Crexendo (CXDO) 10-Q 8 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document And Entity Information
Entity Registrant Name	Crexendo, Inc.
Entity Central Index Key	1,075,736
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
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 Common Stock, Shares Outstanding		14,297,943
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,117	$ 1,282
Restricted cash	100	100
Trade receivables, net of allowance for doubtful accounts of $2 as of March 31, 2018 and $19 as of December 31, 2017	361	372
Contract assets	4	3
Inventories	190	131
Equipment financing receivables	98	116
Contract costs	388	379
Prepaid expenses	416	251
Other current assets	10	10
Total current assets	2,684	2,644
Long-term trade receivables, net of allowance for doubtful accounts of $9 as of March 31, 2018 and $10 as of December 31, 2017	31	31
Long term equipment financing receivables	49	58
Property and equipment, net	7	8
Intangible assets, net	221	239
Goodwill	272	272
Long-term contract costs	359	364
Other long-term assets	119	121
Total assets	3,742	3,737
Current liabilities:
Accounts payable	76	79
Accrued expenses	1,059	961
Notes payable	32	69
Income taxes payable	4	0
Contract liabilities	557	614
Total current liabilities	1,728	1,723
Contract liabilities, net of current portion	346	343
Deferred revenue, net of current portion	30	31
Notes payable, net of current portion	7	10
Total liabilities	2,111	2,107
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, 14,288,656 shares issued and outstanding as of March 31, 2018 and 14,287,556 shares issued and outstanding as of December 31, 2017	14	14
Additional paid-in capital	60,624	60,560
Accumulated deficit	(59,007)	(58,944)
Total stockholders' equity	1,631	1,630
Total liabilities and stockholders' equity	$ 3,742	$ 3,737

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Assets
Allowance for doubtful accounts - trade receivables	$ 2	$ 19
Allowance for doubtful accounts - long-term trade receivables	$ 9	$ 10
Stockholders equity
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	25,000,000	25,000,000
Common stock, issued	14,288,656	14,287,556
Common stock, outstanding	14,288,656	14,287,556

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Service revenue	$ 2,442	$ 2,015
Product revenue	366	279
Total revenue	2,808	2,294
Operating expenses:
Cost of service revenue	729	644
Cost of product revenue	187	108
Selling and marketing	829	662
General and administrative	945	1,171
Research and development	181	190
Total operating expenses	2,871	2,775
Loss from operations	(63)	(481)
Other income/(expense):
Interest income	2	3
Interest expense	(1)	(35)
Other income, net	3	2
Total other income/(expense), net	4	(30)
Loss before income tax	(59)	(511)
Income tax provision	(4)	(4)
Net loss	$ (63)	$ (515)
Net loss per common share:
Basic	$ 0	$ (0.04)
Diluted	$ 0	$ (0.04)
Weighted-average common shares outstanding:
Basic	14,287,734	13,699,389
Diluted	14,287,734	13,699,389

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, amount at Dec. 31, 2016	$ 14	$ 58,716	$ (58,015)	$ 715
Beginning balance, shares at Dec. 31, 2016	13,578,556
Net loss		1,844	(929)	915
Ending balance, amount at Dec. 31, 2017	$ 14	60,560	(58,944)	1,630
Ending balance, shares at Dec. 31, 2017	14,287,556
Share-based compensation		62		62
Issuance of common stock for exercise of stock option, amount		2		2
Issuance of common stock for exercise of stock option, shares	1,100
Net loss			(63)	(63)
Ending balance, amount at Mar. 31, 2018	$ 14	$ 60,624	$ (59,007)	$ 1,631
Ending balance, shares at Mar. 31, 2018	14,288,656

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (63)	$ (515)
Adjustments to reconcile net loss to net cash used for operating activities:
Amortization of prepaid rent	0	54
Depreciation and amortization	19	27
Non-cash interest expense	0	33
Share-based compensation	62	260
Amortization of deferred gain	0	(16)
Changes in assets and liabilities:
Trade receivables	11	(50)
Contract assets	(1)	(1)
Equipment financing receivables	27	31
Inventories	(59)	(124)
Contract costs	(4)	18
Prepaid expenses	(165)	87
Other assets	2	16
Accounts payable and accrued expenses	95	(14)
Income tax payable	4	4
Contract liabilities	(54)	140
Deferred revenue	(1)	(2)
Net cash used for operating activities	(127)	(52)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of long-term investment	0	252
Net cash provided by investing activities	0	252
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable	0	25
Repayments made on notes payable	(40)	(42)
Proceeds from exercise of options	2	166
Net cash provided by/(used for) financing activities	(38)	149
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(165)	349
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD	1,382	719
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD	1,217	1,068
Supplemental disclosure of non-cash investing and financing information:
Issuance of common stock for prepayment of interest on related-party note payable	0	109
Prepaid assets financed through notes payable	$ 0	$ 25

1. Significant Accounting Polic

1. Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies
Significant Accounting Policies	Description of Business - Basis of Presentation – Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Cash and Cash Equivalents Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported on the balance sheet to the cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows (in thousands): March 31, 2018 Cash and cash equivalents $ 1,117 Restricted cash 100 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows $ 1,217 Trade Receivables Allowance for Doubtful Accounts Contract Assets Contract Costs - Inventory Certificate of Deposit 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 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 the statement of operations. Goodwill Intangible Assets Contract Liabilities Use of Estimates - Product and Service Revenue Recognition - Cost of Service Revenue Cost of Product Revenue Research and Development Fair Value Measurements Level 1 Level 2 · 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 Notes Payable Income Taxes - Interest and penalties associated with income taxes are classified as income tax expense in the condensed consolidated statements of operations. Stock-Based Compensation - Comprehensive Loss Operating Segments Significant Customers Recently Adopted Accounting Pronouncements - Inventory In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): On January 1, 2018, the Company adopted the new accounting standards. Amounts generally described as restricted cash are now presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. As a result of adoption, there was no impact to cash flows from operating, investing or financing activities for the three months ended March 31, 2018 and 2017. A reconciliation of cash and cash equivalents and restricted cash presented on the balance sheet to the totals presented in the statement of cash flows as cash, cash equivalents, and restricted cash has been added to the footnote disclosures, see Note 1. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): , The adoption of these new ASUs required us to restate the previously reported cash and cash equivalent amounts reported in prior periods to include restricted cash, see Note 2-Changes in Accounting Principles. In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718 Recently Issued Accounting Pronouncements - Intangibles - Goodwill and Other (Topic 350): In February 2016, the FASB issued ASU 2016-02, Leases

