Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Entity Registrant Name | AWARE, INC. | ||
Entity Central Index Key | 0001015739 | ||
Trading Symbol | AWRE | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 21,084,964 | ||
Entity Public Float | $ 22,549,368 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2023 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
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, $0.01 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 000-21129 | ||
Entity Incorporation, State or Country Code | MA | ||
Entity Tax Identification Number | 04-2911026 | ||
Entity Address, Address Line One | 76 Blanchard Road | ||
Entity Address, City or Town | Burlington | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 01803 | ||
City Area Code | 781 | ||
Local Phone Number | -0300 | ||
Document Annual Report | true | ||
Auditor Name | RSM US LLP | ||
Auditor Location | Boston, Massachusetts | ||
Auditor Firm ID | 49 | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive Proxy Statement to be delivered to shareholders in connection with the registrant’s Annual Meeting of Shareholders to be held on June 7, 2024 are incorporated by reference into Part III of this Annual Report on Form 10-K. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 10,002 | $ 11,749 |
Marketable securities | 20,913 | 17,229 |
Accounts receivable, net | 2,454 | 3,317 |
Unbilled receivables, net | 1,401 | 2,929 |
Tax receivable | 1,362 | |
Prepaid expenses and other current assets | 1,054 | 693 |
Total current assets | 35,824 | 37,279 |
Property and equipment, net | 579 | 726 |
Intangible assets, net | 2,391 | 2,806 |
Goodwill | 3,120 | 3,120 |
Note receivable | 2,601 | |
Right of use asset, net | 4,260 | 4,538 |
Other long-term assets | 122 | 122 |
Total assets | 46,296 | 51,192 |
Current liabilities: | ||
Accounts payable | 280 | 639 |
Accrued expenses | 1,706 | 1,282 |
Current portion operating lease liabilities | 637 | 470 |
Deferred revenue | 4,926 | 3,411 |
Total current liabilities | 7,549 | 5,802 |
Long-term deferred revenue | 611 | 322 |
Long-term operating lease liabilities | 3,838 | 4,047 |
Long-term contingent acquisition payments | 812 | |
Total long-term liabilities | 4,449 | 5,181 |
Commitments and contingent liabilities (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value; 70,000,000 shares authorized; 21,017,892 and 21,093,447 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 210 | 211 |
Additional paid-in capital | 99,405 | 98,306 |
Accumulated deficit | (65,512) | (58,198) |
Accumulated other comprehensive income (loss) | 195 | (110) |
Total stockholders’ equity | 34,298 | 40,209 |
Total liabilities and stockholders’ equity | $ 46,296 | $ 51,192 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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 | 21,017,892 | 21,093,447 |
Common stock, shares outstanding | 21,017,892 | 21,093,447 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue: | ||
Total revenue | $ 18,244 | $ 16,008 |
Costs and expenses: | ||
Cost of services and other | 1,273 | 1,260 |
Research and development | 9,124 | 9,234 |
Selling and marketing | 7,955 | 6,962 |
General and administrative | 6,549 | 6,548 |
Loss on write-off of note receivable | 2,695 | |
Fair value adjustment to contingent acquisition payment | (812) | (107) |
Gain on sale of property and equipment | (5,672) | |
Total costs and expenses | 26,784 | 18,225 |
Operating loss | (8,540) | (2,217) |
Interest and other income | 1,285 | 540 |
Loss before provision for income taxes | (7,255) | (1,677) |
Provision for income taxes | 59 | 49 |
Net loss | $ (7,314) | $ (1,726) |
Net loss per share – basic | $ (0.35) | $ (0.08) |
Net loss per share – diluted | $ (0.35) | $ (0.08) |
Weighted-average shares - basic | 21,013 | 21,604 |
Weighted-average shares - diluted | 21,013 | 21,604 |
Other comprehensive income (loss) | ||
Unrealized gain (loss) on available for sale securities | $ 305 | $ (110) |
Comprehensive (loss) | (7,009) | (1,836) |
Software licenses | ||
Revenue: | ||
Total revenue | 9,529 | 7,386 |
Software maintenance | ||
Revenue: | ||
Total revenue | 7,674 | 7,111 |
Services and other | ||
Revenue: | ||
Total revenue | $ 1,041 | $ 1,511 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (7,314) | $ (1,726) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 578 | 760 |
Gain on sale of fixed assets | (5,672) | |
Stock-based compensation | 1,525 | 1,707 |
Interest receivable | (93) | (101) |
Non-cash lease expense | 237 | 128 |
Loss on write-off of note receivable | 2,695 | |
Change in fair value of contingent acquisition payments | (812) | (107) |
Credit losses (recoveries) | (15) | 344 |
Increase (decrease) from changes in assets and liabilities: | ||
Accounts receivable | 648 | 332 |
Unbilled receivables | 1,758 | (71) |
Prepaid expenses and other current assets | (613) | (406) |
Tax receivable | 1,361 | 49 |
Accounts payable | (359) | 356 |
Accrued expenses | 422 | (628) |
Deferred revenue | 1,805 | (7) |
Net cash provided by (used in) operating activities | 1,823 | (5,042) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (16) | (730) |
Proceeds from sale of fixed assets, net | 8,547 | |
Purchases of marketable securities | (9,128) | (18,555) |
Sale of marketable securities | 6,000 | 1,250 |
Investment in note receivable | (2,500) | |
Net cash used in investing activities | (3,144) | (11,988) |
Cash flows from financing activities: | ||
Proceeds from issuance of unrestricted stock | 96 | 154 |
Payments made for taxes of employees who surrendered shares related to unrestricted stock | (16) | (26) |
Repurchase of common stock | (506) | (1,312) |
Net cash used in financing activities | (426) | (1,184) |
Decrease in cash and cash equivalents | (1,747) | (18,214) |
Cash and cash equivalents, beginning of year | 11,749 | 29,963 |
Cash and cash equivalents, end of year | 10,002 | $ 11,749 |
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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of unrestricted stock | 2 | $ 1 | 1 | ||
Issuance of unrestricted stock (in shares) | 118,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | (26) | (26) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (10,000) | ||||
Issuance of common stock under employee stock purchase plan | 152 | $ 1 | 151 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 76,000 | ||||
Stock-based compensation expense | 1,707 | 1,707 | |||
Repurchase of common stock | (1,312) | $ (7) | (1,305) | ||
Repurchase of common stock (in shares) | (705,000) | ||||
Other comprehensive income (loss) | (110) | $ (110) | |||
Net loss | (1,726) | (1,726) | |||
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 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of unrestricted stock | $ (1) | $ 2 | (3) | ||
Issuance of unrestricted stock (in shares) | 164,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | (16) | (16) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (9,000) | ||||
Issuance of common stock under employee stock purchase plan | 96 | $ 1 | 95 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 70,000 | ||||
Stock-based compensation expense | 1,525 | 1,525 | |||
Repurchase of common stock | (506) | $ (4) | (502) | ||
Repurchase of common stock (in shares) | (300,000) | ||||
Other comprehensive income (loss) | 305 | 305 | |||
Net loss | (7,314) | (7,314) | |||
Balance at Dec. 31, 2023 | $ 34,298 | $ 210 | $ 99,405 | $ (65,512) | $ 195 |
Balance (in shares) at Dec. 31, 2023 | 21,017,892 | 21,018,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (7,314) | $ (1,726) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | 1 NATURE O F BUSINESS We are a leading biometric identity platform company that validates and secures identities using proven and trusted adaptive biometrics 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The consolidated financial statements include the accounts of Aware, Inc. and its subsidiaries (“the Company”). All significant intercompany transactions have been eliminated. Use of Estimates – The preparation of our 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, goodwill and long-lived asset impairment, valuation of investment in note receivable, valuation of contingent acquisition payments, stock based compensation, income taxes, and allowance for credit losses. Fair Value Measurements - The Financial Accounting Standards Board (“FASB”) Codification defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to the unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the FASB Codification are: i) 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; ii) 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 iii) 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 $ 10.0 million and $ 11.7 million at December 31, 2023 and 2022, respectively. Marketable securities, which primarily include U.S. Treasuries and corporate bonds, were $ 20.9 million and $ 17.2 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023, our assets that are measured at fair value on a recurring basis include the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 7,848 $ - $ - $ 7,848 Marketable securities 20,913 - - 20,913 Note receivable - - - - Total assets $ 28,761 $ - $ - $ 28,761 As of December 31, 2022, our assets and liabilities that are measured at fair value on a recurring basis included the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 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 payments $ - $ - $ 812 $ 812 Total liabilities $ - $ - $ 812 $ 812 The fair value of our contingent acquisition payments was $ 0 and $ 0.8 million as of December 31, 2023 and 2022, respectively. The $ 0.8 million decrease during the year ended December 31, 2023 was due to the end of the earnout period without the achievement of any earnout targets, resulting in no earnout payment being required. The fair value as of December 31, 2022 was determined using a Monte Carlo simulation. 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): December 31, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 15,331 $ 176 $ ( 19 ) $ 15,489 Corporate bonds 5,386 39 ( 1 ) 5,424 $ 20,717 $ 215 $ ( 20 ) $ 20,913 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 Changes in note receivable consisted of the following (in thousands): Balance as of December 31, 2021 $ — Investment in Note Receivable 2,500 Accrued interest 101 Balance as of December 31, 2022 2,601 Accrued interest 94 Write-off of Note Receivable ( 2,695 ) Balance as of December 31, 2023 $ — 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"), was negotiated at an arm’s length basis and the total carrying value of the investment of $ 0 and $ 2.6 million is representative of the fair value of the investment as of December 31 2023 and 2022, respectively. The $ 2.7 million write off during the year ended December 31, 2023 was the result of the lack of recoverability of the Note due to liquidity concerns as of December 31, 2023. In addition, i n January 2024, Omlis and MIRACL petitioned to enter the United Kingdom administration process. The deterioration of Omlis' liquidity, resulted in our uncertainty regarding the recoverability of the Note's carrying value. During the year ended December 31, 2022, there were no changes in the underlying assumptions of the Note. The change in fair value during the year ended December 31, 2022 was the result of accrued interest. Cash and Cash Equivalents – Cash and cash equivalents, which consist primarily of money market funds and demand deposits, are stated at fair value. All highly liquid investments purchased with an original maturity of three months or less are considered cash equivalents. Our cash balances exceed the Federal Deposit Insurance Corporation limits. The Company does not believe it is exposed to significant credit risk related to cash and cash equivalents. Allowance for Credit Losses – The Company's accounts receivable are subject to concentrations of credit risk. We maintain an allowance for credit losses that reflects any estimated credit losses. This allowance is evaluated each quarter on a customer by customer basis and considers historical write-off experience with each customer, the number of days that any delinquent invoices are past due, and an evaluation of the potential risk of loss associated with any delinquent accounts. We record the allowance in "general and administrative" expense in the Consolidated Statements of Operations. Account receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. For the years ended December 31, 2023 and 2022, changes to and ending balances of the allowance for credit losses were as follows (in thousands): Years ended 2023 2022 Allowance for credit losses balance - beginning of year $ 188 $ 74 Additions to the allowance for credit losses 37 156 Deductions against the allowance for credit ( 52 ) ( 42 ) Allowance for credit losses balance - end of year $ 173 $ 188 In addition, for the years ended December 31, 2023 and 2022, the credit loss related to unbilled receivables was $ 0 and $ 230 thousand, respectively. Property and Equipment – Property and equipment is stated at cost. Depreciation and amortization of property and equipment is provided using the straight-line method over the estimated useful lives of the assets. Upon retirement or sale, the costs of the assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss on disposal is included in the determination of income or loss. Expenditures for repairs and maintenance are charged to expense as incurred. The estimated useful lives of assets are: Leasehold improvements 10 years Furniture and fixtures 5 years Computer and office equipment 3 years Purchased software 3 years Leases – We account for a contract as a lease when we have the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the lease term. Variable lease costs are recognized in the period in which the obligation for those payments is incurred. We combine lease and non-lease components when determining lease costs for office space. The lease liability includes lease payments related to options to extend or renew the lease term if we are reasonably certain we will exercise those options. Our lease does not contain material residual value guarantees or restrictive covenants. Goodwill – We record goodwill when consideration paid in a business acquisition exceeds the fair value of the net assets acquired. Our estimates of fair value are based upon assumptions believed to be reasonable at the time, but such estimates are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results. Goodwill is not amortized but rather is tested for impairment annually in the fourth quarter or more frequently, if facts and circumstances warrant a review. Circumstances that could trigger an impairment test include, but are not limited to, a significant adverse change in the business climate or legal factors, an adverse action or assessment by a regulator, decline in market capitalization, or unanticipated competition. We have determined that there is a single reporting unit for the purpose of conducting the goodwill impairment assessment. In accordance with ASC Topic 350, Intangibles—Goodwill and Other, we first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If after assessing the totality of events or circumstances, we determine that it is more likely than not (i.e., greater than 50 % likelihood) that the fair value of the reporting unit is less than its carrying amount, then the quantitative test is required. The quantitative goodwill impairment test requires us to estimate and compare the fair value of the reporting unit, determined using an income approach and a market approach, with its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets, goodwill is no t impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss up to the amount of goodwill. Application of the goodwill impairment test requires judgments, including identification of the reporting units, assigning goodwill to reporting units, a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of each reporting unit which often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. There is no assurance that the actual future earnings or cash flows of the reporting unit will not decline significantly from the projections used in the impairment analysis. Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macroeconomic environment and industry, deterioration in the Company’s performance or its future projections, or changes in plans for its reporting unit. As of December 31, 2023 and 2022, we had $ 3.1 million of goodwill. We performed a quantitative analysis during the years ended December 31, 2023 and 2022 and determined there were no impairment losses and to date, there have been no impairments of goodwill. There were no changes to the value of goodwill during the years ended December 31, 2023 and 2022. Long-Lived Assets – We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows estimated to be generated by those assets over their estimated economic life to the related carrying value of those assets to determine if the assets are impaired. If an impairment is indicated, the asset is written down to its estimated fair value. The cash flow estimates used to identify the potential impairment reflect our best estimates using appropriate assumptions and projections at that time. In evaluating potential impairment of these assets, we specifically consider whether any indicators of impairment are present, including, but not limited to: • whether there has been a significant adverse change in the business climate that affects the value of an asset: • whether there has been a significant change in the extent or way an asset is used; and • whether there is an expectation that the asset will be sold or disposed of before the end of its originally estimated useful life. We did not identify any events or changes in business circumstances that would indicate the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate during the years ended December 31, 2023 and 2022. Revenue recognition - The core principle of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) is that we should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To achieve that core principle, we apply the following five step model: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s intent and ability to pay, which is based on a variety of factors including the customer’s historical payment experience, or in the case of a new customer, published credit and financial information pertaining to the customer. We evaluate contract modifications for the impact on revenue recognition if they have been approved by both parties such that the enforceable rights and obligations under the contract have changed. Contract modifications are either accounted for using a cumulative effect adjustment or prospectively over the remaining term of the arrangement. The determination of which method is more appropriate depends on the nature of the modification, which we evaluate on a case-by-case basis. We combine two or more contracts entered into at or near the same time with the same customer and account for them as a single contract if (i) the contracts are negotiated as a package with a common commercial objective, (ii) the amount of consideration to be paid in one contract depends on the price or performance of the other contract, or (iii) some or all of the goods or services in one contract would be combined with some or all of the goods and services in the other contract into a single performance obligation. If two or more contracts are combined, the consideration to be paid is aggregated and allocated to the individual performance obligations without regard to the consideration specified in the individual contracts. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. To identify performance obligations, we consider all of the goods or services promised in a contract regardless of whether they are explicitly stated or are implied by customary business practices. 3) Determine the transaction price The transaction price is determined based on the consideration we expect to be entitled in exchange for transferring promised goods and services to the customer. Determining the transaction price requires significant judgment. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period. Some of our arrangements include usage-based royalties where a software license is the predominant item that the royalty relates to. In these arrangements, revenue from the usage-based royalty is recognized when the subsequent usage occurs. 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 ASC 606-10-32-18. Our revenue arrangements are typically accounted for under such expedient, as payment is typically due within 30 to 60 days. As of December 31, 2023 and 2022, none of our contracts contained a significant financing component. Our arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. The Company also reviews contractual termination provisions in determining contractual term and total transaction price. For variable fees arising from the client’s purchase of additional usage of a previously delivered software license, we apply the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. 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. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative SSPs. 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 amounts 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. 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 customers and circumstances. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. 5) Recognize revenue when or as we satisfy a performance obligation We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if i) the customer simultaneously receives and consumes the benefits provided by our performance, ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or iii) our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. If we do not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. We categorize revenue as software licenses, software maintenance, or services and other. Specific revenue recognition policies apply to each category of revenue. Software licenses Software licenses consist of revenue from the sale of software licenses for biometrics and imaging applications. Our software licenses are functional intellectual property and typically provide customers with the right to use our software on a term or perpetual basis as it exists when made available to the customer. We recognize revenue from perpetual software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. We also offer certain products pursuant to a subscription-based software model which includes a term software license to use the software for a fixed term. We recognize revenue for fixed fees associated with subscription-based software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. Fees subject to the usage-based royalty exception are recognized when the subsequent usage occurs. Also, 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 ratably over the subscription period. For the years ended December 31, 2023 and 2022, we generated a de minimis amount of revenue from SaaS contracts. Software maintenance Software maintenance consists of revenue from the sale of software maintenance contracts for biometrics and imaging software. Software maintenance contracts entitle customers to receive software support and software updates, if and when they become available, during the term of the maintenance contract. Software support and software updates are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. We recognize software maintenance revenue over time on a straight-line basis over the contract period. Services and other Service revenue consists of fees from biometrics customers for software engineering services. We recognize services revenue 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. The use of the over-time revenue recognition method requires judgment in developing budgeted labor hours. Changes in budgeted hours may occur and the resulting impact on revenue recognition is accounted for in the period of the change in estimate. Other revenue, which includes hardware sales that may be purchased with the software license, is recognized at a point in time upon delivery provided all other revenue recognition criteria are met. Arrangements with multiple performance obligations 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. The various combinations of multiple performance obligations and our revenue recognition for each are described as follows: • Perpetual software licenses and software maintenance: When software licenses and software maintenance contracts are sold together, the software licenses and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to the software licenses and the software maintenance based on relative SSP. Revenue allocated to the software licenses is 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 time on a straight-line basis over the contract period. • Perpetual software licenses and services: 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 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 software licenses and standard implementation or consulting-type services are sold together, they are generally considered distinct performance obligations, as the software licenses are not dependent on or interrelated with the associated services. The transaction price in these arrangements is allocated to the software licenses and services based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the services is recognized over time using an input method. In arrangements with both software licenses and services, the software license portion of the arrangement is classified as software license revenue and the services portion is classified as services revenue in our consolidated statements of operations and comprehensive loss. • Perpetual software licenses, software maintenance and services: When we sell software licenses, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. However, if the software services are significant customization engineering services, they are accounted for with the software licenses as a combined performance obligation, as stated above. Revenue for the combined performance obligation is recognized over time using an input method. • Perpetual software licenses, hardware, software maintenance, and services: When we sell software licenses, hardware, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the hardware is recognized at a point in time upon delivery. Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. • Subscription-based software consisting of a software license and software maintenance: When subscription-based software is sold, the software license and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to software license and the software maintenance based on relative SSP. We sell subscription-based software licenses 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 usage-based royalty, revenue is allocated to the software license recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Any royalties not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as revenue when the subsequent usage occurs. Revenue allocated to the software maintenance is recognized on a straight-line basis over the contract period. Returns We do not offer rights of return for our products and services in the normal course of business. Customer Acceptance Our contracts with customers generally do not include customer acceptance clauses. 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 billing date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by deferred revenue until the performance obligation is satisfied. Our contract assets consist of unbilled receivables. Our contract liabilities consisted 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 table presents changes in our contract assets and liabilities during the years ended December 31, 2023 and 2022 (in thousands): Balance at Revenue Billings Balance at Year ended December 31, 2023 Contract Assets: Unbilled receivables $ 2,929 $ 4,356 $ ( 5,884 ) $ 1,401 Year ended December 31, 2022 Contract Assets: Unbilled receivables $ 3,087 $ 5,288 $ ( 5,446 ) $ 2,929 Balance at Billings Revenue Balance at Year ended December 31, 2023 Contract Liabilities: Deferred revenue $ 3,733 $ 9,478 $ ( 7,674 ) $ 5,537 Year ended December 31, 2022 Contract Liabilities: Deferred revenue $ 3,740 $ 7,104 $ ( 7,111 ) $ 3,733 Remaining Performance Obligations Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 94 % of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. The aggregate amount of the transaction price allocated to remaining performance obligations with a duration greater than one year, comprised of software |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31 (in thousands): 2023 2022 Building and improvements 162 146 Computer and office equipment 859 859 Purchased software 78 78 Furniture and fixtures 573 573 Total 1,672 1,656 Less accumulated depreciation ( 1,093 ) ( 930 ) Property and equipment, net $ 579 $ 726 Depreciation expense was $ 0.2 million and $ 0.3 million for the years ended December 31, 2023 and 2022, respectively. |
