Crexendo (CXDO) 10-K 4 Mar 14 2013 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 01, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Crexendo, Inc.	'
Entity Central Index Key	'0001075736	'
Document Type	'10-K	'
Document Period End Date	31-Dec-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Public Float	$16,514,000	'
Entity Common Stock, Shares Outstanding	'	10,827,926
Document Fiscal Period Focus	'FY	'
Document Fiscal Year Focus	'2013	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Assets	'	'
Cash and cash equivalents	$3,076	$7,440
Restricted cash	487	1,444
Trade receivables, net of allowance of doubtful accounts of $163 as of December 31, 2013 and $1,326 as of December 31, 2012	1,090	3,043
Inventories	217	171
Equipment financing receivables	94	28
Income taxes receivable	55	434
Prepaid expenses and other	620	333
Total Current Assets	5,639	12,893
Certificate of deposit	250	500
Long-term trade receivables, net of allowance of doubtful accounts of $37 as December 31, 2013 and $196 as of December 31, 2012	116	395
Long term equipment financing receivables	398	96
Property and equipment, net	2,195	3,172
Deferred income tax assets, net	244	103
Intangible assets	571	6
Goodwill	75	265
Other long-term assets	119	97
Total Assets	9,607	17,527
Liabilities and Stockholders' Equity	'	'
Accounts payable	201	418
Accrued expenses and other	1,095	3,010
Contingent Consideration	51	0
Deferred income tax liability	244	103
Deferred revenue, current portion	1,199	3,052
Total Current Liabilities	2,790	6,583
Deferred revenue, net of current portion	116	399
Other long-term liabilities	0	253
Total Liabilities	2,906	7,235
Commitments and contingencies (Note 10 and 13)	'	'
Stockholders Equity	'	'
Preferred stock, par value $0.001 per share - authorized 5,000,000 shares; none issued	0	0
Common stock, par value $0.001 per share - authorized 25,000,000 shares; 10,801,315 shares outstanding as of December 31, 2013; authorized 100,000,000 shares, 10,669,201 shares outstanding as of December 31, 2012	11	11
Additional paid-in capital	50,998	49,824
Contingent consideration	198	0
Accumulated deficit	-44,506	-39,543
Total Stockholders' Equity	6,701	10,292
Total Liabilities and Stockholders' Equity	$9,607	$17,527

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, except Share data, unless otherwise specified
Assets	'	'
Allowance for Doubtful Accounts - Trade Receivables	$163	$1,326
Allowance for Doubtful accounts - Long Term Trade Receivables	$37	$196
Stockholders Equity	'	'
Preferred Stock par value	$0.00	$0.00
Preferred Stock Shares Authorized	5,000,000	5,000,000
Preferred Stock Issued	0	0
Common Stock par value	$0.00	$0.00
Common Stock Shares Authorized	25,000,000	100,000,000
Common Stock Outstanding	10,801,315	10,669,201

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]	'	'
Revenue	$10,328	$17,167
Operating expenses:	'	'
Cost of revenue	4,091	5,092
Selling and marketing	3,055	3,977
General and administrative	6,970	12,228
Research and development	1,692	1,985
Goodwill impairment	265	0
Total operating expenses	16,073	23,282
Loss from operations	-5,745	-6,115
Other income (expense):	'	'
Interest income	501	1,907
Other income, net	24	55
Total other income, net	525	1,962
Loss before income tax	-5,220	-4,153
Income tax benefit	257	212
Net loss	($4,963)	($3,941)
Net loss per common share:	'	'
Basic	($0.46)	($0.37)
Diluted	($0.46)	($0.37)
Dividends per common share	$0	$0.04
Weighted-average common shares outstanding:	'	'
Basic	10,714,353	10,625,530
Diluted	10,714,353	10,625,530

Condensed_Consolidated_Stateme1

Condensed Consolidated Statement of Stockholders' Equity (USD $)	Common Stock	Additional Paid-In Capital	Contingent Consideration	Accumulated Deficit	Total
In Thousands, except Share data
Beginning Balance, Amount at Dec. 31, 2011	$11	$48,938	$0	($35,602)	$13,347
Beginning Balance, Shares at Dec. 31, 2011	10,523,078	'	'	'	'
Expense for stock options granted to employees	'	812	'	'	812
Common stock issued upon exercise of options, Shares	'	'	'	'	-146,123
Stock issued under stock award plans, Amount	146,123	'	'	'	'
Stock issued under stock award plans, Shares	'	498	'	'	498
Dividends declared	'	-424	'	'	-424
Net loss	'	'	'	-3,941	-3,941
Ending Balance, Amount at Dec. 31, 2012	11	49,824	'	-39,543	10,292
Ending Balance, Shares at Dec. 31, 2012	10,669,201	'	'	'	'
Expense for stock options granted to employees	'	808	'	'	808
Common stock issued upon exercise of options, Shares	'	'	'	'	-67,832
Contingent consideration	'	'	276	'	276
Stock issued under stock award plans, Amount	'	181	'	'	181
Stock issued under stock award plans, Shares	67,832	'	'	'	'
Issuance of common stock in connection with a business acquisition, Amount	'	107	'	'	107
Issuance of common stock in connection with a business acquisition, Shares	38,516	'	'	'	'
Issuance of common stock from contingent consideration, Amount	'	78	-78	'	'
Issuance of common stock from contingent consideration, Shares	25,766	'	'	'	'
Net loss	'	'	'	-4,963	-4,963
Ending Balance, Amount at Dec. 31, 2013	$11	$50,998	$198	($44,506)	$6,701
Ending Balance, Shares at Dec. 31, 2013	10,801,315	'	'	'	'

Condensed_Consolidated_Stateme2

Condensed Consolidated Statements of Cash Flows (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net loss	($4,963)	($3,941)
Adjustments to reconcile net loss to net cash used for operating activities:	'	'
Goodwill impairment	265	0
Impairment of inventory	0	35
Lease abandonment	-606	1,393
Depreciation and amortization	1,145	1,374
Loss on disposal of property and equipment	3	83
Expense for stock options issued to employees	808	812
Change in fair value of contingent consideration	-13	0
Change in uncertain tax positions	-253	-162
Changes in assets and liabilities:	'	'
Trade receivables	2,232	12,079
Inventories	-46	26
Equipment financing receivables	-368	-124
Income taxes receivable	379	118
Prepaid expenses and other	-287	392
Other long-term assets	-22	136
Accounts payable, accrued expenses and other	-1,520	-709
Deferred revenue	-2,136	-11,960
Other long-term liabilities	0	2
Net cash used for operating activities	-5,382	-446
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Acquisition of property and equipment	-62	-1,172
Proceeds from sale of property and equipment	15	22
Redemption of certificate of deposit	250	0
Change in restricted cash	957	521
Acquisition of PBX Central	-300	0
Net cash provided by (used for) investing activities	860	-629
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Proceeds from exercise of options	181	498
Payments made on contingent consideration	-23	-6
Dividend payments	0	-635
Net cash provided by (used for) financing activities	158	-143
NET DECREASE IN CASH AND CASH EQUIVALENTS	-4,364	-1,218
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	7,440	8,658
CASH AND CASH EQUIVALENTS, END OF PERIOD	3,076	7,440
Supplemental disclosure of cash flow information:	'	'
Cash received during the year for: Income taxes	383	158
Supplemental disclosure of non-cash investing and financing information:	'	'
Purchases of property and equipment included in accounts payable	0	6
Business acquisition with stock (Note 3)	107	0
Contingent consideration related to acquisition (Note 3)	363	0
Exchange of property and equipment for services rendered	$4	$0

