Cover
Cover - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Feb. 28, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | Crexendo, Inc. | |
Entity Central Index Key | 0001075736 | |
Document Type | 10-K | |
Amendment Flag | false | |
Entity Voluntary Filers | No | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Known Seasoned Issuer | No | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Dec. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 26,284,202 | |
Entity Public Float | $ 49,538 | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Fin Stmt Error Correction Flag | false | |
Entity File Number | 001-32277 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 87-0591719 | |
Entity Address Address Line 1 | 1615 South 52nd Street | |
Entity Address City Or Town | Tempe | |
Entity Address State Or Province | AZ | |
Entity Address Postal Zip Code | 85281 | |
City Area Code | 602 | |
Icfr Auditor Attestation Flag | false | |
Auditor Name | Urish Popeck & Co., LLC | |
Auditor Location | Pittsburgh, Pennsylvania | |
Auditor Firm Id | 1013 | |
Local Phone Number | 714-8500 | |
Security 12b Title | Common Stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 10,347 | $ 5,475 |
Trade receivables, net of allowance of $116 and $131, respectively | 3,476 | 3,297 |
Contract assets, net of allowance of $85 and $0, respectively | 342 | 318 |
Inventories | 382 | 679 |
Equipment financing receivables, net of allowance of $56 and $0, respectively | 856 | 635 |
Contract costs | 1,345 | 841 |
Prepaid expenses | 508 | 431 |
Other current assets | 35 | 674 |
Total current assets | 17,291 | 12,350 |
Long-term equipment financing receivables, net of allowance of $115 and $0, respectively | 1,768 | 1,255 |
Property and equipment, net | 670 | 3,315 |
Operating lease right-of-use assets | 1,009 | 1,081 |
Intangible assets, net | 23,556 | 26,725 |
Goodwill | 9,454 | 9,454 |
Contract costs, net of current portion | 2,273 | 1,304 |
Other long-term assets | 139 | 150 |
Total Assets | 56,160 | 55,634 |
Current liabilities: | ||
Accounts payable | 769 | 1,206 |
Accrued expenses | 5,951 | 4,890 |
Finance leases | 75 | 95 |
Notes payable | 457 | 420 |
Operating lease liabilities | 566 | 363 |
Income tax payable | 53 | 79 |
Contract liabilities | 2,390 | 3,338 |
Total current liabilities | 10,261 | 10,391 |
Contract liabilities, net of current portion | 198 | 247 |
Finance leases, net of current portion | 23 | 98 |
Notes payable, net of current portion | 592 | 2,605 |
Line of credit | 0 | 82 |
Operating lease liabilities, net of current portion | 473 | 752 |
Total liabilities | 11,547 | 14,175 |
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 50,000,000 shares, 26,130,218 shares issued and outstanding as of December 31, 2023 and 25,670,773 shares issued and outstanding as of December 31, 2022 | 26 | 26 |
Additional paid-in capital | 132,888 | 129,192 |
Accumulated deficit | (88,467) | (87,946) |
Accumulated other comprehensive income | 166 | 187 |
Total stockholders' equity | 44,613 | 41,459 |
Total Liabilities and Stockholders' Equity | $ 56,160 | $ 55,634 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Allowance For Doubtful Accounts - Trade Receivables | $ 116 | $ 131 |
Allowance For Contract Assets | 85 | 0 |
Allowance For Equipment Financing Receivable | 56 | 0 |
Allowance For Long Term Equipment Financing Receivable | $ 115 | $ 0 |
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 | 50,000,000 | 50,000,000 |
Common Stock, Issued | 26,130,218 | 25,670,773 |
Common Stock, Outstanding | 26,130,218 | 25,670,773 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Operations | ||
Service revenue | $ 29,668 | $ 19,515 |
Software solutions | 18,047 | 15,148 |
Product revenue | 5,484 | 2,891 |
Total revenue | 53,199 | 37,554 |
Operating expenses: | ||
Cost of service revenue | 12,606 | 6,711 |
Cost of software solutions | 5,627 | 5,336 |
Cost of product revenue | 3,331 | 1,637 |
Selling and marketing | 14,671 | 11,725 |
General and administrative | 13,793 | 12,904 |
Research and development | 4,860 | 3,955 |
Goodwill and long-lived asset impairment | 0 | 32,678 |
Total operating expenses | 54,888 | 74,946 |
Loss from operations | (1,689) | (37,392) |
Other income/(expense): | ||
Interest income | 2 | 0 |
Interest expense | (115) | (78) |
Gain on sale of property and equipment | 1,459 | 0 |
Other income | 79 | 1,295 |
Total other income, net | 1,425 | 1,217 |
Loss before income tax | (264) | (36,175) |
Income tax benefit/(provision) | (98) | 762 |
Net loss | $ (362) | $ (35,413) |
Earnings per common share: | ||
Basic | $ (0.01) | $ (1.54) |
Diluted | $ (0.01) | $ (1.54) |
Weighted-average common shares outstanding: | ||
Basic | 25,944,748 | 22,939,514 |
Diluted | 25,944,748 | 22,939,514 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net income/(loss) | $ (362) | $ (35,413) |
Foreign currency translation gain/(loss) | (21) | 175 |
Total other comprehensive income/(loss) | (21) | 175 |
Comprehensive income/(loss) | $ (383) | $ (35,238) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive Income | Accumulated Deficit |
Balance, shares at Dec. 31, 2021 | 22,054,239 | ||||
Balance, amount at Dec. 31, 2021 | $ 65,933 | $ 22 | $ 118,432 | $ 12 | $ (52,533) |
Share-based compensation | 4,374 | $ 0 | 4,374 | 0 | 0 |
Vesting of restricted stock units, shares | 361,889 | ||||
Vesting of restricted stock units, amount | 0 | $ 0 | 0 | 0 | 0 |
Foreign currency translation adjustment, net of tax | $ 175 | $ 0 | 0 | 175 | 0 |
Issuance of common stock for exercise of stock options, shares | 960,865 | 793,107 | |||
Issuance of common stock for exercise of stock options, amount | $ 816 | $ 2 | 814 | 0 | 0 |
Taxes paid on the net settlement of stock options | (290) | $ 0 | (290) | 0 | 0 |
Issuance of common stock in connection with business acquisition, shares | 2,461,538 | ||||
Issuance of common stock in connection with business acquisition, amount | 6,326 | $ 2 | 6,324 | 0 | 0 |
Dividends declared | (462) | 0 | (462) | 0 | 0 |
Net loss | (35,413) | $ 0 | 0 | 0 | (35,413) |
Balance, shares at Dec. 31, 2022 | 25,670,773 | ||||
Balance, amount at Dec. 31, 2022 | 41,459 | $ 26 | 129,192 | 187 | (87,946) |
Share-based compensation | 3,849 | $ 0 | 3,849 | 0 | 0 |
Vesting of restricted stock units, shares | 275,924 | ||||
Vesting of restricted stock units, amount | 0 | $ 0 | 0 | 0 | 0 |
Foreign currency translation adjustment, net of tax | $ (21) | $ 0 | 0 | (21) | 0 |
Issuance of common stock for exercise of stock options, shares | 183,521 | 183,521 | |||
Issuance of common stock for exercise of stock options, amount | $ 241 | $ 0 | 241 | 0 | 0 |
Taxes paid on the net settlement of stock options | (264) | 0 | (264) | 0 | 0 |
Dividends declared | (130) | 0 | (130) | 0 | 0 |
Net loss | (362) | 0 | 0 | 0 | (362) |
Cumulative effect of accounting change | (159) | $ 0 | 0 | 0 | (159) |
Balance, shares at Dec. 31, 2023 | 26,130,218 | ||||
Balance, amount at Dec. 31, 2023 | $ 44,613 | $ 26 | $ 132,888 | $ 166 | $ (88,467) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (362) | $ (35,413) |
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||
Depreciation and amortization | 3,573 | 2,747 |
Deferred tax asset | 0 | (936) |
Share-based compensation | 3,849 | 4,374 |
Goodwill and long-lived asset impairment | 0 | 32,678 |
Non-cash release of sales tax accrual | 0 | (1,435) |
Non-cash operating lease amortization | (4) | (23) |
Gain on disposal of property and equipment | (1,459) | 0 |
Allowance for credit losses | 82 | 0 |
Changes in assets and liabilities: | ||
Trade receivables | (164) | (361) |
Contract assets | (109) | (57) |
Equipment financing receivables | (905) | (616) |
Inventories | 297 | 36 |
Contract costs | (1,473) | (788) |
Prepaid expenses | (77) | (25) |
Income tax receivable | 0 | 11 |
Other assets | 651 | (544) |
Accounts payable and accrued expenses | 623 | 246 |
Income tax payable | (26) | 55 |
Contract liabilities | (997) | (360) |
Net cash provided by/(used in) operating activities | 3,499 | (411) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (92) | (289) |
Proceeds from the sale of property and equipment | 3,792 | 0 |
Acquisition of a business, net of cash aquired | 0 | (1,414) |
Net cash provided by/(used in) investing activities | 3,700 | (1,703) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings/(repayments) on line of credit, net | (82) | 82 |
Proceeds from notes payable | 278 | 0 |
Repayments made on finance leases | (95) | (110) |
Repayments made on notes payable | (2,254) | (90) |
Proceeds from exercise of options | 241 | 816 |
Dividend payments | (130) | (462) |
Taxes paid on the net settlement of stock options and RSUs | (264) | (290) |
Net cash provided by/(used for) financing activities | (2,306) | (54) |
Effect of exchange rate changes on cash | (21) | 175 |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 4,872 | (1,993) |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 5,475 | 7,468 |
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 10,347 | 5,475 |
Cash used during the year for: | ||
Income taxes, net | (121) | (118) |
Interest expense | (115) | (78) |
Supplemental disclosure of non-cash investing and financing information: | ||
Stock issued for acquisitions | $ 0 | $ 6,326 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Significant Accounting Policies | |
Description of Business and Significant Accounting Policies | 1. Description of Business and 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. Foreign Currency Translation - Due to changes in exchange rates between reporting periods and changes in certain account balances, the foreign currency translation adjustment will change from period to period. During the year ended December 31, 2023 and 2022, we recorded foreign currency translation gains/(losses) of $21, and $175, respectively, in our statements of comprehensive income (loss). Cash and Cash Equivalents – Trade Receivables and Allowance for Credit Losses – The allowance for credit losses is determined based on an assessment of historical collection experience using the aging schedule method as well as consideration of current and future economic conditions. Trade receivables are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our trade receivable credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. Equipment Financing Receivables and Allowance for Credit Losses – We provide an allowance for credit losses based on historical loss experience, adverse situations that may affect a client's ability to pay, current economic conditions and outlook based on reasonable and supportable forecasts. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. Equipment financing receivables are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our equipment financing receivable credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. Contract Assets and Allowance for Credit Losses– The allowance for credit losses is determined based on an assessment of historical collection experience using the loss-rate method as well as consideration of current and future economic conditions and changes in our loss-rate trends. We utilize a five-year lookback period to establish our estimate of expected credit losses, as our contractual terms range from three to five years. Contract assets are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our contract assets credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. Contract Costs – Inventory – Property and Equipment – Building 39 years Land Not depreciated Computer and office equipment 2 to 5 years Computer software 3 years Internal-use software 3 years Furniture and fixtures 4 years Leasehold improvements 2 to 5 years Vehicles 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. Property and equipment, held for sale Asset Acquisitions – Business Acquisitions - Goodwill – The process of estimating the fair value of goodwill is subjective and required the Company to make estimates that may significantly impact the outcome of the analysis. A qualitative assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors and overall financial performance, as well as company specifications. If after performing this assessment, the Company concluded it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company performed the quantitative test. Under the quantitative test, a goodwill impairment is identified by comparing the fair value of the reporting unit to the carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, goodwill is considered impaired and an impairment charge is recognized in an amount equal to the excess, not to exceed the carrying amount of goodwill. The Company estimated the fair value of the reporting unit with an income approach using the discounted cash flow (“DCF”) analysis and the Company also considered a market-based valuation methodology using comparable public company trading values and the Company’s market capitalization. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, the discount rate and relevant comparable public company earnings multiples. The cash flows employed in the DCF analysis are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions and recent operating performance. The discount rate utilized in the DCF analysis is based on the reporting unit’s weighted-average cost of capital, which takes into account the relative weights of each component of capital structure (equity and debt) and represents the expected cost of new capital, adjusted as appropriate to consider the risk inherent in future cash flows of the Company’s reporting unit. Impairment assessment inherently involves management judgments regarding a number of assumptions described above. The reporting unit fair value also depends on the future strength of the U.S. economy. New and developing competition as well as technological change could also adversely affect future fair value estimates. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of the Company’s recorded goodwill, differences in assumptions could have a material effect on the estimated fair values. For further information, see Note 10 (Intangible Assets and Goodwill). Intangible Assets – Amortizable intangible assets are amortized over the estimated useful lives as follows: Customer relationship 6 to 16 years Developed technologies 2 to 6 years Trademark and trade names 4 years Contract Liabilities – Use of Estimates – C ontingencies – Service, Software Solutions and Product Revenue Recognition – Cost of Service Revenue – Cost of Software Solutions Revenue – Cost of Product Revenue – Product Warranty – Contingent Consideration – 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 Lease Obligations – ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. A lease that transfers substantially all of the benefits and risks incidental to ownership of property are accounted for as finance leases. At the inception of a finance lease, an asset and finance lease obligation is recorded at an amount equal to the lesser of the present value of the minimum lease payments and the property’s fair market value. Finance lease obligations are classified as either current or long-term based on the due dates of future minimum lease payments, net of interest. Notes Payable – Income Taxes – Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations. Stock-Based Compensation – Operating Segments – Significant Customers – Recently Adopted Accounting Pronouncements - In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, Recently Issued Accounting Pronouncements – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Changes in Accounting Principle
Changes in Accounting Principles | 12 Months Ended |
Dec. 31, 2023 | |
Changes in Accounting Principles | |
