Vislink Technologies(VISL) - 2022 Q1 - Quarterly Report

PART I: FINANCIAL INFORMATION Financial Statements This section presents Vislink Technologies, Inc.'s unaudited condensed consolidated financial statements as of March 31, 2022, including balance sheets, statements of operations, cash flows, and related notes Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash | $31,023 | $36,231 | | Total current assets | $56,283 | $59,664 | | Total assets | $64,445 | $68,120 | | Total current liabilities | $7,680 | $9,002 | | Total liabilities | $10,100 | $11,487 | | Total stockholders' equity | $54,345 | $56,633 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue, net | $7,154 | $4,090 | | Loss from operations | $(2,850) | $(2,779) | | Net loss | $(2,767) | $(2,667) | | Basic and diluted loss per share | $(0.06) | $(0.07) | Condensed Consolidated Statements of Cash Flows (in thousands) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,879) | $(4,344) | | Net cash used in investing activities | $(209) | $(46) | | Net cash (used in) provided by financing activities | $(99) | $59,068 | | Net (decrease) increase in cash | $(5,208) | $54,687 | - The company operates as a single segment, offering live video and data solutions for broadcast, surveillance, and defense markets, with key offerings enhanced by the Mobile Viewpoint acquisition[22][23][25] - As of March 31, 2022, the company held $31.0 million in cash and $48.6 million in working capital, with management confident in sufficient liquidity for the next twelve months despite a net loss[66][68] Revenue by Primary Geographical Market (in thousands) | Region | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | North America | $2,428 | $1,692 | | Europe | $2,483 | $1,279 | | Asia | $542 | $431 | | Rest of World | $1,651 | $542 | | South America | $50 | $146 | | Total | $7,154 | $4,090 | - The company faces customer concentration risk, with one customer representing 21% of Q1 2022 revenue and 45% of net accounts receivable as of March 31, 2022[125][126] Management's Discussion and Analysis of Financial Condition and Results of Operations Q1 2022 revenue increased 80% to $7.2 million due to live events and MVP acquisition, while operating expenses and net loss also rose, yet the company maintains strong liquidity Comparison of Operations for the three months ended March 31 (in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $7.2 | $4.0 | +80% | | Cost of Components and Personnel | $3.4 | $2.2 | +55% | | General and Administrative Expenses | $4.9 | $3.6 | +36% | | Research and Development Expenses | $1.1 | $0.6 | +83% | | Net Loss | $2.8 | $2.7 | +4% | - The 80% revenue increase was primarily driven by a resurgence in live event sales, higher military/government sales, and contributions from the MVP acquisition[152] - The rise in General and Administrative expenses was primarily due to a $0.7 million increase in stock-based compensation and a $0.4 million increase in salaries and benefits[155] - The company actively monitors COVID-19 related supply chain risks, mitigating shortages and delays by increasing key component inventory levels[137][140] - As of March 31, 2022, the company held $31.0 million in cash and $48.6 million in working capital, which management deems sufficient for operations over the next twelve months[161][163] Quantitative and Qualitative Disclosures About Market Risk No material changes to market risk disclosures were reported since the company's 2021 annual report - As of March 31, 2022, no material changes to market risk information have occurred since the company's 2021 annual report[172] Controls and Procedures Management concluded disclosure controls and procedures were ineffective as of March 31, 2022, due to an un-remediated material weakness, with MVP integration ongoing - The company's Certifying Officers determined disclosure controls and procedures were ineffective as of March 31, 2022, due to a previously identified material weakness[175] - Remediation efforts, including enhanced supervisory review, are ongoing, but the material weakness remained un-remediated as of March 31, 2022[177] - Integration of the acquired MVP business into operations and internal control processes is underway, expected to conclude within one year of acquisition[178] PART II: OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - No legal proceedings were reported[181] Risk Factors The company faces a material risk of delisting from Nasdaq Capital Market if its common stock bid price falls below $1.00 per share - The company's common stock faces delisting risk from the Nasdaq Capital Market if its closing bid price remains below $1.00 per share for over 30 consecutive business days[181] - Delisting would negatively impact stock price, investor trading ability, and the company's capacity to raise capital or pursue strategic financing[182] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds were reported[183] Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported[184] Mine Safety Disclosures This item is not applicable to the company - This disclosure is not applicable[185] Other Information The company reported no other information - No other information was reported[186] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, material agreements, and officer certifications - The report includes various exhibits, such as the Certificate of Incorporation, bylaws, warrant forms, incentive plans, and required officer certifications (31.1, 31.2, 32.1, 32.2)[187][188] Signatures This section contains the authorized signatures for the report - The report was duly signed and authorized on May 16, 2022, by Carleton Miller, Chief Executive Officer, and Michael Bond, Chief Financial Officer[193]