~~Total revenues were $15.0 million~~operations for the three months ended ~~September 30, 2017 compared to $16.1 million for the three months ended September 30, 2016, a decrease of approximately $1.1 million or approximately 7%.~~March 31, 2021.

~~Revenues from~~The situation surrounding the DDS segment were $11.6 million and $12.1 million for the three months ended September 30, 2017 and 2016, respectively, a decrease of approximately $0.5 million or approximately 4%. The decline was on account of lower volume from clients.

~~Revenues from the IADS segment were $1.2 million and $1.0 million for the three months ended September 30, 2017 and September 30, 2016. The increase reflects additional volume from Synodex clients.~~

Revenues from the MIS segment were $2.2 million and $3.0 million for the three months ended September 30, 2017 and 2016, respectively, a decrease of $0.8 million or approximately 27% during the period following the acquisition of Agility in July 2016.

Two clients in the DDS segment generated approximately 30% of the Company’s total revenues for the three months ended September 30, 2017 and 27% of the Company’s total revenues for the three months ended September 30, 2016. No other client accounted for 10% or more of total revenues during these periods. Further, for the three months ended September 30, 2017 and 2016, revenues from non-U.S. clients accounted for 49% and 48%, respectively, of the Company’s total revenues.

Direct operating costs were $11.5 million and $12.4 million for the three months ended September 30, 2017 and 2016, respectively, a decrease of $0.9 million or 7%. Direct operating costs as a percentage of total revenues was 77% for each of the three months ended September 30, 2017 and September 30, 2016.

Direct operating costs for the DDS segment were approximately $8.7 million and $9.6 million for the three months ended September 30, 2017 and 2016, respectively, a decrease of $0.9 million or 9%. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 75% and 80% for the three months ended September 30, 2017 and 2016, respectively. The decline in direct operating costs and as a percentage of revenues reflects the decline in revenues as well as cost rationalization.

Direct operating costs for the IADS segment were $1.2 million for the three months ended September 30, 2017 and $1.3 million for the three months ended September 30, 2016, net of intersegment profits. The decline in direct operating costs reflects efficiencies in the production headcount. Direct operating costs for the IADS segment as a percentage of IADS segment revenues were 100% and 127% for the three months ended September 30, 2017 and 2016, respectively.

Direct operating costs for the MIS segment were $1.6 million and $1.5 million for the three months ended September 30, 2017 and 2016, respectively. Direct operating costs for the MIS segment as a percentage of MIS segment revenues were 73% and 50% for the three months ended September 30, 2017 and 2016, respectively. The increased percentage reflects the 27% decline in MIS revenues during the period following the acquisition of Agility in July 2016.

Selling and administrative expenses were $4.4 million for the three months ended September 30, 2017 compared to $5.1 million for the three months ended September 30, 2016, a decrease of $0.7 million or approximately 14%. Selling and administrative expenses as a percentage of total revenues decreased to 29% for the three months ended September 30, 2017 from 32% for the three months ended September 30, 2016.

Selling and administrative expenses for the DDS segment were $2.7 million and $3.3 million for the three months ended September 30, 2017 and September 30, 2016, respectively, a decline of $0.6 million or 18%. For the three months ended September 30, 2016, the DDS segment incurred $0.25 million of legal, professional and other costs in connection with an internal investigation and there were miscellaneous administrative cost savings during the three months ended September 30, 2017. As a percentage of DDS revenues, DDS selling and administrative expenses were 23% for the three months ended September 30, 2017 and 27% for the three months ended September 30, 2016. The decline as a percentage of revenues was primarily caused by the decline in selling and administrative expenses.

Selling and administrative expenses for the IADS segment were $0.2 million and $0.3 million for each of the three months ended September 30, 2017 and 2016, respectively. Selling and administrative expenses for the IADS segment as a percentage of IADS segment revenues~~was17% and 26% for the three months ended September 30, 2017 and 2016, respectively.~~

Selling and administrative expenses for the MIS segment were $1.5 million for each of the three months ended September 30, 2017 and 2016. Selling and administrative expenses for the MIS segment as a percentage of MIS segment revenues was 68% for the three months ended September 30, 2017 and 56% for the three months ended September 30, 2016. The increased percentage reflects the 27% decline in MIS revenues during the period following the acquisition of Agility in July 2016.

~~On September 30, 2016, we~~COVID-19 crisis remains fluid and the ~~other parties involved in the acquisition~~extent and duration of ~~MediaMiser amended the terms on which one of our subsidiaries was required to make a supplemental purchase price payment for MediaMiser. Prior~~its impact to the ~~amendment,~~economy remains unclear. For this reason, we cannot reasonably estimate with any degree of certainty the amount of the supplemental purchase price payment was to be determined by the achievement of certain financial thresholds and was in no event to exceed $3.8 million (C$5 million). The amendment fixed the amount of the supplemental purchase price payment at $1.5 million (C$2 million) payable in two equal installments. The first instalment was paidfuture impact that it may have on March 31, 2017 and the second instalment is payable on March 31, 2018 to designated recipients, except that no payments will be made to designated recipients who fail to satisfy specified conditions. We have the option to pay up to 70% of the supplemental amount in shares of Innodata Inc. common stock. We recorded a $1.0 million charge in our ~~statement~~results of operations and financial condition. The potential for ~~the third quarter of 2016 to reflect the amendment.~~

~~We recorded~~ a provision for income taxes of $0.3 million and $0.4 million for the three months ended September 30, 2017 and 2016, respectively. Taxes primarily consist of a provision for foreign taxes recorded in accordance with the local tax regulations bymaterial impact on our foreign subsidiaries. Effective income tax rates are disproportionate due to the losses incurred by our U.S. entity and our Canadian subsidiary and a valuation allowance recorded on deferred taxes on these entities. Some of our foreign subsidiaries are subject to tax holidays or preferential tax rates which reduce our overall effective tax rate when compared to the U.S. statutory tax rate. In addition, the earnings of our foreign subsidiaries are not subject to tax in the U.S. unless the earnings are repatriated.

We have a valuation allowance on all of our U.S. deferred tax assets on account of continuing losses incurred by our U.S. entity. In addition, we also have a valuation allowance on deferred tax assets of our Canadian subsidiary on account of continuing losses.

~~We incurred a net loss of $1.1 million during the three months ended September 30, 2017 compared to net loss of $2.8 million during the three months endedSeptember 30, 2016~~.

~~Net income for the DDS segment was $0.1 million for the three months ended September 30, 2017, compared to net loss of $2.1 million for the three months endedSeptember 30, 2016~~, net of intersegment profits. The change was due to the decline in revenues offset by a decline in direct operating costs and selling and administrative expenses that were mentioned above, and a charge to our operations referred to under “Contingent Consideration” for the three months ended September 30, 2016.

~~Net loss for the IADS segment was $0.3 million for the three months ended September 30, 2017 compared to net loss of $0.6 million for the three months endedSeptember 30, 2016, net of intersegment profits. The decline in net loss is primarily due to an increase in revenues and a decline in direct operating costs and selling and administrative expense.~~

Net loss for the MIS segment was $0.9 million for the three months ended September 30, 2017 compared to net loss of $0.1 million for the three months ended September 30, 2016. The increase in net loss was due to lower revenues.

Adjusted EBITDA for the three months ended September 30, 2017 was $0.2 million compared to a loss of $0.4 million for the three months ended September 30, 2016. Adjusted EBITDA for the DDS segment was $1.0 million for the three months ended September 30, 2017 compared to break-even for the three months ended September 30, 2016. Adjusted EBITDA was a loss of $0.3 million and a loss of $0.6 million for the IADS segment for the three months ended September 30, 2017 and 2016, respectively. Adjusted EBITDA was a loss of $0.5 million for the three months ended September 30, 2017 compared to $0.2 million for the three months ended September 30, 2016 for the MIS segment.

~~Total revenues were $45.3 million for the nine months ended September 30, 2017 compared to $47.4 million for the nine months ended September 30, 2016, a decline of approximately $2.1 million or 4%.~~

Revenues from the DDS segment were $34.8 million and $38.9 million for the nine months ended September 30, 2017 and 2016, respectively, a decrease of $4.1 million or 11%. The decline was primarily on account of reduced volume from a key e-book client amounting to $3.1 million and lower volume from other clients. The decline was partially offset by an increase in revenue for one new client for whom services began in the fourth quarter of 2016.

