Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 24, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | AWARE, INC. | |
Entity Central Index Key | 0001015739 | |
Trading Symbol | AWRE | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,991,726 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2023 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 000-21129 | |
Entity Incorporation, State or Country Code | MA | |
Entity Tax Identification Number | 04-2911026 | |
Entity Address, Address Line One | 76 Blanchard Road in Burlington | |
Entity Address, City or Town | Burlington | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01803 | |
City Area Code | 781 | |
Local Phone Number | 276-4000 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 5,683 | $ 11,749 |
Marketable securities | 21,839 | 17,229 |
Accounts receivable, net | 6,519 | 3,317 |
Unbilled receivables | 1,772 | 2,929 |
Tax receivable | 1,362 | |
Prepaid expenses and other current assets | 989 | 693 |
Total current assets | 36,802 | 37,279 |
Property and equipment, net | 616 | 726 |
Intangible assets, net | 2,495 | 2,806 |
Goodwill | 3,120 | 3,120 |
Note receivable | 2,695 | 2,601 |
Right of use asset | 4,332 | 4,538 |
Other long-term assets | 122 | 122 |
Total assets | 50,182 | 51,192 |
Current liabilities: | ||
Accounts payable | 231 | 639 |
Accrued expenses | 1,646 | 1,282 |
Current portion of operating lease liabilities | 632 | 470 |
Deferred revenue | 5,349 | 3,411 |
Total current liabilities | 7,858 | 5,802 |
Long-term deferred revenue | 563 | 322 |
Long-term operating lease liabilities | 3,896 | 4,047 |
Long-term portion of contingent acquisition payment | 812 | |
Total long-term liabilities | 4,459 | 5,181 |
Stockholders’ equity: | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized, none outstanding | ||
Common stock, $.01 par value; 70,000,000 shares authorized; issued and outstanding of 21,014,256 as of September 30, 2023 and 21,093,447 as of December 31, 2022 | 210 | 211 |
Additional paid-in capital | 98,976 | 98,306 |
Accumulated deficit | (61,273) | (58,198) |
Accumulated other comprehensive loss | (48) | (110) |
Total stockholders’ equity | 37,865 | 40,209 |
Total liabilities and stockholders’ equity | $ 50,182 | $ 51,192 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, shares issued | 21,014,256 | 21,093,447 |
Common stock, shares outstanding | 21,014,256 | 21,093,447 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHNSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 6,381 | $ 3,015 | $ 13,870 | $ 11,945 |
Costs and expenses: | ||||
Cost of services and other revenue | 410 | 282 | 1,033 | 920 |
Research and development | 2,264 | 2,279 | 6,909 | 6,932 |
Selling and marketing | 2,171 | 1,874 | 6,118 | 5,067 |
General and administrative | 1,601 | 1,808 | 4,679 | 4,895 |
Fair value adjustment to contingent acquisition payment | (812) | (812) | ||
Gain on sale of fixed assets | (5,672) | (5,672) | ||
Total costs and expenses | 5,634 | 571 | 17,927 | 12,142 |
Operating income (loss) | 747 | 2,444 | (4,057) | (197) |
Interest income | 397 | 155 | 982 | 228 |
Net income (loss) | $ 1,144 | $ 2,599 | $ (3,075) | $ 31 |
Net income (loss) per share - basic | $ 0.05 | $ 0.12 | $ (0.15) | $ 0 |
Net income (loss) per share - diluted | $ 0.05 | $ 0.12 | $ (0.15) | $ 0 |
Weighted-average shares – basic | 21,049 | 21,725 | 21,017 | 21,674 |
Weighted-average shares – diluted | 21,131 | 21,798 | 21,017 | 21,733 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale securities | $ 43 | $ (170) | $ 62 | $ (170) |
Comprehensive income (loss) | 1,187 | 2,429 | (3,013) | (139) |
Software licenses | ||||
Revenue: | ||||
Total revenue | 4,391 | 814 | 7,535 | 5,459 |
Software maintenance | ||||
Revenue: | ||||
Total revenue | 1,889 | 1,786 | 5,491 | 5,267 |
Services and other | ||||
Revenue: | ||||
Total revenue | $ 101 | $ 415 | $ 844 | $ 1,219 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (3,075) | $ 31 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 437 | 587 |
Gain on sale of fixed assets | (5,672) | |
Stock-based compensation | 1,097 | 1,356 |
Interest on note receivable | (93) | (70) |
Bad debt provision | 221 | |
Non-cash lease expense | 218 | |
Change in fair value of contingent acquisition payment | (812) | |
Changes in assets and liabilities: | ||
Accounts receivable | (3,432) | (122) |
Unbilled receivables | 1,387 | (669) |
Prepaid expenses and other current assets | (459) | (776) |
Tax receivable | 1,355 | |
Accounts payable | (408) | 706 |
Accrued expenses | 363 | (220) |
Deferred revenue | 2,180 | 67 |
Net cash used in operating activities | (1,242) | (4,561) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (16) | (144) |
Proceeds from sale of fixed assets | 8,547 | |
Purchase of marketable securities | (9,128) | (18,556) |
Sale of marketable securities | 4,750 | |
Investment in note receivable | (2,500) | |
Net cash used in investing activities | (4,394) | (12,653) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 52 | 96 |
Payments made for taxes of employees who surrendered shares related to unrestricted stock | (15) | (24) |
Repurchase of common stock | (467) | (164) |
Net cash used in financing activities | (430) | (92) |
Decrease in cash and cash equivalents | (6,066) | (17,306) |
Cash and cash equivalents, beginning of period | 11,749 | 29,963 |
Cash and cash equivalents, end of period | 5,683 | $ 12,657 |
Supplemental disclosure: Cash paid for income taxes | $ 136 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2021 | $ 41,522 | $ 216 | $ 97,778 | $ (56,472) | |
Balance (in shares) at Dec. 31, 2021 | 21,614,000 | ||||
Issuance of unrestricted stock (in shares) | 28,000 | ||||
Stock-based compensation expense | 430 | 430 | |||
Net income (loss) | (1,278) | (1,278) | |||
Balance at Mar. 31, 2022 | 40,674 | $ 216 | 98,208 | (57,750) | |
Balance (in shares) at Mar. 31, 2022 | 21,642,000 | ||||
Balance at Dec. 31, 2021 | 41,522 | $ 216 | 97,778 | (56,472) | |
Balance (in shares) at Dec. 31, 2021 | 21,614,000 | ||||
Net income (loss) | 31 | ||||
Balance at Sep. 30, 2022 | 42,648 | $ 217 | 99,041 | (56,440) | $ (170) |
Balance (in shares) at Sep. 30, 2022 | 21,687,000 | ||||
Balance at Mar. 31, 2022 | 40,674 | $ 216 | 98,208 | (57,750) | |
Balance (in shares) at Mar. 31, 2022 | 21,642,000 | ||||
Issuance of common stock under employee stock purchase plan | 93 | $ 1 | 92 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 40,000 | ||||
Stock-based compensation expense | 378 | 378 | |||
Repurchase of common stock | (3) | (3) | |||
Repurchase of common stock (in shares) | (1,000) | ||||
Net income (loss) | (1,289) | (1,289) | |||
Balance at Jun. 30, 2022 | 39,853 | $ 217 | 98,675 | (59,039) | |
Balance (in shares) at Jun. 30, 2022 | 21,681,000 | ||||
Issuance of common stock under employee stock purchase plan | 3 | $ 1 | 2 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 91,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | (24) | (24) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (10,000) | ||||
Stock-based compensation expense | 548 | 548 | |||
Repurchase of common stock | (161) | $ (1) | (160) | ||
Repurchase of common stock (in shares) | (75,000) | ||||
Other comprehensive income (loss) | (170) | 0 | (170) | ||
Net income (loss) | 2,599 | 2,599 | |||
Balance at Sep. 30, 2022 | 42,648 | $ 217 | 99,041 | (56,440) | (170) |