Gain on Sale of Property and Eq
Gain on Sale of Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Gain on Sale of Property and Equipment | 4. GAIN ON SALE OF PROPERTY AND EQUIPMENT On July 15, 2022, we completed the sale of our former corporate headquarters to FDS Bedford, LLC located at 40 Middlesex Turnpike, Bedford, Massachusetts for total proceeds of $ 8.9 million less a brokerage commission of $ 0.3 million. During the year ended December 31, 2022, we recorded a gain of $ 5.7 million on the sale and disposed of gross assets of $ 11.5 million and net book value of $ 2.9 million, of which $ 1.8 million was property and equipment and $ 1.1 million was land. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. INTANGIBLE ASSETS The carrying value of intangible assets and their estimated useful live as of December 31, 2023 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ ( 715 ) $ 1,965 Developed technology 5 and 7 years 710 ( 297 ) 413 Trade name / trademarks 3 and 7 years 30 ( 17 ) 13 $ 3,420 $ ( 1,029 ) $ 2,391 The carrying value of intangible assets and their estimated useful live as of December 31, 2022 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ ( 424 ) $ 2,256 Developed technology 5 and 7 years 710 ( 180 ) 530 Trade name / trademarks 3 and 7 years 30 ( 10 ) 20 $ 3,420 $ ( 614 ) $ 2,806 During the years ended December 31, 2023 and 2022 we recorded $ 0.4 million of amortization expense on intangible assets. The Company expects to record amortization for the years ended December 31 as follows (in thousands): 2024 $ 415 2025 405 2026 356 2027 345 2028 338 Thereafter 532 $ 2,391 |
Subscription Agreement
Subscription Agreement | 12 Months Ended |
Dec. 31, 2023 | |
Capitalization, Long-Term Debt and Equity [Abstract] | |
Subscription Agreement | 6. 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 for 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 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 purchase 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 fair value in accordance with ASC 825, Financial Instruments, which was $ 0 and $ 2.6 million as of December 31, 2023 and 2022, respectively. The accrued interest of $ 0.1 million as of December 31, 2022, was included in the fair value of the Note. For the year ended December 31, 2023 we recorded a fair value adjustment of $ 2.7 million, which included $ 0.2 million of accrued interest, to adjust the fair value to $ 0 as of December 31, 2023. The $ 2.7 million write off during the year ended December 31, 2023 was the result of the lack of recoverability of the Note due to liquidity concerns as of December 31, 2023. In addition, in January 2024, Omlis and MIRACL petitioned to enter the United Kingdom administration process. The deterioration of Omlis' liquidity resulted in our uncertainty regarding the recoverability of the Note's carrying value and the unlikelihood of a payout as an unsecured creditor from the administration process. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES We recorded a provision for income tax of $ 59 thousand and $ 49 thousand for the years ended December 31, 2023 and 2022, respectively. The components of the provision for income taxes are as follows (in thousands): Year ended 2023 2022 Current: Federal $ ( 11 ) $ 34 State 70 15 Provision for income taxes $ 59 $ 49 The difference between the effective tax rate and the U.S federal statutory rates was driven primarily due to the change in valuation allowance of our deferred tax assets, state income taxes and stock-based compensation to the deferred tax assets in both 2023 and 2022. A reconciliation of the U.S. federal statutory rate to the effective tax rate is as follows: Year ended 2023 2022 Federal statutory rate 21 % 21 % State rate, net of federal benefit 7 12 Tax credits ( 3 ) ( 2 ) Permanent adjustments — ( 1 ) Change in valuation allowance ( 19 ) ( 24 ) Stock compensation ( 2 ) — Tax law change ( 5 ) — Other — ( 9 ) Effective tax rate ( 1 )% ( 3 )% On October 4, 2023, Massachusetts enacted tax law changes which included the adoption of a single sales apportionment factor effective on January 1, 2025. As required under ASC 740, Income Taxes, we have accounted for the deferred tax impacts of this tax law change in the period the tax law was enacted, which has the impact of reducing our state deferred tax assets. The change in the deferred tax asset balance related to this was offset by a corresponding decrease in the valuation allowance. Deferred income taxes - We had net deferred tax assets of $ 0.5 million and $ .07 million as of December 31, 2023 and 2022, respectively. The principal components of deferred tax assets, net, were as follows at December 31 (in thousands): 2023 2022 Stock-based compensation $ 663 554 Research and development credits 6,623 $ 6,817 Capitalized research expense 3,094 1,557 Net operating loss 1,768 2,562 Loss on note receivable 644 — Other 257 335 Total deferred tax assts 13,049 11,825 Valuation allowance ( 12,504 ) ( 11,115 ) Deferred tax liabilities Depreciation ( 138 ) ( 193 ) Intangibles ( 407 ) ( 517 ) Total deferred tax liabilities ( 545 ) ( 710 ) Net deferred tax assets (liabilities) $ - $ - As of December 31, 2023, $ 6.6 million of our deferred tax assets relate to research and development credit carryforwards. Further, a significant portion of our deferred tax assets relates to federal and state research and development credits. These credits may only offset 75 % of the tax liability after net operating loss carryforwards are utilized and thus, we have the risk that the credits could expire before utilization if sufficient taxable income in the carryforward periods doesn’t exist. As of December 31, 2023, we had a federal net operating loss carryforward of $ 4.1 million, which may be available to offset future income tax liabilities. $ 3.5 million of those NOLs can be carried forward indefinitely and the remaining $ 0.6 million expire in 2037 . As of December 31, 2023, we had State NOL carryforwards of $ 32.3 million, which expire at various dates though 2041 . We evaluated and considered all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets was needed. The deferred tax assets are composed principally of net operating loss carryforwards, capitalized research costs and research and development credits. As part of this analysis, we gave more weight to recent, historical evidence than future projections as we consider the past more objective. Under the applicable accounting standards, we considered our history of losses and concluded that is more likely that we will not recognize the benefits of federal and state deferred tax assets. Therefore, we have recorded a full valuation allowance of $ 12.5 million and $ 11.1 million at December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, we increased the valuation allowance by $ 1.4 million from the prior year end. We will continue to monitor the evidence and the realizability of our deferred tax assets in future periods. Should evidence regarding the realizability of our deferred tax assets change at a future point in time, we will adjust the valuation allowance as required. Under Internal Revenue Code Section 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. In connection with our acquisition of FortressID during 2021, the historical NOL carryforwards of $ 3.5 million from FortressID are likely limited under Section 382 due to a change in ownership triggered by the acquisition, however, we do not expect the limitation to result in any of the NOL carryforwards to expire unused. We have not completed a study at the Aware, Inc. level to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since we became a “loss corporation” as defined in Section 382. Future changes in our stock ownership, which may be outside of our control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” If an “ownership change” has occurred or does occur in the future, utilization of the NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to us. Uncertain tax benefits - As of December 31, 2023 and 2022 we had $ 0.7 million of uncertain tax positions that were primarily related to our research and development tax credits. There were no changes to this amount during each of the years ended December 31, 2023 and 2022. The uncertain tax positions will impact our effective tax rate if realized. Tax examinations – We file tax returns as prescribed by the tax laws of the jurisdictions in which we operate. In the normal course of business, we are subject to examination by federal and state jurisdictions, where applicable. The earliest tax years that remain subject to examination by jurisdiction is 2019 for both federal and Massachusetts. However, to the extent the Company utilizes net operating losses or credits from years prior to 2019, the statute remains open to the extent of the net operating losses or other credits are utilized. |
Equity and Stock Compensation P
Equity and Stock Compensation Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity and Stock Compensation Plans | 8. EQUITY AND STOCK COMPENSATION PLANS Stock Option Plan – During the year ended December 31, 2023. we had one active fixed stock option plan which was our 2001 Nonqualified Stock Plan (“2001 Plan”). We were authorized to grant nonqualified stock options, stock appreciation rights and stock awards to our employees and directors for up to 8,000,000 shares of common stock under this plan. As of December 31, 2023, there were 1,577,130 shares available for grant under the 2001 Plan. Subsequent to December 31, 2023, our shareholders approved the Aware, Inc. 2023 Equity and Incentive Plan, which replaced the 2001 Plan. See Note 13, Subsequent Events, for more information regarding the 2023 Equity and Incentive Plan. Options are granted with exercise prices as determined by the Board of Directors and have a maximum term of ten years . Options generally vest over three to five years . The following table presents stock-based compensation expenses included in our consolidated statements of operations and comprehensive loss (in thousands): For the Year 2023 2022 Cost of services and other $ 20 $ 21 Research and development 289 265 Selling and marketing 88 286 General and administrative 1,128 1,135 Stock-based compensation expense $ 1,525 $ 1,707 Stock-based compensation expense in the preceding table includes expenses associated with grants of: i) stock options, ii) unrestricted shares of our common stock; and iii) performance share awards. The methods used to determine stock-based compensation expense for each type of equity grant are described in the following paragraphs. Stock Option Grants. During the years ended December 31, 2023 and 2022, we did no t grant any stock options. We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. We account for forfeitures as they occur. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of stock options granted. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. Unrestricted Stock Grants . Our 2001 Plan permits us to grant shares of unrestricted 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 granted 134,211 and 167,921 shares of unrestricted stock to directors, officers, and employees during the years ended December 31, 2023 and 2022, respectively. Of the shares granted in 2023, 67,104 were issued shortly after June 30, 2023 and 67,107 were issued shortly after December 31, 2023. Of the shares granted in 2022, 61,460 were issued shortly after June 30, 2022 and 46,461 were issued shortly after December 31, 2022. The remaining 60,000 shares of unrestricted stock granted to an officer is to be issued in four equal installments in February 2023, and August of 2023, 2024, and 2025. Stock Options. Total options outstanding at December 31, 2023 and 2022 were as follows: 2023 2022 Options Weighted Options Weighted Outstanding at beginning of year 2,560,000 $ 4.96 3,240,000 $ 4.97 Granted - - - - Exercised - - - - Forfeited or cancelled ( 300,000 ) 4.94 ( 680,000 ) 5.00 Outstanding at end of year 2,260,000 $ 4.88 2,560,000 $ 4.96 Exercisable at year end 1,681,037 $ 4.94 25,000 $ 6.00 At December 31, 2023, the weighted average remaining contractual term for total options outstanding and total options exercisable was approximately 6.98 and 6.92 years, respectively. At December 31, 2023, the aggregate intrinsic value of options outstanding and exercisable was $ 0 . The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The following table summarizes the stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Exercise Price Range Number Weighted Weighted Number Weighted $ 4 to $ 5 2,053,750 $ 4.72 7.10 1,474,787 $ 4.72 $ 5 to $ 6 68,750 $ 5.50 5.76 68,750 $ 5.76 $ 6 to $ 7 68,750 $ 6.50 5.76 68,750 $ 5.76 $ 7 to $ 8 68,750 $ 7.50 5.76 68,750 $ 5.76 2,260,000 $ 4.88 6.98 1,681,037 $ 4.94 At December 31, 2023, unrecognized compensation expense related to non-vested stock options was approximately $ 1.0 million, which is expected to be recognized over a weighted average period of 1.2 years. We issue common stock from previously authorized but unissued shares to satisfy option exercises and purchases under our Employee Stock Purchase Plan. Employee Stock Purchase Plan – In May 2021, we adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”) under which eligible employees could purchase common stock at a price equal to 85 % of the lower of the fair market value of the common stock at the beginning or end of each six-month offering period. Participation in the 2021 ESPP is limited to $ 25,000 worth of stock for each calendar year, may be terminated at any time by the employee, and automatically ends on termination of employment. A total of 1,000,000 shares of common stock were reserved for issuance under the 2021 ESPP, and as of December 31, 2023, there were 800,844 shares available for future issuance thereunder. We issued 69,591 and 75,066 shares under the 2021 ESPP Plan during the years ended December 31, 2023 and 2022, respectively. Share Purchases – On March 1, 2022, our Board of Directors authorized a stock repurchase program pursuant to which we may purchase up to $ 10.0 million of our common stock. On November 30, 2023, our Board of Directors extended the program through December 31, 2025. As of December 31, 2023 we have repurchased $ 1.8 million of our common stock pursuant to this program. During the years ended December 31, 2023 and 2022 we repurchased 299,780 and 705,201 shares of our common stock, respectively. 