Revenues from the IADS segment were $3.4 million and $3.1 million for the nine months ended September 30, 2017 and 2016, respectively, an increase of $0.3 million or 10%. The increase primarily reflects additional volume from docGenix clients.

Revenues from the MIS segment were $7.1 million for the nine months ended September 30, 2017 and $5.4 million for the nine months ended September 30, 2016, an increase of $1.7 million or 31%. The increase is attributable to the acquisition of the Agility business in July 2016.

Two clients in the DDS segment generated approximately 29% of the Company’s total revenues for the nine months ended September 30, 2017 and 30% of the Company’s total revenues for the nine months ended September 30, 2016. No other client accounted for 10% or more of total revenues during these periods. Further, for the nine months ended September 30, 2017 and 2016, revenues from non-U.S. clients accounted for 50% and 48%, respectively, of the Company’s total revenues.

Direct operating costs were $34.6 million and $35.6 million for the nine months ended September 30, 2017 and 2016, respectively, a decrease of $1 million or 3%. Direct operating costs as a percentage of total revenues increased to 76% for the nine months ended September 30, 2017 compared to 75% for the nine months ended September 30, 2016.

Direct operating costs for the DDS segment were $26.7 million and $28.8 million for the nine months ended September 30, 2017 and 2016, respectively, a decrease of $2.1 million or approximately 7%. The decline in direct operating costs is due to a decline in revenues excluding revenues that were previously deferred for one client, and it also reflects cost rationalization. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 77% and 74% for the nine months ended September 30, 2017 and 2016, respectively. The increase in direct operating costs as a percentage of DDS segment revenues primarily reflects a decline in DDS segment direct operating costs relative to a decline in revenues.

Direct operating costs for the IADS segment were $3.3 million for the nine months ended September 30, 2017 and $3.7 million for the nine months ended September 30, 2016, net of intersegment profits. The decline in direct operating costs reflects efficiencies in the production headcount. Direct operating costs for the IADS segment as a percentage of IADS segment revenues were 97% and 119% for the nine months ended September 30, 2017 and 2016, respectively.

Direct operating costs for the MIS segment were $4.6 million and $3.1 million for the nine months ended September 30, 2017 and 2016, respectively, an increase of approximately 48%. The increase in direct operating costs was primarily on account of the acquisition of the Agility business in July 2016. Direct operating costs for the MIS segment as a percentage of MIS segment revenues were 65% and 57% for the nine months ended September 30, 2017 and 2016, respectively.

Selling and administrative expenses were $13.1 million for the nine months ended September 30, 2017 compared to $14.5 million for the nine months ended September 30, 2016, a decrease of $1.4 million or approximately 10%. Selling and administrative expenses as a percentage of total revenues were 29% for the nine months ended September 30, 2017 and 31% for the nine months ended September 30, 2016.

Selling and administrative expenses for the DDS segment were $8.2 million and $10.1 million for the nine months ended September 30, 2017 and September 30, 2016, respectively, a decrease of $1.9 million or 19%. For the nine months ended September 30, 2016, the DDS segment incurred $1.5 million of legal, professional and other costs in connection with an internal investigation and for the nine months ended September 30, 2017, DDS selling and administrative expenses were reduced by the recovery of the approximately $0.3 million of accounts receivable from two clients. Selling and administrative expenses for the DDS segment as a percentage of DDS segment revenues decreased to 24% for the nine months ended September 30, 2017 compared to 26% for the nine months ended September 30, 2016. The decline as a percentage of revenues was primarily caused by the decline in selling and administrative expenses.

Selling and administrative expenses for the IADS segment were $0.8 million and $1.0 million for the nine months ended September 30, 2017 and 2016, respectively. The decrease in selling and administrative expenses is on account of cost optimization. Selling and administrative expenses for the IADS segment as a percentage of IADS segment revenues decreased to 24% for the nine months ended September 30, 2017 compared to 32% for the nine months ended September 30, 2016. The decrease in selling and administrative expenses as a percentage of IADS segment revenues was principally attributable to the increase in IADS revenues and the decline in selling and administrative expenses.

Selling and administrative costs for the MIS segment were $4.1 million and $3.4 million for the nine months ended September 30, 2017 and 2016, respectively, an increase of $0.7 million or 21%. The increase in selling and administrative costs was primarily on account of the acquisition of the Agility business in July 2016. Selling and administrative expenses for the MIS segment as a percentage of MIS segment revenues declined to 58% for the nine months ended September 30, 2017 from 63% for the nine months ended September 30, 2016.

On September 30, 2016, we and the other parties involved in the acquisition of MediaMiser amended the terms on which one of our subsidiaries was required to make a supplemental purchase price payment for MediaMiser. Prior to the amendment, the amount of the supplemental purchase price payment was to be determined by the achievement of certain financial thresholds and was in no event to exceed $3.8 million (C$5 million). The amendment fixed the amount of the supplemental purchase price payment at $1.5 million (C$2 million) payable in two equal installments. The first instalment was paid on March 31, 2017 and the second instalment is payable on March 31, 2018 to designated recipients, except that no payments will be made to designated recipients who fail to satisfy specified conditions. We have the option to pay up to 70% of the supplemental amount in shares of Innodata Inc. common stock. We recorded a $1.0 million charge in our statementresults of operations ~~for~~and financial position increases the ~~third quarter~~longer the virus affects the level of ~~2016 to reflect the amendment.~~

We recorded a provision for income taxes of $0.8 million and $1.1 million for the nine months ended September 30, 2017 and 2016, respectively. Taxes primarily consist of a provision for foreign taxes recorded in accordance with the local tax regulations by our foreign subsidiaries. Effective income tax rates are disproportionate due to the losses incurred by our U.S. entity and our Canadian subsidiary and a valuation allowance recorded on deferred taxes on these entities. Some of our foreign subsidiaries are subject to tax holidays or preferential tax rates which reduce our overall effective tax rate when compared to the U.S. statutory tax rate. In addition, the earnings of our foreign subsidiaries are not subject to tax in the U.S. unless the earnings are repatriated.

~~We incurred a net loss of $3.0 million during the nine months ended September 30, 2017 compared to net loss of $4.5 million during the nine months endedSeptember 30, 2016~~.

Net loss for the DDS segment was a net loss of $0.6 million for the nine months ended September 30, 2017, compared to a net loss of $1.8 million for the nine months ended September 30, 2016, net of intersegment profits. The change was due to the decline in revenues offset by a decline in direct operating costs and selling and administrative expenses that were mentioned above, and a charge to our operations referred to under “Contingent Consideration” for the nine months ended September 30, 2016.

~~Net loss for the IADS segment was $0.8 million for the nine months ended September 30, 2017 compared to net loss of $1.6 million for the nine months endedSeptember 30, 2016, net of intersegment profits. The decline in net loss is primarily due to an increase in revenues and a decline in direct operating costs and selling and administrative expense.~~

Net loss for the MIS segment was $1.6 million for the nine months ended September 30, 2017 compared to net loss of $1.1 million for the nine months ended September 30, 2016. The increased net loss is mainly due to the decline in revenues and an increase in direct operating costs and selling and administrative expenses.

Adjusted EBITDA for the nine months ended September 30, 2017 was $1.0 million compared to $0.3 million for the nine months ended September 30, 2016, an increase of $0.7 million. Adjusted EBITDA for the DDS segment was $2.3 million and $2.5 million for the nine months ended September 30, 2017 and 2016, respectively, a decrease of $0.2 million or approximately 8%. Adjusted EBITDA was a loss of $0.7 million and a loss of $1.6 million for the IADS segment for the nine months ended September 30, 2017 and 2016, respectively. Adjusted EBITDA was a loss of $0.6 million for the MIS segment for each of the nine months ended September 30, 2017 and 2016.

~~Selected measures of liquidity and capital resources, expressed in thousands, are as follows:~~

~~At September 30, 2017, we had cash and cash equivalents of $12.5 million, of which $9.2 million was held by our foreign subsidiaries, and the $3.3 million balance was held~~economic activity in the United ~~States. If needed, amounts held by foreign subsidiaries could be repatriated to the United~~ States to satisfy working capital needs of the U.S. entity, but under current law, they would be subject to United States federal income taxes. As of September 30, 2017, our intent is to permanently reinvest these funds outside the United States, except for $7.0 million in projected deemed dividends described below.and globally.

