AutoWeb (AUTO) 10-Q 5 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 03, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	AutoWeb, Inc.
Entity Central Index Key	0001023364
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,146,831
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	DE
Entity File Number	1-34761

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 5,210	$ 892
Restricted cash	3,300	5,054
Accounts receivable, net of allowances for bad debts and customer credits of $638 and $740 at June 30, 2020 and December 31, 2019, respectively	14,679	24,051
Prepaid expenses and other current assets	1,939	1,265
Total current assets	25,128	31,262
Property and equipment, net	3,026	3,349
Right-of-use assets	3,246	2,528
Intangible assets, net	5,537	7,104
Other assets	745	661
Total assets	37,682	44,904
Current liabilities:
Accounts payable	5,899	14,080
Borrowings under revolving credit facility	7,181	3,745
Current portion of the PPP Loan	615	0
Accrued employee-related benefits	1,928	1,004
Other accrued expenses and other current liabilities	1,257	2,315
Current portion of lease liabilities	820	1,167
Total current liabilities	17,700	22,311
PPP Loan	769	0
Lease liabilities, net of current portion	2,524	1,497
Total liabilities	20,993	23,808
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.001 par value; 55,000,000 shares authorized, and 13,146,831 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively	13	13
Additional paid-in capital	365,056	364,028
Accumulated deficit	(348,380)	(342,945)
Total stockholders' equity	16,689	21,096
Total liabilities and stockholders' equity	37,682	44,904
Preferred Class A
Stockholders' equity:
Preferred stock, $0.001 par value, 11,445,187 shares authorized Series A Preferred stock, none issued and outstanding at June 30, 2020, and December 31, 2019, respectively	$ 0	$ 0

CONSOLIDATED CONDENSED BALANC_2

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Accounts receivable, allowances for bad debts and customer credits	$ 638	$ 740
Stockholders' equity:
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	55,000,000	55,000,000
Common stock, issued	13,146,831	13,146,831
Common stock, outstanding	13,146,831	13,146,831
Preferred Class A
Stockholders' equity:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	11,445,187	11,445,187
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Lead generation	$ 14,263	$ 21,691	$ 32,723	$ 47,389
Digital advertising	2,756	5,432	8,768	11,310
Other revenues	14	19	14	47
Total revenues	17,033	27,142	41,505	58,746
Cost of revenues	10,993	21,758	30,108	47,605
Gross profit (loss)	6,040	5,384	11,397	11,141
Operating expenses:
Sales and marketing	2,026	2,956	4,158	5,834
Technology support	1,786	2,182	3,643	4,962
General and administrative	2,901	4,026	6,844	8,316
Depreciation and amortization	559	1,201	1,281	2,440
Total operating expenses	7,272	10,365	15,926	21,552
Operating (loss)	(1,232)	(4,981)	(4,529)	(10,411)
Interest and other income (expense), net
Interest income (expense)	(204)	(36)	(1,036)	(35)
Other income (expense)	62	69	130	138
Loss before income tax provision	(1,374)	(4,948)	(5,435)	(10,308)
Income tax provision	0	5	0	5
Net loss	$ (1,374)	$ (4,953)	$ (5,435)	$ (10,313)
Basic loss per common share	$ (0.10)	$ (0.38)	$ (0.41)	$ (0.79)
Diluted loss per common share	$ (0.10)	$ (0.38)	$ (0.41)	$ (0.79)

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Preferred Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance (shares) at Dec. 31, 2018	12,960,450	0
Beginning balance, amount at Dec. 31, 2018	$ 13	$ 0	$ 361,218	$ (327,716)	$ 33,515
Share-based compensation			1,111		$ 1,111
Issuance of common stock upon exercise of stock options (shares)	213,048				213,048
Issuance of common stock upon exercise of stock options, amount			408		$ 408
Cancellation of restricted stock (shares)	(26,667)
Net loss				(10,313)	(10,313)
Ending balance (shares) at Jun. 30, 2019	13,146,831	0
Ending balance, amount at Jun. 30, 2019	$ 13	$ 0	362,737	(338,029)	24,721
Beginning balance (shares) at Mar. 31, 2019	13,116,462	0
Beginning balance, amount at Mar. 31, 2019	$ 13	$ 0	362,076	(333,076)	29,013
Share-based compensation			560		$ 560
Issuance of common stock upon exercise of stock options (shares)	57,036				57,036
Issuance of common stock upon exercise of stock options, amount			101		$ 101
Cancellation of restricted stock (shares)	(26,667)
Net loss				(4,953)	(4,953)
Ending balance (shares) at Jun. 30, 2019	13,146,831	0
Ending balance, amount at Jun. 30, 2019	$ 13	$ 0	362,737	(338,029)	24,721
Beginning balance (shares) at Dec. 31, 2019	13,146,831	0
Beginning balance, amount at Dec. 31, 2019	$ 13	$ 0	364,028	(342,945)	21,096
Share-based compensation			1,028		$ 1,028
Issuance of common stock upon exercise of stock options (shares)					0
Net loss				(5,435)	$ (5,435)
Ending balance (shares) at Jun. 30, 2020	13,146,831	0
Ending balance, amount at Jun. 30, 2020	$ 13	$ 0	365,056	(348,380)	16,689
Beginning balance (shares) at Mar. 31, 2020	13,146,831	0
Beginning balance, amount at Mar. 31, 2020	$ 13	$ 0	364,537	(347,006)	17,544
Share-based compensation			519		$ 519
Issuance of common stock upon exercise of stock options (shares)					0
Net loss				(1,374)	$ (1,374)
Ending balance (shares) at Jun. 30, 2020	13,146,831	0
Ending balance, amount at Jun. 30, 2020	$ 13	$ 0	$ 365,056	$ (348,380)	$ 16,689