2. Changes in Accounting Princi

2. Changes in Accounting Principles	3 Months Ended
	Mar. 31, 2018
Changes In Accounting Principles
Changes in Accounting Principles	Except for the changes below, the Company has consistently applied the accounting principles to all periods presented in these condensed consolidated financial statements. The Company adopted Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018. As a result, the Company has changed its accounting policies for revenue recognition as detailed below. The Company applied Topic 606 retrospectively using the practical expedient in paragraph 606-10-65-1(f)(3), under which the Company does not disclose the amount of consideration allocated to the remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for all reporting periods presented before the date of the initial application – i.e. January 1, 2018. The details of the significant changes and quantitative impact of the changes are disclosed below. A. Commission fees payable The Company previously recognized management level indirect sales commission expense related to contracts as selling expenses when they were incurred. Under Topic 606, the Company capitalizes those commission fees as costs of obtaining a contract, when they are incremental and, if they are expected to be recovered, it amortizes them consistently with the pattern of transfer of the good or service over the specific contract life or the average contract life for the group of contracts that resulted in the achievement of the sales commissions. If the expected amortization period is one year or less, the commission fee is expensed when incurred. The adoption of this new accounting policy resulted in a cumulative adjustment to the accumulated deficit related to the incremental contract acquisition cost that was previously expensed being capitalized. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our condensed consolidated financial statements. B. Principal versus agent considerations For the majority of our contracts, we expect no changes. We have certain contracts where we recognize revenue from reselling third party products and services, such as broadband Internet access and professional website management services as a principal on a gross basis. Under Topic 606, the Company recognizes revenue on a net basis as an agent. The new standard focuses on control of the specified goods and service as the overarching principle and the Company does not control the delivery of the goods and services. The adoption of this new accounting policy required us to restate certain previously reported results, including the reduction of service revenue and related cost of service revenue. There was no impact on the accumulated deficit as a result of any changes to our current policy. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our condensed consolidated financial statements. The Company adopted ASU 2016-18, Statement of Cash Flows (Topic 230) Impacts to Previously Reported Results Adoption of the standards related to revenue recognition and statement of cash flows impacted our previously reported results as follows: (Topic 606) Condensed Consolidated Balance Sheet New Revenue December 31, 2017 As Previously Standard As (In thousands) Reported Adjustment Adjusted Trade receivables, net of allowance for doubtful accounts $ 375 $ (3 ) $ 372 Contract assets - 3 3 Contract costs - 379 379 Prepaid expenses 530 (279 ) 251 Total current assets 2,544 100 2,644 Long-term prepaid expenses 173 (173 ) - Long-term contract costs - 364 364 Total assets 3,446 291 3,737 Deferred revenue, current portion 957 (957 ) - Contract liabilities - 614 614 Total current liabilities 2,066 (343 ) 1,723 Contract liabilities, net of current portion - 343 343 Accumulated deficit (59,235 ) 291 (58,944 ) Total stockholders' equity 1,339 291 1,630 Total Liabilities and Stockholders' Equity 3,446 291 3,737 (Topic 606) Condensed Consolidated Statement of Operations New Revenue Three Months Ended March 31, 2017 As Previously Standard As (In thousands, except per share amounts) Reported Adjustment Adjusted Service revenue $ 2,065 $ (50 ) $ 2,015 Total revenue 2,344 (50 ) 2,294 Cost of service revenue 694 (50 ) 644 Selling and marketing 690 (28 ) 662 Total operating expenses 2,853 (78 ) 2,775 Loss from operations (509 ) 28 (481 ) Loss before income tax (539 ) 28 (511 ) Net loss (543 ) 28 (515 ) Diluted loss per share $ (0.04 ) $ - $ (0.04 ) Condensed Consolidated Statements of Stockholders' Equity Additional Total (In thousands) Common Stock Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Equity Balance at January 1, 2017, as previously reported 13,578,556 $ 14 $ 58,716 $ (58,215 ) $ 515 Impact of change in accounting principle - - - 200 200 As adjusted balance at January 1, 2017 13,578,556 14 58,716 (58,015 ) 715 As adjusted net loss 709,000 - 1,844 (929 ) 915 As adjusted balance as of December 31, 2017 14,287,556 $ 14 $ 60,560 $ (58,944 ) $ 1,630 (Topic 606) (Topic 230) Condensed Consolidated Statement of Cash Flows New Revenue Statement of Three Months Ended March 31, 2017 As Previously Standard Cash Flows As (In thousands) Reported Adjustment Adjustments Adjusted Net loss $ (543 ) $ 28 $ - $ (515 ) Trade receivables (51 ) 1 - (50 ) Contract assets - (1 ) - (1 ) Contract costs - 18 - 18 Prepaid expenses 134 (47 ) - 87 Contract liabilities - 140 - 140 Deferred revenue 137 (139 ) - (2 ) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 619 - (619 ) - CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD - - 719 719 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 968 - (968 ) - CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD - - 1,068 1,068 Adoption of the standards related to revenue recognition (Topic 606) and statement of cash flows presentation of restricted cash (Topic 230) had no impact to cash provided by or used for financing, or investing on our condensed consolidated statement of cash flows.

