized through the Company’s eCommerce platform. For the year ended December 31, 2020 and 2019, the Company recognized revenues of $865,000 and $439,000, respectively, for products and services that were purchased through the Company’s eCommerce platform. During the second quarter of 2019, the Company changed its primary method of selling its software from perpetual software licenses, with associated maintenance services, to service subscriptions of limited duration. These subscriptions give the customer access to the use of the latest version of the Company's software only during the term of the subscription. Revenue is generally recognized ratably over the contract term. The Company’s subscription services arrangements are non-cancelable and do not contain refund-type provisions. Revenue from the Company's perpetual software licenses are recognized up-front at the point in time when the software is made available to the customer. Automated traffic safety enforcement Automated traffic safety enforcement revenues reflect arrangements to 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. The Company also installs and maintains public safety systems, which may involve a combination of installation and lease payments or simply software licenses to use the Company's software in connection with a previously installed camera network. Revenue is recognized at various stages of completion of installation and monthly for lease or license payments. 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. On December 31, 2020, the Company had approximately $16,705,000 of remaining performance obligations not yet satisfied or partially satisfied. The Company expects to recognize approximately 30% of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the next two to five years thereafter. When the Company advance bills clients prior to providing services, generally such amounts will be earned and recognized in revenue within the next month 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 y

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	12 Months Ended
BUSINESS ACQUISITIONS	Dec. 31, 2020
Business Combinations [Abstract]
BUSINESS ACQUISITIONS	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 are based on fair values as of the acquisition date. Since the OpenALPR Technology Acquisition occurred on March 12, 2019, the results of operations including OpenALPR Technology Acquisition from the date of acquisition have been included in the Company’s consolidated statement of operations for year ended December 31, 2020. 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 OpenALPR Technology Acquisition. In the current year, the Company has fully integrated the operations of OpenALPR with its core operations. 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, 2019. 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, 2019 or to project potential operating results as of any future date or for any future periods. Year ended December 31, 2020 2019 Total revenue from continuing operations $ 9,234 $ 6,438 Net loss from continuing operations (13,962 ) (11,597 ) Basic and diluted loss per share continuing operations $ (0.63 ) $ (0.64 ) Basic and diluted number of shares 24,192,680 20,129,985

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	12 Months Ended
DISCONTINUED OPERATIONS	Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	In September 2019 and March 2020, the Company determined that TeamGlobal and AOC Key Solutions, respectively, met the criteria for held for sale accounting because the Company expected to complete the sale of TeamGlobal and AOC Key Solutions during the next 12 months as part of a plan to concentrate on the development of its Technology segment. Historically, TeamGlobal and AOC Key Solutions have been presented as part of the Company’s legacy Professional Services segment. During the first quarter of 2020, in connection with the Company’s plan to concentrate on its Technology segment AOC Key Solutions Sale On April 2, 2020, the Company entered into a Stock Purchase Agreement (the “AOC Key Solutions Purchase Agreement”) by and among the Company, AOC Key Solutions, and PurpleReign, LLC, a Virginia limited liability company owned by the members of AOC Key Solutions management (the “ AOC Key Solutions AOC Key Solutions The AOC Key Solutions As of December 31, 2020, the AOC Key Solutions Subordinated Note had been paid in full by the AOC Key Solutions Buyer. The table below shows the breakdown related to the AOC Key Solutions Purchase Agreement (dollars in thousands): Total assets sold $ 4,549 Total liabilities assumed 3,514 Net assets sold 1,035 Closing cost 346 Consideration paid (see below) 4,000 Gain on sale of AOC Key Solutions $ 2,619 Cash consideration $ 3,400 Note receivable 600 Total AOC Key Solution Purchase Agreement consideration $ 4,000 TeamGlobal Sale On June 29, 2020, the Company entered into a Stock Purchase Agreement (the “TeamGlobal Purchase Agreement”) by and among the Company, TeamGlobal, and Talent Teams LLC, a Texas limited liability company owned by the members of TeamGlobal’s management (the “TeamGlobal Buyer”), pursuant to which the Company agreed to sell TeamGlobal to the TeamGlobal Buyer. Subject to the terms and conditions of the TeamGlobal Purchase Agreement, the TeamGlobal Buyer agreed to purchase all of the outstanding equity interests of TeamGlobal for a purchase price of $4,000,000, comprising (i) an aggregate of $2,300,000 in cash, and (ii) a secured promissory note (the “Secured Note”) in the initial principal amount of $1,700,000, with such Secured Note secured by a Pledge and Security Agreement (the “Pledge Agreement”) with respect to all the outstanding shares of TeamGlobal being acquired by the TeamGlobal Buyer. The table below shows the breakdown related to the TeamGlobal Purchase Agreement (dollars in thousands): Total assets sold $ 9,996 Total liabilities assumed 7,130 Net assets sold 2,866 Closing cost 122 Consideration paid (see below) 4,000 Gain on sale of TeamGlobal $ 1,012 Cash consideration $ 2,300 Note receivable 1,700 Total TeamGlobal Purchase Agreement consideration $ 4,000 The dispositions of AOC Key Solutions and TeamGlobal are a result of the Company’s strategic decision to concentrate resources on the development of its legacy 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 TeamGlobal, AOC Key Solutions and Firestorm as discontinued operations, including for all prior periods reflected in the consolidated financial statements and these notes. Secure Education On June 1, 2019, the Company sold all its interest in Secure Education for consideration of $250,000. As a result of the Secure Education 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. Pursuant to ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations The assets and liabilities classified as discontinued operations in the Company's consolidated financial statements as of December 31, 2020 and December 31, 2019 are shown below (dollars in thousands): December 31, 2020 December 31, 2019 Global AOC Key Solutions Firestorm Total Global AOC Key Solutions Firestorm Total ASSETS Cash and cash equivalents $ - $ - $ 2 $ 2 $ 225 $ 93 $ 12 $ 330 Accounts receivable, net - - - - 2,763 4,055 - 6,818 Other current assets, net - - - - 238 52 3 293 Current assets of discontinued operations - - 2 2 3,226 4,200 15 7,441 Property and equipment, net - - - - 113 41 - 154 Right-of-use lease assets, net - - - - 130 499 - 629 Goodwill - - - - 669 - - 669 Intangible assets, net - - - - 1,994 - - 1,994 Deposits and other long-term assets - - - - - 11 - 11 Long-term assets of discontinued operations - - - - 2,906 551 - 3,457 Total assets of discontinued operations $ - $ - $ 2 $ 2 $ 6,132 $ 4,751 $ 15 $ 10,898 LIABILITIES Accounts payable and accrued expenses $ - $ - $ 31 $ 31 $ 461 $ 1,260 $ 33 $ 1,754 Lines of credit - - - - 1,842 1,894 - 3,736 Lease liability, short term - - 93 93 113 100 54 267 Current liabilities of discontinued operations - - 124 124 2,416 3,254 87 5,757 Lease liability, long term - - 5 5 30 467 39 536 Long-term liabilities of discontinued operations - - 5 5 30 467 39 536 Total liabilities of discontinued operations $ - $ - $ 129 $ 129 $ 2,446 $ 3,721 $ 126 $ 6,293 The major components of the discontinued operations, net of tax, are presented in the consolidated statements of operations below (dollars in thousands): Year ended December 31, 2020 2019 Global AOC Key Solutions Firestorm Total Global AOC Key Solutions Firestorm Total Revenue $ 10,510 $ 3,392 $ 5 $ 13,907 $ 26,207 $ 12,845 $ 1,006 $ 40,058 Cost of revenue 9,190 1,866 - 11,056 22,680 6,905 501 30,086 Gross profit 1,320 1,526 5 2,851 3,527 5,940 505 9,972 Operating expenses: General and administrative expenses 1,341 1,284 1 2,626 3,481 4,827 1,048 9,356 Selling and marketing expenses 79 131 - 210 170 528 48 746 Impairment of intangibles - - - - 1,022 - 1,549 2,571 Operating expenses 1,420 1,415 1 2,836 4,673 5,355 2,645 12,673 Income loss income from operations (100 ) 111 4 15 (1,146 ) 585 (2,140 ) (2,701 ) Other (income) expense: Loss on extinguishment of debt - - - - (31 ) (45 ) - (76 ) Interest expense (167 ) (74 ) - (241 ) (294 ) (189 ) - (483 ) Other expense (income) 5 1 - 6 (1 ) (151 ) (67 ) (219 ) Total other expense (162 ) (73 ) - (235 ) (326 ) (385 ) (67 ) (778 ) Income (loss) from discontinued operations (262 ) 38 4 (220 ) (1,472 ) 200 (2,207 ) (3,479 ) Income tax provision from discontinued operations - - - - - - - - Net income (loss) from discontinued operations $ (262 ) $ 38 $ 4 $ (220 ) $ (1,472 ) $ 200 $ (2,207 ) $ (3,479 )

SUPPLEMENTAL DISCLOSURES OF CAS

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	12 Months Ended
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	Dec. 31, 2020
Supplemental Cash Flow Information [Abstract]
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	Supplemental disclosures of cash flow information for the years ended December 31, 2020 and 2019 were as follows (dollars in thousands): Year ended December 31, 2020 2019 Cash paid for interest - continuing operations $ 1,211 $ 2,135 Cash paid for interest - discontinued operations 241 521 Cash paid for taxes - continuing operations 16 - Cash paid for taxes - discontinued operations 33 12 Non-cash investing and financing activities Purchase of vehicles by issuing loan payable 112 Note received as part of TeamGlobal Sale 1,700 - Paid-in-kind interest transferred from accrued interest to the principal balance of the 2019 Promissory Notes 1,283 - Business combinations, net of cash: OpenALPR Technology Acquisition: Current assets - 415 Intangible assets - 7,436 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 ) Sale of Secured Education: Current assets - (58 ) Intangible assets sold - (249 ) Current liabilities - 54 Loss on sale - 3 Financing activities: 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 Non-cash Note Exchange transaction Exchange of accrued interest and stock issuance costs (226 ) - Debt extinguishment costs (2,484 ) - Exchange of the net principal balance of the 2019 Promissory Notes (14,688 ) - Issuance of common stock 17,325 - Cash impact of Note Exchange transaction (73 ) - Adoption of ASC-842 Lease Accounting: Right-of-use lease asset 354 291 Lease liability $ (354 ) $ (291 )

INVENTORY

INVENTORY	12 Months Ended
INVENTORY	Dec. 31, 2020
Inventory Disclosure [Abstract]
INVENTORY	As of December 31, 2020 and 2019, inventory consisted entirely of the following (dollars in thousands): December 31, 2020 2019 Parts and cameras $ 558 $ 302 Finished goods 706 - Total inventory $ 1,264 $ 302