CONSOLIDATED CONDENSED STATEM_2

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (5,435)	$ (10,313)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,278	3,509
Provision for bad debts	94	122
Provision for customer credits	33	120
Share-based compensation	1,028	1,111
Right-of-use assets	767	924
Lease liabilities	(805)	(924)
Changes in assets and liabilities:
Accounts receivable	9,245	3,325
Prepaid expenses and other current assets	(674)	(410)
Other assets	(84)	(303)
Accounts payable	(8,181)	(1,945)
Accrued expenses and other current liabilities	(135)	(787)
Net cash used in operating activities	(1,869)	(5,571)
Cash flows from investing activities:
Purchase of property and equipment	(388)	(990)
Net cash used in investing activities	(388)	(990)
Cash flows from financing activities:
Borrowings under PNC credit facility	28,564	16,940
Principal payments on PNC credit facility	(32,308)	(16,940)
Borrowings under CNC credit facility	33,201	0
Principal payments on CNC credit facility	(26,020)	0
Borrowings under PPP Note	1,384	0
Payment on convertible note	0	(1,000)
Proceeds from exercise of stock options	0	408
Net cash provided by (used in) financing activities	4,821	(592)
Net increase in cash and cash equivalents and restricted cash	2,564	(7,153)
Cash and cash equivalents and restricted cash, beginning of period	5,946	13,600
Cash and cash equivalents and restricted cash, end of period	8,510	6,447
Cash and cash equivalents, beginning of period
Cash and cash equivalents at beginning of period	892	13,600
Restricted cash at beginning of period	5,054	0
Cash and cash equivalents and restricted cash, beginning of period	5,946	13,600
Cash and cash equivalents at end of period	5,210	1,431
Restricted cash at end of period	3,300	5,016
Cash and cash equivalents and restricted cash, end of period	8,510	6,447
Supplemental disclosure of cash flow information:
Cash paid for income taxes	0	1
Cash refunds for income taxes	381	124
Cash paid for interest	449	40
Right-of-use-assets obtained in exchange for operating lease liabilities	$ 1,485	$ 0

