10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2020

OR

☐TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From __________ to __________

Commission File Number: 1-09720

PAR TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	16-1434688
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
PAR Technology Park
8383 Seneca Turnpike
New Hartford, New York	13413-4991
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (315) 738-0600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock	PAR	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  þ  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ☐	Accelerated Filer  þ
Non-Accelerated Filer  ☐	Smaller Reporting Company ☐
	Emerging Growth Company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No  þ

As of May 1, 2020, 18,243,672 shares of the registrant’s common stock, $0.02 par value, were outstanding.

PAR TECHNOLOGY CORPORATION

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

Item Number		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets at March 31. 2020 and December 31, 2019 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)	3
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)	5
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	26
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use Of Proceeds	27
Item 6.	Exhibits	26
Signatures		27

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share amounts)

Assets	March 31, 2020			December 31, 2019
Current assets:
Cash and cash equivalents	$	60,089		$	28,036
Accounts receivable – net	42,819			41,774
Inventories – net	23,339			19,326
Other current assets	7,191			4,427
Total current assets	133,438			93,563
Property, plant and equipment – net	14,052			14,351
Goodwill	41,386			41,386
Intangible assets – net	33,103			32,948
Lease right-of-use assets	2,729			3,017
Other assets	4,274			4,347
Total Assets	$	228,982		$	189,612
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	639		$	630
Accounts payable	16,603			16,385
Accrued salaries and benefits	6,495			7,769
Accrued expenses	2,893			3,176
Lease liabilities - current portion	2,000			2,060
Customer deposits and deferred service revenue	9,732			12,084
Total current liabilities	38,362			42,104
Lease liabilities - net of current portion	805			1,021
Deferred service revenue – non current	4,535			3,916
Long-term debt	101,916			62,414
Other long-term liabilities	7,068			7,310
Total liabilities	152,686			116,765
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized	—			—
Common stock, $.02 par value, 29,000,000 shares authorized; 19,291,289 and 18,360,205 shares issued, 18,244,350 and 16,629,177 outstanding at March 31, 2020 and December 31, 2019, respectively	386			367
Additional paid in capital	106,600			94,372
Accumulated deficit	(21,054		)	(10,144		)
Accumulated other comprehensive loss	(5,167		)	(5,368		)
Treasury stock, at cost, 1,046,939 shares and 1,731,028 shares at March 31, 2020 and December 31, 2019, respectively	(4,469		)	(6,380		)
Total shareholders’ equity	76,296			72,847
Total Liabilities and Shareholders’ Equity	$	228,982		$	189,612

See accompanying notes to unaudited interim condensed consolidated financial statements

1

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2020			2019
Net revenues:
Product	$	18,634		$	15,517
Service	18,775			14,043
Contract	17,323			15,122
	54,732			44,682
Costs of sales:
Product	14,905			11,241
Service	12,646			10,268
Contract	16,134			13,650
	43,685			35,159
Gross margin	11,047			9,523
Operating expenses:
Selling, general and administrative	11,427			8,564
Research and development	4,865			3,060
Amortization of identifiable intangible assets	210			—
	16,502			11,624
Operating loss	(5,455		)	(2,101		)
Other expense, net	(625		)	(430		)
Interest expense, net	(1,972		)	(146		)
Loss on extinguishment of debt	(8,123		)	—
Loss before benefit from (provision for) income taxes	(16,175		)	(2,677		)
Benefit from (provision for) income taxes	5,265			(52		)
Net loss	$	(10,910	)	$	(2,729	)
Basic Earnings per Share:
Net loss	$	(0.61	)	$	(0.17	)
Diluted Earnings per Share:
Net loss	$	(0.61	)	$	(0.17	)
Weighted average shares outstanding:
Basic	17,941			16,044
Diluted	17,941			16,044

See accompanying notes to unaudited interim condensed consolidated financial statements

2

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2020			2019
Net loss	$	(10,910	)	$	(2,729	)
Other comprehensive income (loss), net of applicable tax:
Foreign currency translation adjustments	201			(10		)
Comprehensive loss	$	(10,709	)	$	(2,739	)

See accompanying notes to unaudited interim condensed consolidated financial statements

3

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited, in thousands, except share and per share amounts)

	Common Stock			Additional Paid in Capital			Accumulated deficit			Accumulated Other Comprehensive Loss			Treasury Stock					Total Shareholders’ Equity
	Shares	Amount											Shares		Amount
Balances at December 31, 2019	18,360	$	367	$	94,372		$	(10,144	)	$	(5,368	)	1,731		$	(6,380	)	$	72,847
Net loss	—	—		—			(10,910		)	—			—		—			(10,910		)
Issuance of common stock upon the exercise of stock options	2	—		30			—			—					—			30
Net issuance of restricted stock awards	21	—		—			—			—					—			—
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock	—	—		—			—			—			38		(524		)	(524		)
Issuance of restricted stock for acquisition	908	19		—			—			—			—		—			19
Equity component of redeemed 2024 convertible notes, net of deferred taxes and issuance costs	—	—		(7,988		)	—			—			(722	)	2,435			(5,553		)
Equity component of issued 2026 convertible notes, net of deferred taxes and issuance costs	—	—		19,097			—			—			—		—			19,097
Stock-based compensation	—	—		1,089			—			—			—		—			1,089
Foreign currency translation adjustments	—	—		—			—			201			—		—			201
Balances at March 31, 2020	19,291	$	386	$	106,600		$	(21,054	)	$	(5,167	)	1,047		$	(4,469	)	$	76,296

Balances at December 31, 2018	17,878	$	357	$	50,251	$	5,427		$	(4,253	)	1,708	$	(5,836	)	$	45,946
Net loss	—	—		—		(2,729		)	—			—	—			(2,729		)
Issuance of common stock upon the exercise of stock options	78	—		30		—			—			—	—			30
Stock-based compensation	—	—		248		—			—			—	—			248
Foreign currency translation adjustments	—	—		—		—			(10		)	—	—			(10		)
Balances at March 31, 2019	17,956	$	357	$	50,529	$	2,698		$	(4,263	)	1,708	$	(5,836	)	$	43,485

See accompanying notes to unaudited interim condensed consolidated financial statements

4

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(10,910	)	$	(2,729	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	3,142			1,012
Current expected credit losses	244			107
Provision for obsolete inventory	1,188			588
Stock-based compensation	1,089			248
Loss on debt extinguishment	8,123			—
Deferred income tax	(5,386		)	—
Changes in operating assets and liabilities:
Accounts receivable	(1,289		)	(3,199		)
Inventories	(5,201		)	(490		)
Other current assets	(2,764		)	(1,848		)
Other assets	85			(240		)
Accounts payable	218			2,150
Accrued salaries and benefits	(1,646		)	(795		)
Accrued expenses	(283		)	110
Customer deposits and deferred service revenue	(1,733		)	2,089
Other long-term liabilities	—			(213		)
Net cash used in operating activities	(15,123		)	(3,210		)
Cash flows from investing activities:
Capital expenditures	(188		)	(887		)
Capitalization of software costs	(1,852		)	(1,036		)
Net cash used in investing activities	(2,040		)	(1,923		)
Cash flows from financing activities:
Payments of long-term debt	(154		)	—
Payment of contingent consideration	—			(2,550		)
Payments of bank borrowings	—			(16,777		)
Proceeds from bank borrowings	—			25,097
Payments for the extinguishment of notes payable	(66,250		)	—
Proceeds from notes payable, net of issuance costs	115,916			—
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock	(153		)	—
Proceeds from exercise of stock options	30			30
Net cash provided by financing activities	49,389			5,800
Effect of exchange rate changes on cash and cash equivalents	(173		)	(10		)
Net increase in cash and cash equivalents	32,053			657
Cash and cash equivalents at beginning of period	28,036			3,485
Cash and equivalents at end of period	$	60,089		$	4,142
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	953		$	115
Additions to right-of-use assets and operating lease liabilities	—			3,717

See accompanying notes to unaudited interim condensed consolidated financial statements

5

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements ("unaudited condensed consolidated financial statements") of PAR Technology Corporation (the “Company” or “PAR”, "we","us") have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements.  In the opinion of management, the Company's unaudited condensed consolidated financial statements include all normal and recurring adjustments necessary in order to make the unaudited condensed consolidated financial statements not misleading and to provide a fair presentation of the results for the interim period included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Interim results are not necessarily indicative of results for the full year or any future periods. The information included in this Quarterly Report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2020.

The preparation of the unaudited condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the period.  Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, the measurement of liabilities and equity recognized for outstanding convertible notes, valuation allowances for receivables, inventories, and measurement of contingent consideration at fair value. Actual results could differ from those estimates.

The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail reporting segment provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government reporting segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. In addition, the unaudited condensed consolidated financial statements include corporate and eliminations, which is comprised of enterprise-wide functional departments.

Additionally, the Company has reclassified certain costs and expenses in the condensed consolidated statement of operations for the three months ended March 31, 2019, amounting to $0.3 million, from amortization of intangible assets to cost of service to conform to the current period presentation. These reclassifications had no effect on previously reported total costs and operating expenses and net loss.

Use of Estimates

Preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 11, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses (Topic 326): "Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date, based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016-13

6

effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company adopted ASU 2017-04 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurement disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. ASU 2018-13 modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. The Company adopted ASU 2018-13 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other (Topic 350) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 provides guidance on the measurement of costs for internal-use software during the design, development, and implementation stages for customers in a cloud hosting arrangement. ASU 2018-15 also requires the capitalized costs associated with the design, development and implementation of cloud hosted arrangements to be amortized over the term of the hosting arrangement. The Company adopted ASU 2018-15 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes", which is intended to simplify various requirements related to accounting for income taxes. ASU  2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the impact of this standard on its unaudited condensed consolidated financial statements.

With the exception of the new standards discussed above, there were no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2020 that are of significance or potential significance to the Company, as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Note 2 - Revenue Recognition

Our revenue is derived from Software as a Service (SaaS), hardware and software sales, software activation, hardware support, installations, maintenance and professional services. ASC 606: "Revenue from Contracts with Customers" requires us to distinguish and measure performance obligations under customer contracts. Contract consideration is allocated to all performance obligations within the arrangement or contract. Performance obligations that are determined not to be distinct are combined with other performance obligations until the combined unit is determined to be distinct and that combined unit is then recognized as revenue over time or at a point in time depending on when control is transferred.

We evaluated the potential performance obligations within our Restaurant/Retail reporting segment and evaluated whether each performance obligation met the ASC 606 criteria to be considered distinct performance obligations. Revenue in the Restaurant/Retail reporting segment is recognized at a point in time for software, hardware and installations. Revenue on these items are recognized when the customer obtains control of the asset. This generally occurs upon delivery and acceptance by the customer or upon installation or delivery to a third party carrier for onward delivery to customer. Additionally, revenue in the Restaurant/Retail reporting segment relating to SaaS, our hardware Advanced Exchange, on-site support and other services is recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance obligations. Our support services are stand-ready obligations that are provided over the life of the contract, generally 12 months. We offer installation services to our customers for hardware and software for which we primarily hire third-party contractors to install the equipment on our behalf. We pay third-party contractors installation service fees at mutually agreed rates. When third-party installers are

7

used, we determine whether the nature of our performance obligations is to provide the specified goods or services ourselves (principal) or to arrange for a third-party to provide the goods or services (agent). In direct customer arrangements, we have discretion over our pricing; we are primarily responsible for providing a good or service; and we have inventory risk before the good or service is transferred to the customer. As a result, we have concluded that we are the principal in the arrangement and record installation revenue on a gross basis.

Our contracts typically require payment within 30 to 90 days from the shipping date or installation date. The primary method used to estimate stand-alone selling price, is by referring to the price that we charge for that good or service when we sell it separately under similar circumstances to similar customers. The Company determines stand-alone selling price as follows: hardware, software (on-premises and SaaS) and software activation (which is a one-time fee charged at the initial offering of software) performance obligations are recognized at a stand-alone selling price based on the price at which the Company sells the particular good or service separately in similar circumstances and to similar customers. The stand-alone selling price for all other performance obligations, including: pass-through hardware, such as terminals, printers, or card readers; hardware support, including Advanced Exchange, installation and maintenance; software upgrades; and professional services, including project management, is recognized by using an expected cost plus margin.

Our revenue in the Government reporting segment is generally recognized over time as control of products or services is generally transferred continuously to our customers. While revenue generated by the Government reporting segment is predominantly related to services, we do generate revenue from sales of materials, software, hardware, and maintenance. For the Government reporting segment, cost plus fixed fee contract portfolio revenue is recognized over time using costs incurred as of a determination date, to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead, and general and administrative expenses. Profit is recognized on the fixed fee portion of the contract as costs are incurred and invoiced. Long-term fixed price contracts and programs involve the use of various techniques to estimate total contract revenue and costs. For long-term fixed price contracts, we estimate the profit, as the difference between the total estimated revenue and expected costs to complete a contract, and recognize it over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include: labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; and the performance of subcontractors. Revenue and profit in future periods of contract performance are recognized using the same assumptions, adjusted for estimated costs to complete a contract. Once the services provided are determined to be distinct or not distinct, we evaluate how to allocate the transaction price. Generally, the Government reporting segment does not sell the same good or service to similar customers and the contract performance obligations are unique to each government contract. The performance obligations are typically not distinct; however, in cases where there are distinct performance obligations, the transaction price is allocated to each performance obligation ratably, based upon the stand-alone selling price of each performance obligation. Cost plus margin is used for the cost plus fixed fee contract portfolios as well as the fixed price and time and materials contracts portfolios to determine the stand-alone selling price.

In determining when to recognize revenue, we analyze whether our performance obligations in our Government contracts are satisfied over a period of time or at a point in time. In general, our performance obligations are satisfied over a period of time. However, there may be circumstances where the latter or both scenarios could apply to a contract.

We generally anticipate receipt of payment within 30 to 90 days from the date of service. None of our contracts as of December 31, 2019 or March 31, 2020 contained a significant financing component.

Performance Obligations Outstanding

The Company's performance obligations outstanding represent the transaction price of firm, non-cancellable orders, with expected delivery dates to customers subsequent to March 31, 2020 and March 31, 2019, respectively, for work that has not yet been performed. The activity of outstanding performance obligations as is relates to customer deposits and deferred service revenue is as follows:

8

(in thousands)	2020			2019
Beginning balance - January 1	$	16,000		$	14,134
Deferral of revenue	8,579			7,023
Recognition of revenue	(8,571		)	(6,047		)
Changes in customer deposits	(1,741		)	1,237
Ending balance - March 31	$	14,267		$	16,347

In the Restaurant/Retail reporting segment most performance obligations over one year are related to service and support contracts, approximately 59% of which we expect to fulfill within the one-year period and 100% within 60 months.

During the three months ended March 31, 2020 and March 31, 2019, we recognized revenue of $7.2 million and $5.7 million,

respectively, included in the contract liabilities at the beginning of the respective period.

The value of existing contracts in the Government reporting segment at March 31, 2020, net of amounts relating to work performed to that date, was approximately $136.1 million, of which $34.5 million was funded, and at December 31, 2019, net of amounts relating to work performed to that date, was approximately $148.7 million, of which $32.8 million was funded. The value of existing contracts, net of amounts relating to work performed to that date are expected to be recognized over time as follows (in thousands):

Next 12 Months	$	52,796
Months 13-24	35,110
Months 25-36	27,924
Thereafter	20,227
TOTAL	$	136,057

Disaggregated Revenue

The Company disaggregates revenue from customer contracts by major product group for each reporting segment. The Company believes this method best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregation of revenue for the three months ended March 31, 2020 and March 31, 2019 is as follows:

(in thousands)	Three months ended March 31, 2020
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	28,838	$	8,571	$	—
Mission Systems	—		—		8,448
ISR Solutions	—		—		8,875
TOTAL	$	28,838	$	8,571	$	17,323

(in thousands)	Three months ended March 31, 2019
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	23,023	$	5,103	$	—
Grocery	490		944		—
Mission Systems	—		—		8,546
ISR Solutions	—		—		6,576
TOTAL	$	23,513	$	6,047	$	15,122

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Practical Expedients and Exemptions

The Company generally expenses sales commissions when incurred because the amortization period is less than one year or the total amount of commissions is immaterial. We record these expenses in selling, general and administrative in the condensed consolidated statements of operations.

We elected to exclude from the transaction price measurement, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value added, and some excise taxes).

Note 3 — Acquisitions

Drive-Thru Acquisition

Effective September 30, 2019, the Company, through its wholly-owned subsidiary ParTech, Inc. ("ParTech"), acquired assets of 3M Company's Drive-Thru Communications Systems business, including the XT-1 and G5 headset systems, contracts and intellectual property associated with the business, for a purchase price of $8.4 million (total fair value of assets were $8.4 million, net of warranty liability of $1.4 million, resulting in cash paid of $7.0 million) (the "Drive-Thru Acquisition").

Restaurant Magic Acquisition

Effective December 18, 2019, the Company, through ParTech, acquired 100% of the limited liability company interests of AccSys LLC (f/k/a AccSys, Inc., and otherwise known as Restaurant Magic) in base consideration of approximately $43.0 million, of which approximately $13.0 million was paid in cash, $27.5 million was paid in restricted shares of Company common stock (issued in January 2020) and $2.0 million was paid by delivery of a subordinated promissory note (the "Restaurant Magic Acquisition"). Topic 805: "Business Combinations" allows entities a measurement period of up to one year from the acquisition date to finalize the allocation. The measurement period remains open pending the completion of valuation procedures related to the acquired tangible and intangible assets and assumed liabilities. Following the closing of the transaction, the sellers have the opportunity through 2022 to earn additional purchase price consideration subject to the achievement of certain post-closing revenue focused milestones (“Earn-Out”). As of December 31, 2019 and March 31, 2020, the value of the Earn-Out based on the Monte Carlo simulation was $3.3 million. The Earn-Out, if any, will be payable 50% in cash or subordinated promissory notes, or a combination of both, at the Company's election, and 50% in restricted shares of Company common stock. This Earn-out has no maximum payment.

The Company issued restricted stock units in connection with its assumption of awards granted by Restaurant Magic to its employees and contractors prior to the closing of the acquisition.

The fair values assigned to the acquired assets and assumed liabilities presented in the table below are based on our best estimates and assumptions as of the reporting date:

(in thousands)	Purchase price allocation
Developed technology	$	16,400
Customer relationships	1,100
Trade name	900
Tangible assets	1,344
Goodwill	27,945
Total assets	47,689
Accounts payable and accrued expenses	629
Deferred revenue	715
Earn out liability	3,340
Consideration paid	$	43,005

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Unaudited Pro Forma Financial Information

For the three months ended March 31,2020, the Drive-Thru Acquisition and Restaurant Magic Acquisition resulted in additional revenues of $3.5 million and $2.2 million, respectively. The Company has determined it is impractical to report the amounts of net loss for the Drive-Thru and Restaurant Magic acquisition for each entity for the quarter ended March 31, 2020. The following unaudited pro forma financial information presents our results as if the Drive-Thru Acquisition and Restaurant Magic Acquisition amounts of net loss had occurred January 1, 2019:

(in thousands)	Three months ended March 31, 2019
Total revenue	$	51,352
Net loss	$	(263	)

Note 4 — Divestiture

Sale of SureCheck

During the second quarter of 2019, ParTech entered into an asset purchase agreement to sell substantially all of the assets relating to the SureCheck product group within the Company's Restaurant/Retail reporting segment. The sale does not qualify for treatment as a discontinued operation, and therefore, the SureCheck product group is included in the Company’s continuing operations for all periods presented.

Note 5 — Accounts Receivable, Net

The Company’s accounts receivable, net, consists of:

	March 31, 2020			December 31, 2019
Government reporting segment:
Billed	$	9,895		$	11,608
Advanced billings	(754		)	(608		)
	9,141			11,000
Restaurant/Retail reporting segment:	33,678			30,774
Accounts receivable - net	$	42,819		$	41,774

At March 31, 2020 and December 31, 2019, the Company recorded allowances for doubtful accounts of $2.1 million and $1.8 million, respectively, against the accounts receivable for the Restaurant/Retail reporting segment. The changes in the allowance for doubtful accounts during the three months ended March 31, 2020 were as follows:

(in thousands)	2020
Beginning balance - January 1	$	1,849
Provisions	380
Write-offs	(156		)
Recoveries	—
Ending balance - March 31	$	2,073

Receivables recorded as of March 31, 2020 and December 31, 2019 all represent unconditional rights to payments from customers.