1_Significant_Accounting_Polic

1. Significant Accounting Policies	12 Months Ended
	Dec. 31, 2013
Significant Accounting Policies	'
1. Summary of Significant Accounting Policies	'
	Description of Business - Crexendo, Inc. is incorporated in the state of Delaware. As used hereafter in the notes to consolidated financial statements, we refer to Crexendo, Inc. and its wholly owned subsidiaries, as “we,” “us,” or “our Company”. We are a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development, and broadband internet services for businesses and entrepreneurs.  Our services are designed to make enterprise-class hosting services available to small and medium-sized businesses at affordable monthly rates.  The Company has three operating segments, which consist of Crexendo Network Services, Crexendo Web Services, and StoresOnline.
	The Company has transformed into a start-up telecom company with the inherent risks and uncertainties of funding operations until profitability is achieved. We currently plan to fund our growth during the next twelve months using our cash and cash equivalents of $3.1 million, the collection of the remaining $545,000 of accounts receivable from our former StoresOnline business, and the $2 million proceeds from the sale of the Crexendo head office to the CEO in the first quarter of 2014 (see Note 16,).  The Company also received a commitment from the CEO, and major shareholder, in February of 2014 that the CEO would provide the necessary level of financial support to enable the Company to pay its debts as they become due through March 31, 2015.  Accordingly the Company believes it will have sufficient funds to sustain its operations during the next 12 months as a result of the sources of funding detailed above.
	Basis of Presentation – The consolidated financial statements include the accounts and operations of Crexendo, Inc. and its wholly owned subsidiaries, which include Avail 24/7 Inc., Crexendo Business Solutions, Inc., StoresOnline Inc., StoresOnline International Canada ULC, StoresOnline International, Inc., StoresOnline International Ltd., StoresOnline International Canada, Ltd., Internet Training Group, Inc., Crexendo International, Inc., Crexendo Telecom, Inc., Crexendo India Limited, and Crexendo Property Management, LLC.   All intercompany account balances and transactions have been eliminated in consolidation.  The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements reflect the results of operations, financial position, changes in stockholders’ equity, and cash flows of our Company.
	Cash and Cash Equivalents -We consider all highly liquid, short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. As of December 31, 2013, we had cash and cash equivalents in financial institutions in excess of federally insured limits in the amount of $2,732,000.
	Restricted Cash – We classified $487,000 and $1,444,000 as restricted cash as of December 31, 2013 and 2012, respectively.  Cash is restricted for state licensing letters of credit, compensating balance requirement of our merchant accounts, and purchasing card agreements.  As of December 31, 2013, we had restricted cash in financial institutions in excess of federally insured limits in the amount of $487,000.
	Trade Receivables – We have historically offered to our customers the option to finance, typically through 24 and 36-month extended payment term arrangements (“EPTAs”), purchases made at our suspended Internet Training Workshops through our StoresOnline segment. EPTAs are reflected as short-term and long-term trade receivables, as applicable, as we have the intent and ability to hold the receivables for the foreseeable future, until maturity or payoff.  EPTAs are recorded on a nonaccrual cash basis beginning on the contract date.
	Allowance for Doubtful Accounts – For sales made through EPTA contracts, we record an allowance for doubtful accounts each reporting period based on the Company’s ongoing assessment of collectability. The allowance represents estimated losses resulting from customers’ failure to make required payments. The allowance for doubtful accounts for EPTAs is netted against the current and long-term trade receivables balances. The allowance estimate is based on historical collection experience, specific identification of probable bad debts based on collection efforts, aging of trade receivables, customer payment history, and other known factors, including current economic conditions. We believe that the allowance for doubtful accounts is adequate based on our assessment to date, however, actual collection results may differ materially from our expectations. Because revenue generated from customers financing through EPTAs is deferred and not recognized prior to the collection of cash, adjustments to the allowance for doubtful accounts related to our EPTA contracts increase or decrease deferred revenue. Trade receivables are written off against the allowance when the related customers are no longer making required payments and the trade receivables are determined to be uncollectible, typically 90 days past their original due date.  For sales made in our Crexendo Web Services and Crexendo Network Services segments, the allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.
	Interest Income - Interest income is primarily earned from EPTA contracts. EPTA contract terms generally contain an 18% simple interest rate. Interest income is recognized on these accounts only to the extent cash is received as the receivables are generally 24 and 36-months in length and collection of the full amount of the receivable is not probable. We recognized $501,000 and $1,907,000 for the years ended December 31, 2013 and 2012, respectively.
	Inventory - Inventories consist of telecommunication equipment and is stated at the lower of cost (first-in, first-out method) or market. During the year ended December 31, 2012, the Company identified excess inventory of equipment and recorded an impairment of $35,000.
	Certificate of Deposit - We hold a certificate of deposit as collateral for merchant accounts, which automatically renews every 12 months. The certificate of deposit is classified as long-term in the consolidated balance sheets.
	Property and Equipment - Depreciation and amortization expense is computed using the straight-line method in amounts sufficient to allocate the cost of depreciable assets over their estimated useful lives ranging from two to five years. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the related lease. Depreciation expense is included in general and administrative expenses and totaled $1,022,000 and $1,301,000 for the year ended December 31, 2013 and 2012, respectively.  Depreciable lives by asset group are as follows:
	Computer and office equipment	2 to 5 years
	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years
	Building	20 years
	Maintenance and repairs are expensed as incurred. The cost and accumulated depreciation of property and equipment sold or otherwise retired are removed from the accounts and any related gain or loss on disposition is reflected in net income or loss for the year.
	Goodwill – Goodwill of $265,000 was recorded in connection with the acquisition of CastleWave in 2010. Goodwill of $75,000 was recorded in connection with the acquisition of PBX Central on June 4, 2013. Goodwill is tested for impairment using a fair-value-based approach on an annual basis (December 31) and between annual tests if indicators of potential impairment exist.  During the quarter ended September 30, 2013, the Company made a strategic decision to limit the sale of web services to our enterprise sized customers.  As this change significantly impacted revenue in our Web Services segment, the Company determined that the change was a triggering event requiring the Company to perform an impairment assessment to determine whether the carrying amount of the goodwill exceeded its fair value. In accordance with the accounting guidance, the Company performed the two step goodwill impairment test and concluded that the goodwill related to CastleWave was impaired and recorded an impairment charge of $265,000.
	Intangible Assets - Our intangible assets consist primarily of customer relationships, developed technology, technical know-how, and a non-compete agreement.  The fair value of identifiable intangible assets is based upon the lower of discounted future cash flow projections or the amount paid in an arm’s length transaction.  The intangible assets are amortized following the patterns in which the economic benefits are consumed.  Amortization expense from these acquired assets is included in general and administrative expenses and totaled $123,000 and $73,000 for the years ended December 31, 2013 and 2012, respectively.
	We periodically review the estimated useful lives of our intangible assets and review these assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The determination of impairment is based on estimates of future undiscounted cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will be equal to the excess of the carrying value over the fair value of the asset.
	Use of Estimates - In preparing the consolidated financial statements, management makes assumptions, estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.  Specific estimates and judgments include inventory valuation and obsolescence, intangible assets, allowances for doubtful accounts, sales returns and allowances, uncertainties related to certain income tax benefits, valuation of deferred income tax assets, valuations of share-based payments and recoverability of long-lived assets.   Actual results may differ from our current estimates and those differences may be material.
	Revenue Recognition - In general, we recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.  We recognize revenue from our Web Services and Network Services segments on an accrual basis and revenue from our StoresOnline segment on a cash basis. Specifics by revenue category are as follows:
	Software licenses and DVD training courses sold under EPTAs are recognized as revenue upon receipt of cash from customers and not at the time of sale. Accounting standards require revenue to be deferred until customer payments are received if collection of the original principal balance is not probable.
	We enter into agreements where revenue is derived from multiple deliverables including any mix of products and/or services.  For these arrangements, we determine whether the delivered item(s) has value to the customer on a stand-alone basis, and in the event the arrangement includes a general right of return relative to the delivered item(s), whether the delivery or performance of the undelivered item(s) is considered probable and substantially in our control.  If these criteria are met, the arrangement consideration is allocated to the separate units of accounting based on each unit’s relative selling price.  If these criteria are not met, the arrangement is accounted for as a single unit of accounting which would result in revenue being recognized ratably over the contract term or deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. The amount of product and services revenue recognized for arrangements with multiple deliverables is impacted by the allocation of arrangement consideration to the deliverables in the arrangement based on the relative selling prices. In determining our selling prices, we apply the selling price hierarchy using vendor specific objective evidence (VSOE) when available, third-party evidence of selling price (“TPE”) if VSOE does not exist, and best estimated selling price (“BESP”) if neither VSOE nor TPE is available.
	VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for a deliverable when sold separately.  In determining VSOE, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range, generally evidenced by a substantial majority of such historical stand-alone transactions falling within a reasonably narrow range of the median rate. In addition, we consider major service groups, geographies, customer classifications, and other variables in determining VSOE.
	We are typically not able to determine TPE for our products or services. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality is difficult to obtain. Furthermore, we are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis.
	When we are unable to establish the selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. We determine BESP for a product or service by considering multiple factors including, but not limited to, cost of products, gross margin objectives, pricing practices, geographies, customer classes, and distribution channels.
	We recognize revenue for delivered elements only when we determine there are no uncertainties regarding customer acceptance. Changes in the allocation of the sales price between delivered and undelivered elements can impact the timing of revenue recognized but does not change the total revenue recognized on any agreement.
	Professional Services Revenue - Fees collected for professional services, including website design and development, search engine optimization services, link-building, paid search management services, and telecom installation services are recognized as revenue, net of expected customer refunds, over the period during which the services are performed, based upon the value for such services.
	Web and Telecommunications Services Hosting Revenue - Fees collected for hosting revenue are recognized ratably as services are provided.  Customers are billed for these services on a monthly or annual basis at the customer’s option.We recognize revenue ratably over the applicable service period.
	Equipment Sales and Financing Revenue - Fees generated from the sale of telecommunications equipment are recognized when the devices are installed and hosted telecommunications services begin.
	Fees generated from renting our hosted telecommunication equipment (IP or cloud telephone devices) through leasing contracts are recognized as revenue based on whether the lease qualifies as an operating lease or sales-type lease.  The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: 1) lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and 2) the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. The economic life of most of our products is estimated to be three years, since this represents the most frequent contractual lease term for our products, and there is no residual value for used equipment. Residual values, if any, are established at the lease inception using estimates of fair value at the end of the lease term. The vast majority of our leases that qualify as sales-type leases are non-cancelable and include cancellation penalties approximately equal to the full value of the lease receivables. Leases that do not meet the criteria for sales-type lease accounting are accounted for as operating leases. Revenue from sales-type leases is recognized upon installation and the interest portion is deferred and recognized as earned.  Revenue from operating leases in recognized ratably over the applicable service period.
	Commission Revenue - We have contracts with third-party entities with respect to telemarketing product sales to our customers following the sale of the initial software licenses. These products and services are intended to assist the customers with their Internet businesses. These products are sold and delivered completely by third parties. We receive commissions from these third parties, and recognize the revenue as the commissions are received, net of expected customer refunds.
	We have affiliate agreements with third-party entities that are resellers of satellite television services and internet service provider services. We receive commissions when the services are bundled with our hosted service offerings.
	Cost of Revenue – Cost of revenue consists primarily of the cost of telecommunications equipment, services, and other products sold, credit card fees and salaries for fulfillment services.
	Prepaid Sales Commissions - For arrangements where we recognize revenue over the relevant contract period, we defer related commission payments to our direct sales force and amortize these amounts over the same period that the related revenues are recognized.  This is done to match commission expense with the related revenues.  Commission payments are nonrefundable unless amounts due from a customer are determined to be uncollectible or if the customer subsequently changes or terminates the level of service, in which case commissions which were paid are recoverable by us.  We deferred commission expense of $189,000 and $0 as of December 31, 2013 and December 31, 2012, respectively. We amortized commission expense of $13,000 and $0 for the years ended December 31, 2013 and 2012, respectively.
	Research and Development - Research and development costs are expensed as incurred. Costs related to internally developed software are expensed as research and development expense until technological feasibility has been achieved, after which the costs are capitalized.
	Fair Value Measurements - The fair value of our financial assets and liabilities was determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
	Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
	Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
		·      Quoted prices for similar assets or liabilities in active markets;
		·      Quoted prices for identical or similar assets in non-active markets;
		·      Inputs other than quoted prices that are observable for the asset or liability; and
		·      Inputs that are derived principally from or corroborated by other observable market data.
	Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.  These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
	Financial Instruments - The carrying values of cash and cash equivalents, restricted cash, certificates of deposit, and merchant account deposits approximate their fair values due to either the short maturity of the instruments or the recent date of the initial transaction.
	Income Taxes - We recognize a liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with accounting guidance. Accordingly, we may recognize the tax benefits from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting guidance is also provided on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations, and cash flows.  In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies.  We have placed a full valuation allowance on net deferred tax assets, see Note 11.
	Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations.
	We do not intend to indefinitely reinvest the undistributed earnings of our United Kingdom subsidiary, therefore, we have provided for U.S. deferred income taxes on such undistributed foreign earnings.  All other foreign subsidiaries are considered disregarded foreign entities for US tax purposes.
	Stock-Based Compensation - For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award.  Equity classified awards include the issuance of stock options and restricted stock.  The restricted stock includes all dividend rights and is a participating security; however, the restricted stock does not change earnings per share under the two-class method.
	Comprehensive Loss – There were no other components of comprehensive loss other than net loss for the years ended December 31, 2013 and 2012.
	Operating Segments - Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has three operating segments, which consist of StoresOnline, Crexendo Web Services, and Crexendo Network Services.  Effective October 1, 2012, the Company changed its reporting segments to reflect the allocation of previously unallocated corporate expenses to each of the three operating segments.  The Company revised its segment reporting to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources.  Segment operating results for the three and nine months ended September 30, 2012 have been recast to conform to current quarter segment operating results presentation.  Research and development expenses are allocated to StoresOnline and Crexendo Network Services segments based on the level of effort, measured primarily by wages and benefits attributed to our engineering department.  Indirect sales and marketing expenses are allocated to the Crexendo Web Services and Crexendo Network Services segments based on level of effort, measured by month-to-date contract bookings.  General and administrative expenses are allocated to all three segments based on revenue recognized for each segment.  Accounting guidance also establishes standards for related disclosure about products and services, geographic areas and major customers. We generate over 90% of our total revenue from customers within North America (United States and Canada) and less than 10% of our total revenues from customers in other parts of the world.
	Significant Customers – No customer accounted for 10% or more of our total revenue or total accounts receivable for the twelve months ended December 31, 2013 and 2012.
	Recently Adopted Accounting Guidance - In September 2011, the FASB issued ASU 2011-08 in connection with testing goodwill for impairment. The objective of this ASU is intended to simplify goodwill impairment testing by adding a qualitative review step to assess whether the required quantitative impairment analysis that exists today is necessary. The ASU permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required.  Adoption of the new guidance had no impact on the Company’s financial statements.
	In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740). ASU 2013-11 requires that unrecognized tax benefits be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain circumstances. When those circumstances exist, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets.  This guidance is effective for reporting periods beginning after December 15, 2013.  The Company does not expect adoption of this ASU to significantly impact its consolidated financial statements.

2_Net_Loss_Per_Common_Share

2. Net Loss Per Common Share	12 Months Ended
	Dec. 31, 2013
Net Loss Per Common Share	'
2. Net Loss Per Common Share	'
	Basic net loss per common share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all dilutive common stock equivalents, consisting of common stock options. Diluted net loss per common share for the year ended December 31, 2013 and 2012 is the same as basic net loss per common share because the common share equivalents were anti-dilutive due to the net loss. The following table sets forth the computation of basic and diluted net loss per common share:
		Year Ended December 31,
		2013			2012
	Net loss (in thousands)	$	(4,963	)	$	(3,941	)
	Weighted-average share reconciliation:
	Weighted-average shares outstanding		10,714,353			10,629,614
	Weighted-average restricted shares held in escrow		-			(4,084	)
	Weighted-average basic shares outstanding		10,714,353			10,625,530
	Diluted shares outstanding		10,714,353			10,625,530
	Net loss per common share:
	Basic	$	(0.46	)	$	(0.37	)
	Diluted	$	(0.46	)	$	(0.37	)
	Common stock equivalent shares are not included in the computation of diluted loss per share, because the Company has a net loss and the inclusion of such shares would be anti-dilutive due to the net loss. At December 31, 2013 and 2012, the common stock equivalent shares were 2,130,239 and 1,738,860, respectively.

3_Acquisition

3. Acquisition	12 Months Ended
	Dec. 31, 2013
Acquisition	'
3. Acquisition	'
	PBX Holdings, LLC. Acquisition
	On June 4, 2013 we acquired certain assets from PBX Holdings, LLC., dba PBX Central, a privately-held provider of IP Telecom and Cloud communications located in Austin, Texas. The aggregate purchase price of approximately $770,000 consisted of $300,000 of cash paid at closing and 38,516 shares of our common stock with an estimated fair value of approximately $107,000. The fair value of the issuance of common stock issued as consideration for PBX Central was determined on the basis of the closing market price of the Company’s common stock on the acquisition date. In addition, the Company recorded as part of the purchase price approximately $363,000 of contingent consideration it estimates will be earned relating to an additional payment provision. The estimated additional payment obligation is comprised of approximately $87,000 of cash consideration and 115,385 shares of the Company’s common stock with an estimated value of approximately $276,000 at the time of the acquisition.  The Company’s consolidated financial statements include the results of operations of PBX Central from the date of acquisition and were accounted for as an acquisition of a business. The historical results of operations of PBX Central were not significant to the Company’s consolidated results of operations for the periods presented. The total purchase consideration was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.  The excess of the purchase price over the amounts allocated to assets acquired and liabilities assumed has been recorded as goodwill. In accordance with current accounting standards, goodwill associated with the PBX Central acquisition will not be amortized and will be tested for impairment at least annually.
	During the third quarter of 2013, the Company completed the valuation of the intangible assets acquired.  The final assessment resulted in no changes to the amounts recorded.  The following table presents the final allocation of the purchase price for PBX Central (in thousands):
	Consideration (including estimated unpaid contingent consideration):
	Cash	$	300
	Common stock		107
	Contingent consideration		363
	Total consideration	$	770
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Property and equipment	$	7
	Identifiable intangible assets		688
	Total identifiable net assets		695
	Goodwill		75
		$	770
	The following were the identified intangible assets acquired and the respective estimated periods over which such assets will be amortized (in thousands):
		Amount		Weighted Average useful life (In years)
	Technology	$	180		2
	Customer relationships		508		10
	Total	$	688
	In determining the preliminary purchase price allocation, the Company considered, among other factors, its intention to use the acquired assets and the historical and estimated future demand for PBX Central services. The estimated fair value of customer relationships was based upon the income approach. The income approach relies on an estimation of the present value of the future monetary benefits expected to flow to the owner of an asset during its remaining economic life. This approach requires a projection of the cash flow that the asset is expected to generate in the future. The projected cash flow is discounted to its present value using a rate of return, or discount rate that accounts for the time value of money and the degree of risk inherent in the asset. The income approach may take the form of a “relief from royalty” methodology, a cost savings methodology, a “with and without” methodology, or excess earnings methodology, depending on the specific asset under consideration.
	The cost approach was used to determine the fair value of the technology acquired from PBX Central.  The cost approach estimates the value of the intangible asset by quantifying the aggregate expenditures that would be required to replace the intangible asset.  Such expenditures include the developers’ time and materials.  The underlying assumption is that the cost to purchase or develop an asset is commensurate with the economic benefits the asset is expected to generate over its remaining economic life.  Management has estimated the cost to develop a similar product with current technology.  The key assumptions used in valuing the technology acquired are developers’ time and salary.
	The customer relationships were valued using a form of the income approach known as the multi-period excess earnings method. Inherent in the multi-period excess earnings method is the recognition that, in most cases, all of the assets of the business, both tangible and intangible, contribute to the generation of the cash flow of the business and the net cash flows attributable to the subject asset must recognize the support of the other assets which contribute to the realization of the cash flows. This future cash flow was then discounted using an estimated required rate of return for the asset to determine the present value of the future cash flows attributable to the asset. The key assumptions used in valuing the customer relationships acquired are as follows: discount rate of 18%, tax rate of 38.1%, contributory asset charges for technology license and tangible assets used to deliver services, and estimated economic life of 10 years.
	The total weighted average amortization period for the identified intangible assets acquired from PBX Central is 6 years. The goodwill resulting from the PBX Central acquisition is not currently deductible for income tax purposes.

