Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | GlobalSCAPE, Inc | |
Trading Symbol | GSB | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 18,782,318 | |
Amendment Flag | false | |
Entity Central Index Key | 0001112920 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33601 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-2785449 | |
Entity Address, Address Line One | 4500 Lockhill-Selma, Suite 150 | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78249 | |
City Area Code | 210-308-8267 | |
Local Phone Number | 210-308-8267 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NYSEAMER | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 12,463 | $ 4,702 |
Accounts receivable, net | 6,308 | 7,239 |
Federal income tax receivable | 1,371 | 1,759 |
Prepaid and other current assets | 1,296 | 1,366 |
Total current assets | 21,438 | 15,066 |
Capitalized software development costs, net | 2,570 | 2,650 |
Goodwill | 12,712 | 12,712 |
Deferred tax asset, net | 295 | 493 |
Property and equipment, net | 265 | 274 |
Right-of-use asset | 2,864 | 2,905 |
Other assets | 421 | 459 |
Total assets | 40,565 | 34,559 |
Current liabilities: | ||
Accounts payable | 639 | 746 |
Accrued expenses | 1,500 | 1,598 |
Deferred revenue | 16,500 | 15,683 |
Long term debt, current portion | 5,825 | 4,575 |
Total current liabilities | 24,464 | 22,602 |
Deferred revenue, non-current portion | 2,718 | 2,572 |
Lease liability | 2,853 | 2,900 |
Long term debt, non-current portion | 39,208 | 42,745 |
Other long term liabilities | 24 | 24 |
Commitments and contingencies | ||
Stockholders’ equity (deficit): | ||
Preferred stock, par value $0.001 per share, 10,000,000 authorized, no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001 per share, 40,000,000 authorized, 24,161,818 and 23,890,890 shares issued: 18,782,318 and 18,511,390 outstanding at June 30, 2020 and December 31, 2019, respectively | 24 | 24 |
Additional paid-in capital | 33,868 | 32,156 |
Treasury stock, 5,379,500 and 5,379,500 shares, at cost, at June 30, 2020 and December 31, 2019, respectively | (23,087) | (23,087) |
Retained earnings (deficit) | (39,507) | (45,377) |
Total stockholders’ equity (deficit) | (28,702) | (36,284) |
Total liabilities and stockholders’ equity (deficit) | $ 40,565 | $ 34,559 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 24,161,818 | 23,890,890 |
Common stock, shares outstanding | 18,782,318 | 18,511,390 |
Treasury stock, shares | 5,379,500 | 5,379,500 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating revenues: | ||||
Total Revenues | $ 10,031 | $ 10,269 | $ 19,743 | $ 19,682 |
Cost of revenues: | ||||
Total cost of revenues | 1,607 | 1,587 | 3,189 | 3,021 |
Gross profit | 8,424 | 8,682 | 16,554 | 16,661 |
Operating expenses: | ||||
Sales and marketing | 2,062 | 1,899 | 4,137 | 3,815 |
General and administrative | 1,450 | 1,757 | 2,974 | 3,776 |
Legal and professional | 462 | 222 | 1,077 | 798 |
Research and development | 352 | 275 | 664 | 600 |
Total operating expenses | 4,326 | 4,153 | 8,852 | 8,989 |
Income (loss) from operations | 4,098 | 4,529 | 7,702 | 7,672 |
Interest income (expense), net | (628) | 30 | (1,402) | 54 |
Income (loss) before income taxes | 3,470 | 4,559 | 6,300 | 7,726 |
Income tax expense (benefit) | (31) | 926 | 430 | 1,673 |
Net income (loss) | 3,501 | 3,633 | 5,870 | 6,053 |
Comprehensive income (loss) | $ 3,501 | $ 3,633 | $ 5,870 | $ 6,053 |
Net income per common share - | ||||
Basic (in Dollars per share) | $ 0.19 | $ 0.21 | $ 0.31 | $ 0.35 |
Diluted (in Dollars per share) | $ 0.18 | $ 0.20 | $ 0.31 | $ 0.33 |
Weighted average shares outstanding: | ||||
Basic (in Shares) | 18,750 | 17,268 | 18,681 | 17,233 |
Diluted (in Shares) | 19,119 | 18,379 | 19,072 | 18,120 |
Cash dividends declared per share (in Dollars per share) | $ 0 | $ 0.500 | $ 0 | $ 0.515 |
Software and Licenses [Member] | ||||
Operating revenues: | ||||
Revenues | $ 2,228 | $ 2,835 | $ 4,223 | $ 5,469 |
Cost of revenues: | ||||
Cost of revenues | 729 | 731 | 1,407 | 1,340 |
Maintenance [Member] | ||||
Operating revenues: | ||||
Revenues | 7,295 | 6,602 | 14,361 | 12,678 |
Cost of revenues: | ||||
Cost of revenues | 607 | 566 | 1,220 | 1,098 |
Professional Services [Member] | ||||
Operating revenues: | ||||
Revenues | 508 | 832 | 1,159 | 1,535 |
Cost of revenues: | ||||
Cost of revenues | $ 271 | $ 290 | $ 562 | $ 583 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2018 | $ 22 | $ 25,584 | $ (22,712) | $ 13,062 | $ 15,956 |
Balance (in Shares) at Dec. 31, 2018 | 22,441,860 | ||||
Purchase of Treasury Stock | (375) | (375) | |||
Shares issued upon exercise of stock options | 519 | 519 | |||
Shares issued upon exercise of stock options (in Shares) | 156,489 | ||||
Stock option cash settlement | (445) | (445) | |||
Stock options | 775 | 775 | |||
Restricted stock | 100 | 100 | |||
Common stock cash dividends | (259) | (259) | |||
Net income | 2,420 | 2,420 | |||
Balance at Mar. 31, 2019 | $ 22 | 26,533 | (23,087) | 15,223 | 18,691 |
Balance (in Shares) at Mar. 31, 2019 | 22,598,349 | ||||
Balance at Dec. 31, 2018 | $ 22 | 25,584 | (22,712) | 13,062 | 15,956 |
Balance (in Shares) at Dec. 31, 2018 | 22,441,860 | ||||
Stock option cash settlement | (445) | ||||
Net income | 6,053 | ||||
Balance at Jun. 30, 2019 | $ 22 | 27,286 | (23,087) | 10,143 | 14,364 |
Balance (in Shares) at Jun. 30, 2019 | 22,693,869 | ||||
Balance at Mar. 31, 2019 | $ 22 | 26,533 | (23,087) | 15,223 | 18,691 |
Balance (in Shares) at Mar. 31, 2019 | 22,598,349 | ||||
Shares issued upon exercise of stock options | 179 | 179 | |||
Shares issued upon exercise of stock options (in Shares) | 55,520 | ||||
Stock options | 197 | 197 | |||
Restricted stock | 377 | 377 | |||
Restricted stock (in Shares) | 40,000 | ||||
Common stock cash dividends | (8,713) | (8,713) | |||
Net income | 3,633 | 3,633 | |||
Balance at Jun. 30, 2019 | $ 22 | 27,286 | (23,087) | 10,143 | 14,364 |
Balance (in Shares) at Jun. 30, 2019 | 22,693,869 | ||||
Shares issued upon exercise of stock options | 176 | 176 | |||
Shares issued upon exercise of stock options (in Shares) | 57,006 | ||||
Stock options | 321 | 321 | |||
Restricted stock | 215 | 215 | |||
Common stock cash dividends | (263) | (263) | |||
Net income | 3,580 | 3,580 | |||
Balance at Sep. 30, 2019 | $ 22 | 27,998 | (23,087) | 13,460 | 18,393 |
Balance (in Shares) at Sep. 30, 2019 | 22,750,875 | ||||
Shares issued upon exercise of stock options | $ 2 | 3,728 | 3,730 | ||
Shares issued upon exercise of stock options (in Shares) | 1,060,015 | ||||
Stock options | 288 | 288 | |||
Restricted stock | 142 | 142 | |||
Restricted stock (in Shares) | 80,000 | ||||
Common stock cash dividends | (62,471) | (62,471) | |||
Net income | 3,634 | 3,634 | |||
Balance at Dec. 31, 2019 | $ 24 | 32,156 | (23,087) | (45,377) | (36,284) |
Balance (in Shares) at Dec. 31, 2019 | 23,890,890 | ||||