3. Revenue

3. Revenue	3 Months Ended
	Mar. 31, 2018
Revenue
Revenue	Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, see Note 14. Telecommunications Segment Products and services may be sold separately or in bundled packages. The typical length of a contract for service is thirty-six to sixty months. Customers are billed for these services on a monthly basis. For bundled packages, the Company accounts for individual products and services separately if they are distinct – i.e. if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products and services in a bundle based on their relative stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the desktop devices and telecommunication services. For items that are not sold separately (e.g. additional features) the Company estimates stand-alone selling prices using the adjusted market assessment approach. When we provide a free trial period, we do not begin to recognize recurring revenue until the trial period has ended and the customer has been billed for the services. Desktop Devices - Equipment Financing Revenue - Cloud Telecommunications Services - Broadband Internet Access Professional Services Revenue Commission Revenue - Web Services Segment Website Hosting Service – Professional Website Management Service and Other Disaggregation of Revenue In the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Three Months Ended March 31, 2018 Cloud Total (In thousands) Telecommunications Web Services Reportable Segment Segment Segments Major products/services lines Desktop devices $ 366 $ - $ 366 Equipment financing revenue 31 - 31 Telecommunications services 2,042 - 2,042 Fees, commissions, and other, recognized over time 137 - 137 One time fees, commissions and other 7 - 7 Website hosting services - 204 204 Website management services and other - 21 21 $ 2,583 $ 225 $ 2,808 Timing of revenue recognition Products and fees recognized at a point in time $ 373 $ - $ 373 Services and fees transferred over time 2,210 225 2,435 $ 2,583 $ 225 $ 2,808 Three Months Ended March 31, 2017 Cloud Total (In thousands) Telecommunications Web Services Reportable Segment Segment Segments As Adjusted As Adjusted As Adjusted Major products/services lines Desktop devices $ 279 $ - $ 279 Equipment financing revenue 56 - 56 Telecommunications services 1,566 - 1,566 Fees, commissions, and other, recognized over time 102 - 102 One time fees, commissions and other 11 - 11 Website hosting services - 250 250 Website management services and other - 30 30 $ 2,014 $ 280 $ 2,294 Timing of revenue recognition Products and fees recognized at a point in time $ 290 $ - $ 290 Services and fees transferred over time 1,724 280 2,004 $ 2,014 $ 280 $ 2,294 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. March 31, December 31, 2018 2017 (In thousands) As Adjusted Receivables, which are included in Trade receivables, net of allowance for doubtful accounts $ 392 $ 403 Contract assets 4 3 Contract liabilities 903 957 Significant changes in the contract assets and the contract liabilities balances during the period are as follows: Three Months Ended For the Year Ended (In thousands) March 31, 2018 December 31, 2017 As Adjusted Contract assets Contract Liabilities Contract assets Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ - $ (676 ) $ - $ (630 ) Increase due to cash received, excluding amounts recognized as revenue during the period - 622 - 778 Transferred to receivables from contract assets recognized at the beginning of the period - - (1 ) - Increase due to additional unamortized discounts 1 - 2 - Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): 2018 2019 2020 2021 2022 2023 Total Desktop devices $ 280 - - - - - $ 280 Telecommunications service $ 5,859 6,227 4,501 2,788 998 62 $ 20,435 All consideration from contracts with customers is included in the amounts presented above The Company applies the transition practical expedient in paragraph 606-10-65-1(f)(3) and does not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Company expects to recognize that amount as revenue for the year ended December 31, 2017.

4. Net Loss Per Common Share

4. Net Loss Per Common Share	3 Months Ended
	Mar. 31, 2018
Net Loss Per Common Share
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 and warrants. Diluted net loss per common share for the three months ended March 31, 2018 and 2017 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: Three Months Ended March 31, 2018 2017 Net loss (in thousands) $ (63 ) $ (515 ) Weighted-average share reconciliation: Weighted-average basic shares outstanding 14,287,734 13,699,389 Diluted shares outstanding 14,287,734 13,699,389 Net loss per common share: Basic $ (0.00 ) $ (0.04 ) Diluted $ (0.00 ) $ (0.04 ) Common stock equivalent shares are not included in the computation of diluted loss per share, as the Company has a net loss and the inclusion of such shares would be anti-dilutive due to the net loss. At March 31, 2018 and 2017, the common stock equivalent shares were, as follows: March 31, March 31, 2018 2017 Shares of common stock issuable under equity incentive plans outstanding 3,842,428 4,020,050 Common stock equivalent shares excluded from diluted net loss per share 3,842,428 4,020,050

5. Trade Receivables net

5. Trade Receivables net	3 Months Ended
	Mar. 31, 2018
Trade Receivables Net
Trade Receivables net	Our trade receivables balance consists of traditional trade receivables and residual Extended Payment Term Agreements (“EPTAs”) sold prior to July 2011. Below is an analysis of the days outstanding of our trade receivables as shown on our balance sheet (in thousands): March 31, December 31, 2018 2017 Trade receivables $ 360 $ 386 Conforming EPTAs 39 41 Non-Conforming EPTAs: 1 - 30 days 4 4 31 - 60 days - - 61 - 90 days - 1 Gross trade receivables 403 432 Less: allowance for doubtful accounts (11 ) (29 ) Trade receivables, net $ 392 $ 403 Current trade receivables, net $ 361 $ 372 Long-term trade receivables, net 31 31 Trade receivables, net $ 392 $ 403 All current and long-term EPTAs in the table above had original contract terms of greater than one year. The Company wrote off $1,000 of EPTAs during the three months ended March 31, 2018 and $13,000 during the year ended December 31, 2017, of which, all had original contract terms of greater than one year.

6. Equipment Financing Receivab

6. Equipment Financing Receivables	3 Months Ended
	Mar. 31, 2018
Equipment Financing Receivables
Equipment Financing Receivables	We rent certain cloud telecommunication equipment (IP telephone devices) through leasing contracts that we classify as either operating leases or sale-type leases. Equipment finance receivables are expected to be collected over the next thirty-six to sixty months. Equipment finance receivables arising from the rental of our cloud telecommunication equipment through sales-type leases, are as follows (in thousands): March 31, December 31, 2018 2017 Gross equipment financing receivables $ 212 $ 264 Less: unearned income (65 ) (90 ) Equipment financing receivables, net 147 174 Less: Current portion of equipment finance receivables, net (98 ) (116 ) Long-term equipment finance receivables, net $ 49 $ 58

7. Prepaid Expenses

7. Prepaid Expenses	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid Expenses	Prepaid expenses consisted of the following (in thousands): March 31, December 31, 2018 2017 Prepaid corporate insurance 15 44 Prepaid software services 94 15 Prepaid inventory deposits 195 117 Other prepaid expenses 112 75 Total prepaid expenses $ 416 $ 251

8. Intangible Assets

8. Intangible Assets	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	The net carrying amount of intangible assets are as follows (in thousands): March 31, December 31, 2018 2017 Customer relationships $ 941 $ 941 Developed technology 198 198 Less: accumulated amortization Customer relationships ( 720 ) ( 702 ) Developed technology ( 198 ) (198 ) Total $ 221 $ 239 Amortization expense is included in general and administrative expenses and totaled $18,000 and $24,000 for the three months ended March 31, 2018 and 2017, respectively.