4_Trade_Receivables_net

4. Trade Receivables net	12 Months Ended
	Dec. 31, 2013
Trade Receivables Net	'
4. Trade Receivables net	'
	Our trade receivables balance primarily consists of the residual Extended Payment Term Agreements (EPTAs) sold through our workshop seminars that we discontinued in July 2011.  Below is an analysis of the days outstanding of our trade receivables as shown on our balance sheet (in thousands):
		December 31,
		2013			2012
	Non-EPTA trade receivables	$	688		$	432
	Conforming EPTAs		577			3,945
	Non-Conforming EPTAs:
	1 - 30 days		68			341
	31 - 60 days		30			163
	61 - 90 days		43			79
	Gross trade receivables		1,406			4,960
	Less allowance for doubtful accounts		(200	)		(1,522	)
	Trade receivables, net	$	1,206		$	3,438
	Current trade receivables, net	$	1,090		$	3,043
	Long-term trade receivables, net		116			395
	Trade receivables, net	$	1,206		$	3,438
	All current and long-term EPTAs in the table above had original contract terms of greater than one year.  The Company wrote off $1,027,000 and $3,939,000 of EPTAs during the years ended December 31, 2013 and 2012 respectively, of which, all had original contract terms of greater than one year.

5_Equipment_Financing_Receivab

5. Equipment Financing Receivables	12 Months Ended
	Dec. 31, 2013
Equipment Financing Receivables	'
5. Equipment Financing Receivables	'
	On April 1, 2012, we began renting our hosted telecommunication equipment (VoIP telephone devices) through leasing contracts that we classify as either operating leases or sale-type leases.
	Equipment finance receivables arising from the rental of our hosted equipment through sales-type leases, were as follows (in thousands):
		December 31,
		2013			2012
	Gross financing receivables	$	1,369		$	283
	Less unearned income		(877	)		(159	)
	Financing receivables, net		492			124
	Less: Current portion of finance receivables, net		(94	)		(28	)
	Finance receivables due after one year	$	398		$	96
	Equipment finance receivables are expected to be collected within the next thirty-six to sixty months.

6_Restructuring

6. Restructuring	12 Months Ended
	Dec. 31, 2013
Restructuring	'
6. Restructuring	'
	During the year ended December 31, 2012, we recorded a $1,393,042 impairment charge related to the abandonment of office space under an operating lease in Orem, UT as the Company relocated the majority of its employees to its corporate office in Tempe, Arizona.  The impairment charge relates to remaining monthly payments of $112,454 through October 2013.  In calculating the impairment charge, the Company did not estimate sublease rental income based on high vacancy levels in the surrounding areas and past experience trying to sublease a portion of the space.  As of December 31, 2012, the Company recorded a lease abandonment accrual in the amount of $1,393,042, based on unpaid and remaining contractual payments under the operating lease agreement.  On March 29, 2013, the Company entered into a settlement with TCU in the amount of $787,000.  As a result, the Company released $606,000 of the lease abandonment accrual during the three months ended March 31, 2013.  The release of the lease accrual has been recorded in general and administrative expense.

7_Property_and_Equipment

7. Property and Equipment	12 Months Ended
	Dec. 31, 2013
Restructuring	'
7. Property and Equipment	'
	Property and equipment consisted of the following (in thousands):
		December 31,
		2013			2012
	Software	$	1,180		$	1,228
	Computers and office equipment		1,785			2,363
	Land		877			877
	Building		765			765
	Building improvements		758			745
	Leasehold improvements		8			18
	Furniture and fixtures		124			194
	Less accumulated depreciation and amortization		(3,302	)		(3,018	)
		$	2,195		$	3,172

8_Intangible_Assets

8. Intangible Assets	12 Months Ended
	Dec. 31, 2013
Restructuring	'
8. Intangible Assets	'
		The net carrying amount of intangible assets is as follows (in thousands):
			December 31,
			2013			2012
	Customer relationships		$	606		$	98
	Technical know-how			60			60
	Non-compete			60			60
	Developed technology			180			-
	Less accumulated amortization
	Customer relationships			(163	)		(96	)
	Technical know-how			(60	)		(58	)
	Non-compete			(60	)		(58	)
	Developed technology			(52	)		-
	Total		$	571		$	6
	The following table outlines the estimated future amortization expense related to intangible assets held at December 31, 2013 (in thousands):
	Year ending December 31,
	2014		$	195
	2015			133
	2016			71
	2017			53
	2018			39
	Thereafter			80
	Total		$	571

9_Fair_Value_Measurements

9. Fair Value Measurements	12 Months Ended
	Dec. 31, 2013
Fair Value Measurements	'
9. Fair Value Measurements	'
	We have financial instruments as of December 31, 2013 and 2012 for which the fair value is summarized below (in thousands):
		31-Dec-13						31-Dec-12
		Carrying Value				Estimated Fair Value		Carrying Value		Estimated Fair Value
	Assets:
	Trade receivables, net	$	1,206			$	1,190	$	3,438	$	3,383
	Certificate of deposit		250				250		500		500
	Liabilities:
	Acquisition related contingent consideration	$	51			$	51	$	-	$	-
	The carrying amount of certificates of deposit approximates fair value, as determined by certificates of deposit with similar terms and conditions and is considered Level 2 assets.  The trade receivables consist primarily of extended payment term agreements and the fair value is computed using a discounted cash flow model with an estimated market rate and are considered Level 3 assets.
	Liabilities measured at fair value on a recurring basis are summarized below as of December 31, 2013 (in thousands). There were no assets or liabilities measured at fair value on a reoccurring basis at December 31, 2012.
	Description	As of December 31, 2013				Level 1		Level 2		Level 3
	Liabilities:
	Acquistion related contingent consideration	$	51			$	-	$	-	$	51
	Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value.  Future changes in fair value of the contingent financial milestone consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the statement of operations and balance sheet in the period of the change.
	The progressions of the Company’s Level 3 instruments for the year ended December 31, 2013 are shown in the table below (in thousands):
		Acquisition
		Contingent Consideration
	Balance as of December 31, 2012	$
	Purchases, sales and settlements, net			87
	Cash payments			(23	)
	Fair value adjustment			(13	)
	Transfers in and/or (out) of Level 3			-
	Balance as of December 31, 2013	$		51

10_StockBased_Compensation

10. Stock-Based Compensation	12 Months Ended
	Dec. 31, 2013
Restructuring	'
10. Stock-Based Compensation	'
	We have various incentive stock-based compensation plans that provide for the grant of stock options, restricted stock, and other share-based awards of up to 6,120,239 shares to eligible employees, consultants, and directors. As of December 31, 2013, we had 3,990,000 shares remaining in the plans available to grant.
	The following table summarizes the statement of operations effect of stock-based compensation for the years ended December 31, 2013 and 2012 (in thousands):
			Year Ended December 31,
			2013			2012
	Share based compensation expense by financial statement line item:
	Cost of revenue		$	12		$	34
	Research and development			105			62
	Selling and marketing			76			73
	General and administrative			615			643
	Total cost related to share-based compensation expense		$	808		$	812
	There is no tax benefit related to stock compensation expense due to a full valuation allowance on net deferred tax assets at December 31, 2013 and 2012, respectively.
	Stock Options
	The weighted-average fair value of stock options on the date of grant and the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2013 and 2012 using the Black-Scholes option-pricing model were as follows:
			Year Ended December 31, 2013			Year Ended December 31, 2012
	Weighted-average fair value of options granted		$	1.13		$	1.52
	Expected volatility			59	%		61	%
	Expected life (in years)			4			4
	Risk-free interest rate			0.85	%		0.81	%
	Expected dividend yield			0	%		1.56	%
	The expected volatility of the option is determined using historical volatilities based on historical stock prices. The expected life of the options granted is based on our historical share option exercise experience. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. Expected dividend yield is based on our announced dividends each period during the term of the option.
		The following table summarizes the stock option activity for all plans for the years ended December 31, 2013 and 2012:
						Weighted-Average		Aggregate
		Number of Shares		Weighted-Average		Remaining		Intrinsic Value
				Exercise Price		Contract Life		(in thousands)
	Outstanding at January 1, 2012	1,478,859		$	5.85	8.3 years	$	36
	Granted	882,000			3.63
	Exercised	(146,123)			3.40
	Cancelled/forfeited	(475,876)			7.00
	Outstanding at December 31, 2012	1,738,860			4.61	8.4 years		52
	Granted	745,000			2.49
	Exercised	(67,832)			2.69
	Cancelled/forfeited	(285,789)			4.45
	Outstanding at December 31, 2013	2,130,239			3.96	8.0 years		482
	Shares vested and expected to vest	1,875,489			3.96	8.0 years		424
	Exercisable as of December 31, 2013	1,080,589			4.67	7.3 years		113
	Exercisable as of December 31, 2012	781,762			5.31	7.7 years		8
	The total intrinsic value of options exercised during the years ended December 31, 2013 and 2012, was $133,000 and $211,000 respectively.
	As of December 31, 2013, the total future compensation expense related to non-vested options not yet recognized in the consolidated statements of operations was approximately $1,320,000 and the weighted-average period over which these awards are expected to be recognized is approximately 2.5 years.
	Restricted Stock
	No shares of restricted stock were granted during the year ended December 31, 2013 or 2012.  The restricted stock has a three-year vesting period during which the recipient must remain employed with us or our subsidiaries and was fully vested during the year ended December 31, 2012. The following table summarizes the restricted stock activity for the year ended December 31, 2012:
						Weighted-Average
			Number of			Grant-Date
			Shares			Fair Value
	Restricted stock outstanding as of January 1, 2012			7,000		$	6.89
	Granted			-			-
	Vested			(7,000	)		6.89
	Forfeited			-			-
	Restricted stock outstanding as of December 31, 2012			-		$	-