Changes in Accounting Principles | 2. Changes in Accounting Principles On January 1, 2023, the Company adopted ASC 326 Financial Instruments — Credit Losses Consolidated Balance Sheet December 31, 2022 New ASC 326 January 1, 2023 As Previously Standard As (In thousands) Reported Adjustment Adjusted Assets Trade receivables, net of allowance $ 3,297 $ (18 ) $ 3,279 Contract assets, net of allowance 318 (29 ) 289 Equipment financing receivables, net of allowance 635 (37 ) 598 Total current assets 12,032 (84 ) 11,948 Long-term equipment financing receivables, net of allowance 1,255 (75 ) 1,180 Total Assets $ 55,634 $ (159 ) $ 55,475 Liabilities and Stockholders' Equity Accumulated deficit (87,946 ) (159 ) (88,105 ) Total stockholders' equity 41,459 (159 ) 41,300 Total Liabilities and Stockholders' Equity $ 55,634 $ (159 ) $ 55,475 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Revenue | 3. Revenue Revenue is measured based on 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, service, or software solution 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 21. Cloud Telecommunications Services 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 – Fees, Commissions, and Other, Recognized over Time – · Contracted activation and flash fees – The Company generally allocates a portion of the activation fees to the desktop devices, which is recognized at the time of the installation or customer acceptance, and a portion to the service, which is recognized over the contract term using the straight-line method. · Non-contracted carrier cost recovery fee – This fee recovers the various costs and expenses that the Company incurs in connection with complying with legal, regulatory, and other requirements, including without limitation federal, state, and local reporting and filing requirements. This fee is assessed as a set percentage of our monthly billing and is recognized monthly. · Non-contracted administrative fees – Administrative fees are recognized as revenue on a monthly basis. One-Time Fees, Commissions, and Other – · Contracted professional service revenue – Professional service revenue includes professional installation services, custom integration, and other professional services. The Company typically bills and collects professional service revenue upon entering into a contract with a customer. Professional service revenue is recognized as revenue when the performance obligations are completed. · Non-contracted cancellation fees – These cancellation fees relate to remaining contractual term buyout payments in connection with early cancellation and are billed and recognized as revenue upon receipt. · Other non-contracted fees – These fees include disconnect fees, shipping fees, restocking fees, and porting fees. Other non-contracted fees are recognized as revenue upon receipt of payment. Software Solutions Segment The Software Solutions segment derives revenues from three primary sources: software licenses, software maintenance support and professional services. Software and services may be sold separately or in bundled packages. Generally, contracts with customers contain multiple performance obligations, consisting of software and services. 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 software licenses and professional 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. Software Licenses - · SNAPsolution® · SNAPaccel – a Subscription Maintenance and Support - Professional Services 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. Year Ended December 31, 2023 Cloud Software Total (In thousands) Telecommunications Solutions Reportable Segment Segment Segments Major products/services lines Desktop devices $ 5,484 $ - $ 5,484 Equipment financing revenue 501 - 501 Telecommunications services 25,168 - 25,168 Fees, commissions, and other, recognized over time 1,899 - 1,899 One time fees, commissions and other 2,100 - 2,100 Software licenses - 3,454 3,454 Subscription maintenance and support - 13,181 13,181 Professional services and other - 1,412 1,412 $ 35,152 $ 18,047 $ 53,199 Timing of revenue recognition Products, services, and fees recognized at a point in time $ 7,584 $ 4,866 $ 12,450 Products, services, and fees transferred over time 27,568 13,181 40,749 $ 35,152 $ 18,047 $ 53,199 Year Ended December 31, 2022 Cloud Software Total (In thousands) Telecommunications Solutions Reportable Segment Segment Segments Major products/services lines Desktop devices $ 2,891 $ - $ 2,891 Equipment financing revenue 335 - 335 Telecommunications services 16,560 - 16,560 Fees, commissions, and other, recognized over time 1,709 - 1,709 One time fees, commissions and other 911 - 911 Software licenses - 3,214 3,214 Subscription maintenance and support - 10,829 10,829 Professional services and other - 1,105 1,105 $ 22,406 $ 15,148 $ 37,554 Timing of revenue recognition Products, services, and fees recognized at a point in time $ 3,802 $ 4,319 $ 8,121 Products, services, and fees transferred over time 18,604 10,829 29,433 $ 22,406 $ 15,148 $ 37,554 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. December 31, (In thousands) 2023 2022 Receivables, which are included in trade receivables, net of allowance for doubtful accounts $ 3,476 $ 3,297 Contract assets 342 318 Contract liabilities 2,588 3,585 Significant changes in the contract assets and the contract liabilities balances during the period are as follows: For the Year Ended For the Year Ended (In thousands) December 31, 2023 December 31, 2022 Contract Assets Contract Liabilities Contract Assets Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ - $ (3,393 ) $ - $ (3,046 ) Increase due to cash received, excluding amounts recognized as revenue during the period - 2,396 - 3,603 Transferred to receivables from contract assets recognized at the beginning of the period (192 ) - (166 ) - Increase due to additional unamortized discounts 216 - 223 - Contract assets allowance for credit losses Our contract assets balance consists of the Company’s rights to consideration for work completed but not billed as of the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Contract assets were as follows (in thousands): December 31, 2023 2022 Gross contract assets $ 427 $ 318 Less: allowance for credit losses (85 ) - Contract assets, net of allowance for credit losses $ 342 $ 318 The allowance for credit losses was as follows (in thousands): Balance at December 31, 2022 $ - Cumulative effect of accounting change 29 Provision 2 Write-offs - Recoveries and other - Balance at March 31, 2023 $ 31 Provision (8 ) Write-offs - Recoveries and other - Balance at June 30, 2023 $ 23 Provision 11 Write-offs - Recoveries and other - Balance at September 30, 2023 $ 34 Provision 53 Write-offs (2 ) Recoveries and other - Balance at December 31, 2023 $ 85 The allowance for credit losses is determined based on an assessment of historical collection experience using the loss-rate method as well as consideration of current and future economic conditions and changes in our loss-rate trends. We utilize a five-year lookback period to establish our estimate of expected credit losses, as our contractual terms range from three to five years. Based on that assessment, the allowance for credit losses as a percent of gross contract assets increased to 20.0% at December 31, 2023 from 0% at December 31, 2022. 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): 2024 2025 2026 2027 2028 and thereafter Total Desktop devices $ 229 - - - - $ 229 Telecommunications services $ 18,589 12,776 7,645 4,316 1,255 $ 44,581 Software Solutions $ 10,350 5,040 2,596 1,056 80 $ 19,122 All consideration from contracts with customers is included in the amounts presented above |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per common share: | |
Earnings Per Common Share | 4. Earnings Per Common Share Basic net income/(loss) per common share is computed by dividing the net income for the period by the weighted-average number of common shares outstanding during the period. Diluted net income 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 years ended December 31, 2023 and 2022 are 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 income per common share: Year Ended December 31, 2023 2022 Net loss (in thousands) (A) $ (362 ) $ (35,413 ) Weighted-average share reconciliation: Weighted-average basic shares outstanding (B) 25,944,748 22,939,514 Dilutive effect of stock-based awards - - Diluted weighted-average outstanding shares of common stock (C) 25,944,748 22,939,514 Earnings per common share: Basic (A/B) $ (0.01 ) $ (1.54 ) Diluted (A/C) $ (0.01 ) $ (1.54 ) For the years ended December 31, 2023 and 2022, respectively, the following potentially dilutive common stock, including awards granted under our equity incentive compensation plans, were excluded from the computation of diluted earnings per share because including them would be anti-dilutive. Year Ended December 31, 2023 2022 Stock options 4,580,824 2,846,670 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions | |
Acquisitions | 5. Acquisitions Allegiant Networks, LLC Business Acquisition On October 17, 2022, the Company entered into an Acquisition Agreement with Allegiant Networks, LLC, a Kansas limited liability company (the “Allegiant Networks”) to acquire from seller one hundred percent (100%) of the issued and outstanding shares of Allegiant Networks in exchange for (i) a cash payment at closing in the amount of $2.0 million, (ii) a three-year promissory note by the Company in favor of seller in the amount of $1.1 million, and (iii) 2,461,538 shares of the Company’s common stock, par value $0.001 per share. Shares issued in the transaction shall be fully restricted for a period of 6 months from the date of issuance and subject to lock-up thereafter. Pursuant to the lock-up agreement, after 6 months, 25% of the shares will be permitted to be sold, with an additional 25% permitted to be sold every 6-month period thereafter. On November 1, 2022, the Company closed the transaction, and the Company issued the seller cash consideration of $2.0 million, a three-year promissory note for $1.1 million, and 2,461,538 shares of the Company’s common stock, par value $0.001 per share valued at $2.57 per share, for an aggregate purchase price of approximately $9.4 million. (in thousands) December 31, 2022 Consideration: Cash $ 2,000 Common stock 6,326 Note Payable 1,100 Total consideration $ 9,426 The acquisition was accounted for under the acquisition method of accounting and the operating results of Allegiant Networks have been included in our consolidated financial statements as of the closing date of the acquisition. Under the acquisition method of accounting, the aggregate amount of consideration paid by us was allocated to Allegiant Networks’ net tangible assets and intangible assets based on their estimated fair values as of the acquisition closing date. The excess of the purchase price over the value of the net tangible assets and intangible assets was recorded to goodwill. The factors contributing to the recognition of goodwill were based upon our conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill, which is non-deductible for tax purposes, represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is primarily attributable to the customer relationships of the acquired business and expected synergies at the time of the acquisition. We retained an independent third-party valuation firm to assist management in our valuation of the acquired assets and liabilities. The following table presents the final allocation of the purchase price for Allegiant Networks as of December 31, 2022 (in thousands): Final Purchase Price Allocation Total purchase price $ 9,426 Cash 586 Accounts receivables 759 Prepaid expenses 48 Inventory 484 Other assets 12 Property, plant & equipment 319 Right to use assets 861 Intangible assets acquired (FV) 7,000 Total identifiable assets 10,069 Accounts payable 1,162 Accrued expenses 714 Contract liability 917 Operating lease liability 877 Direct financing liability 142 Buyers note 1,100 Deferred tax liability 1,922 Total liabilities assumed 6,834 Total goodwill $ 5,091 The fair values of the customer relationships was established 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 customer relationships was valued using the multi-period excess earnings method. The 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: weighted average cost of capital of 16.0%, tax rate of 25.0%, and estimated economic life of 15 years. The following unaudited pro forma information presents our consolidated results of operations as if Allegiant Networks had been included in our consolidated results since January 1, 2022: For the Year Ended December 31, (Unaudited, in thousands) 2023 2022 Revenues $ 53,199 $ 46,765 Net loss (362 ) (35,636 ) Earnings per share $ (0.01 ) $ (1.40 ) The unaudited pro forma financial information is presented for informational purposes only and may not necessarily reflect the Company’s future results of operations or what the results of operations would have been had the Company owned and operated Allegiant Networks as of January 1, 2022. Acquisition related expenses incurred by us in connection with the Allegiant Networks acquisition of $18 for the year ended December 31, 2022, are recorded within general and administrative expenses in our consolidated statements of operations. |
Trade Receivables and Allowance
Trade Receivables and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2023 | |
Trade Receivables and Allowance for Credit Losses | |
Trade Receivables and Allowance for Credit Losses | 6. Trade Receivables and Allowance for Credit Losses Our trade receivables balance consists of traditional trade receivables. Trade receivables were as follows (in thousands): December 31, 2023 2022 Gross trade receivables $ 3,592 $ 3,428 Less: allowance for credit losses (116 ) (131 ) Trade receivables, net $ 3,476 $ 3,297 Current trade receivables, net $ 3,476 $ 3,297 Long-term trade receivables, net - - Trade receivables, net $ 3,476 $ 3,297 The allowance for credit losses was as follows (in thousands): Balance at December 31, 2022 $ 131 Cumulative effect of accounting change 18 Provision 45 Write-offs (7 ) Recoveries and other - Balance at March 31, 2023 $ 187 Provision 68 Write-offs (111 ) Recoveries and other - Balance at June 30, 2023 $ 144 Provision (30 ) Write-offs (4 ) Recoveries and other - Balance at September 30, 2023 $ 110 Provision 37 Write-offs (31 ) Recoveries and other - Balance at December 31, 2023 $ 116 The allowance for credit losses is determined based on an assessment of historical collection experience using the aging schedule method as well as consideration of current and future economic conditions. Based on that assessment, the allowance for credit losses as a percent of gross accounts receivable decreased to 3.2% at December 31, 2023 from 3.8% at December 31, 2022. |
Equipment Financing Receivables
Equipment Financing Receivables and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2023 | |
Equipment Financing Receivables and Allowance for Credit Losses | |
Equipment Financing Receivables and Allowance for Credit Losses | 7. Equipment Financing Receivables and Allowance for Credit Losses Our equipment financing receivables balance consists of sales-type leases arising from lease financing of cloud telecommunication equipment (IP or cloud telephone desktop devices) bundled and sold with our cloud telecommunications services. The 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. Revenue from sales-type leases is recognized upon installation and the interest portion is deferred and recognized as earned. These receivables are typically collateralized by a security interest in the underlying equipment. Equipment financing receivables were as follows (in thousands): December 31, 2023 2022 Gross equipment financing receivables $ 3,888 $ 2,666 Less: unearned income (1,093 ) (776 ) Less: allowance for credit losses (171 ) - Equipment financing receivables, net $ 2,624 $ 1,890 Current equipment financing receivables, net $ 856 $ 635 Long-term equipment financing receivables, net 1,768 1,255 Equipment financing receivables, net $ 2,624 $ 1,890 A summary of our gross equipment financing receivables’ future contractual maturities, is as follows (in thousands): Year ending December 31, 2024 $ 1,291 2025 1,109 2026 759 2027 516 2028 213 2029 and thereafter - Total $ 3,888 Allowance for Credit Losses The allowance for credit losses was as follows (in thousands): Balance at December 31, 2022 $ - Cumulative effect of accounting change 112 Provision 19 Write-offs (4 ) Recoveries and other - Balance at March 31, 2023 $ 127 Provision 23 Write-offs (5 ) Recoveries and other - Balance at June 30, 2023 $ 145 Provision 23 Write-offs (7 ) Recoveries and other - Balance at September 30, 2023 $ 161 Provision 27 Write-offs (17 ) Recoveries and other - Balance at December 31, 2023 $ 171 Aging of Receivables The aging of gross equipment financing receivables was as follows (in thousands): December 31, 2023 2022 Past due amounts 0 - 90 days $ 2,623 $ 1,888 Past due amounts > 90 days 1 2 Total $ 2,624 $ 1,890 Our equipment financing receivable portfolio is primarily in the United States. Consistent with our adoption of ASC 326, effective January 1, 2023 (see Note 1 – Recently Adopted Accounting Pronouncements), the allowance for credit losses is determined principally based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment, the allowance for credit losses increased to 6.1% of gross equipment financing receivables (net of unearned income) at December 31, 2023 from 0% at December 31, 2022. The allowance for credit losses represents an estimate of the losses expected to be incurred from the Company's equipment financing receivable portfolio. The projected loss rates are primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current and future economic conditions as well as delinquency trends, resolution rates, and the aging of receivables. The allowance for credit losses for equipment finance receivables is inherently more difficult to estimate than the allowance for trade receivables because the underlying lease portfolio has an average maturity, at any time, of approximately three to five years and contains unbilled amounts. We consider all available information in our quarterly assessments of the adequacy of the allowance for credit losses. We believe our estimates, including any qualitative adjustments, are reasonable and have considered all reasonably available information about past events, current conditions, and reasonable and supportable forecasts of future events and economic conditions. The identification of account-specific exposure is not a significant factor in establishing the allowance for credit losses for equipment finance receivables. We continue to monitor developments in future economic conditions and trends, and as a result, our reserve may need to be updated in future periods. The table below shows gross equipment financing receivables and current period gross write offs by year of origination (in thousands): December 31, 2023 December 31, 2022 2023 2022 2021 2020 2019 Prior Total Equipment Financing Receivables Total Equipment Financing Receivables United States $ 1,540 777 211 196 71 - $ 2,795 $ 1,890 Current period gross write offs $ 14 14 2 2 1 - $ 33 $ 20 |
Prepaid Expenses
