Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | WidePoint Corporation | |
Entity Central Index Key | 0001034760 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 9,138,146 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-33035 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 52-2040275 | |
Entity Address Address Line 1 | 11250 Waples Mill Road | |
Entity Address Address Line 2 | South Tower 210 | |
Entity Address City Or Town | Fairfax | |
Entity Address State Or Province | VA | |
Entity Address Postal Zip Code | 22030 | |
City Area Code | 703 | |
Local Phone Number | 349-2577 | |
Security 12b Title | Common Stock, $0.001 par value per share | |
Trading Symbol | WYY | |
Security Exchange Name | NYSEAMER |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
REVENUES | $ 22,251,282 | $ 57,506,561 | $ 62,885,545 | $ 151,955,707 |
COST OF REVENUES (including amortization and depreciation of $133,756, $130,559, $373,089, and $432,327, respectively) | 18,588,268 | 51,888,205 | 50,514,391 | 136,314,439 |
GROSS PROFIT | 3,663,014 | 5,618,356 | 12,371,154 | 15,641,268 |
OPERATING EXPENSES | ||||
Sales and marketing | 489,721 | 500,015 | 1,505,548 | 1,431,930 |
General and administrative expenses (including share-based compensation of $235,469, $160,056, $662,132 and $650,924, respectively) | 2,101,083 | 3,684,344 | 8,676,332 | 10,887,952 |
Depreciation and amortization | 263,192 | 285,181 | 767,940 | 814,813 |
Total operating expenses | 2,853,996 | 4,469,540 | 10,949,820 | 13,134,695 |
INCOME FROM OPERATIONS | 809,018 | 1,148,816 | 1,421,334 | 2,506,573 |
OTHER (EXPENSE) INCOME | ||||
Interest income | 968 | 94 | 3,535 | 3,119 |
Interest expense | (67,372) | (69,582) | (207,678) | (227,889) |
Other income | 25,158 | 118 | 27,656 | 458 |
Total other expense | (41,246) | (69,370) | (176,487) | (224,312) |
INCOME BEFORE INCOME TAX PROVISION | 767,772 | 1,079,446 | 1,244,847 | 2,282,261 |
INCOME TAX PROVISION | 232,888 | 12,483 | 329,270 | 242,783 |
NET INCOME | $ 534,884 | $ 1,066,963 | $ 915,577 | $ 2,039,478 |
BASIC EARNINGS PER SHARE | $ 0.06 | $ 0.13 | $ 0.10 | $ 0.24 |
BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING | 9,129,406 | 8,450,843 | 9,066,088 | 8,409,114 |
DILUTED EARNINGS PER SHARE | $ 0.06 | $ 0.13 | $ 0.10 | $ 0.24 |
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING | 9,158,396 | 8,527,309 | 9,182,190 | 8,463,561 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
Amortization and depreciation | $ 133,756 | $ 130,559 | $ 373,089 | $ 432,327 |
Share-based compensation expense | $ 235,469 | $ 160,056 | $ 662,132 | $ 650,924 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other comprehensive income (loss): | ||||
Net income | $ 534,884 | $ 1,066,963 | $ 915,577 | $ 2,039,478 |
Foreign currency translation adjustments, net of tax | (49,979) | 64,890 | (85,295) | 55,159 |
Other comprehensive income (loss) | (49,979) | 64,890 | (85,295) | 55,159 |
COMPREHENSIVE INCOME | $ 484,905 | $ 1,131,853 | $ 830,282 | $ 2,094,637 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 18,102,341 | $ 15,996,749 |
Accounts receivable, net of allowance for doubtful accounts of $84,971 and $114,169 in 2021 and 2020, respectively | 10,148,728 | 35,882,661 |
Unbilled accounts receivable | 8,789,327 | 13,848,726 |
Other current assets | 3,721,111 | 1,763,633 |
Total current assets | 40,761,507 | 67,491,769 |
NONCURRENT ASSETS | ||
Property and equipment, net | 833,582 | 573,039 |
Operating lease right of use asset, net | 5,570,297 | 6,095,376 |
Intangible assets, net | 2,588,095 | 2,187,503 |
Goodwill | 18,555,578 | 18,555,578 |
Deferred tax assets, net | 5,619,990 | 5,606,079 |
Other long-term assets | 1,504,074 | 815,007 |
Total assets | 75,433,123 | 101,324,351 |
CURRENT LIABILITIES | ||
Accounts payable | 10,797,731 | 36,221,981 |
Accrued expenses | 11,201,997 | 15,626,313 |
Deferred revenue | 3,517,392 | 2,016,282 |
Current portion of operating lease liabilities | 603,344 | 577,855 |
Total current liabilities | 26,120,464 | 54,442,431 |
NONCURRENT LIABILITIES | ||
Operating lease liabilities, net of current portion | 5,481,299 | 5,931,788 |
Other liabilities | 246,037 | 0 |
Deferred revenue, net of current portion | 431,733 | 398,409 |
Total liabilities | 32,279,533 | 60,772,628 |
Commitments and contingencies (Note 14) | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 2,045,714 shares issued and none outstanding | 0 | 0 |
Common stock, $0.001 par value; 30,000,000 shares authorized; 9,138,146 and 8,876,515 shares issued and outstanding, respectively | 9,138 | 8,876 |
Additional paid-in capital | 102,276,064 | 100,504,741 |
Accumulated other comprehensive loss | (189,910) | (104,615) |
Accumulated deficit | (58,941,702) | (59,857,279) |
Total stockholders' equity | 43,153,590 | 40,551,723 |
Total liabilities and stockholders' equity | $ 75,433,123 | $ 101,324,351 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts receivable | $ 84,971 | $ 114,169 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 2,045,714 | 2,045,714 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 9,138,146 | 8,876,515 |
Common stock, shares outstanding | 9,138,146 | 8,876,515 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 915,577 | $ 2,039,478 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Deferred income tax (benefit) expense | (20,150) | 236,115 |
Depreciation expense | 767,856 | 870,175 |
(Recovery) provision for doubtful accounts | (24,544) | 571 |
Amortization of intangibles | 373,089 | 376,965 |
Amortization of deferred financing costs | 0 | 1,667 |
Share-based compensation expense | 662,132 | 650,924 |
Changes in assets and liabilities: | ||
Accounts receivable and unbilled receivables | 30,807,310 | (17,870,622) |
Inventories | (207,823) | (2,151) |
Prepaid expenses and other current assets | (1,755,636) | 131,403 |
Other assets | 27,161 | 18,334 |
Accounts payable and accrued expenses | (30,169,455) | 19,588,012 |
Income tax payable | 272,523 | (40,747) |
Deferred revenue and other liabilities | 1,566,000 | (4,295) |
Other liabilities | 246,037 | 0 |
Net cash provided by operating activities | 3,460,077 | 5,995,829 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (163,031) | (225,883) |
Capitalized hardware and software development costs | (1,776,382) | (752,837) |
Net cash used in investing activities | (1,939,413) | (978,720) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances on bank line of credit | 0 | 1,895,659 |
Repayments of bank line of credit advances | 0 | (1,895,659) |
Principal repayments under finance lease obligations | (428,415) | (452,841) |
Withholding taxes paid on behalf of employees on net settled restricted stock awards | (140,865) | 0 |
Common stock repurchased | 0 | (10,113) |
Issuance of common stock/At-the-market offering, net of issuance costs | 1,071,045 | (131,436) |
Proceeds from exercise of stock options | 179,273 | 0 |
Net cash provided by (used in) financing activities | 681,038 | (594,390) |
Net effect of exchange rate on cash and equivalents | (96,110) | 70,556 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,105,592 | 4,493,275 |
CASH AND CASH EQUIVALENTS, beginning of period | 15,996,749 | 6,879,627 |
CASH AND CASH EQUIVALENTS, end of period | 18,102,341 | 11,372,902 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 229,795 | |
Cash paid for income taxes | 186,063 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Capitalized hardware and software development costs in accounts payable mgkhg | 75,558 | 0 |
Cashless exercise of stock options | 0 | 169 |
Leased assets obtained in exchange for new lease liabilities | $ 0 | $ 943,290 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive loss | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 8,386,145 | ||||
Balance, amount at Dec. 31, 2019 | $ 24,939,418 | $ 83,861 | $ 95,279,114 | $ (242,594) | $ (70,180,963) |
Common stock repurchased, shares | (2,416) | ||||
Common stock repurchased, amount | (10,113) | $ (24) | (10,089) | 0 | 0 |
Stock compensation expense - restricted | 254,499 | 0 | 254,499 | 0 | 0 |
Stock compensation expense non-qualified stock options | 26,942 | 0 | 26,942 | 0 | 0 |
Foreign currency translation (loss) | (37,330) | 0 | 0 | (37,330) | 0 |
Net income | 483,888 | $ 0 | 0 | 483,888 | |
Balance, shares at Mar. 31, 2020 | 8,383,729 | ||||
Balance, amount at Mar. 31, 2020 | 25,657,304 | $ 83,837 | 95,550,466 | (279,924) | (69,697,075) |
Balance, shares at Dec. 31, 2019 | 8,386,145 | ||||
Balance, amount at Dec. 31, 2019 | 24,939,418 | $ 83,861 | 95,279,114 | (242,594) | (70,180,963) |
Foreign currency translation (loss) | 55,159 | ||||