11_Income_Taxes

11. Income Taxes	12 Months Ended
	Dec. 31, 2013
Income Taxes	'
11. Income Taxes	'
	The income tax benefit consisted of the following for the years ended December 31, 2013 and 2012 (in thousands):
		Year Ended December 31, 2013			Year Ended December 31, 2012
	Current income tax benefit:
	Federal	$	(259	)	$	(212	)
	State and local		59			49
	Foreign		(57	)		(49	)
	Current income tax benefit	$	(257	)	$	(212	)
	There was no deferred income tax expense (benefit) for the years ended December 31, 2013 and 2012.
	The income tax provision attributable to loss before income tax benefit for the years ended December 31, 2013 and 2012 differed from the amounts computed by applying the U.S. federal statutory tax rate of 34.0% as a result of the following (in thousands):
		Year Ended December 31, 2013			Year Ended December 31, 2012
	U.S. federal statutory income tax benefit	$	(1,775	)	$	(1,413	)
	Increase (decrease) in income tax benefit resulting from:
	State and local income tax benefit, net of federal effect		130			(117	)
	Change in the valuation allowance for net deferred income tax assets		1,551			1,385
	Uncertain tax positions		(253	)		(162	)
	Other, net		90			95
	Income tax benefit	$	(257	)	$	(212	)
	As of December 31, 2013 and 2012, significant components of net deferred income tax assets and liabilities were as follows (in thousands):
		As of December 31, 2013						As of December 31, 2012
		Current			Non-current			Current			Non-current
	Deferred income tax assets:
	Accrued expenses	$	243		$	-		$	774		$	-
	Deferred revenue		293			-			171			-
	Net operating loss carry-forwards		-			5,182			-			3,475
	Foreign tax credits		-			892			-			892
	Stock-based compensation		-			2,568			-			2,480
	Property and equipment					223
	Other		-			706			-			864
	Subtotal		536			9,754			945			7,711
	Valuation allowance		(512	)		(9,327	)		(903	)		(7,385	)
	Total deferred income tax assets		24			244			42			326
	Deferred income tax liabilities:
	Property and equipment		-			-			-			(39	)
	Prepaid expenses and other		(268	)		-			(145	)		(184	)
	Total deferred income tax liabilities		(268	)		-			(145	)		(223	)
	Net deferred income tax assets (liabilities)	$	(244	)	$	244		$	(103	)	$	103
	During the fiscal year ended June 30, 2002 (our fiscal year was subsequently changed to December 31), we experienced a change in ownership, as defined by the Internal Revenue Code, as amended (the “Code”) under Section 382.  A change of ownership occurs when ownership of a company increases by more than 50 percentage points over a three-year testing period of certain stockholders.  As a result of this ownership change we determined that our annual limitation on the utilization of our federal net operating loss (“NOL”) carry-forwards is approximately $461,000 per year.  We will only be able to utilize $5,761,000 of our pre-ownership change NOL carry-forwards and will forgo utilizing $14,871,000 of our pre-ownership change NOL carry-forwards as a result of this ownership change.  We do not account for forgone NOL carryovers in our deferred tax assets and only account for the NOL carry-forwards that will not expire unutilized as a result of the restrictions of Code Section 382.
	As of December 31, 2013, we had NOL, research and development, and foreign tax credit carry-forwards for U.S. federal income tax reporting purposes of approximately $13,219,000, $129,000 and $892,000 respectively.  The NOLs will begin to expire in 2020 through 2033, the research and development credits will begin to expire in 2019 through 2020, and the foreign tax credits will expire in 2017, if not utilized.
	We also have state NOL and research and development credit carry-forwards of approximately $7,252,000 and $61,000 which expire on specified dates as set forth in the rules of the various states to which the carry-forwards relate.
	We also have foreign NOL carry-forwards of approximately $710,000 which expire on specified dates as set forth in the rules of the various countries in which the carry-forwards relate.
	In assessing the recovery of the deferred tax assets, we considered whether it is more likely than not that some portion or all of our deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.  We considered the scheduled reversals of future deferred tax liabilities, projected future taxable income, the suspension of the sale of product and services through the direct mail seminar sales channel for our StoresOnline segment, the restructuring of the StoresOnline division, and tax planning strategies in making this assessment.  As a result, we determined it was more likely than not that the deferred tax assets would not be realized as of December 31, 2013 and 2012; accordingly, we recorded a full valuation allowance.  The valuation allowance for deferred tax assets as of December 31, 2013 and 2012 was $9,839,000 and $8,288,000 respectively.
	The net change in our valuation allowance was an increase of $1,551,000 for the year ended December 31, 2013 and an increase of $1,223,000 for the year ended December 31, 2012.
	Accounting guidance clarifies the accounting for uncertain tax positions and requires companies to recognize the impact of a tax position in their financial statements, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.
	Although we believe our estimates are reasonable, there can be no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which it makes such determination.
	The aggregate changes in the balance of unrecognized tax benefits during the years ended December 31, 2013 and 2012 were as follows (in thousands):
	Balance as of January 1, 2012	$	1,295
	Reductions due to lapsed statute of limitations		(162	)
	Balance as of December 31, 2012	$	1,133
	Reductions due to lapsed statute of limitations		(242	)
	Balance as of December 31, 2013	$	891
	As of December 31, 2013, we had unrecognized tax benefits of $891,000, which if recognized, none would reduce our effective tax rate.
	Estimated interest and penalties related to the underpayment or late payment of income taxes are classified as a component of income tax provision (benefit) in the consolidated statements of operations. Accrued interest and penalties were approximately $0 and $11,000 as of December 31, 2013 and 2012, respectively.
	Our U.S. federal income tax returns for fiscal 2010 through 2013 are open tax years. The IRS recently completed an audit of fiscal years 2005 through 2007. We also file in various state and foreign jurisdictions. With few exceptions, we are no longer subject to state and non-U.S. income tax examinations by tax authorities for years prior to fiscal 2009.

12_Accrued_Expenses

12. Accrued Expenses	12 Months Ended
	Dec. 31, 2013
Accrued Expenses	'
12. Accrued Expenses	'
	Accrued expenses consisted of the following (in thousands):
		December 31,
		2013		2012
	Accrued wages and benefits	$	473	$	686
	Accrued lease abondonment charge		-		1,393
	Accrued legal costs		202		202
	Other		420		729
	Total	$	1,095	$	3,010

13_Commitments_and_Contingenci

13. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2013
Less: Current portion of finance receivables not billed, net	'
13. Commitments and Contingencies	'
	Operating Leases
	We lease certain of our equipment and corporate offices under non-cancelable operating lease agreements expiring at various dates through 2016. The operating leases for our Reno, NV and Draper, UT offices contain customary escalation clauses. Future aggregate minimum lease obligations under operating leases as of December 31, 2013, exclusive of taxes and insurance, are as follows (in thousands):
	Years ending December 31,
	2014	$	126
	2015		119
	2016		93
	Total	$	338
	Rental expense for the year ended December 31, 2013 and 2012, was approximately $119,000 and $2,417,000, respectively.  Rental expense for the year ended December 31, 2012 included $606,000 related to a lease abandonment accrual which was reversed during the year ended December 31, 2013.
	The following schedule shows the composition of total rental expense for all operating leases except those with terms of a month or less that were not renewed:
	Years ending December 31,
		2014			2015			2016
	Minimum rentals	$	126		$	119		$	92
	Less: Sublease rentals		(107	)		(107	)		(90	)
	Total	$	19		$	12		$	2
	Legal Proceedings
	From time to time we receive inquiries from federal, state, city and local government officials in the various jurisdictions in which we operate. These inquiries and investigations generally concern compliance with various city, county, state and/or federal regulations involving sales, representations made, customer service, refund policies, and marketing practices. We respond to these inquiries and have generally been successful in addressing the concerns of these persons and entities, without a formal complaint or charge being made, although there is often no formal closing of the inquiry or investigation. There can be no assurance that the ultimate resolution of these or other inquiries and investigations will not have a material adverse effect on our business or operations, or that a formal complaint will not be initiated. We also receive complaints and inquiries in the ordinary course of business from both customers and governmental and non-governmental bodies on behalf of customers, and in some cases these customer complaints have risen to the level of litigation. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on our business or results of operations.
	On November 4, 2013, the Company received a motion for leave to file an amended complaint and a request for scheduling conference (including a request for extending discovery) in the case entitled INFORMATION TECHNOLOGY CUSTOMER CARE, INC., Plaintiff v STORESONLINE, INC., Defendant; filed in IN THE FOURTH DISTRICT COURT, UTAH COUNTY, and STATE OF UTAH Case No. 090401169. In the original Complaint, Plaintiff ITCCI claimed that StoresOnline breached a contract with ITCCI by improperly moving its Philippine support to a new support center.  ITCCI also alleged an action for tortious interference claiming that StoresOnline caused former employees of ITCCI to leave to work for that support center. There was also a claim for “civil conspiracy”.  The original Complaint sought actual and punitive damages.
	The parties had completed discovery and filed various motions, including a motion for Summary Judgment by StoresOnline. The Company believes there was no evidence to support any of the claims raised by the Plaintiff, and that there was no contractual obligation which would have prohibited a change of support centers.
	The Plaintiff has filed motions to substitute new counsel, amend its Complaint and re-open discovery. The allegations included in the proposed Amended Complaint are that former officers and executives of StoresOnline acted fraudulently and secretly to improperly move support centers. The Company strongly disputes the allegations against it under both the original Complaint and the proposed Amended Complaint.  Moreover, even if any of the allegations regarding former employees in the proposed Amended Complaint were true, the Company believes that it would have no liability for those alleged actions.
	On February 8, 2013 the Company received a summons entitled TCU- Canyon Park, a Utah Limited Company, Plaintiff (TCU)v Crexendo, Inc. a Delaware Corporation F/K/A iMergent, Inc., Defendant. The Suit was filed in the Fourth Judicial District Court of Utah County, Provo Department. The Suit seeks unspecified damages against the company for vacating a lease premises. The suit claims that the Company owes basic monthly rent of $112,454 from November 2012 through October 2013 together with other charges (including C.A.M., late fees, property damages, and interest and attorney fees). The Plaintiff alleges that the Company “quit” the premises in November 2012 and the lease terminates on October 2013.
	The Company vacated the premises in November 2012, and alleges it did so due to violations of TCU. The Company had notified TCU that the premises were not habitable and that TCU had violated the Companies rights regarding possession and was therefore vacating the premises. As of December 31, 2012, the Company recorded a lease abandonment accrual in the amount of $1,393,042, based on unpaid and remaining contractual payments under the operating lease agreement. On March 29, 2013, the Company entered into a settlement with TCU in the amount of $787,000. As a result, the Company released $606,000 of the lease abandonment accrual during the three months ended March 31, 2013. The release of the lease accrual has been recorded in general and administrative expense.
	We have recorded liabilities of approximately $202,000 as of December 31, 2013 and 2012, respectively, for estimated losses resulting from various legal proceedings in which we are engaged. Attorney’s fees associated with the various legal proceedings are expensed as incurred. We are also subject to various claims and legal proceedings covering matters that arise in the ordinary course of business. We believe that the resolution of these other cases will not have a material adverse effect on our business, financial position, or results of operations.

14_Employee_Benefit_Plan

14. Employee Benefit Plan	12 Months Ended
	Dec. 31, 2013
Employee Benefit Plan	'
14. Employee Benefit Plan	'
	We have established a retirement savings plan for eligible employees. The plan allows employees to contribute a portion of their pre-tax compensation in accordance with specified guidelines. We may make discretionary profit-sharing contributions. We began making contributions to the plan in July 2006. For the year ended December 31, 2013 and 2012, we contributed approximately $169,000 and $206,000 to the retirement savings plan, respectively.

15_Segments

15. Segments	12 Months Ended
	Dec. 31, 2013
Segments	'
15. Segments	'
	Management has chosen to organize the Company around differences based on its products and services.  Crexendo Web Services segment generates revenue from managing e-commerce or lead generation offerings, websites, search engine optimization/management and link-building services.  Crexendo Network Services segment generates revenue from selling hosted telecommunication services and broadband internet services. We believe that the StoresOnline segment will continue to generate revenue by offering businesses website hosting services.
	The Company has three operating segments, which consist of Crexendo Network Services, Crexendo Web Services, and StoresOnline. Effective October 1, 2012, the Company changed its reporting segments to reflect the allocation of previously unallocated corporate expenses to each of the three operating segments. The Company revised its segment reporting to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources. Segment operating results for the prior year have been revised to conform to current year segment operating results presentation.
	Segment revenue and income (loss) before tax provision was as follows (in thousands):
		Year Ended December 31, 2013			Year Ended December 31, 2012
	Revenue:
	Crexendo Network Services	$	2,370		$	805
	Crexendo Web Services		2,050			2,505
	StoresOnline		5,908			13,857
	Consolidated revenue	$	10,328		$	17,167
	Operating income (loss):
	Crexendo Network Services	$	(5,432	)	$	(5,377	)
	Crexendo Web Services		(2,344	)		(5,291	)
	StoresOnline		2,031			4,553
	Total operating loss	$	(5,745	)	$	(6,115	)
	Other Income, net:
	Crexendo Network Services		3			14
	Crexendo Web Services		25			14
	StoresOnline		497			1,934
	Total other income, net	$	525		$	1,962
	Income (loss)
	Crexendo Network Services		(5,429	)		(5,363	)
	Crexendo Web Services		(2,319	)		(5,277	)
	StoresOnline		2,528			6,487
	Total loss before income tax provision	$	(5,220	)	$	(4,153	)

16_Subsequent_Events

16. Subsequent Events	12 Months Ended
	Dec. 31, 2013
Subsequent Events [Abstract]	'
16. Subsequent Events	'
	On February 28, 2014, the Company entered into a Deed of Sale with SGM EXE, LLC., a Neveda limited liability company controlled by Steven G. Mihaylo, the Chairman of the Board, Chief Executive Officer and principal shareholder of the Company. The land, building and furniture were sold for $2,0 million in cash. On March 1, 2014, the Company entered into a sale leaseback agreement with SGM EXE, LLC. The Company has signed a three-year lease agreement, with the option to renew the lease at fair market value rates for two consecutive three-year terms. During the initial three-year term, of the lease agreement the Company will pay the rent of Three Hundred Thousand Dollars ($300,000.00) per year to the Purchaser in shares of common stock of Crexendo, Inc. The price per share for payment shall be Three Dollars ($3.00) per share. The payment for the first three years shall be paid in advance. The Company has the option to pay rent expense for the subsequent renewal periods in stock or cash. If stock, the number of shares is computed as the average of the last sale price for each business day for the thirty (30) days prior to the first day of the three year renewal term.