WeWith the current level of demand for our services, we believe we have used, and plan to use, our cash and cash equivalents for (i) investments in IADS which are expected to be at the rate of $0.1-0.4 million per quarter in the immediate future; (ii) investments in MIS which are expected to be at the rate of $0.4-0.8 million per quarter in the immediate future; (iii) the expansion of our other operations; (iv) general corporate purposes, including working capital; and (v) possible business acquisitions. As of September 30, 2017, we had working capital of approximately $11.2 million, as compared to working capital of approximately $14.4 million as of December 31, 2016.

~~We believe that our~~ existing cash and cash equivalents ~~and internally generated funds will~~that provide sufficient sources of liquidity to satisfy our financial needs for the next 12 ~~months. However,~~months from the date of the filing of this Report (refer to Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” for additional information). In the event we experience a significant or prolonged reduction in revenues, the likelihood of which is uncertain, we would seek to manage our liquidity by reducing capital expenditures, deferring investment activities, and reducing operating costs as we would likely have no ~~bank facilities or lines~~other sources of credit, and continuing material reductions in our cash and cash equivalents from operating losses, capital expenditures, acquisitions or otherwise could materially and adversely affect us. See the risk factor entitled “Our liquidity ~~could be affected if our losses continue.” in our Report on Form 10K for the year ended December 31, 2016.~~

~~During the nine months ended September 30, 2017, our U.S. entity deferred $4.7 million in payments due~~ to ~~its Asian operating subsidiaries. The deferral in payments resulted~~support ongoing operations in a ~~deemed dividend~~manner that is ~~taxable income~~not significantly detrimental to the U.S. entity and is set off against its net operating loss carryforwards. We project that during the balance of 2017 through 2018 our U.S. entity will not have sufficient cash to pay in full amounts that will be payable by it to its Asian operating subsidiaries and that the cash deficit will amount to approximately $7.0 million. The resulting deferral in payments would similarly result in a deemed dividend that would be taxable income to the U.S. entity and would be set off against its net operating loss carryforwards. We adjusted our deferred tax assets and the corresponding valuation allowance as of September 30, 2017 to reflect the projected deferral in payments.

Cash provided by our operating activities for the nine months ended September 30, 2017 was $1.2 million, resulting from a net loss of $3.2 million and adjustments for non-cash items of $3.4 million and $1.0 million from working capital. Adjustments for non-cash items primarily consisted of $2.8 million for depreciation and amortization, stock option expense of $0.7 million and a reduction in tax provisions of $0.3 million. Working capital activities primarily consisted of a source of cash of $0.7 million due to an increase in accounts receivable and a $0.3 million increase in the other working capital accounts.

Cash used in our operating activities for the nine months ended September 30, 2016 was $1.1 million, resulting from a net loss of $4.9 million and adjustments for non-cash items of $3.8 million. Adjustments for non-cash items primarily consisted of $2.2 million for depreciation and amortization, change in fair value of contingent consideration of $1.0 million, stock option expense of $0.7 million and reduction in tax provisions of $0.3 million.

Our days’ sales outstanding (DSO) for the nine months ended September 30, 2017 was 59 days compared to 55 days for the year ended December 31, 2016. We calculate DSO for a reported period by first dividing the total revenues for the period by the average net accounts receivable for the period (which is the sum of the net accounts receivable at the beginning of the period and the net accounts receivable at the end of the period, divided by two), to yield an amount we refer to as the “accounts receivable turnover.” Then we divide the total number of days within the reported period by the accounts receivable turnover to yield DSO expressed in number of days.

For the nine months ended September 30, 2017 cash used in our investing activities was $2.9 million. These expenditures principally consisted of construction costs related to the relocation of our new corporate offices in the US and Canada and the purchase of technology equipment including servers, network infrastructure and workstations. We continue to expense all capital expenditures for the IADS segment.

For the nine months ended September 30, 2016, cash used in our investing activities was $6.1 million. These expenditures consisted of $4.1 million paid to acquire Agility in July 2016 and capital expenditures of $2.0 million principally for the purchase of technology equipment including servers, network infrastructure and workstations.

During the next twelve months, we anticipate that capital expenditures for ongoing technology, equipment, infrastructure upgrades and development of our proprietary software platform, tools and technologies will approximate $2.0 to $3.0 million, a portion of which we may finance.

For the nine months ended September 30, 2017, cash used in financing activities consisted of proceeds from equipment financing of $1.0 million and total payments of long-term obligations of $1.1 million. For the nine months ended September 30, 2016, cash used in financing activities was comprised of total payments of long term obligations of $0.6 million.

The table below summarizes our contractual obligations (in thousands) at September 30, 2017 and the effects that those obligations are expected to have on our liquidity and cash flows in future periods.

Our most significant costs are the salaries and related benefits of our employees in Asia. We are exposed to ~~higher~~potential high inflation in wage rates in the countries in which we operate. We generally perform work for our clients under project-specific contracts, requirements-based contracts or long-term contracts. We must adequately anticipate wage increases, particularly on our fixed-price contracts. There can be no assurance that we will be able to recover cost increases through increases in the prices that we charge for our services to our clients.

Our quarterly operating results are subject to certain fluctuations. We experience fluctuations in our revenue and earnings as we replace and begin new projects, which may have some normal start-up delays, or we may be unable to replace a project entirely. These and other factors may contribute to fluctuations in our operating results from quarter to quarter. In addition, as some of our Asian facilities are closed during holidays in the fourth quarter, we typically incur higher wages, due to overtime, that reduce our margins.

Our Synodex subsidiary experiences seasonal fluctuations in revenues. Typically, revenue is lowest in the third quarter of the calendar year and highest in the fourth quarter of the calendar year. The seasonality is directly linked to the number of life insurance applications received by the insurance companies.

For further information refer to the risk factor titled “Quarterly fluctuations in our revenues and results of operations could make financial forecasting difficult and could negatively affect our stock price.” in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

Amounts in the MD&A below have been rounded. All percentages have been calculated using rounded amounts.

Three Months Ended March 31, 2021 and 2020

Revenues

Total revenues were $16.0 million for the three months ended March 31, 2021, compared to $14.5 million for the three months ended March 31, 2020, an increase of approximately $1.5 million or 10%. The increase was attributable to increased revenues from the DDS and Agility segments, partially offset by decreases in the Synodex segment.

Revenues from the DDS segment were $11.8 million and $10.4 million for the three months ended March 31, 2021 and 2020, respectively, an increase of approximately $1.4 million or 13%. The increase was primarily attributable to revenue from a new customer.

Revenues from the Synodex segment were $1.0 million and $1.3 million for the three months ended March 31, 2021 and 2020, respectively, a decrease of approximately $0.3 million or 23%. The decrease was primarily attributed to lower volume from two existing clients.

Revenues from the Agility segment were $3.2 million and $2.8 million for the three months ended March 31, 2021 and 2020, respectively, an increase of $0.4 million or approximately 14%. The increase was primarily attributable to higher revenues from subscriptions to our Agility intelligent data platform and newswire products.

One client in the DDS segment generated approximately 12% and 14% of the Company’s total revenues for the three months ended March 31, 2021 and March 31, 2020, respectively. No other client accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. clients accounted for 49% and 54% of the Company’s total revenues for the three months ended March 31, 2021 and 2020, respectively.

Direct Operating Costs

Direct operating costs consist of direct payroll, occupancy costs, data center hosting fees, content acquisition costs, depreciation and amortization, travel, telecommunications, computer services, and supplies, realized gain (loss) on forward contracts, foreign currency revaluation gain (loss), and other direct expenses that are incurred in providing services to our clients.

Direct operating costs were $10.1 million and $9.7 million for the three months ended March 31, 2021 and 2020, respectively, an increase of $0.4 million. The increase was primarily due to higher labor related costs of $0.8 million, offset in part by $0.2 million of foreign exchange gain, $0.1 million decrease in occupancy and related costs and $0.1 million decrease in other direct operating expenses. Direct operating costs as a percentage of total revenues were 63% and 67% for the three months ended March 31, 2021 and 2020, respectively. The decrease in direct operating costs as a percentage of revenues was attributable to higher revenues, partially offset by an increase in direct operating costs.

Direct operating costs for the DDS segment were approximately $7.6 million and $7.1 million for the three months ended March 31, 2021 and 2020, respectively, an increase of $0.5 million. The increase was primarily due to higher labor related costs of $0.9 million, offset in part by a $0.2 million lower occupancy and related costs and a $0.2 million foreign exchange gain. Direct operating costs for the DDS segment as a percentage of DDS segment revenues were 64% and 68% for the three months ended March 31, 2021 and 2020, respectively. The decrease in direct operating costs as a percentage of revenues was attributable to higher revenues, partially offset by an increase in direct operating costs.