Organization and Operations

Organization and Operations	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Operations	AutoWeb, Inc. (“ AutoWeb Company Dealers Manufacturers The Company’s consumer-facing websites (“ Company Websites Leads The Company was incorporated in Delaware on May 17, 1996. The Company’s common stock is listed on The Nasdaq Capital Market under the symbol AUTO.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements are presented on the same basis as the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“ 2019 Form 10-K SEC GAAP References to amounts in the consolidated financial statement sections are in thousands, except share and per share data, unless otherwise specified. As of December 31, 2019, restricted cash primarily consisted of pledged cash pursuant to the PNC Credit Agreement. As of June 30, 2020, restricted cash primarily consisted of cash pledged pursuant to the CNC Credit Agreement. In early 2020 and continuing as of the date of this Quarterly Report on Form 10-Q, the coronavirus pandemic has led to quarantines and stay-at-home/work-from-home orders in a number of countries, states, cities and regions and the closure or limited access to public and private offices and facilities, worldwide, causing widespread disruptions to travel, economic activity and financial markets. Management is unable to predict the extent and duration of these disruptions, which could result in a national or global recession. The pandemic has led the Company’s Manufacturer and Dealer customers to experience disruptions in the (i) supply of vehicle and parts inventories, (ii) ability and willingness of consumers to visit automotive dealerships to purchase or lease vehicles and (iii) overall health and availability of their labor force. Manufacturers also shutdown assembly plants. Volatility in the financial markets, concerns about exposure to the novel coronavirus and governmental quarantines, stay-at-home/work-from-home orders, business closures, and employment furloughs and layoffs have also impacted consumer confidence and willingness to visit dealerships and to purchase or lease vehicles. High unemployment and lower consumer confidence may continue after the stay-at-home/work-from-home orders have ended. These disruptions have impacted the willingness or desire of the Company’s customers to acquire vehicle Leads or other digital marketing services from the Company. Vehicle sales have declined, and the Company has experienced direct disruptions in its operations due to the overall health of, and concerns for, its labor force and as a result of governmental “social distancing” programs, quarantines, travel restrictions and stay-at-home/work-from-home orders, leading to office closures, operating from employee homes and restrictions on its employees traveling to its various offices. The Company continues to experience cancellations or suspensions of purchases of Leads and other digital marketing services by its customers, which materially and adversely affects its business, results of operations, financial condition, earnings per share, cash flow and the trading price of its common stock. In April 2020, the Company implemented a series of cost actions in response to coronavirus pandemic, including reduced executive and board compensation during the three-months ended June 30, 2020, reduced recruitment, travel, consulting and business-to-business marketing expenses, consolidation of various technology tools and products, and limited employee furloughs and staff reductions. The Company also started reducing its overall lead and click generation efforts and corresponding costs to better align its volumes with industry demand and consumer intent to purchase a vehicle. Management will continue to evaluate other cost reduction measures and explore all options available to it in order to minimize the impact of the coronavirus pandemic.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
Recent Accounting Pronouncements	The Company has reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2020
Revenue Recognition [Abstract]
Revenue Recognition	Revenue is recognized upon transfer of control of promised goods or services to the Company’s customers, or when the Company satisfies any performance obligations under contract. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for respective goods or services provided. Further, under Accounting Standards Codification 606, “ Revenue from Contracts with Customers, ASC 606” The Company has two main revenue sources – Lead generation and Digital advertising. Accordingly, the Company recognizes revenue for each source as described below: ● Lead generation – paid by Dealers and Manufacturers participating in the Company’s Lead programs and are comprised of Lead transaction and/or monthly subscription fees. Lead fees are recognized in the period when service is provided. ● Digital advertising – fees paid by Dealers, Manufacturers and third-party wholesale suppliers for (i) the Company’s click traffic program, (ii) display advertising on the Company’s websites, and (iii) email and other direct marketing. Revenue is recognized in the period advertisements are displayed on the Company’s websites or the period in which clicks have been delivered, as applicable. The Company recognizes revenue from the delivery of action-based advertisement (including email and other direct marketing) in the period in which a user takes the action for which the marketer contracted with the Company. For advertising revenue arrangements where the Company is not the principal, the Company recognizes revenue on a net basis. Variable Consideration Leads are generally sold with a right-of-return for services that do not meet customer requirements as specified by the relevant contract. Rights-of-return are estimable, and provisions for estimated returns are recorded as a reduction in revenue by the Company in the period revenue is recognized, and thereby accounted for as variable consideration. As of December 31, 2019, the Company included the allowance for customer credits in its net accounts receivable balances on the Company’s balance sheet at period end. Allowance for customer credits were approximately $106,000 and $194,000 as of June 30, 2020 and December 31, 2019, respectively. Contract Assets and Contract Liabilities Unbilled Revenue Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing. From time to time, the Company may have balances on its balance sheet representing revenue that has been recognized by the Company upon satisfaction of performance obligations and earning a right to receive payment. These not-yet invoiced receivable balances are driven by the timing of administrative transaction processing, and are not indicative of partially complete performance obligations, or unbilled revenue. Deferred Revenue The Company defers the recognition of revenue when cash payments are received or due in advance of satisfying the Company’s performance obligations, including amounts which are refundable. Such activity is not typical for the Company. The Company had zero deferred revenue included in its consolidated balance sheets as of June 30, 2020 and December 31, 2019. Payment terms and conditions can vary by contract type. Generally, payment terms within the Company’s customer contracts include a requirement of payment within 30 to 60 days from date of invoice. Typically, customers make payments after receipt of invoice for billed services, and less typically, in advance of rendered services. The Company has not made any significant changes in applying ASC 606 during the six months ended June 30, 2020. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by revenue source and has determined that disaggregating revenue into these categories sufficiently depicts the differences in the nature, amount, timing and uncertainty of revenue streams. The following table summarizes revenue from contracts with customers, disaggregated by revenue source, for the three and six months ended June 30, 2020 and 2019. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Lead generation $ 14,263 $ 21,691 $ 32,723 $ 47,389 Digital advertising Clicks 2,321 4,456 7,670 9,515 Display and other advertising 435 976 1,098 1,795 Total digital advertising 2,756 5,432 8,768 11,310 Other revenues 14 19 14 47 Total revenues $ 17,033 $ 27,142 $ 41,505 $ 58,746