Net income | 2,039,478 | ||||
Balance, shares at Sep. 30, 2020 | 8,458,734 | ||||
Balance, amount at Sep. 30, 2020 | 40,551,723 | $ 84,587 | 95,919,199 | (187,435) | (68,141,485) |
Balance, shares at Mar. 31, 2020 | 8,383,729 | ||||
Balance, amount at Mar. 31, 2020 | 25,657,304 | $ 83,837 | 95,550,466 | (279,924) | (69,697,075) |
Stock compensation expense - restricted | 182,928 | 0 | 182,928 | 0 | 0 |
Stock compensation expense non-qualified stock options | 26,499 | 0 | 26,499 | 0 | 0 |
Net income | 488,627 | $ 0 | 0 | 0 | 488,627 |
Issuance of common stock restricted, shares | 58,123 | ||||
Issuance of common stock restricted, amount | 0 | $ 581 | (581) | 0 | 0 |
Foreign currency translation gain | 27,599 | $ 0 | 0 | 27,599 | 0 |
Balance, shares at Jun. 30, 2020 | 8,441,852 | ||||
Balance, amount at Jun. 30, 2020 | 26,382,957 | $ 84,418 | 95,759,312 | (252,325) | (69,208,448) |
Stock compensation expense - restricted | 133,266 | 0 | 133,266 | 0 | 0 |
Stock compensation expense non-qualified stock options | 26,790 | 0 | 26,790 | 0 | 0 |
Foreign currency translation (loss) | 64,890 | 0 | 0 | 64,890 | 0 |
Net income | 1,066,963 | $ 0 | 0 | 0 | 1,066,963 |
Issuance of common stock options exercises, shares | 16,882 | ||||
Issuance of common stock options exercises, amount | 0 | $ 169 | (169) | 0 | 0 |
Balance, shares at Sep. 30, 2020 | 8,458,734 | ||||
Balance, amount at Sep. 30, 2020 | 40,551,723 | $ 84,587 | 95,919,199 | (187,435) | (68,141,485) |
Balance, shares at Dec. 31, 2020 | 8,876,515 | ||||
Balance, amount at Dec. 31, 2020 | 40,551,723 | $ 8,876 | 100,504,741 | (104,615) | (59,857,279) |
Stock compensation expense - restricted | 157,107 | 0 | 157,107 | 0 | 0 |
Stock compensation expense non-qualified stock options | 25,735 | 0 | 25,735 | 0 | 0 |
Foreign currency translation (loss) | (54,949) | 0 | 0 | (54,949) | 54,949 |
Net income | 585,424 | $ 0 | 585,424 | ||
Issuance of common stock restricted, shares | 91,650 | ||||
Issuance of common stock restricted, amount | (140,894) | $ 92 | (140,986) | 0 | 0 |
Issuance of common stock options exercises, shares | 2,500 | ||||
Issuance of common stock options exercises, amount | $ 10,250 | $ 2 | $ 10,248 | 0 | 0 |
Issuance of common stock through at-the-market offering program, net of issuance costs of $45,392, shares | 1,088,398 | 100,687 | 1,088,297 | ||
Issuance of common stock through at-the-market offering program, net of issuance costs of $45,392, amount bb | $ 101 | ||||
Balance, shares at Mar. 31, 2021 | 9,071,352 | ||||
Balance, amount at Mar. 31, 2021 | $ 42,222,794 | $ 9,071 | $ 101,645,142 | (159,564) | (59,271,855) |
Balance, shares at Dec. 31, 2020 | 8,876,515 | ||||
Balance, amount at Dec. 31, 2020 | 40,551,723 | $ 8,876 | 100,504,741 | (104,615) | (59,857,279) |
Foreign currency translation (loss) | (85,295) | ||||
Net income | $ 915,577 | ||||
Issuance of common stock restricted, shares | 12,526 | ||||
Balance, shares at Sep. 30, 2021 | 9,138,146 | ||||
Balance, amount at Sep. 30, 2021 | $ 43,153,590 | $ 9,138 | 102,276,064 | (189,910) | (58,941,702) |
Balance, shares at Mar. 31, 2021 | 9,071,352 | ||||
Balance, amount at Mar. 31, 2021 | 42,222,794 | $ 9,071 | 101,645,142 | (159,564) | (59,271,855) |
Stock compensation expense - restricted | 214,852 | 0 | 214,852 | 0 | 0 |
Stock compensation expense non-qualified stock options | 28,969 | 0 | 28,969 | 0 | 0 |
Foreign currency translation (loss) | 19,633 | 0 | 0 | 19,633 | 0 |
Net income | (204,731) | $ 0 | 0 | 0 | (204,731) |
Issuance of common stock restricted, shares | 28,208 | ||||
Issuance of common stock restricted, amount | 0 | $ 29 | (29) | 0 | 0 |
Offering costs for the issuance of common stock At-the-market offering | (17,324) | $ 0 | (17,324) | 0 | 0 |
Balance, shares at Jun. 30, 2021 | 9,099,560 | ||||
Balance, amount at Jun. 30, 2021 | 42,264,193 | $ 9,100 | 101,871,610 | (139,931) | (59,476,586) |
Stock compensation expense - restricted | 210,602 | 210,602 | |||
Stock compensation expense non-qualified stock options | 24,867 | 24,867 | |||
Foreign currency translation (loss) | (49,979) | (49,979) | |||
Net income | 534,884 | $ 0 | 0 | 0 | 534,884 |
Issuance of common stock options exercises, shares | 38,586 | ||||
Issuance of common stock options exercises, amount | 169,023 | $ 38 | 168,985 | ||
Balance, shares at Sep. 30, 2021 | 9,138,146 | ||||
Balance, amount at Sep. 30, 2021 | $ 43,153,590 | $ 9,138 | $ 102,276,064 | $ (189,910) | $ (58,941,702) |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization and Nature of Operations | |
1. Organization and Nature of Operations | 1. Organization and Nature of Operations Organization WidePoint Corporation (“WidePoint” or the “Company”) was incorporated in Delaware on May 30, 1997 and conducts operations through its wholly-owned operating subsidiaries throughout the continental United States, Ireland, the Netherlands and the United Kingdom. The Company’s principal executive and administrative headquarters is located in Fairfax, Virginia. Nature of Operations The Company is a leading provider of trusted mobility management (TM2). The Company’s TM2 platform and service solutions enable its customers to efficiently secure, manage and analyze the entire lifecycle of their mobile communications assets through its federally compliant platform Intelligent Telecommunications Management System (ITMS™). The Company’s ITMS™ platform is SSAE 18 compliant and was granted an Authority to Operate by the U.S. Department of Homeland Security and the U.S. Department of Commerce. Additionally, the Company was granted an Authority to Operate by the General Services Administration with regard to its identity credentialing component of its TM2 platform. The Company is one of two DoD designated External Certificate Authorities and offers ECA certificates, including digital certificates for IOT and machine identity, PIV (Personal Identity Verification) and PIV-I (Personal Identity Verification Interoperability) for the Federal Government including all contractors to the Federal Government. The Company’s Identity Management division is FISMA moderate certified and is a Trusted Root Certificate Authority offering certificates that are cross-certified under the Federal Bridge. The Company’s TM2 platform is internally hosted and accessible on-demand through a secure customer portal that is specially configured for each customer. The Company can deliver these solutions in a number of configurations ranging from utilizing the platform as a service to a full-service solution that includes full lifecycle support for all end users and the organization. The Company also provides digital interactive billing and analytics to both communications service providers (CSPs) and enterprises. Our customized solutions give their end customers the ability to view and analyze their bills online via our advanced self-serve user portal 24/7. Our solutions are delivered in a hosted and secure environment and provide our CSPs with full visibility into their revenue model which drives a stronger customer experience and reduces their operating costs and improves profitability. The Company derives a significant amount of its revenues from contracts funded by federal government agencies for which WidePoint’s subsidiaries act in the capacity as the prime contractor, or as a subcontractor. The Company believes that contracts with federal government agencies will be the primary source of revenues for the foreseeable future. External factors outside of the Company’s control such as delays and/or a change in government administrations, budgets and other political matters that may impact the timing and commencement of such work could result in variations in operating results and directly affect the Company’s financial performance. Successful contract performance and variation in the volume of activity as well as in the number of contracts commenced or completed during any quarter may cause significant variations in operating results from quarter to quarter. A significant portion of the Company’s expenses, such as personnel and facilities costs, are fixed in the short term and may not be easily modified to manage through changes in the Company’s market place that may create pressure on pricing and/or costs to deliver its services. The Company has periodic capital expense requirements to maintain and upgrade its internal technology infrastructure tied to its hosted solutions and other such costs may be significant when incurred in any given quarter. COVID-19 The coronavirus (“COVID-19”) pandemic has created significant macroeconomic uncertainty, volatility and disruption. The assessment of how COVID-19 or any variant thereof will impact our business is on-going and encompasses all aspects of our business, including how COVID-19 or an variant thereof will impact our customers, employees, subcontractors, business partners and the capital markets. Although the Company did not experience significant disruptions during the nine months ended September 30, 2021, we have experienced significant reduction in new customer acquisitions due to lack of customer demand. We are unable to fully predict the impact the COVID-19 pandemic will have on our future financial position, results of operations, or cash flows. Additionally, changes in spending policies, budget priorities and funding levels are a key factor influencing the purchasing levels of government customers. With the current COVID-19 pandemic, future budget priorities and funding levels for these customers may be adversely affected. |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Basis of Presentation and Accounting Policies | |