Shares issued upon exercise of stock options | 768 | 768 | |||
Shares issued upon exercise of stock options (in Shares) | 198,924 | ||||
Stock options | 365 | 365 | |||
Restricted stock | 132 | 132 | |||
Net income | 2,369 | 2,369 | |||
Balance at Mar. 31, 2020 | $ 24 | 33,421 | (23,087) | (43,008) | (32,650) |
Balance (in Shares) at Mar. 31, 2020 | 24,089,814 | ||||
Balance at Dec. 31, 2019 | $ 24 | 32,156 | (23,087) | (45,377) | (36,284) |
Balance (in Shares) at Dec. 31, 2019 | 23,890,890 | ||||
Stock option cash settlement | 0 | ||||
Net income | 5,870 | ||||
Balance at Jun. 30, 2020 | $ 24 | 33,868 | (23,087) | (39,507) | (28,702) |
Balance (in Shares) at Jun. 30, 2020 | 24,161,818 | ||||
Balance at Mar. 31, 2020 | $ 24 | 33,421 | (23,087) | (43,008) | (32,650) |
Balance (in Shares) at Mar. 31, 2020 | 24,089,814 | ||||
Shares issued upon exercise of stock options | 35 | 35 | |||
Shares issued upon exercise of stock options (in Shares) | 11,794 | ||||
Stock options | 356 | 356 | |||
Restricted stock | 56 | 56 | |||
Restricted stock (in Shares) | 60,210 | ||||
Net income | 3,501 | 3,501 | |||
Balance at Jun. 30, 2020 | $ 24 | $ 33,868 | $ (23,087) | $ (39,507) | $ (28,702) |
Balance (in Shares) at Jun. 30, 2020 | 24,161,818 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Deficit) (Parentheticals) - $ / shares | Dec. 05, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | |||||
Common stock cash dividends per share | $ 3.35 | $ 3.365 | $ 0.015 | $ 0.500 | $ 0.015 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 5,870,000 | $ 6,053,000 |
Items not involving cash at the time they are recorded in the statement of operations: | ||
Provision for doubtful accounts receivable | 4,000 | 63,000 |
Depreciation and amortization | 917,000 | 916,000 |
Share-based compensation | 909,000 | 1,449,000 |
Amortization of debt issuance costs | 213,000 | 0 |
Deferred taxes | 198,000 | (159,000) |
Subtotal before changes in operating assets and liabilities | 8,111,000 | 8,322,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 927,000 | 537,000 |
Prepaid and other current assets | 70,000 | 104,000 |
Deferred revenue | 963,000 | 749,000 |
Accounts payable | (107,000) | 63,000 |
Accrued expenses | (98,000) | 303,000 |
Operating lease right-of-use asset | 41,000 | 42,000 |
Other assets | 38,000 | 9,000 |
Operating lease liabilities | (47,000) | (43,000) |
Other long-term liabilities | 0 | (4,000) |
Income tax payable (receivable) | 388,000 | 179,000 |
Net cash provided by operating activities | 10,286,000 | 10,261,000 |
Investing Activities: | ||
Software development costs capitalized | (768,000) | (437,000) |
Purchase of property and equipment | (60,000) | (32,000) |
Net cash used in investing activities | (828,000) | (469,000) |
Financing Activities: | ||
Proceeds from exercise of stock options | 803,238 | 697,725 |
Stock option cash settlement | 0 | (445,000) |
Purchase of Treasury Stock | 0 | (375,000) |
Notes payable principle payments | (2,500,000) | 0 |
Dividends paid | 0 | (8,972,000) |
Net cash used in financing activities | (1,697,000) | (9,094,000) |
Net increase in cash | 7,761,000 | 698,000 |
Cash at beginning of period | 4,702,000 | 9,173,000 |
Cash at end of period | 12,463,000 | 9,871,000 |
Cash paid during the period for: | ||
Interest | 1,436,000 | 0 |
Income tax payments (refunds) | (187,000) | 1,491,000 |
Supplemental disclosure of noncash activities: | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 0 | $ 3,075,000 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations [Text Block] | 1. Nature of Business GlobalSCAPE, Inc., together with its wholly-owned subsidiary (TappIn, Inc., which was dissolved June 16, 2020) (collectively referred to as the “Company”, “GlobalSCAPE”, “we”, “us” or “our”), provides secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provisioning of associated services. Our solution portfolio facilitates transmission of critical information such as financial data, medical records, client files, vendor files, personnel files, transaction activity, and other similar documents between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. In addition to enabling secure, flexible transmission of critical information using servers, desktop and notebook computers, and a wide range of network-enabled mobile devices, our products also provide clients with the ability to monitor and audit file transfer activities. Our primary product is Enhanced File Transfer, or EFT. We have other products that complement our EFT product. We sell other products that are synergistic to EFT including CuteFTP. Collectively, these products aimed at consumers and small businesses constitute less than 2% of our total revenue. We continue to offer product support for Mail Express and WAFS, which we discontinued as products for sale as of January 1, 2019. Throughout these notes unless otherwise noted, our references to the 2020 quarter and the 2019 quarter refer to the three months ended June 30, 2020 and 2019, respectively, and references to the 2020 six months and the 2019 six months refer to the six months ended June 30, 2020 and 2019, respectively. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting [Text Block] | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X, “Interim Financial Statements”, as prescribed by the United States Securities and Exchange Commission, or the SEC. Accordingly, they do not include all information and footnotes required under United States generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all accounting entries necessary for a fair presentation of our financial position and results of operations have been made. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The information included in this Report should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 16, 2020, which we refer to as the 2019 Form 10-K, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations We follow accounting standards set by the Financial Accounting Standards Board, or FASB. The FASB sets GAAP, which we follow in preparing financial statements that report our financial position, results of operations, and sources and uses of cash. We also follow the reporting regulations of the SEC. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements. It is possible the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 3. Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. Revenue Recognition Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which clients install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Clients also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a client. We measure revenue based upon the consideration set forth in an arrangement or contract with a client. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our client the software license key that provides the ability to access and use our product. If our client is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our clients subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the client consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a client pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a client such as rebates or other incentives that reduce amounts owed to us by clients. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred revenue, beginning of period $ 18,208 $ 16,544 $ 18,255 $ 16,237 Deferred revenue resulting from new contracts with customers 8,827 7,841 16,558 14,943 Deferred revenue at the beginning of the period that was amortized to revenue (7,009 ) (6,164 ) (13,830 ) (11,796 ) Deferred revenue arising during the period that was amortized to revenue (808 ) (1,235 ) (1,765 ) (2,398 ) Deferred revenue, end of period $ 19,218 $ 16,986 $ 19,218 $ 16,986 Multi-Element Transactions At the time clients purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Clients may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to clients seeking assistance with products they have previously purchased from us, or SaaS subscriptions to clients not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among clients, we use the residual approach under FASB Accounting Standards Codification Topic 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction unless the entire discount relates to only one or more, but not all, performance obligations in a contract. Sales Tax We collect sales tax on many of our transactions with clients as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with clients. This amount is included in accrued liabilities in our condensed consolidated balance sheets. Contract Assets We generally bill clients for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall client relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the client relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred expense, beginning of period $ 933 $ 979 $ 943 $ 1,009 Deferred expense resulting from new contracts with customers 226 206 444 385 Deferred expense amortized to expense (221 ) (222 ) (449 ) (431 ) Deferred expense, end of period $ 938 $ 963 $ 938 $ 963 At June 30, 2020, $584,000 was recorded in prepaid and current other assets and $354,000 was recorded in noncurrent other assets in our condensed consolidated balance sheet. At December 31, 2019, we had $577,000 recorded in prepaid and other current assets and $366,000 recorded in noncurrent other assets in our condensed consolidated balance sheet. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. 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 future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. On April 18, 2019, the Company signed a new operating lease for our existing office space location. The lease is for a period of 10 years at an average annual rent of $462,000 beginning May 1, 2019. We recorded a right-of-use asset and lease liability of approximately $3 million at the commencement of the lease. Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of June 30, 2020, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a nonrecurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and notes payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. The principal amount of our notes payable, including the current portion, as of June 30, 2020 was $46,875,000. This carrying value, net of unamortized debt issuance costs, approximates fair value based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. Goodwill We account for goodwill in accordance with FASB Accounting Standards Codification 350, or ASC 350, as amended by ASU 2017-04, Simplifying the Test for Goodwill Impairment (effective January 1, 2020, as described in recent accounting pronouncements below). Goodwill is not amortized. Annually, we test goodwill for impairment at the reporting unit level using December 31 as the measurement date, and will also evaluate throughout the year if any indicators of a potential impairment are identified. We operate as a single reporting unit with $12,712,000 of goodwill. As of June 30, 2020 and December 31, 2019, this single reporting unit had a negative carrying value. When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: • Macroeconomic conditions. • Industry and market considerations. • Cost factors and trends for labor and other expenses of operating our business. • Our overall financial performance and outlook for the future. • Trends in the quoted market value and trading of our common stock. In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing, in accordance with GAAP. If we conclude otherwise, we proceed to perform a quantitative goodwill impairment test to identify both the existence of impairment and the amount of impairment loss. In a quantitative test, the fair value of a reporting unit is compared to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered unimpaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As of December 31, 2019, after assessing the totality of the relevant events and circumstances, we determined it not more likely than not that the fair value of our reporting unit was less than its carrying amount. Accordingly, we concluded there was no impairment of goodwill as of that date. There have been no material events (including the recent coronavirus COVID-19 outbreak), or changes in circumstances since that time indicating that the carrying amount of our reporting unit may exceed its fair market value and that interim testing needed to be performed. Additionally, because our single reporting unit has a negative carrying value, reasonable changes in the assumptions used would not indicate impairment. Capitalized Software Development Costs When we complete research and development for a software product, have in place a program plan and a detailed program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. We periodically assess the carrying value of capitalized software development costs and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. Research and Development We expense research and development costs as incurred. Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was approximately $31,000 and $44,000 in the 2020 quarter and the 2019 quarter, respectively, and $90,000 and $95,000 in the 2020 six months and the 2019 six months, respectively. Stock-Based Compensation We measure the cost of stock-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: • We estimate expected volatility based on historical volatility of our common stock. • We primarily use the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. • We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. • We estimate a dividend yield based on our historical and expected future dividend payments. For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award. Income Taxes We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. Recent accounting pronouncements Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-02, Leases (Topic 842): ASU 2018-15 Internal-Use Software. ASU 2019-12 Income taxes |