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET	12 Months Ended
PROPERTY AND EQUIPMENT, NET	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	Property and equipment, net consisted of the following (dollars in thousands): December 31, 2020 2019 Furniture and fixtures $ 83 $ 57 Office equipment 314 110 Camera systems 1,088 772 Vehicles 395 36 Leasehold improvements 200 122 Total $ 2,080 $ 1,097 Less: accumulated depreciation and amortization (1,033 ) (655 ) Property and equipment, net from continuing operations $ 1,047 $ 442 Depreciation and amortization related to property and equipment, net from continuing operations for the years ended December 31, 2020 and 2019 was $382,000 and $323,000, respectively. Information about the Company’s December 31, 2020 2019 United States $ 2,080 $ 1,027 Canada - 70 Accumulated depreciation (1,033 ) (655 ) Property and equipment, net from continuing operations $ 1,047 $ 442

LEASES

LEASES	12 Months Ended
LEASES	Dec. 31, 2020
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 four years. Cash paid for amounts included in the measurement of operating lease liabilities from continuing operations was $251,000 and $75,000 for the year ended December 31, 2020 and 2019, respectively. Operating lease expense from continuing operations , respectively, and is part of general and administrative expenses in the accompanying consolidated statement of operations. Supplemental balance sheet information related to leases as of December 31, 2020 was as follows (dollars in thousands): Operating lease right-of-use lease assets from continuing operations $ 426 Current portion of lease liability $ 253 Long-term portion of lease liability 188 Total lease liability from continuing operations $ 441 Weighted average remaining lease term - operating leases from continuing operations 2.19 Weighted average discount rate - operating leases 9 % Maturities of operating lease liabilities for continuing operations at December 31, 2020 were as follows (dollars in thousands): 2021 $ 278 2022 104 2023 84 2024 18 Total lease payments 484 Less imputed interest 43 Maturities of lease liabilities $ 441

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
INTANGIBLE ASSETS	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	Goodwill There have been no changes from December 31, 2019 in the carrying amount of goodwill of continuing operations for the year ended December 31, 2020. Intangible Assets Subject to Amortization The following summarizes the change in intangible assets from December 31, 2019 to December 31, 2020 (dollars in thousands): December 31, 2019 Additions Amortization December 31, 2020 Intangible assets subject to amortization from continuing operations Customer relationships $ 396 $ - $ (34 ) $ 362 Marketing related 230 - (71 ) 159 Technology based 6,395 - (1,034 ) 5,361 Internally capitalized software 1,223 162 (229 ) 1,156 Intangible assets subject to amortization from continuing operations $ 8,244 $ 162 $ (1,368 ) $ 7,038 The following provides a breakdown of identifiable intangible assets as of December 31, 2020 (dollars in thousands) Customer Relationships Marketing Related Technology Based Internally Capitalized Software Total Identifiable intangible assets $ 461 $ 327 $ 7,206 $ 1,452 $ 9,446 Accumulated amortization (99 ) (168 ) (1,845 ) (296 ) (2,408 ) Identifiable intangible assets from continuing operations, net $ 362 $ 159 $ 5,361 $ 1,156 $ 7,038 These intangible assets are being amortized on a straight-line basis over their weighted average remaining estimated useful life of 3.5 years. Amortization expense attributable to continuing operations for the year ended December 31, 2020 and 2019 was $1,368,000 and $971 , respectively, and is presented as part of general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2020, the estimated annual amortization expense from continuing operations for each of the next five fiscal years and thereafter is as follows (dollars in thousands): 2021 $ 1,551 2022 1,470 2023 1,290 2024 1,060 2025 1,051 Thereafter 400 Capitalized software not yet placed in service 216 Total $ 7,038

DEBT

DEBT	12 Months Ended
DEBT	Dec. 31, 2020
Debt Disclosure [Abstract]
DEBT	Long-Term Debt 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 $980,000 and $961,000, net of unamortized interest, as of December 31, 2020 and December 31, 2019, respectively, to reflect the amortized fair value of the notes issued due to the difference in interest rates of $20,000 and $39,000, respectively. 2018 Promissory Notes 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”). 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. 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 interest in the Company and $75,000 of interest due through May 1, 2019. All amounts paid were obtained from the proceeds of the 2019 Promissory Notes. The consideration of $1,050,000 for the 2018 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. Paycheck Protection Program Loan On May 26, 2020, the Company entered into a loan agreement with Newtek Small Business Finance, LLC, which provides for a loan in the principal amount of $221,000 (the “Rekor PPP Loan”) pursuant to the Paycheck Protection Program under the CARES Act. The Rekor PPP Loan has a two-year term and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. On June 3, 2020, the Company’s wholly owned subsidiary, Rekor Recognition Systems, Inc., entered into a loan agreement with Newtek Small Business Finance, LLC, which provides for a loan in the principal amount of $653,000 (the “Rekor Recognition PPP Loan”) pursuant to the Paycheck Protection Program under the CARES Act. The Rekor Recognition PPP Loan has a two-year term and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Rekor PPP Loan and the Rekor Recognition PPP Loan (collectively the “Loans”) may be prepaid at any time prior to maturity with no prepayment penalties. The Loans contain events of default and other provisions customary for a loan of this type. The Paycheck Protection Program provides that the Loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. The Company used the entire Loans amount for qualifying expenses and to apply for forgiveness of the Loans in accordance with the terms of the CARES Act. The current and long-term portion of the Loans is presented as part of loans payable current portion and loans payable, long-term, respectively, on the accompanying consolidated balance sheets. The Small Business Administration (“SBA”), in consultation with the Department of Treasury, issued new guidance that creates uncertainty regarding the qualification requirements for a PPP loan for public companies. The Company applied for forgiveness with Newtek Small Business Finance, LLC. The Company's forgiveness application is still being reviewed. 2019 Promissory Notes On March 12, 2019, the Company entered into a note purchase agreement pursuant to which investors, including OpenALPR Technology, Inc. (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 bore interest at 16% per annum, of which at least 10% per annum was required to be paid in cash. Any remaining interest accrued to be paid at maturity or earlier redemption. The notes also required 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. Transaction costs included $403,000 for a work fee payable over 10 months, $290,000 in legal fees and a $200,000 closing fee. As of December 31, 2020, the Company had settled the full amount of the 2019 Promissory Notes. The loan was 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. The 2019 Promissory Notes had an effective interest rate of 24.87%. As of the first anniversary date of the commencement of the 2019 Promissory Notes $1,283,000 of the paid-in kind interest had not been paid by the Company and per the purchase agreement was added to the principal balance of the 2019 Promissory Notes in March 2020. 2019 Promissory Note Amendments On March 26, 2020, the Company entered into the First Amendment to the Note Purchase Agreement which effectively extended the maturity date of the 2019 Promissory Notes from March 11, 2021 to On April 2, 2020, in connection with the sale of AOC Key Solutions, the Company transferred $2,200,000 to the holders of the 2019 Promissory Notes. $2,000,000 of the funds were used as a prepayment of principal while the other $200,000 was paid as a premium percentage as the portion of the 2019 Promissory Notes were paid prior to the maturity date. The premium percentage paid in connection with this transaction is presented as part of debt extinguishment costs in the accompanying consolidated statement of operations. On April 2, 2020, the Company entered into a partial release and Second Amendment to Note Purchase Agreement (the “Second Amendment”), by and among the credit parties, the Purchasers and the Agent. Pursuant to the terms of the Second Amendment, AOC Key Solutions was released as a credit party and the assets related to AOC Key Solutions were released as collateral, and the asset disposition proceeds terms of the Note Purchase Agreement were amended to reflect the transaction. On June 29, 2020, in connection with the TeamGlobal Purchase Agreement, the Company entered into a Partial Release and Third Amendment to Note Purchase Agreement (the “Third Amendment”), by and among the Credit Parties, the Purchasers and the Agent. Pursuant to the terms of the Third Amendment, TeamGlobal was released as a credit party and the assets related to TeamGlobal were released as collateral, the mandatory prepayments provision of the 2019 Promissory Notes were waived with regard to the sale of TeamGlobal, and the maturity date of the 2019 Notes remaining outstanding was extended to December 31, 2021. 2019 Promissory Note Retirement On June 30, 2020, the Company entered into Exchange Agreements with certain 2019 Lenders of the Company’s 2019 Promissory Notes. Subject to the terms and conditions set forth in the Exchange Agreements, approximately $17,398,000, was redeemed in exchange for 4,349,497 shares of the Company’s common stock, at a rate of $4 per share, which was the closing price of the common stock on the date of the Exchange. On July 15, 2020, the Company completed the Note Exchange. At the time of the Exchange Agreement the net amount of long-term debt redeemed for common stock was $14,688,000, this included the existing principal balance subject to conversion, the portion of the exit fee associated with the notes subject to conversion, offset by the portion of unamortized issuance costs associated with the notes subject to conversion. There was also $226,000 related to the paid-in-kind (“PIK”) interest associated to the notes subject to conversion that was exchanged as part of the Exchange Agreements. The difference between the market value of the shares issued and the net carrying amount of the obligations above of $2,484,000, was recorded as part of debt extinguishments costs in the accompanying consolidated statement of operations. Following the Note Exchange, approximately $4,398,000 aggregate principal amount of the 2019 Promissory Notes remained outstanding, plus an additional $216,000 related to the exit fee. The Company incurred stock issuance costs of approximately $73,000 related to legal, accounting, and other fees in connection with the Exchange Agreements. These costs are presented as a reduction to additional paid-in capital on the accompanying consolidated balance sheets. On September 16, 2020, the Company issued a cash payment of $5,284,000 to complete the retirement of the remaining aggregate principal balance of the 2019 Promissory Notes. As a result of this optional prepayment, the 2019 Promissory Notes have been fully redeemed pursuant to their terms, and as a result the Company has no further obligations under the Note Purchase Agreement, as amended. The warrants previously issued pursuant to the Note Purchase Agreement remain outstanding pursuant to their terms. Interest Expense The following table presents the interest expense related to the contractual interest and the amortization of debt issuance costs for the Company’s debt arrangements (dollars in thousands): Year ended December 31, 2020 2019 Contractual interest $ 1,846 $ 2,808 Amortization of debt issuance costs 657 1,101 Total interest expense $ 2,503 $ 3,909 Debt Extinguishment Costs For the year ended December 31, 2020, the Company recognized the following debt extinguishment costs: $200,000 related to an early cash payment in April 2020 related to the 2019 Promissory Notes, $2,484,000 related to the Exchange Agreements completed in July 2020 and $684,000 related to an early cash payment in September 2020 to retire the remaining balance of the 2019 Promissory Notes, these costs were offset by the forgiveness of loans in the amount of $87,000 in the third quarter of 2020. These costs are presented as part of debt extinguishment costs in the accompanying consolidated statement of operations, for the year ended December 31, 2020. For the year ended December 31, 2019, loss on the extinguishment of debt of $1,113,000 related to the retirement of the 2018 Promissory Notes. Schedule of Principal Amounts Due of Debt The principal amounts due for long-term notes payable are shown below as of December 31, 2020 (dollars in thousands): 2021 517 2022 1,432 2023 37 Total 1,986 Less unamortized interest (20 ) Total notes payable $ 1,966 Loan payable, current portion $ 517 Loan payable, long-term 469 Notes payable, long-term 980 Total notes payable $ 1,966