Prepaid Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses | |
Prepaid Expenses | 8. Prepaid Expenses Prepaid expenses consisted of the following (in thousands): December 31, 2023 2022 Prepaid corporate insurance $ 68 $ 117 Prepaid software services and support 245 122 Prepaid employee insurance premiums - 30 Nasdaq Listing Fee - 15 User group meeting 84 - Other prepaid expenses 111 147 Total prepaid expenses $ 508 $ 431 |
Property and Equipment and Prop
Property and Equipment and Property and Equipment Held for Sale | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment and Property and Equipment Held for Sale | |
Property and Equipment and Property and Equipment, Held for Sale | 9. Property and Equipment and Property and Equipment, Held for Sale Property and equipment consisted of the following (in thousands): December 31, 2023 2022 Building $ - $ 2,000 Land - 500 Computer and office equipment 2,700 2,726 Computer software 625 576 Internal-use software 14 14 Furniture and fixtures 64 75 Vehicles 143 130 Leasehold improvements 15 15 Less: accumulated depreciation (2,891 ) (2,721 ) Total property and equipment, net $ 670 $ 3,315 Property and equipment, held for sale In March 2023, the Company’s committed to and commenced a plan to sell our corporate headquarters land and building located in Tempe, Arizona. On May 16, 2023, the Company entered into a Purchase and Sale Agreement with Nectar Equities, LLC, an independent third-party, for the sale of our corporate headquarters land and building. The Company classified the corporate headquarters land and building as property and equipment, held for sale on the condensed consolidated balance sheet as of June 30, 2023. The sale closed on August 9, 2023, for a purchase price of $4.0 million. The proceeds from the sale were used to repay the outstanding note payable with Bank of America, N.A. of $1.8 million, closing costs and commissions of approximately $208, generating approximately $2.0 million in net proceeds from the sale. In connection with the sale of the land and building, we entered into a lease agreement to leaseback the property for an initial term of eighteen full calendar months, see Note 18 – Leases for additional details of the leaseback agreement. Depreciation expense is included in general and administrative expenses and totaled $404 and $311 for the years ended December 31, 2023 and 2022, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets and Goodwill | |
Intangible Assets And Goodwill | 10. Intangible Assets and Goodwill On December 31, 2022, the Company determined there was a triggering event, primarily caused by a sustained decrease in the Company's stock price and we retained an independent third-party valuation firm to assist management in performing the quantitative impairment tests. The results of the goodwill and intangible asset impairment tests indicated that the carrying value of goodwill exceeded the estimated fair value and no impairment was required for intangible assets. Thus, as of December 31, 2022, the Company recorded an impairment of $32.6 million related to its goodwill book value for the software solutions operating segment. For further information, see Note 1 (Significant Accounting Polices). On November 1, 2022, the Company acquired $7,000 in intangible assets in connection with the Allegiant Networks business acquisition. On June 1, 2021, the Company acquired $21,100 in intangible assets in connection with the NetSapiens business acquisition. On January 14, 2021, the Company acquired $2,200 in intangible assets in connection with the Centric Telecom business acquisition. Acquired intangible assets subject to amortization consist of the following (in thousands): December 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 26,073 $ (5,260 ) $ 20,813 $ 26,073 $ (3,052 ) $ 23,021 Developed technologies 4,900 (2,269 ) 2,631 4,900 (1,410 ) 3,490 Trademark and trade names 400 (288 ) 112 400 (186 ) 214 Total acquired intangible assets $ 31,373 $ (7,817 ) $ 23,556 $ 31,373 $ (4,648 ) $ 26,725 As of December 31, 2023, the weighted average remaining useful life for customer relationships was 13.4 years, developed technologies was 3.7 years, and trademarks and trade names was 1.7 years. Amortization expense for customer relationships intangible assets is included in sales and marketing expenses and totaled $2,183 and $1,433 for the years ended December 31, 2023 and 2022, respectively. Amortization expense for developed technologies intangible assets is included in cost of software solutions revenue and totaled $860 and $882 for the years ended December 31, 2023 and 2022, respectively. Amortization expense for trademark and trade name intangible assets is included in general and administrative expenses and totaled $127 and $121 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, annual amortization of definite lived intangible assets, based on existing intangible assets and current useful lives, is estimated to be the following (in thousands): Year ending December 31, 2024 $ 3,028 2025 2,770 2026 2,457 2027 2,202 2028 and thereafter 13,099 Total $ 23,556 The following table provides a summary of changes in the carrying amounts of goodwill (in thousands): Goodwill Balance at January 1, 2022 $ 36,972 Centric Telecom business acquisition 5,091 Impairment (32,609 ) Balance at December 31, 2022 9,454 Additions - Balance at December 31, 2023 $ 9,454 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Accrued Expenses | 11. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2023 2022 Accrued wages and benefits $ 2,884 $ 2,427 Accrued accounts payable 1,297 987 Accrued sales and telecommunications taxes 1,234 846 Product warranty liability 25 55 Credit cards 113 - Other 398 575 Total accrued expenses $ 5,951 $ 4,890 The changes in aggregate product warranty liabilities for the years ended December 31, 2023 and 2022 were as follows (in thousands): Warranty Liabilities Balance at January 1, 2022 $ 50 Accrual for warranties 55 Adjustments related to pre-existing warranties (26 ) Warranty settlements (24 ) Balance at December 31, 2022 55 Accrual for warranties 25 Adjustments related to pre-existing warranties (32 ) Warranty settlements (23 ) Balance at December 31, 2023 $ 25 Product warranty expense is included in cost of product revenue and totaled $25 and $29 for the years ended December 31, 2023 and 2022, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2023 | |
Notes Payable | |
Notes Payable | 12. Notes Payable Notes payable consists of a short and long-term financing arrangements: December 31, 2023 2022 Related party note payable $ 843 $ 1,100 Other notes payable 206 1,925 Total notes payable $ 1,049 $ 3,025 Less: current notes payable (457 ) (420 ) Notes payable, net of current portion $ 592 $ 2,605 On February 27, 2023, we entered into a promissory note with CrossFirst Bank in the amount of $278. The promissory note has a term of three (3) years with monthly payments of Eight Thousand Five Hundred Forty-Three ($8,543), including interest of 6.58%, beginning on March 27, 2023. Additionally, the promissory note is subject to certain financial covenants. On November 1, 2022, as part of the acquisition of Allegiant Networks, we entered into a promissory note with the seller in the amount of $1.1 million. The loan agreement has a term of three (3) years with quarterly payments of Ninety-Eight Thousand Three Hundred Eighty-One ($98,381), including interest at 4.00%, beginning on April 1, 2023. As of December 31, 2023 and 2022, the outstanding balance of the related party note payable was $843 and $1,100, respectively. During the year ended December 31, 2023, the Company paid principal and interest of $257 and $38, respectively. As part of the November 1, 2022 acquisition of Allegiant Networks, we assumed two promissory notes with CrossFirst Bank. One loan agreement for $125 has a term of three (3) years with monthly payments of Three Thousand Seven Hundred Seven Dollars ($3,707), including interest of 4.25%, beginning on October 30, 2020. On February 27, 2023, the balance of this note was paid off and added to the promissory note with CrossFirst Bank. The second loan agreement for $150 has a term of three (3) years with monthly payments of Four Thousand Four Hundred Sixty-Six ($4,466), including interest of 4.50%, beginning on September 1, 2021. On February 27, 2023, the balance of this note was paid off and added to the promissory note with CrossFirst Bank. On January 27, 2020, we entered into a Fixed Rate Term Loan Agreement with Bank of America, N.A. to finance $2.0 million to purchase our corporate office building. The Loan Agreement had a term of seven (7) years with monthly payments of Eleven Thousand Eight Hundred Forty-One ($11,841), including interest of 3.67%, beginning on March 1, 2020, secured by the office building. On August 9, 2023, the Company entered into a sale leaseback agreement and used a portion of the proceeds to repay the note payable in full. As of December 31, 2023, future principal payments are scheduled as follows (in thousands): Year ending December 31, 2024 $ 457 2025 478 2026 114 2027 - 2028 - Total $ 1,049 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit | |
Line of Credit | 13. Line of Credit The Company maintains a line of credit with a maximum principal amount of $700, payable upon demand. The line of credit was renewed on February 27, 2024 and will expire on February 27, 2025. The line of credit bears interest at 0.50% over the Wall Street Journal Prime Rate. As of December 31, 2023, there was an outstanding balance of $0, and $700 remained available for borrowing. The line of credit is collateralized by all Company assets and subject to certain financial covenants. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 14. Fair Value Measurements We have financial instruments as of December 31, 2023 and 2022 for which the fair value is summarized below (in thousands): December 31, 2023 December 31, 2022 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Assets: Trade receivables, net $ 3,476 $ 3,476 $ 3,297 $ 3,297 Equipment financing receivables 2,624 2,624 1,890 1,890 Liabilities: Finance leases $ 98 $ 98 $ 193 $ 193 Notes payable 1,049 1,012 3,025 2,724 We have no liabilities for which fair value is recognized in the balance sheet on a recurring basis as of December 31, 2023 and 2022. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity | |
Equity | 15. Equity Common Stock Shares of common stock reserved for future issuance as of December 31, 2023 were as follows: Stock-based compensation plans: Outstanding option awards 8,016 Available for future grants 2,342 10,358 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Stock Based Compensation | |
Stock-Based Compensation | 16. Stock-Based Compensation We have various incentive stock-based compensation plans that provide for the grant of stock options, restricted stock units (RSUs), and other share-based awards of up to 10,358 shares to eligible employees, consultants, and directors. As of December 31, 2023, we had 2,342 shares remaining in the plans available to grant. 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, 2023 and 2022 using the Black-Scholes option-pricing model were as follows: Year Ended December 31, 2023 2022 Weighted-average fair value of options granted $ 1.38 $ 2.31 Expected volatility 88 % 82 % Expected life (in years) 5.74 5.72 Risk-free interest rate 3.76 % 2.99 % Expected dividend yield 0.00 % 0.00 % The expected volatility of the options 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. During 2023 and 2022, the company declared and paid quarterly dividends of $0.005, however, the expected annual dividend yield was less than half of one percent during 2023 and 2022. In March 2023, our Board of Directors cancelled the quarterly dividend. The following table summarizes the stock option activity under the plans for the years ended December 31, 2023 and 2022: Weighted- Weighted-Average Aggregate Number of Average Remaining Intrinsic Value Shares Exercise Price Contract Life (in thousands) Outstanding at January 1, 2022 6,988,843 2.40 4.5 years 19,829 Granted 1,926,000 3.34 Exercised (960,865 ) 1.33 Cancelled/forfeited (301,014 ) 3.59 Outstanding at December 31, 2022 7,652,964 2.73 5.3 years 3,362 Granted 965,500 1.88 Exercised (183,521 ) 1.32 Cancelled/forfeited (439,144 ) 3.04 Outstanding at December 31, 2023 7,995,799 2.64 4.9 years 19,469 Shares vested and expected to vest 7,790,316 2.64 4.9 years 19,051 Exercisable as of December 31, 2023 6,417,000 2.57 3.9 years 16,278 Exercisable as of December 31, 2022 5,655,810 2.25 4.1 years 3,362 The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022, was $154 and $1,576, respectively. As of December 31, 2023, the total future compensation expense related to non-vested options not yet recognized in the consolidated statements of operations was approximately $3,136 and the weighted-average period over which these awards are expected to be recognized is approximately 1.5 years. Restricted Stock Units: The following table summarizes the RSUs outstanding: Years Ended December 31, 2024 2025 2026 RSUs with service-based vesting conditions 13,334 - - The following table summarizes the RSUs activity under the plans for the years ended December 31, 2023 and 2022: Number of Weighted-Average Units Fair Value Outstanding at January 1, 2022 39,138 $ 4.05 Granted 592,500 2.70 Vested/released (475,653 ) 2.50 Cancelled/forfeited - - Outstanding at December 31, 2022 155,985 3.62 Granted 255,000 1.87 Vested/released (397,651 ) 2.57 Cancelled/forfeited - - Outstanding at December 31, 2023 13,334 1.73 The weighted-average grant-date fair value of RSUs granted year ended December 31, 2023 and 2022 was $1.87 and $2.70, respectively. The total intrinsic value of RSUs that vested and were released during the years ended December 31, 2023 and 2022 was $793 and $1,167 respectively. As of December 31, 2023, the total future compensation expense related to non-vested RSUs not yet recognized in the consolidated statements of operations was approximately $23 and the weighted-average period over which these awards are expected to be recognized is approximately 1 year. The following table summarizes the statement of operations effect of stock-based compensation for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Share-based compensation expense by type: Stock options $ 3,221 $ 2,798 Restricted stock units 628 1,576 Total cost related to share-based compensation expense $ 3,849 $ 4,374 Share-based compensation expense by financial statement line item: Cost of revenue $ 582 $ 425 Research and development 610 542 Selling and marketing 658 681 General and administrative 1,999 2,726 Total cost related to share-based compensation expense $ 3,849 $ 4,374 The tax benefit related to stock compensation expense on net deferred tax assets at December 31, 2023 and 2022 was $747 and $510, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 17. Income Taxes The income tax benefit/(expense) consisted of the following for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Current income tax expense: Federal $ - $ - State and local (98 ) (174 ) Current income tax expense (98 ) (174 ) Deferred income tax benefit: Federal - 875 State and local - 61 Deferred income tax benefit - 936 Total income tax benefit/(provision) $ (98 ) $ 762 The income tax provision attributable to income before income tax benefit for the years ended December 31, 2023 and 2022 differed from the amounts computed by applying the U.S. federal statutory tax rate of 21% and 21%, respectively, as a result of the following (in thousands): Year Ended December 31, 2023 2022 U.S. federal statutory income tax benefit/(expense) $ 56 $ 7,596 Increase in income tax benefit resulting from: State and local income tax benefit/(expense), net of federal effect (69 ) 697 Write-off goodwill - (6,848 ) Change in the valuation allowance for net deferred income tax assets 219 (785 ) Stock-based compensation (418 ) 105 Other, net 114 (3 ) Income tax benefit/(provision) $ (98 ) $ 762 As of December 31, 2023 and 2022, significant components of net deferred income tax assets and liabilities were as follows (in thousands): December 31, 2023 2022 Deferred income tax assets: Accrued expenses $ 392 $ 490 Deferred revenue 466 698 Net operating loss carry-forwards 6,451 7,783 Stock-based compensation 747 510 Other 20 127 Subtotal 8,076 9,608 Valuation allowance (4,782 ) (3,179 ) Total deferred income tax assets 3,294 6,429 Deferred income tax liabilities: Property and equipment (41 ) (134 ) Prepaid expenses and other (723 ) (455 ) Intangible assets (2,530 ) (5,840 ) Total deferred income tax liabilities (3,294 ) (6,429 ) Net deferred income tax assets (liabilities) $ - $ - As of December 31, 2023, we had NOL and research credit carry-forwards for U.S. federal income tax reporting purposes of approximately $21,480 and $2, respectively. $10,724 of the NOLs will begin to expire in 2032 through 2037, and the remaining $10,756 of the NOLs will not expire. The research tax credit will begin to expire in 2039 through 2040. Approximately $5,292 of the NOL carryforwards and $2 of the research credit carryforwards relate to the NetSapiens and Centric acquisitions. A valuation allowance of $4,782 and $3,179 was recorded against our gross deferred tax asset balance as of December 31, 2023 and 2022, respectively. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. 