2. Basis of Presentation and Accounting Policies | 2. Basis of Presentation and Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements as of September 30, 2021 and for each of the three and nine month periods ended September 30, 2021 and 2020, respectively, included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. It is the opinion of management that all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results are reflected in the financial statements for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2020 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the operating results for the full year. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and acquired entities since their respective dates of acquisition. All significant inter-company amounts were eliminated in consolidation. Common Stock Reverse Split On October 23, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of Delaware to effect a one-for-ten reverse stock split of the shares of the Company’s common stock, effective as of 5:00 pm Eastern Time on November 6, 2020. The Certificate of Amendment also decreased the number of authorized shares of the Company’s common stock from 110,000,000 to 30,000,000. All share, restricted stock awards (“RSA”) and per share information has been retroactively adjusted to reflect the reverse stock split. Government Subsidies On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for qualified wages and options to defer payroll tax payments for a limited period. Based on our evaluation of the CARES Act, in certain circumstances, we qualify for certain employer payroll tax credits as well as the deferral of payroll tax payments in the future. The Company records government subsidies as offsets to the related operating expenses. During the three months periods ended September 30, 2021, qualified payroll credits reduced general and administrative expenses by $1.3 million on our condensed consolidated statements of operations. As of September 30, 2021, deferred payroll tax payments of $246,000 were included in both accrued liabilities and other long-term liabilities, each, on our condensed consolidated balance sheets. As of December 31, 2020, total deferred payroll tax payments of $492,000 were included in accrued liabilities and other long-term liabilities on our consolidated balance sheets. Foreign Currency Assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon exchange rates prevailing at the end of each reporting period. The resulting translation adjustments, along with any related tax effects, are included in accumulated other comprehensive income, a component of stockholders’ equity. Translation adjustments are reclassified to earnings upon the sale or substantial liquidation of investments in foreign operations. Revenues and expenses are translated at the average month-end exchange rates during the year. Gains and losses related to transactions in a currency other than the functional currency, including operations outside the U.S. where the functional currency is the U.S. dollar, are reported net in the Company’s condensed consolidated statements of operations, depending on the nature of the activity. Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management 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 amounts of revenues and expenses during the reporting period. The more significant areas requiring use of estimates and judgment relate to revenue recognition, accounts receivable valuation reserves, ability to realize intangible assets and goodwill, ability to realize deferred income tax assets, fair value of certain financial instruments and the evaluation of contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. There were no significant changes in accounting estimates used by management during the quarter. Segment Reporting Our TM2 solution offerings comprise an overall single business from which the Company earns revenues and incurs costs. The Company’s TM2 solution offerings are centrally managed and reported on that basis to its Chief Operating Decision Maker who evaluates its business as a single segment. See Note 13 for detailed information regarding the composition of revenues. Significant Accounting Policies There were no significant changes in the Company’s significant accounting policies during the first nine months of 2021 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 23, 2021. Recently Adopted Accounting Standards In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted the standard on January 1, 2021 and it had no material impact on the Company’s condensed consolidated financial statements. Accounting Standards under Evaluation In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Accounts Receivable and Signifi
Accounts Receivable and Significant Concentrations | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable and Significant Concentrations | |
3. Accounts Receivable And Significant Concentration | 3. Accounts Receivable and Significant Concentrations A significant portion of the Company’s receivables are billed under firm fixed price contracts with agencies of the U.S. federal government and similar pricing structures with several corporations. Accounts receivable consist of the following by customer type in the table below as of the periods presented: (1) Government contracts are generally firm fixed price not to exceed arrangements with a term of five (5) years, which consists of a base year and four (4) annual option year renewals. Government receivables are billed under a single consolidated monthly invoice and are billed approximately thirty (30) to sixty (60) days in arrears from the date of service and payment is generally due within thirty (30) days of the invoice date. Government accounts receivable payments could be delayed due to administrative processing delays by the government agency, continuing budget resolutions that may delay availability of contract funding, and/or administrative only invoice correction requests by contracting officers that may delay payment processing by our government customers. (2) Commercial contracts are generally fixed price arrangements with contract terms ranging from two (2) to three (3) years. Commercial accounts receivables are billed based on the underlying contract terms and conditions which generally have repayment terms that range from thirty (30) to ninety (90) days. Commercial receivables are stated at amounts due from customers net of an allowance for doubtful accounts if deemed necessary. (3) For the nine months ended September 30, 2021, the Company recognized $24,500 of recoveries of existing provision for bad debt. The Company has not historically maintained a bad debt reserve for its government customers as it has not experienced material or recurring bad debt charges and the nature and size of the contracts has not necessitated the Company’s establishment of such a bad debt reserve. Significant Concentrations The following table presents revenue by customer in the current and/or comparative periods: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, Customer Type 2021 2020 2021 2020 (Unaudited) U.S. Federal Government (1) 87.1% 94.0% 84.2% 91.4% U.S. State & Local and Foreign Governments 0.3% 0.1% 0.4% 0.1% Commercial 12.6% 5.9% 15.4% 8.5% (1) Sales to the U.S. federal government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. |
Unbilled Accounts Receivable
Unbilled Accounts Receivable | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable and Significant Concentrations | |