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Note 6 — Inventories

Inventories are primarily used in the manufacture, maintenance and service of products within the Restaurant/Retail reporting segment.  The components of inventories, net, consist of the following:

(in thousands)	March 31, 2020		December 31, 2019
Finished goods	$	11,630	$	8,320
Component parts	7,370		6,768
Service parts	4,339		4,238
	$	23,339	$	19,326

At March 31, 2020 and December 31, 2019, the Company had inventory reserves of $11.4 million and $9.8 million, respectively, against inventories used in the Restaurant/Retail reporting segment, which relate primarily to service parts.

Note 7 — Identifiable Intangible Assets and Goodwill

Identifiable intangible assets represent intangible assets acquired by the Company in connection with its acquisition of Brink Software Inc. ("Brink Acquisition"), the Drive-Thru Acquisition and the Restaurant Magic Acquisition, and software development costs.  The Company capitalizes certain software development costs for software used in its Restaurant/Retail reporting segment. Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs.  The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities necessary to establish that the software product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility of software sold as a perpetual license, as defined within ASC 985-20, "Software – Costs of Software to be sold, Leased, or Marketed", are capitalized and amortized on a product-by-product basis when the software product is available for general release to customers. Included in "Acquired and internally developed software costs" in the table below are approximately $4.4 million and $2.5 million of costs related to software products that have not satisfied the general release threshold as of March 31, 2020 and December 31, 2019, respectively. These software products are expected to satisfy the general release threshold within the next 12 months. Software development costs are also capitalized in accordance with ASC 350-40, “Intangibles - Goodwill and Other - Internal - Use Software,” and are amortized over the expected benefit period, which generally ranges from three to five years. Software development costs capitalized during the three months ended March 31, 2020 and March 31, 2019 were $1.8 million and $1.0 million, respectively. 

Annual amortization, charged to cost of sales is computed using the straight-line method over the remaining estimated economic life of software products, generally three to five years. Amortization of capitalized software development costs from continuing operations for the three months ended March 31, 2020 and 2019 were $1.6 million and $0.5 million, respectively. 

Amortization of intangible assets acquired in the Brink Acquisition, the Drive-Thru Acquisition and the Restaurant Magic Acquisition equaled $0.2 million, $0.2 million and $0.6 million, respectively, for the three month period ended March 31, 2020 compared to $0.2 million related to the Brink Acquisition for the three month period ended March 31, 2019.

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The components of identifiable intangible assets are:

(in thousands)	March 31, 2020			December 31, 2019			Estimated Useful Life
Acquired and internally developed software costs	$	36,137		$	36,137		3 - 5 years
Customer relationships	4,860			4,860			7 years
Non-competition agreements	30			30			1 year
	41,027			41,027
Less accumulated amortization	(14,087		)	(12,389		)
	$	26,940		$	28,638
Internally developed software costs not meeting general release threshold	4,353			2,500
Trademarks, trade names (non-amortizable)	1,810			1,810			Indefinite
	$	33,103		$	32,948

The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles and excluding software costs not meeting the general release threshold, is as follows (in thousands):

2020, remaining	$	3,837
2021	4,112
2022	5,311
2023	4,182
2024	4,182
Thereafter	5,316
Total	$	26,940

The Company operates in two reporting segments, Restaurant/Retail and Government, which are also the Company's identified reporting units. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment of goodwill. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded; once assigned, goodwill no longer retains its association with a particular acquisition and all of the activities within the reporting unit, whether acquired from a third-party or organically acquired, are available to support the value of the goodwill.  The amount of goodwill carried by the Restaurant/Retail and Government reporting unit was $41.4 million at March 31, 2020 and December 31, 2019, respectively. The Company recognized additions to goodwill as part of the Drive-Thru Acquisition and Restaurant Magic Acquisition as indicated in Note 3.

The Company is actively monitoring the impacts of COVID-19 that could impact the need to consider a triggering event in the future. As of December 31, 2019 and March 31, 2020, the goodwill asset balance was $41.4 million. No impairment charges were recorded for the periods ended March 31, 2020 or March 31, 2019.

Note 8 — Debt

On April 15, 2019, the Company sold $80.0 million in aggregate principal amount of 4.500% Convertible Senior Notes due 2024 (the "2024 Notes"). The 2024 Notes were sold pursuant to an indenture, dated April 15, 2019 (the "2024 Indenture"), between the Company and The Bank of New York Mellon Trust Company, N.A. (“Trustee”). The 2024 Notes pay interest at a rate equal to 4.500% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2019. Interest accrues on the 2024 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2019. Unless earlier converted, redeemed or repurchased, the 2024 Notes mature on April 15, 2024.

On February 10, 2020, the Company sold $120.0 million in aggregate principal amount of 2.875% Convertible Senior Notes due 2026 (the "2026 Notes" and, together with the 2024 Notes, the "Notes"). The 2026 Notes were sold pursuant to an indenture, dated February 10, 2020 (the "2026 Indenture" and, together with the 2024 Indenture, the "Indentures"), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee. The 2026 Notes pay interest at a rate equal to 2.875% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2020. Interest accrues on the

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2026 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2020. Unless earlier converted, redeemed or repurchased, the 2026 Notes mature on April 15, 2026.

The Company used approximately $66.3 million (excluding cash payments relating to accrued interest and fractional shares) from its sale of the 2026 Notes and issued 722,423 shares of common shares at $32.43 per share out of treasury stock with an average cost basis of $3.37 per share per share to repurchase approximately $66.3 million in aggregate principal amount of the 2024 Notes through individually negotiated transactions. Of the total price paid for the 2024 Notes, $59.0 million was allocated to the 2024 Notes settlement,  $30.8 million was allocated to the equity component, and $1.0 million was used to pay off accrued interest on the 2024 Notes.  The consideration transferred was allocated to the liability and equity components of the 2024 Notes using the equivalent rate that reflected the borrowing rate for a similar non-convertible debt instrument immediately prior to settlement. The transaction resulted in a loss on settlement of convertible notes of $8.1 million, which is recorded as a Loss on extinguishment of debt in the Company’s unaudited condensed consolidated statement of operations. The loss represents the difference between (i) the fair value of the liability component and (ii) the sum of the carrying value of the debt component and any unamortized debt issuance costs at the time of settlement.

The implied estimated effective rate of the liability component of the 2024 Notes and 2026 Notes is 10.24% and 7.33%, respectively.

The Notes are senior, unsecured obligations of the Company. The 2024 Notes and the 2026 Notes are convertible, in whole or in part, at the option of the holder, upon the occurrence of specified events or certain fundamental changes set forth in the Indentures prior to the close of business on the business day immediately preceding October 15, 2023 and October 15, 2025, respectively; and, thereafter, at any time until the close of business on the second business day immediately preceding maturity. The 2024 Notes are convertible into Company common stock at an initial conversion rate of 35.0217 shares per $1,000 principal amount and the 2026 Notes are convertible into Company common stock at an initial conversion rate of 23.2722 shares per $1,000 principal amount. Upon conversion, the Company may elect to settle by paying or delivering either solely cash, shares of Company common stock or a combination of cash and shares of common stock.

In accordance with ASC 470-20 "Debt with Conversion and Other Options — Beneficial Conversion Features", the initial measurement of the 2024 Notes at fair value resulted in a liability of $62.4 million, as such, the calculated discount resulted in an implied value of the convertible feature recognized in Additional Paid in Capital of $17.6 million. In accordance with ASC 470-20, the initial measurement of the 2026 Notes at fair value resulted in a liability of $93.8 million, as such, the calculated discount resulted in an implied value of the convertible feature recognized in Additional Paid in Capital of $26.2 million. Issuance costs for the transactions amounted to $4.9 million and $4.2 million for the 2024 Notes and 2026 Notes, respectively. These costs were allocated to debt and equity components on a ratable basis. For the 2024 Notes this amounted to $3.8 million and $1.1 million to the debt and equity components, respectively. For the 2026 Notes this amounted to $3.1 million and $1.1 million to the debt to equity components, respectively.

The Indentures contain covenants that, among other things, restrict the Company’s ability to merge, consolidate or sell, or otherwise dispose of, substantially all of its assets and customary Events of Default (as defined in the Indentures).

In connection with the sale of the 2026 Notes, the Company recorded an income tax benefit of $5.4 million in the first quarter of 2020 as a result of the creation of a deferred tax liability associated with the portion of the 2026 Notes that was classified within stockholders' equity. While GAAP requires the offset of the deferred tax liability to be recorded in additional paid-in capital, consistent with the equity portion of the 2026 Notes, the creation of the deferred tax liability produced evidence of recoverability of the Company's net deferred tax assets which resulted in the release of a valuation allowance, totaling $5.4 million, reflected as an income tax benefit in the first quarter of 2020.

The following table summarizes information about the net carrying amounts of the 2024 Notes and 2026 Notes as of March 31, 2020:

(in thousands)	2024 Notes			2026 Notes
Principal amount of 2024 Notes outstanding	$	13,750		$	120,000
Unamortized discount (including unamortized debt issuance cost)	(3,219		)	(29,804		)
Total long-term portion of notes payable	$	10,531		$	90,196

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The following table summarizes interest expense recognized:

(in thousands)	Three Months Ended March 31, 2020
	2020			2019
Contractual interest expense	$	(1,014	)	$	(146	)
Amortization of debt issuance costs and discount	(958		)	—
Total interest expense	$	(1,972	)	$	(146	)

The following table summarizes the future principal payments for the 2024 Notes and 2026 Notes (in thousands):

2020, remaining	$	—
2021	—
2022	—
2023	—
2024	13,750
Thereafter	120,000
	$	133,750

In connection with the Restaurant Magic Acquisition, see Note 3 - Acquisitions, $2.0 million was paid by delivery of a subordinated promissory note. The note bears interest at 4.5% per annum, with monthly payments of principal and interest in the amount of $60,391 payable beginning January 15, 2020 through maturity on December 15, 2022. As of March 31, 2020, the outstanding balance of the subordinated promissory note was $1.8 million of which $0.7 million was in the current portion of long-term debt. The Company's future minimum principal payments are $0.5 million, $0.7 million and $0.7 million for the remainder of 2020, 2021 and 2022, respectively.

Note 9 — Stock Based Compensation

The Company applies the fair value recognition provisions of ASC Topic 718: "Stock Compensation". The Company recorded stock based compensation of $1.1 million and $0.2 million for the three month periods ended March 31, 2020 and March 31, 2019, respectively. At March 31, 2020, the aggregate unrecognized compensation expense related to unvested equity awards was $10.1 million (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2020 through 2023.

The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending March 31, 2020:

	March 31, 2020
Expected option life	4.4 years
Weighted average risk-free interest rate	0.4		%
Weighted average expected volatility	47		%
Expected dividend yield	0		%
Fair value of options granted	$	4.87

A summary of stock option activity for the three months ended March 31, 2020:

(in thousands)	Options Outstanding		Weighted Average Exercise Price
Outstanding at January 1, 2020	410		14.50
Granted	587		12.64
Exercised	(2	)	11.66
Canceled/forfeited	(44	)	—
Outstanding at March 31, 2020	951		13.40

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A summary of non-vested restricted stock activity for the three months ended March 31, 2020:

(in thousands)	Restricted Stock Awards		Weighted Average Award Value
Outstanding at Balance at January 1, 2020	171		23.53
Granted	21		29.19
Vested	(122	)	25.82
Forfeited and cancelled	(38	)	14.97
Outstanding at March 31, 2020	32		28.73

A summary of non-vested restricted stock units ("RSU") activity for the three months ended March 31, 2020:

(in thousands)	RSU Awards	Weighted Average Award Value
Outstanding at Balance at January 1, 2020	—	—
Granted	360	12.64
Vested	—	—
Forfeited and cancelled	—	—
Outstanding at March 31, 2020	360	12.64

Note 10 — Net loss per share

Earnings per share are calculated in accordance with ASC Topic 260: "Earnings per Share", which specifies the computation, presentation and disclosure requirements for earnings per share (EPS).  It requires the presentation of basic and diluted EPS.  Basic EPS excludes all dilution and is based upon the weighted average number of shares of common stock outstanding during the period.  Diluted EPS reflects the potential dilution that would occur if convertible securities or other contracts to issue common stock were exercised. For the three months ended March 31, 2020, there were 951,000 anti-dilutive stock options outstanding compared to 486,000 as of March 31, 2019. The potential effect of the conversion feature with respect to the 2024 Notes and 2026 Notes (See Note 8 - Debt) was excluded from the diluted net loss per share as of March 31, 2020 as the Company's closing stock price on March 31, 2020 did not exceed the initial conversion price of $28.55 per share or $42.97 per share, respectively. The potential shares from the 2024 Notes and 2026 Notes at the initial conversion rate was approximately 481,548 and 2,792,664, respectively.

The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations:

(in thousands, except per share data)	Three Months Ended March 31,
	2020			2019
Net loss	$	(10,910	)	$	(2,729	)
Basic:
Shares outstanding at beginning of period	16,629			16,041
Weighted average shares issued during the period, net	1,312			3
Weighted average common shares, basic	17,941			16,044
Net loss per common share, basic	$	(0.61	)	$	(0.17	)
Diluted:
Weighted average common shares, basic	17,941			16,044
Weighted average common shares, diluted	17,941			16,044
Net loss per common share, diluted	$	(0.61	)	$	(0.17	)

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Note 11 — Contingencies

From time to time, the Company is party to legal proceedings arising in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. Based on information currently available, and based on its evaluation of such information, the Company believes the legal proceedings in which it is currently involved are not material or are not likely to result in a material adverse effect on the Company’s business, financial condition or results of operations, or cannot currently be estimated.

The Company is a party to a proceeding filed by Kandice Neals on behalf of herself and others similarly situated (the "Neals Plaintiff") against the Company on March 21, 2019 in the Circuit Court of Cook County, Illinois County Department, Chancery Division. The complaint asserted that the Company violated the Illinois Biometric Information Privacy Act in the alleged collection, use, and storage of her and others' biometric data derived from fingerprint scans taken for authentication purposes on point-of-sale systems. The Neals lawsuit was removed to the Federal District Court for the Northern District of Illinois (the District Court") and was subsequently dismissed on December 19, 2019 without prejudice. On January 15, 2020, the Neals Plaintiff filed an amended complaint against ParTech, Inc. with the District Court. On January 29, 2020, ParTech, Inc. filed its answer and affirmative defenses to the amended complaint. The Company believes the Neals lawsuit is without merit. The Company does not currently believe an accrual is appropriate, but will continue to monitor the lawsuit to provide for probable and estimable losses.

In 2016, the Company's Audit Committee commenced an internal investigation into conduct at the Company's China and Singapore offices and voluntarily notified the SEC and the U.S. Department of Justice ("DOJ") of the internal investigation. Following the conclusion of the Audit Committee's internal investigation, the Company voluntarily reported the relevant findings of the investigation to the China and Singapore authorities. In early April 2019, the SEC notified the Company that based on current information, it did not intend to recommend an enforcement action against the Company; shortly thereafter, the DOJ advised that it did not intend to separately proceed. The Company is cooperating with the China and Singapore authorities, but is currently not able to predict what actions these authorities might take, or what the likely outcome of any such actions might be, or fully estimate the range of reasonably possible fines or penalties, which may be material. The China and Singapore authorities have a broad range of civil and criminal sanctions, and the imposition of fines or penalties could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, results of operations or cash flows.

Note 12 — Segment and Related Information

The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail segment provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. In addition, the unaudited condensed consolidated financial statements include corporate and eliminations, which is comprised of enterprise-wide functional departments.

Information noted as “Other” primarily relates to the Company’s corporate, home office operations.

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Information as to the Company’s reporting segments is set forth below (in thousands).

	Three Months Ended March 31,
	2020			2019
Revenues:
Restaurant/Retail	$	37,409		$	29,560
Government	17,323			15,122
Total	$	54,732		$	44,682
Operating loss:
Restaurant/Retail	$	(6,070	)	$	(2,982	)
Government	1,179			1,363
Other	(564		)	(482		)
Total	(5,455		)	(2,101		)
Other expense	(625		)	(430		)
Interest expense, net	(1,972		)	(146		)
Loss on extinguishment of debt	(8,123		)	—
Loss before provision for income taxes	$	(16,175	)	$	(2,677	)
Depreciation, amortization and accretion:
Restaurant/Retail	$	1,855		$	868
Government	16			19
Other	1,271			125
Total	$	3,142		$	1,012
Capital expenditures including software costs:
Restaurant/Retail	$	1,707		$	1,063
Government	211			176
Other	122			684
Total	$	2,040		$	1,923
Revenues by country:
United States	$	52,631		$	41,925
Other Countries	2,101			2,757
Total	$	54,732		$	44,682

The following table represents identifiable long-lived assets by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	1,974	$	1,987
Government	257		272
Other	11,821		12,093
Total	$	14,052	$	14,352

The following table represents identifiable long-lived assets by country based on the location of the assets (in thousands).

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	March 31, 2020		December 31, 2019
United States	$	13,760	$	14,260
Other Countries	292		92
Total	$	14,052	$	14,352

The following table represents goodwill by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	40,650	$	40,650
Government	736		736
Total	$	41,386	$	41,386

Customers comprising 10% or more of the Company’s total revenues by reporting segment are summarized as follows:

	Three months ended March 31,
	2020		2019
Restaurant/Retail reporting segment:
McDonald’s Corporation	9	%	10	%
Yum! Brands, Inc.	11	%	13	%
Dairy Queen	16	%	7	%
Government reporting segment:
U.S. Department of Defense	32	%	34	%
All Others	32	%	36	%
	100	%	100	%

No other customer within All Others represented 10% of more of the Company’s total revenue for the three months ended March 31, 2020 or 2019.

	December 31,
	2019		2018
Restaurant and Retail segment:
McDonald’s Corporation	10	%	19	%
Yum! Brands, Inc.	16	%	13	%
Government segment:
U.S. Department of Defense	34	%	33	%
All Others	40	%	35	%
	100	%	100	%

The above represents the final 2019 year end concentration disclosure table, which has been revised to reflect the proper percentage of customers that represented greater than 10% revised for reference.

Note 13 — Fair Value of Financial Instruments

The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques.  The fair value hierarchy is based upon three levels of input, which are:

Level 1 — quoted prices in active markets for identical assets or liabilities (observable)

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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 inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable)

Level 3 — unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

The Company’s financial instruments primarily consist of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. The carrying amounts of cash and cash equivalents, trade receivables and trade payables as of March 31, 2020 and December 31, 2019 were considered representative of their fair values.  The estimated fair value of the 2024 Notes and 2026 Notes was $10.8 million and $89.8 million, respectively, at March 31, 2020. The valuation techniques used to determine the fair value of 2024 Notes and 2026 Notes are classified within Level 2 of the fair value hierarchy.

The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, the fair value classification as defined under FASB ASC 820: "Fair Value Measurements", because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under its deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments.

The amounts owed to employees participating in the deferred compensation plan at March 31, 2020 was $2.9 million compared to $3.2 million at December 31, 2019 and is included in other long-term liabilities on the balance sheets.

As it relates to the contingent consideration associated with the Restaurant Magic Acquisition we may use various valuation techniques depending on the terms and conditions of the contingent consideration, including a Monte-Carlo simulation. This simulation uses probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring, as such it is classified as Level 3. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. The Restaurant Magic Acquisition resulted in a liability for the contingent consideration being recorded in the amount of $3.3 million during 2019. The liability for the contingent consideration was established at the time of the acquisition and will be evaluated quarterly based on additional information as it becomes available.  Any change in the fair value adjustment is recorded in the earnings of that period.

The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis, and are recorded as a component of other long-term liabilities on the consolidated balance sheet (in thousands):

(in thousands)	Level 3 Inputs
	Liabilities
Balance at December 31, 2019	$	3,340
New level 3 liability	—
Total gains (losses) reported in earnings	—
Settlement of Level 3 liabilities	—
Balance at March 31, 2020	$	3,340

Note 14 — Subsequent Events

In March 2020, the World Health Organization characterized COVID-19 as a pandemic and President Trump declared the COVID-19 outbreak a national emergency. While the COVID-19 pandemic did not have a material adverse impact on our business, operations, and financial results for the three months ended March 31, 2020, in late March 2020 our Restaurant/Retail reporting segment began experiencing the impact of the COVID-19 pandemic as a result of its impact on our restaurant and retail customers

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and their response, including store closures; changes in product and service offerings and delivery formats, and delayed product adoptions and installations.

We have taken a number of actions to mitigate the impact. Early in the second quarter of 2020, reduced discretionary costs, implemented a hiring freeze on non-essential positions, we reduced the size of our workforce, and temporarily furloughed employees and temporarily reduced the salaries of others in our Restaurant/Retail reporting segment and corporate group.