17_Quarterly_Financial_Informa

17. Quarterly Financial Information (unaudited)	12 Months Ended
	Dec. 31, 2013
Quarterly Financial Information	'
17. Quarterly Financial Information (unaudited)	'
			Year ended December 31, 2013
			For the three months ended
			March 31,				June 30,			September 30,			December 31,
			2013				2013			2013			2013
			(In thousands, except per share data)
	Revenues		$	3,022				2,737		$	2,428		$	2,141
	Cost of revenue			1,042				970			1,044			1,035
	Selling and marketing			908				717			712			718
	General and administrative  (3)			1,438				1,852			1,745			1,935
	Research and development			481				414			396			401
	Goodwill impairment			-				-			265			-
	Loss from operations			(847	)			(1,216			(1,734			(1,948	)
	Total other income			212				120			98			95
	Loss before income taxes			(635	)			(1,096			(1,636			(1,853	)
	Income tax benefit (provision)			237				26			(23			17
	Net loss		$	(398	)			(1,070		$	(1,659		$	(1,836	)
	Basic net loss per common share (2)		$	(0.03	)			(0.10		$	(0.15		$	(0.17	)
	Diluted net loss per common share (2)		$	(0.03	)			(0.10		$	(0.15		$	(0.17	)
				Year ended December 31, 2012
				For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2012				2012			2012			2012
				(In thousands, except per share data)
	Revenues		$	5,255			$	4,914		$	3,865		$	3,133
	Cost of revenue			1,421				1,298			1,233			1,140
	Selling and marketing			933				984			987			1,073
	General and administrative (1)			3,033				2,741			2,440			4,014
	Research and development			594				505			420			466
	Loss from operations			(726	)			(614	)		(1,215	)		(3,560	)
	Total other income			770				510			419			263
	Income (loss) before income taxes			44				(104	)		(796	)		(3,297	)
	Income tax benefit (provision)			153				(13	)		(10	)		82
	Net income (loss)		$	197			$	(117	)	$	(806	)	$	(3,215	)
	Basic net income (loss) per common share (2)		$	0.02			$	(0.01	)	$	(0.08	)	$	(0.30	)
	Diluted net income (loss) per common share (2)		$	0.02			$	(0.01	)	$	(0.08	)	$	(0.30	)
	———————
	-1	During the year ended December 31, 2012, we recorded a $1,393,042 impairment charge related to the abandonment of office space under an operating lease in Orem, UT.
	-2	Net income (loss) per common share is computed independently for each of the quarters presented. Therefore, the sums of quarterly net income (loss) per common share amounts do not necessarily equal the total for the twelve month periods presented.
	-3	During the year ended December 31, 2013, we entered into a settlement and released $606,000 of the lease abandonment accrual.
	CREXENDO, INC. AND SUBSIDIARIES
	Schedule II- Valuation and Qualifying Accounts
	Year Ended December 31, 2013 and 2012
			Balance at										Balance at
			Beginning										End of
			of Year			Additions				Deductions			Year
						(in thousands)
	Year ended December 31, 2013
	Allowance for doubtful accounts receivable		$	1,522			$	-		$	(1,322	)	$	200
	Deferred income tax asset valuation allowance			8,288				1,551			-			9,839
	Year ended December 31, 2012
	Allowance for doubtful accounts receivable		$	5,461			$	-		$	(3,939	)	$	1,522
	Deferred income tax asset valuation allowance			6,903				1,385			-			8,288

1_Summary_of_Significant_Accou

1. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2013
Summary Of Significant Accounting Policies Policies	'
Description of Business	'
	Description of Business - Crexendo, Inc. is incorporated in the state of Delaware. As used hereafter in the notes to consolidated financial statements, we refer to Crexendo, Inc. and its wholly owned subsidiaries, as “we,” “us,” or “our Company”. We are a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development, and broadband internet services for businesses and entrepreneurs.  Our services are designed to make enterprise-class hosting services available to small and medium-sized businesses at affordable monthly rates.  The Company has three operating segments, which consist of Crexendo Network Services, Crexendo Web Services, and StoresOnline.
	The Company has transformed into a start-up telecom company with the inherent risks and uncertainties of funding operations until profitability is achieved. We currently plan to fund our growth during the next twelve months using our cash and cash equivalents of $3.1 million, the collection of the remaining $545,000 of accounts receivable from our former StoresOnline business, and the $2 million proceeds from the sale of the Crexendo head office to the CEO in the first quarter of 2014 (see Note 16,).  The Company also received a commitment from the CEO, and major shareholder, in February of 2014 that the CEO would provide the necessary level of financial support to enable the Company to pay its debts as they become due through March 31, 2015.  Accordingly the Company believes it will have sufficient funds to sustain its operations during the next 12 months as a result of the sources of funding detailed above.
Basis of Presentation	'
	Basis of Presentation – The consolidated financial statements include the accounts and operations of Crexendo, Inc. and its wholly owned subsidiaries, which include Avail 24/7 Inc., Crexendo Business Solutions, Inc., StoresOnline Inc., StoresOnline International Canada ULC, StoresOnline International, Inc., StoresOnline International Ltd., StoresOnline International Canada, Ltd., Internet Training Group, Inc., Crexendo International, Inc., Crexendo Telecom, Inc., Crexendo India Limited, and Crexendo Property Management, LLC.   All intercompany account balances and transactions have been eliminated in consolidation.  The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements reflect the results of operations, financial position, changes in stockholders’ equity, and cash flows of our Company.
Cash and Cash Equivalents	'
	Cash and Cash Equivalents - We consider all highly liquid, short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. As of December 31, 2013, we had cash and cash equivalents in financial institutions in excess of federally insured limits in the amount of $2,732,000.
Restricted Cash	'
	Restricted Cash – We classified $487,000 and $1,444,000 as restricted cash as of December 31, 2013 and 2012, respectively.  Cash is restricted for state licensing letters of credit, compensating balance requirement of our merchant accounts, and purchasing card agreements.  As of December 31, 2013, we had restricted cash in financial institutions in excess of federally insured limits in the amount of $487,000.
Trade Receivables	'
	Trade Receivables – We have historically offered to our customers the option to finance, typically through 24 and 36-month extended payment term arrangements (“EPTAs”), purchases made at our suspended Internet Training Workshops through our StoresOnline segment. EPTAs are reflected as short-term and long-term trade receivables, as applicable, as we have the intent and ability to hold the receivables for the foreseeable future, until maturity or payoff.  EPTAs are recorded on a nonaccrual cash basis beginning on the contract date.
Allowance for Doubtful Accounts	'
	Allowance for Doubtful Accounts – For sales made through EPTA contracts, we record an allowance for doubtful accounts each reporting period based on the Company’s ongoing assessment of collectability. The allowance represents estimated losses resulting from customers’ failure to make required payments. The allowance for doubtful accounts for EPTAs is netted against the current and long-term trade receivables balances. The allowance estimate is based on historical collection experience, specific identification of probable bad debts based on collection efforts, aging of trade receivables, customer payment history, and other known factors, including current economic conditions. We believe that the allowance for doubtful accounts is adequate based on our assessment to date, however, actual collection results may differ materially from our expectations. Because revenue generated from customers financing through EPTAs is deferred and not recognized prior to the collection of cash, adjustments to the allowance for doubtful accounts related to our EPTA contracts increase or decrease deferred revenue. Trade receivables are written off against the allowance when the related customers are no longer making required payments and the trade receivables are determined to be uncollectible, typically 90 days past their original due date.  For sales made in our Crexendo Web Services and Crexendo Network Services segments, the allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.
Interest Income	'
	Interest Income - Interest income is primarily earned from EPTA contracts. EPTA contract terms generally contain an 18% simple interest rate. Interest income is recognized on these accounts only to the extent cash is received as the receivables are generally 24 and 36-months in length and collection of the full amount of the receivable is not probable. We recognized $501,000 and $1,907,000 for the years ended December 31, 2013 and 2012, respectively.
Inventory	'
	Inventory - Inventories consist of telecommunication equipment and is stated at the lower of cost (first-in, first-out method) or market. During the year ended December 31, 2012, the Company identified excess inventory of equipment and recorded an impairment of $35,000.
Certificate of Deposit	'
	Certificate of Deposit - We hold a certificate of deposit as collateral for merchant accounts, which automatically renews every 12 months. The certificate of deposit is classified as long-term in the consolidated balance sheets.
Property and Equipment	'
	Property and Equipment - Depreciation and amortization expense is computed using the straight-line method in amounts sufficient to allocate the cost of depreciable assets over their estimated useful lives ranging from two to five years. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the related lease. Depreciation expense is included in general and administrative expenses and totaled $1,022,000 and $1,301,000 for the year ended December 31, 2013 and 2012, respectively.  Depreciable lives by asset group are as follows:
	Computer and office equipment	2 to 5 years
	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years
	Building	20 years
	Maintenance and repairs are expensed as incurred. The cost and accumulated depreciation of property and equipment sold or otherwise retired are removed from the accounts
Goodwill	'
	Goodwill – Goodwill of $265,000 was recorded in connection with the acquisition of CastleWave in 2010. Goodwill of $75,000 was recorded in connection with the acquisition of PBX Central on June 4, 2013. Goodwill is tested for impairment using a fair-value-based approach on an annual basis (December 31) and between annual tests if indicators of potential impairment exist.  During the quarter ended September 30, 2013, the Company made a strategic decision to limit the sale of web services to our enterprise sized customers.  As this change significantly impacted revenue in our Web Services segment, the Company determined that the change was a triggering event requiring the Company to perform an impairment assessment to determine whether the carrying amount of the goodwill exceeded its fair value. In accordance with the accounting guidance, the Company performed the two step goodwill impairment test and concluded that the goodwill related to CastleWave was impaired and recorded an impairment charge of $265,000.
Intangible Assets	'
	Intangible Assets - Our intangible assets consist primarily of customer relationships, developed technology, technical know-how, and a non-compete agreement.  The fair value of identifiable intangible assets is based upon the lower of discounted future cash flow projections or the amount paid in an arm’s length transaction.  The intangible assets are amortized following the patterns in which the economic benefits are consumed.  Amortization expense from these acquired assets is included in general and administrative expenses and totaled $123,000 and $73,000 for the years ended December 31, 2013 and 2012, respectively.
	We periodically review the estimated useful lives of our intangible assets and review these assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The determination of impairment is based on estimates of future undiscounted cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will be equal to the excess of the carrying value over the fair value of the asset.
Use of Estimates	'
	Use of Estimates - In preparing the consolidated financial statements, management makes assumptions, estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.  Specific estimates and judgments include inventory valuation and obsolescence, intangible assets, allowances for doubtful accounts, sales returns and allowances, uncertainties related to certain income tax benefits, valuation of deferred income tax assets, valuations of share-based payments and recoverability of long-lived assets.   Actual results may differ from our current estimates and those differences may be material.
Revenue Recognition	'
	Revenue Recognition - In general, we recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.  We recognize revenue from our Web Services and Network Services segments on an accrual basis and revenue from our StoresOnline segment on a cash basis. Specifics by revenue category are as follows:
	Software licenses and DVD training courses sold under EPTAs are recognized as revenue upon receipt of cash from customers and not at the time of sale. Accounting standards require revenue to be deferred until customer payments are received if collection of the original principal balance is not probable.
	We enter into agreements where revenue is derived from multiple deliverables including any mix of products and/or services.  For these arrangements, we determine whether the delivered item(s) has value to the customer on a stand-alone basis, and in the event the arrangement includes a general right of return relative to the delivered item(s), whether the delivery or performance of the undelivered item(s) is considered probable and substantially in our control.  If these criteria are met, the arrangement consideration is allocated to the separate units of accounting based on each unit’s relative selling price.  If these criteria are not met, the arrangement is accounted for as a single unit of accounting which would result in revenue being recognized ratably over the contract term or deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. The amount of product and services revenue recognized for arrangements with multiple deliverables is impacted by the allocation of arrangement consideration to the deliverables in the arrangement based on the relative selling prices. In determining our selling prices, we apply the selling price hierarchy using vendor specific objective evidence (VSOE) when available, third-party evidence of selling price (“TPE”) if VSOE does not exist, and best estimated selling price (“BESP”) if neither VSOE nor TPE is available.
	VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for a deliverable when sold separately.  In determining VSOE, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range, generally evidenced by a substantial majority of such historical stand-alone transactions falling within a reasonably narrow range of the median rate. In addition, we consider major service groups, geographies, customer classifications, and other variables in determining VSOE.
	We are typically not able to determine TPE for our products or services. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality is difficult to obtain. Furthermore, we are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis.
	When we are unable to establish the selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. We determine BESP for a product or service by considering multiple factors including, but not limited to, cost of products, gross margin objectives, pricing practices, geographies, customer classes, and distribution channels.
	We recognize revenue for delivered elements only when we determine there are no uncertainties regarding customer acceptance. Changes in the allocation of the sales price between delivered and undelivered elements can impact the timing of revenue recognized but does not change the total revenue recognized on any agreement.
	Professional Services Revenue - Fees collected for professional services, including website design and development, search engine optimization services, link-building, paid search management services, and telecom installation services are recognized as revenue, net of expected customer refunds, over the period during which the services are performed, based upon the value for such services.
	Web and Telecommunications Services Hosting Revenue - Fees collected for hosting revenue are recognized ratably as services are provided.  Customers are billed for these services on a monthly or annual basis at the customer’s option.We recognize revenue ratably over the applicable service period.
	Equipment Sales and Financing Revenue - Fees generated from the sale of telecommunications equipment are recognized when the devices are installed and hosted telecommunications services begin.
	Fees generated from renting our hosted telecommunication equipment (IP or cloud telephone devices) through leasing contracts are recognized as revenue based on whether the lease qualifies as an operating lease or sales-type lease.  The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: 1) lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and 2) the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. The economic life of most of our products is estimated to be three years, since this represents the most frequent contractual lease term for our products, and there is no residual value for used equipment. Residual values, if any, are established at the lease inception using estimates of fair value at the end of the lease term. The vast majority of our leases that qualify as sales-type leases are non-cancelable and include cancellation penalties approximately equal to the full value of the lease receivables. Leases that do not meet the criteria for sales-type lease accounting are accounted for as operating leases. Revenue from sales-type leases is recognized upon installation and the interest portion is deferred and recognized as earned.  Revenue from operating leases in recognized ratably over the applicable service period.
	Commission Revenue - We have contracts with third-party entities with respect to telemarketing product sales to our customers following the sale of the initial software licenses. These products and services are intended to assist the customers with their Internet businesses. These products are sold and delivered completely by third parties. We receive commissions from these third parties, and recognize the revenue as the commissions are received, net of expected customer refunds.
	We have affiliate agreements with third-party entities that are resellers of satellite television services and internet service provider services. We receive commissions when the services are bundled with our hosted service offerings.
Cost of Revenue	'
	Cost of Revenue – Cost of revenue consists primarily of the cost of telecommunications equipment, services, and other products sold, credit card fees and salaries for fulfillment services.
Prepaid Sales Commissions	'
	Prepaid Sales Commissions - For arrangements where we recognize revenue over the relevant contract period, we defer related commission payments to our direct sales force and amortize these amounts over the same period that the related revenues are recognized.  This is done to match commission expense with the related revenues.  Commission payments are nonrefundable unless amounts due from a customer are determined to be uncollectible or if the customer subsequently changes or terminates the level of service, in which case commissions which were paid are recoverable by us.  We deferred commission expense of $189,000 and $0 as of December 31, 2013 and December 31, 2012, respectively. We amortized commission expense of $13,000 and $0 for the years ended December 31, 2013 and 2012, respectively.
Research and Development	'
	Research and Development - Research and development costs are expensed as incurred. Costs related to internally developed software are expensed as research and development expense until technological feasibility has been achieved, after which the costs are capitalized.
Fair Value Measurements	'
	Fair Value Measurements - The fair value of our financial assets and liabilities was determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
	Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
	Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
		·      Quoted prices for similar assets or liabilities in active markets;
		·      Quoted prices for identical or similar assets in non-active markets;
		·      Inputs other than quoted prices that are observable for the asset or liability; and
		·      Inputs that are derived principally from or corroborated by other observable market data.
	Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.  These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
Financial Instruments	'
	Financial Instruments - The carrying values of cash and cash equivalents, restricted cash, certificates of deposit, and merchant account deposits approximate their fair values due to either the short maturity of the instruments or the recent date of the initial transaction.
Income Taxes	'
	Income Taxes - We recognize a liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with accounting guidance. Accordingly, we may recognize the tax benefits from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting guidance is also provided on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations, and cash flows.  In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies.  We have placed a full valuation allowance on net deferred tax assets, see Note 11.
	Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations.
	We do not intend to indefinitely reinvest the undistributed earnings of our United Kingdom subsidiary, therefore, we have provided for U.S. deferred income taxes on such undistributed foreign earnings.  All other foreign subsidiaries are considered disregarded foreign entities for US tax purposes.
Stock-Based Compensation	'
	Stock-Based Compensation - For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award.  Equity classified awards include the issuance of stock options and restricted stock.  The restricted stock includes all dividend rights and is a participating security; however, the restricted stock does not change earnings per share under the two-class method.
Comprehensive Loss	'
	Comprehensive Loss – There were no other components of comprehensive loss other than net loss for the years ended December 31, 2013 and 2012.
Operating Segments	'
	Operating Segments - Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has three operating segments, which consist of StoresOnline, Crexendo Web Services, and Crexendo Network Services.  Effective October 1, 2012, the Company changed its reporting segments to reflect the allocation of previously unallocated corporate expenses to each of the three operating segments.  The Company revised its segment reporting to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources.  Segment operating results for the three and nine months ended September 30, 2012 have been recast to conform to current quarter segment operating results presentation.  Research and development expenses are allocated to StoresOnline and Crexendo Network Services segments based on the level of effort, measured primarily by wages and benefits attributed to our engineering department.  Indirect sales and marketing expenses are allocated to the Crexendo Web Services and Crexendo Network Services segments based on level of effort, measured by month-to-date contract bookings.  General and administrative expenses are allocated to all three segments based on revenue recognized for each segment.  Accounting guidance also establishes standards for related disclosure about products and services, geographic areas and major customers. We generate over 90% of our total revenue from customers within North America (United States and Canada) and less than 10% of our total revenues from customers in other parts of the world.
Significant Customers	'
	Significant Customers – No customer accounted for 10% or more of our total revenue or total accounts receivable for the twelve months ended December 31, 2013 and 2012.
Recently Adopted Accounting Guidance	'
	Recently Adopted Accounting Guidance - In September 2011, the FASB issued ASU 2011-08 in connection with testing goodwill for impairment. The objective of this ASU is intended to simplify goodwill impairment testing by adding a qualitative review step to assess whether the required quantitative impairment analysis that exists today is necessary. The ASU permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required.  Adoption of the new guidance had no impact on the Company’s financial statements.
	In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740). ASU 2013-11 requires that unrecognized tax benefits be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain circumstances. When those circumstances exist, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets.  This guidance is effective for reporting periods beginning after December 15, 2013.  The Company does not expect adoption of this ASU to significantly impact its consolidated financial statements.