Balance (in shares) at Sep. 30, 2022 | 21,687,000 | ||||
Balance at Dec. 31, 2022 | $ 40,209 | $ 211 | 98,306 | (58,198) | (110) |
Balance (in shares) at Dec. 31, 2022 | 21,093,447 | 21,093,000 | |||
Issuance of unrestricted stock | $ 1 | (1) | |||
Issuance of unrestricted stock (in shares) | 62,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | $ (15) | (15) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (9,000) | ||||
Stock-based compensation expense | 335 | 335 | |||
Repurchase of common stock | (341) | $ (2) | (339) | ||
Repurchase of common stock (in shares) | (191,000) | ||||
Other comprehensive income (loss) | 147 | 147 | |||
Net income (loss) | (1,568) | (1,568) | |||
Balance at Mar. 31, 2023 | 38,767 | $ 210 | 98,286 | (59,766) | 37 |
Balance (in shares) at Mar. 31, 2023 | 20,955,000 | ||||
Balance at Dec. 31, 2022 | $ 40,209 | $ 211 | 98,306 | (58,198) | (110) |
Balance (in shares) at Dec. 31, 2022 | 21,093,447 | 21,093,000 | |||
Net income (loss) | $ (3,075) | ||||
Balance at Sep. 30, 2023 | $ 37,865 | $ 210 | 98,976 | (61,273) | (48) |
Balance (in shares) at Sep. 30, 2023 | 21,014,256 | 21,014,000 | |||
Balance at Mar. 31, 2023 | $ 38,767 | $ 210 | 98,286 | (59,766) | 37 |
Balance (in shares) at Mar. 31, 2023 | 20,955,000 | ||||
Issuance of common stock under employee stock purchase plan | 52 | $ 1 | 51 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 38,000 | ||||
Stock-based compensation expense | 403 | 403 | |||
Other comprehensive income (loss) | (128) | (128) | |||
Net income (loss) | (2,651) | (2,651) | |||
Balance at Jun. 30, 2023 | 36,443 | $ 211 | 98,740 | (62,417) | (91) |
Balance (in shares) at Jun. 30, 2023 | 20,993,000 | ||||
Issuance of unrestricted stock | 2 | 2 | |||
Issuance of unrestricted stock (in shares) | 102,000 | ||||
Stock-based compensation expense | 359 | 359 | |||
Repurchase of common stock | (126) | $ (1) | (125) | ||
Repurchase of common stock (in shares) | (81,000) | ||||
Other comprehensive income (loss) | 43 | 43 | |||
Net income (loss) | 1,144 | 1,144 | |||
Balance at Sep. 30, 2023 | $ 37,865 | $ 210 | $ 98,976 | $ (61,273) | $ (48) |
Balance (in shares) at Sep. 30, 2023 | 21,014,256 | 21,014,000 |
Description of the Company and
Description of the Company and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Company and Basis of Presentation | Note 1 – Description of the Company and Basis of Presentation Description of the Company We are a global leader in biometrics software offerings and solutions. Our portfolio enables government agencies and commercial entities to enroll, identify, authenticate and enable using biometrics, which comprise physiological characteristics, such as fingerprints, faces, irises and voices. • Enroll: Register biometric identities into an organization’s secure database • Identify: Utilize an organization’s secure database to accurately identify individuals using biometric data • Authenticate: Provide frictionless multi-factor, passwordless access to secured accounts and databases with biometric verification • Enable: Manage the lifecycle of secure identities through optimized biometric interchanges We have been engaged in this business since 1993. Our comprehensive portfolio of biometric solutions is based on innovative, robust products designed explicitly for ease of integration, including customer-managed and integration ready biometric frameworks, platforms, software development kits (SDKs) and services. Principal government applications of biometrics systems include border control, visa applicant screening, law enforcement, national defense, intelligence, secure credentialing, access control, and background checks. Principal commercial applications include mobile enrollment, user authentication, identity proofing, and secure transaction enablement. Our products span multiple biometric modalities including fingerprint, face, iris and voice, and provide interoperable, standards-compliant, field-proven biometric functionality. Our products are used to capture, verify, format, compress and decompress biometric images as well as aggregate, analyze, process, match and transport those images and templates within biometric systems. For large deployments, we may provide project management and software engineering services. We sell our biometrics software products and services globally through a multifaceted distribution strategy using systems integrators, original equipment manufacturers (OEMs), value added resellers (VARs), partners, and directly to end user customers. Certain amounts in the consolidated financial statements and associated notes may not add due to rounding. All percentages have been calculated using unrounded amounts. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and therefore do not include all information and notes necessary for a complete presentation of our financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. We filed audited financial statements which included all information and notes necessary for such presentation for the two years ended December 31, 2022 in conjunction with our 2022 Annual Report on Form 10-K. This Form 10-Q should be read in conjunction with that Form 10-K. The accompanying unaudited consolidated balance sheets, statements of operations and comprehensive income (loss), statements of cash flows, and statements of stockholders’ equity reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of financial position at September 30, 2023, and of operations and cash flows for the interim periods ended September 30, 2023 and 2022. The results of operations for the interim periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the year. Principles of Consolidation The consolidated financial statements include the accounts of Aware, Inc. and its subsidiaries, Aware Security Corporation and Fortr3ss, Inc. Intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates included in the financial statements pertain to revenue recognition, reserves for credit losses, valuation of the contingent acquisition payment, valuation of the investment in the note receivable, goodwill and long-lived asset impairment and valuation allowance for deferred income tax assets. Actual results could differ from those estimates. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance was to be effective for reporting periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, which deferred the effective dates for us, as a smaller reporting company, until fiscal year 2023. The adoption of this update did not have a material impact on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2 – Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). Under ASC 606, we apply the following five step model: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) each performance obligation is satisfied. We categorize revenue as software licenses, software maintenance, or services and other. Revenue from software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. We recognize software maintenance revenue over time on a straight-line basis over the contract period. Services revenue is recognized over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted), provided all other revenue recognition criteria are met. Other revenue, includes hardware sales that may be included in a software license, is recognized at a point in time upon delivery provided all other revenue recognition criteria are met. In addition to selling software licenses, software maintenance and software services on a standalone basis, a significant portion of our contracts include multiple performance obligations, which require an allocation of the transaction price to each distinct performance obligation based on a relative standalone selling price (“SSP”) basis. The SSP is the price at which we would sell a promised good or service separately to a customer. The best estimate of SSP is the observable price of a good or service when we sell that good or service separately. A contractually stated price or a list price for a good or service may be the SSP of that good or service. We use a range of selling prices to estimate SSP when we sell each of the goods and services separately and need to determine whether there is a discount that needs to be allocated based on the relative SSP of the various goods and services within multiple performance obligation arrangements. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we typically determine the SSP using an adjusted market assessment approach using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual goods and services due to the stratification of those goods and services by customer. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. When software licenses and significant customization engineering services are sold together, they are accounted for as a combined performance obligation, as the software licenses are generally highly dependent on, and interrelated with, the associated customization services and therefore are not distinct performance obligations. Revenue for the combined performance obligation is recognized over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). When subscription-based software is sold, the subscription-based software and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to subscription-based software and the software maintenance based on the relative SSP of each performance obligation. We sell subscription-based software for a fixed fee and/or a usage-based royalty fee, sometimes subject to a minimum guarantee. When the amount is in the form of a fixed fee, including the guaranteed minimum in subscription-based royalties, revenue is allocated to the subscription-based software and recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the software maintenance is recognized over the contract term on a straight-line basis. Any subscription-based software fees earned not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as revenue when the subsequent usage occurs. Our contracts can include variable fees, such as the option to purchase additional usage of a previously delivered software license. We may also provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. We include variable fees in the determination of total transaction price if it is not probable that a future significant reversal of revenue will occur. We use the expected value or most likely value amount, whichever is more appropriate for specific circumstances, to estimate variable consideration, and the estimates are based on the level of historical price concessions offered to clients. The amount of consideration is not adjusted for a significant financing component if the time between payment and the transfer of the related good or service is expected to be one year or less under the practical expedient in the guidance. Our revenue arrangements are typically accounted for under such expedient , as payment is typically due within 30 to 60 days. During the periods ended September 30, 2023 and 2022, none of our contracts contained a significant financing component. Also, to the extent relevant in future periods with our acquisition of FortressID and adaption of our current products to be delivered in a hosted environment with AwareID, we expect to recognize revenue from our SaaS offerings in future periods. SaaS offerings will be recognized ratably over the subscription period. For the three and nine months ended September 30, 2023 and 2022 we generated a de minimis amount of revenue from SaaS contracts. Disaggregation of Revenues We organize ourselves into a single segment that reports to the Chief Executive Officer who is our chief operating decision maker. We conduct our operations in the United States and sell our products and services to domestic and international customers. Revenue generated from the following geographic regions was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 5,247 $ 2,129 $ 9,365 $ 6,439 United Kingdom 323 347 934 1,109 Rest of World 811 539 3,571 4,397 $ 6,381 $ 3,015 $ 13,870 $ 11,945 Revenue by timing of transfer of goods or services was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Goods or services transferred at a point in time $ 4,391 $ 770 $ 6,893 $ 5,484 Goods or services transferred over time 1,990 2,245 6,977 6,461 $ 6,381 $ 3,015 $ 13,870 $ 11,945 Revenue by product group was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 License and service contracts $ 5,982 $ 2,571 $ 11,586 $ 9,787 Subscription-based contracts 399 444 2,284 2,158 $ 6,381 $ 3,015 $ 13,870 $ 11,945 Revenue from subscription-based contracts include revenue that may be recognized at a point in time or over time and be part of a fixed fee and or minimum guarantee as well as fees earned and allocated to software maintenance. Contract Balances When the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by the deferred revenue below until the performance obligation is satisfied. Our contract assets consist of unbilled receivables. Our contract liabilities consist of deferred (unearned) revenue, which is generally related to software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The following tables present changes in our contract assets and liabilities during the three and nine months ended September 30, 2023 and 2022 (in thousands): Balance at Revenue Billings Balance at Three months ended September 30, 2023 Contract assets: Unbilled receivables $ 2,820 $ 924 $ ( 1,972 ) $ 1,772 Three months ended September 30, 2022 Contract assets: Unbilled receivables $ 3,430 $ 1,278 $ ( 952 ) $ 3,756 Balance at Billings Revenue Balance at Three months ended September 30, 2023 Contract liabilities: Deferred revenue $ 4,359 $ 3,442 $ ( 1,889 ) $ 5,912 Three months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,533 $ 2,059 $ ( 1,786 ) $ 3,806 Balance at Beginning of Period Revenue Recognized In Billings Balance at End of Period Nine months ended September 30, 2023 Contract assets: Unbilled receivables $ 2,929 $ 2,601 $ ( 3,758 ) $ 1,772 Nine months ended September 30, 2022 Contract assets: Unbilled receivables $ 3,087 $ 4,279 $ ( 3,610 ) $ 3,756 Balance at Beginning of Period Billings Revenue Recognized Balance at End of Period Nine months ended September 30, 2023 Contract liabilities: Deferred revenue $ 3,733 $ 7,670 $ ( 5,491 ) $ 5,912 Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,740 $ 5,333 $ ( 5,267 ) $ 3,806 Remaining Performance Obligations Remaining performance obligations represent the transaction prices from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 90 % of the remaining deferred revenue over the next 12 months, with the remainder recognized thereafter. As of September 30, 2023, the aggregate amount of the transaction prices allocated to remaining performance obligations for contracts with a duration greater than one year was $ 3.7 million. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 – Fair Value Measurements The FASB Codification defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy under the FASB Codification are: Level 1 – valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; Level 2 – valuations that are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly; and Level 3 – valuations that require inputs that are both significant to the fair value measurement and unobservable. Cash and cash equivalents, which primarily include money market mutual funds were $ 5.7 million and $ 11.7 million as of September 30, 2023 and December 31, 2022, respectively. Marketable securities, which primarily include U.S. Treasuries and corporate bonds, were $ 21.8 million and $ 17.2 million as of September 30, 2023 and December 31, 2022, respectively. Our assets and liabilities that are measured at fair value on a recurring basis included the following (in thousands): Fair Value Measurement at September 30, 2023 Using: Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Money market funds (included in $ 3,904 $ — $ — $ 3,904 Marketable securities 21,839 — — 21,839 Note receivable - — 2,695 2,695 Total assets $ 25,743 $ — $ 2,695 $ 28,438 Liabilities Contingent acquisition payment $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — Fair Value Measurement at December 31, Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Money market funds (included in $ 10,967 $ — $ — $ 10,967 Marketable securities 17,229 — — 17,229 Note receivable — — 2,601 2,601 Total assets $ 28,196 $ — $ 2,601 $ 30,797 Liabilities Contingent acquisition payment $ — $ — $ 812 $ 812 Total liabilities $ — $ — $ 812 $ 812 Our investments in marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive income (loss) in stockholders' equity. Marketable securities by security type consisted of the following (in thousands): September 30, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 16,501 $ 80 $ ( 106 ) $ 16,475 Corporate bonds 5,386 4 ( 26 ) 5,364 $ 21,887 $ 84 $ ( 132 ) $ 21,839 December 31, 2022: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 13,389 $ 24 $ ( 100 ) $ 13,313 Corporate bonds 3,950 — ( 34 ) 3,916 $ 17,339 $ 24 $ ( 134 ) $ 17,229 The investment in the Note Receivable ("Note") with Omlis Limited ("Omlis"), a limited company incorporated and registered in England and Wales and the parent of MIRCAL Technologies Limited ("MIRACL"), and the total carrying value of the investment of $ 2.7 million and $ 2.6 million is representative of the fair value of the investment as of September 30, 2023 and December 31, 2022, respectively. During the three and nine months ended September 30, 2023 and for the year ended December, 31, 2022, there were no changes in the underlying assumptions of the Note. The change in fair value during the three and nine months ended September 30, 2023 and for the year ended December 31, 2022 was the result of accrued interest. In connection with the sale of the Note, Omlis granted us a right of first refusal for 18 months with respect to any proposed sale by Omlis of equity securities constituting 20% or more of the outstanding voting power of Omlis or all or substantially all of the assets of Omlis or any of its material subsidiaries. Also, in connection with the sale of the Note, Omlis issued the Company a warrant, which allowed us to purchase up to 8 % of the total equity shares in Omlis at a price per share of $ 33.91 . Both the right of first refusal and warrant expired as of September 11, 2023 with no action taken. In December 2021, we acquired 100 % of the outstanding shares and acquired all of the assets and liabilities of FortressID for a purchase price of $ 3.4 million, which consisted of $ 2.5 million of cash consideration and contingent acquisition payments which were fair valued at $ 0.9 million at the acquisition date. The maximum contingent acquisition payments at the time of the acquisition was $ 4.0 million and required cash payments of up to $ 2.0 million for set revenue targets in 2022 and another $ 2.0 million for set revenue targets in 2023. No revenue targets were achieved in 2022. The maximum contingent acquisition payment as of September 30, 2023 was $ 2.0 million. We determined that as of September 30, 2023 the fair value of the contingent acquisition payment was $ 0 and recorded a $ 0.8 million gain in the quarter ended September 30, 2023. We determined a remote probability of reaching the revenue targets in 2023 and therefore determined the contingent acquisition payment to have $ 0 value at September 30, 2023. Changes in the Note receivable balance consisted of the following (in thousands): Nine Months Ended September 30, 2023 Balance as of December 31, 2022 $ 2,601 Accrued interest 94 Balance as of September 30, 2023 $ 2,695 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4 – Intangible Assets Intangible assets and their estimated useful lives as of September 30, 2023 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ 642 $ 2,038 Developed technology 5 and 7 years 710 269 441 Trade name trademarks 3 and 7 years 30 14 16 $ 3,420 $ 925 $ 2,495 During the three and nine months ended September 30, 2023 and 2022, we recorded $ 0.1 million and $ 0.3 million, respectively, of intangible assets amortization expense. We expect to record amortization expense for the remainder of 2023 and each subsequent year and thereafter as follows (in thousands): Reminder of 2023 $ 103 2024 415 2025 407 2026 356 2027 356 Thereafter 858 $ 2,495 |
Subscription Agreement
Subscription Agreement | 9 Months Ended |
Sep. 30, 2023 | |
Capitalization, Long-Term Debt and Equity [Abstract] | |
Subscription Agreement | Note 5 – Subscription Agreement On March 11, 2022, concurrently with our entry into a mutual reseller arrangement with MIRACL Technologies Limited (“MIRACL”), we entered into a subscription agreement with Omlis Limited, a limited company incorporated and registered in England and Wales and the parent of MIRACL (“Omlis”). We purchased $ 2.5 million of Omlis’ Note Receivable (“Note”) that accrues interest at 5 % annually with a maturity date of March 11, 2026 . Prior to maturity, we have the right to convert the Note into the securities issued in a future financing at a 20 % discount from the price per share paid by the investors in that financing. If the Note remains outstanding on the maturity date, the Note shall, at the option of the holders of a majority of the outstanding Note, (i) be converted into the most senior shares in Omlis, (ii) be redeemed by payment in cash of the Note and all accrued but unpaid interest or (iii) remain outstanding. In connection with the sale of the Note, Omlis granted us a right of first refusal for 18 months that expired on September 11, 2023 with respect to any proposed sale by Omlis of equity securities constituting 20% or more of the outstanding voting power of Omlis or all or substantially all of the assets of Omlis or any of its material subsidiaries that expired on Septembe r 11, 2023. Also, in connection with the sale of the Note, Omlis issued the Company a warrant that expired on September 11, 2023 , which allowed us to purchase up to 8 % of the total equity shares in Omlis at a price per share of $ 33.91 . We recorded the Note at its fair value in accordance with ASC 825, Financial Instruments, which was $ 2.7 million as of September 30, 2023. Interest income of $ 31 thousand and $ 93 thousand was earned during the three and nine month periods ended September 30, 2023, respectively. Interest income of $ 31 thousand and $ 70 thousand was earned during the three and nine month periods ended September 30, 2022, respectively. The $ 195 thousand in accrued interest is included in the fair value of the note as of September 30, 2023. |