The extent to which the COVID-19 pandemic will continue to impact our business, operations, and financial results will depend on future developments, which are uncertain and cannot be predicted, including the duration and severity of the pandemic, future government actions in response to the pandemic, how quickly and to what extent normal economic and operating conditions can resume in the United States and globally, and a potential resurgence of the pandemic. Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including as a result of any recession that may occur. As of the date of this Quarterly Report, it is impossible to predict the overall impact of the COVID-19 pandemic on our business, operations and financial results, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our business, operations, and financial results during any quarter or year in which we are affected.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

When used in this Quarterly Report on Form 10-Q (“Quarterly Report”), the terms “PAR”, “Company,” “we,” “us” and “our” mean PAR Technology Corporation and its consolidated subsidiaries, unless the context indicates otherwise. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the notes thereto included under Part I, Item 1 of this Quarterly Report and our audited consolidated financial statement and the notes thereto included under Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.  See also, “Forward-Looking Statements” below.

Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, business strategies and prospects. Forward-looking statements are generally identified by words such as "anticipate," "believe," "belief," "continue," "could," "expect," "estimate," "intend," "may," "opportunity," "plan," "should," "will," "would," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those described below in this Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations - The Impact of COVID-19," in Part II, "Item 1A. Risk Factors" and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

Overview

PAR Technology Corporation operates two distinct businesses: our Restaurant/Retail business provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the retail and restaurant industries; our Government business provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the U.S. Department of Defense ("DoD") and other Federal agencies.

We are a leading provider of software, systems, and services to the restaurant and retail industries. We provide multi-unit and individual restaurants, franchisees, and enterprise customers in the three major restaurant categories: fast casual, quick serve, and table service, a fully integrated cloud solution, with our leading Brink POS cloud software and our point-of-sale hardware for the front-of-house, our leading back-office cloud software - Data Central - for the back-of-house, and our wireless headsets for drive-thru order taking.

The Brink POS solution offers customers an integration ecosystem, providing access to industry trends and features, including mobile/on-line ordering, self-ordering kiosks, loyalty programs, kitchen video systems, guest surveys, enterprise reporting, and other features relevant to our customers’ businesses, including Restaurant Magic's cloud, SaaS back-office applications - Data Central. Data Central provides restaurants with the necessary tools to achieve peak operational and financial efficiency and

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integrates information from POS, inventory, supply, payroll, and accounting systems to provide a comprehensive view of a restaurant's operations.

We believe our cloud solutions, hardware offerings and services uniquely positions us to be a leader in helping to digitize the modern restaurant. Our continued success and growth will depend upon our ability to successfully deploy capital to where it earns its highest return. This will include the development and introduction of new products and product enhancements, targeted acquisitions and a constant review of internal spend. We have spent extensive time building a culture of intense rigor around capital allocation and we believe it will be a key part of our future success.

Our Government business provides technical expertise in contract development of advanced systems and software solutions for the U.S. DoD and other Federal agencies, as well as satellite, communication, and IT mission systems support at a number of U.S. Government facilities both in the U.S. and worldwide. Our strategy is to build upon our Government business' sustained performance on existing service contracts, coupled with investments in enhanced business development capabilities. We believe we are well positioned to realize continued renewals of expiring contracts and extensions of existing contracts, and to secure service and solution contracts in expanded areas within the U.S. DoD and other Federal agencies. We believe our highly relevant technical competencies, intellectual property, and investments in new technologies provide opportunities to offer systems integration, products, and highly-specialized service solutions to the U.S. DoD and other Federal agencies. The general uncertainty in U.S. defense total workforce policies (military, civilian, and contract), procurement cycles, and spending levels for the next several years are factors we monitor as we develop and implement our business strategy for our Government business.

Recent Developments Affecting Our Business

• On February 10, 2020, the Company sold an aggregate principal amount of $120.0 million of 2.875% Convertible Senior Notes due 2026 (“2026 Notes”) and received net proceeds of approximately $115.9 million. Approximately $66.3 million (excluding cash payments relating to accrued interest and fractional shares) of the proceeds and 722,423 shares of the Company’s common stock were used to repurchase approximately $66.3 million in aggregate principal amount of the Company’s 2024 Notes through individually negotiated transactions.

• The Impact of COVID-19

We are closely monitoring the impact of the novel coronavirus, or COVID-19, on all aspects of our business. In March 2020, the World Health Organization characterized COVID-19 as a pandemic and President Trump declared the COVID-19 outbreak a national emergency. While the COVID-19 pandemic did not have a material adverse impact on our business, operations, and financial results for the three months ended March 31, 2020, in late March 2020 our Restaurant/Retail reporting segment began experiencing the impact of the COVID-19 pandemic due to its impact on our restaurant and retail customers and their response, including store closures; changes in product and service offerings and delivery formats, and delayed product adoptions and installations.

We have taken a number of actions to mitigate the impact of the virus on our employees and of the COVID-19 pandemic on our business. In March 2020, to support the health and safety of our employees, we suspended all non-essential travel for our employees, implemented work-from-home for all non-manufacturing employees, and augmented shifts for our manufacturing employees; to mitigate the impact of the COVID-19 pandemic on our operations, we initiated operational initiatives, including increasing safety stock inventory and the use of alternative sources when available; and to support our customers, we introduced new product offerings that promote social distancing, including PARkit, a virtual kiosk, virtual drive-thru and/or on-line ordering solution, and self-install hardware product configurations. Additionally, early in the second quarter of 2020, we reduced discretionary costs, implemented a hiring freeze on non-essential positions, we reduced the size of our workforce, and temporarily furloughed employees and temporarily reduced the salaries of others in our Restaurant/Retail reporting segment and in the Company's corporate group.

While the COVID-19 pandemic has not had a material adverse impact on our Government reporting segment to date, we have implemented work-from-home for all non-essential employees and on-site operations are accomplished through telework and a staggered staffing approach that achieves the intent and benefits of social distancing. For contracts requiring specialized equipment, we established an off-site lab environment that permits the safe continuation of development and testing activities until government facilities reopen.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes provisions addressing the carryback of net operating losses for specific periods, refunds of alternative minimum tax credits, temporary modifications to the limitations placed on the tax deductibility of net interest expenses, and technical

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amendments for qualified improvement property. Additionally, the CARES Act, in support of efforts to enhance business’ liquidity, provides for the deferral of the employer-paid portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. As of March 31, 2020, these provisions are expected to provide us with approximately $1.8 to $2.2 million of additional liquidity during the current year.

Significant uncertainty exists regarding the magnitude and duration of the impact of the COVID-19 pandemic; therefore, we cannot predict at this time the full extent of its impact on our business, operations, and financial results in future periods. Please see “Risk Factors” under Part II, Item 1A. of this Quarterly Report for further discussion regarding risks associated with the COVID-19 pandemic.

Results of Operations —

Three months ended March 31, 2020 Compared to Three months ended March 31, 2019

We reported revenues of $54.7 million for the quarter ended March 31, 2020, an increase of 22.4% from $44.7 million recorded for the quarter ended March 31, 2019.  Our net loss from continuing operations was $10.9 million, or $0.61 per diluted share, for the first quarter of 2020 versus net loss of $2.7 million, or $0.17 per diluted share, for the first quarter of 2019. Our year-over-year unfavorable performance was primarily driven by corporate financing charges, including an $8.1 million Loss on extinguishment of debt related to the partial repurchase of the 2024 Notes, an additional $1.8M of interest expense related to the 2024 Notes and 2026 Notes, and an increased investment in sales, marketing and research and development within the Restaurant/Retail operating segment.

Operating segment revenue is set forth below:

	Three Months Ended March 31,				$			%
(in thousands)	2020		2019		variance			variance
Restaurant/Retail
Core *	$	19,869	$	18,650	1,219			7	%
Brink **	17,540		9,477		8,063			85	%
SureCheck	—		1,433		(1,433		)	(100	)%
Total Restaurant Retail	$	37,409	$	29,560	$	7,849		27	%
Government
Intelligence, surveillance, and reconnaissance	$	8,772	$	6,290	2,482			39	%
Mission Systems	8,448		8,541		(93		)	(1	)%
Product Sales	103		291		(188		)	(65	)%
Total Government	$	17,323	$	15,122	$	2,201		15	%

* CORE includes $3.5 million of Drive-Thru revenue for 2020

** Brink includes $2.2 million of Restaurant Magic revenue for 2020

Product revenues were $18.6 million for the quarter ended March 31, 2020, an increase of 20.0% from $15.5 million recorded for the quarter ended March 31, 2019, primarily driven by increased hardware attachment associated with installations attributable to our Brink line of business ("Brink") and hardware sales from our new Drive-Thru product line. Product revenue related to Brink for the quarter ended March 31, 2020 was $6.7 million, an increase of 49% from $4.5 million recorded for the quarter ended March 31, 2019. Drive-thru product revenue for the quarter ended March 31, 2020 was $3.4 million.

Service revenues were $18.8 million for the quarter ended March 31, 2020, an increase of 34.3% from $14.0 million recorded for the quarter ended March 31, 2019, primarily due to growth in recurring software and hardware installation revenues. Service revenue associated with Brink includes recurring software revenue of $5.2 million, an increase of 40% from $3.7 million recorded for the quarter ended March 31, 2019. Restaurant Magic service revenue includes recurring software revenue of $2.0 million.

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Contract revenues were $17.3 million for the quarter ended March 31, 2020, a increase of 14.6% from $15.1 million recorded for the quarter ended March 31, 2019.  The favorable increase in revenue was driven by contracts entered into during the first quarter of 2020 relating to intelligence, surveillance, and reconnaissance ("ISR") solutions, with $8.0 million more in backlog compared to the first quarter of 2019.

Product margins for the quarter ended March 31, 2020 were 20.0%, compared to 27.6%, recorded for the quarter ended March 31, 2019, primarily due to unfavorable product mix shift, increased freight, and reserve costs.

Service margins for the quarter ended March 31, 2020 were 32.6%, compared to 26.9% recorded for the quarter ended March 31, 2019, primarily due to the continued shift in revenue mix to SaaS revenue with Brink and Restaurant Magic partially offset by $0.6 million increase in amortization expense of acquired developed technology costs resulting from the recent Restaurant Magic Acquisition.

Contract margins for the quarter ended March 31, 2020 were 6.9%, compared to 9.7% for the quarter ended March 31, 2019, primarily due to lower product services revenue and increased investment in product services reduced margin rates compared to the quarter ended March 31, 2019.

Selling, general and administrative ("SG&A") expenses increased to $11.4 million for the quarter ended March 31, 2020 from $8.6 million for the quarter ended March 31, 2019, an increase of 32.6%. The increase was primarily driven by an additional $0.7 million of Brink sales and marketing expenses, an additional $0.8 million in stock-based compensation, and the inclusion of $0.7 million of SG&A expense from recently acquired Restaurant Magic.

Research and development ("R&D") expenses were $4.9 million for the quarter ended March 31, 2020, an increase of 1.8 million from $3.1 million for the quarter ended March 31, 2019, driven by a $3.5 million investment in Brink development, an increase of $1.8 million and $0.3M investment in recently acquired Restaurant Magic development.

For the quarter ended March 31, 2020, we recorded $0.2 million of amortization expense associated with identifiable non-developed technology intangible assets acquired in the Drive-Thru Acquisition and the Restaurant Magic Acquisition, compared to $0.0 million for the quarter ended March 31, 2019. Amortization expense associated with identifiable developed technology intangible assets was accounted for as cost of sales within service.

In other expense, net, we recorded $0.6 million for the quarter ended March 31, 2020, compared to other expense, net, of $0.4 million recorded for the quarter ended March 31, 2019. This increase was primarily by fair market value fluctuations of our deferred compensation plan, rental income and respective costs, and foreign currency fair value adjustments.

In interest expense, net, we recorded $2.0 million for the quarter ended March 31, 2020, compared to $0.1 million recorded for the quarter ended March 31, 2019. This increase was primarily driven by interest related to the 2024 Notes and 2026 Notes, which includes $1.0 million of non-cash accretion of debt discount and amortization of issuance costs for the three months ended March 31, 2020.

Loss on extinguishment of debt of $8.1 million for the quarter ended March 31, 2020, as a result of the settlement of $66.3 million of 2024 Notes in the quarter.

Liquidity and Capital Resources

For the three months ended March 31, 2020 the Company’s primary source of liquidity was its sale of the 2026 Notes. Cash used in operating activities was $15.1 million for the three months endedMarch 31, 2020, compared to $3.2 million for quarter ended March 31, 2019. The variance was driven by an increase in net loss and net working capital needs as a result of an increase in inventory, annual variable compensation, prepaid assets for annual insurance premiums and strategic procurement of inventory, and decrease in customer deposits. Inventory levels were strategically increased to support the roll out of projects for Brink and to mitigate risk of supply chain disruption due to the COVID-19 pandemic.

Cash used in investing activities was $2.0 million for the three months endedMarch 31, 2020 compared to $1.9 million for the three months endedMarch 31, 2019.  Investing activities during the three months endedMarch 31, 2020 included capital expenditures of $1.9 million in costs associated with investments in our Restaurant/Retail reporting segment software platforms compared to $0.9 million and $1.0 million, respectively, for the three months endedMarch 31, 2019.  

Cash provided by financing activities was $49.4 million for the three months endedMarch 31, 2020, compared to cash provided by financing activities of $5.8 million for the three months endedMarch 31, 2019.  The increase was primarily driven by the

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proceeds from the sale of the 2026 Notes net of issuance costs and offset by the settlement of a portion of the 2024 Notes in privately negotiated transactions.

We expect our available cash and cash equivalents will be sufficient to meet our operating needs for the next 12 months. Our actual cash needs will depend on many factors, including our rate of revenue growth, including growth of our SaaS revenues, the timing and extent of spending to support our product development efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, potential fines and penalties that may be imposed by Singapore/China authorities that are not currently estimable, but could be material, and the factors described above in this Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations - The Impact of COVID-19," in Part II, "Item 1A. Risk Factors" and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and our other filings with the Securities and Exchange Commission.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or obligations.

Contractual Obligations

The following table summarizes our contractual obligations at March 31, 2020 and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

(in thousands)	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		4-5 Years		More Than 5 Years
Operating lease obligations	$	3,106	$	919	$	2,112	$	75	$	—
Other purchase obligations	10,745		10,745
Debt obligations	135,595		639		1,206		13,750		120,000
	$	149,446	$	12,303	$	3,318	$	13,825	$	120,000

The commitments in the table above consist of lease payments for our San Diego, California office, Ontario, Canada office, our other United States locations, and our international locations. The debt obligations include the 2024 Notes, the 2026 Notes and the subordinated promissory note related to the Restaurant Magic Acquisition. The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without significant penalty are not included in the table above.

Critical Accounting Policies and Estimates

Our unaudited interim condensed consolidated financial statements are based on the application of U.S. generally accepted accounting principles (“GAAP”).  GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported.  We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied.  Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis.  Primary areas where financial information is subject to the use of estimates, assumptions and the application of judgment include revenue recognition, accounts receivable, inventories, accounting for business combinations, contingent consideration, equity compensation, the recognition of right-to-use assets and liabilities, goodwill and intangible assets, the measurement of liabilities and equity recognized for outstanding convertible notes and taxes. Our critical accounting policies have not changed materially from the discussion of those policies included under “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Required.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2020. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2020.

Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a result of the COVID-19 pandemic, the majority of our workforce began working remotely in March 2020. These changes to the working environment did not have a material adverse effect on our internal control over financial reporting during the quarter ended March 31, 2020.

Part II - Other Information

Item 1. Legal Proceedings

The information in Note 11 – Contingencies, to the unaudited interim condensed consolidated financial statements, is responsive to this Item and is incorporated by reference herein.

Item 1A. Risk Factors

In addition to the Risk Factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and our other filings with the SEC, consideration should be given to the following:

The COVID-19 pandemic has adversely affected, and will continue to adversely affect, our business, operations and financial results for the foreseeable future.

As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, we identified that the COVID-19 pandemic had caused disruption to our suppliers and their manufacturers located in China and elsewhere, and that we took steps to mitigate the impact on our supply chain, including increasing safety stock inventory and the use of alternative sources when possible. In late March 2020, we began seeing the impact of the COVID-19 pandemic on all aspects of our Restaurant/Retail reporting segment. While the COVID-19 pandemic did not have a material adverse impact on our business, operations, financial results or financial condition for the three months ended March 31, 2020, since then, it has caused significant economic disruption to our restaurant and retail customers, which has adversely affected our business and is expected to continue for at least the foreseeable future. Factors that have and will likely continue to adversely affect, and that could subsequently adversely impact, our business, operations, financial results and financial condition, include:

•As a result of the COVID-19 pandemic many of our customers have temporarily or permanently closed their restaurants and stores, reconfigured their product and service offerings, including closing dining rooms and only offering take-out and delivery services, or are operating at substantially reduced volumes;

•Due to the uncertainty surrounding the COVID-19 pandemic, including the duration of the pandemic, the severity of the virus and outbreak, future and ongoing actions that may be taken by governmental authorities (including extended shelter-in-place orders, travel restrictions, and mandated business closures), and the length of the COVID-19 pandemic and its impact on the U.S. and global economies, we expect significant volatility in our current or prospective customers' investment decisions, resulting in decreased demand for our products and services; delayed or canceled store implementations, product adoptions and bookings, and hardware sales and installations; and delayed or a reprioritization of investments in technology or point-of-sale infrastructure;

•Payment delays or defaults by our customers as a result of the COVID-19, intensified by increased COVID-19 related bankruptcies and insolvencies;

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•The COVID-19 pandemic could create business continuity issues and operational risks for us. Employees working remotely could increase our exposure to cybersecurity breaches and attacks; if our supply-chain is disrupted or a significant portion of our manufacturing and operations workforce were to become ill with the virus, we could experience a disruption or delay in product assembly and product fulfillment; travel restrictions have limited, and may continue to limit, our sales and marketing efforts; and our management team's focus on addressing the effects of the COVID-19 pandemic on our employees, business and customers, has required, and will continue to require, a large investment of time and resources, and may distract the team from executing our business and growth strategies;

•Our success depends on our ability to hire and retain highly skilled individuals. As a result of the COVID-19 pandemic employee morale may suffer and our ability to hire skilled individuals may be adversely impacted by limited employee and candidate engagement due to work-from-home arrangements and travel restrictions; and

•We could incur a material non-cash charge to our income statement for the impairment of goodwill and other intangible assets, if our financial performance significantly declines.

The extent to which the COVID-19 pandemic will continue to impact our business, operations, financial results and financial condition will depend on future developments, which are uncertain and cannot be predicted, including the duration and severity of the pandemic, future government actions in response to the pandemic, how quickly and to what extent normal economic and operating conditions can resume in the United States and globally, and a potential resurgence of the pandemic. Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including as a result of any recession that may occur. As of the date of this Quarterly Report, it is impossible to predict the overall impact of the COVID-19 pandemic on our business, results of operations and financial results, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our financial results during any quarter or year in which we are affected.

Two customers account for a significant portion of our revenues in the first quarter of 2020 in the Restaurant/Retail reporting segment. The loss of one of these customers, or a significant reduction, delay, or cancellation of purchases by one of these customers, would materially adversely affect our business, financial condition, and results of operations.

Revenues from our Restaurant/Retail reporting segment constituted 68% of our total consolidated revenues for the first quarter of 2020. Aggregate sales attributable to our two largest customers in the first quarter of 2020 (which include sales to our customers' franchisees) - Dairy Queen and Yum! Brands, Inc., which consists of the Kentucky Fried Chicken, Taco Bell, and Pizza Hut brands, constituted consolidated revenues for the first quarter of 2020 of 16% (Dairy Queen) and 11% (Yum!). There were no other customers that comprised greater than 10% of our total consolidated revenues during the first quarter of 2020. Significant reductions, delays, or cancellation of orders by one of these customers, or the loss of one of these customers, would reduce our revenue and operating income and would materially and adversely affect our business, operating results, and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds

Under our equity incentive plan, employees may elect to have us withhold shares to satisfy minimum statutory federal, state and local tax withholding obligations arising from the vesting of their restricted stock. When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the shares withheld, which could be deemed a purchase of shares by us on the date of withholding. For the three months ended March 31, 2020, 30,398 shares were purchased at an average price of $17.22 per share.