1_Significant_Accounting_Polic1

1. Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2013
Property and Equipment	'
			December 31,
			2013			2012
	Software		$	1,180		$	1,228
	Computers and office equipment			1,785			2,363
	Land			877			877
	Building			765			765
	Building improvements			758			745
	Leasehold improvements			8			18
	Furniture and fixtures			124			194
	Less accumulated depreciation and amortization			(3,302	)		(3,018	)
			$	2,195		$	3,172
Useful Life	'
Property and Equipment	'
	Computer and office equipment	2 to 5 years
	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years
	Building	20 years

2_Net_Income_Loss_Per_Common_S

2. Net Income (Loss) Per Common Share (Tables)	12 Months Ended
	Dec. 31, 2013
Net Loss Per Common Share	'
Basic and diluted net income (loss) per common share	'
		Year Ended December 31,
		2013			2012
	Net loss (in thousands)	$	(4,963	)	$	(3,941	)
	Weighted-average share reconciliation:
	Weighted-average shares outstanding		10,714,353			10,629,614
	Weighted-average restricted shares held in escrow		-			(4,084	)
	Weighted-average basic shares outstanding		10,714,353			10,625,530
	Diluted shares outstanding		10,714,353			10,625,530
	Net loss per common share:
	Basic	$	(0.46	)	$	(0.37	)
	Diluted	$	(0.46	)	$	(0.37	)

3_Acquisition_Tables

3. Acquisition (Tables)	12 Months Ended
	Dec. 31, 2013
Acquisition Tables	'
Allocation of the purchase price	'
	Consideration (including estimated unpaid contingent consideration):
	Cash	$	300
	Common stock		107
	Contingent consideration		363
	Total consideration	$	770
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Property and equipment	$	7
	Identifiable intangible assets		688
	Total identifiable net assets		695
	Goodwill		75
		$	770
Identified intangible assets acquired and the respective estimated periods over which such assets will be amortized	'
		Amount		Weighted Average useful life (In years)
	Technology	$	180		2
	Customer relationships		508		10
	Total	$	688

4_Trade_Receivables_net_Tables

4. Trade Receivables, net (Tables)	12 Months Ended
	Dec. 31, 2013
Trade Receivables Net Tables	'
Trade Receivables, net	'
		December 31,
		2013			2012
	Non-EPTA trade receivables	$	688		$	432
	Conforming EPTAs		577			3,945
	Non-Conforming EPTAs:
	1 - 30 days		68			341
	31 - 60 days		30			163
	61 - 90 days		43			79
	Gross trade receivables		1,406			4,960
	Less allowance for doubtful accounts		(200	)		(1,522	)
	Trade receivables, net	$	1,206		$	3,438
	Current trade receivables, net	$	1,090		$	3,043
	Long-term trade receivables, net		116			395
	Trade receivables, net	$	1,206		$	3,438

5_Equipment_Financing_Receivab1

5. Equipment Financing Receivables (Tables)	12 Months Ended
	Dec. 31, 2013
Equipment Financing Receivables Tables	'
Equipment Financing Receivables	'
		December 31,
		2013			2012
	Gross financing receivables	$	1,369		$	283
	Less unearned income		(877	)		(159	)
	Financing receivables, net		492			124
	Less: Current portion of finance receivables, net		(94	)		(28	)
	Finance receivables due after one year	$	398		$	96

7_Property_and_Equipment_Table

7. Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2013
Property And Equipment Tables	'
Property and equipment	'
		December 31,
		2013			2012
	Software	$	1,180		$	1,228
	Computers and office equipment		1,785			2,363
	Land		877			877
	Building		765			765
	Building improvements		758			745
	Leasehold improvements		8			18
	Furniture and fixtures		124			194
	Less accumulated depreciation and amortization		(3,302	)		(3,018	)
		$	2,195		$	3,172

8_Intangible_Assets_Tables

8. Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2013
Intangible Assets Tables	'
Net carrying amount of intangible	'
		December 31,
		2013			2012
	Customer relationships	$	606		$	98
	Technical know-how		60			60
	Non-compete		60			60
	Developed technology		180			-
	Less accumulated amortization
	Customer relationships		(163	)		(96	)
	Technical know-how		(60	)		(58	)
	Non-compete		(60	)		(58	)
	Developed technology		(52	)		-
	Total	$	571		$	6
Estimated future amortization expense	'
	Year ending December 31,
	2014	$	195
	2015		133
	2016		71
	2017		53
	2018		39
	Thereafter		80
	Total	$	571

9_Fair_Value_Measurements_Tabl

9. Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2013
Fair Value Measurements Tables	'
Financial instruments	'
		31-Dec-13						31-Dec-12
		Carrying Value				Estimated Fair Value		Carrying Value		Estimated Fair Value
	Assets:
	Trade receivables, net	$	1,206			$	1,190	$	3,438	$	3,383
	Certificate of deposit		250				250		500		500
	Liabilities:
	Acquisition related contingent consideration	$	51			$	51	$	-	$	-
Assets for which fair value is disclosed	'
	Description	As of December 31, 2013				Level 1		Level 2		Level 3
	Liabilities:
	Acquistion related contingent consideration	$	51			$	-	$	-	$	51
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation	'
		Acquisition
		Contingent Consideration
	Balance as of December 31, 2012	$
	Purchases, sales and settlements, net			87
	Cash payments			(23	)
	Fair value adjustment			(13	)
	Transfers in and/or (out) of Level 3			-
	Balance as of December 31, 2013	$		51

10_StockBased_Compensation_Tab

10. Stock-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2013
Stock-Based Compensation Tables	'
Statement of operations effect of stock-based compensation	'
			Year Ended December 31,
			2013			2012
	Share based compensation expense by financial statement line item:
	Cost of revenue		$	12		$	34
	Research and development			105			62
	Selling and marketing			76			73
	General and administrative			615			643
	Total cost related to share-based compensation expense		$	808		$	812
Fair value of stock options granted	'
			Year Ended December 31, 2013			Year Ended December 31, 2012
	Weighted-average fair value of options granted		$	1.13		$	1.52
	Expected volatility			59	%		61	%
	Expected life (in years)			4			4
	Risk-free interest rate			0.85	%		0.81	%
	Expected dividend yield			0	%		1.56	%
Stock option activity	'
						Weighted-Average		Aggregate
		Number of Shares		Weighted-Average		Remaining		Intrinsic Value
				Exercise Price		Contract Life		(in thousands)
	Outstanding at January 1, 2012	1,478,859		$	5.85	8.3 years	$	36
	Granted	882,000			3.63
	Exercised	(146,123)			3.40
	Cancelled/forfeited	(475,876)			7.00
	Outstanding at December 31, 2012	1,738,860			4.61	8.4 years		52
	Granted	745,000			2.49
	Exercised	(67,832)			2.69
	Cancelled/forfeited	(285,789)			4.45
	Outstanding at December 31, 2013	2,130,239			3.96	8.0 years		482
	Shares vested and expected to vest	1,875,489			3.96	8.0 years		424
	Exercisable as of December 31, 2013	1,080,589			4.67	7.3 years		113
	Exercisable as of December 31, 2012	781,762			5.31	7.7 years		8
Restricted Stock	'
						Weighted-Average
			Number of			Grant-Date
			Shares			Fair Value
	Restricted stock outstanding as of January 1, 2012			7,000		$	6.89
	Granted			-			-
	Vested			(7,000	)		6.89
	Forfeited			-			-
	Restricted stock outstanding as of December 31, 2012			-		$	-