INCOME TAXES

INCOME TAXES	12 Months Ended
INCOME TAXES	Dec. 31, 2020
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, 2020 and 2019 consists of the following (dollars in thousands): Year ended December 31, 2020 2019 Federal: Deferred $ 14 $ 10 Total federal 14 10 State: Current 9 37 Total state 9 37 Provision for income taxes $ 23 $ 47 The components of deferred income tax assets and liabilities are as follows at December 31, 2020 and 2019 (dollars in thousands): Year ended December 31, Deferred tax assets 2020 2019 Net operating loss $ 9,728 $ 4,724 163(j) limitation 2,293 1,079 Lease liabilities 159 246 Other 148 322 Total gross deferred tax assets 12,328 6,371 Valuation allowance for deferred tax assets (12,215 ) (5,813 ) Total deferred tax assets 113 558 Deferred tax liabilities: Right-of-use asset (126 ) (202 ) Goodwill and intangibles (104 ) (328 ) Fixed assets 93 (38 ) Total gross deferred tax liabilities (137 ) (568 ) Net deferred tax liabilities $ (24 ) $ (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, 2020 and 2019: Year ended December 31, 2020 2019 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 11.1 % 1.5 % Impact of changes in tax rates 7.9 % 0.0 % True-ups -1.1 % -0.1 % Other 6.1 % -0.6 % Valuation allowance -45.2 % -22.1 % Effective tax rate -0.2 % -0.3 % 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, 2020. 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. As of December 31, 2020, the Company had gross federal and state net operating loss carryforwards of $33,787,000 and $26,435,000, respectively, and a valuation allowance of $12,215,000 recorded against its net deferred tax assets. As of December 31, 2020, Rekor had net federal and state net operating loss (“NOL”) carryforwards of $7,096,000 and $2,632,000 respectively. These NOLs are scheduled to begin to expire in 2034 and $9,728,000 are grandfathered under the Tax Cuts and Jobs Act; thus, these NOLs are not subject to the 80 percent limitation. NOLs generated in the years ended December 31, 2020 and 2019 of $14,726,000 and $10,249,000, respectively, will be carried forward indefinitely and are subject to the annual 80 percent limitation. As of 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. As of December 31, 2019, Rekor had net federal and state net operating loss carryforwards of $4,030,000 and $693,00 respectively. For the years ended December 31, 2020 and 2019, 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 2017 through 2019 tax years remain subject to examination by the IRS.

EMPLOYEE BENEFIT PLAN

EMPLOYEE BENEFIT PLAN	12 Months Ended
EMPLOYEE BENEFIT PLAN	Dec. 31, 2020
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]
EMPLOYEE BENEFIT 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. Employees that satisfied the eligibility requirements became participants in the Rekor 401(k) Plan. The Company 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 from continuing operations by the Company under these plans during the years ended December 31, 2020 and 2019 were $228,000 and $149,000, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2020
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”)— Rekor Systems, Inc. v. Suzanne Loughlin, et al Following an initial amended complaint, answer and counterclaims, and defendants’ motion for judgment on the pleadings, on January 30, 2020, the Company filed a Second Amended Complaint, which the Firestorm Principals answered together with counterclaims on February 28, 2020. Thereafter, on March 30, the Company moved to dismiss certain counterclaims against certain executives named as counterclaim-defendants, which resulted in the Firestorm Principals voluntarily dismissing those counterclaims against those parties. The Company thereafter filed its response and affirmative defenses to the Counterclaims on April 22, 2020. On April 27, 2020, the Firestorm Principals filed a Motion for Partial Judgment on the Pleadings, which the Company has opposed. In addition, on December 9, 2019, the Firestorm Principals filed a motion for an interim award of expenses and attorney’s fees. The Court denied the Firestorm Principals’ fee advance motion. In the year 2020, the Firestorm Principals filed suit in New York Supreme Court against directors of the Company, alleging breach of fiduciary duty and libel. The Company believes that these suits are without merit and intends to vigorously litigate this matter. At this stage of these litigations, the Company is unable to render an opinion regarding the likelihood of a favorable outcome. The Company intends to continue vigorously litigating its claims against the Firestorm Principals and believes that the Firestorm Principals’ remaining counterclaims and suits against Rekor directors and officers are without merit. 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 alleged that certain of our products violated a patent held by Vigilant. On June 10, 2020, the Company filed an Answer to the complaint denying the pertinent allegations and asserting substantial defenses to the allegations contained in the complaint, including that the patent underlying the complaint is invalid. On September 8, 2020, the Company filed a Petition for Inter Partes In November of 2020, the Company and Vigilant Solutions, LLC agreed to resolve the district court litigation and Inter Partes 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 was licensed to PCS. On June 14, 2020, PCS filed its operative answer to the Complaint. On June 21, 2020, PCS filed a motion to join the Company and another entity, OpenALPR Technology, Inc., as parties to the litigation and made claims against them for defamation, fraud and intentional interference with existing and future business relationships. On July 13, 2020, OpenALPR filed an opposition to the motion for joinder. On November 23, 2020, the Court denied PCS’s Motion for Joinder with prejudice. The case is currently proceeding between OpenALPR and PCS only, and is still in its early stages. Rekor believes that OpenALPR has substantial defenses to the claims and intends to vigorously defend the allegations of those claims. On September 18, 2020, Fordham Financial Management, Inc. (“Fordham”) commenced a lawsuit against the Company in the Supreme Court for the State of New York, New York County. Fordham alleges that the Company breached an underwriting agreement with Fordham. Fordham has brought claims for breach of contract, a declaratory judgment, and attorneys’ fees and expenses, and seeks damages. The Complaint was served to the Company on September 25, 2020. The parties have agreed to extend the Company’s time to respond to the Complaint until March 25, 2021 and have agreed that if the Company files a motion to dismiss, such motion will be fully briefed and returnable on May 25, 2021 if not further extended. The parties engaged in a private mediation on February 24, 2021 but were unable to reach settlement. At this stage of the Fordham litigation, the Company is unable to render an opinion regarding the likelihood of a favorable outcome. The Company intends to vigorously litigate this action and believes that the claims asserted are without merit. In addition, from time to time, the Company may be named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, infringement of proprietary rights, 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 Company’s opinion 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, 2020
Stockholders' Equity Attributable to Parent [Abstract]
STOCKHOLDERS' (DEFICIT) EQUITY	Common Stock Effective March 18, 2019, 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, $0.0001 par value As of December 31, 2020 and 2019, the issued and outstanding common shares of Rekor were 33,013,271 and , respectively. For the year ended December 31, 2020 and 2019, the Company issued 298,392 and 0 shares of Rekor common stock related to the exercise of common stock options, respectively. On March 12, 2019, the Company issued 600,000 shares of Rekor common stock as part of the consideration for the OpenALPR Technology Acquisition. During the third quarter of 2020, the Company issued 4,349,497 shares of Rekor common stock as part of the Exchange Agreements The Company incurred stock issuance costs of approximately $73,000 related to legal, accounting, and other fees in connection with the Exchange Agreement. These costs are presented as a reduction to additional paid-in capital on the accompanying consolidated balance sheets. 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 offered and sold 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 would 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 was 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 accompanying consolidated balance sheets. On August 28, 2020, the Company filed Amendment No. 1 to the Sales Agreement dated August 14, 2019 to increase the size of the market equity program under which the Company from time to time offered and sold shares of its common stock, from an aggregate offering price of up to $15,000,000 to an amended maximum aggregate offering price of up to $40,000,000 through or to B. Riley FBR. The Company incurred issuance costs of approximately $25,000 related to legal fees in connection with the amendment to 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 accompanying consolidated balance sheets. Sales of the Company’s common stock under the Sales Agreement were 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, 2020, based on settlement date, the Company sold 5,216,562 shares of common stock at a weighted-average selling price of $5.92 per share in accordance with the Sales Agreement. Net cash provided for the year ended December 31, 2020 from the Sales Agreement was $29,930,000 after paying 3.0% or $926,000 related to cash commissions provided to B. Riley FBR. For the year ended December 31, 2019, based on the 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 cost, as well as, 3.0% or $98,000 related to cash commissions provided to B. Riley FBR. On September 21, 2020, the Company elected to voluntarily terminate its Sales Agreement with B. Riley FBR pursuant to the terms of the Sales Agreement. As of the termination date, the Company had offered and sold an aggregate of 6,509,292 shares of common stock pursuant to the Sales Agreement, which resulted in aggregate gross proceeds of $34,154,000. 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 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 which began 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 $865,000 and $752,000 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, and 2019, 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, 2020 and 2019, the Company did not pay cash dividends to shareholders of record of Series A Preferred Stock. Accrued dividends payable to Series A Preferred Stock shareholders were $952,000 and $551,000 as of December 31, 2020 and 2019, respectively, and are presented as part of the accounts payable and accrued expenses on the accompanying consolidated balance sheets. See Note 17 for additional details related to the conversion of the Series A Preferred Stock. 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, 2020 the Company did not pay cash dividends and for the year ended December 31, 2019 the Company paid $108,000 of cash dividends to shareholders of record of Series B Preferred Stock. Accrued dividends payable to Series B Preferred Stock shareholders were $167,000 and $54,000 as of December 31, 2020 and 2019 and are presented as part of the accounts payable and accrued expenses on the accompanying consolidated balance sheets. See Note 17 for additional details related to the conversion of the Series B Preferred Stock. Warrants The Company had warrants outstanding that are exercisable into a total of 925,845 and 2,251,232 shares of Rekor common stock as of December 31, 2020 and December 31, 2019, respectively. 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 141,789 and 240,017 shares of Rekor common stock as of December 31, 2020 and December 31, 2019, 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, 2020, and 2019, there were 631,254 Firestorm 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, 2020, and 2019, 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, 2020, 11,551 warrants were exercised in cashless transactions resulting in the issuance of 8,659 shares of common stock. 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, 2020, and 2019, 4,886 and 16,437 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 2,500,000 warrants, 625,000 were issued as partial consideration for the OpenALPR Technology Acquisition. During the year ended December 31, 2020, 1,480,625 warrants were exercised in cash and cashless transactions resulting in the issuance of 1,446,279 shares of common stock. 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. As of December 31, 2020 and 2019, 81,250 and 1,561,875 warrants related to the 2019 Promissory Notes remain outstanding, respectively.