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 reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the evidence available, it is more-likely-than-not that such assets will not be realized. In making the assessment under the more-likely-than-not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods by jurisdiction, unitary versus stand-alone state tax filings, our experience with loss carryforwards expiring unutilized, and all tax planning alternatives that may be available. As of December 31, 2023, management reviewed the weight of all the positive and negative evidence available. Management reviewed negative evidence such as three years of cumulative pretax loss in the U.S. federal tax jurisdiction, and positive evidence such as projections of future pretax income and the duration of statutory carry-forward periods. As of December 31, 2023 the Company has a cumulative pretax loss for the three year lookback excluding the gain on the sale of property and equipment, which is considered significant objectively verifiable negative evidence. Management also evaluated projections of future pretax income and the duration of statutory carry-forward periods to determine if the NOL carryforwards could be utilized in whole or in part before they expire unutilized. Forecasts and projections of future income are inherently subjective and therefore generally are given less weight, based on the extent to which the assumptions can be objectively verified based on historical experience. Although historical trends utilized in our projections are objectively verifiable we assigned less weight to this positive evidence given the subjective nature of assumptions in projections. Management reviewed negative evidence related to experience of credits and loss carryforwards expiring unutilized, and determined that although negative evidence exists, it was not significant evidence, as the current loss carryforwards do not begin to expire until 2032 and therefore risk is minimal. After reviewing the weight of the positive and negative evidence, management determined that the positive evidence was not sufficient enough to overcome the negative evidence of cumulative pretax losses for the three-year lookback to conclude that it is more likely than not that deferred tax assets of $4,782 are realizable. Therefore, a valuation allowance of $4,782 was recorded against our gross deferred tax asset balance as of December 31, 2023. We also have state NOL and research and development credit carryforwards of approximately $25,509 and $19, which expire on specified dates as set forth in the rules of the various states to which the carryforwards relate. The company has recorded a valuation allowance of $19 and $61 against the research and development credit carryforwards as of December 31, 2023 and 2022, respectively. 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, 2023 and 2022 were as follows (in thousands): Balance as of January 1, 2022 $ - Reductions due to lapsed statute of limitations - Balance as of December 31, 2022 - Reductions due to lapsed statute of limitations - Balance as of December 31, 2023 $ - Estimated interest and penalties related to the underpayment or late payment of income taxes are classified as a component of income tax provision in the consolidated statements of operations. There were no accrued interest and penalties as of December 31, 2023 and 2022, respectively. Our U.S. federal income tax returns for fiscal 2020 through 2023 are open tax years. We also file in various states, with few exceptions, we are no longer subject to state income tax examinations by tax authorities for years prior to fiscal 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 18. Leases Lessee Accounting We determine if an agreement is a lease at inception. We lease office space, data center colocation space, other assets, and office equipment under operating leases. We lease data center equipment, including maintenance contracts and vehicles under finance leases. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the balance sheet, excluding leases that are less than 12 months. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. The Company’s lease agreements do not contain any variable lease payments, material residual value guarantees or any restrictive covenants. Our lease terms may include options, at our sole discretion, to extend or terminate the lease. We currently lease office space in Tempe, Arizona under a non-cancelable operating lease agreement that expires in 2025. On August 9, 2023, in connection with the sale of our corporate office building and land, we entered into a lease agreement to leaseback the property. The operating lease agreement has an initial term of eighteen full calendar months, with an option to terminate the lease on the last day of the twelfth full calendar month with a sixty-day notice. The operating lease agreement includes fixed fees for property tax, insurance, and common area maintenance (CAM). We account for the lease components and non-lease components such as fixed fee property tax and insurance charges as a single lease component. The CAM charges are considered a separate non-lease component of the lease agreement and are excluded from the measurement of the lease liability. We currently lease office space in Reston, Virginia under a non-cancelable operating lease agreement that expires in 2025. The operating lease contains customary escalation clauses. Rental expense for the years ended December 31, 2023 and 2022 was approximately $39 and $49, respectively. We leased office space in La Jolla, California under a non-cancelable operating lease agreement that expired in 2022. The operating lease contains customary escalation clauses. Rental expense for the years ended December 31, 2023 and 2022 was approximately $0 and $373, respectively. We currently lease office space in San Diego, California under a non-cancelable operating lease agreement that expires in 2024. Rental expense for the years ended December 31, 2023 and 2022 was approximately $84 and $8, respectively. We currently lease office space in Overland Park, Kansas under a non-cancelable operating lease agreement that expires in 2027. The operating lease contains customary escalation clauses. Rental expense for the years ended December 31, 2023 and 2022 was approximately $196 and $30, respectively. We currently lease other assets under multiple operating leases. The leases expire on various dates through 2027 and the interest rates range from 2.81% to 15.74%. The expense is included in cost of product expenses and totaled approximately $87 and $79 for the years ended December 31, 2023 and 2022, respectively. We currently lease data center colocation space in Grand Rapids, Michigan, Las Vegas, Nevada, Dallas, Texas and Lenexa, Kansas, under non-cancelable operating lease agreements that expire in 2024. Rental expense for the years ended December 31, 2023 and 2022 was approximately $388 and $213, respectively. We have lease agreements with lease and non-lease components, and we account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company leases equipment and support under finance lease agreements which extends through 2026. The Company also leases three vehicles under financing agreements and two of the vehicle leases ended in 2022. The outstanding balance for finance leases was $98 and $193 as of December 31, 2023 and 2022, respectively. The Company recorded assets classified as property and equipment under finance lease obligations of $486 and $486 as of December 31, 2023 and 2022, respectively. Related accumulated depreciation totaled $337 and $259 as of December 31, 2023 and 2022, respectively. The $40,000 in support contracts were classified as a prepaid expense and are being amortized over the service period of three years. One support contract expired in January 2021 and the other expires in June 2024. Amortization expense is included in general and administrative expenses and totaled $5 and $5 for the years ended December 31, 2023 and 2022, respectively. The interest rates on the finance lease obligations range from 1.37% and 15.74% and interest expense was $4 and $7 for the years ended December 31, 2023 and 2022, respectively. The maturity of operating leases and finance lease liabilities as of December 31, 2023 are as follows: Year ending December 31, Operating Leases Finance Leases 2024 $ 683 $ 77 2025 205 21 2026 179 3 2027 134 - 2028 - - Total minimum lease payments 1,201 101 Less: amount representing interest (64 ) (3 ) Present value of minimum lease payments $ 1,137 $ 98 Lease term and discount rate December 31, 2023 Weighted-average remaining lease term (years) Operating leases 2.6 Finance leases 1.4 Weighted-average discount rate Operating leases 4.8 % Finance leases 2.4 % Year Ended December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 674 Operating cash flows from finance leases 5 Financing cash flows from finance leases (2,254 ) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies (Note 19) | |
Commitments And Contingencies | 19. Commitments and Contingencies Annual Employee Bonus Plan Accrual We utilize incentive bonuses to reward performance achievements, which provides potential annual cash bonus awards to Company employees, including Named Executive Officers (“NEOs”). Under the Bonus Plan, the Compensation Committee of the Board of Directors of the Company (the “Board”) has established a bonus pool of $800, for our NEOs and executive management team for the year ended December 31, 2023. The Board established a bonus pool of $240 for our non-executive employees, for the year ending December 31, 2023. Participants will be eligible to receive cash bonus awards based upon annual performance targets established by the Compensation Committee for the year ended December 31, 2023, relating to one or more of the following performance targets; annual revenue, Adjusted EBITDA, cash balance and our stock price measured at the end of the Company’s fiscal year. Awards will be paid on a tiered scale based upon actual performance as a percentage of the performance targets with a floor and cap. Payments for individual performance targets met or exceeded are payable, whether or not all performance targets are met, consistent with the weighted amounts for each performance target within the bonus pools. Bonus awards for NEOs and executive management will be weighted 30% on annual revenue, 30% on Adjusted EBITDA, 30% on cash balance, and 10% on the Company’s stock price. No bonus will be awarded for any performance target for which actual performance is less than 90% of target. At 90% or greater actual performance relative to the target, 50% of the weighted bonus amount apportioned for the performance target is payable. From 90% to 100% actual performance relative to the target, the remaining 50% of the weighted bonus amount is awarded pro rata with the percentage of actual performance exceeding 90% of target (i.e., each 1% excess over 90% of performance target equals 5% of the weighted bonus amount payable). If actual performance reaches 110% of performance target or greater for any individual performance target, then an additional 10% of the amount apportioned to that performance target will be payable as an additional bonus. Based on our financial performance for the year ended December 31, 2023, revenue exceeded the annual revenue performance target and 100% of the bonus was achieved, and the Adjusted EBITDA, cash balance, and stock price exceeded the performance targets by 110% and 110% of the bonus was achieved for these three performance targets. The Company accrued $1,098 for the employee bonus plan, which is included in accrued expenses in the accompanying consolidated balance sheet at December 31, 2023. Legal Proceedings In the ordinary course of business, the Company may be involved in a variety of claims, lawsuits, investigations, and other proceedings, including patent infringement claims, employment litigation, regulatory compliance matters, and contractual disputes, that can arise in the normal course of the Company's operations. The Company recognizes a provision when management believes information available prior to the issuance of the financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. The Company adjusts the amount of the provision to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. As of December 31, 2023, the Company does not have a recorded liability for estimated losses. Legal costs are expensed as incurred. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Plan | |
Employee Benefit Plan | 20. 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. For the years ended December 31, 2023 and 2022, we contributed approximately $517 and $365, respectively to the retirement savings plan. |
Segment
Segment | 12 Months Ended |
Dec. 31, 2023 | |
Segment | |
Segment | 21. Segments Our chief operating decision maker (who is our Chief Executive Officer) reviews our financial information presented on an operating segment basis for purposes of allocating resources and evaluating our financial performance. Following the merger with NetSapiens, Inc., the Company reorganized into two operating segments, a software solutions operating segment and a cloud telecommunications services operating segment. The cloud telecommunications services segment generates revenue from selling cloud telecommunication services, products, and other internet services. The software solutions segment generates revenue from selling perpetual software licenses and software subscriptions, subscription maintenance and support, and professional services. The Company has two reportable operating segments, which consist of cloud telecommunications services and software solutions. Segment revenue, income/(loss) from operations, other income/(expense) and income/(loss) before income tax provision are as follows (in thousands): Year Ended December 31, 2023 2022 Revenue: Cloud telecommunications service $ 35,152 $ 22,406 Software solutions 18,047 15,148 Consolidated revenue 53,199 37,554 Loss from operations: Cloud telecommunications services (1,483 ) (3,877 ) Software solutions (206 ) (33,515 ) Total operating loss (1,689 ) (37,392 ) Other income/(expense), net: Cloud telecommunications services 1,359 (71 ) Software solutions 66 1,288 Total other income/(expense), net 1,425 1,217 Loss before income tax benefit/(provision): Cloud telecommunications services (124 ) (3,948 ) Software solutions (140 ) (32,227 ) Loss before income tax benefit/(provision): $ (264 ) $ (36,175 ) Depreciation and amortization was $1,553 and $712 for the Cloud telecommunications services segment for the years ended December 31, 2023 and 2022, respectively. Depreciation and amortization was $2,020 and $2,035 for the Software solutions segment for the years ended December 31, 2023 and 2022, respectively. Interest income was $2 and $0 for the cloud telecommunications services segment for the years ended December 31, 2023 and 2022, respectively. Interest income was $0 and $0 for the software solutions segment for the years ended December 31, 2023 and 2022, respectively. Interest expense was $115 and $77 for the cloud telecommunications services segment for the years ended December 31, 2023 and 2022, respectively. Interest expense was $0 and $1 for the software solutions segment for the years ended December 31, 2023 and 2022, respectively. Goodwill impairment was $0 and $32,609 for the software solutions segment for the years ended December 31, 2023 and 2022, respectively. The Company operates in two geographic areas, the United States and international. Revenue by geography is based on the location of the customer from which the revenue is earned. Revenue by geographic location is as follows (in thousands): Year Ended 2023 2022 United States $ 50,662 $ 36,095 International 2,537 1,459 Total revenue $ 53,199 $ 37,554 |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information | |
Quarterly Financial Information | 22. Quarterly Financial Information (in thousands, unaudited) For the three months ended March 31, June 30, September 30, December 31, Consolidated 2023 2023 2023 2023 Service revenue $ 7,158 $ 7,308 $ 7,517 $ 7,685 Software Solutions 4,108 3,930 4,691 5,318 Product revenue 1,225 1,432 1,666 1,161 Total revenue 12,491 12,670 13,874 14,164 Operating expenses: Cost of service revenue 3,044 3,095 3,173 3,294 Cost of software solutions 1,185 1,293 1,328 1,822 Cost of product revenue 839 881 923 688 Selling and marketing 3,809 3,613 3,502 3,747 General and administrative 3,997 3,167 3,309 3,320 Research and development 1,191 1,138 1,275 1,255 Total operating expenses 14,065 13,187 13,510 14,126 Income/(loss) from operations (1,574 ) (517 ) 364 38 Total other income/(expense), net 16 (4 ) 1,373 40 Income/(loss) before income taxes (1,558 ) (521 ) 1,737 78 Income tax provision (24 ) (24 ) (33 ) (17 ) Net income/(loss) $ (1,582 ) $ (545 ) $ 1,704 $ 61 Basic earnings per common share (1) $ (0.06 ) $ (0.02 ) $ 0.07 $ 0.00 Diluted earnings per common share (1) $ (0.06 ) $ (0.02 ) $ 0.06 $ 0.00 For the three months ended March 31, June 30, September 30, December 31, Consolidated 2022 2022 2022 2022 Service revenue $ 4,398 $ 4,556 $ 4,473 $ 6,088 Software Solutions 3,268 3,598 3,875 4,407 Product revenue 492 692 760 947 Total revenue 8,158 8,846 9,108 11,442 Operating expenses: Cost of service revenue 1,436 1,438 1,375 2,462 Cost of software solutions 1,661 1,131 1,141 1,403 Cost of product revenue 317 372 453 495 Selling and marketing 2,584 2,771 2,732 3,638 General and administrative 3,249 2,757 2,800 4,098 Research and development 304 1,229 1,151 1,271 Goodwill and long-lived asset impairment - - - 32,678 Total operating expenses 9,551 9,698 9,652 46,045 Loss from operations (1,393 ) (852 ) (544 ) (34,603 ) Total other income/(expense), net (28 ) (126 ) (184 ) 1,555 Loss before income taxes (1,421 ) (978 ) (728 ) (33,048 ) Income tax benefit 201 82 32 447 Net loss $ (1,220 ) $ (896 ) $ (696 ) $ (32,601 ) Basic earnings per common share (1) $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (1.33 ) Diluted earnings per common share (1) $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (1.33 ) ——————— (1) Earnings per common share is computed independently for each of the quarters presented. Therefore, the sums of quarterly earnings per common share amounts do not necessarily equal the total for the twelve-month periods presented. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events Purchase Obligations In February 2024, the Company entered into a $5.0 million noncancellable five-year hosting service contract with Oracle, a third-party network service provider. The contract includes minimum quarterly commitments and the requirements to maintain the service level for the entire contract period. Under this agreement, $200 remains due during fiscal year 2024, $700 will be due during fiscal 2025, $1.1 million will be due during fiscal 2026, $1.2 million will be due during fiscal 2027, $1.4 million will be due during fiscal 2028, and $400 will be due during fiscal 2029. |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Significant Accounting 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. |