9. Accrued Expenses

9. Accrued Expenses	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued Expenses	Accrued expenses consisted of the following (in thousands): March 31, December 31, 2018 2017 Accrued wages and benefits $ 372 $ 303 Accrued accounts payable 256 242 Accrued sales and telecommunication taxes 358 343 Other 73 73 Total accrued expenses $ 1,059 $ 961

10. Notes Payable

10. Notes Payable	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Notes Payable	Related-Party Note Payable On December 30, 2015, Crexendo, Inc. (the "Company") entered into a Term Loan Agreement (the "Loan Agreement"), with Steven G. Mihaylo, as Trustee of The Steven G. Mihaylo Trust dated August 19, 1999 (the "Lender"). Mr. Mihaylo is the principal shareholder and Chief Executive Officer of the Company. The term of the Loan is five years, with simple interest paid at 9% per annum until a balloon payment is due December 30, 2020. The Loan Agreement provides for interest to be paid in shares of common stock of the Company (the “Common Stock”) at a stock price of $1.20. For the first two years of the Loan term, interest will be paid in advance at the beginning of each year; for the last three years of the Loan term, interest will be paid at the end of each year. After the second year of the Loan term, there is no pre-payment penalty for early repayment of the outstanding principal amount of the Loan. If the Loan is repaid within the first two years of the Loan term, the Company will forfeit prepaid interest as a pre-payment penalty. In February 2017, the Company entered into a second amendment to our Loan Agreement with Steven G. Mihaylo. The amendment extends the ability of the Board of Directors to request the remaining $1.0 million available under the Loan Agreement if necessary to fund operations through May 30, 2018. All other terms remain the same as initial loan agreement. In September 2017, Steven G. Mihaylo exercised 444,999 options for a total strike price of $974,000. In December 2017, Steven G. Mihaylo exercised 12,001 options for a total strike price of $22,000. The Company used the proceeds from the stock options exercise to repay $996,000 of the $1.0 million outstanding related party note payable. During the year ended December 31, 2017, the Company accelerated the amortization of the debt discount in the amount of $77,000 as a result of the repayment. Other Notes Payable Other notes payable consists of short and long-term financing arrangements for software licenses, subscriptions, support and corporate insurance policies. The Company’s outstanding balances under its note payable agreements were as follows (in thousands): March 31, December 31, 2018 2017 Related-party note payable $ 4 $ 4 Other notes payable 35 75 Total notes payable 39 79 Less: notes payable, current portion (32 ) (69 ) Notes payable, net of current portion $ 7 $ 10 As of March 31, 2018, future principal payments are scheduled as follows (in thousands): Year ending December 31, 2018 $ 29 2019 6 2020 4 Total $ 39

11. Fair Value Measurements

11. Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Fair Value Measurements	We have financial instruments as of March 31, 2018 and December 31, 2017 for which the fair value is summarized below (in thousands): March 31, 2018 December 31, 2017 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Assets: Trade receivables, net $ 392 $ 392 $ 403 $ 403 Equipment financing receivables 147 147 174 174 Liabilities: Notes payable 39 39 79 79

12. Income Taxes

12. Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	Our effective tax rate for the three months ended March 31, 2018 and 2017 was (6.8)% and (0.8)%, respectively, which resulted in an income tax provision of $(4,000) and $(4,000), respectively. The tax provision is due to state tax payments made with extensions filed. Significant management judgment is required in determining our provision for income taxes and in determining whether deferred tax assets will be realized in full or in part. 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 assets, projected future taxable income, the suspension of the sale of product and services through the seminar sales channel, 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; accordingly, we recorded a full valuation allowance. Subsequent to placing a full valuation allowance on our net deferred tax assets, adjustments impacting our tax rate have been and are expected to continue to be insignificant.

13. Commitments and Contingenci

13. Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Less: Current portion of finance receivables not billed, net
Commitments and Contingencies	Operating Leases We lease office space under non-cancelable operating lease agreements. Currently we have one lease agreement in Reno, NV, which is expiring in 2018. The operating lease for our Reno, NV office contains customary escalation clauses. Rental expense incurred on operating leases for the three months ended March 31, 2018 and 2017 was approximately $5,000 and $5,000, respectively. Sale-Leaseback On February 28, 2014, the Company sold and leased back the land, building and furniture associated with the corporate headquarters in Tempe, Arizona to a Company that is owned by the major shareholder and CEO of the Company for $2.0 million in cash. The Company recognized a deferred gain of $281,000 on sale-leaseback, which was amortized over the initial lease term of thirty-six months to offset rent expense. Deferred gain amortization for the three months ended March 31, 2018 and 2017 was $0 and $16,000, respectively. Effective March 1, 2017 the rent agreement was renewed for a three year term with rent payable in cash. Rent expense incurred on the sale-leaseback during the three months ended March 31, 2018 and 2017 was $75,000 and $63,000, respectively. Future aggregate minimum lease obligations under the operating lease as of March 31, 2018, exclusive of taxes and insurance, are as follows (in thousands): Year ending December 31, 2018 $ 235 2019 300 2020 50 Total $ 585

14. Segments

14. Segments	3 Months Ended
	Mar. 31, 2018
Segments
Segments	Management has chosen to organize the Company around differences based on its products and services. Cloud Telecommunications segment generates revenue from selling cloud telecommunication products and services and broadband Internet services. Web Services segment generates revenue from website hosting and other professional services. The Company has two operating segments, which consist of Cloud Telecommunications and Web Services. Segment revenue and income/(loss) before income tax provision are as follows (in thousands): Three Months Ended March 31, 2018 2017 As Adjusted Revenue: Cloud telecommunications $ 2,583 $ 2,014 Web services 225 280 Consolidated revenue 2,808 2,294 Income/(loss) from operations: Cloud telecommunications (188 ) (588 ) Web services 125 107 Total operating loss (63 ) (481 ) Other income/(expense), net: Cloud telecommunications 4 (30 ) Web services - - Total other income/(expense), net 4 (30 ) Income/(loss) before income tax provision Cloud telecommunications (184 ) (618 ) Web services 125 107 Loss before income tax provision $ (59 ) $ (511 ) Depreciation and amortization was $18,000 and $24,000 for the Cloud Telecommunications segment for the three months ended March 31, 2018 and 2017, respectively. Depreciation and amortization was $1,000 and $3,000 for the Web Services segment for the three months ended March 31, 2018 and 2017, respectively. Interest income was $2,000 and $3,000 for the Web Services segment for the three months ended March 31, 2018 and 2017, respectively. Interest expense was $1,000 and $31,000 for the Cloud Telecommunications segment for the three months ended March 31, 2018 and 2017, respectively. Interest expense was $0 and $4,000 for the Web Services segment for the three months ended March 31, 2018 and 2017, respectively.