4. Unbilled Accounts Receivable | 4. Unbilled Accounts Receivable Unbilled accounts receivable represent revenues earned but not invoiced to the customer at the balance sheet date due to either timing of invoice processing or delays due to fixed contractual billing schedules. A significant portion of our unbilled accounts receivable consist of carrier services and hardware and software products delivered but not invoiced at the end of the reporting period. The following table presents customers that represent ten (10) percent or more of consolidated unbilled accounts receivable as of the dates presented below: SEPTEMBER 30, DECEMBER 31, 2021 2020 As a % of As a % of Customer Type Receivables Receivables (Unaudited) U.S. Federal Government 99% 99% Commercial 1% 1% |
Other Current Assets and Accrue
Other Current Assets and Accrued Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Other Current Assets and Accrued Expenses | |
5. Other Current Assets and Accrued Expenses | 5. Other Current Assets and Accrued Expenses Other current assets consisted of the following as of the dates presented below: SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Inventories $ 1,198,546 $ 990,976 Prepaid rent, insurance and other assets 1,226,169 772,657 Employee retention credit receivable 1,296,396 - Total other current assets $ 3,721,111 $ 1,763,633 Accrued expenses consisted of the following as of the dates presented below: SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Carrier service costs $ 7,644,300 $ 11,832,170 Salaries and payroll taxes 1,780,618 2,774,138 Inventory purchases, consultants and other costs 1,490,137 1,004,303 Other 286,942 15,702 $ 11,201,997 $ 15,626,313 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property and Equipment | |
6. Property and Equipment | 6. Property and Equipment Major classes of property and equipment consisted of the following as of the dates presented below: SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Computer hardware and software $ 2,671,326 $ 2,271,000 Furniture and fixtures 454,624 462,361 Leasehold improvements 303,733 318,449 Automobiles 92,108 31,913 Gross property and equipment 3,521,791 3,083,723 Less: accumulated depreciation and amortization 2,688,209 2,510,684 Property and equipment, net $ 833,582 $ 573,039 During the three and nine month periods ended September 30, 2021, property and equipment depreciation expense was approximately $89,200 and $248,900, respectively. During the three and nine month periods ended September 30, 2020, property and equipment depreciation expense was approximately $117,000 and $328,300, respectively. During the nine month periods ended September 30, 2021 and 2020, there were no material disposals of owned property and equipment. There were no changes in the estimated useful lives used to depreciate property and equipment during the nine month periods ended September 30, 2021 and 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets | |
7. Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company has recorded goodwill of $18,555,578 as of September 30, 2021. There were no changes in the carrying amount of goodwill during the nine month period ended September 30, 2021. Intangible assets consists of the following: SEPTEMBER 30, 2021 Gross Carrying Accumulated Net Book Amount Amortization Value (Unaudited) Channel Relationships $ 2,628,080 $ (1,299,440 ) $ 1,328,640 Internally Developed Software 2,616,847 (1,504,241 ) 1,112,606 Trade Name and Trademarks 290,472 (143,623 ) 146,849 $ 5,535,399 $ (2,947,304 ) $ 2,588,095 DECEMBER 31, 2020 Gross Carrying Accumulated Net Book Amount Amortization Value (Unaudited) Customer Relationships $ 1,980,000 $ (1,980,000 ) $ - Channel Relationships 2,628,080 (1,168,036 ) 1,460,044 Internally Developed Software 1,846,194 (1,280,108 ) 566,086 Trade Name and Trademarks 290,472 (129,099 ) 161,373 $ 6,744,746 $ (4,557,243 ) $ 2,187,503 For the three and nine month periods ended September 30, 2021, the Company capitalized $607,900 and $1,851,900, respectively, of internally developed software costs, primarily associated with upgrading our ITMS™ (Intelligent Telecommunications Management System), next generation TDI TM For the three and nine month periods ended September 30, 2020, the Company capitalized $234,000 and $753,000, respectively, of internally developed software costs, primarily associated with upgrading our ITMS™ (Intelligent Telecommunications Management System), secure identity management technology and network operations center. During the nine month period ended September 30, 2021, the Company disposed of fully amortized intangible assets with a historical cost and accumulated amortization of $1,980,000. There were no disposals of intangible assets during the nine month period ended September 30, 2020. The aggregate amortization expense recorded for the three month periods ended September 30, 2021 and 2020 were approximately $133,800 and $125,700, respectively. The aggregate amortization expense recorded for the nine month periods ended September 30, 2021 and 2020 were approximately $373,100 and $377,000, respectively As of September 30, 2021, estimated annual amortization for our intangible assets for each of the next five years is approximately: Remainder 2021 $ 295,515 2022 624,671 2023 491,976 2024 332,799 2025 194,570 Thereafter 648,564 Total $ 2,588,095 |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Line of Credit | |
8. Line of Credit | 8. Line of Credit On June 15, 2017, the Company entered into a Loan and Security Agreement with Atlantic Union Bank (formerly known as Access National Bank) (the “Loan Agreement”). The Loan Agreement provides for a $5.0 million working capital revolving line of credit. Effective, April 30, 2021, the Company entered into a sixth modification agreement (“Modification Agreement”) with Atlantic Union Bank to amend the existing Loan Agreement. The Modification Agreement extended the maturity date of the facility from April 30, 2021 through June 15, 2022. The Loan Agreement requires that the Company meet the following financial covenants on a quarterly basis: (i) maintain a minimum adjusted tangible net worth of at least $2.0 million, (ii) maintain minimum consolidated EBITDA of at least two times interest expense and (iii) maintain a current ratio of 1.1 to 1.0 (excluding finance lease liabilities reported under lease accounting standards). The available amount under the working capital line of credit is subject to a borrowing base, which is equal to the lesser of (i) $5.0 million or (ii) 50% of the net unpaid balance of the Company’s eligible accounts receivable. The facility is secured by a first lien security interest on all of the Company’s personal property, including its accounts receivable, general intangibles, inventory and equipment maintained in the United States. As of September 30, 2021, the Company was eligible to borrow up to $4.9 million under the borrowing base formula. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
9. Income Taxes | 9. Income Taxes The Company files U.S. federal income tax returns with the Internal Revenue Service (“IRS”) as well as income tax returns in various states and certain foreign countries. The Company may be subject to examination by the IRS or various state taxing jurisdictions for tax years 2003 and forward. The Company may be subject to examination by various foreign countries for tax years 2014 forward. As of September 30, 2021, the Company was not under examination by the IRS, any state or foreign tax jurisdiction. The Company did not have any unrecognized tax benefits at either September 30, 2021 or December 31, 2020. In the future if applicable, any interest and penalties related to uncertain tax positions will be recognized in income tax expense. As of September 30, 2021, the Company had approximately $36.1 million in net operating loss (NOL) carry forwards available to offset future taxable income for federal income tax purposes, net of the potential Section 382 limitations. These federal NOL carry forwards expire between 2021 and 2036. Included in the recorded deferred tax asset, the Company had a benefit of approximately $36.0 million available to offset future taxable income for state income tax purposes. These state NOL carry forwards expire between 2024 and 2036. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of our domestic NOL may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Under existing income tax accounting standards such objective evidence is more heavily weighted in comparison to other subjective evidence such as our projections for future growth, tax planning and other tax strategies. During 2020, in part because the Company achieved three years of cumulative pretax income in the U.S. federal tax jurisdiction, management determined that there was sufficient positive evidence to conclude that it was more likely than not that deferred tax assets were realizable. It therefore reduced the valuation allowance accordingly and the Company released $8.2 million of the deferred tax asset valuation allowance during the fourth quarter of 2020 to offset the regular tax expense generated by its earnings in 2020. There were no changes to the valuation allowance during 2021. In the future, changes in the Company’s valuation allowance may result from, among other things, additional pretax operating losses resulting in increases in its valuation allowance or pretax operating income resulting in decreases in its valuation allowance. |