Foreign Currency Translation | Foreign Currency Translation - Due to changes in exchange rates between reporting periods and changes in certain account balances, the foreign currency translation adjustment will change from period to period. During the year ended December 31, 2023 and 2022, we recorded foreign currency translation gains/(losses) of $21, and $175, respectively, in our statements of comprehensive income (loss). |
Cash and Cash Equivalents | Cash and Cash Equivalents – |
Trade Receivables and Allowance for Credit Losses | Trade Receivables and Allowance for Credit Losses – The allowance for credit losses is determined based on an assessment of historical collection experience using the aging schedule method as well as consideration of current and future economic conditions. Trade receivables are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our trade receivable credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. |
Equipment Financing Receivables and Allowance for Credit Losses | Equipment Financing Receivables and Allowance for Credit Losses – We provide an allowance for credit losses based on historical loss experience, adverse situations that may affect a client's ability to pay, current economic conditions and outlook based on reasonable and supportable forecasts. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. Equipment financing receivables are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our equipment financing receivable credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. |
Contract Assets and Allowance for Credit Losses | Contract Assets and Allowance for Credit Losses– The allowance for credit losses is determined based on an assessment of historical collection experience using the loss-rate method as well as consideration of current and future economic conditions and changes in our loss-rate trends. We utilize a five-year lookback period to establish our estimate of expected credit losses, as our contractual terms range from three to five years. Contract assets are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our contract assets credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. |
Contract Costs | Contract Costs – |
Inventory | Inventory – |
Property and Equipment | Property and Equipment – Building 39 years Land Not depreciated Computer and office equipment 2 to 5 years Computer software 3 years Internal-use software 3 years Furniture and fixtures 4 years Leasehold improvements 2 to 5 years Vehicles 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. |
Property and equipment, held for sale | Property and equipment, held for sale |
Asset Acquisitions | Asset Acquisitions – |
Business Acquisition | Business Acquisitions - |
Goodwill | Goodwill – The process of estimating the fair value of goodwill is subjective and required the Company to make estimates that may significantly impact the outcome of the analysis. A qualitative assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors and overall financial performance, as well as company specifications. If after performing this assessment, the Company concluded it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company performed the quantitative test. Under the quantitative test, a goodwill impairment is identified by comparing the fair value of the reporting unit to the carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, goodwill is considered impaired and an impairment charge is recognized in an amount equal to the excess, not to exceed the carrying amount of goodwill. The Company estimated the fair value of the reporting unit with an income approach using the discounted cash flow (“DCF”) analysis and the Company also considered a market-based valuation methodology using comparable public company trading values and the Company’s market capitalization. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, the discount rate and relevant comparable public company earnings multiples. The cash flows employed in the DCF analysis are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions and recent operating performance. The discount rate utilized in the DCF analysis is based on the reporting unit’s weighted-average cost of capital, which takes into account the relative weights of each component of capital structure (equity and debt) and represents the expected cost of new capital, adjusted as appropriate to consider the risk inherent in future cash flows of the Company’s reporting unit. Impairment assessment inherently involves management judgments regarding a number of assumptions described above. The reporting unit fair value also depends on the future strength of the U.S. economy. New and developing competition as well as technological change could also adversely affect future fair value estimates. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of the Company’s recorded goodwill, differences in assumptions could have a material effect on the estimated fair values. For further information, see Note 10 (Intangible Assets and Goodwill). |
Intangible Assets | Intangible Assets – Amortizable intangible assets are amortized over the estimated useful lives as follows: Customer relationship 6 to 16 years Developed technologies 2 to 6 years Trademark and trade names 4 years |
Contract Liabilities | Contract Liabilities – |
Use of Estimates | Use of Estimates – |
Contingencies | C ontingencies – |
Service, Software Solutions and Product Revenue Recognition | Service, Software Solutions and Product Revenue Recognition – |
Cost of Service Revenue | Cost of Service Revenue – |
Cost of Software Solutions Revenue | Cost of Software Solutions Revenue – |
Cost of Product Revenue | Cost of Product Revenue – |
Product Warranty | Product Warranty – |
Contingent Consideration | Contingent Consideration – |
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 |
Lease Obligations | Lease Obligations – ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. A lease that transfers substantially all of the benefits and risks incidental to ownership of property are accounted for as finance leases. At the inception of a finance lease, an asset and finance lease obligation is recorded at an amount equal to the lesser of the present value of the minimum lease payments and the property’s fair market value. Finance lease obligations are classified as either current or long-term based on the due dates of future minimum lease payments, net of interest. |
Notes Payable | Notes Payable – |
Income Taxes | Income Taxes – Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation – |
Operating Segments | Operating Segments – |
Significant Customers | Significant Customers – |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements - In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business and Significant Accounting Policies | |
Estimated useful life of Intangible assets | Customer relationship 6 to 16 years Developed technologies 2 to 6 years Trademark and trade names 4 years |
Estimated useful life of property and equipment | Building 39 years Land Not depreciated Computer and office equipment 2 to 5 years Computer software 3 years Internal-use software 3 years Furniture and fixtures 4 years Leasehold improvements 2 to 5 years Vehicles 5 years |
Changes in Accounting Princip_2
Changes in Accounting Principles (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Changes in Accounting Principles | |
Schedule of Condensed Consolidated Balance Sheet | Consolidated Balance Sheet December 31, 2022 New ASC 326 January 1, 2023 As Previously Standard As (In thousands) Reported Adjustment Adjusted Assets Trade receivables, net of allowance $ 3,297 $ (18 ) $ 3,279 Contract assets, net of allowance 318 (29 ) 289 Equipment financing receivables, net of allowance 635 (37 ) 598 Total current assets 12,032 (84 ) 11,948 Long-term equipment financing receivables, net of allowance 1,255 (75 ) 1,180 Total Assets $ 55,634 $ (159 ) $ 55,475 Liabilities and Stockholders' Equity Accumulated deficit (87,946 ) (159 ) (88,105 ) Total stockholders' equity 41,459 (159 ) 41,300 Total Liabilities and Stockholders' Equity $ 55,634 $ (159 ) $ 55,475 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Disaggregation of revenue | Year Ended December 31, 2023 Cloud Software Total (In thousands) Telecommunications Solutions Reportable Segment Segment Segments Major products/services lines Desktop devices $ 5,484 $ - $ 5,484 Equipment financing revenue 501 - 501 Telecommunications services 25,168 - 25,168 Fees, commissions, and other, recognized over time 1,899 - 1,899 One time fees, commissions and other 2,100 - 2,100 Software licenses - 3,454 3,454 Subscription maintenance and support - 13,181 13,181 Professional services and other - 1,412 1,412 $ 35,152 $ 18,047 $ 53,199 Timing of revenue recognition Products, services, and fees recognized at a point in time $ 7,584 $ 4,866 $ 12,450 Products, services, and fees transferred over time 27,568 13,181 40,749 $ 35,152 $ 18,047 $ 53,199 Year Ended December 31, 2022 Cloud Software Total (In thousands) Telecommunications Solutions Reportable Segment Segment Segments Major products/services lines Desktop devices $ 2,891 $ - $ 2,891 Equipment financing revenue 335 - 335 Telecommunications services 16,560 - 16,560 Fees, commissions, and other, recognized over time 1,709 - 1,709 One time fees, commissions and other 911 - 911 Software licenses - 3,214 3,214 Subscription maintenance and support - 10,829 10,829 Professional services and other - 1,105 1,105 $ 22,406 $ 15,148 $ 37,554 Timing of revenue recognition Products, services, and fees recognized at a point in time $ 3,802 $ 4,319 $ 8,121 Products, services, and fees transferred over time 18,604 10,829 29,433 $ 22,406 $ 15,148 $ 37,554 |
Contract balances | December 31, (In thousands) 2023 2022 Receivables, which are included in trade receivables, net of allowance for doubtful accounts $ 3,476 $ 3,297 Contract assets 342 318 Contract liabilities 2,588 3,585 |
Significant changes in the contract assets and liabilities | For the Year Ended For the Year Ended (In thousands) December 31, 2023 December 31, 2022 Contract Assets Contract Liabilities Contract Assets Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ - $ (3,393 ) $ - $ (3,046 ) Increase due to cash received, excluding amounts recognized as revenue during the period - 2,396 - 3,603 Transferred to receivables from contract assets recognized at the beginning of the period (192 ) - (166 ) - Increase due to additional unamortized discounts 216 - 223 - |
Contract assets allowance for credit losses | December 31, 2023 2022 Gross contract assets $ 427 $ 318 Less: allowance for credit losses (85 ) - Contract assets, net of allowance for credit losses $ 342 $ 318 |
Schedule of allowance for credit losses | Balance at December 31, 2022 $ - Cumulative effect of accounting change 29 Provision 2 Write-offs - Recoveries and other - Balance at March 31, 2023 $ 31 Provision (8 ) Write-offs - Recoveries and other - Balance at June 30, 2023 $ 23 Provision 11 Write-offs - Recoveries and other - Balance at September 30, 2023 $ 34 Provision 53 Write-offs (2 ) Recoveries and other - Balance at December 31, 2023 $ 85 |
Performance obligations | 2024 2025 2026 2027 2028 and thereafter Total Desktop devices $ 229 - - - - $ 229 Telecommunications services $ 18,589 12,776 7,645 4,316 1,255 $ 44,581 Software Solutions $ 10,350 5,040 2,596 1,056 80 $ 19,122 All consideration from contracts with customers is included in the amounts presented above |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings per common share: | |
Schedule of basic and diluted net income per common share | Year Ended December 31, 2023 2022 Net loss (in thousands) (A) $ (362 ) $ (35,413 ) Weighted-average share reconciliation: Weighted-average basic shares outstanding (B) 25,944,748 22,939,514 Dilutive effect of stock-based awards - - Diluted weighted-average outstanding shares of common stock (C) 25,944,748 22,939,514 Earnings per common share: Basic (A/B) $ (0.01 ) $ (1.54 ) Diluted (A/C) $ (0.01 ) $ (1.54 ) |
Schedule of common stock not included in the computation of diluted income per share | Year Ended December 31, 2023 2022 Stock options 4,580,824 2,846,670 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions | |
Cost of acquisition | (in thousands) December 31, 2022 Consideration: Cash $ 2,000 Common stock 6,326 Note Payable 1,100 Total consideration $ 9,426 |
Schedule Of Recognized Identified Assets Acquired And Liabilities Assumed | Final Purchase Price Allocation Total purchase price $ 9,426 Cash 586 Accounts receivables 759 Prepaid expenses 48 Inventory 484 Other assets 12 Property, plant & equipment 319 Right to use assets 861 Intangible assets acquired (FV) 7,000 Total identifiable assets 10,069 Accounts payable 1,162 Accrued expenses 714 Contract liability 917 Operating lease liability 877 Direct financing liability 142 Buyers note 1,100 Deferred tax liability 1,922 Total liabilities assumed 6,834 Total goodwill $ 5,091 |
Schedule of pro forma information | For the Year Ended December 31, (Unaudited, in thousands) 2023 2022 Revenues $ 53,199 $ 46,765 Net loss (362 ) (35,636 ) Earnings per share $ (0.01 ) $ (1.40 ) |
Trade Receivables and Allowan_2
Trade Receivables and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Trade Receivables and Allowance for Credit Losses | |
Schedule of trade receivables balance consists of traditional trade receivables | December 31, 2023 2022 Gross trade receivables $ 3,592 $ 3,428 Less: allowance for credit losses (116 ) (131 ) Trade receivables, net $ 3,476 $ 3,297 Current trade receivables, net $ 3,476 $ 3,297 Long-term trade receivables, net - - Trade receivables, net $ 3,476 $ 3,297 |
Schedule of allowance for credit losses | Balance at December 31, 2022 $ 131 Cumulative effect of accounting change 18 Provision 45 Write-offs (7 ) Recoveries and other - Balance at March 31, 2023 $ 187 Provision 68 Write-offs (111 ) Recoveries and other - Balance at June 30, 2023 $ 144 Provision (30 ) Write-offs (4 ) Recoveries and other - Balance at September 30, 2023 $ 110 Provision 37 Write-offs (31 ) Recoveries and other - Balance at December 31, 2023 $ 116 |
Equipment Financing Receivabl_2
Equipment Financing Receivables and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equipment Financing Receivables and Allowance for Credit Losses | |
Schedule of financing receivables | December 31, 2023 2022 Gross equipment financing receivables $ 3,888 $ 2,666 Less: unearned income (1,093 ) (776 ) Less: allowance for credit losses (171 ) - Equipment financing receivables, net $ 2,624 $ 1,890 Current equipment financing receivables, net $ 856 $ 635 Long-term equipment financing receivables, net 1,768 1,255 Equipment financing receivables, net $ 2,624 $ 1,890 |
Schedule of financing receivables future contractual maturities | Year ending December 31, 2024 $ 1,291 2025 1,109 2026 759 2027 516 2028 213 2029 and thereafter - Total $ 3,888 |
Schedule of financing receivables Allowance for Credit Losses | Balance at December 31, 2022 $ - Cumulative effect of accounting change 112 Provision 19 Write-offs (4 ) Recoveries and other - Balance at March 31, 2023 $ 127 Provision 23 Write-offs (5 ) Recoveries and other - Balance at June 30, 2023 $ 145 Provision 23 Write-offs (7 ) Recoveries and other - Balance at September 30, 2023 $ 161 Provision 27 Write-offs (17 ) Recoveries and other - Balance at December 31, 2023 $ 171 |
Schedule of Aging of Receivables | December 31, 2023 2022 Past due amounts 0 - 90 days $ 2,623 $ 1,888 Past due amounts > 90 days 1 2 Total $ 2,624 $ 1,890 |
Schedule of financing receivables and current period gross write offs | December 31, 2023 December 31, 2022 2023 2022 2021 2020 2019 Prior Total Equipment Financing Receivables Total Equipment Financing Receivables United States $ 1,540 777 211 196 71 - $ 2,795 $ 1,890 Current period gross write offs $ 14 14 2 2 1 - $ 33 $ 20 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses | |
Schedule of Prepaid expenses | December 31, 2023 2022 Prepaid corporate insurance $ 68 $ 117 Prepaid software services and support 245 122 Prepaid employee insurance premiums - 30 Nasdaq Listing Fee - 15 User group meeting 84 - Other prepaid expenses 111 147 Total prepaid expenses $ 508 $ 431 |
Property and Equipment and Pr_2
Property and Equipment and Property and Equipment Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment and Property and Equipment Held for Sale | |
Schedule of Property And Equipment | December 31, 2023 2022 Building $ - $ 2,000 Land - 500 Computer and office equipment 2,700 2,726 Computer software 625 576 Internal-use software 14 14 Furniture and fixtures 64 75 Vehicles 143 130 Leasehold improvements 15 15 Less: accumulated depreciation (2,891 ) (2,721 ) Total property and equipment, net $ 670 $ 3,315 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets and Goodwill | |
Schedule of intangible assets | December 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 26,073 $ (5,260 ) $ 20,813 $ 26,073 $ (3,052 ) $ 23,021 Developed technologies 4,900 (2,269 ) 2,631 4,900 (1,410 ) 3,490 Trademark and trade names 400 (288 ) 112 400 (186 ) 214 Total acquired intangible assets $ 31,373 $ (7,817 ) $ 23,556 $ 31,373 $ (4,648 ) $ 26,725 |
Sammary of amortization of intangible assets | Year ending December 31, 2024 $ 3,028 2025 2,770 2026 2,457 2027 2,202 2028 and thereafter 13,099 Total $ 23,556 |
Schedule of goodwill carrying amount | Goodwill Balance at January 1, 2022 $ 36,972 Centric Telecom business acquisition 5,091 Impairment (32,609 ) Balance at December 31, 2022 9,454 Additions - Balance at December 31, 2023 $ 9,454 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2023 2022 Accrued wages and benefits $ 2,884 $ 2,427 Accrued accounts payable 1,297 987 Accrued sales and telecommunications taxes 1,234 846 Product warranty liability 25 55 Credit cards 113 - Other 398 575 Total accrued expenses $ 5,951 $ 4,890 |
Schedule of product warranty liabilities | Warranty Liabilities Balance at January 1, 2022 $ 50 Accrual for warranties 55 Adjustments related to pre-existing warranties (26 ) Warranty settlements (24 ) Balance at December 31, 2022 55 Accrual for warranties 25 Adjustments related to pre-existing warranties (32 ) Warranty settlements (23 ) Balance at December 31, 2023 $ 25 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Notes Payable | |
Schedule of notes payable | December 31, 2023 2022 Related party note payable $ 843 $ 1,100 Other notes payable 206 1,925 Total notes payable $ 1,049 $ 3,025 Less: current notes payable (457 ) (420 ) Notes payable, net of current portion $ 592 $ 2,605 |
Schedule of principal payments of notes payable | Year ending December 31, 2024 $ 457 2025 478 2026 114 2027 - 2028 - Total $ 1,049 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair value of financial instruments | December 31, 2023 December 31, 2022 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Assets: Trade receivables, net $ 3,476 $ 3,476 $ 3,297 $ 3,297 Equipment financing receivables 2,624 2,624 1,890 1,890 Liabilities: Finance leases $ 98 $ 98 $ 193 $ 193 Notes payable 1,049 1,012 3,025 2,724 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity | |
Schedule of shares of common stock reserved for future issuance | Stock-based compensation plans: Outstanding option awards 8,016 Available for future grants 2,342 10,358 |
StockBased Compensation (Tables
StockBased Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock Based Compensation | |
Schedule of fair value of stock options granted | Year Ended December 31, 2023 2022 Weighted-average fair value of options granted $ 1.38 $ 2.31 Expected volatility 88 % 82 % Expected life (in years) 5.74 5.72 Risk-free interest rate 3.76 % 2.99 % Expected dividend yield 0.00 % 0.00 % |
Schedule of stock option activity | Weighted- Weighted-Average Aggregate Number of Average Remaining Intrinsic Value Shares Exercise Price Contract Life (in thousands) Outstanding at January 1, 2022 6,988,843 2.40 4.5 years 19,829 Granted 1,926,000 3.34 Exercised (960,865 ) 1.33 Cancelled/forfeited (301,014 ) 3.59 Outstanding at December 31, 2022 7,652,964 2.73 5.3 years 3,362 Granted 965,500 1.88 Exercised (183,521 ) 1.32 Cancelled/forfeited (439,144 ) 3.04 Outstanding at December 31, 2023 7,995,799 2.64 4.9 years 19,469 Shares vested and expected to vest 7,790,316 2.64 4.9 years 19,051 Exercisable as of December 31, 2023 6,417,000 2.57 3.9 years 16,278 Exercisable as of December 31, 2022 5,655,810 2.25 4.1 years 3,362 |
Summary of RSUs outstanding | Years Ended December 31, 2024 2025 2026 RSUs with service-based vesting conditions 13,334 - - |
Summary of RSUs activity | Number of Weighted-Average Units Fair Value Outstanding at January 1, 2022 39,138 $ 4.05 Granted 592,500 2.70 Vested/released (475,653 ) 2.50 Cancelled/forfeited - - Outstanding at December 31, 2022 155,985 3.62 Granted 255,000 1.87 Vested/released (397,651 ) 2.57 Cancelled/forfeited - - Outstanding at December 31, 2023 13,334 1.73 |
Statement of operations effect of stock-based compensation | Year Ended December 31, 2023 2022 Share-based compensation expense by type: Stock options $ 3,221 $ 2,798 Restricted stock units 628 1,576 Total cost related to share-based compensation expense $ 3,849 $ 4,374 Share-based compensation expense by financial statement line item: Cost of revenue $ 582 $ 425 Research and development 610 542 Selling and marketing 658 681 General and administrative 1,999 2,726 Total cost related to share-based compensation expense $ 3,849 $ 4,374 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of income tax benefit/(expense) | Year Ended December 31, 2023 2022 Current income tax expense: Federal $ - $ - State and local (98 ) (174 ) Current income tax expense (98 ) (174 ) Deferred income tax benefit: Federal - 875 State and local - 61 Deferred income tax benefit - 936 Total income tax benefit/(provision) $ (98 ) $ 762 |
Schedule of reconciliation of federal statutory income tax rate to our effective income tax rate | Year Ended December 31, 2023 2022 U.S. federal statutory income tax benefit/(expense) $ 56 $ 7,596 Increase in income tax benefit resulting from: State and local income tax benefit/(expense), net of federal effect (69 ) 697 Write-off goodwill - (6,848 ) Change in the valuation allowance for net deferred income tax assets 219 (785 ) Stock-based compensation (418 ) 105 Other, net 114 (3 ) Income tax benefit/(provision) $ (98 ) $ 762 |
Schedule of net deferred income tax assets and liabilities | December 31, 2023 2022 Deferred income tax assets: Accrued expenses $ 392 $ 490 Deferred revenue 466 698 Net operating loss carry-forwards 6,451 7,783 Stock-based compensation 747 510 Other 20 127 Subtotal 8,076 9,608 Valuation allowance (4,782 ) (3,179 ) Total deferred income tax assets 3,294 6,429 Deferred income tax liabilities: Property and equipment (41 ) (134 ) Prepaid expenses and other (723 ) (455 ) Intangible assets (2,530 ) (5,840 ) Total deferred income tax liabilities (3,294 ) (6,429 ) Net deferred income tax assets (liabilities) $ - $ - |
Schedule of changes in unrecognized tax benefits | Balance as of January 1, 2022 $ - Reductions due to lapsed statute of limitations - Balance as of December 31, 2022 - Reductions due to lapsed statute of limitations - Balance as of December 31, 2023 $ - |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Maturity of operating lease and finance lease liabilities | Year ending December 31, Operating Leases Finance Leases 2024 $ 683 $ 77 2025 205 21 2026 179 3 2027 134 - 2028 - - Total minimum lease payments 1,201 101 Less: amount representing interest (64 ) (3 ) Present value of minimum lease payments $ 1,137 $ 98 |
Schedule of lease term and discount rate | Lease term and discount rate December 31, 2023 Weighted-average remaining lease term (years) Operating leases 2.6 Finance leases 1.4 Weighted-average discount rate Operating leases 4.8 % Finance leases 2.4 % |
Schedule of cash paid for amounts included in the measurement of lease liabilities | Year Ended December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 674 Operating cash flows from finance leases 5 Financing cash flows from finance leases (2,254 ) |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment | |
Information on reportable segments and reconciliation to condensed consolidated net (loss) income | Year Ended December 31, 2023 2022 Revenue: Cloud telecommunications service $ 35,152 $ 22,406 Software solutions 18,047 15,148 Consolidated revenue 53,199 37,554 Loss from operations: Cloud telecommunications services (1,483 ) (3,877 ) Software solutions (206 ) (33,515 ) Total operating loss (1,689 ) (37,392 ) Other income/(expense), net: Cloud telecommunications services 1,359 (71 ) Software solutions 66 1,288 Total other income/(expense), net 1,425 1,217 Loss before income tax benefit/(provision): Cloud telecommunications services (124 ) (3,948 ) Software solutions (140 ) (32,227 ) Loss before income tax benefit/(provision): $ (264 ) $ (36,175 ) |
Schedule of Revenue by geography | Year Ended 2023 2022 United States $ 50,662 $ 36,095 International 2,537 1,459 Total revenue $ 53,199 $ 37,554 |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information | |
Schedule Of quarterly financial information | For the three months ended March 31, June 30, September 30, December 31, Consolidated 2023 2023 2023 2023 Service revenue $ 7,158 $ 7,308 $ 7,517 $ 7,685 Software Solutions 4,108 3,930 4,691 5,318 Product revenue 1,225 1,432 1,666 1,161 Total revenue 12,491 12,670 13,874 14,164 Operating expenses: Cost of service revenue 3,044 3,095 3,173 3,294 Cost of software solutions 1,185 1,293 1,328 1,822 Cost of product revenue 839 881 923 688 Selling and marketing 3,809 3,613 3,502 3,747 General and administrative 3,997 3,167 3,309 3,320 Research and development 1,191 1,138 1,275 1,255 Total operating expenses 14,065 13,187 13,510 14,126 Income/(loss) from operations (1,574 ) (517 ) 364 38 Total other income/(expense), net 16 (4 ) 1,373 40 Income/(loss) before income taxes (1,558 ) (521 ) 1,737 78 Income tax provision (24 ) (24 ) (33 ) (17 ) Net income/(loss) $ (1,582 ) $ (545 ) $ 1,704 $ 61 Basic earnings per common share (1) $ (0.06 ) $ (0.02 ) $ 0.07 $ 0.00 Diluted earnings per common share (1) $ (0.06 ) $ (0.02 ) $ 0.06 $ 0.00 For the three months ended March 31, June 30, September 30, December 31, Consolidated 2022 2022 2022 2022 Service revenue $ 4,398 $ 4,556 $ 4,473 $ 6,088 Software Solutions 3,268 3,598 3,875 4,407 Product revenue 492 692 760 947 Total revenue 8,158 8,846 9,108 11,442 Operating expenses: Cost of service revenue 1,436 1,438 1,375 2,462 Cost of software solutions 1,661 1,131 1,141 1,403 Cost of product revenue 317 372 453 495 Selling and marketing 2,584 2,771 2,732 3,638 General and administrative 3,249 2,757 2,800 4,098 Research and development 304 1,229 1,151 1,271 Goodwill and long-lived asset impairment - - - 32,678 Total operating expenses 9,551 9,698 9,652 46,045 Loss from operations (1,393 ) (852 ) (544 ) (34,603 ) Total other income/(expense), net (28 ) (126 ) (184 ) 1,555 Loss before income taxes (1,421 ) (978 ) (728 ) (33,048 ) Income tax benefit 201 82 32 447 Net loss $ (1,220 ) $ (896 ) $ (696 ) $ (32,601 ) Basic earnings per common share (1) $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (1.33 ) Diluted earnings per common share (1) $ (0.05 ) $ (0.04 ) $ (0.03 ) $ (1.33 ) |
Description of Business and S_4
Description of Business and Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Computer and Office Equipment | |
Depreciable lives | 2 to 5 years |
Computer Software | |
Depreciable lives | 3 years |
Internal-use Software | |
Depreciable lives | 3 years |
Furniture and Fixtures | |
Depreciable lives | 4 years |
Leasehold Improvements | |
Depreciable lives | 2 to 5 years |
Vehicles | |
Depreciable lives | 5 years |
Land | |
Depreciable lives | Not depreciated |
As Previously Reported [Member] | |
Depreciable lives | 39 years |
Description of Business and S_5
Description of Business and Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2023 | |
Customer Relationship [Member] | Minimum [Member] | |
Estimated useful lives | 6 years |
Customer Relationship [Member] | Maximum [Member] | |
Estimated useful lives | 16 years |
Developed Technologies [Member] | Minimum [Member] | |
Estimated useful lives | 2 years |
Developed Technologies [Member] | Maximum [Member] | |
Estimated useful lives | 6 years |
Trademark and trade names [Member] | |
Estimated useful lives | 4 years |
Description of Business and S_6
Description of Business and Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Description of Business and Significant Accounting Policies | ||
Foreign currency translation gains/(losses) | $ 21 | $ 175 |
Cash and Cash Equivalents | 9,587 | 4,750 |
Capitalized contract costs | 3,618 | 2,145 |
Amortization in relation to costs capitalized | $ 1,720 | $ 1,249 |
Actual warranty cost, percentage | 0.90% | 1.30% |
Annual warranty provision | 0.90% | 2.30% |
Change in the valuation allowance for net deferred income tax assets | $ 4,782 | $ 3,179 |
Revenue percentage generated from customers | 10% | 10% |
Changes in Accounting Princip_3
Changes in Accounting Principles (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Trade receivables, net of allowance | $ 3,476 | $ 3,297 | |
Trade receivables, net of allowance | (3,476) | (3,297) | |
Total current assets | 17,291 | 12,350 | |
Total current assets | (17,291) | (12,350) | |
Long-term equipment Financing Receivables net of allowance | 0 | 0 | |
Long-term equipment Financing Receivables net of allowance | 0 | 0 | |
Total assets | 56,160 | 55,634 | |
Total assets | (56,160) | (55,634) | |
Accumulated deficit | (88,467) | (87,946) | |
Total stockholders' equity | 44,613 | 41,459 | $ 65,933 |
Total Liabilities and Stockholders' Equity | 56,160 | 55,634 | |
Total Liabilities and Stockholders' Equity | (56,160) | $ (55,634) | |
As Previously Reported [Member] | |||
Trade receivables, net of allowance | 3,297 | ||
Trade receivables, net of allowance | (3,297) | ||
Contract assets, net of allowance | 318 | ||
Equipment Financing Receivables net of allowance | 635 | ||
Total current assets | 12,032 | ||
Total current assets | (12,032) | ||
Long-term equipment Financing Receivables net of allowance | 1,255 | ||
Long-term equipment Financing Receivables net of allowance | (1,255) | ||
Total assets | 55,634 | ||
Total assets | (55,634) | ||
Accumulated deficit | (87,946) | ||
Total stockholders' equity | 41,459 | ||
Total Liabilities and Stockholders' Equity | 55,634 | ||
Total Liabilities and Stockholders' Equity | (55,634) | ||
New ASC 326 Standard Adjustment [Member] | |||
Trade receivables, net of allowance | 18 | ||
Trade receivables, net of allowance | (18) | ||
Contract assets, net of allowance | (29) | ||
Equipment Financing Receivables net of allowance | (37) | ||
Total current assets | 84 | ||
Total current assets | (84) | ||
Long-term equipment Financing Receivables net of allowance | 75 | ||
Long-term equipment Financing Receivables net of allowance | (75) | ||
Total assets | 159 | ||
Total assets | (159) | ||
Accumulated deficit | (159) | ||
Total stockholders' equity | (159) | ||
Total Liabilities and Stockholders' Equity | 159 | ||
Total Liabilities and Stockholders' Equity | (159) | ||
As Adjusted [Member] | |||
Trade receivables, net of allowance | 3,279 | ||
Trade receivables, net of allowance | (3,279) | ||
Contract assets, net of allowance | 289 | ||
Equipment Financing Receivables net of allowance | 598 | ||
Total current assets | 11,948 | ||
Total current assets | (11,948) | ||
Long-term equipment Financing Receivables net of allowance | 1,180 | ||
Long-term equipment Financing Receivables net of allowance | (1,180) | ||
Total assets | 55,475 | ||
Total assets | (55,475) | ||
Accumulated deficit | (88,105) | ||
Total stockholders' equity | 41,300 | ||
Total Liabilities and Stockholders' Equity | 55,475 | ||
Total Liabilities and Stockholders' Equity | $ (55,475) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Desktop Services | $ 5,484 | $ 2,891 | ||||||||
Equipment Financing Revenue | 501 | 335 | ||||||||
Telecommunications Services | 25,168 | 16,560 | ||||||||
Fees, Commissions And Other Recognized Over Time | 1,899 | 1,709 | ||||||||
One time fees commissions and other | 2,100 | 911 | ||||||||
SoftwareLicenses | 3,454 | 3,214 | ||||||||
Subscription Maintenance And Support | 13,181 | 10,829 | ||||||||
Professional Servicing And Other | 1,412 | 1,105 | ||||||||
Revenue | $ 14,164 | $ 13,874 | $ 12,670 | $ 12,491 | $ 11,442 | $ 9,108 | $ 8,846 | $ 8,158 | 53,199 | 37,554 |
Products Services And Fees Recognized At a Point In Time | 12,450 | 8,121 | ||||||||
Products Services And Fees Transferred Over Time | 40,749 | 29,433 | ||||||||
Service Lines | 53,199 | 37,554 | ||||||||
Cloud Telecommunications Segment | ||||||||||
Desktop Services | 5,484 | 2,891 | ||||||||
Equipment Financing Revenue | 501 | 335 | ||||||||
Telecommunications Services | 25,168 | 16,560 | ||||||||
Fees, Commissions And Other Recognized Over Time | 1,899 | 1,709 | ||||||||
One time fees commissions and other | 2,100 | 911 | ||||||||
Subscription Maintenance And Support | 0 | 0 | ||||||||
Professional Servicing And Other | 0 | 0 | ||||||||
Revenue | 35,152 | 22,406 | ||||||||
Products Services And Fees Recognized At a Point In Time | 7,584 | 3,802 | ||||||||
Products Services And Fees Transferred Over Time | 27,568 | 18,604 | ||||||||
Service Lines | 35,152 | 22,406 | ||||||||
Software Licenses | 0 | 0 | ||||||||