11_Income_Taxes_Tables

11. Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2013
Income Taxes Tables	'
Provision (benefit) for income taxes	'
		Year Ended December 31, 2013			Year Ended December 31, 2012
	Current income tax benefit:
	Federal	$	(259	)	$	(212	)
	State and local		59			49
	Foreign		(57	)		(49	)
	Current income tax benefit	$	(257	)	$	(212	)
Reconciliation of federal statutory income tax rate to our effective income tax rate	'
		Year Ended December 31, 2013			Year Ended December 31, 2012
	U.S. federal statutory income tax benefit	$	(1,775	)	$	(1,413	)
	Increase (decrease) in income tax benefit resulting from:
	State and local income tax benefit, net of federal effect		130			(117	)
	Change in the valuation allowance for net deferred income tax assets		1,551			1,385
	Uncertain tax positions		(253	)		(162	)
	Other, net		90			95
	Income tax benefit	$	(257	)	$	(212	)
Net deferred income tax assets and liabilities	'
		As of December 31, 2013						As of December 31, 2012
		Current			Non-current			Current			Non-current
	Deferred income tax assets:
	Accrued expenses	$	243		$	-		$	774		$	-
	Deferred revenue		293			-			171			-
	Net operating loss carry-forwards		-			5,182			-			3,475
	Foreign tax credits		-			892			-			892
	Stock-based compensation		-			2,568			-			2,480
	Property and equipment					223
	Other		-			706			-			864
	Subtotal		536			9,754			945			7,711
	Valuation allowance		(512	)		(9,327	)		(903	)		(7,385	)
	Total deferred income tax assets		24			244			42			326
	Deferred income tax liabilities:
	Property and equipment		-			-			-			(39	)
	Prepaid expenses and other		(268	)		-			(145	)		(184	)
	Total deferred income tax liabilities		(268	)		-			(145	)		(223	)
	Net deferred income tax assets (liabilities)	$	(244	)	$	244		$	(103	)	$	103
Unrecognized tax benefits	'
	Balance as of January 1, 2012	$	1,295
	Reductions due to lapsed statute of limitations		(162	)
	Balance as of December 31, 2012	$	1,133
	Reductions due to lapsed statute of limitations		(242	)
	Balance as of December 31, 2013	$	891

12_Accrued_Expenses_Tables

12. Accrued Expenses (Tables)	12 Months Ended
	Dec. 31, 2013
Accrued Expenses Tables	'
Accrued expenses	'
		December 31,
		2013		2012
	Accrued wages and benefits	$	473	$	686
	Accrued lease abondonment charge		-		1,393
	Accrued legal costs		202		202
	Other		420		729
	Total	$	1,095	$	3,010

13_Commitments_and_Contingenci1

13. Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2013
Commitments And Contingencies Tables	'
Future aggregate minimum lease obligations under operating leases	'
	Years ending December 31,
	2014	$	126
	2015		119
	2016		93
	Total	$	338
Total rental expense	'
	Years ending December 31,
		2014			2015			2016
	Minimum rentals	$	126		$	119		$	92
	Less: Sublease rentals		(107	)		(107	)		(90	)
	Total	$	19		$	12		$	2

15_Segments_Tables

15. Segments (Tables)	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
Information on reportable segments and reconciliation to condensed consolidated net (loss) income	'
		Year Ended December 31, 2013			Year Ended December 31, 2012
	Revenue:
	Crexendo Network Services	$	2,370		$	805
	Crexendo Web Services		2,050			2,505
	StoresOnline		5,908			13,857
	Consolidated revenue	$	10,328		$	17,167
	Operating income (loss):
	Crexendo Network Services	$	(5,432	)	$	(5,377	)
	Crexendo Web Services		(2,344	)		(5,291	)
	StoresOnline		2,031			4,553
	Total operating loss	$	(5,745	)	$	(6,115	)
	Other Income, net:
	Crexendo Network Services		3			14
	Crexendo Web Services		25			14
	StoresOnline		497			1,934
	Total other income, net	$	525		$	1,962
	Income (loss)
	Crexendo Network Services		(5,429	)		(5,363	)
	Crexendo Web Services		(2,319	)		(5,277	)
	StoresOnline		2,528			6,487
	Total loss before income tax provision	$	(5,220	)	$	(4,153	)

17_Quarterly_Financial_Informa1

17. Quarterly Financial Information (unaudited) (Tables)	12 Months Ended
	Dec. 31, 2013
Quarterly Financial Information Tables	'
Quarterly Financial Information	'
			Year ended December 31, 2013
			For the three months ended
			March 31,				June 30,			September 30,			December 31,
			2013				2013			2013			2013
			(In thousands, except per share data)
	Revenues		$	3,022				2,737		$	2,428		$	2,141
	Cost of revenue			1,042				970			1,044			1,035
	Selling and marketing			908				717			712			718
	General and administrative  (3)			1,438				1,852			1,745			1,935
	Research and development			481				414			396			401
	Goodwill impairment			-				-			265			-
	Loss from operations			(847	)			(1,216			(1,734			(1,948	)
	Total other income			212				120			98			95
	Loss before income taxes			(635	)			(1,096			(1,636			(1,853	)
	Income tax benefit (provision)			237				26			(23			17
	Net loss		$	(398	)			(1,070		$	(1,659		$	(1,836	)
	Basic net loss per common share (2)		$	(0.03	)			(0.10		$	(0.15		$	(0.17	)
	Diluted net loss per common share (2)		$	(0.03	)			(0.10		$	(0.15		$	(0.17	)
				Year ended December 31, 2012
				For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2012				2012			2012			2012
				(In thousands, except per share data)
	Revenues		$	5,255			$	4,914		$	3,865		$	3,133
	Cost of revenue			1,421				1,298			1,233			1,140
	Selling and marketing			933				984			987			1,073
	General and administrative (1)			3,033				2,741			2,440			4,014
	Research and development			594				505			420			466
	Loss from operations			(726	)			(614	)		(1,215	)		(3,560	)
	Total other income			770				510			419			263
	Income (loss) before income taxes			44				(104	)		(796	)		(3,297	)
	Income tax benefit (provision)			153				(13	)		(10	)		82
	Net income (loss)		$	197			$	(117	)	$	(806	)	$	(3,215	)
	Basic net income (loss) per common share (2)		$	0.02			$	(0.01	)	$	(0.08	)	$	(0.30	)
	Diluted net income (loss) per common share (2)		$	0.02			$	(0.01	)	$	(0.08	)	$	(0.30	)
	———————
	-1	During the year ended December 31, 2012, we recorded a $1,393,042 impairment charge related to the abandonment of office space under an operating lease in Orem, UT.
	-2	Net income (loss) per common share is computed independently for each of the quarters presented. Therefore, the sums of quarterly net income (loss) per common share amounts do not necessarily equal the total for the twelve month periods presented.
	-3	During the year ended December 31, 2013, we entered into a settlement and released $606,000 of the lease abandonment accrual.
Valuation and Qualifying Accounts	'
	CREXENDO, INC. AND SUBSIDIARIES
	Schedule II- Valuation and Qualifying Accounts
	Year Ended December 31, 2013 and 2012
			Balance at										Balance at
			Beginning										End of
			of Year			Additions				Deductions			Year
						(in thousands)
	Year ended December 31, 2013
	Allowance for doubtful accounts receivable		$	1,522			$	-		$	(1,322	)	$	200
	Deferred income tax asset valuation allowance			8,288				1,551			-			9,839
	Year ended December 31, 2012
	Allowance for doubtful accounts receivable		$	5,461			$	-		$	(3,939	)	$	1,522
	Deferred income tax asset valuation allowance			6,903				1,385			-			8,288

1_Significant_Accounting_Polic2

1. Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2013
Computer and office equipment | Minimum	'
Depreciable lives	'2 years
Computer and office equipment | Maximum [Member]	'
Depreciable lives	'5 years
Computer software	'
Depreciable lives	'3 years
Furniture and fixtures	'
Depreciable lives	'4 years
Leasehold improvements | Minimum	'
Depreciable lives	'2 years
Leasehold improvements | Maximum [Member]	'
Depreciable lives	'5 years
Building	'
Depreciable lives	'20 years

1_Significant_Accounting_Polic3

1. Significant Accounting Policies (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Significant Accounting Policies Details Narrative	'	'
Impairment of inventory	$0	$35,000
Restricted cash	487,000	1,444,000
Cash and cash equivalents in financial institutions in excess of federally insured limits	2,732,000	'
Restricted cash federally insured limits	487,000	'
Interest Income	501,000	1,907,000
Depreciation and amortization expense included in general and administrative expenses	1,022,000	1,301,000
Deferred commissions	189,000	0
Amortization of deferred commissions	13,000	0
Amortization expense from acquired assets included in general and administrative expenses	$123,000	$73,000

2_Net_Income_Loss_Per_Common_S1

2. Net Income (Loss) Per Common Share (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Net Income Loss Per Common Share Details	'	'	'	'	'	'	'	'	'	'
Net loss (in thousands)	($1,836)	($1,659)	($1,070)	($398)	($3,215)	($806)	($117)	$197	($4,963)	($3,941)
Weighted-average share reconciliation:	'	'	'	'	'	'	'	'	'	'
Weighted-average shares outstanding	'	'	'	'	'	'	'	'	10,714,353	10,629,614
Weighted-average restricted shares held in escrow	'	'	'	'	'	'	'	'	0	-4,084
Weighted-average basic shares outstanding	'	'	'	'	'	'	'	'	10,714,353	10,625,530
Diluted shares outstanding	'	'	'	'	'	'	'	'	10,714,353	10,625,530
Net loss per common share:	'	'	'	'	'	'	'	'	'	'
Basic	($0.17)	($0.15)	($0.10)	($0.03)	($0.30)	($0.08)	($0.01)	$0.02	($0.46)	($0.37)
Diluted	($0.17)	($0.15)	($0.10)	($0.03)	($0.30)	($0.08)	($0.01)	$0.02	($0.46)	($0.37)

2_Net_Income_Loss_Per_Common_S2

2. Net Income (Loss) Per Common Share (Details Narrative)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Net Income Loss Per Common Share Details Narrative	'	'
Anti-dilutive common stock equivalent shares are not included in the computation of diluted loss per share	2,130,239	1,738,860

3_Acquisition_Purchase_price_a

3. Acquisition - Purchase price allocation (Details) (PBX Central [Member], USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013
PBX Central [Member]	'
Consideration (including estimated unpaid contingent consideration):	'
Cash	$300
Common Stock	107
Contingent consideration	363
Total Consideration	770
Recognized amounts of identifiable assets acquired and liabilities assumed:	'
Property and Equipment	7
Identifiable intangible assets	688
Total identifiable net assets	695
Goodwill	75
Total recognized amounts of identifiable assets acquired and liabilities assumed	$770

3_Acquisition_Indentified_inta

3. Acquisition - Indentified intangible assets (Details1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013
Identified intangible assets acquired	$688
Technology [Member]	'
Identified intangible assets acquired	180
Weighted Average useful life (In years)	'2 years
Customer Relationships [Member]	'
Identified intangible assets acquired	$508
Weighted Average useful life (In years)	'10 years

4_Trade_Receivables_net_Detail

4. Trade Receivables, net (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
In Thousands, unless otherwise specified
Valuation and Qualifying Accounts Disclosure [Line Items]	'	'	'
Non-EPTA trade receivables	$688	$432	'
Conforming EPTAs	577	3,945	'
Gross trade receivables	1,406	4,960	'
Less allowance for doubtful accounts	-200	-1,522	-5,461
Trade receivables, net	1,206	3,438	'
Current trade receivables, net	1,090	3,043	'
Long-term trade receivables, net	116	395	'
Trade receivables, net	1,206	3,438	'
Non-Conforming EPTAs [Member]	'	'	'
Valuation and Qualifying Accounts Disclosure [Line Items]	'	'	'
1 - 30 days	68	341	'
31 - 60 days	30	163	'
61 - 90 days	$43	$79	'

4_Trade_Receivables_net_Detail1

4. Trade Receivables, net (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Trade Receivables Net Details Narrative	'	'
Write off	$1,027,000	$3,939,000

5_Equipment_Financing_Receivab2

5. Equipment Financing Receivables (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Equipment Financing Receivables Details	'	'
Gross financing receivables	$1,369	$283
Less unearned income	-877	-159
Financing receivables, net	492	124
Less: Current portion of finance receivables, net	-94	-28
Finance receivables due after one year	$398	$96

7_Property_and_Equipment_Detai

7. Property and Equipment (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Property And Equipment Details	'	'
Software	$1,180	$1,228
Computers and office equipment	1,785	2,363
Land	877	877
Building	765	765
Building Improvement	758	745
Leasehold improvements	8	18
Furniture and fixtures	124	194
Less accumulated depreciation and amortization	-3,302	-3,018
Property and equipment, Net	$2,195	$3,172