Accounts Receivable, Net
Accounts Receivable, Net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 4. Accounts Receivable, Net We bill clients and issue invoices when we have delivered goods or services. In addition, when clients agree to purchase or renew M&S services, we bill and invoice clients at that time which could be before the date we begin delivering those services. In that event, we exclude from accounts receivable (and from the related deferred revenue, see Note 6) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the client as of the date of our condensed consolidated financial statements. We continually assess the collectability of our accounts receivable. If we deem it less than probable that we will collect an amount due us, we write-off that balance against our allowance for doubtful accounts. Accordingly, we determine our accounts receivable, net, as follows ($ in thousands): June 30, 2020 December 31, 2019 Total invoices issued and unpaid $ 7,537 $ 8,245 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,129 ) (906 ) Gross accounts receivable 6,408 7,339 Allowance for doubtful accounts (100 ) (100 ) Accounts receivable, net $ 6,308 $ 7,239 |
Capitalized Software Developmen
Capitalized Software Development Costs, Net | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 5. Capitalized Software Development Costs, Net Our capitalized software development costs balances and activities were as follows ($ in thousands): June 30, 2020 December 31, 2019 Gross capitalized cost $ 12,297 $ 11,529 Accumulated amortization (9,727 ) (8,879 ) Capitalized software development costs, net $ 2,570 $ 2,650 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Amount capitalized $ 404 $ 236 $ 768 $ 437 Amortization expense (442 ) (453 ) (848 ) (806 ) Released Unreleased Products Products Gross capitalized amount at June 30, 2020 $ 11,828 $ 469 Accumulated amortization (9,727 ) - Net capitalized cost at June 30, 2020 $ 2,101 $ 469 Future amortization expense: Six months ending December 31, 2020 657 Year ending December 31, 2021 825 2022 535 2023 84 Total $ 2,101 The future amortization expense of the gross capitalized software development costs related to unreleased products will be determinable at a future date when those products are ready for general release to the public. |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 6. Deferred Revenue As described in Note 4 regarding accounts receivable, when clients agree to purchase or renew M&S services, we bill and invoice our clients at that time which could be before the date we begin delivering those services. In that event, we exclude from deferred revenue (and from the related accounts receivable) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the client as of the date of our financial statements. Accordingly, we determine our deferred revenue as follows ($ in thousands): June 30, 2020 December 31, 2019 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 20,347 $ 19,161 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,129 ) (906 ) Total deferred revenue $ 19,218 $ 18,255 Deferred revenue, current portion $ 16,500 $ 15,683 Deferred revenue, non-current portion 2,718 2,572 Total deferred revenue $ 19,218 $ 18,255 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 7. Notes Payable In November 2019, we entered into a credit facility with J.P. Morgan Chase Bank, N.A, as Administrative Agent and East West Bank as Syndication Agent consisting of a $50.0 million term loan and a $5 million revolving agreement (the “Loan Agreement”), which is secured by substantially all of our assets. Funds from the term loan were substantially used to fund a special dividend of $3.35 to our common shareholders which was paid on December 5, 2019. The revolving loan may be accessed to fund working capital needs. The loans bear a variable interest rate of LIBOR plus a Term Loan Spread between 3.75% and 2.25%. The amount of the Term Loan Spread is a function of the Company’s Leverage Ratio. Effective January 3, 2020, the Company entered into an Amendment and Waiver No. 1 to the Credit Agreement to increase the amount of the special dividend permitted to be paid to stockholders on December 5, 2019 to accommodate last minute option exercises and to exclude the May 28, 2019 special dividend from the fixed charges calculation. Effective April 13, 2020 the Company entered into Amendment No. 2 to the Credit Agreement which provided consent for the Company to borrow $2.0 million under the U.S. Small Business Administration Payroll Protection Program authorized by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Following receipt of the loan proceeds, we evaluated our access to credit through other sources of funding and returned the funds on May 5, 2020. At June 30, 2020, the principal balance outstanding under the term note payable was $46.9 million and the balance of the revolving note payable was zero. The aggregate maturities of our notes payable, as of June 30, 2020, are as follows: $2.5 million in 2020, $7.5 million in 2021, $7.5 million in 2022, $10.0 million in 2023, and $19.4 million in 2024. Interest payments under the credit facility are due monthly. Principal payments are due quarterly. The loans may be prepaid at any time without penalty. The Loan Agreement contains the following financial covenants: ● We must not exceed a Total Leverage Ratio of 3.25x. This ratio decreases to 3.0x at September 30, 2020, 2.75x at March 31, 2021 and 2.25x at March 31, 2022. This ratio is defined in the Loan Agreement as the ratio of consolidated total funded indebtedness to consolidated EBITDA minus capitalized software expenditures for the period of the four most recent consecutive fiscal quarters. As of June 30, 2020, this debt service coverage ratio was 2.57x. ● We must maintain a Fixed Coverage Charge Ratio of 1.25x. This ratio is defined in the Loan Agreement as the ratio of consolidated EBITDA minus unfinanced capital expenditures to cash interest expense plus scheduled principal payments made plus taxes paid in cash plus restricted payments made in cash. As of June 30, 2020, this debt to tangible net worth ratio was 2.69x. The Loan Agreement contains customary covenants relating to maintaining legal existence and good standing, complying with applicable laws, delivery of financial statements, payment of taxes and maintaining insurance. The Loan Agreement also contains customary events of default including the failure to make payments of principal and interest, the breach of any covenants, the occurrence of a material adverse change, and certain bankruptcy and insolvency events. Additionally, we may be restricted from declaring dividends if an Event of Default exists, or if immediately prior to and after giving effect of such dividend it would cause us to exceed our maximum Total Leverage Ratio, or fall below our minimum Fixed Charge Coverage Ratio. The following table represents the components of our long-term debt disclosed on the condensed consolidated balance sheet as of June 30, 2020. June 30, 2020 Credit facility $ 46,875 Unamortized debt issuance costs (1,842 ) Total long-term debt 45,033 Less current portion of long-term debt 5,825 Total long-term debt, non-current portion $ 39,208 Interest rate 5.4 % |