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 Directors discretion. Dividends – We did not pay dividends in the years ended December 31, 2023 and 2022. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | 9. LEASES We lease 20,730 rentable square feet at 76 Blanchard Road in Burlington, Massachusetts (the “Leased Space”) which has a term of ten years and six months , which includes a one-time termination right after seven years and six months . The term of the lease commenced on October 1, 2022 , the date that the landlord notified us that the planned construction on the Leased Space was substantially complete. The lease provides for an aggregate of $ 8.2 million of rent payments over the lease term and also provides a renewal option for up to two additional terms of five years each. The components of lease expense included in the consolidated statement of operations and comprehensive loss are as follows (in thousands): For the Year Ended December 31, 2023 2022 Operating lease costs $ 733 $ 182 Supplemental balance sheet information related to the Company's operating lease was as follows (in thousands): As of December 31, 2023 2022 Operating lease right-of-use assets $ 4,260 $ 4,538 Current portion, operating lease liabilities 637 470 Operating lease liabilities, long term 3,838 4,047 Total operating lease liabilities $ 4,475 $ 4,517 Weighted average remaining lease term (years) 9.3 10.3 Weighted average incremental borrowing rate 10.1 % 10.1 % The discount rate implicit in the lease was not readily determinable, and as such, we engaged a third-party valuation specialist to calculate the incremental borrowing rate (“IBR”). The IBR was determined as of the lease commencement date and was dependent on several factors including the amount of lease payments, our credit rating based on a collateralized borrowing, the lease term and the currency of the lease. Future minimum lease payments for operating leases with initial remaining terms in excess of one year as of December 31, 2023 are as follows: 2024 $ 667 2025 687 2026 708 2027 729 2028 751 Thereafter 3,451 Total lease payments 6,993 Less implied interest ( 2,518 ) Total operating lease liabilities $ 4,475 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | 10. COMMITMENTS AND CONTINGENT LIABILITIES Litigation - There are no material pending legal proceedings to which we are a party or to which any of our properties are subject which, either individually or in the aggregate, are expected to have a material adverse effect on our business, financial position or results of operations. Guarantees and Indemnification Obligations – We enter into agreements in the ordinary course of business that require us: i) to perform under the terms of the contracts, ii) to protect the confidentiality of our customers’ intellectual property, and iii) to indemnify customers, including indemnification against third party claims alleging infringement of intellectual property rights. We also have agreements with each of our directors and executive officers to indemnify such directors or executive officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or officer of the Company. Given the nature of the above obligations and agreements, we are unable to make a reasonable estimate of the maximum potential amount that we could be required to pay. Historically, we have not made any significant payments on the above guarantees and indemnifications, and no amount has been accrued in the accompanying consolidated financial statements with respect to these guarantees and indemnifications. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 11. EMPLOYEE BENEFIT PLAN In 1994, we established a qualified 401(k) Retirement Plan (the “401K Plan”) under which employees are allowed to contribute certain percentages of their pay, up to the maximum allowed under Section 401(k) of the Internal Revenue Code. Our contributions to the 401K Plan are at the discretion of the Board of Directors. Our contributions were $ 0.4 million in 2023 and 2022. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 12. NET LOSS PER SHARE The number of common shares used in the computation of diluted net loss per share for the periods presented does not include the effect of the following potentially outstanding common shares because the effect would have been anti-dilutive (in thousands): Year ended 2023 2022 Stock options 2,533 2,982 Net loss per share is calculated as follows (in thousands, except per share data): Year ended 2023 2022 Net loss ( 7,314 ) ( 1,726 ) Shares outstanding: Weighted-average common shares outstanding 21,013 21,604 Additional dilutive common stock equivalents — — Diluted shares outstanding 21,013 21,604 Net loss per share – basic $ ( 0.35 ) $ ( 0.08 ) Net loss per share - diluted $ ( 0.35 ) $ ( 0.08 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS 2023 Equity and Incentive Plan - On January 17, 2024, our shareholders approved the Aware, Inc. 2023 Equity and Incentive Plan (the “2023 Plan”), which replaced our 2001 Plan. The 2023 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, dividend equivalent rights, and cash awards. An aggregate of 1,277,130 shares of our common stock is authorized for issuance pursuant to awards under the 2023 Plan, plus an additional number of shares equal to the number of shares of our common stock subject to awards granted under the 2001 Plan that expire or terminate without having been exercised, are forfeited or otherwise repurchased by us at the grantee’s original purchase price, or are withheld in payment of the exercise price of an option under the 2001 Plan or to satisfy tax withholding obligations with respect to such exercise, up to a maximum of 2,590,000 shares. Options exchange program - On February 20, 2024, we completed an options exchange program, pursuant to which current employees holding stock options to purchase approximately 2.2 million shares of our common stock at weighted average exercise price of $ 4.88 per share (the “Old Options”), including stock options held by our executive officers to purchase approximately 2.2 million shares of our common stock, exchanged the Old Options for new stock options to purchase an aggregate 0.9 million shares of our common stock at an exercise price of $ 2.21 per share (the “New Options”). Each New Options will vest and become exercisable (a) with respect to 50 % of the shares of common stock underlying such New Options on the first anniversary of the grant date and, (b) with respect to the remaining shares of common stock underlying such New Options, in twelve equal monthly installments thereafter, in each case subject to the continuous service of the employee holding such New Options. We expect to record an incremental $ 0.1 million in stock based compensation expense over the vesting period of the New Options. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The consolidated financial statements include the accounts of Aware, Inc. and its subsidiaries (“the Company”). All significant intercompany transactions have been eliminated. |
Use of Estimates | Use of Estimates – The preparation of our 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, goodwill and long-lived asset impairment, valuation of investment in note receivable, valuation of contingent acquisition payments, stock based compensation, income taxes, and allowance for credit losses. |
Fair Value Measurements | Fair Value Measurements - The Financial Accounting Standards Board (“FASB”) Codification defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to the unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the FASB Codification are: i) 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; ii) 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 iii) 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 $ 10.0 million and $ 11.7 million at December 31, 2023 and 2022, respectively. Marketable securities, which primarily include U.S. Treasuries and corporate bonds, were $ 20.9 million and $ 17.2 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023, our assets that are measured at fair value on a recurring basis include the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 7,848 $ - $ - $ 7,848 Marketable securities 20,913 - - 20,913 Note receivable - - - - Total assets $ 28,761 $ - $ - $ 28,761 As of December 31, 2022, our assets and liabilities that are measured at fair value on a recurring basis included the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 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 payments $ - $ - $ 812 $ 812 Total liabilities $ - $ - $ 812 $ 812 The fair value of our contingent acquisition payments was $ 0 and $ 0.8 million as of December 31, 2023 and 2022, respectively. The $ 0.8 million decrease during the year ended December 31, 2023 was due to the end of the earnout period without the achievement of any earnout targets, resulting in no earnout payment being required. The fair value as of December 31, 2022 was determined using a Monte Carlo simulation. 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): December 31, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 15,331 $ 176 $ ( 19 ) $ 15,489 Corporate bonds 5,386 39 ( 1 ) 5,424 $ 20,717 $ 215 $ ( 20 ) $ 20,913 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 Changes in note receivable consisted of the following (in thousands): Balance as of December 31, 2021 $ — Investment in Note Receivable 2,500 Accrued interest 101 Balance as of December 31, 2022 2,601 Accrued interest 94 Write-off of Note Receivable ( 2,695 ) Balance as of December 31, 2023 $ — 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"), was negotiated at an arm’s length basis and the total carrying value of the investment of $ 0 and $ 2.6 million is representative of the fair value of the investment as of December 31 2023 and 2022, respectively. The $ 2.7 million write off during the year ended December 31, 2023 was the result of the lack of recoverability of the Note due to liquidity concerns as of December 31, 2023. In addition, i n January 2024, Omlis and MIRACL petitioned to enter the United Kingdom administration process. The deterioration of Omlis' liquidity, resulted in our uncertainty regarding the recoverability of the Note's carrying value. During the year ended December 31, 2022, there were no changes in the underlying assumptions of the Note. The change in fair value during the year ended December 31, 2022 was the result of accrued interest. |
Cash and Cash Equivalents | Cash and Cash Equivalents – Cash and cash equivalents, which consist primarily of money market funds and demand deposits, are stated at fair value. All highly liquid investments purchased with an original maturity of three months or less are considered cash equivalents. Our cash balances exceed the Federal Deposit Insurance Corporation limits. The Company does not believe it is exposed to significant credit risk related to cash and cash equivalents. |
Allowance for Credit Losses | Allowance for Credit Losses – The Company's accounts receivable are subject to concentrations of credit risk. We maintain an allowance for credit losses that reflects any estimated credit losses. This allowance is evaluated each quarter on a customer by customer basis and considers historical write-off experience with each customer, the number of days that any delinquent invoices are past due, and an evaluation of the potential risk of loss associated with any delinquent accounts. We record the allowance in "general and administrative" expense in the Consolidated Statements of Operations. Account receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. For the years ended December 31, 2023 and 2022, changes to and ending balances of the allowance for credit losses were as follows (in thousands): Years ended 2023 2022 Allowance for credit losses balance - beginning of year $ 188 $ 74 Additions to the allowance for credit losses 37 156 Deductions against the allowance for credit ( 52 ) ( 42 ) Allowance for credit losses balance - end of year $ 173 $ 188 In addition, for the years ended December 31, 2023 and 2022, the credit loss related to unbilled receivables was $ 0 and $ 230 thousand, respectively. |
Property and Equipment | Property and Equipment – Property and equipment is stated at cost. Depreciation and amortization of property and equipment is provided using the straight-line method over the estimated useful lives of the assets. Upon retirement or sale, the costs of the assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss on disposal is included in the determination of income or loss. Expenditures for repairs and maintenance are charged to expense as incurred. The estimated useful lives of assets are: Leasehold improvements 10 years Furniture and fixtures 5 years Computer and office equipment 3 years Purchased software 3 years |
Leases | Leases – We account for a contract as a lease when we have the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the lease term. Variable lease costs are recognized in the period in which the obligation for those payments is incurred. We combine lease and non-lease components when determining lease costs for office space. The lease liability includes lease payments related to options to extend or renew the lease term if we are reasonably certain we will exercise those options. Our lease does not contain material residual value guarantees or restrictive covenants. |