1. Significant Accounting Pol21

1. Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies Policies
Description of Business	Description of Business -
Basis of Presentation	Basis of Presentation – Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
Cash and Cash Equivalents	Cash and Cash Equivalents
Restricted Cash	Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported on the balance sheet to the cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows (in thousands): March 31, 2018 Cash and cash equivalents $ 1,117 Restricted cash 100 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows $ 1,217
Trade Receivables	Trade Receivables
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts
Contract Assets	Contract Assets
Contract Costs	Contract Costs -
Inventory	Inventory
Certificate of Deposit	Certificate of Deposit
Property and Equipment	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 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 the statement of operations.
Goodwill	Goodwill
Intangible Assets	Intangible Assets
Contract Liabilities	Contract Liabilities
Use of Estimates	Use of Estimates -
Product and Service Revenue Recognition	Product and Service Revenue Recognition -
Cost of Service Revenue	Cost of Service Revenue
Cost of Product Revenue	Cost of Product Revenue
Research and Development	Research and Development
Fair Value Measurements	Fair Value Measurements Level 1 Level 2 · 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
Notes Payable	Notes Payable
Income Taxes	Income Taxes - Interest and penalties associated with income taxes are classified as income tax expense in the condensed consolidated statements of operations.
Stock-Based Compensation	Stock-Based Compensation -
Comprehensive Loss	Comprehensive Loss
Operating Segments	Operating Segments
Significant Customers	Significant Customers
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements - Inventory In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): On January 1, 2018, the Company adopted the new accounting standards. Amounts generally described as restricted cash are now presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. As a result of adoption, there was no impact to cash flows from operating, investing or financing activities for the three months ended March 31, 2018 and 2017. A reconciliation of cash and cash equivalents and restricted cash presented on the balance sheet to the totals presented in the statement of cash flows as cash, cash equivalents, and restricted cash has been added to the footnote disclosures, see Note 1. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): , The adoption of these new ASUs required us to restate the previously reported cash and cash equivalent amounts reported in prior periods to include restricted cash, see Note 2-Changes in Accounting Principles. In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements - Intangibles - Goodwill and Other (Topic 350): In February 2016, the FASB issued ASU 2016-02, Leases

1. Significant Accounting Pol22

1. Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies Tables
Restricted cash	March 31, 2018 Cash and cash equivalents $ 1,117 Restricted cash 100 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows $ 1,217
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

2. Changes in Accounting Prin23

2. Changes in Accounting Principles (Tables)	3 Months Ended
	Mar. 31, 2018
Changes In Accounting Principles Tables
Impact of changes in accounting principles	(Topic 606) Condensed Consolidated Balance Sheet New Revenue December 31, 2017 As Previously Standard As (In thousands) Reported Adjustment Adjusted Trade receivables, net of allowance for doubtful accounts $ 375 $ (3 ) $ 372 Contract assets - 3 3 Contract costs - 379 379 Prepaid expenses 530 (279 ) 251 Total current assets 2,544 100 2,644 Long-term prepaid expenses 173 (173 ) - Long-term contract costs - 364 364 Total assets 3,446 291 3,737 Deferred revenue, current portion 957 (957 ) - Contract liabilities - 614 614 Total current liabilities 2,066 (343 ) 1,723 Contract liabilities, net of current portion - 343 343 Accumulated deficit (59,235 ) 291 (58,944 ) Total stockholders' equity 1,339 291 1,630 Total Liabilities and Stockholders' Equity 3,446 291 3,737 (Topic 606) Condensed Consolidated Statement of Operations New Revenue Three Months Ended March 31, 2017 As Previously Standard As (In thousands, except per share amounts) Reported Adjustment Adjusted Service revenue $ 2,065 $ (50 ) $ 2,015 Total revenue 2,344 (50 ) 2,294 Cost of service revenue 694 (50 ) 644 Selling and marketing 690 (28 ) 662 Total operating expenses 2,853 (78 ) 2,775 Loss from operations (509 ) 28 (481 ) Loss before income tax (539 ) 28 (511 ) Net loss (543 ) 28 (515 ) Diluted loss per share $ (0.04 ) $ - $ (0.04 ) Condensed Consolidated Statements of Stockholders' Equity Additional Total (In thousands) Common Stock Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Equity Balance at January 1, 2017, as previously reported 13,578,556 $ 14 $ 58,716 $ (58,215 ) $ 515 Impact of change in accounting principle - - - 200 200 As adjusted balance at January 1, 2017 13,578,556 14 58,716 (58,015 ) 715 As adjusted net loss 709,000 - 1,844 (929 ) 915 As adjusted balance as of December 31, 2017 14,287,556 $ 14 $ 60,560 $ (58,944 ) $ 1,630 (Topic 606) (Topic 230) Condensed Consolidated Statement of Cash Flows New Revenue Statement of Three Months Ended March 31, 2017 As Previously Standard Cash Flows As (In thousands) Reported Adjustment Adjustments Adjusted Net loss $ (543 ) $ 28 $ - $ (515 ) Trade receivables (51 ) 1 - (50 ) Contract assets - (1 ) - (1 ) Contract costs - 18 - 18 Prepaid expenses 134 (47 ) - 87 Contract liabilities - 140 - 140 Deferred revenue 137 (139 ) - (2 ) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 619 - (619 ) - CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD - - 719 719 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 968 - (968 ) - CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD - - 1,068 1,068

3. Revenue (Tables)

3. Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue Tables
Disaggregation of revenue	Three Months Ended March 31, 2018 Cloud Total (In thousands) Telecommunications Web Services Reportable Segment Segment Segments Major products/services lines Desktop devices $ 366 $ - $ 366 Equipment financing revenue 31 - 31 Telecommunications services 2,042 - 2,042 Fees, commissions, and other, recognized over time 137 - 137 One time fees, commissions and other 7 - 7 Website hosting services - 204 204 Website management services and other - 21 21 $ 2,583 $ 225 $ 2,808 Timing of revenue recognition Products and fees recognized at a point in time $ 373 $ - $ 373 Services and fees transferred over time 2,210 225 2,435 $ 2,583 $ 225 $ 2,808 Three Months Ended March 31, 2017 Cloud Total (In thousands) Telecommunications Web Services Reportable Segment Segment Segments As Adjusted As Adjusted As Adjusted Major products/services lines Desktop devices $ 279 $ - $ 279 Equipment financing revenue 56 - 56 Telecommunications services 1,566 - 1,566 Fees, commissions, and other, recognized over time 102 - 102 One time fees, commissions and other 11 - 11 Website hosting services - 250 250 Website management services and other - 30 30 $ 2,014 $ 280 $ 2,294 Timing of revenue recognition Products and fees recognized at a point in time $ 290 $ - $ 290 Services and fees transferred over time 1,724 280 2,004 $ 2,014 $ 280 $ 2,294
Contract balances	March 31, December 31, 2018 2017 (In thousands) As Adjusted Receivables, which are included in Trade receivables, net of allowance for doubtful accounts $ 392 $ 403 Contract assets 4 3 Contract liabilities 903 957
Significant changes in the contract assets and liabilities	Three Months Ended For the Year Ended (In thousands) March 31, 2018 December 31, 2017 As Adjusted Contract assets Contract Liabilities Contract assets Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ - $ (676 ) $ - $ (630 ) Increase due to cash received, excluding amounts recognized as revenue during the period - 622 - 778 Transferred to receivables from contract assets recognized at the beginning of the period - - (1 ) - Increase due to additional unamortized discounts 1 - 2 -
Performance obligations	2018 2019 2020 2021 2022 2023 Total Desktop devices $ 280 - - - - - $ 280 Telecommunications service $ 5,859 6,227 4,501 2,788 998 62 $ 20,435 All consideration from contracts with customers is included in the amounts presented above