Stockholders Equity
Stockholders Equity | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS' EQUITY | |
10. Stockholders' Equity | 10. Stockholders’ Equity Common Stock The Company is authorized to issue 30,000,000 shares of common stock, $.001 par value per share. As of September 30, 2021, there were 9,138,146 shares issued and outstanding. During the nine month period ended September 30, 2021, there were 132,384 shares of common stock vested in accordance with the vesting terms of the RSAs. Two employees received less than the shares vested because they elected to have a total of 12,526 shares withheld in satisfaction of each of the employees corresponding tax liability of approximately $140,900. The Company’s payment of this tax liability was recorded as a cash flow from financing activity on the consolidated statement of cash flows. During the nine month period ended September 30, 2020, there were 58,123 shares of common stock vested in accordance with the vesting terms of RSAs. Shares of common stock issued as a result of stock option exercises and realized gross proceeds for the nine month period ended September 30, 2021, were 41,500 and $179,233, respectively. During the nine month period ended September 30, 2020, 75,000 stock options were exercised on a cashless basis for an aggregate issuance of 16,882 shares of the Company’s common stock. At The Market Offering Agreement On August 18, 2020, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley FBR”), The Benchmark Company, LLC (“Benchmark”) and Spartan Capital Securities, LLC (“Spartan”, and together with B. Riley FBR and Benchmark, the “Sales Agents”) which establishes an at-the-market equity program pursuant to which the Company may offer and sell shares of our common stock, par value $0.001 per share, from time to time as set forth in the Sales Agreement. The Sales Agreement provides for the sale of shares of the Company’s common stock (“Shares”) having an aggregate offering price of up to $24,000,000. The Sales Agreement will terminate upon the earlier of sale of all of the Shares under the Sales Agreement or termination of the Sales Agreement as permitted. The Company has no obligation to sell any of the Shares, and, at any time, we may suspend offers under the Sales Agreement or terminate the Sales Agreement. The Company did not sell any shares during the three month period ended September 30, 2021. During the nine month period ended September 30, 2021, the Company sold 100,687 shares for gross proceeds of $1.1 million. During the nine month period ended September 30, 2021, the Company has incurred $62,700of offering costs. |
Sharebased Compensation
Sharebased Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Sharebased Compensation | |
11. Share-based Compensation | 11. Share-based Compensation Share-based compensation (including restricted stock awards) represents both stock option based expense and stock grant expense. The following table sets forth the composition of stock compensation expense included in general and administrative expense for the periods then ended: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Restricted stock compensation expense $ 210,602 $ 133,266 $ 582,561 $ 570,693 Non-qualified option stock compensation expense 24,867 26,790 79,571 80,231 Total share-based compensation before taxes $ 235,469 $ 160,056 $ 662,132 $ 650,924 The Company’s stock incentive plan is administered by the Compensation Committee of the Board of Directors and authorizes the grant or award of incentive stock options, nonqualified stock options (NQSO), restricted stock awards (RSA), stock appreciation rights, dividend equivalent rights, performance unit awards and phantom shares. The Company issues new shares of common stock upon the exercise of stock options. Restricted Stock The Company records the fair value of all restricted stock awards based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when vested and included in the total number of common shares issued and outstanding. During the nine month period ended September 30, 2021, the Company granted 83,326 RSAs. Non-Qualified Stock Options The Company estimates the fair value of nonqualified stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, forfeiture rates and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. There were no non-qualified stock option awards granted during the nine month periods ended September 30, 2021 and 2020. At September 30, 2021, the Company had approximately $564,846 of total unrecognized share-based compensation expense, net of estimated forfeitures, related to share-based compensation that will be recognized over the weighted average remaining period of 1.1 year. |
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Common Share (EPS) | |
12. Earnings Per Common Share (EPS) | 12. Earnings Per Common Share (EPS) The computations of basic and diluted earnings per share were as follows for the periods presented below: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Basic Earnings Per Share Computation: Net income $ 534,884 $ 1,066,963 $ 915,577 $ 2,039,478 Weighted average number of common shares 9,129,406 8,450,843 9,066,088 8,409,114 Basic Earnings Per Share $ 0.06 $ 0.13 $ 0.10 $ 0.24 Diluted Earnings Per Share Computation: Net income $ 534,884 $ 1,066,963 $ 915,577 $ 2,039,478 Weighted average number of common shares 9,129,406 8,450,843 9,066,088 8,409,114 Incremental shares from assumed conversions of dilutive securities 28,990 76,466 116,102 54,447 Adjusted weighted average number of common shares 9,158,396 8,527,309 9,182,190 8,463,561 Diluted Earnings Per Share $ 0.06 $ 0.13 $ 0.10 $ 0.24 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contracts with Customers | |
13. Revenue from Contracts with Customers | 13. Revenue from Contracts with Customers The following table was prepared to provide additional information about the composition of revenues from contracts with customers for the periods presented: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Carrier Services $ 13,100,499 $ 45,029,563 $ 36,347,673 $ 118,116,987 Managed Services 9,150,783 12,476,998 26,537,872 33,838,720 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 The Company recognized revenues from contracts with customers for the following customer types as set forth below: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) U.S. Federal Government $ 19,377,818 $ 54,067,651 $ 52,959,115 $ 138,942,101 U.S. State and Local Governments 50,196 24,969 168,284 76,255 Foreign Governments 14,840 40,906 53,929 106,812 Commercial Enterprises 2,808,428 3,373,035 9,704,217 12,830,539 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 The Company recognized revenues from contracts with customers in the following geographic regions: THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) North America $ 21,286,194 $ 56,407,094 $ 59,459,998 $ 148,655,842 Europe 965,088 1,099,467 3,425,547 3,299,865 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 During the three months ended September 30, 2021 and 2020, the Company recognized approximately $344,700 and $350,400, respectively, of revenue related to amounts that were included in deferred revenue as of December 31, 2020 and 2019, respectively. During the nine months ended September 30, 2021 and 2020, the Company recognized approximately $1.8 million and $1.6 million, respectively, of revenue related to amounts that were included in deferred revenue as of December 31, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
14. Commitments and Contingencies | 14. Commitments and Contingencies Employment Agreements The Company has employment agreements with certain executives that set forth compensation levels and provide for severance payments in certain instances. Litigation The Company is not involved in any material legal proceedings. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Event | |