Net Loss Per Share

Net Loss Per Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Net Loss Per Share	Basic net loss per share is computed using the weighted average number of common shares outstanding during the period, excluding any unvested restricted stock. Diluted net loss per share is computed using the weighted average number of common shares, and if dilutive, potential common shares outstanding, as determined under the treasury stock and if-converted methods, during the period. Potential common shares consist of unvested restricted stock and common shares issuable upon the exercise of stock options and warrants. The following are the share amounts utilized to compute the basic and diluted net loss per share for the three and six months ended June 30, 2020 and 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Basic Shares: Weighted average common shares outstanding 13,146,831 13,147,741 13,146,831 13,066,617 Weighted average unvested restricted stock (13,333 ) (36,850 ) (13,333 ) (48,362 ) Basic Shares 13,133,498 13,110,891 13,133,498 13,018,255 Diluted Shares: Basic shares 13,133,498 13,110,891 13,133,498 13,018,255 Weighted average dilutive securities — — — — Diluted Shares 13,133,498 13,110,891 13,133,498 13,018,255 For the three and six months ended June 30, 2020 and 2019, the Company’s basic and diluted net loss per share are the same because the Company generated a net loss for the period and potentially dilutive securities are excluded from diluted net loss per share because they have an anti-dilutive impact. For the three and six months ended June 30, 2020, the Company had 4.0 million of potentially anti-dilutive securities related to common stock that have been excluded from the calculation of diluted net earnings per share. For the three and six months ended June 30, 2019, the Company had 4.2 million and 4.1 million of potentially anti-dilutive securities related to common stock that have been excluded from the calculation of diluted net earnings per share, respectively.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Share-Based Compensation	Share-based compensation expense is included in costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2019 2018 Share-based compensation expense: Sales and marketing $ 29 $ 66 $ 61 $ 138 Technology support 28 52 55 93 General and administrative 462 442 912 880 Share-based compensation costs 519 560 1,028 1,111 Amount capitalized to internal use software — — — — Total share-based compensation costs $ 519 $ 560 $ 1,028 $ 1,111 Service-Based Options. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Number of service-based options granted 55,000 140,000 515,000 1,182,883 Weighted average grant date fair value $ 0.67 $ 1.84 $ 1.05 $ 1.82 Weighted average exercise price $ 1.08 $ 3.45 $ 1.90 $ 3.42 These options are valued using a Black-Scholes option pricing model. Options issued to employees generally vest one-third on the first anniversary of the grant date and ratably over twenty-four months thereafter. The vesting of these awards is contingent upon the employee’s continued employment with the Company during the vesting period and vesting may be accelerated under certain conditions, including upon a change in control of the Company and, in the case of certain officers of the Company, termination of employment by the Company without cause and voluntary termination of employment by such officer with good reason. Options issued to non-employee directors generally vest monthly over a 12-month period and vesting may be accelerated under certain conditions, including upon a change in control of the Company and upon the termination of service as a director of the Company in the event such termination of service is due to resignation, failure to be re-elected, failure to be nominated for re-election, or without removal for cause. The grant date fair value of stock options granted during these periods was estimated using the Black-Scholes option pricing model using the following weighted average assumptions: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Dividend yield — — — — Volatility 81 % 66 % 70 % 65 % Risk-free interest rate 0.3 % 2.2 % 1.1 % 2.5 % Expected life (years) 4.6 4.4 4.6 4.4 Stock option exercises Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Number of stock options exercised — 57,036 — 213,048 Weighted average exercise price $ — $ 1.77 $ — $ 1.92

Selected Balance Sheet Accounts

Selected Balance Sheet Accounts	6 Months Ended
	Jun. 30, 2020
Balance Sheet Related Disclosures [Abstract]
Selected Balance Sheet Accounts	Property and Equipment June 30, 2020 December 31, 2019 Computer software and hardware $ 11,679 $ 12,804 Capitalized internal use software 7,391 5,878 Furniture and equipment 1,743 1,743 Leasehold improvements 1,613 1,613 22,426 22,038 Less—Accumulated depreciation and amortization (19,400 ) (18,689 ) Property and equipment, net $ 3,026 $ 3,349 Concentration of Credit Risk and Risks Due to Significant Customers. Accounts receivable are primarily derived from fees billed to Dealers and Manufacturers. The Company generally requires no collateral to support its accounts receivables and maintains an allowance for bad debts for potential credit losses. The Company has a concentration of credit risk with its accounts receivable balances. Approximately 60%, or $8.9 million, of gross accounts receivable at June 30, 2020, and approximately 45% of total revenues for the six months ended June 30, 2020, are related to Urban Science Applications (which represents Acura, Honda, Subaru, and Volvo), Carat Detroit (General Motors), Ford Direct and Autodata Solutions. For 2019, 34%, or $8.0 million, of gross accounts receivable at June 30, 2019, and approximately 27% of total revenues for the six months ended June 30, 2019, are related to Urban Science Applications (which represents Acura, Honda, Nissan, Infiniti, Subaru, Toyota and Volvo) and Carat Detroit (General Motors). Intangible Assets. The Company’s intangible assets are amortized over the following estimated useful lives: June 30, 2020 December 31, 2019 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks/ trade names/ licenses/ domains 3 - 7 years $ 16,589 $ (15,701 ) $ 888 $ 16,589 $ (15,442 ) $ 1,147 Customer relationships 2 - 5 years 19,563 (19,563 ) — 19,563 (18,800 ) 763 Developed technology 5 - 7 years 8,955 (6,506 ) 2,449 8,955 (5,961 ) 2,994 $ 45,107 $ (41,770 ) $ 3,337 $ 45,107 $ (40.203 ) $ 4,904 June 30, 2020 December 31, 2019 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Domain Indefinite $ 2,200 $ — $ 2,200 $ 2,200 $ — $ 2,200 Amortization expense is included in “Cost of revenues” and “Depreciation and amortization” in the Unaudited Consolidated Condensed Statements of Operations. Total amortization expense was $0.7 million and $1.6 million for the three and six months ended June 30, 2020, respectively. Amortization expense was $1.3 million and $2.7 million for the three and six months ended June 30, 2019, respectively. Amortization expense for the remainder of the year and for future years is as follows: Year Amortization Expense 2020 $ 804 2021 1,499 2022 902 2023 86 2024 46 $ 3,337 Accrued Expenses and Other Current Liabilities June 30, 2020 December 31, 2019 Accrued employee-related benefits $ 1,928 $ 1,004 Other accrued expenses and other current liabilities: Other accrued expenses 617 1,264 Amounts due to customers 338 355 Other current liabilities 302 696 Total other accrued expenses and other current liabilities 1,257 2,315 Total accrued expenses and other current liabilities $ 3,185 $ 3,319 Convertible Notes Payable AutoUSA Note