Stock Options, Restricted Stock
Stock Options, Restricted Stock and Share-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | 8. Stock Options, Restricted Stock and Stock-Based Compensation We have granted stock-based incentive awards to our officers and employees under long-term equity incentive plans that originated in 2000, 2006, 2010, 2015 and 2016. We currently issue stock-based awards to our officers and employees under the 2015 Non-Employee Directors Long-Term Equity Incentive Plan (“2015 Directors Plan”) and 2016 Employee Long-Term Equity Incentive Plan (“2016 Employee Plan”). The 2015 Directors Plan and 2016 Employee Plan authorize the issuance of up to 500,000 and 5,000,000 shares of common stock for stock-based incentives, including stock options and restricted stock awards, respectively. As of June 30, 2020, stock-based incentives for up to 80,000 and 2,581,925 shares remained available for issuance in the future under these plans, respectively. The following shares are currently outstanding under our long-term equity incentive plans: Plan Shares outstanding 2010 Employee LT Equity Incentive Plan 23,207 2015 Directors Plan - 2016 Employee LT Equity Incentive Plan 1,565,642 Total shares Outstanding at June 30, 2020 1,588,849 Under these stock-based compensation plans we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of our Board of Directors. Our stock-based compensation expense was as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock-based compensation expense $ 412 $ 574 $ 909 $ 1,449 Stock Options During the 2020 six months, we granted stock options only under the 2016 Employee Plan. Provisions and characteristics of the options granted to our officers and employees under our long-term equity incentive plans include the following: ● The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of our Board of Directors. ● The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock at market close on that date. ● Stock options we issue generally become exercisable ratably over a three-year period or following a four-year period, expire ten years from the date of grant, and are exercisable for a period of ninety days after the end of employment. ● Upon exercise of a stock option, we issue new shares from the shares of common stock we are authorized to issue. Our stock option activity has been as follows: Weighted Average Weighted Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares Per Share Term in Years (000's) Outstanding at December 31, 2019 1,563,784 $ 5.78 8.69 $ 6,372 Granted 132,000 $ 9.56 Forfeited (18,668 ) $ 7.33 Exercised (210,718 ) $ 3.81 Outstanding at June 30, 2020 1,466,398 $ 6.38 8.45 $ 4,995 Exercisable at June 30, 2020 195,428 $ 4.14 7.30 $ 1,096 Additional information about our stock options is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Weighted average fair value of options granted $ 3.72 $ 2.78 $ 3.93 $ 2.76 Intrinsic value of options exercised $ 79,754 $ 297,289 $ 1,299,868 $ 555,390 Cash received from stock options exercised $ 35,307 $ 178,541 $ 803,238 $ 697,725 Number of options that vested 14,334 19,669 57,838 645,947 Fair value of options that vested $ 33,583 $ 32,982 $ 105,310 $ 997,803 Unrecognized compensation expense related to non-vested options at end of period $ 2,511,397 $ 2,651,482 $ 2,511,397 $ 2,651,482 Weighted average years over which non-vested option expense will be recognized 2.61 3.20 2.61 3.20 As of June 30, 2020 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $2.35 - $3.53 83,649 7.56 $ 3.35 25,355 $ 3.13 $3.54 - $5.31 556,916 7.83 $ 4.03 164,070 $ 4.14 $5.34 - $8.01 328,833 8.80 $ 6.81 2,001 $ 6.99 $8.30 - $12.45 491,000 9.06 $ 9.20 4,002 $ 9.26 $13.07 - $19.61 6,000 9.30 $ 13.21 - $ - Total options 1,466,398 195,428 We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Expected volatility 48 % 47 % 48 % 47 % Expected annual dividend yield 0.00 % 1.50 % 1.43 % 1.50 % Risk free rate of return 0.43 % 2.19 % 1.52 % 2.20 % Expected option term (years) 6.00 4.05 6.19 4.10 The risk free rate of return has seen a significant decrease in the 2020 three months and 2020 six months as a direct result from the decrease in the U.S. Department of Treasury daily treasury yield curve rates in response to economic conditions including COVID-19. Restricted Stock Awards Prior to the fourth quarter of 2019 we issued restricted stock only from the 2015 Directors Plan. Beginning in the fourth quarter of 2019, shares of restricted stock were granted from the 2016 Employee Plan in addition to the 2015 Directors Plan. Provisions and characteristics of these plans include the following: ● The exercise price, term and other conditions applicable to each stock award granted are determined by the Compensation Committee of our Board of Directors. ● Restricted stock awards are initially issued as restricted shares with a legend restricting transferability of the shares until the recipient satisfies the vesting provision of the award, after which time the restrictive legend is removed from the shares. ● Restricted shares participate in dividend payments and may be voted. Our restricted stock awards activity has been as follows: Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted shares outstanding at December 31, 2019 184,079 $ 9.32 Shares granted with restrictions - $ - Shares forfeited (1,418 ) $ 9.54 Shares vested and restrictions removed (60,210 ) $ 8.85 $ 576,195 Restricted shares outstanding at June 30, 2020 122,451 $ 9.54 Unrecognized compensation expense for non-vested shares as of June 30, 2020 Expense to be recognized in future periods $ 1,007,577 Weighted average number of months over which expense is expected to be recognized 41.0 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9. Income Taxes The components of our income tax expense are as follows ($ in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Current Deferred Total Current Deferred Total Current Deferred Total Current Deferred Total Federal $ (232 ) $ 60 $ (172 ) $ 904 $ (130 ) $ 774 $ 21 $ 152 $ 173 $ 1,550 $ (139 ) $ 1,411 State 119 22 141 167 (15 ) 152 211 46 257 282 (20 ) $ 262 Total $ (113 ) $ 82 $ (31 ) $ 1,071 $ (145 ) $ 926 $ 232 $ 198 $ 430 $ 1,832 $ (159 ) $ 1,673 Deferred income taxes on our consolidated balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): June 30, December 31, 2020 2019 Deferred tax assets: Deferred revenue $ 480 $ 672 Right-of-use operating lease asset 599 609 Share-based compensation 207 200 Compensation and benefits 130 123 Texas franchise tax R&D credit 120 150 Allowance for doubtful accounts 37 37 Deferred state income taxes 29 45 Tangible assets 31 24 Accrued expenses not deducted for tax 10 8 Total deferred tax assets 1,643 1,868 Deferred tax liabilities: Right-of-use operating lease liability 601 610 Intangible assets 550 567 Deferred expenses 197 198 Total deferred tax liabilities 1,348 1,375 Net deferred tax assets $ 295 $ 493 In assessing the realizability of deferred tax assets, we consider whether it is more-likely-than-not that some portion or all the deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We have concluded it is more-likely-than-not that our ability to generate future taxable income will allow us to realize those deferred tax assets. As of June 30, 2020, we had Texas Research and Development tax credit carryforwards of $120,000. These carryforwards expire in years 2034 through 2039. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): Six Months Ended June 30, 2020 2019 Balance at beginning of period $ 24 $ 113 Increases for tax positions related to the current year - - Increases for tax positions related to prior years - - Decreases for tax positions where the statue has expired - - Balance at end of period $ 24 $ 113 Our unrecognized tax benefit is related to research and development credits taken on our 2017 U.S. income tax return and the uncertainty related to the realization of a portion of those credits based on prior experience. If we realized and recognized any of our unrecognized tax benefits, such benefits would reduce our effective tax rate in the year of recognition. We record interest and penalty expense related to income taxes as interest and other expense, respectively. At June 30, 2020, no interest or penalties had been or were required to be accrued. We file income tax returns in the US and in various state jurisdictions with varying statues of limitations. We are no longer subject to income tax examination by tax authorities for years prior to 2016 with respect to our federal income tax returns and years prior to 2015 with respect to most of our state income tax returns. We do not file, and are not required to file, any foreign income tax returns. Our income tax expense reconciles to an income tax expense resulting from applying an assumed statutory federal income tax rate of 21% for the 2020 quarter and 2019 quarter to income before income taxes as follows ($ in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Income tax expense at federal statutory rate $ 729 $ 957 $ 1,323 $ 1,622 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 115 117 213 203 TappIn loss (787 ) - (787 ) - Stock based compensation (4 ) (56 ) (202 ) 8 Other 2 4 6 27 Research and development credit (20 ) - (30 ) (17 ) Foreign derived intangible income deduction (66 ) (96 ) (93 ) (170 ) Income tax expense per the statements of operations $ (31 ) $ 926 $ 430 $ 1,673 |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 10. Earnings per Common Share Earnings per share for the periods indicated were as follows ($ in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerators Numerator for basic and diluted earnings per share: Net income $ 3,501 $ 3,633 $ 5,870 $ 6,053 Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 18,750 17,268 18,681 17,233 Dilutive potential common shares Stock options and awards 369 1,111 391 887 Denominator for diluted earnings per share 19,119 18,379 19,072 18,120 Net income per common share - basic $ 0.19 $ 0.21 $ 0.31 $ 0.35 Net income per common share – diluted $ 0.18 $ 0.20 $ 0.31 $ 0.33 |
Dividends
Dividends | 6 Months Ended |
Jun. 30, 2020 | |
Dividends [Abstract] | |
Dividends [Text Block] | 11. Dividends The Company did not pay dividends during the 2020 six months. We paid dividends during the 2019 six months as follows: Three Months Ended March 31, 2019 June 30, 2019 Dividend per share of common stock $ 0.015 $ 0.500 Dividend record date March 11, 2019 May 13, 2019 Dividend payment date March 25, 2019 May 28, 2019 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 12. Commitments and Contingencies Severance Payments We have agreements with key personnel that provide for severance payments to them in the event of a “change in control” of the Company, as defined in those agreements, and their employment is terminated in connection with that change in control. In such event, our aggregate severance payments to those employees would be between approximately $700,000 and $1.5 million depending upon the circumstances. Legal and Regulatory Matters Litigation Relating to the Offer and Merger On August 3, 2020, Shiva Stein, a purported stockholder of the Company, filed a complaint in the United States District Court of Delaware, captioned Shiva Stein v. GlobalSCAPE, Inc., Robert Alpert, Thomas E. Hicks, David L. Mann, and C. Clark Webb., Civil Action No. 1:20-cv-01035-UNA (the “Stein Complaint”) against the Company and all members of the Board of Directors. Among other things, the Stein Complaint alleges that the Company, and the members of the Board of Directors in their capacity as controlling persons, caused a materially incomplete and misleading Solicitation Statement on Schedule 14D-9 (the “Solicitation Statement”), concerning, among other things, (i) the Company’s financial projections relied upon by the Company’s financial advisor, B. Riley Securities, Inc. (“B. Riley”), in its financial analyses; and (ii) the data and inputs underlying the financial valuation analyses that support the fairness opinion provided by B. Riley, filed on July 31, 2020 with the SEC and disseminated to Company stockholders, rendering the Solicitation Statement false and misleading and in violation of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and related regulations. The Stein Complaint seeks, among other things, an order preliminarily and permanently enjoining proceeding with the tender offer unless and until the allegedly omitted information is disclosed to the Company’s stockholders or, in the event the Offer (as defined and further described below) is consummated, to recover damages resulting from the alleged violations of the Exchange Act by the Company and the members of the Board of Directors. On August 4, 2020, John Thompson, a purported stockholder of the Company, filed a putative class action complaint in the United States District Court of Delaware, captioned John Thompson, individually and on behalf of all others similarly situated v. GlobalSCAPE, Inc., Robert Alpert, Thomas E. Hicks, David L. Mann, C. Clark Webb, Help/Systems, LLC and Grail Merger Sub, Inc., Civil Action No. 1:20-cv-01039-UNA (the “Thompson Complaint”) against the Company, all members of the Board of Directors, Help/Systems, LLC, a Delaware limited liability