4. Net Loss Per Common Share (T

4. Net Loss Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net Loss Per Common Share
Basic and diluted net income (loss) per common share	Three Months Ended March 31, 2018 2017 Net loss (in thousands) $ (63 ) $ (515 ) Weighted-average share reconciliation: Weighted-average basic shares outstanding 14,287,734 13,699,389 Diluted shares outstanding 14,287,734 13,699,389 Net loss per common share: Basic $ (0.00 ) $ (0.04 ) Diluted $ (0.00 ) $ (0.04 )
Antidilutive securities excluded from earnings	March 31, March 31, 2018 2017 Shares of common stock issuable under equity incentive plans outstanding 3,842,428 4,020,050 Common stock equivalent shares excluded from diluted net loss per share 3,842,428 4,020,050

5. Trade Receivables, net (Tabl

5. Trade Receivables, net (Tables)	3 Months Ended
	Mar. 31, 2018
Trade Receivables Net Tables
Trade receivables, net	March 31, December 31, 2018 2017 Trade receivables $ 360 $ 386 Conforming EPTAs 39 41 Non-Conforming EPTAs: 1 - 30 days 4 4 31 - 60 days - - 61 - 90 days - 1 Gross trade receivables 403 432 Less: allowance for doubtful accounts (11 ) (29 ) Trade receivables, net $ 392 $ 403 Current trade receivables, net $ 361 $ 372 Long-term trade receivables, net 31 31 Trade receivables, net $ 392 $ 403

6. Equipment Financing Receiv27

6. Equipment Financing Receivables (Tables)	3 Months Ended
	Mar. 31, 2018
Equipment Financing Receivables Tables
Equipment financing receivables	March 31, December 31, 2018 2017 Gross equipment financing receivables $ 212 $ 264 Less: unearned income (65 ) (90 ) Equipment financing receivables, net 147 174 Less: Current portion of equipment finance receivables, net (98 ) (116 ) Long-term equipment finance receivables, net $ 49 $ 58

7. Prepaid Expenses (Tables)

7. Prepaid Expenses (Tables)	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	March 31, December 31, 2018 2017 Prepaid corporate insurance 15 44 Prepaid software services 94 15 Prepaid inventory deposits 195 117 Other prepaid expenses 112 75 Total prepaid expenses $ 416 $ 251

8. Intangible Assets (Tables)

8. Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets	March 31, December 31, 2018 2017 Customer relationships $ 941 $ 941 Developed technology 198 198 Less: accumulated amortization Customer relationships ( 720 ) ( 702 ) Developed technology ( 198 ) (198 ) Total $ 221 $ 239

9. Accrued Expenses (Tables)

9. Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued expenses	March 31, December 31, 2018 2017 Accrued wages and benefits $ 372 $ 303 Accrued accounts payable 256 242 Accrued sales and telecommunication taxes 358 343 Other 73 73 Total accrued expenses $ 1,059 $ 961

10. Notes Payable (Tables)

10. Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Summary of note payable	March 31, December 31, 2018 2017 Related-party note payable $ 4 $ 4 Other notes payable 35 75 Total notes payable 39 79 Less: notes payable, current portion (32 ) (69 ) Notes payable, net of current portion $ 7 $ 10
Schedule of future principal payments	Year ending December 31, 2018 $ 29 2019 6 2020 4 Total $ 39

11. Fair Value Measurements (Ta

11. Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements Tables
Financial instruments	March 31, 2018 December 31, 2017 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Assets: Trade receivables, net $ 392 $ 392 $ 403 $ 403 Equipment financing receivables 147 147 174 174 Liabilities: Notes payable 39 39 79 79

13. Commitments and Contingen33

13. Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Future aggregate minimum lease obligations under operating leases	Year ending December 31, 2018 $ 235 2019 300 2020 50 Total $ 585

14. Segments (Tables)

14. Segments (Tables)	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
Information on reportable segments and reconciliation to condensed consolidated net (loss) income	Three Months Ended March 31, 2018 2017 As Adjusted Revenue: Cloud telecommunications $ 2,583 $ 2,014 Web services 225 280 Consolidated revenue 2,808 2,294 Income/(loss) from operations: Cloud telecommunications (188 ) (588 ) Web services 125 107 Total operating loss (63 ) (481 ) Other income/(expense), net: Cloud telecommunications 4 (30 ) Web services - - Total other income/(expense), net 4 (30 ) Income/(loss) before income tax provision Cloud telecommunications (184 ) (618 ) Web services 125 107 Loss before income tax provision $ (59 ) $ (511 )

1. Significant Accounting Pol35

1. Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Significant Accounting Policies Details
Cash and cash equivalents	$ 1,117	$ 1,282	$ 0	$ 0
Restricted cash	100
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows	$ 1,217	$ 1,382	$ 1,068	$ 719

1. Significant Accounting Pol36

1. Significant Accounting Policies (Details 1)	3 Months Ended
	Mar. 31, 2018
Computer and office equipment | Minimum
Depreciable lives	2 years
Computer and office equipment | Maximum
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
Depreciable lives	5 years

1. Significant Accounting Pol37

1. Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Significant Accounting Policies Details Narrative
Cash equivalents in financial institutions in excess of federally insured limits	$ 888		$ 1,038
Restricted cash	100		100
Capitalized contract costs	747		$ 743
Capitalized contract costs amortization	112	$ 92
Depreciation expense included in general and administrative expense	$ 1	$ 3