15. Subsequent Event | 15. Subsequent Event Acquisition On October 1, 2021, the Company completed the acquisition of specified assets of IT Authorities, Inc. (ITA). The closing purchase price paid by the Company consisted of $4.75 million in cash and 75,000 fully vested warrants to purchase an equal number of shares of the Company’s common stock at an exercise price of $5.33 per share (“Warrants”) exercisable for a period of four years. In addition, the Company agreed to pay contingent consideration to the seller as follows: (i) up to an additional $250,000 and 75,000 Warrants exercisable for four years depending on the EBITDA of the business in 2021; (ii) up to an additional $1.0 million and 150,000 Warrants exercisable for three years depending on the EBITDA of the business in 2022; (iii) up to an additional $1.0 million and 125,000 Warrants exercisable for three years depending on the EBITDA of the business in 2023; and (iv) up to an additional $1.0 million and 125,000 Warrants exercisable for three years depending on the EBITDA of the Business in 2024. In addition, the Company entered into employment agreements with two of the founders of the seller and in the event of the termination of either employee without cause (or by the employee for good reason), the contingent consideration payable under the purchase agreement will be deemed earned and payable for earn-out periods that have not been completed at the time of termination. The cash portion of the acquisition was funded using cash on hand. As of the date of filing this quarterly report on Form 10-Q, total consideration transferred and the acquisition-date fair value information is not provided because the preliminary purchase accounting has not yet been finalized due primarily to the timing of information being provided to our valuation specialist and the pending receipt of a preliminary valuation report for certain assets and liabilities, including identified intangible assets. The Company expects to update this information in the fourth quarter. Supplemental Unaudited Pro Forma Information The following unaudited pro forma information presents the condensed consolidated results of operations of the Company and ITA for the three and nine month periods ended September 30, 2021 and 2020 as if the acquisition of ITA had been completed on January 1, 2020. These unaudited pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments that reflect pro forma results of operations, such as removal of revenue and expenses that were not part of the asset purchase agreement, and does not reflect the potential amortization for the fair value of acquired intangible assets and fair value adjustment for deferred revenue, adjustments for revenue and contract costs in connection with the adoption of Accounting Standards Codification 606 “Revenue from Contracts with Customers” for the IT Authorities business, and adjustments relating to the tax effect of combining the Company and IT Authorities businesses. The unaudited pro forma results do not reflect any operating efficiencies or potential cross-selling of product and services which may result from the consolidation of the operations of the Company and ITA. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of the results of operations that actually would have been achieved had the acquisition occurred as of January 1, 2020, nor are they intended to represent or be indicative of future results of operations. THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (a) (a) (a) (a) (Unaudited) Revenues $ 24,740,000 $ 60,387,000 $ 70,100,000 $ 161,897,000 Net income 636,000 1,287,000 1,061,000 2,823,000 (a) To reflect on a pro forma basis unaudited consolidated financial information for the three and nine month periods ended September 30, 2021 and 2020 for the Company. The unaudited financial information presented herein were derived from unaudited historical internally prepared financial statements for ITA and WidePoint’s Form 10-Q quarterly unaudited financial statements. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Basis of Presentation and Accounting Policies | |
Basis of Presentation | The unaudited condensed consolidated financial statements as of September 30, 2021 and for each of the three and nine month periods ended September 30, 2021 and 2020, respectively, included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. It is the opinion of management that all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results are reflected in the financial statements for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2020 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the operating results for the full year. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and acquired entities since their respective dates of acquisition. All significant inter-company amounts were eliminated in consolidation. |
Common Stock Reverse Split | On October 23, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of Delaware to effect a one-for-ten reverse stock split of the shares of the Company’s common stock, effective as of 5:00 pm Eastern Time on November 6, 2020. The Certificate of Amendment also decreased the number of authorized shares of the Company’s common stock from 110,000,000 to 30,000,000. All share, restricted stock awards (“RSA”) and per share information has been retroactively adjusted to reflect the reverse stock split. |
Government Subsidies | On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for qualified wages and options to defer payroll tax payments for a limited period. Based on our evaluation of the CARES Act, in certain circumstances, we qualify for certain employer payroll tax credits as well as the deferral of payroll tax payments in the future. The Company records government subsidies as offsets to the related operating expenses. During the three months periods ended September 30, 2021, qualified payroll credits reduced general and administrative expenses by $1.3 million on our condensed consolidated statements of operations. As of September 30, 2021, deferred payroll tax payments of $246,000 were included in both accrued liabilities and other long-term liabilities, each, on our condensed consolidated balance sheets. As of December 31, 2020, total deferred payroll tax payments of $492,000 were included in accrued liabilities and other long-term liabilities on our consolidated balance sheets. |
Foreign Currency | Assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon exchange rates prevailing at the end of each reporting period. The resulting translation adjustments, along with any related tax effects, are included in accumulated other comprehensive income, a component of stockholders’ equity. Translation adjustments are reclassified to earnings upon the sale or substantial liquidation of investments in foreign operations. Revenues and expenses are translated at the average month-end exchange rates during the year. Gains and losses related to transactions in a currency other than the functional currency, including operations outside the U.S. where the functional currency is the U.S. dollar, are reported net in the Company’s condensed consolidated statements of operations, depending on the nature of the activity. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management 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 amounts of revenues and expenses during the reporting period. The more significant areas requiring use of estimates and judgment relate to revenue recognition, accounts receivable valuation reserves, ability to realize intangible assets and goodwill, ability to realize deferred income tax assets, fair value of certain financial instruments and the evaluation of contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. There were no significant changes in accounting estimates used by management during the quarter. |
Segment Reporting | Our TM2 solution offerings comprise an overall single business from which the Company earns revenues and incurs costs. The Company’s TM2 solution offerings are centrally managed and reported on that basis to its Chief Operating Decision Maker who evaluates its business as a single segment. See Note 13 for detailed information regarding the composition of revenues. |
Significant Accounting Policies | There were no significant changes in the Company’s significant accounting policies during the first nine months of 2021 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 23, 2021. |