company (“Parent”) and Grail Merger Sub, Inc. a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Among other things, the Thompson Complaint alleges that the Company, Merger Sub and the members of the Board of Directors and Parent in their capacity as controlling persons, caused a materially incomplete and misleading Solicitation Statement, concerning, among other things, (i) the Company’s financial projections relied upon by the Company’s financial advisor, B. Riley, in its financial analyses, (ii) the data and inputs underlying the financial valuation analyses that support the fairness opinion provided by B. Riley, filed on July 31, 2020 with the SEC and disseminated to Company stockholders, (iii) the engagement of past services of B. Riley and Stephens Inc., the Company’s financial advisors and (iv) non-disclosure agreements prior to and during the “go-shop” process, rendering the Solicitation Statement false and misleading and in violation of the Exchange Act and related regulations. The Thompson Complaint seeks, among other things, (i) an order enjoining proceeding with the tender offer, (ii) in the event the Offer is consummated, to recover damages resulting from the alleged violations of the Exchange Act by the Company, the members of the Board of Directors, Parent and Merger Sub and (iii) an order directing the Board of Directors to file a Solicitation Statement that does not contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements contained therein not misleading. Other Legal and Regulatory Matters As disclosed in a Current Report on Form 8-K filed on March 16, 2018, the Fort Worth, Texas Regional Office of the SEC has opened a formal investigation of issues relating to the Restatement, with which the Company is cooperating fully. At this time, the Company is unable to predict the duration, scope, result or related costs associated with the SEC’s investigation. The Company is also unable to predict what, if any, action may be taken by the SEC, or what penalties or remedial actions the SEC may seek. Any determination by the SEC that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s financial position, liquidity, or results of operations. On May 31, 2018, the Company was served with a subpoena issued by a grand jury sitting in the United States District Court for the Western District of Texas (the “Grand Jury Subpoena”). The Grand Jury Subpoena requests all documents and emails relating to the Company’s investigation of the potential improper recognition of software license revenue. The Company intends to fully cooperate with the Grand Jury Subpoena and related investigation being conducted by the United States Attorney’s Office for the Western District of Texas (the “U.S. Attorney’s Investigation”). At this time, the Company is unable to predict the duration, scope, result or related costs of the U.S. Attorney’s Investigation. The Company is also unable to predict what, if any, further action may be taken in connection with the Grand Jury Subpoena and the U.S. Attorney’s Investigation, or what, if any, penalties, sanctions or remedial actions may be sought. Any determination by the U.S. Attorney’s office that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Leases [Text Block] | 13. Leases On April 18, 2019, the Company signed a new operating lease for our existing office space location. The lease is for a period of 10 years at an average annual rent of $462,000 beginning May 1, 2019. We recorded a right-of-use asset and lease liability of approximately $3 million at the commencement of the lease. Our non-cancellable, contractual obligations at June 30, 2020 consisted primarily of the following ($ in thousands): Operating Lease 2020 (remaining six months) $ 212 2021 431 2022 442 2023 453 2024 464 Thereafter 2,133 Total lease payments $ 4,135 Supplemental other information related to leases: Three Months Ended June 30, Six Months Ended June 30, 2020 2020 Operating lease cost $ 101 $ 202 Weighted-average remaining lease term (years) 8.8 8.8 Weighted-average discount rate (%) 5 % 5 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 105 $ 208 |
Concentration of Business Volum
Concentration of Business Volume and Credit Risk | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 14. Concentration of Business Volume and Credit Risk In order to leverage the resources of third parties, we make our products available for purchase by end users through third-party, channel distributors even though those end users can also purchase those products directly from us. In the 2020 quarter and 2019 quarter, we earned approximately 18% and 15%, respectively, of our revenue from such sales through our largest third-party channel distributor. During the 2020 six months and the 2019 six months, we earned approximately 18% and 17% of our revenue from such sales, respectively. As of June 30, 2020, approximately 21% of our accounts receivable were due from this channel distributor with payment for substantially all such amounts having been received subsequent to that date. |
Segment and Geographic Disclosu
Segment and Geographic Disclosures | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 15. Segment and Geographic Disclosures In accordance with ASC 280, Segment Reporting, we view our operations and manage our business as principally one segment. As a result, the financial information disclosed herein represents all of the material financial information related to our principal operating segment. Revenues derived from clients and partners located outside the United States accounted for approximately 26% and 22% of our total revenues in the 2020 quarter and 2019 quarter, respectively and 24% and 25% for the 2020 six months and 2019 six months, respectively. Each individual foreign country accounts for less than 10% of total revenue in all periods. We attribute revenues to countries based on the country in which the client or partner is located. We have no Company offices located in a foreign country and none of our property and equipment was located in a foreign country as of June 30, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 16. Subsequent Events As set forth in the Explanatory Note to this Quarterly Report on Form 10-Q, on July 19, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Help/Systems, LLC (“Parent”), Grail Merger Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), and solely with respect to certain sections therein, HS Purchaser, LLC and Help/Systems Holdings, Inc. Pursuant to the terms of the Merger Agreement, Merger Sub commenced a tender offer (“Offer”), on July 31, 2020, to purchase any and all of the outstanding shares (the “Shares”) of our common stock, at a price of $9.50 per Share (the “Offer Price”), subject to any required withholding of taxes, net to the seller in cash without interest. Parent and Merger Sub filed an Offer to Purchase with