2. Changes in Accounting Prin38

2. Changes in Accounting Principles (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Trade receivables, net of allowance for doubtful accounts	$ 361	$ 372
Contract assets	4	3
Contract costs	388	379
Prepaid expenses	416	251
Total current assets	2,684	2,644
Long-term prepaid expenses		0
Long-term contract costs	359	364
Total assets	3,742	3,737
Deferred revenue, current portion		0
Contract liabilities	557	614
Total current liabilities	1,728	1,723
Contract liabilities, net of current portion	346	343
Accumulated deficit	(59,007)	(58,944)
Total stockholders' equity	1,631	1,630
Total liabilities and stockholders' equity	$ 3,742	3,737
As Previously Reported
Trade receivables, net of allowance for doubtful accounts		375
Contract assets		0
Contract costs		0
Prepaid expenses		530
Total current assets		2,544
Long-term prepaid expenses		173
Long-term contract costs		0
Total assets		3,446
Deferred revenue, current portion		957
Contract liabilities		0
Total current liabilities		2,066
Contract liabilities, net of current portion		0
Accumulated deficit		(59,235)
Total stockholders' equity		1,339
Total liabilities and stockholders' equity		3,446
(Topic 606) New Revenue Standard Adjustment
Trade receivables, net of allowance for doubtful accounts		(3)
Contract assets		3
Contract costs		379
Prepaid expenses		(279)
Total current assets		100
Long-term prepaid expenses		(173)
Long-term contract costs		364
Total assets		291
Deferred revenue, current portion		(957)
Contract liabilities		614
Total current liabilities		(343)
Contract liabilities, net of current portion		343
Accumulated deficit		291
Total stockholders' equity		291
Total liabilities and stockholders' equity		$ 291

2. Changes in Accounting Prin39

2. Changes in Accounting Principles (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Service revenue	$ 2,442	$ 2,015
Total revenue	2,808	2,294
Cost of service revenue	729	644
Selling and marketing	829	662
Total operating expenses	2,871	2,775
Loss from operations	(63)	(481)
Loss before income tax	(59)	(511)
Net loss	$ (63)	$ (515)	$ 915
Diluted	$ 0	$ (0.04)
As Previously Reported
Service revenue		$ 2,065
Total revenue		2,344
Cost of service revenue		694
Selling and marketing		690
Total operating expenses		2,853
Loss from operations		(509)
Loss before income tax		(539)
Net loss		$ (543)
Diluted		$ (0.04)
(Topic 606) New Revenue Standard Adjustment
Service revenue		$ (50)
Total revenue		(50)
Cost of service revenue		(50)
Selling and marketing		(28)
Total operating expenses		(78)
Loss from operations		28
Loss before income tax		28
Net loss		$ 28
Diluted		$ 0

2. Changes in Accounting Prin40

2. Changes in Accounting Principles (Details 2) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Beginning balance as previously reported, amount			$ 515
Impact of change in accounting principle, amount			200
Beginning balance, amount	$ 1,630	$ 715	715
Net loss	(63)	(515)	915
Ending balance, amount	1,631		1,630
Common Stock
Beginning balance as previously reported, amount			$ 14
Beginning balance as previously reported, shares			13,578,556
Beginning balance, amount	$ 14	$ 14	$ 14
Beginning balance, shares	14,287,556	13,578,556	13,578,556
Net loss, shares			709,000
Ending balance, amount	$ 14		$ 14
Ending balance, shares	14,288,656		14,287,556
Additional Paid-In Capital
Beginning balance as previously reported, amount			$ 58,716
Beginning balance, amount	$ 60,560	$ 58,716	58,716
Net loss			1,844
Ending balance, amount	60,624		60,560
Accumulated Deficit
Beginning balance as previously reported, amount			(58,215)
Impact of change in accounting principle, amount			200
Beginning balance, amount	(58,944)	$ (58,015)	(58,015)
Net loss	(63)		(929)
Ending balance, amount	$ (59,007)		$ (58,944)

2. Changes in Accounting Prin41

2. Changes in Accounting Principles (Details 3) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Net loss	$ (63)	$ (515)	$ 915
Trade receivables	11	(50)
Contract assets		(1)
Contract costs		18
Prepaid expenses		87
Contract liabilities		140
Deferred revenue	(1)	(2)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	1,282	0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD	1,382	719	719
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	1,117	0	1,282
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD	$ 1,217	1,068	1,382
As Previously Reported
Net loss		(543)
Trade receivables		(51)
Contract assets		0
Contract costs		0
Prepaid expenses		134
Contract liabilities		0
Deferred revenue		137
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		619	619
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD		0	0
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		968
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD		0
Standard Adjustment
Net loss		28
Trade receivables		1
Contract assets		(1)
Contract costs		18
Prepaid expenses		(47)
Contract liabilities		140
Deferred revenue		(139)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD		0	0
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD		0
Cash Flows Adjustments
Net loss		0
Trade receivables		0
Contract assets		0
Contract costs		0
Prepaid expenses		0
Contract liabilities		0
Deferred revenue		0
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		(619)	(619)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE BEGINNING OF THE PERIOD		719	$ 719
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		(968)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF THE PERIOD		$ 1,068

3. Revenue (Details)

3. Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue	$ 2,808	$ 2,294
Desktop devices
Revenue	366	279
Equipment financing revenue
Revenue	31	56
Telecommunications services
Revenue	2,042	1,566
Fees, commissions, and other, recognized over time
Revenue	137	102
One time fees, commissions and other
Revenue	7	11
Website hosting services
Revenue	204	250
Website management services and other
Revenue	21	30
Products and fees recognized at a point in time
Revenue	373	290
Services and fees transferred over time
Revenue	2,435	2,004
Cloud Telecommunications Segment
Revenue	2,583	2,014
Cloud Telecommunications Segment | Desktop devices
Revenue	366	279
Cloud Telecommunications Segment | Equipment financing revenue
Revenue	31	56
Cloud Telecommunications Segment | Telecommunications services
Revenue	2,042	1,566
Cloud Telecommunications Segment | Fees, commissions, and other, recognized over time
Revenue	137	102
Cloud Telecommunications Segment | One time fees, commissions and other
Revenue	7	11
Cloud Telecommunications Segment | Website hosting services
Revenue	0	0
Cloud Telecommunications Segment | Website management services and other
Revenue	0	0
Cloud Telecommunications Segment | Products and fees recognized at a point in time
Revenue	373	290
Cloud Telecommunications Segment | Services and fees transferred over time
Revenue	2,210	1,724
Web Services Segment
Revenue	225	280
Web Services Segment | Desktop devices
Revenue	0	0
Web Services Segment | Equipment financing revenue
Revenue	0	0
Web Services Segment | Telecommunications services
Revenue	0	0
Web Services Segment | Fees, commissions, and other, recognized over time
Revenue	0	0
Web Services Segment | One time fees, commissions and other
Revenue	0	0
Web Services Segment | Website hosting services
Revenue	204	250
Web Services Segment | Website management services and other
Revenue	21	30
Web Services Segment | Products and fees recognized at a point in time
Revenue	0	0
Web Services Segment | Services and fees transferred over time
Revenue	$ 225	$ 280