Gain on Sale of Fixed Assets
Gain on Sale of Fixed Assets | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Gain on Sale of Fixed Assets | Note 6 – Gain on Sale of Fixed Assets On July 15, 2022, we completed our sale to FDS Bedford, LLC of our former corporate headquarters located at 40 Middlesex Turnpike, Bedford, Massachusetts for total proceeds of $ 8.9 million less a brokerage commission of $ 0.3 million. The assets had remaining deprecation scheduled of $ 1.8 million at the time of the sale and we recorded a gain of $ 5.7 million in the third quarter of 2022 on the sale and disposal of these assets at the time of the sale. |
Computation of Earnings per Sha
Computation of Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Earnings per Share | Note 7 – Computation of Earnings per Share Basic earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For the purposes of this calculation, stock options are considered common stock equivalents in periods in which they have a dilutive effect. Stock options that are anti-dilutive are excluded from the calculation. Potential common stock equivalents were not included in the per share calculation for diluted earnings per share where we had a net loss, and the effect of their inclusion would be anti-dilutive. Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income (loss) $ 1,144 $ 2,599 $ ( 3,075 ) $ 31 Shares outstanding: Weighted-average common shares outstanding 21,049 21,725 21,017 21,674 Additional dilutive common stock equivalents 82 73 — 59 Diluted shares outstanding 21,131 21,798 21,017 21,733 Net income (loss) per share – basic $ 0.05 $ 0.12 $ ( 0.15 ) $ 0.00 Net income (loss) per share - diluted $ 0.05 $ 0.12 $ ( 0.15 ) $ 0.00 |
Equity and Stock-based Compensa
Equity and Stock-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity and Stock-based Compensation | Note 8 – Equity and Stock-based compensation The following table presents stock-based compensation expenses included in our unaudited consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of services and other revenue $ 5 $ 7 $ 13 $ 19 Research and development 60 54 180 229 Selling and marketing 21 182 71 260 General and administrative 273 305 833 848 Stock-based compensation expense $ 359 $ 548 $ 1,097 $ 1,356 Stock Options - We did no t grant stock options in the three or nine months ended September 30, 2023 or 2022. Unrestricted Stock Grants - Our 2001 Nonqualified Stock Plan permits us to grant shares of unrestricted shares of stock to our directors, officers, and employees. Stock-based compensation expense for stock grants is determined based on the fair market value of our stock on the date of grant, provided the number of shares in the grant is fixed on the grant date. We did no t grant any shares of unrestricted stock during the three months ended September 30, 2023. In the nine months ended September 30, 2023 we granted an aggregate of 134,211 shares of unrestricted stock. Of the shares granted in the nine months ended September 30, 2023, 67,105 shares were issued shortly after June 30, 2023 and the remaining shares are scheduled to be issued shortly after December 31, 2023, provided that each applicable grantee is serving as a director, officer or employee as of that date. In the three and nine months ended September 30, 2022 we granted an aggregate 60,000 and 167,921 shares of unrestricted stock, respectively. Of the 167,921 shares of unrestricted stock granted during the nine months ended September 30, 2022, 61,459 were issued shortly after June 30, 2022, 46,461 were issued shortly after December 31, 2022 and 15,000 were issued in each February 2023 and August 2023. The remaining 30,000 is scheduled to be issued in two equal installments in August 2024 and 2025 provided that the grantee is serving as a director, officer or employee as of that date. Share Purchases - On March 1, 2022, our Board of Directors authorized a new stock repurchase program pursuant to which we may purchase up to $ 10.0 million of our common stock, of which $ 1.8 million has been repurchased as of September 30, 2023. During the three and nine months ended September 30, 2023 we purchased 81,083 and 271,991 shares of our common stock, respectively. During the three and nine months ended September 30, 2022 we purchased 75,407 and 76,561 shares of our common stock, respectively. The shares may be purchased from time to time in the open market or through privately negotiated transactions at management’s discretion, depending upon market conditions and other factors. The authorization to repurchase shares of our common stock expires on December 31, 2023. Repurchases will be made under the program using our own cash resources and will be in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, and other applicable laws, rules and regulations, which may permit repurchases to occur during periods when we might otherwise be precluded from making purchases under insider trading laws or company policy. The program does not obligate us to acquire any particular amount of common stock and the program may be modified or suspended at any time at our Board of Director’s discretion. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 – Income Taxes During the three and nine months ended September 30, 2023 and 2022, we recorded no income tax benefits for the net operating income (losses) incurred or for the research and development tax credits generated due to the uncertainty of realizing a benefit from those items. We have evaluated the positive and negative evidence bearing upon our ability to realize our deferred tax assets, which primarily consist of net operating loss carryforwards and research and development tax credits. We considered the history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and we have concluded that it is more likely than not that we will not realize the benefits of our deferred tax assets. As a result, as of September 30, 2023 and December 31, 2022, we have a full valuation recorded against our net deferred tax assets. The carryback of the estimated loss resulted in a refundable federal tax credit of $ 1.5 million and an increase in research credit carryforwards previously utilized. We decided to carry back the loss reported on the filed 2020 tax return. Upon filing our 2020 tax return and the related carry back claim we received the payment of $ 1.5 million in August 2023. |
Description of the Company an_2