Direct operating costs for the Synodex segment were $0.7 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively, a decrease of $0.2 million. The decrease was primarily due to lower labor related costs and software maintenance costs of $0.1 million each. Direct operating costs for the Synodex segment as a percentage of Synodex segment revenues were 70% and 69% for the three months ended March 31, 2021 and 2020, respectively. The increase in direct operating costs as a percentage of revenues was primarily due to lower revenue from two existing clients.

Direct operating costs for the Agility segment were $1.8 million and $1.7 million for the three months ended March 31, 2021 and 2020, respectively. The increase of $0.1 million was primarily due to higher software amortization costs during the quarter. Direct operating costs for the Agility segment as a percentage of Agility segment revenues were 56% and 61% for the three months ended March 31, 2021 and 2020, respectively. The decrease in direct operating costs as a percentage of revenues was attributable to higher revenues, partially offset by an increase in direct operating costs.

Selling and Administrative Expenses

Selling and administrative expenses consist of management and administrative salaries, sales and marketing costs including commissions, new services research and related software development, third-party software, advertising and trade conferences, professional fees and consultant costs, and other administrative overhead costs.

Selling and administrative expenses were $5.5 million for the three months ended March 31, 2021, compared to $4.6 million for the three months ended March 31, 2020, an increase of $0.9 million. The increase was primarily due to new hires, labor related incentives, recruitment, and other professional fees to support revenue growth plan across all business segments. Selling and administrative expenses as a percentage of total revenues were 34% and 32% for the three months ended March 31, 2021 and 2020, respectively. The increase in selling and administrative expenses as a percentage of revenues was attributable to higher selling and administrative expenses offset by increased revenues.

Selling and administrative expenses for the DDS segment were $3.5 million and $3.0 million for the three months ended March 31, 2021 and 2020, respectively, an increase of $0.5 million. The increase in selling and administrative expenses for the DDS segment was primarily due to new hires, labor related incentives, recruitment, and other professional fees. Selling and administrative expenses for the DDS segment as a percentage of DDS revenues were 30% and 29% for the three months ended March 31, 2021 and March 31, 2020, respectively. The increase in selling and administrative expenses as a percentage of revenues was attributable to higher selling and administrative expenses offset by increased revenues.

Selling and administrative expenses for the Synodex segment were $0.2 million for each of the three months ended March 31, 2021 and 2020. Selling and administrative expenses for the Synodex segment as a percentage of Synodex segment revenues were 20% and 15% for the three months ended March 31, 2020 and March 31, 2020, respectively. The increase in selling and administrative expenses as a percentage of revenues was attributable to lower revenues.

Selling and administrative expenses for the Agility segment were $1.8 million and $1.4 million for the three months ended March 31, 2021 and 2020, respectively. The increase of $0.4 million was primarily due to new hires and recruitment fees. Selling and administrative expenses for the Agility segment as a percentage of Agility segment revenues were 56% and 50% for the three months ended March 31, 2021 and March 31, 2020, respectively. The increase in selling and administrative expenses as a percentage of revenues was primarily due to higher selling and administrative expenses offset by increased revenues.

Income Taxes

We recorded a tax benefit of $0.1 million compared to a provision of $0.4 million for the three months ended March 31, 2021 and 2020, respectively. The decrease in tax provision of $0.5 million was primarily due to the partial reversal of an accrual for an uncertain tax position due to the settlement of an income tax matter in one of our foreign subsidiaries and foreign exchange gains in the three months ended March 31, 2020.

Taxes primarily consist of a provision for foreign taxes recorded in accordance with the local tax regulations by our foreign subsidiaries. Effective income tax rates are disproportionate due to the losses incurred by the Company’s Canadian subsidiaries and a valuation allowance recorded on deferred taxes on the U.S. and Canadian entities and tax effects of foreign operations, including foreign exchange gains and losses.

Net Income (Loss)

Net income was $0.4 million during the three months ended March 31, 2021, compared to a net loss of $0.3 million during the three months ended March 31, 2020. The improvement was primarily attributable to the DDS segment.

Net income for the DDS segment was $0.7 million for the three months ended March 31, 2021, compared a net loss of $0.2 million for the three months ended March 31, 2020. The improvement in net income of $0.9 million is attributable to a lower tax provision of $0.5 million in the period and a $0.4 million net increase attributable to higher revenues partially offset by higher operating costs.

Net income for Synodex segment was $0.1 million and $0.2 million for the three months ended March 31, 2021 and March 31,2020, respectively. The decrease was due to lower revenues partially offset by lower operating costs.

Net loss for the Agility segment was $0.4 million for the three months ended March 31, 2021, compared to $0.3 million for the three months ended March 31, 2020. The increase in net loss is due to higher operating costs offset by increased revenues.

Liquidity and Capital Resources

Selected measures of liquidity and capital resources, expressed in thousands, were as follows:

	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	17,296	$	17,573
Working capital		13,528		13,515

At March 31, 2021, we had cash and cash equivalents of $17.3 million, of which $10.2 million was held by our foreign subsidiaries, and $7.1 million was held in the United States. Despite our ability under existing tax law to repatriate funds from overseas after paying the toll charge, it is our intent as of March 31, 2021, to permanently reinvest the overseas funds in our foreign subsidiaries on account of the withholding tax that we would have to incur on the actual remittances.

We have used, and plan to use, our cash and cash equivalents for (i) hiring of sales personnel; (ii) the expansion of our other operations; (iii) technology innovation; (iv) product management and strategic marketing; (v) general corporate purposes, including working capital; and (vi) possible business acquisitions. We had working capital of approximately $13.5 million as of March 31, 2021 and December 31, 2020.

Our days’ sales outstanding (DSO) were 56 days as of March 31, 2021 and 62 days as of December 31, 2020. We calculate DSO for a reported period by first dividing the total revenues for the period by the average net accounts receivable for the period (which is the sum of the net accounts receivable at the beginning of the period and the net accounts receivable at the end of the period, divided by two), to yield an amount we refer to as the “accounts receivable turnover”. Then we divide the total number of days within the reported period by the accounts receivable turnover to yield DSO expressed in number of days.

On May 4, 2020, we received loan proceeds of $579,700 under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid, Relief and Economic Security Act. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The unforgiven portion of the loan is payable over two years at an interest rate of 1% per year, with a deferral of payments for the first six months. On January 29, 2021, we applied for loan forgiveness for 100% of the approved loan under the PPP.

We believe that our existing cash and cash equivalents and internally generated funds will provide sufficient sources of liquidity to satisfy our financial needs for the next 12 months from the date of issuance of these financial statements. However, we have no bank facilities or lines of credit. Reductions in our cash and cash equivalents from operating losses, capital expenditures, adverse legal decisions, acquisitions or otherwise could materially and adversely affect the Company.

Cash Flows

Net Cash Provided by Operating activities

Cash provided by our operating activities for the three months ended March 31, 2021 was $0.8 million primarily on account of the following factors: our net income for the period of $0.4 million; a source of $1.1 million from non-cash expenses consisting of depreciation and amortization of $0.7 million, stock-based compensation of $0.3 million and pension cost of $0.1 million, offset by net changes from working capital accounts for a use of $0.7 million. Refer to the condensed consolidated statements of cash flows for further details.

Cash provided by our operating activities for the three months ended March 31, 2020 was $0.8 million primarily on account of the following factors: our net loss for the period of $0.3 million; a source of $1.0 million from non-cash expenses consisting of depreciation and amortization of $0.6 million, pension cost of $0.2 million and stock-based compensation of $0.2 million; and net changes from working capital accounts which contributed an additional source of $0.1 million. Refer to the condensed consolidated statements of cash flows for further details.

Net Cash Used in Investing Activities

For the three months ended March 31, 2021 and 2020, cash used in our investing activities was $0.5 million and $0.6 million, respectively. These expenditures principally consisted of purchases of technology equipment including servers, network infrastructure and workstations.

During the next 12 months, we anticipate that capital expenditures for ongoing technology, equipment and infrastructure upgrades will approximate $2.0 million to $2.5 million.

The source of funds for the anticipated capital expenditures will be cash generated from our operations.

Net Cash Used in Financing Activities

Cash provided by financing activities for the three months ended March 31, 2021 was from proceeds from stock option exercises of $0.6 million. Cash paid for withholding taxes on net settlement exercises for the three months ended March 31, 2021 were $0.8 million. Payments of long-term obligations were $0.3 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively.