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Leases	The Company determines if an arrangement is a lease at inception of the arrangement. The Company leases its facilities and certain office equipment under operating leases that expire on various dates through 2025. Right-of-use assets (“ ROU Lease Liabilities Current portion of lease liabilities $ 820 Long term lease liabilities, net of current portion 2,524 Total lease liabilities $ 3,344 The Company’s aggregate lease maturities as of June 30, 2020 are as follows: Year 2020 (remaining 6 months) $ 499 2021 997 2022 791 2023 786 2024 528 Thereafter 197 Total minimum lease payments 3,798 Less imputed interest (454 ) Total lease liabilities $ 3,344 On March 11, 2020, the Company entered into a Lease Agreement (“ New Irvine Lease Rent expense included in operating expenses and cost of revenue was $0.9 million for the six months ended June 30, 2020. The Company had a weighted average remaining lease term of 1.9 years and a weighted average discount rate of 5.5% for leases prior to December 31, 2019. For leases starting January 1, 2020, the weighted average discount rate is 6.25%. Rent expense included in operating expenses and cost of revenue was $1.0 million for the six months ended June 30, 2019. The Company had a weighted average remaining lease term of 2.1 years and a weighted average discount rate of 5.5% as of June 30, 2019. In June 2017, the Company subleased one of its offices to a third party for the remainder of the lease term which expired in February 2019. Rent expense for the six months ended June 30, 2019 is net of sublease income of $26,000.