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Item 6. Exhibits

Exhibit Number		Incorporated by reference into this Quarterly Report on Form 10-Q		Date Filed or Furnished
	Exhibit Description	Form	Exhibit No.
3(ii)	By-laws, as amended March 29, 2020			Filed herewith
4.2	Indenture, dated as of February 10, 2020, between PAR Technology Corporation, as Issuer, and the Bank of New York Mellon Trust Company, N.A., as Trustee	Form 8-K (File No. 001-09720)	4.1	2/10/2020
10.1 ††	Form of Amended and Restated PAR Technology Corporation 2015 Equity Incentive Plan - Grant Notices - Restricted Stock Unit Award and Restricted Stock Unit Award Agreement	Form 10-K (File No. 001-09720)	10.15	3/16/2020
10.2 ††	Employment Letter: Service as Chief Executive Officer, dated February 27, 2020, between PAR Technology Corporation and Savneet Singh	Form 10-K (File No. 001-09720)	10.20	3/16/2020
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended			Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended			Filed herewith
32.1	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350			Furnished herewith
32.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350			Furnished herewith
101.INS	XBRL Instance Document			Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document			Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document			Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document			Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document			Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document			Filed herewith

†† Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PAR TECHNOLOGY CORPORATION
		(Registrant)
Date:	May 11, 2020	/s/ Bryan A. Menar
		Bryan A. Menar
		Chief Financial and Accounting Officer
		(Principal Financial and Accounting Officer)

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EX-3

BYLAWS OF

PAR TECHNOLOGY CORPORATION

(AS AMENDED)

ARTICLE I

OFFICES

Section 1.    Delaware Office. The office of PAR Technology Corporation (the "Corporation") within the State of Delaware shall be in the City of Wilmington, County of New Castle.

Section 2.    Other Offices. The Corporation may also have an office or offices and keep the books and records of the Corporation, except as otherwise may be required by law, in such other place or places, either within or without the State of Delaware, as the Board of Directors of the Corporation may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1.    Place of Meetings. All meetings of holders of shares of capital stock of the Corporation shall be held at the office of the Corporation in the State of Delaware or at such other place, within or without the State of Delaware, as may from time to time be fixed by the Board.

Section 2.    Annual Meetings. An annual meeting of shareholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting (an "Annual Meeting) shall be held on such date and at such time as may be fixed by the Board. If the Annual Meeting shall not be held on the day designated, the Board shall call a special meeting of shareholders as soon as practicable for the election of directors.

Section 3.    Special Meetings. Except as required by law, and subject to the rights of holders of any series of Preferred Stock, established pursuant to Article Fourth of the Certificate of Incorporation, a special meeting of shareholders may be called at any time by the Board of Directors, the Chairman or the President, and shall be called only by the Board of Directors or the Chairman or the President pursuant to a resolution approved by a majority of the then authorized number of Directors of the Corporation (as determined in accordance with Section 2 of Article III of these Bylaws). Any such calls must specify the matter or matters to be acted upon at such meeting and only such matter or matters shall be acted upon thereat.

Section 4.    Notice of Meetings. Except as otherwise may be required by law, notice of each meeting of shareholders, whether an Annual Meeting or a special meeting, shall be in writing, shall state the purpose or purposes of the meeting, the place, date and hour of the meeting and, unless it is an Annual Meeting, shall indicate that the notice is being issued by or at the direction of the person or persons calling the meeting, and a copy thereof shall be delivered or sent by mail, not less than 10 nor more than 60 days before the date of said meeting, to each shareholder at his address as it appears on the stock records of the Corporation, unless he shall have filed with the Secretary a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of an adjourned meeting need not be given if the time and place to which the meeting is to be adjourned was announced at the meeting at which the adjournment was taken, unless (i) the adjournment is for more than 30 days or (ii) the Board shall fix a new record date for such adjourned meeting after the adjournment. Whenever any notice is required to be given under the provisions of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, a waiver thereof, signed by the shareholder entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a shareholder at the meeting shall be deemed equivalent to a written waiver of notice of such meeting.

Section 5.    Quorum. At each meeting of shareholders of the Corporation, the holders of shares having a majority of the voting power of the capital stock of the Corporation issued and outstanding and entitled to vote thereat shall be present or represented by proxy to constitute a quorum for the transaction of business, except as otherwise provided by law.

Section 6.    Adjournments. In the absence of a quorum at any meeting of shareholders or any adjournment or adjournments thereof, holders of shares having a majority of the voting power of the capital stock present or represented by proxy at the meeting may adjourn the meeting from time to time until a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called if a quorum had been present or represented by proxy thereat.

Section 7.    Order of Business.

(a) At the Annual Meeting, only such business shall be conducted as shall have been brought before the Annual Meeting (i) by or at the direction of the Board of Directors of (ii) by any shareholder who complies with the procedures set forth in this Section 7. At any special meeting, only such business shall be conducted as shall have been set forth in the notice of such meeting.

(b) For business properly to be brought before an Annual Meeting by a shareholder, the shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the Annual Meeting; provided, however, that if the event that less than 70 days' notice or prior public disclosure of the date of the Annual Meeting is given or made to shareholders, notice by the shareholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure was made. To be in proper written form, a shareholder's notice to the Secretary shall be set forth in writing as to each matter the shareholder proposes to bring before the Annual Meeting: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (ii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business; (iii) the class and number of shares of the Corporation which are beneficially owned by the shareholder; and (iv) any material interest of the shareholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at the Annual Meeting of shareholders except in accordance with the procedures set forth in this Section 7. The chairman of an Annual Meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the Annual Meeting in accordance with the provisions of this Section 7 and, if he should so determine, he shall so declare to the Annual Meeting and any such business not properly brought before the Annual Meeting shall not be transacted.

Section 8.    Voting. Except as otherwise provided in the Certificate of Incorporation of the Corporation or in a resolution of the Board of Directors adopted pursuant to the Certificate of Incorporation establishing a series of Preferred Stock of the Corporation ("Preferred Stock"), at each meeting of shareholders, every shareholder of the Corporation entitled to vote at a meeting of shareholders shall be entitled to one vote for every share outstanding in his name on the stock records of the Corporation (i) at the time fixed pursuant to Section 6 of Article VII of these Bylaws as the record date for the determination of shareholders entitled to vote at such meeting, or (ii) if no such record date shall have been fixed, then at the close of business on the day next preceding the day on which notice thereof shall be given. At each meeting of shareholders, all matters (except as otherwise provided in Section 3 of Article III of these Bylaws and except in cases where larger vote is required by law or by the Certificate of Incorporation of the Corporation or these Bylaws) shall be decided by a majority of the votes cast at such meeting by the holders of shares of capital stock present or represented by proxy and entitled to vote thereon, a quorum being present.

Section 9.    Proxies. Any shareholder entitled to vote at any meeting of the shareholders or to express consent to or dissent from corporate action without a meeting may authorize another person or persons to vote at any such meeting and express such consent or dissent for him by proxy. A shareholder may authorize a valid proxy by executing a written instrument signed by such shareholder, or by causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature, or by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person designated as the holder of the proxy, a proxy solicitation firm or a like authorized agent. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the shareholder executing it, except in those cases where applicable lawprovides that a proxy shall be irrevocable. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by fling another duly executed proxy bearing a later date with the Secretary. Proxies by telegram, cablegram or other electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the shareholder. Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission created in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 10.    Inspectors of Elections. Preceding any meeting of the shareholders, the Board of Directors shall appoint one or more persons to act as Inspectors of Elections, and may designate one or more alternate inspectors. In the event no inspector or alternate is able to act, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of an inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall:

(a)        ascertain the number of shares outstanding and the voting power of each;

(b)        determine the shares represented at a meeting and the validity of proxies and ballots;

(c)        count all votes and ballots;

(d)        determine and retain for a reasonable period a record of the disposition of any challenges                 made to any determination by the inspectors; and

(e)        certify his or her determination of the number of shares represented at the meeting, and                 his or her count of all votes and ballots.

The inspector may appoint or retain other persons or entities to assist in the performance of the duties of inspector.

When determining the shares represented and the validity of proxies and ballots, the inspector shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Section 9 of these Bylaws, ballots and the regular books and records of the Corporation. The inspector may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers or their nominees or a similar person which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the shareholder holds of record. If the inspector considers other reliable information as outlined in this section, the inspector, at the time of his or her certification pursuant to (e) of this section shall specify the precise information considered, the person or persons from whom the information was obtained, when this information was obtained, the means by which the information was obtained, and the basis for the inspector's belief that such information is accurate and reliable.

Section 11.    Opening and Closing of Polls. The date and time for the opening and the closing of the polls for each matter to be voted upon at a shareholder meeting shall be announced at the meeting. The inspector of the election shall be prohibited from accepting any ballots, proxies or votes nor any revocations thereof or changes thereto after the closing of the polls, unless the Court of Chancery upon application by a shareholder shall determine otherwise.

ARTICLE III

DIRECTORS

Section 1.    Powers. The business of the Corporation shall be managed under the direction of the Board. The Board may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by law or otherwise directed or required to be exercised or done by the shareholders.

Section 2.    Number, Election and Terms. The authorized number of directors may be determined from time to time by a vote of a majority of the then authorized number of directors; provided, however, that such number shall not be less than a minimum of three nor more than a maximum of fifteen; and provided, further, that such number and such minimum and maximum may be increased or decreased pursuant to resolution of the Board. Subject to Sections 9 and 10 of Article III of these By Laws, the directors, other than those who may be elected by the holders of any series of preferred stock, shall serve for a one-year term. Following the 2014 annual meeting of shareholders the Board of Directors will no longer be classified under Section 141(d) of the General Corporation Law of the State of Delaware and directors shall no longer be divided into three classes. The term of all directors currently serving or appointed to serve shall expire at the 2015 annual meeting of shareholders. Effective as of the 2015 annual meeting of shareholders and each annual meeting of shareholders thereafter, all directors (other than those who may be elected by the holders of any series of preferred stock, voting as a separate class) shall be elected for a one-year term expiring at the next annual meeting of shareholders. Each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation or removal. Vacancies and newly created directorships resulting from any increase in the authorized number of directors, and any vacancies on the Board resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Board, or by a sole remaining director, and the directors so chosen shall hold office, subject to Sections 9 and 10 of Article III of these Bylaws until the next Annual Meeting of shareholders and until their respective successors are elected and qualified. No decrease in the number of directors constituting the Board shall shorten the terms of any incumbent director.

Section 3.    Nominations of Directors, Elections. Nominations for the election of directors may be made by the Board or a committee appointed by the Board, or by any shareholder entitled to vote generally in the election of directors who complies with the procedures set forth in this Section 3. Directors shall be at least 21 years of age. Directors need not be shareholders. At each meeting of shareholders for the election of directors at which a quorum is present, the persons receiving a plurality of the votes cast shall be elected directors. All nominations by shareholders shall be made pursuant to timely notice in proper written form to the Secretary of the Corporation. To be timely, a shareholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. To be in proper written form, such shareholder's notice shall set forth in writing (i) as to each person whom the shareholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitation of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or any successor regulation or law including, without limitation, such person's written consent to being named in the proxy statement as a nominee and to serving as director if elected; and (ii) as to the shareholder giving the notice, (x) the name and address, as they appear on the Corporation's books, of such shareholder and (y) the class and number of shares of the Corporation which are beneficially owned by such shareholder. In the event that a shareholder seeks to nominate one or more directors, the Secretary shall appoint two inspectors, who shall not be affiliated with the Corporation, to determine whether a shareholder has complied with this Section 3. If the Inspectors shall determine that a stockholder has not complied with this Section 3, the inspectors shall direct the chairman of the meeting to declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws of the Corporation, and the chairman shall so declare to the meeting and the defective nomination shall be disregarded.

Section 4.    Place of Meetings. Meetings of the Board shall be held at the Corporation's office in the State of Delaware or at such other place, within or without such State, as the Board may from time to time determine or as shall be specified or fixed in the notice or waiver of notice of any such meeting.

Section 5.    Regular Meetings. Regular meetings of the Board shall be held in accordance with a yearly meeting schedule as determined by the Board; or such meetings may be held on such other days and at such other times as the Board may from time to time determine. Notice of regular meetings of the Board need not be given except as otherwise required by these Bylaws.

Section 6.    Special Meetings. Special meetings of the Board may be called by the Chairman or the President and shall be called by the Secretary at the request of any two of the other directors.

Section 7.    Notice of Meetings. Notice of each special meeting of the Board and of each regular meeting for which notice shall be required), stating the time, place and purposes thereof, shall be mailed to each director, addressed to him at his residence or usual place of business, or shall be mailed to each director, addressed to him at his residence or usual place of business, or shall be sent to him by telex, cable or telegram so addressed, or shall be given personally or by telephone on 24 hours' notice.

Section 8.    Quorum and Manner of Acting. The presence of at least a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board. If a quorum shall not be present at any meeting of the Board, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Except where a different vote is required or permitted by law or these Bylaws or otherwise, the act of a majority of the directors present at any meeting at which a quorum shall be present shall be the act of the Board. Any action required or permitted to be taken by the Board may be taken without a meeting if all the directors consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consent thereto by the directors shall be filed with the minutes of the proceedings of the board. Any one or more directors may participate in any meeting of the Board by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall be deemed to constitute presence in person at a meeting of the Board.

Section 9.    Resignation. Any director may resign at any time by giving written notice to the Corporation; provided, however, that written notice to the Board, the Chairman of the Board, the President or the Secretary shall be deemed to constitute notice to the Corporation. Such resignation shall take effect upon receipt of such notice or at any later time specified therein and, unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective.

Section 10.    Removal of Directors. Subject to the rights of the holders of any series of Preferred Stock any director may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

Section 11.    Compensation of Directors. The Board may provide for the payment to any of the directors, other than officers or employees of the Corporation, of a specified amount for services as director or member of a committee of the Board, or of a specified amount for attendance at each regular or special Board meeting or committee meeting, or of both, and all directors shall be reimbursed for reasonable expenses of attendance at any such meeting; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 12.    Waiver of Notice. Whenever any notice is required to be given under the provisions of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, a waiver thereof, signed by the director entitled to such notice, whether before or after the time stated herein, shall be deemed equivalent thereto. Attendance of a director at a meeting shall be deemed equivalent to a written waiver of notice of such meeting.

Section 13.    Chairman of the Board. The Chairman of the Board shall be elected by a majority vote of the directors. The Chairman of the Board shall, if present, preside at all meetings of the Board and of the Shareholders.

ARTICLE IV

COMMITTEES OF THE BOARD

Section 1.    Appointment and Powers of Executive Committee. The Board may, by resolution adopted by the affirmative vote of majority of the authorized number of directors, designate an Executive Committee of the Board which shall consist of such number of members as the Board shall determine. Except as provided by Delaware law, during the interval between the meetings of the Board, the Executive Committee shall possess and may exercise all the power of the Board in the management and direction of all the business and affairs of the Corporation (except the matters hereinafter assigned to any other Committee of the board) in such manner as the Executive Committee shall deem in the best interests of the Corporation in all cases in which specific directions shall not have been given by the Board. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business by the committee and the act of a majority of the members of the committee present at a meeting at which a quorum shall be present shall be the act of the committee. Either the Chairman or the Board or the Chairman of the Executive Committee may call the meetings of the Executive Committee.

Section 2.    Appointment and Powers of Audit Committee. The Board may, by resolution adopted by the affirmative vote of a majority of the authorized number of directors, designate an Audit Committee of the board, which shall consist of such members as the Board shall determine. The Audit Committee shall (i) make recommendations to the Board as to the independent accountants to be appointed by the Board; (ii) review with the independent accountants the scope of their examination; (iii) receive the reports of the independent accountants and meet with representatives of such accountants for the purpose of reviewing and considering questions relating to their examination and such reports; (iv) review, either directly or through the independent accountants, the internal accounting and auditing procedures of the Corporation; and (v) perform such other functions as may be assigned to it from time to time by the Board. The Audit Committee may determine its manner of acting and fix the time and place of its meetings, unless the Board shall otherwise provide. A majority of the members of the Audit Committee shall constitute a quorum for the transaction of business by the committee and the act of a majority of the members of the committee present at a meeting which a quorum shall be present shall be the act of the committee.

Section 3.    Other Committees. The Board may, by resolution adopted by the affirmative vote of a majority of the authorized number of directors, designate members of the Board to constitute such other committees of the Board as the Board may determine. Such committees shall in each case consist of such number of directors as the board may determine, and shall have and may exercise, to the extent permitted by law, such powers as the Board may delegate to them, in the respective resolutions appointing them. Each such committee may determine its manner of acting and fix the time and place of its meeting, unless the Board shall otherwise provide. A majority of the members of any such committee present at a meeting at which a quorum shall be present shall be the act of the Committee.

Section 4.    Action by Consent. Participation by Telephone or Similar Equipment. Unless the Board shall otherwise provide, any action required or permitted to be taken by any committee may be taken without a meeting if all members of the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the committee shall be filed with the minutes of the proceedings of the committee. Unless the Board shall otherwise provide, any one or more members of any such committee may participate in any meeting of the committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear one another. Participation by such means shall constitute presence in person at a meeting of the committee.

Section 5.    Changes in Committees: Resignations, Removals. The Board shall have power, by the affirmative vote of a majority of the authorized number of directors, at any time to change the members of, to fill vacancies in, and to discharge any committee of the Board. Any member of any such committee may resign at any time by giving notice to the Corporation; provided, however, that notice to the Board, the Chairman of the Board, the President, the chairman of such committee or the Secretary shall be deemed to constitute notice to the Corporation. Such resignation shall take effect upon receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. Any member of any such committee may be removed at any time, either with or without cause, by the affirmative vote of a majority of the authorized number of directors at any meeting of the Board called for that purpose.

ARTICLE V

OFFICERS

Section 1.    Enumeration. The officers shall consist of a President, a Treasurer, a Secretary and such other corporate officers and agents (including one or more vice-presidents, assistant treasurers and assistant secretaries), as the Board of Directors may, in their discretion, determine.

Section 2.    Election. The President, Treasurer and Secretary shall be elected annually by the directors at their first meeting following the annual meeting of the stockholders or any special meeting held in lieu of the annual meeting. Other officers may be chosen by the directors at such meeting or at any other meeting.

Section 3.    Qualification. An officer may, but need not, be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the directors may determine. The premiums for such bonds may be paid by the corporation.

Section 4.    Tenure. Except as otherwise provided by the Certificate of Incorporation or these Bylaws, the term of office of each officer shall be for one year or until his successor is elected and qualified or until his earlier resignation or removal.

Section 5.    Removal. Any officer may be removed from office, with or without cause, by the affirmative vote of a majority of the directors then in office; provided, however, that an officer may be removed for cause only after reasonable notice and opportunity to be heard by the Board of Directors prior to action thereon.

Section 6.    Resignation. Any officer may resign at any time by delivering or mailing postage prepaid a written resignation to the corporation at its principal office or to the Chairman of the Board, the President, or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some event; and unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective

Section 7.    Vacancies. A vacancy in any office arising from any cause may be filled by the Board of Directors.

Section 8.    President. The President shall be the Chief Executive Officer of the corporation. Except as otherwise voted by the Board of Directors, if the Chairman of the Board is not present then the President shall preside at all meetings of the stockholders and of the Board of Directors at which present. The President shall have such duties and powers as are commonly incident to the office and such duties and powers as the Board of Directors shall from time to time designate.

Section 9.    Vice-President(s). The vice-president(s), if any, shall have such powers and perform such duties as the Board of Directors or President may from time to time determine.

Section 10.    Treasurer and Assistant Treasurers. The Treasurer, subject to the direction and under the supervision and control of the Board of Directors, shall have general charge of the financial affairs of the corporation. The Treasurer shall have custody of all funds, securities and valuable papers of the corporation, except as the Board of Directors may otherwise provide. The Treasurer shall keep or cause to be kept full and accurate records of account which shall be the property of the corporation, and which shall be always open to the inspection of each elected officer and director of the corporation. The Treasurer shall deposit or cause to be deposited all funds of the corporation in such depository or depositories as may be authorized by the Board of Directors. The Treasurer shall have the power to endorse for deposit or collection all notes, checks, drafts, and other negotiable instruments payable to the corporation. The Treasurer shall perform such other duties as are incidental to the office, and such other duties as may be assigned by the Board of Directors.

Assistant treasurers, if any, shall have such powers and perform such duties as the Board of Directors may from time to time determine.

Section 11.    Secretary and Assistant Secretaries. The Secretary shall record, or cause to be recorded, all proceedings of the meetings of the stockholders and directors (including committees thereof) in the book of records of this corporation. The record books shall be open at reasonable times to the inspection of any stockholder, director, or officer. The Secretary shall notify the stockholders and directors, when required by law or by these Bylaws, of their respective meetings, and shall perform such other duties as the directors and stockholders may from time to time prescribe. The Secretary shall have the custody and charge of the corporate seal, and shall affix the seal of the corporation to all instruments requiring such seal, and shall certify under the corporate seal the proceedings of the directors and of the stockholders, when required. In the absence of the Secretary at any such meeting, a temporary Secretary shall be chosen who shall record the proceedings of the meeting in the aforesaid books.

Assistant secretaries, if any, shall have such powers and perform such duties as the Board of Directors may from time to time designate.

Section 12.    Other Powers and Duties. Subject to these Bylaws and to such limitations as the Board of Directors may from time to time prescribe, the officers of the corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors.