EQUITY INCENTIVE PLAN

EQUITY INCENTIVE PLAN	12 Months Ended
EQUITY INCENTIVE PLAN	Dec. 31, 2020
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 years with a contractual term of ten years. Stock compensation expense related to stock options for the years ended December 31, 2020 and 2019 was $313,000 and $446,000, respectively, and is presented as part of general and administrative expenses in the accompanying consolidated statements of operations. A summary of stock option activity under the Company’s 2017 Plan for the years ended December 31, 2020 and 2019 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, 2019 1,227,557 $ 2.13 8.39 - Granted 870,549 1.03 8.76 Forfeited (111,537 ) 1.95 - Canceled (331,187 ) 2.05 - Outstanding balance at December 31, 2019 1,655,383 $ 1.68 8.33 $ 3,256 Granted 20,000 4.32 - (1) Exercised (298,392 ) 2.35 - Forfeited (88,841 ) 3.17 - Canceled (44,896 ) 2.13 - Outstanding balance at December 31, 2020 1,243,254 $ 1.44 7.57 $ 7,827 Exercisable at December 31, 2020 849,908 $ 1.62 7.20 $ 5,339 (1) All shares granted in the current year were forfeited in the current year. The weighted average grant date fair value of options granted for the years ended December 31, 2020 and 2019 was $3.18 and $0.52, respectively. The intrinsic value of the stock options granted during the years ended December 31, 2020 and 2019, was $75,000 and $2,172,000, respectively. The total fair value of shares that became vested after grant during the years ended December 31, 2020 and 2019 was $316,000 and $408,000, respectively. As of December 31, 2020, there was $180,000 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 1.43 years. Restricted Stock Units Stock compensation expense related to RSU’s for the years ended December 31, 2020 was $483,000 and was presented as part of general and administrative expenses in the accompanying consolidated statements of operations. There were no RSU’s outstanding during the year ended December 31, 2019. A summary of RSU activity under the Company’s 2017 Plan for Number of Shares Weighted Average Unit Price Weighted Average Remaining Contractual Term (Years) Outstanding balance at January 1, 2020 - $ - - Granted 488,834 4.44 2.12 Forfeited (8,850 ) 3.75 - Outstanding balance at December 31, 2020 479,984 $ 4.45 2.12 The grant date fair value is based on the estimated fair value of the Company’s common stock on the date of grant. All RSUs granted vest upon the satisfaction of a service-based vesting condition. As of December 31, 2020, there was $1,640,000 of unrecognized stock compensation expense related to unvested RSUs granted under the 2017 Plan that will be recognized over an average remaining period of 2.12

LOSS PER SHARE

LOSS PER SHARE	12 Months Ended
LOSS PER SHARE	Dec. 31, 2020
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, 2020 2019 Basic and diluted loss per share Net loss from continuing operations $ (13,962 ) $ (12,405 ) Less: preferred stock accretion (865 ) (752 ) Less: preferred stock dividends (460 ) (460 ) Net loss attributable to shareholders from continuing operations (15,287 ) (13,617 ) Net loss from discontinued operations (220 ) (3,479 ) Net loss attributable to shareholders $ (15,507 ) $ (17,096 ) Weighted average common shares outstanding - basic and diluted 24,192,680 20,033,023 Basic and diluted loss per share from continuing operations $ (0.63 ) $ (0.68 ) Basic and diluted loss per share from discontinued operations (0.01 ) (0.17 ) Basic and diluted loss per share $ (0.64 ) $ (0.85 ) Common stock equivalents excluded due to anti-dilutive effect 4,051,601 5,602,841 As the Company had a net loss for the year ended December 31, 2020, the following 4,051,601 potentially dilutive securities were excluded from diluted loss per share: 925,845 for outstanding warrants, 887,461 related to the Series A Preferred Stock, 515,057 related to the Series B Preferred Stock, 1,243,254 related to outstanding options and 479,984 related to outstanding RSUs. 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. (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.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Public Offering On February 9, 2021, the Company issued and sold 6,126,936 shares of its common stock (which includes 799,166 shares of common stock sold pursuant to the exercise of an overallotment option). The net proceeds to the Company, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, were approximately $70.1 million. The shares were sold pursuant to an underwriting agreement with B. Riley Securities, Inc. and Lake Street Capital Markets, LLC, as representatives of the several underwriters named therein and our shelf registration statement on Form S-3 (Registration Statement No. 333-224423) filed by the Company with the SEC that became effective on April 30, 2018. On February 4, 2021, a prospectus supplement and accompanying prospectus were filed with the SEC in connection with the offering and a related registration statement (File No. 333-252735) was filed pursuant to Rule 462(b) promulgated under the Securities Act. Automatic Conversion of Series A Cumulative Convertible Redeemable Preferred Stock and Series B Cumulative Convertible Redeemable Preferred Stock As a result of the closing of the Public Offering, all of the Company’s issued and outstanding Series A Preferred Stock was automatically converted and Series B Preferred Stock was converted pursuant to their respective terms into an aggregate of 1,416,785 shares of the Company’s common stock. As a result of the automatic conversion of the Series A Preferred, the Series A Preferred will no longer be quoted on the OTC Pink. The Series B Preferred was not quoted on any trading market. Offer To Purchase Iteris On February 20, 2021, the Company advised Iteris Inc. (“Iteris”) that it was prepared to offer to purchase all of Iteris’ outstanding common stock. The offer to Iteris was for a combination of cash and common stock subject to confirmatory diligence and approval of both boards of directors. On February 26, 2021, the Company was advised that the board of directors of Iteris declined the offer by the Company.