Credit Facility

Credit Facility	6 Months Ended
	Jun. 30, 2020
Line of Credit Facility [Abstract]
Credit Facility	On April 30, 2019, the Company entered into a $25.0 million Revolving Credit and Security Agreement (“ PNC Credit Agreement PNC Company U.S. Subsidiaries The interest rates per annum applicable to borrowings under the PNC Credit Agreement were, at the Company’s option (subject to certain conditions), equal to either a domestic rate (“ Domestic Rate Loans LIBOR Rate Loans On October 29, 2019, the Company, the Company’s U.S. Subsidiaries, and PNC entered into a First Amendment to the PNC Credit Agreement (“ PNC Credit Agreement First Amendment Cure Right On January 16, 2020, the Company received a notice of event of default and reservation of rights (“ Default Notice On March 26, 2020, the Company fully paid the PNC Credit Agreement, at which time it was terminated, and in conjunction with the termination of the PNC Credit Agreement, on March 26, 2020, the Company entered into a $20.0 million Loan, Security and Guarantee Agreement (“ CNC Credit Agreement As of June 30, 2020, the Company had $7.2 million outstanding under the CNC Credit Agreement and approximately $2.5 million of net availability. To increase the borrowing base sufficient enough to meet the minimum borrowing usage requirement, on June 29, 2020, the Company placed $3.0 million into a restricted cash account that provided for greater availability under the CNC Credit Agreement. The Company can borrow up to 97.5% of the total restricted cash amount. The restricted cash accrues interest at a variable rate currently averaging 0.30% per annum. On July 2nd, 2020, the Company drew an additional $3.0 million to satisfy the increased minimum borrowing requirement. Financing costs related to the CNC Credit Agreement, net of accumulated amortization, of approximately $0.5 million, have been deferred over the initial term of the loan and are included in other assets as of June 30, 2020. The interest rate per annum applicable to borrowings under the CNC Credit Agreement will be the LIBO plus 5.5%. The LIBO Rate will be equal to the greater of (i) 1.75%, and (ii) the rate determined by the Agent to be equal to the quotient obtained by dividing (1) the LIBO Base Rate (i.e., the rate per annum determined by Agent to be the offered rate that appears on the applicable Bloomberg page) for the applicable LIBOR Loan for the applicable interest period by (2) one minus the Eurodollar Reserve Percentage (i.e., the reserve percentage in effect under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement with respect to Eurocurrency funding for the applicable LIBOR Loan for the applicable interest period). The CNC Credit Agreement expires on March 26, 2023. On April 16, 2020, the Company received a loan in the amount of approximately $1.38 million from PNC pursuant to the Paycheck Protection Program (“ PPP SBA PPP Loan PPP Note On June 5, 2020 the Paycheck Protection Program Flexibility Act (“ PPPFA The PPP Note matures on April 16, 2022 and bears interest at a rate of 1.00% per annum. Principal and accrued interest are payable monthly in equal installments commencing November 15, 2020, unless the PPP Loan is forgiven as described below. The PPP Note may be prepaid at any time prior to maturity with no prepayment penalties. The PPP Note contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The proceeds from the PPP Loan may only be used to retain workers and maintain payroll or make mortgage interest, lease and utility payments. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness of the PPP Loan is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. The outstanding principal will be reduced in the event the Loan, or any portion thereof, is forgiven pursuant to the PPP. The Company intends to apply for forgiveness after the covered period. Furthermore, the Company expects to meet the terms of forgiveness as described above.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Employment Agreements The Company has employment agreements and severance benefits agreements with certain key employees. A number of these agreements require severance payments and continuation of certain insurance benefits in the event of a termination of the employee’s employment by the Company without cause or by the employee for good reason (as defined is these agreements). Stock option agreements and restricted stock award agreements with some key employees provide for acceleration of vesting of stock options and lapsing of forfeiture restrictions on restricted stock in the event of a change in control of the Company, upon termination of employment by the Company without cause or by the employee for good reason, or upon the employee’s death or disability. Litigation From time to time, the Company may be involved in litigation matters arising from the normal course of its business operations. Such litigation, even if not meritorious, could result in substantial costs and diversion of resources and management attention, and an adverse outcome in litigation could materially and adversely affect the Company’s business, results of operations, financial condition and cash flows.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	On an interim basis, the Company estimates what its anticipated annual effective tax rate will be and records a quarterly income tax provision in accordance with the estimated annual rate, adjusted accordingly by the tax effect of certain discrete items that arise during the quarter. This process can result in significant changes to the Company’s estimated effective tax rate. When such activity occurs, the income tax provision is adjusted during the quarter in which the estimates are refined and adjusted. As such, the Company’s year-to-date tax provision reflects the estimated annual effective tax rate. Therefore, these changes along with the adjustments to the Company’s deferred taxes and related valuation allowance, may create fluctuations in the overall effective tax rate from period to period. Due to overall cumulative losses incurred in recent years, the Company maintained a valuation allowance against its deferred tax assets as of June 30, 2020 and December 31, 2019. The Company’s effective tax rate for the six months ended June 30, 2020 differed from the U.S. federal statutory rate primarily due to operating losses that receive no tax benefit as a result of a valuation allowance recorded against the Company’s existing tax assets. The total amount of unrecognized tax benefits, excluding associated interest and penalties, was $0.5 million as of June 30, 2020, all of which, if subsequently recognized, would have affected the Company’s tax rate. As of June 30, 2020, and December 31, 2019, there were no accrued interest and penalties related to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense, and the accrued interest and penalties are included in deferred and other long-term liabilities in the Company’s unaudited condensed consolidated balance sheets. There were no material interest or penalties included in income tax expense for six months ended June 30, 2020 and 2019. The Company is subject to taxation in the U.S. and in various foreign and state jurisdictions. Due to expired statutes of limitation, the Company’s federal income tax returns for years prior to calendar year 2016 are not subject to examination by the U.S. Internal Revenue Service. In response to the coronavirus pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act NOL’s Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. The enactment of the CARES Act did not result in any material adjustments to the Company’s income tax provision for the six months ended June 30, 2020, or to its net deferred tax assets as of June 30, 2020.

Recent Accounting Pronounceme_2

Recent Accounting Pronouncements (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
Recent Accounting Pronouncements	The Company has reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2020
Revenue Recognition [Abstract]
Revenue from contracts	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Lead generation $ 14,263 $ 21,691 $ 32,723 $ 47,389 Digital advertising Clicks 2,321 4,456 7,670 9,515 Display and other advertising 435 976 1,098 1,795 Total digital advertising 2,756 5,432 8,768 11,310 Other revenues 14 19 14 47 Total revenues $ 17,033 $ 27,142 $ 41,505 $ 58,746

Net Loss Per Share and Stockhol

Net Loss Per Share and Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Computation of basic and diluted net earnings (loss) per share	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Basic Shares: Weighted average common shares outstanding 13,146,831 13,147,741 13,146,831 13,066,617 Weighted average unvested restricted stock (13,333 ) (36,850 ) (13,333 ) (48,362 ) Basic Shares 13,133,498 13,110,891 13,133,498 13,018,255 Diluted Shares: Basic shares 13,133,498 13,110,891 13,133,498 13,018,255 Weighted average dilutive securities — — — — Diluted Shares 13,133,498 13,110,891 13,133,498 13,018,255