ARTICLE VI

CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.

Section 1.    Contracts. The Chairman of the Board or President may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. In addition, the Board may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation, to enter into any contract or to execute and deliver any instrument, which authorization may be general or confined to specific instances; and, unless so authorized by the Board, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable pecuniarily for any purpose or for any amount.

Section 2.    Checks, etc. All checks, drafts, bills of exchange or other orders for the payment of money out of the funds of the Corporation, and all notes or other evidences of indebtedness of the Corporation, shall be signed in the name and on behalf of the Corporation in such manner as shall from time to time be authorized by the Board, which authorization may be general or confined to specific instances.

Section 3.    Loans. No loan shall be obtained or contracted for by or on behalf of the Corporation, and no negotiable paper shall be issued in its name, unless authorized by the Board, which authorization may be general or confined to specific instances. Any officer or agent of the Corporation thereunto so authorized may obtain loans and advances for the Corporation, and for such loans and advances may make, execute and deliver promissory notes, bonds, or other evidences of indebtedness of the Corporation and may pledge, hypothecate or transfer as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, any and all stocks, bonds, other personal property, securities or receivables at any time owned by the Corporation or to which it is or will be at any time entitled, and to the end may endorse, assign and deliver the same and do every act and thing necessary or proper in connection therewith.

Section 4.    Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as may be selected by or in the manner designated by the Board or as may be selected or in a manner designated by any officer or officers authorized so to do by the Board. The Board or its designees may make such special rules and regulations with respect so such bank accounts, not inconsistent with the provisions of the Certificate of Incorporation or these Bylaws, as they may deem advisable.

Section 5.    Proxies. Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the Chairman of the Board or the President, or any Vice President or other person or persons thereunto authorized by the Board of Directors.

ARTICLE VII

CAPITAL STOCK

Section 1.    Certificates of Stock. The shares of stock of the Corporation shall be either certificated shares or uncertificated shares or a combination thereof. A resolution approved by a majority of the directors on the Board of Directors may provide that some or all of any or all classes or series of the shares of the Corporation will be uncertificated shares. Any certificate representing shares of the Corporation shall be signed by or in the name of the Corporation by the Chairman of the Board of Directors or the President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation. Any or all of the signatures appearing on such certificate or certificates may be a facsimile. If any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice that shall set forth the name of the Corporation, that the Corporation is organized under the laws of the State of Delaware, the name of the stockholder, the number and class (and the designation of the series, if any) of the shares represented, and any restrictions on the transfer or registration of such shares of stock imposed by the Corporation’s Certificate of Incorporation, these Bylaws, any agreement among stockholders or any agreement between stockholders and the Corporation.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the Bylaws, applicable securities laws or any agreement among any number of stockholders or among such holders and the Corporation shall have conspicuously noted on the face or back of such certificate either the full text of such restriction or a statement of the existence of such restriction.

Section 2.    List of Shareholders Entitled to Vote. The Corporation shall prepare, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting (provided, however, if the record date for determining the shareholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the shareholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder for any purpose germane to the meeting at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of shareholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any shareholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any shareholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

Section 3.    Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the shareholders entitled to examine the stock ledger, the list required by Section 2 of this Article VII or the books of the Corporation, or to vote in person or by proxy at any meeting of shareholders.

Section 4.    Transfers of Capital Stock. Shares of stock shall be transferable on the books of the Corporation pursuant to applicable law and such rules and regulations as the Board of Directors shall from time to time prescribe. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate or evidence of the issuance of uncertificated shares to the stockholder entitled thereto, cancel the old certificate and record the transaction upon the Corporation’s books. Upon the surrender of any certificate for transfer of stock, such certificate shall at once be conspicuously marked on its face “Canceled” and filed with the permanent stock records of the Corporation.

Upon receipt of proper transfer instructions from the registered owner of uncertificated shares, such uncertificated shares shall be canceled, issuance of new equivalent shares or certificated shares shall be made to the stockholder entitled thereto and the transaction shall be recorded upon the books of the Corporation. If the Corporation has a transfer agent or registrar acting on its behalf, the signature of any officer or representative thereof may be in facsimile.

The Board of Directors may appoint a transfer agent and one or more co-transfer agents and registrar and one or more co-registrars and may make or authorize such agent to make all such rules and regulations deemed expedient concerning the issue, transfer and registration of shares of stock.

Section 5.    Lost Certificates. The Board of Directors may direct either (i) a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, or (ii) uncertificated shares in place of any certificate or certificates previously issued by the Corporation, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 6.    Fixing of Record Date. In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividends or other distributions or allotments of any rights, or entitled to exercise any rights in respect to any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 days nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 7.    Beneficial Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have express or other notice thereof, except as otherwise provided by law

FISCAL YEAR

The Corporation's fiscal year shall coincide with the calendar year.

ARTICLE IX

INDEMNIFICATION

Section 1.    Nature of Indemnity. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer, of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys' fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

The termination of any action, suit or proceeding by judgment, order settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2.    Successful Defense. To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

Section 3.    Determination That Indemnification is Proper. Any indemnification of a director or officer of the Corporation under Section 1 hereof (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the director or officer is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Section 1 hereof. Any indemnification of an employee or agent of the corporation under Section 1 hereof (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 hereof. Any such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the shareholders.

Section 4.    Advance Payment of Expenses. Expenses (including attorneys' fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Corporation's counsel to represent such director, officer, employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding.

Section 5.    Procedure for Indemnification of Directors and Officers. Any indemnification of a director or officer of the Corporation under Section 1 and 2, or advance of costs, charges and expenses to a director or officer under Section 4 of this Article, shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the Corporation that the director or officer is entitled to indemnification pursuant to this Article is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and to enforce a claim for the advance of costs, charges and expenses under Section 4 of this Article where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Section 1 of this Article, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 of this Article, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct .

Section 6.    Survival; Preservation of Other Rights. The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of the Delaware Corporation Law are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract right" may not be modified retroactively without the consent of such director, officer, employee or agent.

The indemnification provided by this Article IX shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7.    Insurance. The Corporation shall purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors.

Section 8.    Severability. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE X

SEAL

The Corporate seal shall be circular in form and shall bear the name of the Corporation and words and figures denoting Its organization under the laws of the State of Delaware and the year thereof and otherwise shall be in such form as shall be approved from time to time by the Board of Directors.

ARTICLE XI

WAIVER OF NOTICE

Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws to be given to any director, member of a committee or shareholder, a waiver thereof in writing, signed by the person entitled to such notice, whether signed before or after the time stated in such written waiver, shall be deemed equivalent to such notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when such person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the grounds that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the shareholders, directors, or members of a committee of directors need be specified in any written waiver of notice.

ARTICLE XII

FORUM FOR ADJUDICATION OF DISPUTES

Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation's stockholders, (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law, the Articles of Incorporation or the By-Laws of the Corporation or (iv) any action asserting a claim governed by the internal affairs doctrine.

ARTICLE XIII

AMENDMENTS

These Bylaws or any of them may be amended, repealed, in any respect, and new Bylaws adopted at any time, either (i) at any annual or special shareholders' meeting, by an affirmative vote of 66 2/3% of the shareholders of the Corporation entitled to vote generally in the election of directors provided that any amendment, repeal or new Bylaws proposed to be acted upon at any such meeting shall have been described or referred to in the notice of such meeting or (ii) by an affirmative vote of a majority of the directors present at any organizational, regular, or special meeting of the Board of Directors provided that any amendment, repeal or new by-Law proposed to be acted upon at any such meeting shall have been described or referenced to in the notice of such meeting or an announcement with respect thereto shall have been made at the last previous board meeting. Notwithstanding the foregoing and anything contained in these Bylaws to the contrary, Section 3 ("Special Meetings") or Section 7 ("Order of Business") of Article II ("Meeting of Shareholders") of the Bylaws; Section 2 ("Number, Election and Terms"), Section 3 ("Nominations of Directors, Elections") or Section 6 ("Special Meetings") of Article III ("Directors") of the Bylaws; or Article XII ("Amendments") of the Bylaws shall not be amended or repealed and no provision inconsistent with any thereof shall be adopted without the affirmative vote of the 66 2/3% of the shareholders entitled to vote generally for the election of directors, voting together as a single class. Notwithstanding anything contained in these Bylaws to the contrary, the affirmative vote of the 66 2/3% of the shareholders entitled to vote generally for the election of directors, voting together as a single class shall be required to amend or repeal, or adopt any provision inconsistent with, any provision or this Article XII.

ARTICLE XIV

CONSTRUCTION

In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Certificate of Incorporation of the Corporation as in effect from time to time, the provisions of such certificate of incorporation shall be controlling.

__________

Amendments:

Article III (Directors), Section 2 (Number, Election and Terms), amended May 22, 2014

Article VII (Capital Stock), Section 2 (List of Shareholders Entitled to Vote), amended March 29, 2020

1

EX-31.1

EXHIBIT 31.1

I, Savneet Singh, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PAR Technology Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 11, 2020	/s/ Savneet Singh
	Savneet Singh
	Chief Executive Officer & President
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

I, Bryan A. Menar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PAR Technology Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 11, 2020	/s/ Bryan A. Menar
	Bryan A. Menar
	Chief Financial and Accounting Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

Certification of Principal Executive Officer

pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,

and 18 U.S.C. Section 1350

In connection with the Quarterly Report of PAR Technology Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Savneet Singh, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. § 1350, that, to my knowledge:

(i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 11, 2020

/s/ Savneet Singh

Savneet Singh

Chief Executive Officer & President

(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

Certification of Principal Financial Officer

pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,

and 18 U.S.C. Section 1350

In connection with the Quarterly Report of PAR Technology Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bryan A. Menar, Chief Financial and Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, that, to my knowledge:

(i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 11, 2020

/s/ Bryan A. Menar

Bryan A. Menar

Chief Financial and Accounting Officer

(Principal Financial Officer)

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Basis of presentation (Policies)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements ("unaudited condensed consolidated financial statements") of PAR Technology Corporation (the “Company” or “PAR”, "we","us") have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements.  In the opinion of management, the Company's unaudited condensed consolidated financial statements include all normal and recurring adjustments necessary in order to make the unaudited condensed consolidated financial statements not misleading and to provide a fair presentation of the results for the interim period included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Interim results are not necessarily indicative of results for the full year or any future periods. The information included in this Quarterly Report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2020.

The preparation of the unaudited condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the period.  Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, the measurement of liabilities and equity recognized for outstanding convertible notes, valuation allowances for receivables, inventories, and measurement of contingent consideration at fair value. Actual results could differ from those estimates.

Segment Reporting

The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail reporting segment provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government reporting segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. In addition, the unaudited condensed consolidated financial statements include corporate and eliminations, which is comprised of enterprise-wide functional departments.

Reclassification

These reclassifications had no effect on previously reported total costs and operating expenses and net loss.

Use of Estimates

Use of Estimates

Preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 11, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses (Topic 326): "Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date, based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016-13 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company adopted ASU 2017-04 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurement disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. ASU 2018-13 modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. The Company adopted ASU 2018-13 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other (Topic 350) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 provides guidance on the measurement of costs for internal-use software during the design, development, and implementation stages for customers in a cloud hosting arrangement. ASU 2018-15 also requires the capitalized costs associated with the design, development and implementation of cloud hosted arrangements to be amortized over the term of the hosting arrangement. The Company adopted ASU 2018-15 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes", which is intended to simplify various requirements related to accounting for income taxes. ASU  2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the impact of this standard on its unaudited condensed consolidated financial statements.

With the exception of the new standards discussed above, there were no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2020 that are of significance or potential significance to the Company, as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

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Inventories (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories are primarily used in the manufacture, maintenance and service of products within the Restaurant/Retail reporting segment.  The components of inventories, net, consist of the following:

(in thousands)	March 31, 2020		December 31, 2019
Finished goods	$	11,630	$	8,320
Component parts	7,370		6,768
Service parts	4,339		4,238
	$	23,339	$	19,326

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (10,910)	$ (2,729)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	3,142	1,012
Current expected credit losses	244	107
Provision for obsolete inventory	1,188	588
Stock-based compensation	1,089	248
Loss on debt extinguishment	8,123	0
Deferred income tax	(5,386)	0
Changes in operating assets and liabilities:
Accounts receivable	(1,289)	(3,199)
Inventories	(5,201)	(490)
Other current assets	(2,764)	(1,848)
Other assets	85	(240)
Accounts payable	218	2,150
Accrued salaries and benefits	(1,646)	(795)
Accrued expenses	(283)	110
Customer deposits and deferred service revenue	(1,733)	2,089
Other long-term liabilities	0	(213)
Net cash used in operating activities	(15,123)	(3,210)
Cash flows from investing activities:
Capital expenditures	(188)	(887)
Capitalization of software costs	(1,852)	(1,036)
Net cash used in investing activities	(2,040)	(1,923)
Cash flows from financing activities:
Payments of long-term debt	(154)	0
Payment of contingent consideration	0	(2,550)
Payments of bank borrowings	0	(16,777)
Proceeds from bank borrowings	0	25,097
Payments for the extinguishment of notes payable	(66,250)	0
Proceeds from notes payable, net of issuance costs	115,916	0
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock	(153)	0
Proceeds from exercise of stock options	30	30
Net cash provided by financing activities	49,389	5,800
Effect of exchange rate changes on cash and cash equivalents	(173)	(10)
Net increase in cash and cash equivalents	32,053	657
Cash and cash equivalents at beginning of period	28,036	3,485
Cash and equivalents at end of period	60,089	4,142
Cash paid during the period for:
Interest	953	115
Additions to right-of-use assets and operating lease liabilities	$ 0	$ 3,717

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Shareholders’ Equity:
Preferred stock, par value (in dollars per share)	$ 0.02	$ 0.02
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, authorized (in shares)	29,000,000	29,000,000
Common stock, issued (in shares)	19,291,289	18,360,205
Common stock, outstanding (in shares)	18,244,350	16,629,177
Treasury stock, at cost (in shares)	1,046,939	1,731,028

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Debt - Narrative (Details)				3 Months Ended
	Feb. 10, 2020 USD ($) $ / shares shares	Dec. 18, 2019 USD ($)	Apr. 15, 2019 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Current portion of long-term debt				$ 639,000	$ 630,000
Convertible Notes
Debt Instrument [Line Items]
Liability, debt				133,750,000
2020, remaining				0
2021				0
2022				0
Convertible Senior Notes due 2024 | Convertible Notes
Debt Instrument [Line Items]
Debt issued			$ 80,000,000.0	13,750,000
Stated interest rate			4.50%
Repayment of convertible debt	$ 66,300,000
Shares issued upon conversion (in shares) | shares	722,423
Price of shares issued upon conversion (in dollars per share) | $ / shares	$ 32.43
Average cost basis (in dollars per share) | $ / shares	$ 3.37
Liability, debt	$ 59,000,000		$ 62,400,000
Equity component of notes	30,800,000		$ 17,600,000
Repayment of interest accrued	1,000,000
Loss on settlement	8,100,000
Implied estimated effective rate			10.24%
Conversion rate			0.0350217
Issuance costs				4,900,000
Issuance costs, debt component				3,800,000
Issuance cost, equity component				1,100,000
Convertible Senior Notes Due 2026 | Convertible Notes
Debt Instrument [Line Items]
Debt issued	$ 120,000,000.0			120,000,000
Stated interest rate	2.875%
Liability, debt	$ 93,800,000
Equity component of notes	$ 26,200,000
Implied estimated effective rate	7.33%
Conversion rate	0.0232722
Issuance costs				4,200,000
Issuance costs, debt component				3,100,000
Issuance cost, equity component				1,100,000
Income tax benefit, equity transaction				5,400,000
Subordinate Promissory Note | Restaurant Magic
Debt Instrument [Line Items]
Stated interest rate		4.50%
Liability, debt				1,800,000
Warranty liability assumed		$ 2,000,000
Monthly principal and interest payments		60,391
Current portion of long-term debt				$ 700,000
2020, remaining		500,000
2021		700,000
2022		$ 700,000

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Inventory, Net, Items Net of Reserve Alternative [Abstract]
Finished goods	$ 11,630	$ 8,320
Component parts	7,370	6,768
Service parts	4,339	4,238
Inventories-net	23,339	19,326
Inventory reserves	$ 11,400	$ 9,800

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Stock Based Compensation - Share Based Compensation Activity (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Options Outstanding
Beginning balance (in shares) | shares	410
Granted (in shares) | shares	587
Exercised (in shares) | shares	(2)
Canceled/forfeited (in shares) | shares	(44)
Ending balance (in shares) | shares	951
Weighted Average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 14.50
Granted (in dollars per share) | $ / shares	12.64
Exercised (in dollars per share) | $ / shares	11.66
Canceled/forfeited (in dollars per share) | $ / shares	0.00
Ending balance (in dollars per share) | $ / shares	$ 13.40
Restricted Stock Awards
Restricted Stock and RSU Awards Outstanding
Beginning balance (in shares) | shares	171
Granted (in shares) | shares	21
Vested (in shares) | shares	(122)
Forfeited and cancelled (in shares) | shares	(38)
Beginning balance (in shares) | shares	32
Weighted Average Award Value
Beginning balance (in dollars per share) | $ / shares	$ 23.53
Granted (in dollars per share) | $ / shares	29.19
Vested (in dollars per share) | $ / shares	25.82
Forfeited and canceled (in dollars per share) | $ / shares	14.97
Ending balance (in dollars per share) | $ / shares	$ 28.73
RSU Awards
Restricted Stock and RSU Awards Outstanding
Beginning balance (in shares) | shares	0
Granted (in shares) | shares	360
Vested (in shares) | shares	0
Forfeited and cancelled (in shares) | shares	0
Beginning balance (in shares) | shares	360
Weighted Average Award Value
Beginning balance (in dollars per share) | $ / shares	$ 0.00
Granted (in dollars per share) | $ / shares	12.64
Vested (in dollars per share) | $ / shares	0.00
Forfeited and canceled (in dollars per share) | $ / shares	0.00
Ending balance (in dollars per share) | $ / shares	$ 12.64

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Segment and Related Information - Revenue by Major Customers (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Revenue, Major Customer [Line Items]
Concentration risk, percentage	100.00%	100.00%	100.00%	100.00%
Operating segments | Restaurant/Retail | McDonald’s Corporation
Revenue, Major Customer [Line Items]
Concentration risk, percentage	9.00%	10.00%	10.00%	19.00%
Operating segments | Restaurant/Retail | Yum! Brands, Inc.
Revenue, Major Customer [Line Items]
Concentration risk, percentage	11.00%	13.00%	16.00%	13.00%
Operating segments | Restaurant/Retail | Dairy Queen
Revenue, Major Customer [Line Items]
Concentration risk, percentage	16.00%	7.00%
Operating segments | Government | U.S. Department of Defense
Revenue, Major Customer [Line Items]
Concentration risk, percentage	32.00%	34.00%	34.00%	33.00%
Other
Revenue, Major Customer [Line Items]
Concentration risk, percentage	32.00%	36.00%	40.00%	35.00%

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Revenue Recognition - Performance Obligations by Period (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 14,267	$ 16,000	$ 16,347	$ 14,134
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period
Government
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 136,057	$ 148,700
Government | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	52,796
Government | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	35,110
Government | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	27,924
Government | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations	$ 20,227

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Basis of presentation (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Number of operating segments | segment	2
Number of reportable segments | segment	2
Amortization of identifiable intangible assets	$ 210	$ 0
Cost of sales	43,685	35,159
Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of sales	$ 12,646	10,268
Reclassification
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Amortization of identifiable intangible assets		300
Reclassification | Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of sales		$ 300

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Acquisitions

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

Drive-Thru Acquisition

Effective September 30, 2019, the Company, through its wholly-owned subsidiary ParTech, Inc. ("ParTech"), acquired assets of 3M Company's Drive-Thru Communications Systems business, including the XT-1 and G5 headset systems, contracts and intellectual property associated with the business, for a purchase price of $8.4 million (total fair value of assets were $8.4 million, net of warranty liability of $1.4 million, resulting in cash paid of $7.0 million) (the "Drive-Thru Acquisition").

Restaurant Magic Acquisition

Effective December 18, 2019, the Company, through ParTech, acquired 100% of the limited liability company interests of AccSys LLC (f/k/a AccSys, Inc., and otherwise known as Restaurant Magic) in base consideration of approximately $43.0 million, of which approximately $13.0 million was paid in cash, $27.5 million was paid in restricted shares of Company common stock (issued in January 2020) and $2.0 million was paid by delivery of a subordinated promissory note (the "Restaurant Magic Acquisition"). Topic 805: "Business Combinations" allows entities a measurement period of up to one year from the acquisition date to finalize the allocation. The measurement period remains open pending the completion of valuation procedures related to the acquired tangible and intangible assets and assumed liabilities. Following the closing of the transaction, the sellers have the opportunity through 2022 to earn additional purchase price consideration subject to the achievement of certain post-closing revenue focused milestones (“Earn-Out”). As of December 31, 2019 and March 31, 2020, the value of the Earn-Out based on the Monte Carlo simulation was $3.3 million. The Earn-Out, if any, will be payable 50% in cash or subordinated promissory notes, or a combination of both, at the Company's election, and 50% in restricted shares of Company common stock. This Earn-out has no maximum payment.