Goodwill | Goodwill – We record goodwill when consideration paid in a business acquisition exceeds the fair value of the net assets acquired. Our estimates of fair value are based upon assumptions believed to be reasonable at the time, but such estimates are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results. Goodwill is not amortized but rather is tested for impairment annually in the fourth quarter or more frequently, if facts and circumstances warrant a review. Circumstances that could trigger an impairment test include, but are not limited to, a significant adverse change in the business climate or legal factors, an adverse action or assessment by a regulator, decline in market capitalization, or unanticipated competition. We have determined that there is a single reporting unit for the purpose of conducting the goodwill impairment assessment. In accordance with ASC Topic 350, Intangibles—Goodwill and Other, we first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If after assessing the totality of events or circumstances, we determine that it is more likely than not (i.e., greater than 50 % likelihood) that the fair value of the reporting unit is less than its carrying amount, then the quantitative test is required. The quantitative goodwill impairment test requires us to estimate and compare the fair value of the reporting unit, determined using an income approach and a market approach, with its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets, goodwill is no t impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss up to the amount of goodwill. Application of the goodwill impairment test requires judgments, including identification of the reporting units, assigning goodwill to reporting units, a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of each reporting unit which often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. There is no assurance that the actual future earnings or cash flows of the reporting unit will not decline significantly from the projections used in the impairment analysis. Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macroeconomic environment and industry, deterioration in the Company’s performance or its future projections, or changes in plans for its reporting unit. As of December 31, 2023 and 2022, we had $ 3.1 million of goodwill. We performed a quantitative analysis during the years ended December 31, 2023 and 2022 and determined there were no impairment losses and to date, there have been no impairments of goodwill. There were no changes to the value of goodwill during the years ended December 31, 2023 and 2022. |
Long-Lived Assets | Long-Lived Assets – We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows estimated to be generated by those assets over their estimated economic life to the related carrying value of those assets to determine if the assets are impaired. If an impairment is indicated, the asset is written down to its estimated fair value. The cash flow estimates used to identify the potential impairment reflect our best estimates using appropriate assumptions and projections at that time. In evaluating potential impairment of these assets, we specifically consider whether any indicators of impairment are present, including, but not limited to: • whether there has been a significant adverse change in the business climate that affects the value of an asset: • whether there has been a significant change in the extent or way an asset is used; and • whether there is an expectation that the asset will be sold or disposed of before the end of its originally estimated useful life. We did not identify any events or changes in business circumstances that would indicate the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate during the years ended December 31, 2023 and 2022. |
Revenue Recognition | Revenue recognition - The core principle of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) is that we should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To achieve that core principle, we apply the following five step model: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s intent and ability to pay, which is based on a variety of factors including the customer’s historical payment experience, or in the case of a new customer, published credit and financial information pertaining to the customer. We evaluate contract modifications for the impact on revenue recognition if they have been approved by both parties such that the enforceable rights and obligations under the contract have changed. Contract modifications are either accounted for using a cumulative effect adjustment or prospectively over the remaining term of the arrangement. The determination of which method is more appropriate depends on the nature of the modification, which we evaluate on a case-by-case basis. We combine two or more contracts entered into at or near the same time with the same customer and account for them as a single contract if (i) the contracts are negotiated as a package with a common commercial objective, (ii) the amount of consideration to be paid in one contract depends on the price or performance of the other contract, or (iii) some or all of the goods or services in one contract would be combined with some or all of the goods and services in the other contract into a single performance obligation. If two or more contracts are combined, the consideration to be paid is aggregated and allocated to the individual performance obligations without regard to the consideration specified in the individual contracts. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. To identify performance obligations, we consider all of the goods or services promised in a contract regardless of whether they are explicitly stated or are implied by customary business practices. 3) Determine the transaction price The transaction price is determined based on the consideration we expect to be entitled in exchange for transferring promised goods and services to the customer. Determining the transaction price requires significant judgment. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period. Some of our arrangements include usage-based royalties where a software license is the predominant item that the royalty relates to. In these arrangements, revenue from the usage-based royalty is recognized when the subsequent usage occurs. 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 ASC 606-10-32-18. Our revenue arrangements are typically accounted for under such expedient, as payment is typically due within 30 to 60 days. As of December 31, 2023 and 2022, none of our contracts contained a significant financing component. Our arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. The Company also reviews contractual termination provisions in determining contractual term and total transaction price. For variable fees arising from the client’s purchase of additional usage of a previously delivered software license, we apply the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. 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. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative SSPs. 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 amounts 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. 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 customers and circumstances. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. 5) Recognize revenue when or as we satisfy a performance obligation We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if i) the customer simultaneously receives and consumes the benefits provided by our performance, ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or iii) our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. If we do not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. We categorize revenue as software licenses, software maintenance, or services and other. Specific revenue recognition policies apply to each category of revenue. Software licenses Software licenses consist of revenue from the sale of software licenses for biometrics and imaging applications. Our software licenses are functional intellectual property and typically provide customers with the right to use our software on a term or perpetual basis as it exists when made available to the customer. We recognize revenue from perpetual software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. We also offer certain products pursuant to a subscription-based software model which includes a term software license to use the software for a fixed term. We recognize revenue for fixed fees associated with subscription-based software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. Fees subject to the usage-based royalty exception are recognized when the subsequent usage occurs. Also, 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 ratably over the subscription period. For the years ended December 31, 2023 and 2022, we generated a de minimis amount of revenue from SaaS contracts. Software maintenance Software maintenance consists of revenue from the sale of software maintenance contracts for biometrics and imaging software. Software maintenance contracts entitle customers to receive software support and software updates, if and when they become available, during the term of the maintenance contract. Software support and software updates are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. We recognize software maintenance revenue over time on a straight-line basis over the contract period. Services and other Service revenue consists of fees from biometrics customers for software engineering services. We recognize services revenue 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. The use of the over-time revenue recognition method requires judgment in developing budgeted labor hours. Changes in budgeted hours may occur and the resulting impact on revenue recognition is accounted for in the period of the change in estimate. Other revenue, which includes hardware sales that may be purchased with the software license, is recognized at a point in time upon delivery provided all other revenue recognition criteria are met. Arrangements with multiple performance obligations 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. The various combinations of multiple performance obligations and our revenue recognition for each are described as follows: • Perpetual software licenses and software maintenance: When software licenses and software maintenance contracts are sold together, the software licenses and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to the software licenses and the software maintenance based on relative SSP. Revenue allocated to the software licenses is 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 time on a straight-line basis over the contract period. • Perpetual software licenses and services: 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 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 software licenses and standard implementation or consulting-type services are sold together, they are generally considered distinct performance obligations, as the software licenses are not dependent on or interrelated with the associated services. The transaction price in these arrangements is allocated to the software licenses and services based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the services is recognized over time using an input method. In arrangements with both software licenses and services, the software license portion of the arrangement is classified as software license revenue and the services portion is classified as services revenue in our consolidated statements of operations and comprehensive loss. • Perpetual software licenses, software maintenance and services: When we sell software licenses, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. However, if the software services are significant customization engineering services, they are accounted for with the software licenses as a combined performance obligation, as stated above. Revenue for the combined performance obligation is recognized over time using an input method. • Perpetual software licenses, hardware, software maintenance, and services: When we sell software licenses, hardware, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the hardware is recognized at a point in time upon delivery. Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. • Subscription-based software consisting of a software license and software maintenance: When subscription-based software is sold, the software license and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to software license and the software maintenance based on relative SSP. We sell subscription-based software licenses 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 usage-based royalty, revenue is allocated to the software license recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Any royalties not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as revenue when the subsequent usage occurs. Revenue allocated to the software maintenance is recognized on a straight-line basis over the contract period. Returns We do not offer rights of return for our products and services in the normal course of business. Customer Acceptance Our contracts with customers generally do not include customer acceptance clauses. 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 billing date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by deferred revenue until the performance obligation is satisfied. Our contract assets consist of unbilled receivables. Our contract liabilities consisted 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 table presents changes in our contract assets and liabilities during the years ended December 31, 2023 and 2022 (in thousands): Balance at Revenue Billings Balance at Year ended December 31, 2023 Contract Assets: Unbilled receivables $ 2,929 $ 4,356 $ ( 5,884 ) $ 1,401 Year ended December 31, 2022 Contract Assets: Unbilled receivables $ 3,087 $ 5,288 $ ( 5,446 ) $ 2,929 Balance at Billings Revenue Balance at Year ended December 31, 2023 Contract Liabilities: Deferred revenue $ 3,733 $ 9,478 $ ( 7,674 ) $ 5,537 Year ended December 31, 2022 Contract Liabilities: Deferred revenue $ 3,740 $ 7,104 $ ( 7,111 ) $ 3,733 Remaining Performance Obligations Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 94 % of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. The aggregate amount of the transaction price allocated to remaining performance obligations with a duration greater than one year, comprised of software maintenance contracts , was $ 0.6 million as of December 31, 2023. Contract Costs We recognize an other asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales commissions meet the requirements to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on software maintenance contracts with a contract period of one year or less as sales commissions paid on contract renewals are commensurate with those paid on the initial contract. |