Share-Based Compensation (Table

Share-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Share-based compensation expense included in costs and expenses	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2019 2018 Share-based compensation expense: Sales and marketing $ 29 $ 66 $ 61 $ 138 Technology support 28 52 55 93 General and administrative 462 442 912 880 Share-based compensation costs 519 560 1,028 1,111 Amount capitalized to internal use software — — — — Total share-based compensation costs $ 519 $ 560 $ 1,028 $ 1,111
Service based options granted during period	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Number of service-based options granted 55,000 140,000 515,000 1,182,883 Weighted average grant date fair value $ 0.67 $ 1.84 $ 1.05 $ 1.82 Weighted average exercise price $ 1.08 $ 3.45 $ 1.90 $ 3.42
Fair value of stock options granted using the following weighted average assumptions	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Dividend yield — — — — Volatility 81 % 66 % 70 % 65 % Risk-free interest rate 0.3 % 2.2 % 1.1 % 2.5 % Expected life (years) 4.6 4.4 4.6 4.4
Stock option exercises	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Number of stock options exercised — 57,036 — 213,048 Weighted average exercise price $ — $ 1.77 $ — $ 1.92

Selected Balance Sheet Accoun_2

Selected Balance Sheet Accounts (Tables)	6 Months Ended
	Jun. 30, 2020
Balance Sheet Related Disclosures [Abstract]
Property and equipment	June 30, 2020 December 31, 2019 Computer software and hardware $ 11,679 $ 12,804 Capitalized internal use software 7,391 5,878 Furniture and equipment 1,743 1,743 Leasehold improvements 1,613 1,613 22,426 22,038 Less—Accumulated depreciation and amortization (19,400 ) (18,689 ) Property and equipment, net $ 3,026 $ 3,349
Intangible assets amortized over the estimated useful lives	June 30, 2020 December 31, 2019 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks/ trade names/ licenses/ domains 3 - 7 years $ 16,589 $ (15,701 ) $ 888 $ 16,589 $ (15,442 ) $ 1,147 Customer relationships 2 - 5 years 19,563 (19,563 ) — 19,563 (18,800 ) 763 Developed technology 5 - 7 years 8,955 (6,506 ) 2,449 8,955 (5,961 ) 2,994 $ 45,107 $ (41,770 ) $ 3,337 $ 45,107 $ (40.203 ) $ 4,904 June 30, 2020 December 31, 2019 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Domain Indefinite $ 2,200 $ — $ 2,200 $ 2,200 $ — $ 2,200
Future amortization expense	Year Amortization Expense 2020 $ 804 2021 1,499 2022 902 2023 86 2024 46 $ 3,337
Accrued expenses and other current liabilities	June 30, 2020 December 31, 2019 Accrued employee-related benefits $ 1,928 $ 1,004 Other accrued expenses and other current liabilities: Other accrued expenses 617 1,264 Amounts due to customers 338 355 Other current liabilities 302 696 Total other accrued expenses and other current liabilities 1,257 2,315 Total accrued expenses and other current liabilities $ 3,185 $ 3,319

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Lease liabilities	Current portion of lease liabilities $ 820 Long term lease liabilities, net of current portion 2,524 Total lease liabilities $ 3,344
Aggregate lease maturities	Year 2020 (remaining 6 months) $ 499 2021 997 2022 791 2023 786 2024 528 Thereafter 197 Total minimum lease payments 3,798 Less imputed interest (454 ) Total lease liabilities $ 3,344

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue from contracts with customers	$ 17,033	$ 27,142	$ 41,505	$ 58,746
Lead Fees
Revenue from contracts with customers	14,263	21,691	32,723	47,389
Click Advertising
Revenue from contracts with customers	2,321	4,456	7,670	9,515
Display and Other Advertising
Revenue from contracts with customers	435	976	1,098	1,795
Advertising
Revenue from contracts with customers	2,756	5,432	8,768	11,310
Other Revenues
Revenue from contracts with customers	$ 14	$ 19	$ 14	$ 47

Net Loss Per Share and Stockh_2

Net Loss Per Share and Stockholders' Equity (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Basic Shares:
Weighted average common shares outstanding	13,146,831	13,147,741	13,146,831	13,066,617
Weighted average unvested restricted stock	(13,333)	(36,850)	(13,333)	(48,362)
Basic shares	13,133,498	13,110,891	13,133,498	13,018,255
Diluted Shares:
Basic shares	13,133,498	13,110,891	13,133,498	13,018,255
Weighted average dilutive securities	0	0	0	0
Diluted Shares	13,133,498	13,110,891	13,133,498	13,018,255

Net Loss Per Share and Stockh_3

Net Loss Per Share and Stockholders' Equity (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Anti-dilutive potential shares of common stock	4,000	4,200	4,000	4,100

Share-Based Compensation (Detai

Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based compensation expense:
Share-based compensation costs	$ 519	$ 560	$ 1,028	$ 1,111
Amount capitalized to internal use software	0	0	0	0
Total share-based compensation costs	519	560	1,028	1,111
Sales and marketing
Share-based compensation expense:
Share-based compensation costs	29	66	61	138
Technology support
Share-based compensation expense:
Share-based compensation costs	28	52	55	93
General and administrative
Share-based compensation expense:
Share-based compensation costs	$ 462	$ 442	$ 912	$ 880