BUSINESS AND SIGNIFICANT ACCO_2

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2020
Accounting Policies [Abstract]
Basis of Consolidation	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 prior year amounts have been reclassified to conform with the current year presentation. Amounts for the year ended December 31, 2019, have been reclassified to conform to the current year presentation. Due to the sale of TeamGlobal, the sale of AOC Key Solutions, and the discontinuance of all professional services activities, certain amounts have been reclassified in order to conform to the current period presentation. As a result of these reclassifications there was no impact on the ending balances in the consolidated balance sheets or consolidated statements of operations.
Use of Estimates	The preparation of consolidated financial statements in conformity with GAAP requires the extensive use of management's estimates. Management uses estimates and assumptions in preparing consolidated 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, income taxes and evaluation of standalone selling prices in contracts with customers that contain multiple performance obligations. 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.
Liquidity	For all annual and interim periods, 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, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period”, as defined in U.S. 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. These assumptions including among other factors, the expected timing and nature of the Company’s programs and projected cash expenditures, its ability to delay or curtail these expenditures or programs and its ability to raise additional capital, if necessary, to the extent management has the proper authority to execute them and considers it probable that those implementations can be achieved 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 the sale of common stock, proceeds from the private sale of the Company’s non-core subsidiaries, proceeds from note receivables, debt financings and a public offering of its common stock to support cashflow from operations. The Company attributes losses to public company corporate overhead and non-capital expenditures related to the scaling and development of new products and service offerings in connection with the focus on the technology of the Company. As of and for the year ended December 31, 2020, the Company had a net loss from continuing operations of $13,962,000 and working capital of $18,324,000. The Company's net cash position was increased by $18,860,000 for the year ended December 31, 2020 primarily due to the net proceeds of $29,930,000 from the At Market Issuance Sales Agreement (the "Sales Agreement") and the net cash proceeds of $6,300,000 from the sale of AOC Key Solutions and TeamGlobal, which includes the repayment of the $600,000 AOC Key Solutions Subordinate Note, offset by the net loss from operations in the period. As of September 21, 2020, the Company voluntarily terminated the Sales Agreement (see Note 14). 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. Should access to funds be unavailable, the Company will need to seek out additional sources of funding. Furthermore, the Company has contingency plans to reduce or defer expenses and cash outlays should operations weaken in the look-forward period or additional financing, if needed, is not available. The Company's ability to generate positive operating results and complete the execution of its business strategy will depend on (i) its ability to continue the growth of its technology business, (ii) the continued performance of its contractors, subcontractors and vendors, (iii) its ability to maintain and build good relationships with its lenders and financial intermediaries, (iv) its ability to maintain timely collections from existing customers, and (v) the stabilization 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 and implement new business, raise capital, and otherwise, depending on the severity of such impact, materially adversely affect its operating results. The Company’s operations have been affected by the recent and ongoing outbreak of the coronavirus disease (“COVID-19”) which was declared a pandemic by the World Health Organization in March 2020. The impact has resulted in a slowdown in the Company’s rate of growth and includes disruptions in the delivery and installation of equipment, slower than expected contract approvals and implementation of projects by its customers, the need for employees to work remotely, restrictions on travel affecting the Company’s ability to attend meetings, conferences, consultations and installations and otherwise provide and market its products and services, and disruptions to its customers' operations which may affect its revenues. The Company benefited from the financing under the CARES Act. The Company continues to evaluate the potential impact of the pandemic and the ultimate disruption that may be caused by the outbreak is uncertain. Possible additional effects may include, but are not limited to, continuing disruption to the Company’s customers and revenue, absenteeism in the Company’s labor workforce, unavailability of products and supplies used in operations, and a decline in value of assets held by the Company. As a result, the pandemic may result in a material adverse impact on the Company’s financial position, operations and cash flow.
Rounding	Dollar amounts, except per share data, in the notes to these consolidated 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, 2020, and 2019, the Company had deposits from continuing operations totaling $21,007,000 and $1,536,000, respectively, in one U.S. financial institution that was federally insured up to $250,000 per account. The Company has a market concentration of revenue and accounts receivable from continuing operations related to its customer base. Company A accounted for 16% of the Company’s total revenues for the year ended December 31, 2020. Company B accounted for 17% of the Company’s total revenues for the year ended December 31, 2019. As of December 31, 2020, accounts receivable from Company C and Company D totaled $161 of the consolidated accounts receivable balance. As of December 31, 2019, Company D accounted for $198,000, or 26% 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, 2020 and 2019 or consolidated accounts receivable balance as of December 31, 2020 and 2019.
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, 2020 and 2019 were $412,000 and $461,000, 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 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 billing occurs after services have been provided, 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 $600,000 and $440,000 were included in accounts receivable, net, in the consolidated balance sheets as of December 31, 2020 and December 31, 2019, respectively. 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 will 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 $22,000 and $0 was required at December 31, 2020 and 2019, respectively.
Note Receivable	In connection with the sale of AOC Key Solutions in April 2020, the Company received a $600,000, five-year promissory note due March 2025, that carried an interest rate of 8%. Based on the general market conditions and the credit quality of the buyer at the time of the sale, the Company determined that the fixed interest rate approximated the current market rates. During fiscal year 2020, the full principal balance of the $600,000 note associated with the sale of AOC Key Solutions was paid in full. In connection with the sale of TeamGlobal in June 2020, the Company received a $1,700,000, five and a half year promissory note due December 2025, that carries an interest rate of 4% and is secured by a first priority security interest in the shares of TeamGlobal. Monthly principal payments on the promissory note will begin in 2021. Based on the general market conditions, the security interest held by the Company and the credit quality of the buyer at the time of the sale, the Company determined that the fixed interest rate approximates the current market rates. Interest income recognized for the year ended December 31, 2020 was $54,000 and is included as part of other income on the consolidated statement of operations. Interest income for the year ended December 31, 2019 was immaterial.
Inventory	Inventory principally consists of parts and finished goods held temporarily until installed for service. Inventory is valued at the lower of cost or net realizable value. The cost is determined by the first-in, first-out (“FIFO”) method.
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 - 5 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 $216,000 and $966,000 as of December 31, 2020 and 2019, respectively. For the year ended December 31, 2020 and 2019, the Company placed in service $730,000 and $232,000, respectively, 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 during the application phase 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 the year ended December 31, 2020 and 2019, the Company capitalized $162,000 and $91,000, respectively, of development costs related to internal use software.
Intangible Assets	Intangible assets include internally developed capitalized software and amounts recognized in connection with acquisitions, including customer relationships, technology and marketing related assets. Intangible assets, other than software development costs, are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise.
Leases	The Company accounts for its leases in accordance with Accounting Standard Codification (“ASC”) Topic 842, Leases ("ASC 842"). 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 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. ASU 2016-02 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 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.
Equity Method Investments	Investments in common stock of entities other than the Company’s consolidated subsidiaries are accounted for under the equity method in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures. In June of 2020, the Company announced a joint venture in which the Company would have a 50 percent equity interest in Roker Inc. In the third quarter of 2020, the Company contributed $75,000 for its 50 percent equity interest. This investment is accounted for under the equity method. In February 2017, the Company contributed substantially all of the assets and certain liabilities related to its vehicle services business to Global Public Safety (the “GPS Closing”). After the GPS Closing, the Company continues to own 19.9% of the units of Global Public Safety. This equity investment does not have a readily determinable fair value and the Company reports this investment at cost, less impairment. In 2018, the Company recorded an impairment of $262,000, related to the investment in Global Public Safety, effectively reducing the total investment value to $0. The carrying amount of the Company’s investments are included as part of investments in unconsolidated companies in the consolidated balance sheets. There were no distributions or earnings received from either investment in the year ended December 31, 2020 or 2019.
Goodwill	The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. The Company will assess goodwill for impairment annually, or more often if events or changes in circumstances indicate that it might be impaired, by comparing its carrying value to the reporting unit’s fair value. During the years ended December 31, 2020 and 2019, we had not recognized any impairment to goodwill from continuing operations.
Revenue Recognition	The Company derives its revenues substantially from license and subscription fees for software and related products and services. A portion of the subscription fees are generated through the Company’s eCommerce website rather than through in-person sales. In addition, the Company derives net revenues in connection with certain citation and collection services in connection with the Company’s automated traffic safety and parking enforcement services. 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 related to hardware, 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 (dollars in thousands): Year ended December 31, 2020 2019 Revenue Licensing and subscription revenue $ 6,207 $ 2,066 Automated traffic safety enforcement 3,027 3,403 Total revenue $ 9,234 $ 5,469 Information about the Company’s Year ended December 31, 2020 2019 Revenue United States $ 6,498 $ 4,052 Canada 910 654 Other 1,826 763 Total revenue $ 9,234 $ 5,469 For the year ended December 31, 2020, except for the United States, total revenue in any single country was less than 10% of consolidated revenue. Revenues Licensing and subscription revenue The Company's revenues are derived principally from fees for technology products and services, including software licenses and subscriptions, hardware leases and sales, and other related support 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 services include providing, through a web server, access to the Company’s proprietary vehicle recognition software, a self-managed database and a powerful, cross-platform application programming interface. The Company's proprietary software employs a convolutional neural network architecture to classify images and features that 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. Included in the licensing and subscription revenue is revenue that was recognized through the Company’s eCommerce platform. For the year ended December 31, 2020 and 2019, the Company recognized revenues of $865,000 and $439,000, respectively, for products and services that were purchased through the Company’s eCommerce platform. During the second quarter of 2019, the Company changed its primary method of selling its software from perpetual software licenses, with associated maintenance services, to service subscriptions of limited duration. These subscriptions give the customer access to the use of the latest version of the Company's software only during the term of the subscription. Revenue is generally recognized ratably over the contract term. The Company’s subscription services arrangements are non-cancelable and do not contain refund-type provisions. Revenue from the Company's perpetual software licenses are recognized up-front at the point in time when the software is made available to the customer. Automated traffic safety enforcement Automated traffic safety enforcement revenues reflect arrangements to 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. The Company also installs and maintains public safety systems, which may involve a combination of installation and lease payments or simply software licenses to use the Company's software in connection with a previously installed camera network. Revenue is recognized at various stages of completion of installation and monthly for lease or license payments. 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. On December 31, 2020, the Company had approximately $16,705,000 of remaining performance obligations not yet satisfied or partially satisfied. The Company expects to recognize approximately 30% of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the next two to five years thereafter. When the Company advance bills clients prior to providing services, generally such amounts will be earned and recognized in revenue within the next month 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, 2020, were not materially impacted by any other factors. Contract liabilities as of December 31, 2020 and December 31, 2019, were $2,084,000 and $1,524,000, respectively. All contract liabilities as of December 31, 2020 and December 31, 2019, were attributable to continuing operations. During the year ended December 31, 2020, $710,000 of the contract liabilities balance as of December 31, 2019, were recognized as revenue. The services due for contract liabilities described above are shown below as of December 31, 2020 (dollars in thousands): 2021 $ 1,126 2022 430 2023 320 2024 171 2025 37 Total $ 2,084 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, 2020 and 2019 were $221,000 and $271,000, respectively, and are included in sales and marketing expense in the consolidated statement of operations.
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. 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, 2020, and 2019, the Company’s evaluation revealed no uncertain tax positions that would have a material impact on the financial statements. The 2017 through 2019 tax years remain subject to examination by the IRS, as of December 31, 2020. 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 costs related to all share-based payments, including stock options and restricted stock units (“RSUs”), based on the grant-date fair value of the award on a straight-line basis over the requisite service period, net of actual forfeitures. The fair value of RSUs is measured on the grant date based on the closing fair market value of the Company’s common stock. 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, 2020 and 2019: Year ended December 31, 2020 2019 Risk-free interest rate 1.24% 1.35-3.03% Expected term 6 years 5-6 years Volatility 89.5% 80.4-89.8% Dividend yield 0% 0% Estimated annual forfeiture rate at time of grant 0% 0-30% 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. Changes in the redemption value are recognized in additional paid in capital in the consolidated balance sheets.
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, 2020 and December 31, 2019, because of the relatively short-term maturity of these financial instruments. The carrying amount reported for long-term debt and long-term receivables approximates fair value as of December 31, 2020 and December 31, 2019, 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 (“ASC 820”). Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. ASC 820 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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 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, 2020. The Company considers its note receivables to be Level 3 investments and that the fair value approximates the carrying value. There were no changes in levels during the year ended December 31, 2020.
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	FASB ASC Topic 280, Segment Reporting As part of a strategic shift by the Company, all operations related to the Professional Services segment have been classified as discontinued operations. As of January 1, 2020, the Company had one reportable segment. Continuing operations are all operations that previously were reported as part of the Technology Segment.
New Accounting Pronouncements	New Accounting Pronouncements Effective in the Year Ended December 31, 2020 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 New Accounting Pronouncements Effective in Future Periods In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) 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, 2020
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 - 5 years
Summary of revenue	Year ended December 31, 2020 2019 Revenue Licensing and subscription revenue $ 6,207 $ 2,066 Automated traffic safety enforcement 3,027 3,403 Total revenue $ 9,234 $ 5,469 Year ended December 31, 2020 2019 Revenue United States $ 6,498 $ 4,052 Canada 910 654 Other 1,826 763 Total revenue $ 9,234 $ 5,469
Contract liabilities	2021 $ 1,126 2022 430 2023 320 2024 171 2025 37 Total $ 2,084
Assumptions for options granted	Year ended December 31, 2020 2019 Risk-free interest rate 1.24% 1.35-3.03% Expected term 6 years 5-6 years Volatility 89.5% 80.4-89.8% Dividend yield 0% 0% Estimated annual forfeiture rate at time of grant 0% 0-30%

BUSINESS ACQUISITIONS (Tables)

BUSINESS ACQUISITIONS (Tables)	12 Months Ended
BUSINESS ACQUISITIONS (Tables)	Dec. 31, 2020
Business Combinations [Abstract]
Purchase price allocation	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, 2020 2019 Total revenue from continuing operations $ 9,234 $ 6,438 Net loss from continuing operations (13,962 ) (11,597 ) Basic and diluted loss per share continuing operations $ (0.63 ) $ (0.64 ) Basic and diluted number of shares 24,192,680 20,129,985