Software Solutions Segment [Member] | ||||||||||
Desktop Services | 0 | 0 | ||||||||
Equipment Financing Revenue | 0 | 0 | ||||||||
Telecommunications Services | 0 | 0 | ||||||||
Fees, Commissions And Other Recognized Over Time | 0 | 0 | ||||||||
One time fees commissions and other | 0 | 0 | ||||||||
Subscription Maintenance And Support | 13,181 | 10,829 | ||||||||
Professional Servicing And Other | 1,412 | 1,105 | ||||||||
Revenue | 18,047 | 15,148 | ||||||||
Products Services And Fees Recognized At a Point In Time | 4,866 | 4,319 | ||||||||
Products Services And Fees Transferred Over Time | 13,181 | 10,829 | ||||||||
Service Lines | 18,047 | 15,148 | ||||||||
Software Licenses | $ 3,454 | $ 3,214 |
Revenue (Details 1)
Revenue (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue | ||
Receivables, Which Are Included In Trade Receivables, Net Of Allowance For Doubtful Accounts | $ 3,476 | $ 3,297 |
Contract Assets | 342 | 318 |
Contract Liabilities | $ 2,588 | $ 3,585 |
Revenue (Details 2)
Revenue (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
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 | (192) | (166) |
Increase Due To Additional Unamortized Discounts | 216 | 223 |
Contract Liabilities | ||
Revenue Recognized That Was Included In The Contract Liability Balance At The Beginning Of The Period | (3,393) | (3,046) |
Increase Due To Cash Received, Excluding Amounts Recognized As Revenue During The Period | 2,396 | 3,603 |
Transferred To Receivables From Contract Assets Recognized At The Beginning Of The Period | 0 | 0 |
Increase Due To Additional Unamortized Discounts | $ 0 | $ 0 |
Revenue (Details 3)
Revenue (Details 3) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue | ||
Gross contract assets | $ 427 | $ 318 |
Less: allowance for credit losses | (85) | 0 |
Contract assets, net of allowance for credit losses | $ 342 | $ 318 |
Revenue (Details 4)
Revenue (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | |
Revenue | ||||
Opening balance | $ 0 | $ 0 | $ 0 | $ 0 |
Cumulative effect of accounting change | 29 | |||
Provision | 2 | (8) | 11 | 53 |
Write- offs | 0 | 0 | 0 | (2) |
Recoveries and others | 0 | 0 | 0 | 0 |
Closing balance | $ 31 | $ 23 | $ 34 | $ 85 |
Revenue (Details 5)
Revenue (Details 5) $ in Thousands | Dec. 31, 2023 USD ($) |
Total | $ 4,000 |
Software Solutions [Member] | |
2024 | 10,350 |
2025 | 5,040 |
2026 | 2,596 |
2027 | 1,056 |
2028 And Thereafter | 80 |
Total | 19,122 |
Desktop Devices | |
2024 | 229 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 And Thereafter | 0 |
Total | 229 |
Telecommunications Services | |
2024 | 18,589 |
2025 | 12,776 |
2026 | 7,645 |
2027 | 4,316 |
2028 And Thereafter | 1,255 |
Total | $ 44,581 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings per common share: | ||||||||||
Net loss | $ 61 | $ 1,704 | $ (545) | $ (1,582) | $ (32,601) | $ (696) | $ (896) | $ (1,220) | $ (362) | $ (35,413) |
Weighted-average share reconciliation: | ||||||||||
Weighted-average basic shares outstanding (B) | 25,944,748 | 22,939,514 | ||||||||
Diluted weighted-average outstanding shares of common stock (C) | 25,944,748 | 22,939,514 | ||||||||
Earnings per common share: | ||||||||||
Basic (A/B) | $ 0 | $ 0.07 | $ (0.02) | $ (0.06) | $ (1.33) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.01) | $ (1.54) |
Diluted (A/C) | $ 0 | $ 0.06 | $ (0.02) | $ (0.06) | $ (1.33) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.01) | $ (1.54) |
Earnings Per Common Share (De_2
Earnings Per Common Share (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Options | ||
Securities excluded from earnings | 4,580,824 | 2,846,670 |
Acquisitions (Details)
Acquisitions (Details) - Allegiant Networks, LLC Business Acquisition $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Cash | $ 2,000 |
Common Stock | 6,326 |
Note payable | 1,100 |
Total consideration | $ 9,426 |
Acquisitions (Details 1)
Acquisitions (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, plant & equipment | $ 486 | $ 486 |
Allegiant Networks, LLC Business Acquisition | ||
Total purchase price | 9,426 | |
Cash | 586 | |
Accounts receivables | 759 | |
Prepaid expenses | 48 | |
Inventory | 484 | |
Other assets | 12 | |
Property, plant & equipment | 319 | |
Right to use assets | 861 | |
Intangible assets acquired (FV) | 7,000 | |
Total identifiable assets | 10,069 | |
Accounts payable | 1,162 | |
Accrued expenses | 714 | |
Contract liability | 917 | |
Operating lease liability | 877 | |
Direct Financing Liability | 142 | |
Buyers note | 1,100 | |
Deferred tax liability | 1,922 | |
Total liabilities assumed | 6,834 | |
Total goodwill | $ 5,091 |
Acquisitions (Details 2)
Acquisitions (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Acquisitions | ||
Revenues | $ 53,199 | $ 46,765 |
Net loss | $ (362) | $ (35,636) |
Earnings per share | $ (0.01) | $ (1.40) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 01, 2022 | Oct. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Common stock, par value | $ 0.001 | $ 0.001 | ||
Common stock issued, value | $ 0 | $ 6,326,000 | ||
Allegiant Networks business acquisition [Member] | ||||
Description of key assumptions used in valuing the developed technology | The key assumptions used in valuing the customer relationships acquired are as follows: weighted average cost of capital of 16.0%, tax rate of 25.0%, and estimated economic life of 15 years | |||
Acquire, Percentage | 100% | |||
Description of Acquisition Agreement | (i) a cash payment at closing in the amount of $2.0 million, (ii) a three-year promissory note by the Company in favor of seller in the amount of $1.1 million, and (iii) 2,461,538 shares of the Company’s common stock, par value $0.001 per share | |||
Discription of lock-up agreement | after 6 months, 25% of the shares will be permitted to be sold, with an additional 25% permitted to be sold every 6-month period thereafter | |||
Cash consideration | $ 2,000,000 | |||
Promissory note | $ 1,100,000 | |||
Common stock, issued | 2,461,538 | |||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Common stock issued, value | $ 257 | |||
Aggregate purchase price | $ 9,400,000 | |||
Acquisition related expenses incurred | $ 1,100,000 | $ 18,000 |
Trade Receivables and Allowan_3
Trade Receivables and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Trade Receivables and Allowance for Credit Losses | ||
Gross Trade Receivables | $ 3,592 | $ 3,428 |
Less Allowance For Doubtful Accounts | (116) | (131) |
Trade Receivables, Net | 3,476 | 3,297 |
Current Trade Receivables, Net | 3,476 | 3,297 |
Long-term Trade Receivables, Net | 0 | 0 |
Trade Receivables | $ 3,476 | $ 3,297 |
Trade Receivables and Allowan_4
Trade Receivables and Allowance for Credit Losses (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Trade Receivables and Allowance for Credit Losses | ||||
Begaining balance | $ 110 | $ 144 | $ 187 | $ 131 |
Cumulative effect of accounting charges | 18 | |||
Provision | 37 | 30 | 68 | 45 |
Write-offs | (31) | (4) | (111) | (7) |
Recoveries and others | 0 | 0 | 0 | 0 |
Ending balance | $ 116 | $ 110 | $ 144 | $ 187 |
Trade Receivables and Allowan_5
Trade Receivables and Allowance for Credit Losses (Details Narrative) | Dec. 31, 2023 | Dec. 31, 2022 |
Trade Receivables and Allowance for Credit Losses | ||
Percent of gross accounts receivable | 3.20% | 3.80% |
Equipment Financing Receivabl_3
Equipment Financing Receivables and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Equipment Financing Receivables and Allowance for Credit Losses | ||
Gross Equipment Financing Receivables | $ 3,888 | $ 2,666 |
Less Unearned Income | (1,093) | (776) |
Less: allowance for credit losses | 171 | 0 |
Equipment Financing Receivables, Net | 2,624 | 1,890 |
Current Equipment Financing Receivables, Net | 856 | 635 |
Long-term Equipment Financing Receivables, Net | 1,768 | 1,255 |
Equipment Financing Receivables, Net | $ 2,624 | $ 1,890 |
Equipment Financing Receivabl_4
Equipment Financing Receivables and Allowance for Credit Losses (Details 1) $ in Thousands | Dec. 31, 2023 USD ($) |
Equipment Financing Receivables and Allowance for Credit Losses | |
2024 | $ 1,291 |
2025 | 1,109 |
2026 | 759 |
2027 | 516 |
2028 | 213 |
2029 and thereafter | 0 |
Total | $ 3,888 |
Equipment Financing Receivabl_5
Equipment Financing Receivables and Allowance for Credit Losses (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | |
Opening balance | $ 0 | $ 0 | $ 0 | $ 0 | |||
Provision | $ 37 | $ 30 | $ 68 | 45 | |||
Write- offs | 0 | 0 | 0 | (2) | |||
Recoveries and others | 0 | 0 | 0 | 0 | |||
Closing balance | 85 | 85 | |||||
Allowance for Credit Losses | |||||||
Opening balance | 161 | 145 | 127 | 0 | 0 | 0 | 0 |
Cumulative effect of accounting change | 112 | ||||||
Provision | 27 | 23 | 23 | 19 | |||
Write- offs | (17) | (7) | (5) | (4) | |||
Recoveries and others | 0 | 0 | 0 | 0 | |||
Closing balance | $ 171 | $ 161 | $ 145 | $ 127 | $ 145 | $ 161 | $ 171 |
Equipment Financing Receivabl_6
Equipment Financing Receivables and Allowance for Credit Losses (Details 3) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Aging of receivables dues | $ 2,624 | $ 1,890 |
Past due amounts 0-90 days | ||
Aging of receivables dues | 2,623 | 1,888 |
Past due amounts >90 days | ||
Aging of receivables dues | $ 1 | $ 2 |
Equipment Financing Receivabl_7
Equipment Financing Receivables and Allowance for Credit Losses (Details 4) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Total equipment financing receivables | $ 2,795 | $ 1,890 |
Current period gross write offs equipment financing receivables | 33 | $ 20 |
2021 [Member] | ||
Current period gross write offs equipment financing receivables | 2 | |
2020 [Member] | ||
Current period gross write offs equipment financing receivables | 2 | |
2019 [Member] | ||
Current period gross write offs equipment financing receivables | 1 | |
Prior [Member] | ||
Current period gross write offs equipment financing receivables | 0 | |
2023 [Member] | ||
Current period gross write offs equipment financing receivables | 14 | |
2022 [Member] | ||
Current period gross write offs equipment financing receivables | 14 | |
UNITED STATES | ||
Total equipment financing receivables | 1,540 | |
UNITED STATES | 2021 [Member] | ||
Total equipment financing receivables | 211 | |
UNITED STATES | 2020 [Member] | ||
Total equipment financing receivables | 196 | |
UNITED STATES | 2019 [Member] | ||
Total equipment financing receivables | 71 | |
UNITED STATES | Prior [Member] | ||
Total equipment financing receivables | 0 | |
UNITED STATES | 2022 [Member] | ||
Total equipment financing receivables | $ 777 |
Equipment Financing Receivabl_8
Equipment Financing Receivables and Allowance for Credit Losses (Details Narrative) | Dec. 31, 2023 | Dec. 31, 2022 |
Equipment Financing Receivables and Allowance for Credit Losses | ||
Allowance for credit losses | 6.10% | 0% |
Prepaid Expenses (Details)
Prepaid Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid Expenses | ||
Prepaid Corporate Insurance | $ 68 | $ 117 |
Prepaid Software Services And Support | 245 | 122 |
Prepaid Employee Insurance Premiums | 0 | 30 |
Prepaid Nasdaq Listing Fee | 0 | 15 |
User group meeting | 84 | 0 |
Other Prepaid Expenses | 111 | 147 |
Total Prepaid Assets | $ 508 | $ 431 |
Property and Equipment and Pr_3
Property and Equipment and Property and Equipment, Held for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Less: Accumulated Depreciation | $ (2,891) | $ (2,721) |
Total Property And Equipment, Net | 670 | 3,315 |
Computer and Office Equipment | ||
Property And Equipment, Gross | 2,700 | 2,726 |
Computer Software | ||
Property And Equipment, Gross | 625 | 576 |
Internal-use Software | ||
Property And Equipment, Gross | 14 | 14 |
Furniture and Fixtures | ||
Property And Equipment, Gross | 64 | 75 |
Leasehold Improvements | ||
Property And Equipment, Gross | 15 | 15 |
Vehicles | ||
Property And Equipment, Gross | 143 | 130 |
Land | ||
Property And Equipment, Gross | 0 | 500 |
As Previously Reported [Member] | ||
Property And Equipment, Gross | $ 0 | $ 2,000 |
Property and Equipment and Pr_4
Property and Equipment and Property and Equipment, Held for Sale (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and Equipment and Property and Equipment, Held for Sale (Details) | ||
Purchase price | $ 4,000,000 | |
Note payable | 1,800,000 | |
Closing costs | 208 | |
Net proceeds | 2,000,000 | |
Depreciation And Amortization Expense | $ 404,000 | $ 311,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Amount Of Intangible, Net | $ 23,556 | |
Customer Relationships | ||
Carrying Amount Of Intangible, Gross | 26,073 | $ 26,073 |
Less: Accumulated Amortization | (5,260) | (3,052) |
Carrying Amount Of Intangible, Net | 20,813 | 23,021 |
Developed Technologies | ||
Carrying Amount Of Intangible, Gross | 4,900 | 4,900 |
Less: Accumulated Amortization | (2,269) | (1,410) |
Carrying Amount Of Intangible, Net | 2,631 | 3,490 |
Trademark and trade names [Member] | ||
Carrying Amount Of Intangible, Gross | 400 | 400 |
Less: Accumulated Amortization | (288) | (186) |
Carrying Amount Of Intangible, Net | 112 | 214 |
Total acquired intangible assets [Member] | ||
Carrying Amount Of Intangible, Gross | 31,373 | 31,373 |
Less: Accumulated Amortization | (7,817) | (4,648) |
Carrying Amount Of Intangible, Net | $ 23,556 | $ 26,725 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 1) $ in Thousands | Dec. 31, 2023 USD ($) |
Intangible Assets and Goodwill | |
2024 | $ 3,028 |
2025 | 2,770 |
2026 | 2,457 |
2027 | 2,202 |
2028 and thereafter | 13,099 |
Total | $ 23,556 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible Assets and Goodwill | ||
Goodwill, beginning balance | $ 9,454 | $ 36,972 |
Centric telecom business acquisition | 5,091 | |
Impairment | (32,609) | |
Additions | 0 | |
Goodwill, ending balance | $ 9,454 | $ 9,454 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 01, 2022 | Jun. 01, 2021 | Jan. 14, 2021 | |
Software Solution Revenue | $ 860 | $ 882 | |||
Sales And Marketing Expenses | $ 2,183 | 1,433 | |||
Developed Technologies | 3 years 8 months 12 days | ||||
Trademarks And Trade Names | 1 year 8 months 12 days | ||||
Weighted Average Remaining Useful Life For Customer Relationships | 13 years 4 months 24 days | ||||
Goodwill book value | 32,600,000 | ||||
Intangible assets | $ 23,556,000 | ||||
General And Administrative Expenses | $ 127 | $ 121 | |||
Allegiant Networks business acquisition [Member] | |||||
Intangible assets | $ 7,000 | ||||
NetSapiens business acquisition [Member] | |||||
Intangible assets | $ 21,100 | ||||
Centric Telecom business acquisition [Member] | |||||
Intangible assets | $ 2,200 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Accrued Wages And Benefits | $ 2,884,000 | $ 2,427,000 |
Accrued Accounts Payable | 1,297,000 | 987,000 |
Accrued Sales And Telecommunications Taxes | 1,234,000 | 846,000 |
Product Warranty Liability | 25,000 | 55,000 |
Credit cards | 113,000 | 0 |
Other | 398,000 | 575,000 |
Total Accrued Expenses | $ 5,951,000 | $ 4,890,000 |
Accrued Expenses (Details 1)
Accrued Expenses (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Expenses | ||
Beginning Balance | $ 55,000 | $ 50,000 |
Accrual For Warranties | 25,000 | 55,000 |
Adjustments Related To Pre-existing Warranties | (32,000) | (26,000) |
Warranty Settlements | (23,000) | (24,000) |
Ending Balance | $ 25,000 | $ 55,000 |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Expenses | ||
Product Warranty Expense | $ 25 | $ 29 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Notes Payable | ||
Related party note payable | $ 843,000 | $ 1,100,000 |
Other note payable | 206,000 | 1,925,000 |
Notes Payable | 1,049,000 | 3,025,000 |
Less: Current Notes Payable | (457,000) | (420,000) |
Notes Payable, Net Of Current Portion | $ 592 | $ 2,605,000 |
Notes Payable (Details 1)
Notes Payable (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Notes Payable | |
2024 | $ 457 |
2025 | 478 |
2026 | 114 |
2027 | 0 |
2028 | 0 |
Total | $ 1,049 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 01, 2022 | Jan. 27, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related party note payable | $ 843,000 | $ 1,100,000 | ||
On February 27, 2023 | ||||
Agreement Term | 3 years | |||
Promissory note | $ 278,000,000 | |||
Interest Rate | 6.58% | |||
Quartely Payment | $ 85,430 | |||
Allegiant Networks business acquisition [Member] | ||||
Related party note payable | $ 843,000 | $ 1,100,000 | ||
Agreement Term | 3 years | |||
Promissory note | $ 1,100,000 | |||
Interest Rate | 4% | |||
Quartely Payment | $ 983,810 | |||
Principal amount paid | 2,570 | |||
Interest paid | $ 380 | |||
Fixed Rate Term Loan Agreement [Member] | ||||
Agreement Term | 7 years | |||
Purchase Of Building | $ 2,000,000 | |||
Interest Rate | 3.67% | |||
Quartely Payment | $ 118,410 | |||
Allegiant Networks business acquisition One [Member] | CrossFirst Bank [Member] | ||||
Agreement Term | 3 years | |||
Promissory note | $ 125 | |||
Interest Rate | 4.25% | |||
Quartely Payment | $ 37,070 | |||
Allegiant Networks business acquisition One [Member] | CrossFirst Bank Second [Member] | ||||
Agreement Term | 3 years | |||
Promissory note | $ 150 | |||
Interest Rate | 4.50% | |||
Quartely Payment | $ 44,660 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Line of Credit | |
Outstanding balance | $ 0 |
Line of credit with a maximum principal amount | $ 700,000 |
Line of credit expiry term | Feb. 27, 2025 |
Line of credit bears interest rate | 0.50% |
Remaining available for borrowing | $ 700,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Value | ||