Share-Based Compensation (Det_2

Share-Based Compensation (Details 1) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock Issued or Granted During Period, Share-based Compensation
Number of service-based options granted	55,000	140,000	515,000	1,182,883
Weighted average grant date fair value	$ 0.67	$ 1.84	$ 1.05	$ 1.82
Weighted average exercise price	$ 1.08	$ 3.45	$ 1.9	$ 3.42

Share-Based Compensation (Det_3

Share-Based Compensation (Details 2)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Fair value of stock options granted using the following weighted average assumptions
Dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility	81.00%	66.00%	70.00%	65.00%
Risk-free interest rate	0.30%	2.20%	1.10%	2.50%
Expected life	4 years 7 months 6 days	4 years 4 months 24 days	4 years 7 months 6 days	4 years 4 months 24 days

Share-Based Compensation (Det_4

Share-Based Compensation (Details 3) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Number of stock options exercised	0	57,036	0	213,048
Weighted average exercise price	$ 0	$ 1.77	$ 0	$ 1.92

Selected Balance Sheet Accoun_3

Selected Balance Sheet Accounts (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property and Equipment
Computer software and hardware	$ 11,679	$ 12,804
Capitalized internal use software	7,391	5,878
Furniture and equipment	1,743	1,743
Leasehold improvements	1,613	1,613
Property and equipment, gross	22,426	22,038
Less - Accumulated depreciation and amortization	(19,400)	(18,689)
Property and equipment, net	$ 3,026	$ 3,349

Selected Balance Sheet Accoun_4

Selected Balance Sheet Accounts (Details 1) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Intangible Assets
Gross	$ 45,107		$ 45,107
Accumulated amortization	(41,770)		(40,203)
Net	5,537		7,104
Trademarks and Trade Names
Intangible Assets
Gross	16,589		16,589
Accumulated amortization	(15,701)		(15,442)
Net	$ 888		$ 1,147
Trademarks and Trade Names | Minimum
Finite-Lived Intangible Assets
Estimated useful life	3 years		3 years
Trademarks and Trade Names | Maximum
Finite-Lived Intangible Assets
Estimated useful life	7 years		7 years
Customer Relationships
Intangible Assets
Gross	$ 19,563		$ 19,563
Accumulated amortization	(19,563)		(18,800)
Net	$ 0		$ 763
Customer Relationships | Minimum
Finite-Lived Intangible Assets
Estimated useful life	2 years		2 years
Customer Relationships | Maximum
Finite-Lived Intangible Assets
Estimated useful life	5 years		5 years
Developed Technology Rights
Intangible Assets
Gross	$ 8,955		$ 8,955
Accumulated amortization	(6,506)		(5,961)
Net	$ 2,449		2,994
Developed Technology Rights | Minimum
Finite-Lived Intangible Assets
Estimated useful life	5 years	5 years
Developed Technology Rights | Maximum
Finite-Lived Intangible Assets
Estimated useful life	7 years	7 years
Domain
Intangible Assets
Gross	$ 2,200		2,200
Accumulated amortization	0		0
Net	$ 2,200		$ 2,200

Selected Balance Sheet Accoun_5

Selected Balance Sheet Accounts (Details 2) $ in Thousands	Jun. 30, 2020USD ($)
Amortization expense for the remainder of the year and for the next five years
2020	$ 804
2021	1,499
2022	902
2023	86
2024	46
Total	$ 3,337

Selected Balance Sheet Accoun_6

Selected Balance Sheet Accounts (Details 3) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accrued expenses and other current liabilities
Accrued employee-related benefits	$ 1,928	$ 1,004
Other accrued expenses	617	1,264
Amounts due to customers	338	355
Other current liabilities	302	696
Total other accrued expenses and other current liabilities	1,257	2,315
Total accrued expenses and other current liabilities	$ 3,185	$ 3,319

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Current portion of lease liabilities	$ 820	$ 1,167
Long term lease liabilities, net of current portion	2,524	$ 1,497
Total lease liabilities	$ 3,344

Leases (Details 1)

Leases (Details 1) $ in Thousands	Jun. 30, 2020USD ($)
Leases [Abstract]
2020 (remaining 6 months)	$ 499
2021	997
2022	791
2023	786
2024	528
Thereafter	197
Total minimum lease payments	3,798
Less imputed interest	(454)
Total lease liabilities	$ 3,344

Leases (Details Narrative)

Leases (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Rent expense	$ 900	$ 100
Weighted average remaining lease term	1 year 10 months 24 days	2 years 1 month 6 days
Weighted average discount rate	6.25%	5.50%
Sublease income		$ 26

Credit Facility (Details Narrat

Credit Facility (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Line of Credit Facility [Abstract]
Outstanding under CNC Credit Agreement	$ 7,181	$ 3,745