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	12 Months Ended
DISCONTINUED OPERATIONS (Tables)	Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]
AOC Key Solutions Purchase Agreement	Total assets sold $ 4,549 Total liabilities assumed 3,514 Net assets sold 1,035 Closing cost 346 Consideration paid (see below) 4,000 Gain on sale of AOC Key Solutions $ 2,619 Cash consideration $ 3,400 Note receivable 600 Total AOC Key Solution Purchase Agreement consideration $ 4,000
Team Global Purchase Agreement	Total assets sold $ 9,996 Total liabilities assumed 7,130 Net assets sold 2,866 Closing cost 122 Consideration paid (see below) 4,000 Gain on sale of TeamGlobal $ 1,012 Cash consideration $ 2,300 Note receivable 1,700 Total TeamGlobal Purchase Agreement consideration $ 4,000
Discontinued operations	The assets and liabilities classified as discontinued operations in the Company's consolidated financial statements as of December 31, 2020 and December 31, 2019 are shown below (dollars in thousands): December 31, 2020 December 31, 2019 Global AOC Key Solutions Firestorm Total Global AOC Key Solutions Firestorm Total ASSETS Cash and cash equivalents $ - $ - $ 2 $ 2 $ 225 $ 93 $ 12 $ 330 Accounts receivable, net - - - - 2,763 4,055 - 6,818 Other current assets, net - - - - 238 52 3 293 Current assets of discontinued operations - - 2 2 3,226 4,200 15 7,441 Property and equipment, net - - - - 113 41 - 154 Right-of-use lease assets, net - - - - 130 499 - 629 Goodwill - - - - 669 - - 669 Intangible assets, net - - - - 1,994 - - 1,994 Deposits and other long-term assets - - - - - 11 - 11 Long-term assets of discontinued operations - - - - 2,906 551 - 3,457 Total assets of discontinued operations $ - $ - $ 2 $ 2 $ 6,132 $ 4,751 $ 15 $ 10,898 LIABILITIES Accounts payable and accrued expenses $ - $ - $ 31 $ 31 $ 461 $ 1,260 $ 33 $ 1,754 Lines of credit - - - - 1,842 1,894 - 3,736 Lease liability, short term - - 93 93 113 100 54 267 Current liabilities of discontinued operations - - 124 124 2,416 3,254 87 5,757 Lease liability, long term - - 5 5 30 467 39 536 Long-term liabilities of discontinued operations - - 5 5 30 467 39 536 Total liabilities of discontinued operations $ - $ - $ 129 $ 129 $ 2,446 $ 3,721 $ 126 $ 6,293 The major components of the discontinued operations, net of tax, are presented in the consolidated statements of operations below (dollars in thousands): Year ended December 31, 2020 2019 Global AOC Key Solutions Firestorm Total Global AOC Key Solutions Firestorm Total Revenue $ 10,510 $ 3,392 $ 5 $ 13,907 $ 26,207 $ 12,845 $ 1,006 $ 40,058 Cost of revenue 9,190 1,866 - 11,056 22,680 6,905 501 30,086 Gross profit 1,320 1,526 5 2,851 3,527 5,940 505 9,972 Operating expenses: General and administrative expenses 1,341 1,284 1 2,626 3,481 4,827 1,048 9,356 Selling and marketing expenses 79 131 - 210 170 528 48 746 Impairment of intangibles - - - - 1,022 - 1,549 2,571 Operating expenses 1,420 1,415 1 2,836 4,673 5,355 2,645 12,673 Income loss income from operations (100 ) 111 4 15 (1,146 ) 585 (2,140 ) (2,701 ) Other (income) expense: Loss on extinguishment of debt - - - - (31 ) (45 ) - (76 ) Interest expense (167 ) (74 ) - (241 ) (294 ) (189 ) - (483 ) Other expense (income) 5 1 - 6 (1 ) (151 ) (67 ) (219 ) Total other expense (162 ) (73 ) - (235 ) (326 ) (385 ) (67 ) (778 ) Income (loss) from discontinued operations (262 ) 38 4 (220 ) (1,472 ) 200 (2,207 ) (3,479 ) Income tax provision from discontinued operations - - - - - - - - Net income (loss) from discontinued operations $ (262 ) $ 38 $ 4 $ (220 ) $ (1,472 ) $ 200 $ (2,207 ) $ (3,479 )

SUPPLEMENTAL DISCLOSURES OF C_2

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)	12 Months Ended
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)	Dec. 31, 2020
Supplemental Cash Flow Information [Abstract]
Supplemental disclosures of cash flow information	Year ended December 31, 2020 2019 Cash paid for interest - continuing operations $ 1,211 $ 2,135 Cash paid for interest - discontinued operations 241 521 Cash paid for taxes - continuing operations 16 - Cash paid for taxes - discontinued operations 33 12 Non-cash investing and financing activities Purchase of vehicles by issuing loan payable 112 Note received as part of TeamGlobal Sale 1,700 - Paid-in-kind interest transferred from accrued interest to the principal balance of the 2019 Promissory Notes 1,283 - Business combinations, net of cash: OpenALPR Technology Acquisition: Current assets - 415 Intangible assets - 7,436 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 ) Sale of Secured Education: Current assets - (58 ) Intangible assets sold - (249 ) Current liabilities - 54 Loss on sale - 3 Financing activities: 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 Non-cash Note Exchange transaction Exchange of accrued interest and stock issuance costs (226 ) - Debt extinguishment costs (2,484 ) - Exchange of the net principal balance of the 2019 Promissory Notes (14,688 ) - Issuance of common stock 17,325 - Cash impact of Note Exchange transaction (73 ) - Adoption of ASC-842 Lease Accounting: Right-of-use lease asset 354 291 Lease liability $ (354 ) $ (291 )

INVENTORY (Tables)

INVENTORY (Tables)	12 Months Ended
INVENTORY (Tables)	Dec. 31, 2020
Inventory Disclosure [Abstract]
Inventory	As of December 31, 2020 and 2019, inventory consisted entirely of the following (dollars in thousands): December 31, 2020 2019 Parts and cameras $ 558 $ 302 Finished goods 706 - Total inventory $ 1,264 $ 302

PROPERTY AND EQUIPMENT, NET (Ta

PROPERTY AND EQUIPMENT, NET (Tables)	12 Months Ended
PROPERTY AND EQUIPMENT, NET (Tables)	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Property and equipment	Property and equipment, net consisted of the following (dollars in thousands): December 31, 2020 2019 Furniture and fixtures $ 83 $ 57 Office equipment 314 110 Camera systems 1,088 772 Vehicles 395 36 Leasehold improvements 200 122 Total $ 2,080 $ 1,097 Less: accumulated depreciation and amortization (1,033 ) (655 ) Property and equipment, net from continuing operations $ 1,047 $ 442 Information about the Company’s December 31, 2020 2019 United States $ 2,080 $ 1,027 Canada - 70 Accumulated depreciation (1,033 ) (655 ) Property and equipment, net from continuing operations $ 1,047 $ 442

LEASES (Tables)

LEASES (Tables)	12 Months Ended
LEASES (Tables)	Dec. 31, 2020
Leases [Abstract]
Summary of operating lease	Operating lease right-of-use lease assets from continuing operations $ 426 Current portion of lease liability $ 253 Long-term portion of lease liability 188 Total lease liability from continuing operations $ 441 Weighted average remaining lease term - operating leases from continuing operations 2.19 Weighted average discount rate - operating leases 9 %
Maturities of lease liabilities	2021 $ 278 2022 104 2023 84 2024 18 Total lease payments 484 Less imputed interest 43 Maturities of lease liabilities $ 441

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
INTANGIBLE ASSETS (Tables)	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Change in intangible assets	December 31, 2019 Additions Amortization December 31, 2020 Intangible assets subject to amortization from continuing operations Customer relationships $ 396 $ - $ (34 ) $ 362 Marketing related 230 - (71 ) 159 Technology based 6,395 - (1,034 ) 5,361 Internally capitalized software 1,223 162 (229 ) 1,156 Intangible assets subject to amortization from continuing operations $ 8,244 $ 162 $ (1,368 ) $ 7,038
Schedule of intangible assets	Customer Relationships Marketing Related Technology Based Internally Capitalized Software Total Identifiable intangible assets $ 461 $ 327 $ 7,206 $ 1,452 $ 9,446 Accumulated amortization (99 ) (168 ) (1,845 ) (296 ) (2,408 ) Identifiable intangible assets from continuing operations, net $ 362 $ 159 $ 5,361 $ 1,156 $ 7,038
Estimated annual amortization expense	2021 $ 1,551 2022 1,470 2023 1,290 2024 1,060 2025 1,051 Thereafter 400 Capitalized software not yet placed in service 216 Total $ 7,038

DEBT (Tables)

DEBT (Tables)	12 Months Ended
DEBT (Tables)	Dec. 31, 2020
Debt Disclosure [Abstract]
Interest expense	Year ended December 31, 2020 2019 Contractual interest $ 1,846 $ 2,808 Amortization of debt issuance costs 657 1,101 Total interest expense $ 2,503 $ 3,909
Schedule of debt	2021 517 2022 1,432 2023 37 Total 1,986 Less unamortized interest (20 ) Total notes payable $ 1,966 Loan payable, current portion $ 517 Loan payable, long-term 469 Notes payable, long-term 980 Total notes payable $ 1,966

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
INCOME TAXES (Tables)	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income tax expense	Year ended December 31, 2020 2019 Federal: Deferred $ 14 $ 10 Total federal 14 10 State: Current 9 37 Total state 9 37 Provision for income taxes $ 23 $ 47
Deferred income tax assets and liabilities	Year ended December 31, Deferred tax assets 2020 2019 Net operating loss $ 9,728 $ 4,724 163(j) limitation 2,293 1,079 Lease liabilities 159 246 Other 148 322 Total gross deferred tax assets 12,328 6,371 Valuation allowance for deferred tax assets (12,215 ) (5,813 ) Total deferred tax assets 113 558 Deferred tax liabilities: Right-of-use asset (126 ) (202 ) Goodwill and intangibles (104 ) (328 ) Fixed assets 93 (38 ) Total gross deferred tax liabilities (137 ) (568 ) Net deferred tax liabilities $ (24 ) $ (10 )
Effective tax rate	Year ended December 31, 2020 2019 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 11.1 % 1.5 % Impact of changes in tax rates 7.9 % 0.0 % True-ups -1.1 % -0.1 % Other 6.1 % -0.6 % Valuation allowance -45.2 % -22.1 % Effective tax rate -0.2 % -0.3 %

EQUITY INCENTIVE PLAN (Tables)

EQUITY INCENTIVE PLAN (Tables)	12 Months Ended
EQUITY INCENTIVE PLAN (Tables)	Dec. 31, 2020
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, 2019 1,227,557 $ 2.13 8.39 - Granted 870,549 1.03 8.76 Forfeited (111,537 ) 1.95 - Canceled (331,187 ) 2.05 - Outstanding balance at December 31, 2019 1,655,383 $ 1.68 8.33 $ 3,256 Granted 20,000 4.32 - (1) Exercised (298,392 ) 2.35 - Forfeited (88,841 ) 3.17 - Canceled (44,896 ) 2.13 - Outstanding balance at December 31, 2020 1,243,254 $ 1.44 7.57 $ 7,827 Exercisable at December 31, 2020 849,908 $ 1.62 7.20 $ 5,339 (1) All shares granted in the current year were forfeited in the current year.
Restricted stock units activity	Number of Shares Weighted Average Unit Price Weighted Average Remaining Contractual Term (Years) Outstanding balance at January 1, 2020 - $ - - Granted 488,834 4.44 2.12 Forfeited (8,850 ) 3.75 - Outstanding balance at December 31, 2020 479,984 $ 4.45 2.12

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	12 Months Ended
LOSS PER SHARE (Tables)	Dec. 31, 2020
Earnings Per Share [Abstract]
Loss per common share	Year ended December 31, 2020 2019 Basic and diluted loss per share Net loss from continuing operations $ (13,962 ) $ (12,405 ) Less: preferred stock accretion (865 ) (752 ) Less: preferred stock dividends (460 ) (460 ) Net loss attributable to shareholders from continuing operations (15,287 ) (13,617 ) Net loss from discontinued operations (220 ) (3,479 ) Net loss attributable to shareholders $ (15,507 ) $ (17,096 ) Weighted average common shares outstanding - basic and diluted 24,192,680 20,033,023 Basic and diluted loss per share from continuing operations $ (0.63 ) $ (0.68 ) Basic and diluted loss per share from discontinued operations (0.01 ) (0.17 ) Basic and diluted loss per share $ (0.64 ) $ (0.85 ) Common stock equivalents excluded due to anti-dilutive effect 4,051,601 5,602,841