Description of the Company and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and therefore do not include all information and notes necessary for a complete presentation of our financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. We filed audited financial statements which included all information and notes necessary for such presentation for the two years ended December 31, 2022 in conjunction with our 2022 Annual Report on Form 10-K. This Form 10-Q should be read in conjunction with that Form 10-K. The accompanying unaudited consolidated balance sheets, statements of operations and comprehensive income (loss), statements of cash flows, and statements of stockholders’ equity reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of financial position at September 30, 2023, and of operations and cash flows for the interim periods ended September 30, 2023 and 2022. The results of operations for the interim periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the year. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Aware, Inc. and its subsidiaries, Aware Security Corporation and Fortr3ss, Inc. Intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates included in the financial statements pertain to revenue recognition, reserves for credit losses, valuation of the contingent acquisition payment, valuation of the investment in the note receivable, goodwill and long-lived asset impairment and valuation allowance for deferred income tax assets. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance was to be effective for reporting periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, which deferred the effective dates for us, as a smaller reporting company, until fiscal year 2023. The adoption of this update did not have a material impact on our consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Generated from Geographic Regions | Revenue generated from the following geographic regions was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 5,247 $ 2,129 $ 9,365 $ 6,439 United Kingdom 323 347 934 1,109 Rest of World 811 539 3,571 4,397 $ 6,381 $ 3,015 $ 13,870 $ 11,945 |
Schedule of Revenue by Timing of Transfer of Goods or Services | Revenue by timing of transfer of goods or services was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Goods or services transferred at a point in time $ 4,391 $ 770 $ 6,893 $ 5,484 Goods or services transferred over time 1,990 2,245 6,977 6,461 $ 6,381 $ 3,015 $ 13,870 $ 11,945 |
Schedule of Revenue by Contract Type | Revenue by product group was (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 License and service contracts $ 5,982 $ 2,571 $ 11,586 $ 9,787 Subscription-based contracts 399 444 2,284 2,158 $ 6,381 $ 3,015 $ 13,870 $ 11,945 |
Schedule of Changes in Contract Assets and Liabilities | The following tables present changes in our contract assets and liabilities during the three and nine months ended September 30, 2023 and 2022 (in thousands): Balance at Revenue Billings Balance at Three months ended September 30, 2023 Contract assets: Unbilled receivables $ 2,820 $ 924 $ ( 1,972 ) $ 1,772 Three months ended September 30, 2022 Contract assets: Unbilled receivables $ 3,430 $ 1,278 $ ( 952 ) $ 3,756 Balance at Billings Revenue Balance at Three months ended September 30, 2023 Contract liabilities: Deferred revenue $ 4,359 $ 3,442 $ ( 1,889 ) $ 5,912 Three months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,533 $ 2,059 $ ( 1,786 ) $ 3,806 Balance at Beginning of Period Revenue Recognized In Billings Balance at End of Period Nine months ended September 30, 2023 Contract assets: Unbilled receivables $ 2,929 $ 2,601 $ ( 3,758 ) $ 1,772 Nine months ended September 30, 2022 Contract assets: Unbilled receivables $ 3,087 $ 4,279 $ ( 3,610 ) $ 3,756 Balance at Beginning of Period Billings Revenue Recognized Balance at End of Period Nine months ended September 30, 2023 Contract liabilities: Deferred revenue $ 3,733 $ 7,670 $ ( 5,491 ) $ 5,912 Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,740 $ 5,333 $ ( 5,267 ) $ 3,806 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Our assets and liabilities that are measured at fair value on a recurring basis included the following (in thousands): Fair Value Measurement at September 30, 2023 Using: Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Money market funds (included in $ 3,904 $ — $ — $ 3,904 Marketable securities 21,839 — — 21,839 Note receivable - — 2,695 2,695 Total assets $ 25,743 $ — $ 2,695 $ 28,438 Liabilities Contingent acquisition payment $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — Fair Value Measurement at December 31, Quoted Significant Significant Total (Level 1) (Level 2) (Level 3) Assets Money market funds (included in $ 10,967 $ — $ — $ 10,967 Marketable securities 17,229 — — 17,229 Note receivable — — 2,601 2,601 Total assets $ 28,196 $ — $ 2,601 $ 30,797 Liabilities Contingent acquisition payment $ — $ — $ 812 $ 812 Total liabilities $ — $ — $ 812 $ 812 |
Summary of Marketable Securities by Security Type | Marketable securities by security type consisted of the following (in thousands): September 30, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 16,501 $ 80 $ ( 106 ) $ 16,475 Corporate bonds 5,386 4 ( 26 ) 5,364 $ 21,887 $ 84 $ ( 132 ) $ 21,839 December 31, 2022: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 13,389 $ 24 $ ( 100 ) $ 13,313 Corporate bonds 3,950 — ( 34 ) 3,916 $ 17,339 $ 24 $ ( 134 ) $ 17,229 |
Summary of Changes in Note Receivable | Changes in the Note receivable balance consisted of the following (in thousands): Nine Months Ended September 30, 2023 Balance as of December 31, 2022 $ 2,601 Accrued interest 94 Balance as of September 30, 2023 $ 2,695 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets and Estimated Useful Lives | Intangible assets and their estimated useful lives as of September 30, 2023 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ 642 $ 2,038 Developed technology 5 and 7 years 710 269 441 Trade name trademarks 3 and 7 years 30 14 16 $ 3,420 $ 925 $ 2,495 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We expect to record amortization expense for the remainder of 2023 and each subsequent year and thereafter as follows (in thousands): Reminder of 2023 $ 103 2024 415 2025 407 2026 356 2027 356 Thereafter 858 $ 2,495 |
Computation of Earnings per S_2
Computation of Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income (loss) $ 1,144 $ 2,599 $ ( 3,075 ) $ 31 Shares outstanding: Weighted-average common shares outstanding 21,049 21,725 21,017 21,674 Additional dilutive common stock equivalents 82 73 — 59 Diluted shares outstanding 21,131 21,798 21,017 21,733 Net income (loss) per share – basic $ 0.05 $ 0.12 $ ( 0.15 ) $ 0.00 Net income (loss) per share - diluted $ 0.05 $ 0.12 $ ( 0.15 ) $ 0.00 |
Equity and Stock-based Compen_2
Equity and Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expenses Included in Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) | The following table presents stock-based compensation expenses included in our unaudited consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of services and other revenue $ 5 $ 7 $ 13 $ 19 Research and development 60 54 180 229 Selling and marketing 21 182 71 260 General and administrative 273 305 833 848 Stock-based compensation expense $ 359 $ 548 $ 1,097 $ 1,356 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Practical expedient for financing components | true |
Minimum period of payment of transaction price in contract with customer | 30 days |
Maximum period of payment of transaction price in contract with customer | 60 days |
Percentage of remaining performance obligations expected to be recognized as revenue | 90% |
remaining deferred revenue | 12 months |