Critical Accounting Policies and Estimates

Our discussion and analysis of our results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in conformity with ~~accounting principles generally accepted in the United States of America.~~U.S. GAAP. The preparation of ~~these~~the condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, allowance for doubtful accounts and billing adjustments, long-lived assets, intangible assets, goodwill, valuation of deferred tax assets, value of securities underlying stock-based compensation, litigation accruals, pension benefits, purchase price allocation of Agility, valuation of derivative instruments and estimated accruals for various tax exposures. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates and could have a significant adverse effect on our condensed consolidated results of operations and financial position. ~~For a discussion of our~~We believe the following critical accounting policies ~~see Part II, Item 7. “Management’s Discussion~~affect our more significant estimates and ~~Analysis~~judgments in the preparation of ~~Financial Condition and Results of Operations”~~our condensed consolidated financial statements.

The significant accounting policies used in ~~our~~preparing these condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K, ~~for the year ended December 31, 2016. There have been no material changes to our critical accounting policies during the nine months ended September 30, 2017.~~unless otherwise noted.

Recent Accounting Pronouncements

– In ~~May 2014,~~December 2019, the FASB issued ~~guidance on revenue from contracts with customers. This update is a comprehensive new revenue recognition model that requires a company~~Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This accounting guidance is effective prospectively for annual reporting periods, and interim periods within that period, beginning after December 15, 2017, and early adoption is permittedreduce complexity in the ~~first quarter of 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt the new~~accounting standards. The standard when it takes effect. We will adopt the new standard and related updates effective January 1, 2018, and intends to use the modified retrospective method of adoption. We have undertaken an initial impact analysis, which includes reviewing the terms and conditions of our Company’s existing customer contracts and applying the five discrete criteria required for recognizing revenues as set forth in ASU 2014-09. Based upon its preliminary analysis undertaken through September 30, 2017, we currently do not expect the new revenue recognition guidance to have a material impact on our consolidated condensed financial statements, and expects to conclude such analysis by December 31, 2017. We continue to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may, in conjunction with the completion of our overall assessment of the new guidance, impact our current conclusions.

~~In February 2016, the FASB issued guidance~~eliminates certain exceptions related to ~~leases. This new guidance requires lessees to recognize on~~ the ~~balance sheet a right-of-use asset, representing its right to use~~approach for intra-period tax allocation, the ~~underlying asset~~methodology for calculating income taxes in an interim period and the ~~lease term, and a lease liability~~recognition of deferred tax liabilities for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases.outside basis differences. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. This new standard is effective for annual periods beginning after December 15, 2018. Early application is permitted. We are in the process of evaluating the effect the guidance will have on our existing accounting policiesalso clarifies and condensed consolidated financial statements, but expect there will be an increase in assets and liabilities on the condensed consolidated balance sheets at adoption due to the recording of right-of-use assets and corresponding lease liabilities, which may be material.

~~In March 2016, the FASB issued guidance relating to share-based compensation. This new guidance is intended to simplify several~~simplifies other aspects of the accounting for ~~share-based payment transactions, including the~~ income ~~tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.~~taxes. The ~~new guidance~~standard is effective for ~~annual~~fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2016. Early application is permitted. We~~2020. The Company adopted ~~this~~the standard on January 1, 2021 and ~~there was~~it had no material impact on ~~our condensed consolidated financial statements.~~

~~In March 2017,~~ the FASB issued guidance on Compensation - Retirement Benefits relating to improvements in the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Under existing U.S. GAAP, an entity is required to present all components of net periodic pension cost and net periodic postretirement benefit cost aggregated as a net amount in the income statement, and this net amount may be capitalized as part of an asset where appropriate. The amendments in the guidance require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period, and requires the other components of net periodic pension cost and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. The amendments in the guidance will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The guidance will be effective for us for~~interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We do not anticipate that adoption of this standard will have a material impact on our~~Company’s condensed consolidated financial statements.

In ~~January 2017,~~June 2016, the FASB issued ~~guidance simplifying~~ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements” (“ASU 2016-13”). ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the ~~accounting~~net amount expected to be collected. The allowance for ~~goodwill impairment by removing Step 2~~credit losses is a valuation amount that is deducted from the amortized cost basis of the ~~goodwill impairment test. Under current guidance, Step 2~~financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which clarifies ASC 326, “Financial Instruments – Credit Losses” and corrects unintended application of the ~~goodwill impairment test requires entities~~guidance, and in November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to ~~calculate~~Topic 326, Financial Instruments-Credit Losses,” which clarifies or addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the ~~implied fair value~~FASB issued ASU No. 2020-03, “Codification Improvements to Financial Instruments,” which modifies the measurement of ~~goodwill in the same manner as the amount~~expected credit losses of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standardcertain financial instruments. ASU 2016-13 is effective for certain smaller reporting companies for financial statements issued for fiscal years beginning ~~in January 2020,~~after December 15, 2022 and interim periods within those fiscal years, which will be fiscal 2023 for us if we continue to be classified as a smaller reporting company, with early adoption permitted. We do not ~~believe~~expect that the adoption of ~~this~~the new guidance will have a material impact on our condensed consolidated financial statements.

In August 2017, the FASB amended the requirements of the Derivatives and Hedging Topic of the Accounting Standards Codification to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments will be effective for us for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We do not anticipate that the adoption of this guidance will have a material impact on our condensed consolidated financial statements.Off-Balance Sheet Arrangements

None.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~

~~Interest Rate Risk~~Not applicable for smaller reporting companies.

Our equipment sales leaseback financing and capital lease transactions carry a fixed interest rate. Thus, as of September 30, 2017 we are not exposed to any market risk due to interest rate fluctuations.

~~Foreign Currency Risk~~

Although the majority of our revenues is denominated in U.S. dollars, a significant portion of our revenues is denominated in Canadian dollars, Pound Sterling and Euros. In addition, a significant portion of our expenses, primarily labor expenses in the Philippines, India, Sri Lanka, the United Kingdom, Germany, Canada and Israel, is incurred in the local currencies of the countries in which we operate. For financial reporting purposes, we translate all non-U.S. denominated transactions into U.S. dollars in accordance with accounting principles generally accepted in the United States. As a result, we are exposed to the risk that fluctuations in the value of these currencies relative to the U.S. dollar could have a direct impact on our revenues and our results of operations.

To mitigate the exposure of fluctuating future cash flows due to changes in foreign exchange rates, we entered into foreign currency forward contracts. These foreign currency forward contracts were entered into with a maximum term of twelve months and have an aggregate notional amount of approximately $20.0 million as of September 30, 2017. The total unrealized loss on the outstanding hedges was $0.2 million as of September 30, 2017.

The impact of foreign currency fluctuations will continue to present economic challenges to us and could negatively impact our overall results of operations. A 10% appreciation in the U.S. dollar’s value relating to hedged currencies would decrease the forward contracts’ fair value by approximately $1.8 million as of September 30, 2017. Similarly, a 10% depreciation in the U.S. dollar’s value relative to hedged currencies would increase the forward contracts’ fair value by approximately $2.2 million. Any increase or decrease in the fair value of our currency exchange-rate-sensitive forward contracts, if utilized, would be substantially offset by a corresponding decrease or increase in the fair value of the hedged underlying cash flows.

~~We may continue to enter into these, or other such instruments, in the future to reduce foreign currency exposure to appreciation or depreciation in the value of these foreign currencies.~~

Other than the aforementioned forward contracts, we have not engaged in any hedging activities nor have we entered into off-balance-sheet transactions or arrangements. In addition, as of September 30, 2017, our foreign locations held cash and cash equivalents totaling approximately $9.2 million. These assets are exposed to foreign exchange risk arising from changes in foreign exchange rates. At present, we do not enter into any hedging instruments to mitigate foreign exchange risk on such assets; however, we may do so in the future.

Item 4.

Controls and Procedures

~~Item 4. Controls~~We maintain disclosure controls and ~~Procedures~~procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~As of the end of the period covered by this report, we performed an evaluation under~~Under the supervision, and with the participation of our management, including our ~~Chief Executive Officer~~principal executive officer and ~~Chief Financial Officer,~~our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, ~~(as~~as defined ~~in Rules 13a-15(e) and 15d-15(e)~~ under ~~the Securities and~~ Exchange Act Rule 13a-15(e), as of ~~1934 (the Exchange Act)).~~March 31, 2021. Based ~~upon that~~on this evaluation, our ~~Chief Executive Officer~~principal executive officer and ~~Chief Financial Officer~~our principal financial officer concluded that, as of ~~the end of the period covered by this Quarterly Report,~~March 31, 2021, our disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the ~~fiscal quarter to which this report relates,~~three months ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

~~Item 1. Legal Proceedings~~See Note 4. Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

~~Reference is made to the disclosure under “Legal Proceedings” in Part II, Item 1. in our Form 10-Q for the quarterly period ended June 30, 2017.~~

Item 1A.