BUSINESS AND SIGNIFICANT ACCO_4

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2020
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 \| Minimum
Estimated useful life	3 years
Camera systems \| Maximum
Estimated useful life	5 years

BUSINESS AND SIGNIFICANT ACCO_5

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue	$ 9,234	$ 5,469
United States
Revenue	6,498	4,052
Canada
Revenue	910	654
Other
Revenue	1,826	763
Licensing and Subscription Revenue
Revenue	6,207	2,066
Automated Traffic Safety Enforcement
Revenue	$ 3,027	$ 3,403

BUSINESS AND SIGNIFICANT ACCO_6

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) $ in Thousands	Dec. 31, 2020USD ($)
Accounting Policies [Abstract]
2021	$ 1,126
2022	430
2023	320
2024	171
2025	37
Total	$ 2,084

BUSINESS AND SIGNIFICANT ACCO_7

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 3)	12 Months Ended
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 3)	Dec. 31, 2020	Dec. 31, 2019
Risk-free interest rate	1.24%
Expected term	6 years
Volatility	89.50%
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, 2020	Dec. 31, 2019
Date of operation	Feb. 1, 2017	Feb. 1, 2017
Net loss from continuing operations	$ (13,962)	$ (12,405)
Working capital deficit	(18,324)	(1,786)
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents	18,860	(1,017)
Net proceeds from at-the-market agreement	29,930	2,949
Net proceeds from sale of TeamGlobal and AOC Key Solutions	6,300	0
Proceeds from AOC Key Solutions note receivable	600	0
Deposits from continuing operations	21,007	1,536
Restricted cash	412	461
Unbilled accounts receivable	600	440
Allowance for doubtful accounts	22	0
Interest Income	54	0
Capitalized internally developed software costs	216	966
Capitalized internally developed software - internal use	162	91
Advertising expense	221	271
Company C \| Accounts Receivable
Accounts receivable	$ 161
Concentration risk	16.00%
Company D \| Accounts Receivable
Accounts receivable	$ 314	$ 198
Concentration risk	30.00%	26.00%
Revenues \| Company A
Concentration risk	16.00%
Revenues \| Company B
Concentration risk		17.00%

BUSINESS ACQUISITIONS (Details)

BUSINESS ACQUISITIONS (Details) - OpenALPR Technology $ in Thousands	12 Months Ended
	Dec. 31, 2020USD ($)
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)
Goodwill recorded	4,934
Cash consideration	7,000
Notes payable	5,000
Common stock consideration	397
Total acquisition consideration	$ 12,397

BUSINESS ACQUISITIONS (Details

BUSINESS ACQUISITIONS (Details 1) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Business Combinations [Abstract]
Revenues	$ 9,234	$ 6,438
Net loss from continuing operations	$ (13,962)	$ (11,597)
Basic and diluted loss per share continuing operations	$ (.63)	$ (.64)
Basic and diluted number of shares	24,192,680	20,129,985

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands	12 Months Ended
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Gain on sale	$ 3,631	$ 0
AOC Key Solutions
Total assets sold	4,549
Total liabilities assumed	3,514
Net assets sold	1,035
Closing cost	346
Consideration received	4,000
Gain on sale	2,619
Cash consideration	3,400
Note receivable	600
Total Purchase Agreement consideration	4,000
Global
Total assets sold	9,996
Total liabilities assumed	7,130
Net assets sold	2,866
Closing cost	122
Consideration received	4,000
Gain on sale	1,012
Cash consideration	2,300
Note receivable	1,700
Total Purchase Agreement consideration	$ 4,000

DISCONTINUED OPERATIONS (Deta_2

DISCONTINUED OPERATIONS (Details 1) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 2	$ 330
Accounts receivable, net	0	6,818
Other current assets, net	0	293
Current assets of discontinued operations	2	7,441
Property and equipment, net	0	154
Right-of-use lease assets net	0	629
Goodwill	0	669
Intangible assets, net	0	1,994
Deposits and other long-term assets	0	11
Long-term assets of discontinued operations	0	3,457
Total assets of discontinued operations	2	10,898
Liabilities
Accounts payable and accrued expenses	31	1,754
Lines of Credit	0	3,736
Lease liability, short term	93	267
Current liabilities of discontinued operations	124	5,757
Lease liability, long term	5	536
Long-term liabilities of discontinued operations	5	536
Total liabilities of discontinued operations	129	6,293
Global
ASSETS
Cash and cash equivalents	0	225
Accounts receivable, net	0	2,763
Other current assets, net	0	238
Current assets of discontinued operations	0	3,226
Property and equipment, net	0	113
Right-of-use lease assets net	0	130
Goodwill	0	669
Intangible assets, net	0	1,994
Deposits and other long-term assets	0	0
Long-term assets of discontinued operations	0	2,906
Total assets of discontinued operations	0	6,132
Liabilities
Accounts payable and accrued expenses	0	461
Lines of Credit	0	1,842
Lease liability, short term	0	113
Current liabilities of discontinued operations	0	2,416
Lease liability, long term	0	30
Long-term liabilities of discontinued operations	0	30
Total liabilities of discontinued operations	0	2,446
AOC Key Solutions
ASSETS
Cash and cash equivalents	0	93
Accounts receivable, net	0	4,055
Other current assets, net	0	52
Current assets of discontinued operations	0	4,200
Property and equipment, net	0	41
Right-of-use lease assets net	0	499
Goodwill	0	0
Intangible assets, net	0	0
Deposits and other long-term assets	0	11
Long-term assets of discontinued operations	0	551
Total assets of discontinued operations	0	4,751
Liabilities
Accounts payable and accrued expenses	0	1,260
Lines of Credit	0	1,894
Lease liability, short term	0	100
Current liabilities of discontinued operations	0	3,254
Lease liability, long term	0	467
Long-term liabilities of discontinued operations	0	467
Total liabilities of discontinued operations	0	3,721
Firestorm
ASSETS
Cash and cash equivalents	2	12
Accounts receivable, net	0	0
Other current assets, net	0	3
Current assets of discontinued operations	2	15
Property and equipment, net	0	0
Right-of-use lease assets net	0	0
Goodwill	0	0
Intangible assets, net	0	0
Deposits and other long-term assets	0	0
Long-term assets of discontinued operations	0	0
Total assets of discontinued operations	2	15
Liabilities
Accounts payable and accrued expenses	31	33
Lines of Credit	0	0
Lease liability, short term	93	54
Current liabilities of discontinued operations	124	87
Lease liability, long term	5	39
Long-term liabilities of discontinued operations	5	39
Total liabilities of discontinued operations	$ 129	$ 126

DISCONTINUED OPERATIONS (Deta_3

DISCONTINUED OPERATIONS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue	$ 13,907	$ 40,058
Cost of Revenue	11,056	30,086
Gross profit	2,851	9,972
Operating expenses
General and administrative expenses	2,626	9,356
Selling and marketing expenses	210	746
Impairment of intangibles	0	2,571
Operating expenses	2,836	12,673
Income (loss) from operations	15	(2,701)
Other income (expense)
Loss on extinguishment of debt	0	(76)
Interest expense	(241)	(483)
Other expense (income)	6	(219)
Total other expense	(235)	(778)
Income (loss) from discontinued operations	(220)	(3,479)
Income tax provision from disctontinued operations	0	0
Net income (loss) from discontinued operations	(220)	(3,479)
Global
Revenue	10,510	26,207
Cost of Revenue	9,190	22,680
Gross profit	1,320	3,527
Operating expenses
General and administrative expenses	1,341	3,481
Selling and marketing expenses	79	170
Impairment of intangibles	0	1,022
Operating expenses	1,420	4,673
Income (loss) from operations	(100)	(1,146)
Other income (expense)
Loss on extinguishment of debt	0	(31)
Interest expense	(167)	(294)
Other expense (income)	5	(1)
Total other expense	(162)	(326)
Income (loss) from discontinued operations	(262)	(1,472)
Income tax provision from disctontinued operations	0	0
Net income (loss) from discontinued operations	(262)	(1,472)
AOC Key Solutions
Revenue	3,392	12,845
Cost of Revenue	1,866	6,905
Gross profit	1,526	5,940
Operating expenses
General and administrative expenses	1,284	4,827
Selling and marketing expenses	131	528
Impairment of intangibles	0	0
Operating expenses	1,415	5,355
Income (loss) from operations	111	585
Other income (expense)
Loss on extinguishment of debt	0	(45)
Interest expense	(74)	(189)
Other expense (income)	1	(151)
Total other expense	(73)	(385)
Income (loss) from discontinued operations	38	200
Income tax provision from disctontinued operations	0	0
Net income (loss) from discontinued operations	38	200
Firestorm
Revenue	5	1,006
Cost of Revenue	0	501
Gross profit	5	505
Operating expenses
General and administrative expenses	1	1,048
Selling and marketing expenses	0	48
Impairment of intangibles	0	1,549
Operating expenses	1	2,645
Income (loss) from operations	4	(2,140)
Other income (expense)
Loss on extinguishment of debt	0	0
Interest expense	0	0
Other expense (income)	0	(67)
Total other expense	0	(67)
Income (loss) from discontinued operations	4	(2,207)
Income tax provision from disctontinued operations	0	0
Net income (loss) from discontinued operations	$ 4	$ (2,207)

SUPPLEMENTAL DISCLOSURES OF C_3

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Supplemental Cash Flow Information [Abstract]
Cash paid for interest - continuing operations	$ 1,211	$ 2,135
Cash paid for interest - discontinued operations	241	521
Cash paid for taxes - continuing operations	16	0
Cash paid for taxes - discontinued operations	33	12
Non-cash investing and financing activities
Purchase of vehicles by issuing loan payable	112	0
Notes received as part of Team Global Sale	1,700	0
Non-cash financing - paid-in-kind interest transferred to the principal balance of the 2019 Promissory Notes	1,283	0
Business combinations, net of cash:
Current assets	0	415
Intangible assets	0	7,436
Goodwill	0	4,934
Current liabilities	0	(388)
Cash paid acquisition of OpenALPR Technology	0	(7,000)
Note issued acquisition of OpenALPR Technology	0	(5,000)
Issuance of common stock	0	(397)
Sale of Secure Consultants
Current assets	0	(58)
Intangible assets sold	0	(249)
Current liabilities	0	54
Loss on sale	0	3
Financing:
Notes payable - continuing operations	0	21,000
Debt discount financing costs	0	(2,599)
Extinguishment of debt	0	(1,113)
Repayment of notes payable and interest expense, net of debt discount	0	(2,515)
Investment in OpenALPR Technology	0	(12,000)
Issuance of warrants in conjunction with notes payable	0	706
Accounts payable	0	360
Proceeds from notes payable	0	3,839
Exchange of accrued interest and stock issuance costs	(226)	0
Debt extinguishment costs	(2,484)	0
Exchange of the net principal balance of the 2019 Promissory Note	(14,688)	0
Issuance of common stock	17,325	0
Cash impact of Note Exchange transaction	(73)	0
Adoption of ASC-842 Lease Accounting:
Right-of-use lease asset	354	291
Lease liability	$ (354)	$ (291)