Income Taxes | Income Taxes – We compute deferred income taxes based on the differences between the financial statement and tax basis of assets and liabilities using enacted rates in effect in the years in which the differences are expected to reverse. We establish a valuation allowance to offset temporary deductible differences, net operating loss carryforwards and tax credits when it is more likely than not that the deferred tax assets will not be realized. We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position. The evaluation of an uncertain tax position is based on factors that include, but are not limited to, changes in the tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit and changes in facts or circumstances related to a tax position. Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could impact our tax provision in future periods. Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in the consolidated statements of operations and comprehensive loss. |
Capitalization of Software Costs | Capitalization of Software Costs – We capitalize certain costs to develop software products to be sold, leased, or marketed to external users after technological feasibility of the product has been established. No software costs were capitalized during the years ended December 31, 2023 and 2022, because such costs incurred between the period after technological feasibility to the product release were immaterial. The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three to five years , commencing on the date the software is placed into service. No software costs were capitalized during the years ended December 31, 2023 and 2022, because such costs incurred after attainment of technological feasibility but before product release were immaterial. |
Research and Development Costs | Research and Development Costs – Costs incurred in the research and development of our products are expensed as incurred. |
Concentration of Credit Risk | Concentration of Credit Risk – At December 31, 2023 and 2022, we had cash and cash equivalents, in excess of federally insured deposit limits of approximately $ 9.7 million and $ 11.5 million, respectively. Concentration of credit risk with respect to net accounts receivable and unbilled receivables consisted of amounts owed by the following customers that comprised more than 10 % of net accounts receivable and unbilled receivables at December 31: December 31, 2023 2022 Customer A 16 % 2 % Customer B 8 % 12 % Customer C - 26 % We had one customer in 2023 that represented 18 % of revenue. No other customers represented over 10 % of revenue in 2023 or 2022. |
Stock-based Compensation | Stock-Based Compensation – We grant stock and stock options to our employees and directors. We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize stock-based compensation expense on a straight-line basis over the requisite service period of the award. For stock awards, we determine the fair value of the award by using 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. For stock options, we use the Black-Scholes option valuation model to estimate the fair value of the award. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. |
Computation of Earnings per Share | Computation of Earnings per Share – Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing income available to common shareholders 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 antidilutive are excluded from the calculation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments – The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of their short-term nature. |
Segments | Segments – We organize ourselves into a single segment reporting to the chief operating decision maker, who we have designated as our Chief Executive Officer. We conduct our operations in the United States and sell our products and services to domestic and international customers. Revenues were generated from the following geographic regions (in thousands): Year ended 2023 2022 United States $ 11,953 $ 7,613 United Kingdom 1,524 1,717 Rest of world 4,767 6,678 $ 18,244 $ 16,008 Revenue by product group was (in thousands): Year ended 2023 2022 License and service contracts $ 14,272 $ 12,937 Subscription-based contracts 3,972 3,071 $ 18,244 $ 16,008 Revenue by product group consists of all associated revenue within the contract, including license revenue, maintenance revenue, and services and other revenue. Revenue by product group may be recognized at a point in time or over-time. These revenues are attributable to both contracts with fixed fees and guaranteed minimums. Revenue by timing of transfer of goods or services was (in thousands): Year ended 2023 2022 Goods or services transferred at a point in time $ 8,223 $ 7,178 Goods or services transferred over time 10,021 8,830 $ 18,244 $ 16,008 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | As of December 31, 2023, our assets that are measured at fair value on a recurring basis include the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 7,848 $ - $ - $ 7,848 Marketable securities 20,913 - - 20,913 Note receivable - - - - Total assets $ 28,761 $ - $ - $ 28,761 As of December 31, 2022, our assets and liabilities that are measured at fair value on a recurring basis included the following (in thousands): Fair Value Measurement at Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (included in cash $ 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 payments $ - $ - $ 812 $ 812 Total liabilities $ - $ - $ 812 $ 812 |
Summary of Marketable Securities by Security Type | Marketable securities by security type consisted of the following (in thousands): December 31, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury notes and bonds $ 15,331 $ 176 $ ( 19 ) $ 15,489 Corporate bonds 5,386 39 ( 1 ) 5,424 $ 20,717 $ 215 $ ( 20 ) $ 20,913 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 note receivable consisted of the following (in thousands): Balance as of December 31, 2021 $ — Investment in Note Receivable 2,500 Accrued interest 101 Balance as of December 31, 2022 2,601 Accrued interest 94 Write-off of Note Receivable ( 2,695 ) Balance as of December 31, 2023 $ — |
Schedule of Allowance for Credit Losses | For the years ended December 31, 2023 and 2022, changes to and ending balances of the allowance for credit losses were as follows (in thousands): Years ended 2023 2022 Allowance for credit losses balance - beginning of year $ 188 $ 74 Additions to the allowance for credit losses 37 156 Deductions against the allowance for credit ( 52 ) ( 42 ) Allowance for credit losses balance - end of year $ 173 $ 188 In addition, for the years ended December 31, 2023 and 2022, the credit loss related to unbilled receivables was $ 0 and $ 230 thousand, respectively. |
Schedule of Estimated Useful Lives Assets | The estimated useful lives of assets are: Leasehold improvements 10 years Furniture and fixtures 5 years Computer and office equipment 3 years Purchased software 3 years |
Schedule of Changes in Contract Assets and Liabilities | The following table presents changes in our contract assets and liabilities during the years ended December 31, 2023 and 2022 (in thousands): Balance at Revenue Billings Balance at Year ended December 31, 2023 Contract Assets: Unbilled receivables $ 2,929 $ 4,356 $ ( 5,884 ) $ 1,401 Year ended December 31, 2022 Contract Assets: Unbilled receivables $ 3,087 $ 5,288 $ ( 5,446 ) $ 2,929 Balance at Billings Revenue Balance at Year ended December 31, 2023 Contract Liabilities: Deferred revenue $ 3,733 $ 9,478 $ ( 7,674 ) $ 5,537 Year ended December 31, 2022 Contract Liabilities: Deferred revenue $ 3,740 $ 7,104 $ ( 7,111 ) $ 3,733 |
Schedules of Concentration of Credit Risk with Respect to Net Accounts Receivable and Total Revenue | December 31, 2023 2022 Customer A 16 % 2 % Customer B 8 % 12 % Customer C - 26 % |
Schedule of Revenues Generated from Geographic Regions | Revenues were generated from the following geographic regions (in thousands): Year ended 2023 2022 United States $ 11,953 $ 7,613 United Kingdom 1,524 1,717 Rest of world 4,767 6,678 $ 18,244 $ 16,008 |
Schedule of Revenue by Product Group | Revenue by product group was (in thousands): Year ended 2023 2022 License and service contracts $ 14,272 $ 12,937 Subscription-based contracts 3,972 3,071 $ 18,244 $ 16,008 |
Schedule of Revenue by Timing of Transfer of Goods or Services | Revenue by timing of transfer of goods or services was (in thousands): Year ended 2023 2022 Goods or services transferred at a point in time $ 8,223 $ 7,178 Goods or services transferred over time 10,021 8,830 $ 18,244 $ 16,008 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at December 31 (in thousands): 2023 2022 Building and improvements 162 146 Computer and office equipment 859 859 Purchased software 78 78 Furniture and fixtures 573 573 Total 1,672 1,656 Less accumulated depreciation ( 1,093 ) ( 930 ) Property and equipment, net $ 579 $ 726 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Carrying Value of Intangible Assets and Estimated Useful Live | The carrying value of intangible assets and their estimated useful live as of December 31, 2023 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ ( 715 ) $ 1,965 Developed technology 5 and 7 years 710 ( 297 ) 413 Trade name / trademarks 3 and 7 years 30 ( 17 ) 13 $ 3,420 $ ( 1,029 ) $ 2,391 The carrying value of intangible assets and their estimated useful live as of December 31, 2022 are as follows (dollars in thousands): Useful Life Gross Accumulated Net Book Customer relationships 8 and 10 years $ 2,680 $ ( 424 ) $ 2,256 Developed technology 5 and 7 years 710 ( 180 ) 530 Trade name / trademarks 3 and 7 years 30 ( 10 ) 20 $ 3,420 $ ( 614 ) $ 2,806 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company expects to record amortization for the years ended December 31 as follows (in thousands): 2024 $ 415 2025 405 2026 356 2027 345 2028 338 Thereafter 532 $ 2,391 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The components of the provision for income taxes are as follows (in thousands): Year ended 2023 2022 Current: Federal $ ( 11 ) $ 34 State 70 15 Provision for income taxes $ 59 $ 49 |
Schedule of Reconciliation of U.S. Federal Statutory Rate to Effective Tax Rate | The difference between the effective tax rate and the U.S federal statutory rates was driven primarily due to the change in valuation allowance of our deferred tax assets, state income taxes and stock-based compensation to the deferred tax assets in both 2023 and 2022. A reconciliation of the U.S. federal statutory rate to the effective tax rate is as follows: Year ended 2023 2022 Federal statutory rate 21 % 21 % State rate, net of federal benefit 7 12 Tax credits ( 3 ) ( 2 ) Permanent adjustments — ( 1 ) Change in valuation allowance ( 19 ) ( 24 ) Stock compensation ( 2 ) — Tax law change ( 5 ) — Other — ( 9 ) Effective tax rate ( 1 )% ( 3 )% |
Schedule of Principal Components of Deferred Tax Assets | The principal components of deferred tax assets, net, were as follows at December 31 (in thousands): 2023 2022 Stock-based compensation $ 663 554 Research and development credits 6,623 $ 6,817 Capitalized research expense 3,094 1,557 Net operating loss 1,768 2,562 Loss on note receivable 644 — Other 257 335 Total deferred tax assts 13,049 11,825 Valuation allowance ( 12,504 ) ( 11,115 ) Deferred tax liabilities Depreciation ( 138 ) ( 193 ) Intangibles ( 407 ) ( 517 ) Total deferred tax liabilities ( 545 ) ( 710 ) Net deferred tax assets (liabilities) $ - $ - |
Equity and Stock Compensation_2
Equity and Stock Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Employee Compensation Expenses Included in Consolidated Statements of Operations and Comprehensive Loss | The following table presents stock-based compensation expenses included in our consolidated statements of operations and comprehensive loss (in thousands): For the Year 2023 2022 Cost of services and other $ 20 $ 21 Research and development 289 265 Selling and marketing 88 286 General and administrative 1,128 1,135 Stock-based compensation expense $ 1,525 $ 1,707 |
Summary of Stock Option Transactions for Fixed Stock Option Plan | 2023 2022 Options Weighted Options Weighted Outstanding at beginning of year 2,560,000 $ 4.96 3,240,000 $ 4.97 Granted - - - - Exercised - - - - Forfeited or cancelled ( 300,000 ) 4.94 ( 680,000 ) 5.00 Outstanding at end of year 2,260,000 $ 4.88 2,560,000 $ 4.96 Exercisable at year end 1,681,037 $ 4.94 25,000 $ 6.00 |
Summary of Stock Options Outstanding | The following table summarizes the stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Exercise Price Range Number Weighted Weighted Number Weighted $ 4 to $ 5 2,053,750 $ 4.72 7.10 1,474,787 $ 4.72 $ 5 to $ 6 68,750 $ 5.50 5.76 68,750 $ 5.76 $ 6 to $ 7 68,750 $ 6.50 5.76 68,750 $ 5.76 $ 7 to $ 8 68,750 $ 7.50 5.76 68,750 $ 5.76 2,260,000 $ 4.88 6.98 1,681,037 $ 4.94 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense included in the consolidated statement of operations and comprehensive loss are as follows (in thousands): For the Year Ended December 31, 2023 2022 Operating lease costs $ 733 $ 182 |
Summary of Operating Lease Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company's operating lease was as follows (in thousands): As of December 31, 2023 2022 Operating lease right-of-use assets $ 4,260 $ 4,538 Current portion, operating lease liabilities 637 470 Operating lease liabilities, long term 3,838 4,047 Total operating lease liabilities $ 4,475 $ 4,517 Weighted average remaining lease term (years) 9.3 10.3 Weighted average incremental borrowing rate 10.1 % 10.1 % |