Risk Factors

~~Item 1A. Risk Factors~~

~~The information in the next paragraph is in addition to~~There were no material changes from the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

~~Our common stock may become subject to delisting from The Nasdaq Stock Market.~~Nasdaq may under Nasdaq Listing Rule 5810 delist the Company’s common stock if the closing bid price for its common stock is less than $1.00 per share for 30 consecutive business days and the Company does not thereafter cure all listing deficiencies during Nasdaq-designated compliance periods.

The information in the following paragraphs replaces the disclosure under “We are the subject of continuing litigation, including litigation by certain of our former employees” in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016. Other than the disclosures in this Item 1A. there were no material changes from the risk factors disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.

In 2008, the Supreme Court of the Republic of the Philippines refused to review a decision of the Court of Appeals in Manila against a Philippines subsidiary of the Company that is inactive and has no material assets, and purportedly also against Innodata Inc., that orders the reinstatement of certain former employees of the subsidiary to their former positions and also orders the payment of back wages and benefits that aggregate approximately $7.0 million. The payment ordered by the Philippine courts accrued legal interest at the rate of 12% per annum from August 13, 2008 to September 30, 2013, and has thereafter accrued and continues to accrue legal interest at the rate of 6% per annum. The amount of the payment as expressed in U.S. dollars varies with the Philippine peso to U.S. dollar exchange rate. Based on consultation with legal counsel, the Company believes that financial recovery against the Company is unlikely.

~~We are also subject to various other legal proceedings and claims which arise in the ordinary course of business.~~

While we currently believe that the ultimate outcome of these proceedings will not have a material adverse effect on our financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. Substantial recovery against us in the above referenced Philippines action could have a material adverse impact on us, and unfavorable rulings or recoveries in the other proceedings could have a material adverse impact on the operating results of the period in which the ruling or recovery occurs. In addition, our estimate of potential impact on our financial position or overall results of operations for the above legal proceedings could change in the future. See “Legal Proceedings.”

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

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

There were no sales of unregistered equity securities or repurchases of equity securities during the three months ended ~~September 30, 2017.~~March 31, 2021.

~~Item 3. Defaults Upon Senior Securities~~

Item 3.

Defaults Upon Senior Securities

None.

~~Item 4. Mine Safety Disclosures~~

Item 4.

Mine Safety Disclosures

None.

~~Item 5. Other Information~~

Item 5.

Other Information

None.

~~Item 6. Exhibits~~

Item 6.

Exhibits

Exhibit No.

Description

~~31.1~~31.1*

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

~~31.2~~

Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

~~32.1~~

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

~~32.2~~

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101. INS XBRL Instance Document~~

101

The following materials from Innodata Inc.'s Quarterly Report on Form 10-Q for the three months ended March 31, 2021, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of March 31, 2021(unaudited) and December 31, 2020; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020 (unaudited); (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited); (iv) Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2021 and 2020 and (v) Notes to Condensed Consolidated Financial Statements (unaudited).

~~101. SCH XBRL Taxonomy Extension Schema Document~~

~~101. CAL XBRL Taxonomy Extension Calculation Link base Document~~

Filed herewith.

~~101. DEF XBRL Taxonomy Extension Definition Link base Document~~

~~101. LAB XBRL Taxonomy Extension Label Link base Document~~

~~101. PRE XBRL Taxonomy Extension Presentation Link base Document~~

44**

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

SIGNATURES

~~In accordance with~~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.

INNODATA INC.

	Date:	~~November 9, 2017~~May 6, 2021	~~/s/~~ /s/ Jack S. Abuhoff
			Jack S. Abuhoff
		~~Chairman of the Board,~~
		Chief Executive Officer and President

~~Date:~~	~~November 9, 2017~~	~~/s/ O’Neil Nalavadi~~
		~~O’Neil Nalavadi~~
	Date:	May 6, 2021	/s/ Mark A. Spelker
		~~Senior Vice President~~	Mark A. Spelker
			Chief Financial Officer
		and Principal Accounting Officer


	OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from ________________ to ________________

Delaware		13-3475943
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

55 Challenger Road		07660
Ridgefield Park, New Jersey		(Zip Code)
(Address of principal executive offices)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	INOD	The NASDAQ Stock Market LLC
Preferred Stock Purchase Right	N/A	N/A

~~Large accelerated filer~~¨	~~Accelerated filer~~þ	~~Non-accelerated filer~~ ¨	~~Smaller reporting company~~ þ
~~Emerging growth company~~ ¨

	September 30,			December 31,
	2017			2016				March 31, 2021			December 31, 2020
ASSETS							ASSETS
Current assets:
Cash and cash equivalents	$	12,468		$	14,172			$	17,296		$	17,573
Accounts receivable, net		9,577			9,952
Accounts receivable, net of allowance for doubtful accounts of $680 and $670, respectively									9,969			10,048
Prepaid expenses and other current assets		3,761			3,124				3,987			4,240
Total current assets		25,806			27,248				31,252			31,861
Property and equipment, net		7,322			5,397				7,291			7,227
Right-of-use-asset, net									6,377			6,610
Other assets		3,136			2,377				2,507			2,563
Deferred income taxes		1,909			1,641
Deferred income taxes, net									2,270			2,187
Intangibles, net		7,884			8,191				4,437			4,656
Goodwill		2,839			2,734				2,157			2,150
Total assets	$	48,896		$	47,588			$	56,291		$	57,254
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	856		$	1,018			$	1,287		$	1,435
Accrued expenses		4,492			4,333
Accrued expenses and other									4,130			3,490
Accrued salaries, wages and related benefits		5,418			5,040				4,919			5,719
Income and other taxes		1,764			1,330				4,237			5,000
Current portion of long-term obligations		2,124			1,120
Long-term obligations - current portion									2,134			1,712
Operating lease liability - current portion									1,017			990
Total current liabilities		14,654			12,841				17,724			18,346

Deferred income taxes		694			680				68			44
Long-term obligations, net of current portion		4,733			3,917				5,660			6,282
Operating lease liability, net of current portion									6,066			6,332

Total liabilities									29,518			31,004

Commitments and contingencies
Non-controlling interests		(3,888	)		(3,634	)			(3,379	)		(3,390	)
Commitments and contingencies		-			-

STOCKHOLDERS’ EQUITY:
Serial preferred stock; 5,000,000 shares authorized, none outstanding
Common stock, $.01 par value; 75,000,000 shares authorized; 27,559,000 shares issued and 25,878,000 outstanding at September 30, 2017 and 27,305,000 shares issued and 25,624,000 outstanding at December 31, 2016		275			273
Serial preferred stock; 4,998,000 shares authorized, none outstanding									-			-
Common stock, $.01 par value; 75,000,000 shares authorized; 29,481,000 shares issued and 26,297,000 outstanding at March 31, 2021 and 28,984,000 shares issued and 25,800,000 outstanding at December 31, 2020;									294			289
Additional paid-in capital		27,242			26,057				32,040			31,921
Retained earnings		9,436			12,400				5,231			4,833
Accumulated other comprehensive income (loss)		372			(324	)
Accumulated other comprehensive loss									(948	)		(938	)
		37,325			38,406				36,617			36,105
Less: treasury stock, 1,681,000 shares at September 30, 2017 and December 31, 2016, at cost		(4,622	)		(4,622	)
Less: treasury stock, 3,184,000 shares at March 31, 2021 and December 31, 2020 at cost									(6,465	)		(6,465	)
Total stockholders’ equity		32,703			33,784				30,152			29,640
Total liabilities and stockholders’ equity	$	48,896		$	47,588			$	56,291		$	57,254

	x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the quarterly period ended ~~September 30, 2017~~March 31, 2021

				Page No.
		Part I – Financial Information

Item 1.		Financial Statements
		Condensed Consolidated Financial Statements (Unaudited):
		Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020		12
		Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income (Loss) for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	2
	~~Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2017 and 2016~~	3
		Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020		4
		Condensed Consolidated Statements of Stockholders’ Equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020		5
		Notes to Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2622
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		4131
Item 4.		Controls and Procedures		4231