INVENTORY (Details)

INVENTORY (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Parts and cameras	$ 558	$ 302
Finished goods	706	0
Total inventory	$ 1,264	$ 302

PROPERTY AND EQUIPMENT, NET (De

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and equipment, gross	$ 2,080	$ 1,097
Less: accumulated depreciation and amortization	(1,033)	(655)
Property and equipment, net from continuing operations	1,047	442
United States
Property and equipment, gross	2,080	1,027
Canada
Property and equipment, gross	0	70
Furniture and Fixtures
Property and equipment, gross	83	57
Office Equipment
Property and equipment, gross	314	110
Camera Systems
Property and equipment, gross	1,088	772
Vehicles
Property and equipment, gross	395	36
Leasehold Improvements
Property and equipment, gross	$ 200	$ 122

PROPERTY AND EQUIPMENT, NET (_2

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation and amortization from continuing operations	$ 382	$ 323

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease right-of-use lease assets from continuing operations	$ 426	$ 283
Current portion of lease liability	253	148
Long-term portion of lease liability	188	$ 161
Total operating lease liabilities	$ 441
Weighted average remaining lease term - operating leases	2 years 2 months 5 days
Weighted average discount rate - operating leases	9.00%

LEASES (Details 1)

LEASES (Details 1) $ in Thousands	Dec. 31, 2020USD ($)
Leases [Abstract]
2021	$ 278
2022	104
2023	84
2024	18
Total	484
Less imputed interest	43
Maturities of lease liabilities	$ 441

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Amortization	$ (1,368)	$ (971)
Intangible assets, ending	7,038
Continuing Operations
Intangible assets, beginning	8,244
Additions	162
Amortization	(1,368)
Intangible assets, ending	7,038	8,244
Continuing Operations \| Customer Relationships
Intangible assets, beginning	396
Additions	0
Amortization	(34)
Intangible assets, ending	362	396
Continuing Operations \| Marketing Related
Intangible assets, beginning	230
Additions	0
Amortization	(71)
Intangible assets, ending	159	230
Continuing Operations \| Technology Based
Intangible assets, beginning	6,395
Additions	0
Amortization	(1,034)
Intangible assets, ending	5,361	6,395
Continuing Operations \| Internally Developed Capitalized Software
Intangible assets, beginning	1,223
Additions	162
Amortization	(229)
Intangible assets, ending	$ 1,156	$ 1,223

INTANGIBLE ASSETS (Details 1)

INTANGIBLE ASSETS (Details 1) $ in Thousands	Dec. 31, 2020USD ($)
Identifiable intangible assets	$ 9,446
Accumulated amortization	(2,408)
Identifiable intangible assets, net	7,038
Customer Relationships
Identifiable intangible assets	461
Accumulated amortization	(99)
Identifiable intangible assets, net	362
Marketing Related
Identifiable intangible assets	327
Accumulated amortization	(168)
Identifiable intangible assets, net	159
Technology Based
Identifiable intangible assets	7,206
Accumulated amortization	(1,845)
Identifiable intangible assets, net	5,361
Internally Developed Capitalized Software
Identifiable intangible assets	1,452
Accumulated amortization	(296)
Identifiable intangible assets, net	$ 1,156

INTANGIBLE ASSETS (Details 3)

INTANGIBLE ASSETS (Details 3) $ in Thousands	Dec. 31, 2020USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021	$ 1,551
2022	1,470
2023	1,290
2024	1,060
2025	1,051
Thereafter	400
Capitalized software not yet placed in service	216
Total	$ 7,038

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	12 Months Ended
DEBT (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Contractual interest	$ 1,846	$ 2,808
Amortization of debt issuance costs	657	1,101
Total interest expense	$ 2,503	$ 3,909

DEBT (Details 1)

DEBT (Details 1) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
2021	$ 517
2022	1,432
2023	37
Total	1,986
Less unamortized interest	(20)
Total notes payable	1,966
Loans payable, current portion	517	$ 0
Loans payable, long-term	469
Notes payable, long-term	$ 980	$ 20,409

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Federal:
Deferred	$ 14	$ 10
Total federal	14	10
State:
Current	9	37
Total state	9	37
Provision for income taxes	$ 23	$ 47

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Net operating loss carryforward	$ 9,728	$ 4,724
163 (j) limitation	2,293	1,079
Lease liabilities	159	246
Other	148	322
Total gross deferred tax assets	12,328	6,371
Valuation allowance	(12,215)	(5,813)
Deferred tax assets	113	558
Deferred tax liabilities:
Right-of-Use Asset	(126)	(202)
Goodwill and Intangibles	(104)	(328)
Fixed assets	93	(38)
Total gross deferred tax liabilities	(137)	(568)
Net deferred tax liabilities	$ (24)	$ (10)

INCOME TAXES (Details 2)

INCOME TAXES (Details 2)	12 Months Ended
INCOME TAXES (Details 2)	Dec. 31, 2020	Dec. 31, 2019
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	11.10%	1.50%
Impact of changes in tax rates	7.90%	0.00%
True-ups	(1.10%)	(0.10%)
Other	6.10%	(0.60%)
Valuation allowance	(45.20%)	(22.10%)
Effective tax rate	(0.20%)	(0.30%)

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Valuation allowance	$ (12,215)	$ (5,813)
Federal
Net operating loss carryforwards	33,787
State
Net operating loss carryforwards	$ 26,435

EMPLOYEE BENEFIT PLAN (Details

EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]
Contributions	$ 228	$ 149

STOCKHOLDERS' (DEFICIT) EQUITY

STOCKHOLDERS' (DEFICIT) EQUITY (Details Narrative) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, issued	743,188	743,188
Preferred stock, outstanding	743,188	743,188
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	100,000,000	30,000,000
Common stock, issued	33,013,271	21,595,653
Common stock, outstanding	33,013,271	21,595,653
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, 2020	Dec. 31, 2019
Equity [Abstract]
Number of options outstanding, beginning	1,655,383	1,227,557
Number of options, granted	20,000	870,549
Number of options, exercised	(298,392)
Number of options, forfeited	(88,841)	(111,537)
Number of options, cancelled	(44,896)	(331,186)
Number of options outstanding, ending	1,243,254	1,655,383
Number of options outstanding, exercisable	849,908
Weighted average exercise price outstanding, beginning	$ 1.68	$ 2.13
Weighted average exercise price, granted	4.32	1.03
Weighted average exercise price, exercised	2.35	.00
Weighted average exercise price, forfeited	3.17	1.95
Weighted average exercise price, cancelled	2.13	2.05
Weighted average exercise price outstanding, ending	1.44	$ 1.68
Weighted average exercise price outstanding, exercisable	$ 1.62
Average remaining contractual term outstanding, beginning	8 years 3 months 29 days	8 years 4 months 20 days
Average remaining contractual term, granted		8 years 9 months 4 days
Average remaining contractual term outstanding, ending	7 years 6 months 25 days	8 years 3 months 29 days
Average remaining contractual term, exercisable	7 years 2 months 12 days
Aggregate intrinsic value outstanding, beginning	$ 3,256	$ 0
Aggregate intrinsic value outstanding, ending	7,827	$ 3,256
Aggregate intrinsic value outstanding, exercisable	$ 5,339

EQUITY INCENTIVE PLAN (Details

EQUITY INCENTIVE PLAN (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Equity [Abstract]
Stock compensation expense, stock options	$ 313	$ 446
Unrecognized stock compensation expense, stock options	180
Stock compensation expense, restricted stock units	483
Unrecognized stock compensation expense, restricted stock units	$ 1,640

EQUITY INCENTIVE PLAN (Detail_2

EQUITY INCENTIVE PLAN (Details 1)	12 Months Ended
EQUITY INCENTIVE PLAN (Details 1)	Dec. 31, 2020$ / sharesshares
Equity [Abstract]
Number of restricted stock units outstanding, beginning \| shares	0
Number of restricted stock units, granted \| shares	488,834
Number of restricted stock units, forfeited \| shares	(8,850)
Number of restricted stock units outstanding, ending \| shares	479,984
Weighted average unit price, beginning \| $ / shares	$ .00
Weighted average unit price, granted \| $ / shares	4.44
Weighted average unit price, forfeited \| $ / shares	3.75
Weighted average unit price, ending \| $ / shares	$ 4.45
Weighted average remaining contractual term, beginning	0 years
Weighted average remaining contractual term, granted	2 years 1 month 13 days
Weighted average remaining contractual term, ending	2 years 1 month 13 days

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Basic and diluted loss per share
Net loss from continuing operations	$ (13,962)	$ (12,405)
Less: preferred stock accretion	(865)	(752)
Less: preferred stock dividends	(460)	(460)
Net loss attributable to shareholders from continuing operations	(15,287)	(15,624)
Net loss from discontinued operations	(220)	(3,479)
Net loss attributable to shareholders	$ (15,507)	$ (17,096)
Weighted average common shares outstanding - basic and diluted	24,192,680	20,033,023
Basic and diluted loss per share from continuing operations	$ (0.63)	$ (0.68)
Basic and diluted (loss) earnings per share from discontinued operations	(0.01)	(0.17)
Basic and diluted loss per share	$ (0.64)	$ (0.85)
Common stock equivalents excluded due to anti-dilutive effect	4,051,601	5,602,841

LOSS PER SHARE (Details Narrati

LOSS PER SHARE (Details Narrative) - shares	12 Months Ended
LOSS PER SHARE (Details Narrative) - shares	Dec. 31, 2020	Dec. 31, 2019
Potentially dilutive securities excluded from loss per share	4,051,601	5,602,841
Warrants
Potentially dilutive securities excluded from loss per share	925,845	2,491,249
Series A Preferred Stock
Potentially dilutive securities excluded from loss per share	887,461	974,487
Series B Preferred Stock
Potentially dilutive securities excluded from loss per share	515,057	481,722
Options
Potentially dilutive securities excluded from loss per share	1,243,254	1,655,383
RSUs
Potentially dilutive securities excluded from loss per share	479,984	0