3. Revenue (Details 1)

3. Revenue (Details 1) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Revenue Details 1
Receivables, which are included in Trade receivables, net of allowance for doubtful accounts	$ 392	$ 403
Contract assets	4	3
Contract liabilities	$ 903	$ 957

3. Revenue (Details 2)

3. Revenue (Details 2) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Contract Assets
Revenue recognized that was included in the contract liability balance at the beginning of the period	$ 0	$ 0
Increase due to cash received, excluding amounts recognized as revenue during the period	0	0
Transferred to receivables from contract assets recognized at the beginning of the period	0	(1)
Increase due to additional unamortized discounts	1	2
Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the period	(676)	(630)
Increase due to cash received, excluding amounts recognized as revenue during the period	622	778
Transferred to receivables from contract assets recognized at the beginning of the period	0	0
Increase due to additional unamortized discounts	$ 0	$ 0

4. Net Loss Per Common Share (D

4. Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Net Loss Per Common Share Details
Net loss	$ (63)	$ (515)	$ 915
Weighted-average share reconciliation:
Weighted-average basic shares outstanding	14,287,734	13,699,389
Diluted shares outstanding	14,287,734	13,699,389
Net loss per common share:
Basic	$ 0	$ (0.04)
Diluted	$ 0	$ (0.04)

4. Net Loss Per Common Share 46

4. Net Loss Per Common Share (Details 1) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Shares excluded from earnings	3,842,428	4,020,050
Equity incentive plans
Shares excluded from earnings	3,842,428	4,020,050

5. Trade Receivables, net (Deta

5. Trade Receivables, net (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Valuation and Qualifying Accounts Disclosure [Line Items]
Trade receivables	$ 360	$ 386
Conforming EPTAs	39	41
Gross trade receivables	403	432
Less allowance for doubtful accounts	(11)	(29)
Trade receivables, net	392	403
Current trade receivables, net	361	372
Long-term trade receivables, net	31	31
Trade receivables, net	392	403
1 - 30 Days
Valuation and Qualifying Accounts Disclosure [Line Items]
Non-Conforming EPTAs	4	4
31 - 60 Days
Valuation and Qualifying Accounts Disclosure [Line Items]
Non-Conforming EPTAs	0	0
61 To 90 Days
Valuation and Qualifying Accounts Disclosure [Line Items]
Non-Conforming EPTAs	$ 0	$ 1

5. Trade Receivables, net (De48

5. Trade Receivables, net (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Trade Receivables Net Details Narrative
Write off	$ 1	$ 13

6. Equipment Financing Receiv49

6. Equipment Financing Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Equipment Financing Receivables Details
Gross equipment financing receivables	$ 212	$ 264
Less: unearned income	(65)	(90)
Equipment financing receivables, net	147	174
Less: Current portion of equipment finance receivables, net	(98)	(116)
Long-term equipment finance receivables, net	$ 49	$ 58

7. Prepaid Expenses (Details)

7. Prepaid Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid corporate insurance	$ 15	$ 44
Prepaid software services	94	15
Prepaid inventory deposits	195	117
Other prepaid expenses	112	75
Total prepaid assets	$ 416	$ 251

8. Intangible Assets (Details)

8. Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Carrying amount of intangible, Net	$ 221	$ 239
Customer Relationships [Member]
Carrying amount of intangible, Gross	941	941
Less accumulated amortization	(720)	(702)
Developed technology
Carrying amount of intangible, Gross	198	198
Less accumulated amortization	$ (198)	$ (198)

8. Intangible Assets (Details N

8. Intangible Assets (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Intangible Assets Details Narrative
Amortization expense	$ 18	$ 24

9. Accrued Expenses (Details)

9. Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued wages and benefits	$ 372	$ 303
Accrued accounts payable	256	242
Accrued sales and telecommunications taxes	358	343
Other	73	73
Total accrued expenses	$ 1,059	$ 961

10. Notes Payable (Details)

10. Notes Payable (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Notes Payable Details
Related party note payable	$ 4	$ 4
Other notes payable	35	75
Total notes payable	39	79
Less: notes payable, current portion	(32)	(69)
Notes payable, net of current portion	$ 7	$ 10

10. Notes Payable (Details 1)

10. Notes Payable (Details 1) $ in Thousands	Mar. 31, 2018USD ($)
Notes Payable Details 1
2,018	$ 29
2,019	6
2,020	4
Total	$ 39

11. Fair Value Measurements (De

11. Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Carrying Value [Member]
Assets:
Trade receivables, net	$ 392	$ 403
Equipment financing receivables	147	174
Liabilities:
Notes payable	39	79
Estimated Fair Value [Member]
Assets:
Trade receivables, net	392	403
Equipment financing receivables	147	174
Liabilities:
Notes payable	$ 39	$ 79

12. Income Taxes (Details Narra

12. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Taxes Details Narrative
Effective tax rate	(6.80%)	(0.80%)
Income tax provision	$ (4)	$ (4)

13. Commitments and Contingen58

13. Commitments and Contingencies (Details) $ in Thousands	Mar. 31, 2018USD ($)
Commitments And Contingencies Details
2,018	$ 235
2,019	300
2,020	50
Total	$ 585

13. Commitments and Contingen59

13. Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Liabilities relating to legal proceedings
Rent expense	$ 5	$ 5
Deferred gain amortization	0	16
Rent expense incurred on the sale-leaseback	$ 75	$ 63

14. Segment Information (Detail

14. Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Information
Revenue	$ 2,808	$ 2,294
Income/(loss) from operations	(63)	(481)
Other income/(loss), net	4	(30)
Income/(loss) before income tax provision	(59)	(511)
Cloud telecommunications
Segment Information
Revenue	2,583	2,014
Income/(loss) from operations	(188)	(588)
Other income/(loss), net	4	(30)
Income/(loss) before income tax provision	(184)	(618)
Web Services
Segment Information
Revenue	225	280
Income/(loss) from operations	125	107
Other income/(loss), net	0	0
Income/(loss) before income tax provision	$ 125	$ 107

14. Segment Information (Deta61

14. Segment Information (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest expense	$ 1	$ 35
Cloud telecommunications
Depreciation and amortization	18	24
Interest expense	1	31
Web Services
Depreciation and amortization	1	3
Interest income	2	3
Interest expense	$ 0	$ 4