Summary of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for operating leases with initial remaining terms in excess of one year as of December 31, 2023 are as follows: 2024 $ 667 2025 687 2026 708 2027 729 2028 751 Thereafter 3,451 Total lease payments 6,993 Less implied interest ( 2,518 ) Total operating lease liabilities $ 4,475 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense included in the consolidated statement of operations and comprehensive loss are as follows (in thousands): For the Year Ended December 31, 2023 2022 Operating lease costs $ 733 $ 182 |
Summary of Operating Lease Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company's operating lease was as follows (in thousands): As of December 31, 2023 2022 Operating lease right-of-use assets $ 4,260 $ 4,538 Current portion, operating lease liabilities 637 470 Operating lease liabilities, long term 3,838 4,047 Total operating lease liabilities $ 4,475 $ 4,517 Weighted average remaining lease term (years) 9.3 10.3 Weighted average incremental borrowing rate 10.1 % 10.1 % |
Summary of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for operating leases with initial remaining terms in excess of one year as of December 31, 2023 are as follows: 2024 $ 667 2025 687 2026 708 2027 729 2028 751 Thereafter 3,451 Total lease payments 6,993 Less implied interest ( 2,518 ) Total operating lease liabilities $ 4,475 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Potentially Outstanding Common Shares Anti-dilutive | The number of common shares used in the computation of diluted net loss per share for the periods presented does not include the effect of the following potentially outstanding common shares because the effect would have been anti-dilutive (in thousands): Year ended 2023 2022 Stock options 2,533 2,982 |
Schedule of Net Loss Per Share | Net loss per share is calculated as follows (in thousands, except per share data): Year ended 2023 2022 Net loss ( 7,314 ) ( 1,726 ) Shares outstanding: Weighted-average common shares outstanding 21,013 21,604 Additional dilutive common stock equivalents — — Diluted shares outstanding 21,013 21,604 Net loss per share – basic $ ( 0.35 ) $ ( 0.08 ) Net loss per share - diluted $ ( 0.35 ) $ ( 0.08 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) Customer | Dec. 31, 2022 USD ($) Customer | |
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Cash and cash equivalents | $ 10,002,000 | $ 11,749,000 |
Marketable securities | 20,913,000 | 17,229,000 |
Contingent acquisition payments | 0 | 800,000 |
Decrease in fair value recognized due to end of earnout period | 800,000 | |
Credit loss expense unbilled receivables | 0 | 230,000 |
Goodwill impairment | 0 | |
Goodwill | $ 3,120,000 | $ 3,120,000 |
Percentage of remaining performance obligations | 94% | |
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 | |
18% of Revenue | One Customer | Revenue | Customer Concentration Risk [Member] | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Percentage of revenue owned by customers | 18% | |
Number of customers | Customer | 1 | |
10% of Revenue | No Other Customer | Revenue | Customer Concentration Risk [Member] | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Percentage of revenue owned by customers | 10% | 10% |
Number of customers | Customer | 0 | 0 |
Minimum | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Percentage of likelihood for goodwill examination of quantitative test | 50% | |
U S Treasuries And Corporate Bonds | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Marketable securities | $ 20,900,000 | $ 17,200,000 |
Fair Value, Measurements, Recurring | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Note receivable | 0 | 2,601,000 |
Contingent acquisition payments | 812,000 | |
Fair Value, Measurements, Recurring | Omlis Limited | Note Receivable | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Note receivable | 0 | 2,600,000 |
Write-off of notes receivable | 2,700,000 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Disclosure Of Significant Of Accounting Policies [Line Items] | ||
Note receivable | $ 0 | 0 |
Contingent acquisition payments |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Marketable securities | $ 20,913 | $ 17,229 |
Liabilities: | ||
Contingent acquisition payments | 0 | 800 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Note receivable | 0 | 2,601 |
Total assets | 28,761 | 30,797 |
Liabilities: | ||
Contingent acquisition payments | 812 | |
Total liabilities | 812 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Note receivable | 0 | 0 |
Total assets | 28,761 | 28,196 |
Liabilities: | ||
Contingent acquisition payments | ||
Total liabilities | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Note receivable | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent acquisition payments | ||
Total liabilities | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Note receivable | 0 | 2,601 |
Total assets | 0 | 2,601 |
Liabilities: | ||
Contingent acquisition payments | 812 | |
Total liabilities | 812 | |
Money market funds (included in cash and cash equivalents) | Fair Value, Measurements, Recurring | ||
Assets: | ||
Money market funds (included in cash and cash equivalents) | 7,848 | 10,967 |
Money market funds (included in cash and cash equivalents) | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Money market funds (included in cash and cash equivalents) | 7,848 | 10,967 |
Money market funds (included in cash and cash equivalents) | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Money market funds (included in cash and cash equivalents) | 0 | 0 |
Money market funds (included in cash and cash equivalents) | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Money market funds (included in cash and cash equivalents) | 0 | 0 |
Marketable Securities | Fair Value, Measurements, Recurring | ||
Assets: | ||
Marketable securities | 20,913 | 17,229 |
Marketable Securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Marketable securities | 20,913 | 17,229 |
Marketable Securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Marketable securities | 0 | 0 |
Marketable Securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Marketable securities | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Marketable Securities by Security Type (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 20,717 | $ 17,339 |
Gross Unrealized Gains | 215 | 24 |
Gross Unrealized Losses | (20) | (134) |
Fair Value | 20,913 | 17,229 |
U.S. Treasury Notes and Bonds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 15,331 | 13,389 |
Gross Unrealized Gains | 176 | 24 |
Gross Unrealized Losses | (19) | (100) |
Fair Value | 15,489 | 13,313 |
Corporate Bonds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 5,386 | 3,950 |
Gross Unrealized Gains | 39 | |
Gross Unrealized Losses | (1) | (34) |
Fair Value | $ 5,424 | $ 3,916 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Changes in Note Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Securities, Available-for-Sale [Line Items] | ||
Ending Balance | $ 0 | |
Note Receivable | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Beginning Balance | 2,601,000 | $ 0 |
Investment in Note Receivable | 2,500,000 | |
Accrued interest | 94,000 | 101,000 |
Write-off of Note Receivable | (2,695,000) | |
Ending Balance | $ 0 | $ 2,601,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Allowance for Doubtful Accounts Receivable | ||
Allowance for credit losses balance - beginning of year | $ 188 | $ 74 |
Additions to the allowance for credit losses | 37 | 156 |
Deductions against the allowance for credit losses | (52) | (42) |
Allowance for credit losses balance - end of year | $ 173 | $ 188 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details) | Dec. 31, 2023 |
Leasehold Improvements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of assets | 10 years |
Furniture and Fixtures | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of assets | 5 years |
Computer and office equipment | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of assets | 3 years |
Purchased software | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful lives of assets | 3 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Contract Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Unbilled receivables, Balance at Beginning of Period | $ 2,929 | $ 3,087 |
Unbilled receivables, Revenue Recognized In Advance of Billings | 4,356 | 5,288 |
Unbilled receivables, Billings | (5,884) | (5,446) |
Unbilled receivables, Balance at End of Period | $ 1,401 | $ 2,929 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Deferred revenue, Balance at Beginning of Period | $ 3,733 | $ 3,740 |
Deferred revenue, Billings | 9,478 | 7,104 |
Deferred revenue, Revenue Recognized | (7,674) | (7,111) |
Deferred revenue, Balance at End of Period | $ 5,537 | $ 3,733 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Remaining Performance Obligation , Contract Costs , Capitalization Costs and Concentration of Credit Risk (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Line Items] | ||
Minimum period of remaining performance obligations | 12 months | |
Revenue recognition performance obligation transaction price | $ 600,000 | |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | |
Software costs capitalized during period | $ 0 | $ 0 |
Cash and cash equivalents, in excess of federally insured deposit limits | $ 9,700,000 | $ 11,500,000 |
Percentage of accounts receivable and unbilled receivables owned by customers | 10% | |
Minimum | ||
Accounting Policies [Line Items] | ||
Amortization period of capitalized software | 3 years | |
Maximum | ||
Accounting Policies [Line Items] | ||
Amortization period of capitalized software | 5 years |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Accounts Receivable [Member] - Credit Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer A [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk, percentage | 16% | 2% |
Customer B [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk, percentage | 8% | 12% |
Customer C [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk, percentage | 0% | 26% |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Revenues Generated Following Geographic Regions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 18,244 | $ 16,008 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 18,244 | 16,008 |
Operating Segments | United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 11,953 | 7,613 |
Operating Segments | United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,524 | 1,717 |
Operating Segments | Rest of World | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 4,767 | $ 6,678 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Summary of Revenue by Product Group (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 18,244 | $ 16,008 |
License and Service Contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 9,529 | 7,386 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 18,244 | 16,008 |
Operating Segments | License and Service Contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 14,272 | 12,937 |
Operating Segments | Subscription-based Contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,972 | $ 3,071 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Revenue by Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 18,244 | $ 16,008 |
Goods or services transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,223 | 7,178 |
Goods or services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 10,021 | $ 8,830 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property and Equipment | ||
Total | $ 1,672 | $ 1,656 |
Less accumulated depreciation | (1,093) | (930) |
Property and equipment, net | 579 | 726 |
Building and Improvements | ||
Property and Equipment | ||
Total | 162 | 146 |
Computer and Office Equipment | ||
Property and Equipment | ||
Total | 859 | 859 |
Purchased software | ||
Property and Equipment | ||
Total | 78 | 78 |
Furniture and Fixtures | ||
Property and Equipment | ||
Total | $ 573 | $ 573 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 15, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 200 | $ 300 | |
Purchase obligation | $ 8,900 | ||
Brokerage commission paid | $ 300 | ||
Gain on sale of fixed assets | 5,672 | ||
Long-lived assets held for sale gross | $ 11,500 |
Gain on Sale of Property and _2
Gain on Sale of Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 15, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Long-lived assets held for sale | $ 2,900 | |
Purchase obligation | $ 8,900 | |
Brokerage commission paid | $ 300 | |
Gain on sale of fixed assets | 5,672 | |
Long-lived assets held for sale gross | 11,500 | |
Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets held for sale | 1,800 | |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets held for sale | $ 1,100 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Goodwill | $ 3,120 | $ 3,120 |
Goodwill related to deferred tax assets | $ (407) | $ (517) |
Acquisition - Summary of Fair V
Acquisition - Summary of Fair Value of Assets Acquired and Liabilities Assumed At Date of Acquisition (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Goodwill | $ 3,120 | $ 3,120 |
Intangible Assets - Summary of
Intangible Assets - Summary of Carrying Value of Intangible Assets and Estimated Useful Live (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 3,420 | $ 3,420 |
Accumulated Amortization | (1,029) | (614) |
Net Book Value | 2,391 | 2,806 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 2,680 | 2,680 |
Accumulated Amortization | (715) | (424) |
Net Book Value | $ 1,965 | $ 2,256 |
Customer Relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 years | 8 years |
Customer Relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 10 years | 10 years |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 710 | $ 710 |
Accumulated Amortization | (297) | (180) |
Net Book Value | $ 413 | $ 530 |
Developed Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | 5 years |
Developed Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 7 years | 7 years |
Trade Name / Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 30 | $ 30 |
