Business Combination (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of purchase price allocation

(in thousands)	Total
Accounts receivable	$	1,452
Unbilled receivables		221
Inventory		142
Prepaid expenses & other current assets		17
Property and equipment		177
Other assets		7
Identified intangible assets:
Definite-lived trade names		340
Developed technology		1,770
Customer relationships		2,870
Goodwill		3,812
Accounts payable		(330	)
Accrued expenses		(294	)
Customer deposits		(494	)
Deferred revenues		(276	)
Accounts payable converted into Seller Note		(737	)
Net consideration transferred	$	8,047

Schedule of amortization period of identifiable intangible assets

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

Allure Acquisition [Member]

Schedule of purchase price allocation

(in thousands)	Consideration
Cash consideration for stock	$	6,300	(1)
Payable to former Allure management		1,021	(2)
Seller note payable		900	(3)
Earnout liability		250	(4)
Total consideration		8,471
Cash acquired		(424	)(5)
Net consideration transferred	$	8,047

(1)	Cash consideration for outstanding shares of Allure common stock per Stock Purchase Agreement.
(2)	Represents a payable due to two former members of the Allure management team for a total of $1,250 as a result of the acquisition; 30% due in November 2018 and 70% due in November 2019. The fair value of the payable as of the acquisition date was deemed to be $1,021. During November 2019, the Company entered a payment plan with each former member of Allure management to spread the remaining payments due from the Company throughout 2020. As of December 31, 2019, the Company's consolidated balance sheet includes $535 related to this liability within accrued expenses.
(3)	Represents a note payable due from Allure to Seller, under a pre-existing Seller Note which was amended and restated for this amount through the Stock Purchase Agreement. At the closing date, the estimated net working capital deficit of Allure was $801 in excess of the target net working capital as defined in the stock purchase agreement. As of the acquisition date, Allure also had accounts payable to Seller for outsourced services of $2,204. We agreed with the Seller to settle the estimated net working capital deficit through a reduction in the accounts payable to Seller as of the acquisition date and to further amend the Seller Note to include the remaining $1,403 accounts payable due from Allure to Seller. The Seller Note thereby increased from $900 per the Stock Purchase Agreement to $2,303 at the opening balance sheet. That debt is represented by our issuance to the Seller of a promissory note accruing interest at 3.5% per annum. The promissory note required us to make quarterly payments of interest through February 19, 2020, on which date the promissory note matured and all remaining amounts owing thereunder were due. See Note 10 Commitments and Contingencies in the consolidated financial statements for further discussion of this note, which is now past due.

(4)

The Stock Purchase Agreement contemplates additional consideration or $2,000 to be paid by us to Seller in the event that acquiree revenue exceeds $13,000, as defined in the underlying agreement. The fair value of the earnout liability was initially determined to be $250 at the time of acquisition but has since been adjusted to $0, resulting in a gain on reversal of earnout liability of $250 in the fourth quarter of 2019. We currently do not expect to owe any amount of additional consideration to Seller and no liability has been recorded in the Consolidated Financial Statements for this contingent liability as of December 31, 2019. We utilized a third-party valuation specialist to assist in evaluating this liability as of the opening balance sheet date. Should revenues from Allure customers exceed $13,000 during 2020, the $2,000 liability generated would be recorded through the Company's statement of operations.

(5)

Represents the Allure cash balance acquired at acquisition ($26) and the cash received from Seller in settlement of our net working capital claim ($398).

Schedule of amortization period of identifiable intangible assets

	Year Ended December 31,
(in thousands, except earnings per common share)	2019		2018
	(unaudited)
Net sales	$	31,598	$	31,477
Net income/(loss)	$	1,038	$	(11,615	)
Earnings per common share	$	0.11	$	(3.22	)