The Company issued restricted stock units in connection with its assumption of awards granted by Restaurant Magic to its employees and contractors prior to the closing of the acquisition.

The fair values assigned to the acquired assets and assumed liabilities presented in the table below are based on our best estimates and assumptions as of the reporting date:

(in thousands)	Purchase price allocation
Developed technology	$	16,400
Customer relationships	1,100
Trade name	900
Tangible assets	1,344
Goodwill	27,945
Total assets	47,689
Accounts payable and accrued expenses	629
Deferred revenue	715
Earn out liability	3,340
Consideration paid	$	43,005

Unaudited Pro Forma Financial Information

For the three months ended March 31,2020, the Drive-Thru Acquisition and Restaurant Magic Acquisition resulted in additional revenues of $3.5 million and $2.2 million, respectively. The Company has determined it is impractical to report the amounts of net loss for the Drive-Thru and Restaurant Magic acquisition for each entity for the quarter ended March 31, 2020. The following unaudited pro forma financial information presents our results as if the Drive-Thru Acquisition and Restaurant Magic Acquisition amounts of net loss had occurred January 1, 2019:

(in thousands)	Three months ended March 31, 2019
Total revenue	$	51,352
Net loss	$	(263	)

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Identifiable Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Identifiable Intangible Assets and Goodwill

Identifiable Intangible Assets and Goodwill

Identifiable intangible assets represent intangible assets acquired by the Company in connection with its acquisition of Brink Software Inc. ("Brink Acquisition"), the Drive-Thru Acquisition and the Restaurant Magic Acquisition, and software development costs.  The Company capitalizes certain software development costs for software used in its Restaurant/Retail reporting segment. Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs.  The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities necessary to establish that the software product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility of software sold as a perpetual license, as defined within ASC 985-20, "Software – Costs of Software to be sold, Leased, or Marketed", are capitalized and amortized on a product-by-product basis when the software product is available for general release to customers. Included in "Acquired and internally developed software costs" in the table below are approximately $4.4 million and $2.5 million of costs related to software products that have not satisfied the general release threshold as of March 31, 2020 and December 31, 2019, respectively. These software products are expected to satisfy the general release threshold within the next 12 months. Software development costs are also capitalized in accordance with ASC 350-40, “Intangibles - Goodwill and Other - Internal - Use Software,” and are amortized over the expected benefit period, which generally ranges from three to five years. Software development costs capitalized during the three months ended March 31, 2020 and March 31, 2019 were $1.8 million and $1.0 million, respectively. 

Annual amortization, charged to cost of sales is computed using the straight-line method over the remaining estimated economic life of software products, generally three to five years. Amortization of capitalized software development costs from continuing operations for the three months ended March 31, 2020 and 2019 were $1.6 million and $0.5 million, respectively. 

Amortization of intangible assets acquired in the Brink Acquisition, the Drive-Thru Acquisition and the Restaurant Magic Acquisition equaled $0.2 million, $0.2 million and $0.6 million, respectively, for the three month period ended March 31, 2020 compared to $0.2 million related to the Brink Acquisition for the three month period ended March 31, 2019.

The components of identifiable intangible assets are:

(in thousands)	March 31, 2020			December 31, 2019			Estimated Useful Life
Acquired and internally developed software costs	$	36,137		$	36,137		3 - 5 years
Customer relationships	4,860			4,860			7 years
Non-competition agreements	30			30			1 year
	41,027			41,027
Less accumulated amortization	(14,087		)	(12,389		)
	$	26,940		$	28,638
Internally developed software costs not meeting general release threshold	4,353			2,500
Trademarks, trade names (non-amortizable)	1,810			1,810			Indefinite
	$	33,103		$	32,948

The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles and excluding software costs not meeting the general release threshold, is as follows (in thousands):

2020, remaining	$	3,837
2021	4,112
2022	5,311
2023	4,182
2024	4,182
Thereafter	5,316
Total	$	26,940

The Company operates in two reporting segments, Restaurant/Retail and Government, which are also the Company's identified reporting units. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment of goodwill. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded; once assigned, goodwill no longer retains its association with a particular acquisition and all of the activities within the reporting unit, whether acquired from a third-party or organically acquired, are available to support the value of the goodwill.  The amount of goodwill carried by the Restaurant/Retail and Government reporting unit was $41.4 million at March 31, 2020 and December 31, 2019, respectively. The Company recognized additions to goodwill as part of the Drive-Thru Acquisition and Restaurant Magic Acquisition as indicated in Note 3.

The Company is actively monitoring the impacts of COVID-19 that could impact the need to consider a triggering event in the future. As of December 31, 2019 and March 31, 2020, the goodwill asset balance was $41.4 million. No impairment charges were recorded for the periods ended March 31, 2020 or March 31, 2019.

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Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

From time to time, the Company is party to legal proceedings arising in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. Based on information currently available, and based on its evaluation of such information, the Company believes the legal proceedings in which it is currently involved are not material or are not likely to result in a material adverse effect on the Company’s business, financial condition or results of operations, or cannot currently be estimated.

The Company is a party to a proceeding filed by Kandice Neals on behalf of herself and others similarly situated (the "Neals Plaintiff") against the Company on March 21, 2019 in the Circuit Court of Cook County, Illinois County Department, Chancery Division. The complaint asserted that the Company violated the Illinois Biometric Information Privacy Act in the alleged collection, use, and storage of her and others' biometric data derived from fingerprint scans taken for authentication purposes on point-of-sale systems. The Neals lawsuit was removed to the Federal District Court for the Northern District of Illinois (the District Court") and was subsequently dismissed on December 19, 2019 without prejudice. On January 15, 2020, the Neals Plaintiff filed an amended complaint against ParTech, Inc. with the District Court. On January 29, 2020, ParTech, Inc. filed its answer and affirmative defenses to the amended complaint. The Company believes the Neals lawsuit is without merit. The Company does not currently believe an accrual is appropriate, but will continue to monitor the lawsuit to provide for probable and estimable losses.

In 2016, the Company's Audit Committee commenced an internal investigation into conduct at the Company's China and Singapore offices and voluntarily notified the SEC and the U.S. Department of Justice ("DOJ") of the internal investigation. Following the conclusion of the Audit Committee's internal investigation, the Company voluntarily reported the relevant findings of the investigation to the China and Singapore authorities. In early April 2019, the SEC notified the Company that based on current information, it did not intend to recommend an enforcement action against the Company; shortly thereafter, the DOJ advised that it did not intend to separately proceed. The Company is cooperating with the China and Singapore authorities, but is currently not able to predict what actions these authorities might take, or what the likely outcome of any such actions might be, or fully estimate the range of reasonably possible fines or penalties, which may be material. The China and Singapore authorities have a broad range of civil and criminal sanctions, and the imposition of fines or penalties could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, results of operations or cash flows.

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Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Feb. 10, 2020	Dec. 31, 2019	Apr. 15, 2019	Dec. 31, 2018
Earnings Per Share Reconciliation [Abstract]
Net loss	$ (10,910)	$ (2,729)
Basic:
Shares outstanding at beginning of period (in shares)				16,629,000		16,041,000
Weighted average shares issued/(repurchased) during the period, net (in shares)	1,312,000	3,000
Weighted average common shares, basic (in shares)	17,941,000	16,044,000
Net loss per common share, basic (in dollars per shares)	$ (0.61)	$ (0.17)
Diluted:
Weighted average common shares, basic (in shares)	17,941,000	16,044,000
Weighted average common shares, diluted (in shares)	17,941,000	16,044,000
Net loss per common share, diluted (in dollars per share)	$ (0.61)	$ (0.17)
Convertible Notes | Convertible Senior Notes due 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Initial conversion price					$ 28.55
Convertible Notes | Convertible Senior Notes Due 2026
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Initial conversion price			$ 42.97
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive stock options outstanding (in shares)	951,000	486,000
Stock options | Convertible Notes | Convertible Senior Notes due 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive stock options outstanding (in shares)	481,548
Stock options | Convertible Notes | Convertible Senior Notes Due 2026
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive stock options outstanding (in shares)	2,792,664

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amounts owed to employees participating in the deferred compensation plan	$ 2,900	$ 3,200
Obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	3,340
New level 3 liability	0
Total gains (losses) reported in earnings	0
Settlement of Level 3 liabilities	0
Balance at end of period	3,340
Restaurant Magic
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent consideration liability	3,300	$ 3,300
Fair Value, Inputs, Level 2 | Convertible Notes | Convertible Senior Notes due 2024
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value of debt	10,800
Fair Value, Inputs, Level 2 | Convertible Notes | Convertible Senior Notes Due 2026
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value of debt	$ 89,800

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Revenue Recognition - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 54,732	$ 44,682
Billed | Restaurant/Retail
Disaggregation of Revenue [Line Items]
Revenue	28,838	23,513
Billed | Restaurant/Retail | Restaurant/Retail
Disaggregation of Revenue [Line Items]
Revenue	28,838	23,023
Billed | Restaurant/Retail | Grocery
Disaggregation of Revenue [Line Items]
Revenue		490
Billed | Restaurant/Retail | Mission Systems
Disaggregation of Revenue [Line Items]
Revenue	0	0
Billed | Restaurant/Retail | ISR Solutions
Disaggregation of Revenue [Line Items]
Revenue	0	0
Advanced billings | Restaurant/Retail
Disaggregation of Revenue [Line Items]
Revenue	8,571	6,047
Advanced billings | Restaurant/Retail | Restaurant/Retail
Disaggregation of Revenue [Line Items]
Revenue	8,571	5,103
Advanced billings | Restaurant/Retail | Grocery
Disaggregation of Revenue [Line Items]
Revenue		944
Advanced billings | Restaurant/Retail | Mission Systems
Disaggregation of Revenue [Line Items]
Revenue	0	0
Advanced billings | Restaurant/Retail | ISR Solutions
Disaggregation of Revenue [Line Items]
Revenue	0	0
Advanced billings | Government
Disaggregation of Revenue [Line Items]
Revenue	17,323	15,122
Advanced billings | Government | Restaurant/Retail
Disaggregation of Revenue [Line Items]
Revenue	0	0
Advanced billings | Government | Grocery
Disaggregation of Revenue [Line Items]
Revenue		0
Advanced billings | Government | Mission Systems
Disaggregation of Revenue [Line Items]
Revenue	8,448	8,546
Advanced billings | Government | ISR Solutions
Disaggregation of Revenue [Line Items]
Revenue	$ 8,875	$ 6,576

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Summary of changes in fair value of the company's Level 3 assets and liabilities that are measured at fair value on a recurring basis

The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis, and are recorded as a component of other long-term liabilities on the consolidated balance sheet (in thousands):

(in thousands)	Level 3 Inputs
	Liabilities
Balance at December 31, 2019	$	3,340
New level 3 liability	—
Total gains (losses) reported in earnings	—
Settlement of Level 3 liabilities	—
Balance at March 31, 2020	$	3,340

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Segment and Related Information

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment and Related Information

Segment and Related Information

The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail segment provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. In addition, the unaudited condensed consolidated financial statements include corporate and eliminations, which is comprised of enterprise-wide functional departments.

Information noted as “Other” primarily relates to the Company’s corporate, home office operations.

Information as to the Company’s reporting segments is set forth below (in thousands).

	Three Months Ended March 31,
	2020			2019
Revenues:
Restaurant/Retail	$	37,409		$	29,560
Government	17,323			15,122
Total	$	54,732		$	44,682
Operating loss:
Restaurant/Retail	$	(6,070	)	$	(2,982	)
Government	1,179			1,363
Other	(564		)	(482		)
Total	(5,455		)	(2,101		)
Other expense	(625		)	(430		)
Interest expense, net	(1,972		)	(146		)
Loss on extinguishment of debt	(8,123		)	—
Loss before provision for income taxes	$	(16,175	)	$	(2,677	)
Depreciation, amortization and accretion:
Restaurant/Retail	$	1,855		$	868
Government	16			19
Other	1,271			125
Total	$	3,142		$	1,012
Capital expenditures including software costs:
Restaurant/Retail	$	1,707		$	1,063
Government	211			176
Other	122			684
Total	$	2,040		$	1,923
Revenues by country:
United States	$	52,631		$	41,925
Other Countries	2,101			2,757
Total	$	54,732		$	44,682

The following table represents identifiable long-lived assets by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	1,974	$	1,987
Government	257		272
Other	11,821		12,093
Total	$	14,052	$	14,352

The following table represents identifiable long-lived assets by country based on the location of the assets (in thousands).

	March 31, 2020		December 31, 2019
United States	$	13,760	$	14,260
Other Countries	292		92
Total	$	14,052	$	14,352

The following table represents goodwill by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	40,650	$	40,650
Government	736		736
Total	$	41,386	$	41,386

Customers comprising 10% or more of the Company’s total revenues by reporting segment are summarized as follows:

	Three months ended March 31,
	2020		2019
Restaurant/Retail reporting segment:
McDonald’s Corporation	9	%	10	%
Yum! Brands, Inc.	11	%	13	%
Dairy Queen	16	%	7	%
Government reporting segment:
U.S. Department of Defense	32	%	34	%
All Others	32	%	36	%
	100	%	100	%

No other customer within All Others represented 10% of more of the Company’s total revenue for the three months ended March 31, 2020 or 2019.

	December 31,
	2019		2018
Restaurant and Retail segment:
McDonald’s Corporation	10	%	19	%
Yum! Brands, Inc.	16	%	13	%
Government segment:
U.S. Department of Defense	34	%	33	%
All Others	40	%	35	%
	100	%	100	%

The above represents the final 2019 year end concentration disclosure table, which has been revised to reflect the proper percentage of customers that represented greater than 10% revised for reference.

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Divestiture

3 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Divestiture

Divestiture

Sale of SureCheck

During the second quarter of 2019, ParTech entered into an asset purchase agreement to sell substantially all of the assets relating to the SureCheck product group within the Company's Restaurant/Retail reporting segment. The sale does not qualify for treatment as a discontinued operation, and therefore, the SureCheck product group is included in the Company’s continuing operations for all periods presented.

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Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Convertible Senior Notes

On April 15, 2019, the Company sold $80.0 million in aggregate principal amount of 4.500% Convertible Senior Notes due 2024 (the "2024 Notes"). The 2024 Notes were sold pursuant to an indenture, dated April 15, 2019 (the "2024 Indenture"), between the Company and The Bank of New York Mellon Trust Company, N.A. (“Trustee”). The 2024 Notes pay interest at a rate equal to 4.500% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2019. Interest accrues on the 2024 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2019. Unless earlier converted, redeemed or repurchased, the 2024 Notes mature on April 15, 2024.

On February 10, 2020, the Company sold $120.0 million in aggregate principal amount of 2.875% Convertible Senior Notes due 2026 (the "2026 Notes" and, together with the 2024 Notes, the "Notes"). The 2026 Notes were sold pursuant to an indenture, dated February 10, 2020 (the "2026 Indenture" and, together with the 2024 Indenture, the "Indentures"), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee. The 2026 Notes pay interest at a rate equal to 2.875% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2020. Interest accrues on the 2026 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2020. Unless earlier converted, redeemed or repurchased, the 2026 Notes mature on April 15, 2026.

The Company used approximately $66.3 million (excluding cash payments relating to accrued interest and fractional shares) from its sale of the 2026 Notes and issued 722,423 shares of common shares at $32.43 per share out of treasury stock with an average cost basis of $3.37 per share per share to repurchase approximately $66.3 million in aggregate principal amount of the 2024 Notes through individually negotiated transactions. Of the total price paid for the 2024 Notes, $59.0 million was allocated to the 2024 Notes settlement,  $30.8 million was allocated to the equity component, and $1.0 million was used to pay off accrued interest on the 2024 Notes.  The consideration transferred was allocated to the liability and equity components of the 2024 Notes using the equivalent rate that reflected the borrowing rate for a similar non-convertible debt instrument immediately prior to settlement. The transaction resulted in a loss on settlement of convertible notes of $8.1 million, which is recorded as a Loss on extinguishment of debt in the Company’s unaudited condensed consolidated statement of operations. The loss represents the difference between (i) the fair value of the liability component and (ii) the sum of the carrying value of the debt component and any unamortized debt issuance costs at the time of settlement.

The implied estimated effective rate of the liability component of the 2024 Notes and 2026 Notes is 10.24% and 7.33%, respectively.

The Notes are senior, unsecured obligations of the Company. The 2024 Notes and the 2026 Notes are convertible, in whole or in part, at the option of the holder, upon the occurrence of specified events or certain fundamental changes set forth in the Indentures prior to the close of business on the business day immediately preceding October 15, 2023 and October 15, 2025, respectively; and, thereafter, at any time until the close of business on the second business day immediately preceding maturity. The 2024 Notes are convertible into Company common stock at an initial conversion rate of 35.0217 shares per $1,000 principal amount and the 2026 Notes are convertible into Company common stock at an initial conversion rate of 23.2722 shares per $1,000 principal amount. Upon conversion, the Company may elect to settle by paying or delivering either solely cash, shares of Company common stock or a combination of cash and shares of common stock.

In accordance with ASC 470-20 "Debt with Conversion and Other Options — Beneficial Conversion Features", the initial measurement of the 2024 Notes at fair value resulted in a liability of $62.4 million, as such, the calculated discount resulted in an implied value of the convertible feature recognized in Additional Paid in Capital of $17.6 million. In accordance with ASC 470-20, the initial measurement of the 2026 Notes at fair value resulted in a liability of $93.8 million, as such, the calculated discount resulted in an implied value of the convertible feature recognized in Additional Paid in Capital of $26.2 million. Issuance costs for the transactions amounted to $4.9 million and $4.2 million for the 2024 Notes and 2026 Notes, respectively. These costs were allocated to debt and equity components on a ratable basis. For the 2024 Notes this amounted to $3.8 million and $1.1 million to the debt and equity components, respectively. For the 2026 Notes this amounted to $3.1 million and $1.1 million to the debt to equity components, respectively.

The Indentures contain covenants that, among other things, restrict the Company’s ability to merge, consolidate or sell, or otherwise dispose of, substantially all of its assets and customary Events of Default (as defined in the Indentures).

In connection with the sale of the 2026 Notes, the Company recorded an income tax benefit of $5.4 million in the first quarter of 2020 as a result of the creation of a deferred tax liability associated with the portion of the 2026 Notes that was classified within stockholders' equity. While GAAP requires the offset of the deferred tax liability to be recorded in additional paid-in capital, consistent with the equity portion of the 2026 Notes, the creation of the deferred tax liability produced evidence of recoverability of the Company's net deferred tax assets which resulted in the release of a valuation allowance, totaling $5.4 million, reflected as an income tax benefit in the first quarter of 2020.