Accumulated Amortization | (17) | (10) |
Net Book Value | $ 13 | $ 20 |
Trade Name / Trademarks | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | 3 years |
Trade Name / Trademarks | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 7 years | 7 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on intangible assets | $ 0.4 | $ 0.4 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | ||
2024 | $ 415 | |
2025 | 405 | |
2026 | 356 | |
2027 | 345 | |
2028 | 338 | |
Thereafter | 532 | |
Net Book Value | $ 2,391 | $ 2,806 |
Subscription Agreement - Additi
Subscription Agreement - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Mar. 11, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Capitalization Longterm Debt [Line Items] | |||
Note receivable | $ 2,601,000 | ||
Assets, fair value adjustment | $ 2,700,000 | ||
Notes receivable, fair value disclosure | $ 0 | ||
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 | Warrant | Maximum | |||
Schedule Of Capitalization Longterm Debt [Line Items] | |||
Issuance of warrants purchase percentage | 8% | ||
Omlis Limited | Note Receivable | |||
Schedule Of Capitalization Longterm Debt [Line Items] | |||
Convertible Note amount | $ 2,500,000 | ||
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 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. | ||
Note receivable | $ 0 | 2,600,000 | |
Accrued interest included in fair value of note | 200,000 | $ 100,000 | |
Omlis Limited | Note Receivable | Fair Value, Measurements, Recurring | |||
Schedule Of Capitalization Longterm Debt [Line Items] | |||
Write-off of notes receivable | $ 2,700,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Line Items] | ||
Income tax expense (Benefit) | $ 59 | $ 49 |
Deferred tax assets | 500 | 70 |
Research and development credits | 6,623 | 6,817 |
Net operating loss carryforward | 32,300 | |
Valuation allowance | $ 12,504 | 11,115 |
Percentage of offset tax liability after net operating loss carryforwards | 75% | |
Operating loss carryforwards expiration year | 2041 | |
Increase in deferred tax assets valuation allowance | $ 1,400 | |
Uncertain tax positions | 700 | $ 700 |
Fortress ID | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforward | 3,500 | |
Federal | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforward | 4,100 | |
Federal | Carryforward Indefinitely | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforward | 3,500 | |
Federal | Expires in 2037 | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforward | $ 600 | |
Operating loss carryforwards expiration year | 2037 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ (11) | $ 34 |
State | 70 | 15 |
Deferred: | ||
Provision for income taxes | $ 59 | $ 49 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of U.S. Federal Statutory Rate to Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21% | 21% |
State rate, net of federal benefit | 7% | 12% |
Tax credits | (3.00%) | (2.00%) |
Permanent adjustments | (1.00%) | |
Change in valuation allowance | (19.00%) | (24.00%) |
Stock compensation | (2.00%) | |
Tax law change | (5.00%) | |
Other | (9.00%) | |
Effective tax rate | (1.00%) | (3.00%) |
Income Taxes - Schedule of Prin
Income Taxes - Schedule of Principal Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Stock-based compensation | $ 663 | $ 554 |
Research and development credits | 6,623 | 6,817 |
Capitalized research expense | 3,094 | 1,557 |
Net operating loss | 1,768 | 2,562 |
Loss on note receivable | 644 | |
Other | 257 | 335 |
Total deferred tax assts | 13,049 | 11,825 |
Valuation allowance | (12,504) | (11,115) |
Depreciation | (138) | (193) |
Intangibles | (407) | (517) |
Total deferred tax liabilities | $ (545) | $ (710) |
Equity and Stock Compensation_3
Equity and Stock Compensation Plans - Stock Option Plan (Details) - 2001 Nonqualified Stock Plan - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of stock awards authorized to grant | 8,000,000 | |
Number of stock awards available for grant | 1,577,130 | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Term of options vested | 3 years | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Term of options granted at exercise prices | 10 years | |
Term of options vested | 5 years |
Equity and Stock Compensation_4
Equity and Stock Compensation Plans - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 1,525 | $ 1,707 |
Cost of services and other | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 20 | 21 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 289 | 265 |
Selling and marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 88 | 286 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 1,128 | $ 1,135 |
Equity and Stock Compensation_5
Equity and Stock Compensation Plans - Stock Option Grants and Unrestricted Stock Grants (Details) | 12 Months Ended | ||||
Jul. 01, 2023 shares | Jul. 01, 2022 shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) Installment $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total stock-based compensation expense | $ | $ 1,525,000 | $ 1,707,000 | |||
Stock options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock options granted | 0 | 0 | |||
Options outstanding, Weighted average remaining contractual term (in years) | 6 years 11 months 23 days | ||||
Weighted average remaining contractual term | 6 years 11 months 1 day | ||||
Aggregate intrinsic value of options exercisable | $ | $ 0 | ||||
Amount of unrecognized compensation expense related to non-vested options | $ | $ 1,000,000 | ||||
Unrestricted Stock | 2001 Nonqualified Stock Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 60,000 | ||||
Unrestricted Stock | 2001 Nonqualified Stock Plan | 2022 Grant | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 134,211 | 167,921 | |||
Number of shares issued | 61,460 | 46,461 | |||
Unrestricted Stock | 2001 Nonqualified Stock Plan | 2022 Grant | Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of installment | Installment | 4 | ||||
Unrestricted Stock | 2001 Nonqualified Stock Plan | 2023 Grant | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares issued | 67,104 | 67,107 | |||
Equity Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of options outstanding | 2,260,000 | 2,560,000 | 3,240,000 | ||
Weighted average exercise price of options outstanding | $ / shares | $ 4.88 | $ 4.96 | $ 4.97 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 6 years 11 months 23 days | ||||
Weighted average period for nonvested options | 1 year 2 months 12 days |
Equity and Stock Compensation_6
Equity and Stock Compensation Plans - Summary of Stock Option Transactions (Details) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shares | ||
Outstanding at beginning of year | 2,560,000 | 3,240,000 |
Forfeited or cancelled | (300,000) | (680,000) |
Outstanding at end of year | 2,260,000 | 2,560,000 |
Exercisable at year end | 1,681,037 | 25,000 |
Weighted Average Exercise Price | ||
Outstanding at beginning of year | $ 4.96 | $ 4.97 |
Forfeited or cancelled | 4.94 | 5 |
Outstanding at end of year | 4.88 | 4.96 |
Exercisable at year end | $ 4.94 | $ 6 |
Equity and Stock Compensation_7
Equity and Stock Compensation Plans - Summarizes of Stock Options Outstanding (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Exercise price range $4 to $5 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Options outstanding, Number | 2,053,750 | ||
Options exercisable, Number | 1,474,787 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 7 years 1 month 6 days | ||
Options outstanding, Weighted average exercise price | $ 4.72 | ||
Options exercisable, Weighted average exercise price | $ 4.72 | ||
Exercise price range $5 to $6 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Options outstanding, Number | 68,750 | ||
Options exercisable, Number | 68,750 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 5 years 9 months 3 days | ||
Options outstanding, Weighted average exercise price | $ 5.50 | ||
Options exercisable, Weighted average exercise price | $ 5.76 | ||
Exercise price range $6 to $7 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Options outstanding, Number | 68,750 | ||
Options exercisable, Number | 68,750 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 5 years 9 months 3 days | ||
Options outstanding, Weighted average exercise price | $ 6.50 | ||
Options exercisable, Weighted average exercise price | $ 5.76 | ||
Exercise price range $7 to $8 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Options outstanding, Number | 68,750 | ||
Options exercisable, Number | 68,750 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 5 years 9 months 3 days | ||
Options outstanding, Weighted average exercise price | $ 7.50 | ||
Options exercisable, Weighted average exercise price | $ 5.76 | ||
Stock Option [Member] | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Options outstanding, Number | 2,260,000 | 2,560,000 | 3,240,000 |
Options exercisable, Number | 1,681,037 | 25,000 | |
Options outstanding, Weighted average remaining contractual term (in years) | 6 years 11 months 23 days | ||
Options outstanding, Weighted average exercise price | $ 4.88 | $ 4.96 | $ 4.97 |
Options exercisable, Weighted average exercise price | 4.94 | $ 6 | |
Stock Option [Member] | Exercise price range $4 to $5 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Exercise price range (lower) | 4 | ||
Exercise price range (upper) | 5 | ||
Stock Option [Member] | Exercise price range $5 to $6 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Exercise price range (lower) | 5 | ||
Exercise price range (upper) | 6 | ||
Stock Option [Member] | Exercise price range $6 to $7 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Exercise price range (lower) | 6 | ||
Exercise price range (upper) | 7 | ||
Stock Option [Member] | Exercise price range $7 to $8 | |||
EQUITY AND STOCK COMPENSATION PLANS | |||
Exercise price range (lower) | 7 | ||
Exercise price range (upper) | $ 8 |
Equity and Stock Compensation_8
Equity and Stock Compensation Plans - Employee Stock Purchase Plan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 1,525,000 | $ 1,707,000 | |
2021 ESPP Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of common stock at a price lower of the fair market value | 85% | ||
Period of common stock offering | 6 months | ||
Annual purchase limit | $ 25,000 | ||
Total number of common stock shares reserved for issuance | 1,000,000 | ||
Number of common stock shares reserved for issuance | 800,844 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 69,591 | 75,066 |
Equity and Stock Compensation_9
Equity and Stock Compensation Plans - Share Purchases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 01, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Repurchase of common stock | $ (506) | $ (1,312) | |
Share Purchases | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of common stock authorized for repurchase | $ 10,000 | ||
Number of stock repurchased | 299,780 | 705,201 | |
Repurchase of common stock | $ (1,800) |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | Oct. 01, 2022 USD ($) ft² | Dec. 31, 2023 |
Lessee, Lease, Description [Line Items] | ||
Operating leases, remaining lease term | 1 year | |
Original Lease Agreement | ||
Lessee, Lease, Description [Line Items] | ||
Rentable area | ft² | 20,730 | |
Lease, term of contract | 10 years 6 months | |
Lease, option to terminate | one-time termination right after seven years and six months | |
Lease commencement date | Oct. 01, 2022 | |
Rent expenses | $ | $ 8.2 | |
Lease, option to extend | a renewal option for up to two additional terms | |
Lease, renewal term | 5 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease, Cost [Abstract] | ||
Operating lease costs | $ 733 | $ 182 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Balance Sheet Information Related to Company's Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | ||
Operating lease right-of-use assets | $ 4,260 | $ 4,538 |
Current portion operating lease liabilities | 637 | 470 |
Operating lease liabilities, long term | 3,838 | 4,047 |
Total operating lease liabilities | $ 4,475 | $ 4,517 |
Weighted average remaining lease term (years) | 9 years 3 months 18 days | 10 years 3 months 18 days |
Weighted average incremental borrowing rate | 10.10% | 10.10% |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
2024 | $ 667 | |
2025 | 687 | |
2026 | 708 | |
2027 | 729 | |
2028 | 751 | |
Thereafter | 3,451 | |
Total lease payments | 6,993 | |
Less implied interest | (2,518) | |
Total operating lease liabilities | $ 4,475 | $ 4,517 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Plans 401 K Defined Benefit | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Discretionary contribution by employer | $ 0.4 | $ 0.4 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Outstanding Common Shares Anti-dilutive (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,533 | 2,982 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (7,314) | $ (1,726) |
Shares outstanding: | ||
Weighted-average common shares outstanding (in shares) | 21,013 | 21,604 |
Diluted shares outstanding (in shares) | 21,013 | 21,604 |
Net loss per share – basic | $ (0.35) | $ (0.08) |
Net loss per share – diluted | $ (0.35) | $ (0.08) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 20, 2024 | Jan. 17, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Stock based compensation expense | $ 1,525 | $ 1,707 | ||
Subsequent Event [Member] | 2023 Plan | ||||
Subsequent Event [Line Items] | ||||
Number of stock awards authorized to grant | 1,277,130 | |||
Subsequent Event [Member] | 2001 Plan | ||||
Subsequent Event [Line Items] | ||||
Shares paid for option exercises and tax withholding for share based compensation | 2,590,000 | |||
Subsequent Event [Member] | Old Options | ||||
Subsequent Event [Line Items] | ||||
Number of shares purchased under option exchange program | 2,200,000 | |||
Granted | $ 4.88 | |||
Subsequent Event [Member] | New options | ||||
Subsequent Event [Line Items] | ||||
Number of shares purchased under option exchange program | 900,000 | |||
Granted | $ 2.21 | |||
Share-based compensation arrangement by share-based payment award, exchange offer, percentage of total shares outstanding | 50% | |||
Stock based compensation expense | $ 100 |