Revenue recognition performance obligation transaction prices | $ 3.7 |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true |
Revenue Recognition - Revenue G
Revenue Recognition - Revenue Generated Following Geographic Regions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,381 | $ 3,015 | $ 13,870 | $ 11,945 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,381 | 3,015 | 13,870 | 11,945 |
Operating Segments | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,247 | 2,129 | 9,365 | 6,439 |
Operating Segments | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 323 | 347 | 934 | 1,109 |
Operating Segments | Rest of World | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 811 | $ 539 | $ 3,571 | $ 4,397 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,381 | $ 3,015 | $ 13,870 | $ 11,945 |
Goods or services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,391 | 770 | 6,893 | 5,484 |
Goods or services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,990 | $ 2,245 | $ 6,977 | $ 6,461 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue by Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,381 | $ 3,015 | $ 13,870 | $ 11,945 |
License and Service Contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,391 | 814 | 7,535 | 5,459 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,381 | 3,015 | 13,870 | 11,945 |
Operating Segments | License and Service Contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,982 | 2,571 | 11,586 | 9,787 |
Operating Segments | Subscription-based Contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 399 | $ 444 | $ 2,284 | $ 2,158 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Contract Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Unbilled receivables, Balance at Beginning of Period | $ 2,820 | $ 3,430 | $ 2,929 | $ 3,087 |
Unbilled receivables, Revenue Recognized In Advance of Billings | 924 | 1,278 | 2,601 | 4,279 |
Unbilled receivables, Billings | (1,972) | (952) | (3,758) | (3,610) |
Unbilled receivables, Balance at End of Period | $ 1,772 | $ 3,756 | $ 1,772 | $ 3,756 |
Revenue Recognition - Changes_2
Revenue Recognition - Changes in Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue, Balance at Beginning of Period | $ 4,359 | $ 3,533 | $ 3,733 | $ 3,740 |
Deferred revenue, Billings | 3,442 | 2,059 | 7,670 | 5,333 |
Deferred revenue, Revenue Recognized | (1,889) | (1,786) | (5,491) | (5,267) |
Deferred revenue, Balance at End of Period | $ 5,912 | $ 3,806 | $ 5,912 | $ 3,806 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 11, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Available-for-sale Securities | ||||||
Cash and cash equivalents | $ 5,683 | $ 5,683 | $ 11,749 | |||
Marketable securities | 21,839 | 21,839 | 17,229 | |||
Business acquisition, earnout with fair value | $ 0 | |||||
Gain on contingent acquisition payment | 800 | |||||
Note Receivable | Omlis Limited | ||||||
Schedule of Available-for-sale Securities | ||||||
Sale of note, description | Omlis granted us a right of first refusal for 18 months with respect to any proposed sale by Omlis of equity securities constituting 20% or more of the outstanding voting power of Omlis or all or substantially all of the assets of Omlis or any of its material subsidiaries. | |||||
Maximum | ||||||
Schedule of Available-for-sale Securities | ||||||
Contingent consideration earn out payable | $ 4,000 | $ 2,000 | ||||
Earn out cash payments | 2,000 | |||||
Maximum | Scenario Forecast | ||||||
Schedule of Available-for-sale Securities | ||||||
Earn out cash payments | $ 2,000 | |||||
Fortress ID | ||||||
Schedule of Available-for-sale Securities | ||||||
Percentage of ownership control | 100% | |||||
Business acquisition, purchase price | $ 3,400 | |||||
Business acquisition, cash consideration | 2,500 | |||||
Business acquisition, earnout with fair value | $ 900 | |||||
U.S. Treasuries and Corporate Bonds [Member] | ||||||
Schedule of Available-for-sale Securities | ||||||
Marketable securities | 21,800 | 21,800 | 17,200 | |||
Warrant | Omlis Limited | ||||||
Schedule of Available-for-sale Securities | ||||||
Equity shares purchase price per shares | $ 33.91 | |||||
Warrants expire date | Sep. 11, 2023 | |||||
Warrant | Maximum | Omlis Limited | ||||||
Schedule of Available-for-sale Securities | ||||||
Issuance of warrants purchase percentage | 8% | |||||
Fair Value, Measurements, Recurring [Member] | ||||||
Schedule of Available-for-sale Securities | ||||||
Total fair value of the instrument | 2,695 | 2,695 | 2,601 | |||
Contingent acquisition payment | 0 | 0 | 812 | |||
Fair Value, Measurements, Recurring [Member] | Note Receivable | Omlis Limited | ||||||
Schedule of Available-for-sale Securities | ||||||
Total fair value of the instrument | $ 2,700 | $ 2,700 | $ 2,600 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Available-for-sale Securities | ||
Marketable securities | $ 21,839 | $ 17,229 |
Fair Value, Measurements, Recurring [Member] | ||
Schedule of Available-for-sale Securities | ||
Note receivable | 2,695 | 2,601 |
Total assets | 28,438 | 30,797 |
Contingent acquisition payment | 0 | 812 |
Total liabilities | 0 | 812 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of Available-for-sale Securities | ||
Note receivable | 0 | 0 |
Total assets | 25,743 | 28,196 |
Contingent acquisition payment | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Schedule of Available-for-sale Securities | ||
Note receivable | 0 | 0 |
Total assets | 0 | 0 |
Contingent acquisition payment | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Schedule of Available-for-sale Securities | ||
Note receivable | 2,695 | 2,601 |
Total assets | 2,695 | 2,601 |
Contingent acquisition payment | 0 | 812 |
Total liabilities | 0 | 812 |
Fair Value, Measurements, Recurring [Member] | Money market funds (included in cash and cash equivalents) | ||
Schedule of Available-for-sale Securities | ||
Money market funds (included in cash and cash equivalents) | 3,904 | 10,967 |
Fair Value, Measurements, Recurring [Member] | Money market funds (included in cash and cash equivalents) | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of Available-for-sale Securities | ||
Money market funds (included in cash and cash equivalents) | 3,904 | 10,967 |
Fair Value, Measurements, Recurring [Member] | Money market funds (included in cash and cash equivalents) | Significant Other Observable Inputs (Level 2) | ||
Schedule of Available-for-sale Securities | ||
Money market funds (included in cash and cash equivalents) | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Money market funds (included in cash and cash equivalents) | Significant Unobservable Inputs (Level 3) | ||
Schedule of Available-for-sale Securities | ||
Money market funds (included in cash and cash equivalents) | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Marketable securities | ||
Schedule of Available-for-sale Securities | ||
Marketable securities | 21,839 | 17,229 |
Fair Value, Measurements, Recurring [Member] | Marketable securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of Available-for-sale Securities | ||
Marketable securities | 21,839 | 17,229 |
Fair Value, Measurements, Recurring [Member] | Marketable securities | Significant Other Observable Inputs (Level 2) | ||
Schedule of Available-for-sale Securities | ||
Marketable securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Marketable securities | Significant Unobservable Inputs (Level 3) | ||