Recently Adopted Accounting Standards | In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted the standard on January 1, 2021 and it had no material impact on the Company’s condensed consolidated financial statements. |
Accounting Standards under Evaluation | In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Accounts Receivable and Signi_2
Accounts Receivable and Significant Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable and Significant Concentrations | |
Schedule of accounts receivable | SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Government (1) $ 9,025,163 $ 34,097,906 Commercial (2) 1,208,536 1,898,924 Gross accounts receivable 10,233,699 35,996,830 Less: allowances for doubtful accounts (3) 84,971 114,169 Accounts receivable, net $ 10,148,728 $ 35,882,661 |
Schedules of concentration of risk | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, Customer Type 2021 2020 2021 2020 (Unaudited) U.S. Federal Government (1) 87.1% 94.0% 84.2% 91.4% U.S. State & Local and Foreign Governments 0.3% 0.1% 0.4% 0.1% Commercial 12.6% 5.9% 15.4% 8.5% |
Unbilled Accounts Receivable (T
Unbilled Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable and Significant Concentrations | |
Schedule of accounts receivable period | SEPTEMBER 30, DECEMBER 31, 2021 2020 As a % of As a % of Customer Type Receivables Receivables (Unaudited) U.S. Federal Government 99% 99% Commercial 1% 1% |
Other Current Assets and Accr_2
Other Current Assets and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Current Assets and Accrued Expenses | |
Schedule of other current assets | SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Inventories $ 1,198,546 $ 990,976 Prepaid rent, insurance and other assets 1,226,169 772,657 Employee retention credit receivable 1,296,396 - Total other current assets $ 3,721,111 $ 1,763,633 |
Schedule of accrued expenses | SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Carrier service costs $ 7,644,300 $ 11,832,170 Salaries and payroll taxes 1,780,618 2,774,138 Inventory purchases, consultants and other costs 1,490,137 1,004,303 Other 286,942 15,702 $ 11,201,997 $ 15,626,313 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property and Equipment | |
Schedule of property and equipment | SEPTEMBER 30, DECEMBER 31, 2021 2020 (Unaudited) Computer hardware and software $ 2,671,326 $ 2,271,000 Furniture and fixtures 454,624 462,361 Leasehold improvements 303,733 318,449 Automobiles 92,108 31,913 Gross property and equipment 3,521,791 3,083,723 Less: accumulated depreciation and amortization 2,688,209 2,510,684 Property and equipment, net $ 833,582 $ 573,039 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets | |
Schedule of finite-lived intangible assets | SEPTEMBER 30, 2021 Gross Carrying Accumulated Net Book Amount Amortization Value (Unaudited) Channel Relationships $ 2,628,080 $ (1,299,440 ) $ 1,328,640 Internally Developed Software 2,616,847 (1,504,241 ) 1,112,606 Trade Name and Trademarks 290,472 (143,623 ) 146,849 $ 5,535,399 $ (2,947,304 ) $ 2,588,095 DECEMBER 31, 2020 Gross Carrying Accumulated Net Book Amount Amortization Value (Unaudited) Customer Relationships $ 1,980,000 $ (1,980,000 ) $ - Channel Relationships 2,628,080 (1,168,036 ) 1,460,044 Internally Developed Software 1,846,194 (1,280,108 ) 566,086 Trade Name and Trademarks 290,472 (129,099 ) 161,373 $ 6,744,746 $ (4,557,243 ) $ 2,187,503 |
Schedule of finite-lived intangible assets, future amortization expense | Remainder 2021 $ 295,515 2022 624,671 2023 491,976 2024 332,799 2025 194,570 Thereafter 648,564 Total $ 2,588,095 |
Sharebased Compensation (Tables
Sharebased Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Sharebased Compensation | |
Schedule of share-based compensation | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Restricted stock compensation expense $ 210,602 $ 133,266 $ 582,561 $ 570,693 Non-qualified option stock compensation expense 24,867 26,790 79,571 80,231 Total share-based compensation before taxes $ 235,469 $ 160,056 $ 662,132 $ 650,924 |
Earnings Per Common Share (EP_2
Earnings Per Common Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Common Share (EPS) | |
Schedule of earnings per common share | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Basic Earnings Per Share Computation: Net income $ 534,884 $ 1,066,963 $ 915,577 $ 2,039,478 Weighted average number of common shares 9,129,406 8,450,843 9,066,088 8,409,114 Basic Earnings Per Share $ 0.06 $ 0.13 $ 0.10 $ 0.24 Diluted Earnings Per Share Computation: Net income $ 534,884 $ 1,066,963 $ 915,577 $ 2,039,478 Weighted average number of common shares 9,129,406 8,450,843 9,066,088 8,409,114 Incremental shares from assumed conversions of dilutive securities 28,990 76,466 116,102 54,447 Adjusted weighted average number of common shares 9,158,396 8,527,309 9,182,190 8,463,561 Diluted Earnings Per Share $ 0.06 $ 0.13 $ 0.10 $ 0.24 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contracts with Customers | |
Schedule of revenues by service | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) Carrier Services $ 13,100,499 $ 45,029,563 $ 36,347,673 $ 118,116,987 Managed Services 9,150,783 12,476,998 26,537,872 33,838,720 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 |
Schedule of revenues by service customer type | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) U.S. Federal Government $ 19,377,818 $ 54,067,651 $ 52,959,115 $ 138,942,101 U.S. State and Local Governments 50,196 24,969 168,284 76,255 Foreign Governments 14,840 40,906 53,929 106,812 Commercial Enterprises 2,808,428 3,373,035 9,704,217 12,830,539 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 |
Schedule of revenue from customers by geographic area | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (Unaudited) North America $ 21,286,194 $ 56,407,094 $ 59,459,998 $ 148,655,842 Europe 965,088 1,099,467 3,425,547 3,299,865 $ 22,251,282 $ 57,506,561 $ 62,885,545 $ 151,955,707 |
Subsequent Event (Table)
Subsequent Event (Table) | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Event | |
Schedule Of Subsequent Event | THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2021 2020 2021 2020 (a) (a) (a) (a) (Unaudited) Revenues $ 24,740,000 $ 60,387,000 $ 70,100,000 $ 161,897,000 Net income 636,000 1,287,000 1,061,000 2,823,000 |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Details Narrative) | 1 Months Ended |
Oct. 23, 2020 | |
Basis of Presentation and Accounting Policies | |
Certificate of Amendment description | On October 23, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of Delaware to effect a one-for-ten reverse stock split of the shares of the Company’s common stock, effective as of 5:00 pm Eastern Time on November 6, 2020. The Certificate of Amendment also decreased the number of authorized shares of the Company’s common stock from 110,000,000 to 30,000,000 |
Accounts Receivable and Signi_3
Accounts Receivable and Significant Concentrations (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Accounts receivable, gross | $ 10,233,699 | $ 35,996,830 | |
Less: allowances for doubtful accounts | 84,971 | 114,169 | |
Accounts receivable, net | 10,148,728 | 35,882,661 | $ 35,882,661 |
Commercial | |||
Accounts receivable, gross | 1,208,536 | 1,898,924 | |
Government | |||
Accounts receivable, gross | $ 9,025,163 | $ 34,097,906 |
Accounts Receivable and Signi_4
Accounts Receivable and Significant Concentrations (Details 1) - Sales Revenue, Net | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
U.S. Federal Government | ||||
Concentration risk | 87.10% | 94.00% | 84.20% | 91.40% |
U.S. State & Local and Foreign Governments | ||||
Concentration risk | 0.30% | 0.10% | 0.40% | 0.10% |
Commercial | ||||
Concentration risk | 12.60% | 5.90% | 15.40% | 8.50% |
Accounts Receivable and Signi_5
Accounts Receivable and Significant Concentrations (Details Narrative) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Accounts Receivable and Significant Concentrations | |
Bad debts recovery | $ 24,500 |
Unbilled Accounts Receivable (D
Unbilled Accounts Receivable (Details) - Unbilled Accounts Receivable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
U.S. Federal Government | ||
Concentration risk | 99.00% | 99.00% |
Commercial | ||
Concentration risk | 1.00% | 1.00% |
Other Current Assets and Accr_3
Other Current Assets and Accrued Expenses (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Other Current Assets and Accrued Expenses | |||
Inventories | $ 1,198,546 | $ 990,976 | |
Prepaid rent, insurance and other assets | 1,226,169 | 772,657 | |
Employee retention credit receivable | 1,296,396 | 0 | |
Total other current assets | $ 3,721,111 | $ 1,763,633 | $ 1,763,633 |