8_Intangible_Assets_Details

8. Intangible Assets (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
carrying amount of intangible, Net	$571	$6
Customer Relationships [Member]	'	'
Carrying amount of intangible, Gross	606	98
Less accumulated amortization	-163	-96
Technical Know How [Member]	'	'
Carrying amount of intangible, Gross	60	60
Less accumulated amortization	-60	-58
Non Compete [Member]	'	'
Carrying amount of intangible, Gross	60	60
Less accumulated amortization	-60	-58
Developed technology	'	'
Carrying amount of intangible, Gross	180	0
Less accumulated amortization	($52)	$0

8_Intangible_Assets_Future_amo

8. Intangible Assets - Future amortization expense (Details1) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Intangible Assets - Future Amortization Expense Details1	'	'
2014	$195	'
2015	133	'
2016	71	'
2017	53	'
2018	39	'
Thereafter	80	'
Estimated future amortization expense	$571	$6

9_Fair_Value_Measurements_Deta

9. Fair Value Measurements (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Assets:	'	'
Certificate of deposit	$250	$500
Liabilities:	'	'
Acquisition related contingent consideration	51	0
Carrying Value [Member]	'	'
Assets:	'	'
Trade receivables, net	1,206	3,438
Certificate of deposit	250	500
Liabilities:	'	'
Acquisition related contingent consideration	51	0
Estimated Fair Value [Member]	'	'
Assets:	'	'
Trade receivables, net	1,190	3,383
Certificate of deposit	250	500
Liabilities:	'	'
Acquisition related contingent consideration	$51	$0

9_Fair_Value_Measurements_Cont

9. Fair Value Measurements - Contingent consideration (Details 1) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Liabilities:	'	'
Acquisition related contingent consideration	$51	$0
Level 1 Member	'	'
Liabilities:	'	'
Acquisition related contingent consideration	0	'
Level 2 Member	'	'
Liabilities:	'	'
Acquisition related contingent consideration	$0	'

9_Fair_Value_Measurements_Peri

9. Fair Value Measurements - Period change for contingent consideration (Details 2) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013
Acquistion Related Contingent Consideration at December 31, 2012	$0
Acquistion Related Contingent Considerationat December 31, 2013	51
Purchases, sales and settlements, net	'
Period change in contingent consideration	87
Cash payments	'
Period change in contingent consideration	-23
Fair value adjustment	'
Period change in contingent consideration	-13
Transfers in and/or (out) of Level 3	'
Period change in contingent consideration	$0

10_StockBased_Compensation_All

10. Stock-Based Compensation - Allocation of expense (Details) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Total cost related to share-based compensation expense	$808	$812
Cost of revenue [Member]	'	'
Total cost related to share-based compensation expense	12	34
Research and development [Member]	'	'
Total cost related to share-based compensation expense	105	62
Selling and marketing [Member]	'	'
Total cost related to share-based compensation expense	76	73
General and administrative [Member]	'	'
Total cost related to share-based compensation expense	$615	$643

10_StockBased_Compensation_Val

10. Stock-Based Compensation - Valuation assumptions (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Stock-Based Compensation - Valuation Assumptions Details 1	'	'
Weighted-average fair value of options granted	$1.13	$1.52
Expected volatility	59.00%	61.00%
Expected life (in years)	'4 years	'4 years
Risk-free interest rate	0.85%	0.81%
Expected dividend yield	0.00%	1.56%

10_StockBased_Compensation_Act

10. Stock-Based Compensation - Activity (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Number of Shares	'	'
Outstanding	1,738,860	1,478,859
Granted	745,000	882,000
Exercised	-67,832	-146,123
Cancelled/forfeited	-285,789	-475,876
Outstanding	2,130,239	1,738,860
Shares vested and expected to vest	1,875,489	'
Exercisable	1,080,589	781,762
Weighted-Average Exercise Price	'	'
Outstanding	$4.61	$5.85
Granted	$2.49	$3.63
Exercised	$2.69	$3.40
Cancelled/forfeited	$4.45	$7
Outstanding	$3.96	$4.61
Shares vested and expected to vest	$3.96	'
Exercisable	$4.67	$5.31
Weighted-Average Remaining Contract Life	'	'
Outstanding	'8 years 4 months 24 days	'8 years 3 months 18 days
Outstanding	'8 years	'8 years 4 months 24 days
Shares vested and expected to vest	'8 years	'
Exercisable	'7 years 3 months 18 days	'7 years 8 months 12 days
Aggregate Intrinsic Value	'	'
Outstanding	$52	$36
Outstanding	482	52
Shares vested and expected to vest	424	'
Exercisable	$113	$8

10_StockBased_Compensation_Det

10. Stock-Based Compensation (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Stock-Based Compensation Details Narrative	'	'
Intrinsic value of options exercised	$133,000	$211,000

11_Income_Taxes_Details

11. Income Taxes (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Current income tax provision -benefit):	'	'	'	'	'	'	'	'	'	'
Federal	'	'	'	'	'	'	'	'	($259)	($212)
State and local	'	'	'	'	'	'	'	'	59	49
Foreign	'	'	'	'	'	'	'	'	-57	-49
Current income tax benefit	17	-23	26	237	82	-10	-13	153	-257	-212
Total income tax -benefit provision	'	'	'	'	'	'	'	'	($257)	($212)

11_Income_Taxes_Reconciliation

11. Income Taxes - Reconciliation (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Taxes	'	'
U.S federal statutory income tax expense (benefit)	($1,775)	($1,413)
Increase (decrease) in income tax provision (benefit) resultingB from:	'	'
State and local income tax provision (benefit), net of federal effect	130	-117
Change in the valuation allowance for net deferred income tax assets	1,551	1,385
Uncertain tax positions	-253	-162
Other, net	90	95
Income tax (benefit) provision	($257)	($212)

11_Income_Taxes_Deferred_tax_a

11. Income Taxes - Deferred tax assets and liabilities (Details 2) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
In Thousands, unless otherwise specified
Deferred income tax assets (liabilities):	'	'	'
Valuation allowance	$9,839	$8,288	$6,903
Total deferred income tax assets	244	103	'
Current [Member]	'	'	'
Deferred income tax assets (liabilities):	'	'	'
Accrued expenses	243	774	'
Deferred revenue	293	171	'
Net operating loss carry-forwards	0	0	'
Foreign tax credits	0	0	'
Stock-based compensation	0	0	'
Other	0	0	'
Subtotal	536	945	'
Valuation allowance	-512	-903	'
Total deferred income tax assets	24	42	'
Deferred income tax liabilities:	'	'	'
Property and equipment	0	0	'
Prepaid expenses and other	-268	-145	'
Total deferred income tax liabilities	-268	-145	'
Net deferred income tax assets (liabilities)	244	-103	'
NonCurrent [Member]	'	'	'
Deferred income tax assets (liabilities):	'	'	'
Accrued expenses	0	0	'
Deferred revenue	0	0	'
Net operating loss carry-forwards	5,182	3,475	'
Foreign tax credits	892	892	'
Stock-based compensation	2,568	2,480	'
Property and equipment	223	'	'
Other	706	864	'
Subtotal	9,754	7,711	'
Valuation allowance	-9,327	-7,385	'
Total deferred income tax assets	244	326	'
Deferred income tax liabilities:	'	'	'
Property and equipment	0	-39	'
Prepaid expenses and other	0	-184	'
Total deferred income tax liabilities	0	-223	'
Net deferred income tax assets (liabilities)	$244	$103	'

11_Income_Taxes_Unrecognized_t

11. Income Taxes - Unrecognized tax benefits (Details 3) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Taxes	'	'
Beginning Balance	$1,133	$1,295
Reductions due to lapsed statute of limitations	-242	-162
Ending Balance	$891	$1,133

11_Income_Taxes_Details_Narrat

11. Income Taxes (Details Narrative)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Taxes Details Narrative	'	'
Effective tax rate	34.00%	34.00%

12_Accrued_Expenses_Details

12. Accrued Expenses (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Accrued Expenses Details	'	'
Accrued wages and benefits	$473	$686
Accrued lease abondonment charge	0	1,393
Accrued legal costs	202	202
Other	420	729
Total	$1,095	$3,010

13_Commitments_and_Contingenci2

13. Commitments and Contingencies - Future minimum lease payments (Details) (USD $)	Dec. 31, 2013
In Thousands, unless otherwise specified
Less: Current portion of finance receivables not billed, net	'
2014	$126
2015	119
2016	93
Total	$338

13_Commitments_and_Contingenci3

13. Commitments and Contingencies - Total rental expense (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013
Year 2014	'
Minimum rentals	$126
Less: Sublease rentals	-107
Total	19
Year 2015	'
Minimum rentals	119
Less: Sublease rentals	-107
Total	12
Year 2016	'
Minimum rentals	92
Less: Sublease rentals	-90
Total	$2

13_Commitments_and_Contingenci4

13. Commitments and Contingencies (Details Narrative) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Liabilities relating to legal proceedings	'	'
Liabilities relating to legal proceedings	$202,000	$202,000

14_Employee_Benefit_Plan_Detai

14. Employee Benefit Plan (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Employee Benefit Plan Details Narrative	'	'
Employer contributions to employee benefit plan	$169,000	$206,000

15_Segment_Details

15. Segment (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Segment Information	'	'	'	'	'	'	'	'	'	'
Revenue	$2,141	$2,428	$2,737	$3,022	$3,133	$3,865	$4,914	$5,255	$10,328	$17,167
Operating income (loss):	-1,948	-1,734	-1,216	-847	-3,560	-1,215	-614	-726	-5,745	-6,115
Other Income, net	'	'	'	'	'	'	'	'	525	1,962
Income (loss) before income tax provision	'	'	'	'	'	'	'	'	-5,220	-4,153
Crexendo Network Services Member	'	'	'	'	'	'	'	'	'	'
Segment Information	'	'	'	'	'	'	'	'	'	'
Revenue	'	'	'	'	'	'	'	'	2,370	805
Operating income (loss):	'	'	'	'	'	'	'	'	-5,432	-5,377
Other Income, net	'	'	'	'	'	'	'	'	3	14
Income (loss) before income tax provision	'	'	'	'	'	'	'	'	-5,429	-5,363
Crexendo Web Services Member	'	'	'	'	'	'	'	'	'	'
Segment Information	'	'	'	'	'	'	'	'	'	'
Revenue	'	'	'	'	'	'	'	'	2,050	2,505
Operating income (loss):	'	'	'	'	'	'	'	'	-2,344	-5,291
Other Income, net	'	'	'	'	'	'	'	'	25	14
Income (loss) before income tax provision	'	'	'	'	'	'	'	'	-2,319	-5,277
Stores Online Member	'	'	'	'	'	'	'	'	'	'
Segment Information	'	'	'	'	'	'	'	'	'	'
Revenue	'	'	'	'	'	'	'	'	5,908	13,857
Operating income (loss):	'	'	'	'	'	'	'	'	2,031	4,553
Other Income, net	'	'	'	'	'	'	'	'	497	1,934
Income (loss) before income tax provision	'	'	'	'	'	'	'	'	$2,528	$6,487

17_Quarterly_Financial_Informa2

17. Quarterly Financial Information (unaudited) (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Quarterly Financial Information Details	'	'	'	'	'	'	'	'	'	'
Revenues	$2,141	$2,428	$2,737	$3,022	$3,133	$3,865	$4,914	$5,255	$10,328	$17,167
Cost of revenue	1,035	1,044	970	1,042	1,140	1,233	1,298	1,421	4,091	5,092
Selling and marketing	718	712	717	908	1,073	987	984	933	3,055	3,977
General and administrative (3) and (1)	1,935	1,745	1,852	1,438	4,014	2,440	2,741	3,033	6,970	12,228
Research and development	401	396	414	481	466	420	505	594	1,692	1,985
Goodwill impairment	0	265	0	0	'	'	'	'	265	0
Loss from operations	-1,948	-1,734	-1,216	-847	-3,560	-1,215	-614	-726	-5,745	-6,115
Total other income	-1,853	-1,636	-1,096	-635	-3,297	-796	-104	44	525	1,962
Loss before income taxes	-1,853	-1,636	-1,096	-635	-3,297	-796	-104	44	525	1,962
Income tax benefit (provision)	17	-23	26	237	82	-10	-13	153	-257	-212
Net loss	($1,836)	($1,659)	($1,070)	($398)	($3,215)	($806)	($117)	$197	($4,963)	($3,941)
Basic net loss per common share (2)	($0.17)	($0.15)	($0.10)	($0.03)	($0.30)	($0.08)	($0.01)	$0.02	($0.46)	($0.37)
Diluted net loss per common share (2)	($0.17)	($0.15)	($0.10)	($0.03)	($0.30)	($0.08)	($0.01)	$0.02	($0.46)	($0.37)

17_Quarterly_Financial_Informa3

17. Quarterly Financial Information (unaudited) - Valuation and qualifying accounts (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Financial Information - Valuation And Qualifying Accounts Details 1	'	'	'
Allowance for doubtful accounts receivable	$200	$1,522	$5,461
Allowance for doubtful accounts receivable, addition	0	0	'
Allowance for doubtful accounts receivable, deduction	-1,322	-3,939	'
Deferred income tax asset valuation allowance	9,839	8,288	6,903
Deferred income tax asset valuation allowance, addition	1,551	1,385	'
Deferred income tax asset valuation allowance, deduction	$0	$0	'