Schedule of Available-for-sale Securities | ||
Marketable securities | $ 0 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Marketable Securities by Security Type (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 21,887 | $ 17,339 |
Gross Unrealized Gains | 84 | 24 |
Gross Unrealized Losses | (132) | (134) |
Fair Value | 21,839 | 17,229 |
U.S. Treasury Notes and Bonds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 16,501 | 13,389 |
Gross Unrealized Gains | 80 | 24 |
Gross Unrealized Losses | (106) | (100) |
Fair Value | 16,475 | 13,313 |
Corporate Bonds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 5,386 | 3,950 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (26) | (34) |
Fair Value | $ 5,364 | $ 3,916 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Changes in Note Receivable (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Debt Securities, Available-for-Sale [Line Items] | |
Beginning Balance | $ 2,601 |
Note Receivable | |
Debt Securities, Available-for-Sale [Line Items] | |
Accrued Interest | 94 |
Ending Balance | $ 2,695 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets and Estimated Useful Lives (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Finite Lived Intangible Assets [Line Items] | |
Gross Amount | $ 3,420 |
Accumulated Amortization | 925 |
Net Book Value | 2,495 |
Customer Relationships | |
Finite Lived Intangible Assets [Line Items] | |
Gross Amount | 2,680 |
Accumulated Amortization | 642 |
Net Book Value | $ 2,038 |
Customer Relationships | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 8 years |
Customer Relationships | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 10 years |
Developed Technology | |
Finite Lived Intangible Assets [Line Items] | |
Gross Amount | $ 710 |
Accumulated Amortization | 269 |
Net Book Value | $ 441 |
Developed Technology | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 5 years |
Developed Technology | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 7 years |
Trade Name Trademarks | |
Finite Lived Intangible Assets [Line Items] | |
Gross Amount | $ 30 |
Accumulated Amortization | 14 |
Net Book Value | $ 16 |
Trade Name Trademarks | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 3 years |
Trade Name Trademarks | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Useful Life | 7 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 0.1 | $ 0.3 | $ 0.1 | $ 0.3 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |
Reminder of 2023 | $ 103 |
2024 | 415 |
2025 | 407 |
2026 | 356 |
2027 | 356 |
Thereafter | 858 |
Net Book Value | $ 2,495 |
Subscription Agreement - Additi
Subscription Agreement - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 11, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule Of Capitalization Longterm Debt [Line Items] | ||||||
Note receivable | $ 2,695 | $ 2,695 | $ 2,601 | |||
Interest income | 397 | $ 155 | $ 982 | $ 228 | ||
Omlis Limited | Warrant | ||||||
Schedule Of Capitalization Longterm Debt [Line Items] | ||||||
Warrants expire date | Sep. 11, 2023 | |||||
Equity shares purchase price per shares | $ 33.91 | |||||
Omlis Limited | Maximum | Warrant | ||||||
Schedule Of Capitalization Longterm Debt [Line Items] | ||||||
Issuance of warrants purchase percentage | 8% | |||||
Note Receivable | Omlis Limited | ||||||
Schedule Of Capitalization Longterm Debt [Line Items] | ||||||
Convertible Note amount | $ 2,500 | |||||
Interest rate percentage | 5% | |||||
Maturity date | Mar. 11, 2026 | |||||
Discount from effective price per share paid by investors, percentage | 20% | |||||
Sale of note, description | Omlis granted us a right of first refusal for 18 months that expired on September 11, 2023 with respect to any proposed sale by Omlis of equity securities constituting 20% or more of the outstanding voting power of Omlis or all or substantially all of the assets of Omlis or any of its material subsidiaries that expired on September 11, 2023. | |||||
Note receivable | 2,700 | $ 2,700 | ||||
Interest income | 31 | $ 31 | 93 | $ 70 | ||
Accrued interest included in fair value of note | $ 195 | $ 195 |
Gain on Sale of Fixed Assets -
Gain on Sale of Fixed Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jul. 15, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Purchase obligation | $ 8,900 | ||
Brokerage commission paid | 300 | ||
Remaining depreciation on assets held for sale | $ 1,800 | ||
Gain on sale of fixed assets | $ 5,672 | $ 5,672 |
Computation of Earnings per S_3
Computation of Earnings per Share - Schedule of Net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Net income (loss) | $ 1,144 | $ (2,651) | $ (1,568) | $ 2,599 | $ (1,289) | $ (1,278) | $ (3,075) | $ 31 |
Shares outstanding: | ||||||||
Weighted-average common shares outstanding (in shares) | 21,049 | 21,725 | 21,017 | 21,674 | ||||
Additional dilutive common stock equivalents (in shares) | 82 | 73 | 59 | |||||
Diluted shares outstanding (in shares) | 21,131 | 21,798 | 21,017 | 21,733 | ||||
Net income (loss) per share - basic | $ 0.05 | $ 0.12 | $ (0.15) | $ 0 | ||||
Net income (loss) per share - diluted | $ 0.05 | $ 0.12 | $ (0.15) | $ 0 |
Equity and Stock-based Compen_3
Equity and Stock-based Compensation - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 359 | $ 548 | $ 1,097 | $ 1,356 |
Cost of services and other revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 5 | 7 | 13 | 19 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 60 | 54 | 180 | 229 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 21 | 182 | 71 | 260 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 273 | $ 305 | $ 833 | $ 848 |
Equity and Stock-based Compen_4
Equity and Stock-based Compensation - Stock Option Grants and Unrestricted Stock Grants (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 31, 2023 shares | Feb. 28, 2023 shares | Jul. 31, 2022 shares | Sep. 30, 2023 shares | Sep. 30, 2022 shares | Sep. 30, 2023 Installment shares | Sep. 30, 2022 shares | Dec. 31, 2022 shares | |
Stock options | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of stock options granted | 0 | 0 | 0 | 0 | ||||
Unrestricted Stock | Stock Option Plan2001 [Member] | 2022 Grant | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of unrestricted stock granted | 0 | 60,000 | 134,211 | 167,921 | ||||
Number of shares issued | 15,000 | 15,000 | 61,459 | 67,105 | 167,921 | 46,461 | ||
Unrestricted Stock | Stock Option Plan2001 [Member] | 2022 Grant | Directors, officers and employees | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares granted (in shares) | 30,000 | |||||||
Number of installment | Installment | 2 |
Equity and Stock-based Compen_5
Equity and Stock-based Compensation - Share Purchases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 01, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Repurchase of common stock | $ 126 | $ 341 | $ 161 | $ 3 | |||
Share Purchases | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of common stock authorized for repurchase | $ 10,000 | ||||||
Repurchase of common stock | $ 1,800 | ||||||
Number of stock repurchased | 81,083 | 75,407 | 271,991 | 76,561 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefits for net operating losses | $ 0 | $ 0 | $ 0 | $ 0 | |
Estimated benefit of federal tax refund | $ 1,500,000 | $ 1,500,000 | |||
Income tax return | $ 1,500,000 |