The following table summarizes information about the net carrying amounts of the 2024 Notes and 2026 Notes as of March 31, 2020:

(in thousands)	2024 Notes			2026 Notes
Principal amount of 2024 Notes outstanding	$	13,750		$	120,000
Unamortized discount (including unamortized debt issuance cost)	(3,219		)	(29,804		)
Total long-term portion of notes payable	$	10,531		$	90,196

The following table summarizes interest expense recognized:

(in thousands)	Three Months Ended March 31, 2020
	2020			2019
Contractual interest expense	$	(1,014	)	$	(146	)
Amortization of debt issuance costs and discount	(958		)	—
Total interest expense	$	(1,972	)	$	(146	)

The following table summarizes the future principal payments for the 2024 Notes and 2026 Notes (in thousands):

2020, remaining	$	—
2021	—
2022	—
2023	—
2024	13,750
Thereafter	120,000
	$	133,750

In connection with the Restaurant Magic Acquisition, see Note 3 - Acquisitions, $2.0 million was paid by delivery of a subordinated promissory note. The note bears interest at 4.5% per annum, with monthly payments of principal and interest in the amount of $60,391 payable beginning January 15, 2020 through maturity on December 15, 2022. As of March 31, 2020, the outstanding balance of the subordinated promissory note was $1.8 million of which $0.7 million was in the current portion of long-term debt. The Company's future minimum principal payments are $0.5 million, $0.7 million and $0.7 million for the remainder of 2020, 2021 and 2022, respectively.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Performance Obligations

Next 12 Months	$	52,796
Months 13-24	35,110
Months 25-36	27,924
Thereafter	20,227
TOTAL	$	136,057

:

(in thousands)	2020			2019
Beginning balance - January 1	$	16,000		$	14,134
Deferral of revenue	8,579			7,023
Recognition of revenue	(8,571		)	(6,047		)
Changes in customer deposits	(1,741		)	1,237
Ending balance - March 31	$	14,267		$	16,347

Schedule of Disaggregated Revenue

Disaggregation of revenue for the three months ended March 31, 2020 and March 31, 2019 is as follows:

(in thousands)	Three months ended March 31, 2020
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	28,838	$	8,571	$	—
Mission Systems	—		—		8,448
ISR Solutions	—		—		8,875
TOTAL	$	28,838	$	8,571	$	17,323

(in thousands)	Three months ended March 31, 2019
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	23,023	$	5,103	$	—
Grocery	490		944		—
Mission Systems	—		—		8,546
ISR Solutions	—		—		6,576
TOTAL	$	23,513	$	6,047	$	15,122

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Identifiable Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Components of identifiable intangible assets, excluding discontinued operations

The components of identifiable intangible assets are:

(in thousands)	March 31, 2020			December 31, 2019			Estimated Useful Life
Acquired and internally developed software costs	$	36,137		$	36,137		3 - 5 years
Customer relationships	4,860			4,860			7 years
Non-competition agreements	30			30			1 year
	41,027			41,027
Less accumulated amortization	(14,087		)	(12,389		)
	$	26,940		$	28,638
Internally developed software costs not meeting general release threshold	4,353			2,500
Trademarks, trade names (non-amortizable)	1,810			1,810			Indefinite
	$	33,103		$	32,948

Schedule of future amortization of intangible assets

The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles and excluding software costs not meeting the general release threshold, is as follows (in thousands):

2020, remaining	$	3,837
2021	4,112
2022	5,311
2023	4,182
2024	4,182
Thereafter	5,316
Total	$	26,940

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid in Capital	Retained Earnings (accumulated deficit)	Accumulated Other Comprehensive Loss	Treasury Stock
Balance (in shares) at Dec. 31, 2018		17,878,000				1,708,000
Balance at Dec. 31, 2018	$ 45,946	$ 357	$ 50,251	$ 5,427	$ (4,253)	$ (5,836)
Net income (loss)	(2,729)			(2,729)
Issuance of common stock upon the exercise of stock options (in shares)		78,000
Issuance of common stock upon the exercise of stock options	30		30
Stock-based compensation	248		248
Foreign currency translation adjustments	(10)				(10)
Balance (in shares) at Mar. 31, 2019		17,956,000				1,708,000
Balance at Mar. 31, 2019	$ 43,485	$ 357	50,529	2,698	(4,263)	$ (5,836)
Balance (in shares) at Dec. 31, 2019	16,629,177	18,360,000				1,731,000
Balance at Dec. 31, 2019	$ 72,847	$ 367	94,372	(10,144)	(5,368)	$ (6,380)
Net income (loss)	$ (10,910)			(10,910)
Issuance of common stock upon the exercise of stock options (in shares)	2,000	2,000
Issuance of common stock upon the exercise of stock options	$ 30		30
Net issuance of restricted stock awards (in shares)		21,000
Net issuance of restricted stock awards	0
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock (in shares)						38,000
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock	(524)		0			$ (524)
Acquisition consideration (in shares)		908,000
Issuance of restricted stock for acquisition	19	$ 19
Equity component of redeemed 2024 convertible notes, net of deferred taxes and issuance costs	(5,553)		(7,988)			$ 2,435
Equity component of redeemed 2024 convertible notes, net of deferred taxes and issuance costs (in shares)						722,000
Equity component of issued 2026 convertible notes, net of deferred taxes and issuance costs	19,097		19,097
Stock-based compensation	1,089		1,089
Foreign currency translation adjustments	$ 201				201
Balance (in shares) at Mar. 31, 2020	18,244,350	19,291,000				1,047,000
Balance at Mar. 31, 2020	$ 76,296	$ 386	$ 106,600	$ (21,054)	$ (5,167)	$ (4,469)

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 60,089	$ 28,036
Accounts receivable – net	42,819	41,774
Inventories – net	23,339	19,326
Other current assets	7,191	4,427
Total current assets	133,438	93,563
Property, plant and equipment – net	14,052	14,351
Goodwill	41,386	41,386
Intangible assets – net	33,103	32,948
Lease right-of-use assets	2,729	3,017
Other assets	4,274	4,347
Total Assets	228,982	189,612
Current liabilities:
Current portion of long-term debt	639	630
Accounts payable	16,603	16,385
Accrued salaries and benefits	6,495	7,769
Accrued expenses	2,893	3,176
Lease liabilities - current portion	2,000	2,060
Customer deposits and deferred service revenue	9,732	12,084
Total current liabilities	38,362	42,104
Lease liabilities - net of current portion	805	1,021
Deferred service revenue – non current	4,535	3,916
Long-term debt	101,916	62,414
Other long-term liabilities	7,068	7,310
Total liabilities	152,686	116,765
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized	0	0
Common stock, $.02 par value, 29,000,000 shares authorized; 19,291,289 and 18,360,205 shares issued, 18,244,350 and 16,629,177 outstanding at March 31, 2020 and December 31, 2019, respectively	386	367
Additional paid in capital	106,600	94,372
Accumulated deficit	(21,054)	(10,144)
Accumulated other comprehensive loss	(5,167)	(5,368)
Treasury stock, at cost, 1,046,939 shares and 1,731,028 shares at March 31, 2020 and December 31, 2019, respectively	(4,469)	(6,380)
Total shareholders’ equity	76,296	72,847
Total Liabilities and Shareholders’ Equity	$ 228,982	$ 189,612

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Identifiable Intangible Assets and Goodwill - Expected Future Amortization (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020, remaining	$ 3,837
2020	4,112
2021	5,311
2022	4,182
2023	4,182
Thereafter	5,316
Total	$ 26,940	$ 28,638

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Accounts Receivable, Net - Accounts Receivable, Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Provisions	$ 244	$ 107
Restaurant/Retail
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance - January 1	1,849
Provisions	380
Write-offs	(156)
Recoveries	0
Ending balance - March 31	$ 2,073

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Stock Based Compensation - Valuation Assumptions for Options (Details) - Stock options	3 Months Ended
	Mar. 31, 2020 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected option life	4 years 5 months
Weighted average risk-free interest rate	0.40%
Weighted average expected volatility	47.00%
Expected dividend yield	0.00%
Fair value of options granted (in dollars per share)	$ 4.87

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Segment and Related Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 14,052	$ 14,352
Goodwill by business segment [Abstract]
Goodwill	41,386	41,386
Operating segments | Restaurant/Retail
Identifiable assets by geographic area [Abstract]
Identifiable assets	1,974	1,987
Goodwill by business segment [Abstract]
Goodwill	40,650	40,650
Operating segments | Government
Identifiable assets by geographic area [Abstract]
Identifiable assets	257	272
Goodwill by business segment [Abstract]
Goodwill	736	736
Reportable geographical components | United States
Identifiable assets by geographic area [Abstract]
Identifiable assets	13,760	14,260
Reportable geographical components | Other Countries
Identifiable assets by geographic area [Abstract]
Identifiable assets	292	92
Other
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 11,821	$ 12,093

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Inventories

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are primarily used in the manufacture, maintenance and service of products within the Restaurant/Retail reporting segment.  The components of inventories, net, consist of the following:

(in thousands)	March 31, 2020		December 31, 2019
Finished goods	$	11,630	$	8,320
Component parts	7,370		6,768
Service parts	4,339		4,238
	$	23,339	$	19,326

At March 31, 2020 and December 31, 2019, the Company had inventory reserves of $11.4 million and $9.8 million, respectively, against inventories used in the Restaurant/Retail reporting segment, which relate primarily to service parts.

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Net loss per share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Net loss per share

Net loss per share

Earnings per share are calculated in accordance with ASC Topic 260: "Earnings per Share", which specifies the computation, presentation and disclosure requirements for earnings per share (EPS).  It requires the presentation of basic and diluted EPS.  Basic EPS excludes all dilution and is based upon the weighted average number of shares of common stock outstanding during the period.  Diluted EPS reflects the potential dilution that would occur if convertible securities or other contracts to issue common stock were exercised. For the three months ended March 31, 2020, there were 951,000 anti-dilutive stock options outstanding compared to 486,000 as of March 31, 2019. The potential effect of the conversion feature with respect to the 2024 Notes and 2026 Notes (See Note 8 - Debt) was excluded from the diluted net loss per share as of March 31, 2020 as the Company's closing stock price on March 31, 2020 did not exceed the initial conversion price of $28.55 per share or $42.97 per share, respectively. The potential shares from the 2024 Notes and 2026 Notes at the initial conversion rate was approximately 481,548 and 2,792,664, respectively.

The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations:

(in thousands, except per share data)	Three Months Ended March 31,
	2020			2019
Net loss	$	(10,910	)	$	(2,729	)
Basic:
Shares outstanding at beginning of period	16,629			16,041
Weighted average shares issued during the period, net	1,312			3
Weighted average common shares, basic	17,941			16,044
Net loss per common share, basic	$	(0.61	)	$	(0.17	)
Diluted:
Weighted average common shares, basic	17,941			16,044
Weighted average common shares, diluted	17,941			16,044
Net loss per common share, diluted	$	(0.61	)	$	(0.17	)

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Acquisitions - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended
	Dec. 18, 2019	Sep. 30, 2019	Mar. 31, 2020	Dec. 31, 2019
3M's Drive-Thru Communications Systems
Business Acquisition [Line Items]
Business acquisition, purchase price		$ 8,400
Fair value of assets acquired		8,400
Warranty liability assumed		1,400
Business acquisition, cash paid		$ 7,000
Revenue of acquiree			$ 3,500
Restaurant Magic
Business Acquisition [Line Items]
Fair value of assets acquired	$ 47,689
Business acquisition, cash paid	$ 13,000
Percent acquired	100.00%
Consideration	$ 43,005
Equity issued	27,500
Contingent consideration liability			3,300	$ 3,300
Revenue of acquiree			$ 2,200
Subordinate Promissory Note | Restaurant Magic
Business Acquisition [Line Items]
Warranty liability assumed	$ 2,000
Cash Or Subordinated Promissory Notes | Restaurant Magic
Business Acquisition [Line Items]
Percent of contingent consideration	50.00%
Restricted Shares Of Common Stock | Restaurant Magic
Business Acquisition [Line Items]
Percent of contingent consideration	50.00%

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Revenue Recognition - Schedule of Performance Obligations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Dec. 31, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Support contract timing	12
Revenue, Remaining Performance Obligation [Roll Forward]
Beginning balance	$ 16,000	$ 14,134
Deferral of revenue	8,579	7,023
Recognition of revenue	(8,571)	(6,047)
Changes in customer deposits	(1,741)	1,237
Ending balance	14,267	16,347
Performance obligations	14,267	16,347	$ 14,267	$ 16,000
Restaurant/Retail
Revenue, Remaining Performance Obligation [Roll Forward]
Recognition of revenue	7,200	$ 5,700
Government
Revenue, Remaining Performance Obligation [Roll Forward]
Beginning balance	148,700
Ending balance	136,057
Performance obligations	$ 136,057		136,057	148,700
Funded performance obligations			$ 34,500	$ 32,800
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Payment period	30 days
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Payment period	90 days

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Net loss per share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Reconciliation of the Weighted Average Shares Outstanding for the Basic and Diluted EPS Computations

The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations:

(in thousands, except per share data)	Three Months Ended March 31,
	2020			2019
Net loss	$	(10,910	)	$	(2,729	)
Basic:
Shares outstanding at beginning of period	16,629			16,041
Weighted average shares issued during the period, net	1,312			3
Weighted average common shares, basic	17,941			16,044
Net loss per common share, basic	$	(0.61	)	$	(0.17	)
Diluted:
Weighted average common shares, basic	17,941			16,044
Weighted average common shares, diluted	17,941			16,044
Net loss per common share, diluted	$	(0.61	)	$	(0.17	)

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Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In March 2020, the World Health Organization characterized COVID-19 as a pandemic and President Trump declared the COVID-19 outbreak a national emergency. While the COVID-19 pandemic did not have a material adverse impact on our business, operations, and financial results for the three months ended March 31, 2020, in late March 2020 our Restaurant/Retail reporting segment began experiencing the impact of the COVID-19 pandemic as a result of its impact on our restaurant and retail customers and their response, including store closures; changes in product and service offerings and delivery formats, and delayed product adoptions and installations.

We have taken a number of actions to mitigate the impact. Early in the second quarter of 2020, reduced discretionary costs, implemented a hiring freeze on non-essential positions, we reduced the size of our workforce, and temporarily furloughed employees and temporarily reduced the salaries of others in our Restaurant/Retail reporting segment and corporate group.

The extent to which the COVID-19 pandemic will continue to impact our business, operations, and financial results will depend on future developments, which are uncertain and cannot be predicted, including the duration and severity of the pandemic, future government actions in response to the pandemic, how quickly and to what extent normal economic and operating conditions can resume in the United States and globally, and a potential resurgence of the pandemic. Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including as a result of any recession that may occur. As of the date of this Quarterly Report, it is impossible to predict the overall impact of the COVID-19 pandemic on our business, operations and financial results, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our business, operations, and financial results during any quarter or year in which we are affected.

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Accounts Receivable, Net (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Schedule of Accounts Receivable, Net

The Company’s accounts receivable, net, consists of:

	March 31, 2020			December 31, 2019
Government reporting segment:
Billed	$	9,895		$	11,608
Advanced billings	(754		)	(608		)
	9,141			11,000
Restaurant/Retail reporting segment:	33,678			30,774
Accounts receivable - net	$	42,819		$	41,774

Accounts Receivable, Allowance for Credit Loss

At March 31, 2020 and December 31, 2019, the Company recorded allowances for doubtful accounts of $2.1 million and $1.8 million, respectively, against the accounts receivable for the Restaurant/Retail reporting segment. The changes in the allowance for doubtful accounts during the three months ended March 31, 2020 were as follows:

(in thousands)	2020
Beginning balance - January 1	$	1,849
Provisions	380
Write-offs	(156		)
Recoveries	—
Ending balance - March 31	$	2,073

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Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Valuation Assumptions for Options

The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending March 31, 2020:

	March 31, 2020
Expected option life	4.4 years
Weighted average risk-free interest rate	0.4		%
Weighted average expected volatility	47		%
Expected dividend yield	0		%
Fair value of options granted	$	4.87

Summary of Stock Option Activity

A summary of stock option activity for the three months ended March 31, 2020:

(in thousands)	Options Outstanding		Weighted Average Exercise Price
Outstanding at January 1, 2020	410		14.50
Granted	587		12.64
Exercised	(2	)	11.66
Canceled/forfeited	(44	)	—
Outstanding at March 31, 2020	951		13.40

Summary of Restricted Stock and RSU Awards Activity

A summary of non-vested restricted stock activity for the three months ended March 31, 2020:

(in thousands)	Restricted Stock Awards		Weighted Average Award Value
Outstanding at Balance at January 1, 2020	171		23.53
Granted	21		29.19
Vested	(122	)	25.82
Forfeited and cancelled	(38	)	14.97
Outstanding at March 31, 2020	32		28.73

A summary of non-vested restricted stock units ("RSU") activity for the three months ended March 31, 2020:

(in thousands)	RSU Awards	Weighted Average Award Value
Outstanding at Balance at January 1, 2020	—	—
Granted	360	12.64
Vested	—	—
Forfeited and cancelled	—	—
Outstanding at March 31, 2020	360	12.64

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Debt - Summary of Information about the Equity and Liability Components of Notes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Feb. 10, 2020	Dec. 31, 2019	Apr. 15, 2019
Debt Instrument [Line Items]
Total long-term portion of notes payable	$ 101,916,000			$ 62,414,000
Convertible Notes
Debt Instrument [Line Items]
Contractual interest expense	(1,014,000)	$ (146,000)
Amortization of debt issuance costs and discount	(958,000)	0
Total interest expense	(1,972,000)	$ (146,000)
Convertible Notes | Convertible Senior Notes due 2024
Debt Instrument [Line Items]
Principal amount of Notes outstanding	13,750,000				$ 80,000,000.0
Unamortized discount (including unamortized debt issuance cost)	(3,219,000)
Total long-term portion of notes payable	10,531,000
Convertible Notes | Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Principal amount of Notes outstanding	120,000,000		$ 120,000,000.0
Unamortized discount (including unamortized debt issuance cost)	(29,804,000)
Total long-term portion of notes payable	$ 90,196,000

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Identifiable Intangible Assets and Goodwill - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 18, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Research and development	$ 4,865,000	$ 3,060,000
Capitalized software development costs	1,800,000	1,000,000
Amortization of capitalized software development costs	1,600,000	500,000
Amortization of identifiable intangible assets	$ 210,000	0
Number of operating segments | segment	2
Goodwill	$ 41,386,000		$ 41,386,000
Goodwill impairment charge	0	0
Restaurant/Retail And Government Reporting Segments
Finite-Lived Intangible Assets [Line Items]
Goodwill	41,400,000		41,400,000
Brink Acquisition
Finite-Lived Intangible Assets [Line Items]
Amortization of identifiable intangible assets	200,000	$ 200,000
3M's Drive-Thru Communications Systems
Finite-Lived Intangible Assets [Line Items]
Amortization of identifiable intangible assets	200,000
Restaurant Magic
Finite-Lived Intangible Assets [Line Items]
Amortization of identifiable intangible assets	$ 600,000
Goodwill				$ 27,945,000
Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Minimum | Internal use software
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years
Maximum | Internal use software
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years
Internally developed software costs not meeting general release threshold
Finite-Lived Intangible Assets [Line Items]
Research and development	$ 4,400,000		$ 2,500,000

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Acquisitions - Pro Forma Information (Details) - Drive-Thru And Restaurant Magic $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Business Acquisition [Line Items]
Total revenue	$ 51,352
Net loss	$ (263)

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Basis of presentation

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements ("unaudited condensed consolidated financial statements") of PAR Technology Corporation (the “Company” or “PAR”, "we","us") have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements.  In the opinion of management, the Company's unaudited condensed consolidated financial statements include all normal and recurring adjustments necessary in order to make the unaudited condensed consolidated financial statements not misleading and to provide a fair presentation of the results for the interim period included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Interim results are not necessarily indicative of results for the full year or any future periods. The information included in this Quarterly Report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2020.

The preparation of the unaudited condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the period.  Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, the measurement of liabilities and equity recognized for outstanding convertible notes, valuation allowances for receivables, inventories, and measurement of contingent consideration at fair value. Actual results could differ from those estimates.

The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail reporting segment provides point-of-sale (POS) software and hardware, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government reporting segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. In addition, the unaudited condensed consolidated financial statements include corporate and eliminations, which is comprised of enterprise-wide functional departments.

Additionally, the Company has reclassified certain costs and expenses in the condensed consolidated statement of operations for the three months ended March 31, 2019, amounting to $0.3 million, from amortization of intangible assets to cost of service to conform to the current period presentation. These reclassifications had no effect on previously reported total costs and operating expenses and net loss.

Use of Estimates

Preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 11, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses (Topic 326): "Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date, based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016-13 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company adopted ASU 2017-04 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurement disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. ASU 2018-13 modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. The Company adopted ASU 2018-13 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other (Topic 350) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 provides guidance on the measurement of costs for internal-use software during the design, development, and implementation stages for customers in a cloud hosting arrangement. ASU 2018-15 also requires the capitalized costs associated with the design, development and implementation of cloud hosted arrangements to be amortized over the term of the hosting arrangement. The Company adopted ASU 2018-15 effective January 1, 2020, and the application of the standard had no material impact on the Company's financial results for the quarter ended March 31, 2020.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes", which is intended to simplify various requirements related to accounting for income taxes. ASU  2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the impact of this standard on its unaudited condensed consolidated financial statements.