Other Current Assets and Accr_4
Other Current Assets and Accrued Expenses (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Other Current Assets and Accrued Expenses | ||
Carrier service costs | $ 7,644,300 | $ 11,832,170 |
Salaries and payroll taxes | 1,780,618 | 2,774,138 |
Inventory purchases, consultants and other costs | 1,490,137 | 1,004,303 |
Carrier service costs | 7,644,300 | 11,832,170 |
Salaries and payroll taxes | 1,780,618 | 2,774,138 |
Inventory purchases, consultants and other costs | 1,490,137 | 1,004,303 |
Other | 286,942 | 15,702 |
Total accrued expenses | $ 11,201,997 | $ 15,626,313 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Property and equipment, gross | $ 3,521,791 | $ 3,083,723 | |
Less: accumulated depreciation and amortization | 2,688,209 | 2,510,684 | |
Property and equipment, net | 833,582 | 573,039 | $ 573,039 |
Computer Hardware and Software | |||
Property and equipment, gross | 2,671,326 | 2,271,000 | |
Furniture and Fixtures | |||
Property and equipment, gross | 454,624 | 462,361 | |
Leasehold Improvements | |||
Property and equipment, gross | 303,733 | 318,449 | |
Automobiles [Member] | |||
Property and equipment, gross | $ 92,108 | $ 31,913 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property and Equipment | ||||
Depreciation expense | $ 89,200 | $ 117,000 | $ 248,900 | $ 328,300 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Gross carrying amount | $ 5,535,399 | $ 6,744,746 |
Accumulated amortization | (2,947,304) | (4,557,243) |
Net book value | 2,588,095 | 2,187,503 |
Trade Name and Trademarks | ||
Gross carrying amount | 290,472 | 290,472 |
Accumulated amortization | (143,623) | (129,099) |
Net book value | 146,849 | 161,373 |
Channel Relationships | ||
Gross carrying amount | 2,628,080 | 2,628,080 |
Accumulated amortization | (1,299,440) | (1,168,036) |
Net book value | 1,328,640 | 1,460,044 |
Internally Developed Software | ||
Gross carrying amount | 2,616,847 | 1,846,194 |
Accumulated amortization | (1,504,241) | (1,280,108) |
Net book value | $ 1,112,606 | 566,086 |
Customer Relationships | ||
Gross carrying amount | 1,980,000 | |
Accumulated amortization | (1,980,000) | |
Net book value | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets | ||
Remainder of 2021 | $ 295,515 | |
2022 | 624,671 | |
2023 | 194,976 | |
2024 | 332,799 | |
2025 | 194,570 | |
Thereafter | 648,564 | |
Total | $ 2,588,095 | $ 2,187,503 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets | ||||
Goodwill | $ 18,555,578 | $ 18,555,578 | $ 18,555,578 | $ 18,555,578 |
Capitalized software cost | 607,900 | 234,000 | 1,851,900 | 753,000 |
Cost and accumulated amortization | 1,980,000 | |||
Aggregate amortization expense | $ 133,800 | $ 239,300 | 373,100 | $ 377,000 |
Work in progress software cost | $ 531,600 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Jun. 15, 2017 | |
Line of Credit | ||
Line of credit borrowing capacity | $ 4.9 | |
Working capital revolving line of credit | $ 5 | |
Description of date of maturity extention from | April 30, 2021 through June 15, 2022 | |
Quarterly minimum tangible net worth | $ 2 | |
Descrioption of Current ratio | of 1.1 to 1.0 (excluding finance lease liabilities reported under lease accounting standards) | |
Percentage of unpaid balance of eligible accounts receivable | 50.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Income Taxes | |
Net operating loss carry forwards | $ 36.1 |
Deferred tax asset | 36 |
Valuation allowance | $ 8.2 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) | 9 Months Ended | |||
Sep. 30, 2021USD ($)integer$ / sharesshares | Sep. 30, 2020USD ($)shares | Dec. 31, 2020$ / sharesshares | Aug. 18, 2020USD ($)$ / shares | |
STOCKHOLDERS' EQUITY | ||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 30,000,000 | 30,000,000 | ||
Common stock, shares issued | 9,138,146 | 8,876,515 | ||
Common stock, shares outstanding | 9,138,146 | 8,876,515 | ||
Common stock vested | 132,384 | 58,123 | ||
Number of employee received less than shares vested | integer | 2 | |||
Shares withheld in satisfaction of each employees corresponding tax liability, shares | 12,526 | |||
Shares withheld in satisfaction of each employees corresponding tax liability, amount | $ | $ 140,900 | |||
Shares of common stock issued, stock option exercises | 41,500 | 75,000 | ||
Gross proceeds from shares of common stock issued, stock option exercises | $ | $ 179,233 | $ 16,882 | ||
Sale of common stock shares aggregate offering price per share | $ / shares | $ 0.001 | |||
Sale of common stock shares | $ | $ 24,000,000 | |||
Common stock shares sold during period | 100,687 | |||
Proceeds from sale of common stock shares | $ | $ 1,100,000 | |||
Offering costs on common stock shares | $ | $ 62,700 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Sharebased Compensation | ||||
Restricted stock compensation expense | $ 210,602 | $ 133,266 | $ 582,561 | $ 570,693 |
Non-qualified option stock compensation expense | 24,867 | 26,790 | 79,571 | 80,231 |
Share-based compensation expense | $ 235,469 | $ 160,056 | $ 662,132 | $ 650,924 |
Share-based Compensation (Det_2
Share-based Compensation (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | |
Sharebased Compensation | |||
Granted RSAs | 83,326 | ||
Unamortized share-based compensation expense | $ 564,846 | ||
Unrecognized share-based compensation expense, recognition period | 1 year 1 month 6 days | ||
Non-qualified stock option awards granted | 0 | 0 |
Earnings Per Common Share (EP_3
Earnings Per Common Share (EPS) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Basic Earnings Per Share Computation: | ||||||||
Net income | $ 534,884 | $ (204,731) | $ 585,424 | $ 1,066,963 | $ 488,627 | $ 483,888 | $ 915,577 | $ 2,039,478 |
Weighted average number of common shares | 9,129,406 | 8,450,843 | 9,066,088 | 8,409,114 | ||||
Basic earnings per share | $ 0.06 | $ 0.13 | $ 0.10 | $ 0.24 | ||||
Diluted Earnings Per Share Computation: | ||||||||
Net income | $ 534,884 | $ 1,066,963 | $ 915,577 | $ 2,039,478 | ||||
Weighted average number of common shares | 9,129,406 | 8,450,843 | 9,066,088 | 8,409,114 | ||||
Incremental shares from assumed conversions of dilutive securities | 28,990 | 76,466 | 116,102 | 54,447 | ||||
Adjustments weighted-average number of common shares | 9,158,396 | 8,527,309 | 9,182,190 | 8,463,561 | ||||
Diluted earnings per share | $ 0.06 | $ 0.13 | $ 0.10 | $ 0.24 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | $ 22,251,282 | $ 57,506,561 | $ 62,885,545 | $ 151,955,707 |
Managed Services | ||||
Revenues | 9,150,783 | 12,476,998 | 26,537,872 | 33,838,720 |
Carrier Services | ||||
Revenues | $ 13,100,499 | $ 45,029,563 | $ 36,347,673 | $ 118,116,987 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | $ 22,251,282 | $ 57,506,561 | $ 62,885,545 | $ 151,955,707 |
U.S. Federal Government | ||||
Revenues | 19,377,818 | 54,067,651 | 52,959,115 | 138,942,101 |
U.S. State and Local Governments | ||||
Revenues | 50,196 | 24,969 | 168,284 | 76,255 |
Foreign Governments | ||||
Revenues | 14,840 | 40,906 | 53,929 | 106,812 |
Commercial Enterprises | ||||
Revenues | $ 2,808,428 | $ 3,373,035 | $ 9,704,217 | $ 12,830,539 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues | $ 22,251,282 | $ 57,506,561 | $ 62,885,545 | $ 151,955,707 |
North America | ||||
Revenues | 21,286,194 | 56,407,094 | 59,459,998 | 148,655,842 |
Europe | ||||
Revenues | $ 965,088 | $ 1,099,467 | $ 3,425,547 | $ 3,299,865 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue from Contracts with Customers | ||||
Revenues | $ 344,700 | $ 350,400 | $ 1,800,000 | $ 1,600,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Subsequent Event | ||||
Revenues | $ 24,740,000 | $ 60,387,000 | $ 70,100,000 | $ 161,897,000 |
Net income | $ 636,000 | $ 1,287,000 | $ 1,061,000 | $ 2,823,000 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event $ / shares in Units, $ in Thousands | Oct. 01, 2021USD ($)$ / sharesshares |
2022 | |
Additional Warrants exercisable | 1,000,000 |
Warrants exercisable period | three |
Warrants exercisable | 150,000 |
2023 | |
Additional Warrants exercisable | 1,000,000 |
Warrants exercisable period | three |
Warrants exercisable | 125,000 |
2021 | |
Additional Warrants exercisable | 250,000 |
Warrants exercisable period | four |
Acquisition of specified assets purchase price paid in cash | $ | $ 4,750 |
Warrants to purchase common stock shares | 75,000 |
Warrants to purchase common stock shares exercise price | $ / shares | $ 5.33 |
2024 | |
Additional Warrants exercisable | 1,000,000 |
Warrants exercisable period | three |
Warrants exercisable | 125,000 |