		Part II – Other Information

Item 1.		Legal Proceedings		4333
Item 1A.		Risk Factors		4333
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		4333
Item 3.		Defaults Upon Senior Securities		4333
Item 4.		Mine Safety Disclosures		4333
Item 5.		Other Information		4333

Item 6.		Exhibits		4434

Signatures				4535

	Three Months Ended
	September 30,
	2017			2016

Revenues	$	15,018		$	16,060
Operating costs and expenses:
Direct operating costs		11,463			12,422
Selling and administrative expenses		4,438			5,105
Interest expense, net		2			15
Change in fair value of contingent consideration		-			1,038
		15,903			18,580

Loss before provision for income taxes		(885	)		(2,520	)

Provision for income taxes		268			352

Net loss		(1,153	)		(2,872	)

Loss attributable to non-controlling interests		85			106

Net loss attributable to Innodata Inc. and Subsidiaries	$	(1,068	)	$	(2,766	)

Loss per share attributable to Innodata Inc. and Subsidiaries:
Basic and diluted	$	(0.04	)	$	(0.11	)

Weighted average shares outstanding:
Basic and diluted		25,877			25,651

Comprehensive loss:
Net loss	$	(1,153	)	$	(2,872	)
Pension liability adjustment, net of taxes		(60	)		(83	)
Change in fair value of derivatives, net of taxes		(37	)		(39	)
Foreign currency translation adjustment		482			(118	)
Other comprehensive income (loss)		385			(240	)
Total comprehensive loss		(768	)		(3,112	)
Comprehensive loss attributed to non-controlling interest		85			106
Comprehensive loss attributable to Innodata Inc. and Subsidiaries	$	(683	)	$	(3,006	)

	Three Months Ended March 31,
	2021			2020
Revenues	$	15,967		$	14,530
Operating costs and expenses:
Direct operating costs		10,096			9,743
Selling and administrative expenses		5,525			4,620
Interest expense, net		10			42
		15,631			14,405
Income before provision for income taxes		336			125

Provision for income taxes		(73	)		405

Consolidated net income (loss)		409			(280	)

Income attributable to non-controlling interests		11			11

Net income (loss) attributable to Innodata Inc. and Subsidiaries	$	398		$	(291	)

Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic	$	0.02		$	(0.01	)
Diluted	$	0.01		$	(0.01	)

Weighted average shares outstanding:
Basic		25,873			24,401
Diluted		29,452			24,401

Comprehensive income (loss):
Consolidated net income (loss)	$	409		$	(280	)
Pension liability adjustment, net of taxes		11			14
Change in fair value of derivatives, net of taxes		-			(171	)
Foreign currency translation adjustment, net of taxes		(21	)		(718	)
Other comprehensive loss		(10	)		(875	)
Total comprehensive income (loss)		399			(1,155	)
Less: Comprehensive income attributable to non-controlling interest		11			11
Comprehensive income (loss) attributable to Innodata Inc. and Subsidiaries	$	388		$	(1,166	)

	Nine Months Ended
	September 30,
	2017			2016

Revenues	$	45,271		$	47,400
Operating costs and expenses:
Direct operating costs		34,585			35,572
Selling and administrative expenses		13,106			14,469
Interest expense (income), net		(9	)		44
Change in fair value of contingent consideration		-			1,038
		47,682			51,123

Loss before provision for income taxes		(2,411	)		(3,723	)

Provision for income taxes		807			1,128

Net loss		(3,218	)		(4,851	)

Loss attributable to non-controlling interests		254			310

Net loss attributable to Innodata Inc. and Subsidiaries	$	(2,964	)	$	(4,541	)

Loss per share attributable to Innodata Inc. and Subsidiaries:
Basic and diluted	$	(0.11	)	$	(0.18	)

Weighted average shares outstanding:
Basic and diluted		25,795			25,514

Comprehensive loss:
Net loss	$	(3,218	)	$	(4,851	)
Pension liability adjustment, net of taxes		(183	)		(247	)
Change in fair value of derivatives, net of taxes		99			207
Foreign currency translation adjustment		780			246
Other comprehensive income		696			206
Total comprehensive loss		(2,522	)		(4,645	)
Comprehensive loss attributed to non-controlling interest		254			310
Comprehensive loss attributable to Innodata Inc. and Subsidiaries	$	(2,268	)	$	(4,335	)

	Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Treasury						Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Treasury Stock
	Shares			Amount		Capital			Earnings			Income (Loss)			Stock			Total			Shares			Amount		Capital			Earnings			Loss			Shares		Amount			Total

January 1, 2017		25,624		$	273	$	26,057		$	12,400		$	(324	)	$	(4,622	)	$	33,784
January 1, 2020																						27,643		$	275	$	28,426		$	4,993		$	(920	)		3,184	$	(6,465	)	$	26,309
Net loss attributable to Innodata Inc. and subsidiaries		-			-		-			(2,964	)		-			-			(2,964	)		-			-		-			(291	)		-			-		-			(291	)
Stock-based compensation		-			-		662			-			-			-			662			-			-		170			-			-			-		-			170
Issuance of common stock in connection with MediaMiser acquisition		254			2		523			-			-			-			525
Pension liability adjustments, net of taxes		-			-		-			-			(183	)		-			(183	)		-			-		-			-			14			-		-			14
Foreign currency translation adjustment, net of taxes		-			-		-			-			780			-			780			-			-		-			-			(718	)		-		-			(718	)
Change in fair value of derivatives, net of taxes		-			-		-			-			99			-			99			-			-		-			-			(171	)		-		-			(171	)
September 30, 2017		25,878		$	275	$	27,242		$	9,436		$	372		$	(4,622	)	$	32,703
March 31, 2020																						27,643		$	275	$	28,596		$	4,702		$	(1,795	)		3,184	$	(6,465	)	$	25,313

January 1, 2016		25,445		$	270	$	24,590		$	17,924		$	(84	)	$	(4,488	)	$	38,212
Net loss attributable to Innodata Inc. and subsidiaries		-			-		-			(4,541	)		-			-			(4,541	)
January 1, 2021																						28,984		$	289	$	31,921		$	4,833		$	(938	)		3,184	$	(6,465	)	$	29,640
Net income attributable to Innodata Inc. and subsidiaries																						-			-		-			398			-			-		-			398
Stock-based compensation		-			-		729			-			-			-			729			-			-		278			-			-			-		-			278
Issuance of common stock in connection with MediaMiser acquisition		236			3		566			-			-			-			569
Acquisition of non-controlling interest		-			-		(261	)		-			-			-			(261	)
Exercise of stock options																						690			4		605			-			-			-		-			609
Shares withheld for exercise settlement and taxes																						(193	)		1		(764	)		-			-			-		-			(763	)
Pension liability adjustments, net of taxes		-			-		-			-			(247	)		-			(247	)		-			-		-			-			11			-		-			11
Foreign currency translation adjustment, net of taxes		-			-		-			-			246			-			246			-			-		-			-			(21	)		-		-			(21	)
Change in fair value of derivatives, net of taxes		-			-		-			-			207			-			207			-			-		-			-			-			-		-			-
Purchase of treasury stock		(57	)		-		-			-			-			(134	)		(134	)
September 30, 2016		25,624		$	273	$	25,624		$	13,383		$	122		$	(4,622	)	$	34,780
March 31, 2021																						29,481		$	294	$	32,040		$	5,231		$	(948	)		3,184	$	(6,465	)	$	30,152

	Amount
Accounts receivable	$	771
Media contact database		3,610
Developed technology		994
Tradenames and trademarks		310
Total identifiable assets acquired		5,685

Accrued salaries, wages and related benefits		63
Deferred revenues		2,560
Income and other taxes		97
Total liabilities assumed		2,720
Net identifiable assets acquired		2,965
Goodwill		1,263
Net assets acquired	$	4,228

Goodwill
Balance as of January 1, 2017	$	2,734
Foreign currency translation adjustment		105
Balance as of September 30, 2017	$	2,839

Balance as of January 1, 2016	$	1,476
Goodwill recorded in connection with an acquisition		1,239
Foreign currency translation adjustment		33
Balance as of September 30, 2016	$	2,748

Balance as of January 1, 2021	$	2,150
Foreign currency translation adjustment		7
Balance as of March 31, 2021	$	2,157