With the exception of the new standards discussed above, there were no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2020 that are of significance or potential significance to the Company, as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue	$ 54,732	$ 44,682
Costs of sales:
Cost of sales	43,685	35,159
Gross margin	11,047	9,523
Operating expenses:
Selling, general and administrative	11,427	8,564
Research and development	4,865	3,060
Amortization of identifiable intangible assets	210	0
Operating expenses	16,502	11,624
Operating loss	(5,455)	(2,101)
Other expense, net	(625)	(430)
Interest expense, net	(1,972)	(146)
Loss on extinguishment of debt	(8,123)	0
Loss before benefit from (provision for) income taxes	(16,175)	(2,677)
Benefit from (provision for) income taxes	5,265	(52)
Net loss	$ (10,910)	$ (2,729)
Basic Earnings per Share:
Net loss (in dollars per share)	$ (0.61)	$ (0.17)
Diluted Earnings per Share:
Net loss (in dollars per share)	$ (0.61)	$ (0.17)
Weighted average shares outstanding:
Basic (in shares)	17,941	16,044
Diluted (in shares)	17,941	16,044
Product
Revenue	$ 18,634	$ 15,517
Costs of sales:
Cost of sales	14,905	11,241
Service
Revenue	18,775	14,043
Costs of sales:
Cost of sales	12,646	10,268
Contract
Revenue	17,323	15,122
Costs of sales:
Cost of sales	$ 16,134	$ 13,650

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Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Summary of Equity And Liability Components of the Notes

The following table summarizes information about the net carrying amounts of the 2024 Notes and 2026 Notes as of March 31, 2020:

(in thousands)	2024 Notes			2026 Notes
Principal amount of 2024 Notes outstanding	$	13,750		$	120,000
Unamortized discount (including unamortized debt issuance cost)	(3,219		)	(29,804		)
Total long-term portion of notes payable	$	10,531		$	90,196

The following table summarizes interest expense recognized:

(in thousands)	Three Months Ended March 31, 2020
	2020			2019
Contractual interest expense	$	(1,014	)	$	(146	)
Amortization of debt issuance costs and discount	(958		)	—
Total interest expense	$	(1,972	)	$	(146	)

Schedule of Maturities of Notes

The following table summarizes the future principal payments for the 2024 Notes and 2026 Notes (in thousands):

2020, remaining	$	—
2021	—
2022	—
2023	—
2024	13,750
Thereafter	120,000
	$	133,750

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques.  The fair value hierarchy is based upon three levels of input, which are:

Level 1 — quoted prices in active markets for identical assets or liabilities (observable)

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 inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable)

Level 3 — unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

The Company’s financial instruments primarily consist of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. The carrying amounts of cash and cash equivalents, trade receivables and trade payables as of March 31, 2020 and December 31, 2019 were considered representative of their fair values.  The estimated fair value of the 2024 Notes and 2026 Notes was $10.8 million and $89.8 million, respectively, at March 31, 2020. The valuation techniques used to determine the fair value of 2024 Notes and 2026 Notes are classified within Level 2 of the fair value hierarchy.

The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, the fair value classification as defined under FASB ASC 820: "Fair Value Measurements", because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under its deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments.

The amounts owed to employees participating in the deferred compensation plan at March 31, 2020 was $2.9 million compared to $3.2 million at December 31, 2019 and is included in other long-term liabilities on the balance sheets.

As it relates to the contingent consideration associated with the Restaurant Magic Acquisition we may use various valuation techniques depending on the terms and conditions of the contingent consideration, including a Monte-Carlo simulation. This simulation uses probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring, as such it is classified as Level 3. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. The Restaurant Magic Acquisition resulted in a liability for the contingent consideration being recorded in the amount of $3.3 million during 2019. The liability for the contingent consideration was established at the time of the acquisition and will be evaluated quarterly based on additional information as it becomes available.  Any change in the fair value adjustment is recorded in the earnings of that period.

The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis, and are recorded as a component of other long-term liabilities on the consolidated balance sheet (in thousands):

(in thousands)	Level 3 Inputs
	Liabilities
Balance at December 31, 2019	$	3,340
New level 3 liability	—
Total gains (losses) reported in earnings	—
Settlement of Level 3 liabilities	—
Balance at March 31, 2020	$	3,340

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The fair values assigned to the acquired assets and assumed liabilities presented in the table below are based on our best estimates and assumptions as of the reporting date:

(in thousands)	Purchase price allocation
Developed technology	$	16,400
Customer relationships	1,100
Trade name	900
Tangible assets	1,344
Goodwill	27,945
Total assets	47,689
Accounts payable and accrued expenses	629
Deferred revenue	715
Earn out liability	3,340
Consideration paid	$	43,005

Business Acquisition, Pro Forma Information

The following unaudited pro forma financial information presents our results as if the Drive-Thru Acquisition and Restaurant Magic Acquisition amounts of net loss had occurred January 1, 2019:

(in thousands)	Three months ended March 31, 2019
Total revenue	$	51,352
Net loss	$	(263	)

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Identifiable Intangible Assets and Goodwill Components of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets, Net [Abstract]
Finite-lived intangible assets, gross	$ 41,027	$ 41,027
Less accumulated amortization	(14,087)	(12,389)
Total	26,940	28,638
Indefinite-lived Intangible Assets [Line Items]
Intangible assets – net	33,103	32,948
Acquired and internally developed software costs
Finite-Lived Intangible Assets, Net [Abstract]
Finite-lived intangible assets, gross	36,137	36,137
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Finite-lived intangible assets, gross	$ 4,860	4,860
Useful life	7 years
Non-competition agreements
Finite-Lived Intangible Assets, Net [Abstract]
Finite-lived intangible assets, gross	$ 30	30
Useful life	1 year
Minimum
Finite-Lived Intangible Assets, Net [Abstract]
Useful life	3 years
Minimum | Acquired and internally developed software costs
Finite-Lived Intangible Assets, Net [Abstract]
Useful life	3 years
Maximum
Finite-Lived Intangible Assets, Net [Abstract]
Useful life	5 years
Maximum | Acquired and internally developed software costs
Finite-Lived Intangible Assets, Net [Abstract]
Useful life	5 years
Internally developed software costs not meeting general release threshold
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets, gross	$ 4,353	2,500
Trademarks, trade names (non-amortizable)
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets, gross	$ 1,810	$ 1,810

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Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounts Receivable [Abstract]
Accounts receivable - net	$ 42,819	$ 41,774
Government
Accounts Receivable [Abstract]
Accounts receivable - net	9,141	11,000
Restaurant/Retail
Accounts Receivable [Abstract]
Accounts receivable - net	33,678	30,774
Allowance for doubtful accounts	2,073	1,849
Billed | Government
Accounts Receivable [Abstract]
Accounts receivable - net	9,895	11,608
Advanced billings | Government
Accounts Receivable [Abstract]
Accounts receivable - net	$ (754)	$ (608)

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Debt - Schedule of Maturities of Notes (Details) - Convertible Notes $ in Thousands	Mar. 31, 2020 USD ($)
Debt Instrument [Line Items]
2020, remaining	$ 0
2021	0
2022	0
2023	0
2024	13,750
Thereafter	120,000
Total	$ 133,750

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (10,910)	$ (2,729)
Other comprehensive income (loss), net of applicable tax:
Foreign currency translation adjustments	201	(10)
Comprehensive loss	$ (10,709)	$ (2,739)

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	PAR TECHNOLOGY CORP
Entity Central Index Key	0000708821
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,243,672
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020

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Revenue Recognition

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Our revenue is derived from Software as a Service (SaaS), hardware and software sales, software activation, hardware support, installations, maintenance and professional services. ASC 606: "Revenue from Contracts with Customers" requires us to distinguish and measure performance obligations under customer contracts. Contract consideration is allocated to all performance obligations within the arrangement or contract. Performance obligations that are determined not to be distinct are combined with other performance obligations until the combined unit is determined to be distinct and that combined unit is then recognized as revenue over time or at a point in time depending on when control is transferred.

We evaluated the potential performance obligations within our Restaurant/Retail reporting segment and evaluated whether each performance obligation met the ASC 606 criteria to be considered distinct performance obligations. Revenue in the Restaurant/Retail reporting segment is recognized at a point in time for software, hardware and installations. Revenue on these items are recognized when the customer obtains control of the asset. This generally occurs upon delivery and acceptance by the customer or upon installation or delivery to a third party carrier for onward delivery to customer. Additionally, revenue in the Restaurant/Retail reporting segment relating to SaaS, our hardware Advanced Exchange, on-site support and other services is recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance obligations. Our support services are stand-ready obligations that are provided over the life of the contract, generally 12 months. We offer installation services to our customers for hardware and software for which we primarily hire third-party contractors to install the equipment on our behalf. We pay third-party contractors installation service fees at mutually agreed rates. When third-party installers are used, we determine whether the nature of our performance obligations is to provide the specified goods or services ourselves (principal) or to arrange for a third-party to provide the goods or services (agent). In direct customer arrangements, we have discretion over our pricing; we are primarily responsible for providing a good or service; and we have inventory risk before the good or service is transferred to the customer. As a result, we have concluded that we are the principal in the arrangement and record installation revenue on a gross basis.

Our contracts typically require payment within 30 to 90 days from the shipping date or installation date. The primary method used to estimate stand-alone selling price, is by referring to the price that we charge for that good or service when we sell it separately under similar circumstances to similar customers. The Company determines stand-alone selling price as follows: hardware, software (on-premises and SaaS) and software activation (which is a one-time fee charged at the initial offering of software) performance obligations are recognized at a stand-alone selling price based on the price at which the Company sells the particular good or service separately in similar circumstances and to similar customers. The stand-alone selling price for all other performance obligations, including: pass-through hardware, such as terminals, printers, or card readers; hardware support, including Advanced Exchange, installation and maintenance; software upgrades; and professional services, including project management, is recognized by using an expected cost plus margin.

Our revenue in the Government reporting segment is generally recognized over time as control of products or services is generally transferred continuously to our customers. While revenue generated by the Government reporting segment is predominantly related to services, we do generate revenue from sales of materials, software, hardware, and maintenance. For the Government reporting segment, cost plus fixed fee contract portfolio revenue is recognized over time using costs incurred as of a determination date, to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead, and general and administrative expenses. Profit is recognized on the fixed fee portion of the contract as costs are incurred and invoiced. Long-term fixed price contracts and programs involve the use of various techniques to estimate total contract revenue and costs. For long-term fixed price contracts, we estimate the profit, as the difference between the total estimated revenue and expected costs to complete a contract, and recognize it over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include: labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; and the performance of subcontractors. Revenue and profit in future periods of contract performance are recognized using the same assumptions, adjusted for estimated costs to complete a contract. Once the services provided are determined to be distinct or not distinct, we evaluate how to allocate the transaction price. Generally, the Government reporting segment does not sell the same good or service to similar customers and the contract performance obligations are unique to each government contract. The performance obligations are typically not distinct; however, in cases where there are distinct performance obligations, the transaction price is allocated to each performance obligation ratably, based upon the stand-alone selling price of each performance obligation. Cost plus margin is used for the cost plus fixed fee contract portfolios as well as the fixed price and time and materials contracts portfolios to determine the stand-alone selling price.

In determining when to recognize revenue, we analyze whether our performance obligations in our Government contracts are satisfied over a period of time or at a point in time. In general, our performance obligations are satisfied over a period of time. However, there may be circumstances where the latter or both scenarios could apply to a contract.

We generally anticipate receipt of payment within 30 to 90 days from the date of service. None of our contracts as of December 31, 2019 or March 31, 2020 contained a significant financing component.

Performance Obligations Outstanding

The Company's performance obligations outstanding represent the transaction price of firm, non-cancellable orders, with expected delivery dates to customers subsequent to March 31, 2020 and March 31, 2019, respectively, for work that has not yet been performed. The activity of outstanding performance obligations as is relates to customer deposits and deferred service revenue is as follows:

(in thousands)	2020			2019
Beginning balance - January 1	$	16,000		$	14,134
Deferral of revenue	8,579			7,023
Recognition of revenue	(8,571		)	(6,047		)
Changes in customer deposits	(1,741		)	1,237
Ending balance - March 31	$	14,267		$	16,347

In the Restaurant/Retail reporting segment most performance obligations over one year are related to service and support contracts, approximately 59% of which we expect to fulfill within the one-year period and 100% within 60 months.

During the three months ended March 31, 2020 and March 31, 2019, we recognized revenue of $7.2 million and $5.7 million,

respectively, included in the contract liabilities at the beginning of the respective period.

The value of existing contracts in the Government reporting segment at March 31, 2020, net of amounts relating to work performed to that date, was approximately $136.1 million, of which $34.5 million was funded, and at December 31, 2019, net of amounts relating to work performed to that date, was approximately $148.7 million, of which $32.8 million was funded. The value of existing contracts, net of amounts relating to work performed to that date are expected to be recognized over time as follows (in thousands):

Next 12 Months	$	52,796
Months 13-24	35,110
Months 25-36	27,924
Thereafter	20,227
TOTAL	$	136,057

Disaggregated Revenue

The Company disaggregates revenue from customer contracts by major product group for each reporting segment. The Company believes this method best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregation of revenue for the three months ended March 31, 2020 and March 31, 2019 is as follows:

(in thousands)	Three months ended March 31, 2020
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	28,838	$	8,571	$	—
Mission Systems	—		—		8,448
ISR Solutions	—		—		8,875
TOTAL	$	28,838	$	8,571	$	17,323

(in thousands)	Three months ended March 31, 2019
	Restaurant/Retail - Point in Time		Restaurant/Retail - Over Time		Government - Over Time
Restaurant/Retail	$	23,023	$	5,103	$	—
Grocery	490		944		—
Mission Systems	—		—		8,546
ISR Solutions	—		—		6,576
TOTAL	$	23,513	$	6,047	$	15,122

Practical Expedients and Exemptions

The Company generally expenses sales commissions when incurred because the amortization period is less than one year or the total amount of commissions is immaterial. We record these expenses in selling, general and administrative in the condensed consolidated statements of operations.

We elected to exclude from the transaction price measurement, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value added, and some excise taxes).

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Stock Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2018
Share-based Payment Arrangement [Abstract]
Stock based compensation	$ 1.1	$ 0.2
Unrecognized compensation expense	$ 10.1

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Segment and Related Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)
Segment and Related Information [Abstract]
Number of operating segments | segment	2
Number of reportable segments | segment	2
Information as to the Company's segments [Abstract]
Revenue	$ 54,732	$ 44,682
Operating loss	(5,455)	(2,101)
Other expense	(625)	(430)
Interest expense, net	(1,972)	(146)
Loss on extinguishment of debt	(8,123)	0
Loss before benefit from (provision for) income taxes	(16,175)	(2,677)
Depreciation, amortization and accretion	3,142	1,012
Capital expenditures including software costs	2,040	1,923
Operating segments | Restaurant/Retail
Information as to the Company's segments [Abstract]
Revenue	37,409	29,560
Operating loss	(6,070)	(2,982)
Depreciation, amortization and accretion	1,855	868
Capital expenditures including software costs	1,707	1,063
Operating segments | Government
Information as to the Company's segments [Abstract]
Revenue	17,323	15,122
Operating loss	1,179	1,363
Depreciation, amortization and accretion	16	19
Capital expenditures including software costs	211	176
Other
Information as to the Company's segments [Abstract]
Operating loss	(564)	(482)
Depreciation, amortization and accretion	1,271	125
Capital expenditures including software costs	122	684
Reportable geographical components | United States
Information as to the Company's segments [Abstract]
Revenue	52,631	41,925
Reportable geographical components | Other Countries
Information as to the Company's segments [Abstract]
Revenue	$ 2,101	$ 2,757

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Accounts Receivable, Net

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

The Company’s accounts receivable, net, consists of:

	March 31, 2020			December 31, 2019
Government reporting segment:
Billed	$	9,895		$	11,608
Advanced billings	(754		)	(608		)
	9,141			11,000
Restaurant/Retail reporting segment:	33,678			30,774
Accounts receivable - net	$	42,819		$	41,774

At March 31, 2020 and December 31, 2019, the Company recorded allowances for doubtful accounts of $2.1 million and $1.8 million, respectively, against the accounts receivable for the Restaurant/Retail reporting segment. The changes in the allowance for doubtful accounts during the three months ended March 31, 2020 were as follows:

(in thousands)	2020
Beginning balance - January 1	$	1,849
Provisions	380
Write-offs	(156		)
Recoveries	—
Ending balance - March 31	$	2,073

Receivables recorded as of March 31, 2020 and December 31, 2019 all represent unconditional rights to payments from customers.

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Stock Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Based Compensation

Stock Based Compensation

The Company applies the fair value recognition provisions of ASC Topic 718: "Stock Compensation". The Company recorded stock based compensation of $1.1 million and $0.2 million for the three month periods ended March 31, 2020 and March 31, 2019, respectively. At March 31, 2020, the aggregate unrecognized compensation expense related to unvested equity awards was $10.1 million (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2020 through 2023.

The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending March 31, 2020:

	March 31, 2020
Expected option life	4.4 years
Weighted average risk-free interest rate	0.4		%
Weighted average expected volatility	47		%
Expected dividend yield	0		%
Fair value of options granted	$	4.87

A summary of stock option activity for the three months ended March 31, 2020:

(in thousands)	Options Outstanding		Weighted Average Exercise Price
Outstanding at January 1, 2020	410		14.50
Granted	587		12.64
Exercised	(2	)	11.66
Canceled/forfeited	(44	)	—
Outstanding at March 31, 2020	951		13.40

A summary of non-vested restricted stock activity for the three months ended March 31, 2020:

(in thousands)	Restricted Stock Awards		Weighted Average Award Value
Outstanding at Balance at January 1, 2020	171		23.53
Granted	21		29.19
Vested	(122	)	25.82
Forfeited and cancelled	(38	)	14.97
Outstanding at March 31, 2020	32		28.73

A summary of non-vested restricted stock units ("RSU") activity for the three months ended March 31, 2020:

(in thousands)	RSU Awards	Weighted Average Award Value
Outstanding at Balance at January 1, 2020	—	—
Granted	360	12.64
Vested	—	—
Forfeited and cancelled	—	—
Outstanding at March 31, 2020	360	12.64

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Revenue Recognition - Remaining Performance Obligations (Details)	Mar. 31, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period
Restaurant/Retail | Current - under one year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation, percentage	59.00%
Restaurant/Retail | Non-current - over one year | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations, period	60 months

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Segment and Related Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of information of the company's segments

Information as to the Company’s reporting segments is set forth below (in thousands).

	Three Months Ended March 31,
	2020			2019
Revenues:
Restaurant/Retail	$	37,409		$	29,560
Government	17,323			15,122
Total	$	54,732		$	44,682
Operating loss:
Restaurant/Retail	$	(6,070	)	$	(2,982	)
Government	1,179			1,363
Other	(564		)	(482		)
Total	(5,455		)	(2,101		)
Other expense	(625		)	(430		)
Interest expense, net	(1,972		)	(146		)
Loss on extinguishment of debt	(8,123		)	—
Loss before provision for income taxes	$	(16,175	)	$	(2,677	)
Depreciation, amortization and accretion:
Restaurant/Retail	$	1,855		$	868
Government	16			19
Other	1,271			125
Total	$	3,142		$	1,012
Capital expenditures including software costs:
Restaurant/Retail	$	1,707		$	1,063
Government	211			176
Other	122			684
Total	$	2,040		$	1,923
Revenues by country:
United States	$	52,631		$	41,925
Other Countries	2,101			2,757
Total	$	54,732		$	44,682

Schedule of identifiable assets by reporting segment

The following table represents identifiable long-lived assets by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	1,974	$	1,987
Government	257		272
Other	11,821		12,093
Total	$	14,052	$	14,352

Schedule of revenue by geographic area

The following table represents identifiable long-lived assets by country based on the location of the assets (in thousands).

	March 31, 2020		December 31, 2019
United States	$	13,760	$	14,260
Other Countries	292		92
Total	$	14,052	$	14,352

Schedule of goodwill by reporting segment

The following table represents goodwill by reporting segment (in thousands).

	March 31, 2020		December 31, 2019
Restaurant/Retail	$	40,650	$	40,650
Government	736		736
Total	$	41,386	$	41,386

Schedule of revenue by major customers

Customers comprising 10% or more of the Company’s total revenues by reporting segment are summarized as follows:

	Three months ended March 31,
	2020		2019
Restaurant/Retail reporting segment:
McDonald’s Corporation	9	%	10	%
Yum! Brands, Inc.	11	%	13	%
Dairy Queen	16	%	7	%
Government reporting segment:
U.S. Department of Defense	32	%	34	%
All Others	32	%	36	%
	100	%	100	%

No other customer within All Others represented 10% of more of the Company’s total revenue for the three months ended March 31, 2020 or 2019.

	December 31,
	2019		2018
Restaurant and Retail segment:
McDonald’s Corporation	10	%	19	%
Yum! Brands, Inc.	16	%	13	%
Government segment:
U.S. Department of Defense	34	%	33	%
All Others	40	%	35	%
	100	%	100	%

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Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 18, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 41,386	$ 41,386
Restaurant Magic
Acquired Finite-Lived Intangible Assets [Line Items]
Tangible assets			$ 1,344
Goodwill			27,945
Total assets			47,689
Accounts payable and accrued expenses			629
Deferred revenue			715
Earn out liability			3,340
Cash consideration			43,005
Restaurant Magic | Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets			16,400
Restaurant Magic | Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets			1,100
Restaurant Magic | Trade name
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets			$ 900