Trade Receivables, Net | $ 3,476 | $ 3,297 |
Equipment Financing Receivables | 2,624 | 1,890 |
Finance lease obligations | 98 | 193 |
Notes Payable | 1,049 | 3,025 |
Estimated Fair Value | ||
Trade Receivables, Net | 3,476 | 3,297 |
Equipment Financing Receivables | 2,624 | 1,890 |
Finance lease obligations | 98 | 193 |
Notes Payable | $ 1,012 | $ 2,724 |
Equity (Details)
Equity (Details) | Dec. 31, 2023 shares |
Stock-based compensation plans: | |
Outstanding option awards | 8,016 |
Available for future grants | 2,342 |
Total | 10,358 |
StockBased Compensation (Detail
StockBased Compensation (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Based Compensation | ||
Weighted-average fair value of options and warrants granted | $ 1.38 | $ 2.31 |
Expected volatility | 88% | 82% |
Expected life (in years) | 5 years 8 months 26 days | 5 years 8 months 19 days |
Risk-free interest rate | 3.76% | 2.99% |
Expected dividend yield | 0% | 0% |
StockBased Compensation (Deta_2
StockBased Compensation (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Outstanding, Beginning balance | 7,652,964 | 6,988,843 |
Granted | 965,500 | 1,926,000 |
Exercised | (183,521) | (960,865) |
Cancelled/forfeited | (439,144) | (301,014) |
Outstanding, ending balance | 7,995,799 | 7,652,964 |
Shares vested and expected to vest | 7,790,316 | |
Exercisable | 6,417,000 | 5,655,810 |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance | $ 2.73 | $ 2.40 |
Granted | 1.88 | 3.34 |
Exercised | 1.32 | 1.33 |
Cancelled/forfeited | 3.04 | 3.59 |
Outstanding, ending balance | 2.64 | 2.73 |
Shares vested and expected to vest | 2.64 | |
Exercisable | $ 2.57 | $ 2.25 |
Weighted-Average Remaining Contract Life | ||
Outstanding, beginning balance | 5 years 3 months 18 days | 4 years 6 months |
Shares vested and expected to vest | 4 years 10 months 24 days | |
Exercisable | 3 years 10 months 24 days | 4 years 1 month 6 days |
Outstanding, ending balance | 4 years 10 months 24 days | 5 years 3 months 18 days |
Aggregate Intrinsic Value | ||
Outstanding, beginning balance | $ 3,362,000 | $ 19,829,000 |
Shares vested and expected to vest | 16,278 | |
Exercisable | 19,469 | 3,362 |
Outstanding, ending balance | $ 19,051,000 | $ 3,362,000 |
StockBased Compensation (Deta_3
StockBased Compensation (Details 2) | 12 Months Ended |
Dec. 31, 2024 shares | |
Stock Based Compensation | |
RSUs with service based vesting conditions | 13,334 |
StockBased Compensation (Deta_4
StockBased Compensation (Details 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Based Compensation | ||
Number of restricted stock units outstanding, beginning | 155,985 | 39,138 |
Number of restricted stock units granted | 255,000 | 592,500 |
Number of restricted stock units vested/released | (397,651) | (475,653) |
Number of restricted stock units outstanding, ending | 13,334 | 155,985 |
Weighted average exercise price outstanding, beginning | $ 3.62 | $ 4.05 |
Weighted average exercise price granted | 1.87 | 2.70 |
Weighted average exercise price vested/released | 2.57 | 2.50 |
Weighted average exercise price cancelled/forfeited | 0 | 0 |
Weighted average exercise price outstanding, ending | $ 1.73 | $ 3.62 |
StockBased Compensation (Deta_5
StockBased Compensation (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based compensation expense by type: | ||
Stock options | $ 3,221 | $ 2,798 |
Restricted stock units | 628 | 1,576 |
Share-based compensation | 3,849 | 4,374 |
Share-based compensation expense by financial statement line item: | ||
Total cost related to share-based compensation expense | 3,849 | 4,374 |
Cost of Revenue | ||
Share-based compensation expense by type: | ||
Share-based compensation | 582 | 425 |
Research and Development | ||
Share-based compensation expense by type: | ||
Share-based compensation | 610 | 542 |
Selling and Marketing | ||
Share-based compensation expense by type: | ||
Share-based compensation | 658 | 681 |
General and Administrative | ||
Share-based compensation expense by type: | ||
Share-based compensation | $ 1,999 | $ 2,726 |
StockBased Compensation (Deta_6
StockBased Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intrinsic value of options exercised | $ 154,000 | $ 1,576,000 |
Weighted-average grant-date fair value of RSUs granted | $ 1.87 | $ 2.70 |
Intrinsic value of RSUs vested | $ 793,000 | $ 1,167,000 |
Quarterly dividend | $ 5 | |
Shares remaining in the plans available to grant | 10,358 | |
Incentive stock-based compensation plans granted | 2,342 | |
Description about quarterly dividends | the company declared and paid quarterly dividends of $0.005, however, the expected annual dividend yield was less than half of one percent during 2023 and 2022. In March 2023, our Board of Directors cancelled the quarterly dividend | |
Tax benefit related to stock compensation expense on net deferred tax assets | $ 747,000 | $ 510,000 |
Restricted Stock Units (RSUs) [Member] | ||
Total future compensation expense related to non-vested options not yet recognized | 23,000 | |
Total future compensation expense related to non-vested options not yet recognized, period | 1 year | |
Share-based Payment Arrangement, Option [Member] | ||
Total future compensation expense related to non-vested options not yet recognized | $ 3,136,000 | |
Total future compensation expense related to non-vested options not yet recognized, period | 1 year 6 months | 1 year 5 months 30 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current income tax expense: | ||
Federal | $ 0 | $ 0 |
State and local | (98) | (174) |
Current income tax (expense) | (98) | (174) |
Deferred income tax benefit: | ||
Federal | 0 | 875 |
State and local | 0 | 61 |
Deferred income tax benefit | 0 | 936 |
Total income tax benefit/(provision) | $ (98) | $ 762 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
U.S. federal statutory income tax benefit/(expense) | $ 56 | $ 7,596 |
Increase in income tax benefit resulting from: | ||
State and local income tax benefit /(expense), net of federal effect | (69) | 697 |
Write-off goodwill | 0 | (6,848) |
Change in the valuation allowance for net deferred income tax assets | 219 | (785) |
Stock-based compensation | (418) | 105 |
Other, net | 114 | (3) |
Income tax benefit | $ (98) | $ 762 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred income tax assets: | ||
Accrued expenses | $ 392 | $ 490 |
Deferred revenue | 466 | 698 |
Net operating loss carry-forwards | 6,451 | 7,783 |
Stock-based compensation | 747 | 510 |
Other | 20 | 127 |
Subtotal | 8,076 | 9,608 |
Valuation allowance | (4,782) | (3,179) |
Total deferred income tax assets | 3,294 | 6,429 |
Deferred income tax liabilities: | ||
Property and equipment | (41) | (134) |
Prepaid expenses and other | (723) | (455) |
Intangible assets | (2,530) | (5,840) |
Total deferred income tax liabilities | (3,294) | (6,429) |
Net deferred income tax assets (liabilities) | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
U.S. federal statutory tax rate | 21% | 21% |
Valuation allowance | $ 4,782 | |
Deferred taxes, realizable amount | 4,782,000 | |
NOL carry-forwards | 6,451,000 | $ 7,783,000 |
Net Sapiens, Inc. and Centric Telecom, Inc. | ||
NOL carry-forwards | 5,292 | |
Tax credit carry-forwards, research | 2,000 | |
Federal | ||
Valuation allowance | 4,782 | 3,179 |
NOL carry-forwards | 21,480 | 2 |
Tax credit carry-forwards, research | $ 10,724 | |
NOL carry-forwards, expiration year | 2037 | |
NOL carryforwards, not subject to expiration | $ 10,756 | |
Tax credit carry-forwards, research, expiration year | 2040 | |
State | ||
NOL carry-forwards | $ 25,509,000 | 19 |
Tax credit carry-forward, research and development, valuation allowance | $ 19,000 | $ 61,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 683 | |
2025 | 205 | |
2026 | 179 | |
2027 | 134 | |
2028 | 0 | |
Total Minimum Lease Payment | 1,201 | |
Less: Amount Representing Interest | (64) | |
Present Value Of Minimum Lease Payments | 1,137 | |
Finance Leases | ||
2024 | 77 | |
2025 | 21 | |
2026 | 3 | |
2027 | 0 | |
2028 | 0 | |
Total Minimum Lease Payment | 101 | |
Less: Amount Representing Interest | (3) | |
Present Value Of Minimum Lease Payments | $ 98 | $ 193 |
Leases (Details 1)
Leases (Details 1) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Weighted-average Remaining Lease Term - Operating Leases | 2 years 7 months 6 days |
Weighted-average Remaining Lease Term - Finance Leases | 1 year 4 months 24 days |
Weighted-average Discount Rate - Operating Leases | 4.80% |
Weighted-average Discount Rate- Finance Leases | 2.40% |
Leases (Details 2)
Leases (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Leases | |
Operating Cash Flows From Operating Leases | $ 674 |
Operating Cash Flows From Finance Leases | 5 |
Financing Cash Flows From Finance Leases | $ (2,254) |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finance lease | $ 98,000 | $ 193,000 |
Assets classified as property and equipment under finance lease obligations | 486,000 | 486,000 |
Related accumulated depreciation | 337,000 | 259,000 |
Prepaid expense | 40,000 | |
Amortization Expense Included In General And Administrative Expenses | 5,000 | 5,000 |
Interest Expense | 4,000 | 7,000 |
Reston, Virginia [Member] | ||
Rental Expense Incurred On Operating Leases | $ 39,000 | 49,000 |
Description Of lease Expiry Date | lease agreement that expires in 2025 | |
Tempe Arizona Member | ||
Rental Expense Incurred On Operating Leases | $ 111,000 | 0 |
Description Of lease Expiry Date | lease agreement that expires in 2025 | |
Incremental borrowing rate | 6.58% | |
La Jolla, California [Member] | ||
Rental Expense Incurred On Operating Leases | $ 0 | 373,000 |
Lease Expiry Date | lease agreement that expired in 2022 | |
San Diego, California [Member] | ||
Rental Expense Incurred On Operating Leases | $ 84,000 | 8,000 |
Description Of lease Expiry Date | lease agreement that expires in 2024 | |
Overland Park, Kansas [Member] | ||
Rental Expense Incurred On Operating Leases | $ 196,000 | 30,000 |
Description Of lease Expiry Date | lease agreement that expires in 2027 | |
Michigan Las Vegas Member | ||
Rental Expense Incurred On Operating Leases | $ 388,000 | 213,000 |
Description Of lease Expiry Date | lease agreements that expire in 2024 | |
Other Operating Leases [Member] | ||
Description Of lease Expiry Date | The leases expire on various dates through 2027 and the interest rates range from 2.81% to 15.74% | |
Cost of product | $ 87,000 | $ 79,000 |
Maximum Member | ||
Interest Rate- Finance Leases | 1.37% | |
Minimum Member | ||
Interest Rate- Finance Leases | 15.74% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Bonus Plan [Member] | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Bonus for Executives | $ 800,000 |
Bonus for Non-Executives | $ 240,000 |
Bonus awards on annual revenue | 30% |
Bonus awards on Adjusted EBITDA | 30% |
Bonus awards on cash balance | 30% |
Bonus awards on Company stock price | 10% |
Description of Bonus Plan | No bonus will be awarded for any performance target for which actual performance is less than 90% of target. At 90% or greater actual performance relative to the target, 50% of the weighted bonus amount apportioned for the performance target is payable. From 90% to 100% actual performance relative to the target, the remaining 50% of the weighted bonus amount is awarded pro rata with the percentage of actual performance exceeding 90% of target (i.e., each 1% excess over 90% of performance target equals 5% of the weighted bonus amount payable). If actual performance reaches 110% of performance target or greater for any individual performance target, then an additional 10% of the amount apportioned to that performance target will be payable as an additional bonus. Based on our financial performance for the year ended December 31, 2023, revenue exceeded the annual revenue performance target and 100% of the bonus was achieved, and the Adjusted EBITDA, cash balance, and stock price exceeded the performance targets by 110% and 110% of the bonus was achieved for these three performance targets |
Accrued employee bonus plan | $ 1,098 |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Benefit Plan | ||
Employer contributions to employee benefit plan | $ 517 | $ 365 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income/(loss) before income tax benefit | ||||||||||
Cloud telecommunications services | $ (124) | $ (3,948) | ||||||||
Software solutions | (140) | (32,227) | ||||||||
Total other income expense net | (264) | (36,175) | ||||||||
Total other income expense net | $ 40 | $ 1,373 | $ (4) | $ 16 | $ 1,555 | $ (184) | $ (126) | $ (28) | ||
Cloud Telecommunications Service | ||||||||||
Income/(loss) before income tax benefit | ||||||||||
Cloud telecommunications services | 35,152 | 22,406 | ||||||||
Software solutions | 18,047 | 15,148 | ||||||||
Consolidated revenue | 53,199 | 37,554 | ||||||||
Cloud Telecommunications Service 1 | ||||||||||
Income/(loss) before income tax benefit | ||||||||||
Cloud telecommunications services | (1,483) | (3,877) | ||||||||
Software solutions | (206) | (33,515) | ||||||||
Total operating income loss | (1,689) | (37,392) | ||||||||
Cloud Telecommunications Service 2 | ||||||||||
Income/(loss) before income tax benefit | ||||||||||
Cloud telecommunications services | 1,359 | (71) | ||||||||
Software solutions | 66 | 1,288 | ||||||||
Total other income expense net | $ 1,425 | $ 1,217 |
Segment (Details 1)
Segment (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues | $ 14,164 | $ 13,874 | $ 12,670 | $ 12,491 | $ 11,442 | $ 9,108 | $ 8,846 | $ 8,158 | $ 53,199 | $ 37,554 |
United States [Member] | ||||||||||
Revenues | 50,662 | 36,095 | ||||||||
International [Member] | ||||||||||
Revenues | $ 2,537 | $ 1,459 |
Segments (Details Narrative)
Segments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Depreciation and amortization | $ 404,000 | $ 311,000 |
Interest expense | 115,000 | 78,000 |
Goodwill impairment | 32,609,000 | |
Cloud Telecommunications Service Segment | ||
Depreciation and amortization | 1,553,000 | 712,000 |
Interest expense | 115,000 | 77,000 |
Interest income | 2,000 | 0 |
Software Solution Segment | ||
Depreciation and amortization | 2,020,000 | 2,035,000 |
Interest expense | 0 | 1,000 |
Interest income | 0 | 0 |
Goodwill impairment | $ 0 | $ 32,609 |
Quarterly Financial Informati_3
Quarterly Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues | $ 14,164,000 | $ 13,874,000 | $ 12,670,000 | $ 12,491,000 | $ 11,442,000 | $ 9,108,000 | $ 8,846,000 | $ 8,158,000 | $ 53,199,000 | $ 37,554,000 |
Operating expenses: | ||||||||||
Selling and marketing | 3,747,000 | 3,502,000 | 3,613,000 | 3,809,000 | 3,638,000 | 2,732,000 | 2,771,000 | 2,584,000 | 14,671,000 | 11,725,000 |
General and administrative | 3,320,000 | 3,309,000 | 3,167,000 | 3,997,000 | 4,098,000 | 2,800,000 | 2,757,000 | 3,249,000 | ||
Research and development | 1,255,000 | 1,275,000 | 1,138,000 | 1,191,000 | 1,271,000 | 1,151,000 | 1,229,000 | 304,000 | 4,860,000 | 3,955,000 |
Total operating expenses | 14,126,000 | 13,510,000 | 13,187,000 | 14,065,000 | 46,045,000 | 9,652,000 | 9,698,000 | 9,551,000 | 54,888,000 | 74,946,000 |
dodd | 32,678 | |||||||||
Income (loss) from operations | 38,000 | 364,000 | (517,000) | (1,574,000) | (34,603,000) | (544,000) | (852,000) | (1,393,000) | (1,689,000) | (37,392,000) |
Total other income/(expense), net | 40,000 | 1,373,000 | (4,000) | 16,000 | 1,555,000 | (184,000) | (126,000) | (28,000) | ||
Income (loss) before income tax | 78,000 | 1,737,000 | (521,000) | (1,558,000) | (33,048,000) | (728,000) | (978,000) | (1,421,000) | ||
Income tax benefit/(provision) | (17,000) | (33,000) | (24,000) | (24,000) | 447,000 | 32,000 | 82,000 | 201,000 | (98,000) | 762,000 |
Net loss | $ 61,000 | $ 1,704,000 | $ (545,000) | $ (1,582,000) | $ (32,601,000) | $ (696,000) | $ (896,000) | $ (1,220,000) | $ (362,000) | $ (35,413,000) |
Basic earnings per common share | $ 0 | $ 0.07 | $ (0.02) | $ (0.06) | $ (1.33) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.01) | $ (1.54) |
Diluted earnings per common share | $ 0 | $ 0.06 | $ (0.02) | $ (0.06) | $ (1.33) | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.01) | $ (1.54) |
Software Solutions | ||||||||||
Revenues | $ 5,318,000 | $ 4,691,000 | $ 3,930,000 | $ 4,108,000 | $ 4,407,000 | $ 3,875,000 | $ 3,598,000 | $ 3,268,000 | ||
Operating expenses: | ||||||||||
Cost of revenue | 1,822,000 | 1,328,000 | 1,293,000 | 1,185,000 | 1,403,000 | 1,141,000 | 1,131,000 | 1,661,000 | ||
Service | ||||||||||
Revenues | 7,685,000 | 7,517,000 | 7,308,000 | 7,158,000 | 6,088,000 | 4,473,000 | 4,556,000 | 4,398,000 | ||
Operating expenses: | ||||||||||
Cost of revenue | 3,294,000 | 3,173,000 | 3,095,000 | 3,044,000 | 2,462,000 | 1,375,000 | 1,438,000 | 1,436,000 | ||
Product | ||||||||||
Revenues | 1,161,000 | 1,666,000 | 1,432,000 | 1,225,000 | 947,000 | 760,000 | 692,000 | 492,000 | ||
Operating expenses: | ||||||||||
Cost of revenue | $ 688,000 | $ 923,000 | $ 881,000 | $ 839,000 | $ 495,000 | $ 453,000 | $ 372,000 | $ 317,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Oracle [Member] $ in Millions | 1 Months Ended |
Feb. 29, 2024 USD ($) | |
Non cancellable service contract amount | $ 5 |
Description related to noncancellable service contract | Under this agreement, $200 remains due during fiscal year 2024, $700 will be due during fiscal 2025, $1.1 million will be due during fiscal 2026, $1.2 million will be due during fiscal 2027, $1.4 million will be due during fiscal 2028, and $400 will be due during fiscal 2029 |