	Developed technology		Customer relationships		Trademarks and tradenames		Patents		Media Contact Database		Total
Gross carrying amounts:
Balance as of January 1, 2017	$	3,019	$	2,112	$	865	$	43	$	3,510	$	9,549
Foreign currency translation		204		170		22		3		137		536
Balance as of September 30, 2017	$	3,223	$	2,282	$	887	$	46	$	3,647	$	10,085

														Developed technology		Customer relationships		Trademarks and tradenames		Patents		Media Contact Database			Total
Gross carrying amounts:
Balance as of January 1, 2021														$	3,175	$	2,228	$	882	$	45	$	3,670		$	10,000
Foreign currency translation															18		18		2		1		(1	)		38
Balance as of March 31, 2021														$	3,193	$	2,246	$	884	$	46	$	3,669		$	10,038
	Developed technology		Customer relationships		Trademarks and tradenames		Patents		Media Contact Database			Total
Accumulated amortization:
Balance as of January 1, 2016	$	280	$	240	$	98	$	5	$	-		$	623
Balance as of January 1, 2021														$	1,844	$	1,192	$	629	$	29	$	1,650		$	5,344
Amortization expense		180		133		75		3		90			481		79		46		14		1		91			231
Foreign currency translation		16		14		1		2		(1	)		32		12		10		1		1		2			26
Balance as of September 30, 2016	$	476	$	387	$	174	$	10	$	89		$	1,136
Balance as of March 31, 2021														$	1,935	$	1,248	$	644	$	31	$	1,743		$	5,601

Net carrying values - March 31, 2021														$	1,258	$	998	$	240	$	15	$	1,926		$	4,437

Year	Amortization
2017	$	251
2018		1,004
2019		1,004
2020		939
2021		939
Thereafter		3,747
	$	7,884

Year		Amortization
2021	$	701
2022		935
2023		935
2024		831
2025		685
Thereafter		350
	$	4,437

	For the Three Months Ended March 31,
	2021			2020
Federal income tax expense at statutory rate		21.0	%		21.0	%
Effect of:
Tax effects of foreign operations		85.2			242.7
Change in valuation allowance		26.7			(78.5	)
Foreign operations permanent difference - foreign exchange gains and losses		15.4			144.3
State income tax net of federal benefit		2.4			16.2
Return to provision true up		0.4			(50.6	)
Withholding tax		0.3			9.3
Foreign rate differential		(5.8	)		(34.7	)
Effect of stock based compensation		(61.3	)		-
Increase (decrease) in unrecognized tax benefits (ASC 740)		(114.9	)		67.1
Other		8.9			(12.8	)
Effective tax rate		(21.7	)%		324.0	%

	Unrecognized tax benefits
Balance - January 1, 2017	$	1,184
Interest accrual		34
Foreign currency revaluation		62
Balance - September 30, 2017	$	1,280

	Unrecognized tax benefits
Balance - January 1, 2021	$	3,231
Increase for current period tax positions		61
Decrease for prior period tax positions		(1,476	)
Interest accrual		30
Foreign currency remeasurement		(4	)
Balance - March 31, 2021	$	1,842

	Number of Options			Weighted - Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2021		5,906,884		$	1.61
Granted		360,000			6.40
Exercised		(689,616	)		2.17
Forfeited/Expired		(13,333	)		1.38
Outstanding at March 31, 2021		5,563,935		$	1.86		7.69	$	24,770,815

Exercisable at March 31, 2021		3,594,434		$	1.68		7.10	$	16,621,389

Vested and Expected to Vest at March 31, 2021		5,563,935		$	1.86		7.69	$	24,770,815

	Number of Options			Weighted - Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2017		5,169,169		$	2.88
Granted		40,000			1.50
Exercised		-			-
Forfeited/Expired		(75,237	)		2.93
Outstanding at September 30, 2017		5,133,932		$	2.87		5.08	$	-

Exercisable at September 30, 2017		4,116,869		$	2.95		4.18	$	-

Vested and Expected to Vest at September 30, 2017		5,133,932		$	2.87		5.08	$	-

	For the Three Months Ended March 31, 2021
Weighted average fair value of options granted	$	3.33

Risk-free interest rate		0.22%-0.82	%
Expected term (years)		2.96-6.0
Expected volatility factor		59.62	%
Expected dividends		-

	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2020		50,000
Granted		-
Vested		(25,000	)
Forfeited/Expired		-
Unvested at March 31, 2021		25,000		$	1.38

	For the Three Months Ended March 31,
	2021		2020
Direct operating costs	$	38	$	40
Selling and administrative expenses		240		130
Total stock-based compensation	$	278	$	170

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016

Direct operating costs	$	55	$	81	$	204	$	245
Selling and administrative expenses		130		126		458		484
Total stock-based compensation	$	185	$	207	$	662	$	729

Weighted-average lease term remaining			63 months
Weighted-average discount rate			8.68	%

	September 30,		December 31,		March 31,		December 31,
	2017		2016		2021		2020

Pension obligations - accrued pension liability					$	6,015	$	5,940
Settlement agreement ⁽¹⁾						456		518
Capital lease obligations	$	955	$	224		-		209
Deferred lease payments⁽¹⁾		787		705
Microsoft licenses⁽²⁾		751		-		743		747
Acquisition related liability⁽³⁾		806		1,492
Lease incentive liability⁽⁴⁾		684		-
Pension obligations - accrued pension liability		2,874		2,616
Bank loans payable ⁽³⁾						580		580
		6,857		5,037		7,794		7,994
Less: Current portion of long-term obligations		2,124		1,120		2,134		1,712
Totals	$	4,733	$	3,917	$	5,660	$	6,282

Prepaid expenses and other current assets	$	404
Other assets		809
	$	1,213

	Pension Liability Adjustment			Fair Value of Derivatives			Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at July 1, 2017	$	1,264		$	(182	)	$	(1,095	)	$	(13	)
Other comprehensive income (loss) before reclassifications, net of taxes		-			(119	)		482			363
Total other comprehensive income (loss) before reclassifications, net of taxes		1,264			(301	)		(613	)		350
Net amount reclassified to earnings		(60	)		82			-			22
Balance at September 30, 2017	$	1,204		$	(219	)	$	(613	)	$	372

	Three Months Ended September 30,						Nine Months Ended September 30,						For the Three Months Ended March 31,
	2017			2016			2017			2016			2021			2020
Revenues:
DDS	$	11,617		$	12,052		$	34,772		$	38,928		$	11,764		$	10,409
IADS		1,193			1,028			3,406			3,090
MIS		2,208			2,980			7,093			5,382
Synodex														1,018			1,282
Agility														3,185			2,839
Total Consolidated	$	15,018		$	16,060		$	45,271		$	47,400		$	15,967		$	14,530

Income (loss) before provision for income taxes⁽¹⁾:
DDS	$	1,077		$	(1,132	)	$	2,230		$	1,195		$	654		$	203
IADS		(1,016	)		(1,296	)		(2,978	)		(3,754	)
MIS		(946	)		(92	)		(1,663	)		(1,164	)
Synodex														108			196
Agility														(426	)		(274	)
Total Consolidated	$	(885	)	$	(2,520	)	$	(2,411	)	$	(3,723	)	$	336		$	125

Income (loss) before provision for income taxes⁽²⁾:
DDS	$	297		$	(1,882	)	$	(46	)	$	(980	)	$	584		$	133
IADS		(257	)		(553	)		(750	)		(1,598	)
MIS		(925	)		(85	)		(1,615	)		(1,145	)
Synodex														152			241
Agility														(400	)		(249	)
Total Consolidated	$	(885	)	$	(2,520	)	$	(2,411	)	$	(3,723	)	$	336		$	125

							September 30, 2017			December 31, 2016
Total assets:
DDS							$	26,190		$	29,804
IADS								1,567			1,282
MIS								21,139			16,502
Total Consolidated							$	48,896		$	47,588

							September 30, 2017			December 31, 2016
Goodwill:
DDS							$	675		$	675
MIS								2,164			2,059
Total Consolidated							$	2,839		$	2,734

	March 31, 2021		December 31, 2020
Goodwill:
Agility	$	2,157	$	2,150
Total	$	2,157	$	2,150

⁽¹⁾	Before elimination of any inter-segment profits
⁽²⁾	After elimination of any inter-segment profits

	For the Three Months Ended
	March 31,
	2021		2020
United States	$	8,220	$	6,694
United Kingdom		2,802		2,771
The Netherlands		1,654		1,640
Canada		1,595		1,545
Others - principally Europe		1,696		1,880
Totals	$	15,967	$	14,530