the Securities and Exchange Commission (the “SEC”) on July 31, 2020, as amended on August 4, 2020, and the Company filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC on July 31, 2020. The consummation of the Offer is subject to, among other things: (i) there being validly tendered and not validly withdrawn prior to the expiration of the Offer a number of Shares which, considered together with all other Shares, if any, beneficially owned by Parent, and its affiliates, but excluding any Shares tendered to guaranteed delivery procedures that have not yet been received, represents at least a majority of the Shares outstanding on a fully diluted basis, (ii) the expiration or termination of any waiting period (and extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, relating to the purchase of Shares pursuant to the Offer or the consummation of the Merger (which condition was satisfied on August 4, 2020) , (iii) the absence of any law, judgment, injunction, order or decree by any governmental authority that would make illegal or otherwise prevent or prohibit the consummation of the Offer or the Merger, (iv) that any change, event, effect or development that, individually or in the aggregate, has had or would reasonably be expected to have, a Company Material Adverse Effect (as defined in the Merger Agreement) shall not have occurred, (v) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to customary exceptions, (vi) the Company’s material compliance with its covenants contained in the Merger Agreement, (vii) the Merger Agreement shall not have been terminated, and (viii) other customary conditions. Assuming the Offer is consummated in accordance with the Merger Agreement, then, following the consummation of the Offer, and subject to the satisfaction or waiver of the applicable conditions in the Merger Agreement, pursuant to Section 251(h) of the Delaware General Corporation Law, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a direct, wholly owned subsidiary of Parent, without a meeting or vote of the Company’s stockholders. The Merger Agreement contains representations, warranties and covenants of the parties as customary for transactions of this type. The Company has also agreed to customary covenants governing the conduct of its business, including an obligation to conduct its business in the ordinary course consistent with past practices through the Effective Time. The Merger Agreement contains a “go-shop” provision pursuant to which the Company retains the right to initiate, solicit, propose, induce, receive, evaluate, encourage and engage in discussions and negotiations with respect to alternative acquisition proposals from third parties through August 24, 2020 (the “ No-Shop Period Start Date Company Option Option Consideration The Merger Agreement also provides that at the Effective Time, each outstanding Share of restricted stock granted under the Company’s equity plans (a “ Company Restricted Stock Assuming that all conditions to the consummation of the Offer and Merger are satisfied or, where permitted, waived, the Offer and Merger are expected to close in the third quarter of 2020. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying condensed consolidated financial statements are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. |
Revenue [Policy Text Block] | Revenue Recognition Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which clients install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Clients also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a client. We measure revenue based upon the consideration set forth in an arrangement or contract with a client. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our client the software license key that provides the ability to access and use our product. If our client is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our clients subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the client consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a client pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a client such as rebates or other incentives that reduce amounts owed to us by clients. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred revenue, beginning of period $ 18,208 $ 16,544 $ 18,255 $ 16,237 Deferred revenue resulting from new contracts with customers 8,827 7,841 16,558 14,943 Deferred revenue at the beginning of the period that was amortized to revenue (7,009 ) (6,164 ) (13,830 ) (11,796 ) Deferred revenue arising during the period that was amortized to revenue (808 ) (1,235 ) (1,765 ) (2,398 ) Deferred revenue, end of period $ 19,218 $ 16,986 $ 19,218 $ 16,986 Multi-Element Transactions At the time clients purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Clients may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to clients seeking assistance with products they have previously purchased from us, or SaaS subscriptions to clients not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among clients, we use the residual approach under FASB Accounting Standards Codification Topic 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction unless the entire discount relates to only one or more, but not all, performance obligations in a contract. Sales Tax We collect sales tax on many of our transactions with clients as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with clients. This amount is included in accrued liabilities in our condensed consolidated balance sheets. Contract Assets We generally bill clients for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall client relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the client relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred expense, beginning of period $ 933 $ 979 $ 943 $ 1,009 Deferred expense resulting from new contracts with customers 226 206 444 385 Deferred expense amortized to expense (221 ) (222 ) (449 ) (431 ) Deferred expense, end of period $ 938 $ 963 $ 938 $ 963 |
Lessee, Leases [Policy Text Block] | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. 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 future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. On April 18, 2019, the Company signed a new operating lease for our existing office space location. The lease is for a period of 10 years at an average annual rent of $462,000 beginning May 1, 2019. We recorded a right-of-use asset and lease liability of approximately $3 million at the commencement of the lease. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of June 30, 2020, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a nonrecurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and notes payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. The principal amount of our notes payable, including the current portion, as of June 30, 2020 was $46,875,000. This carrying value, net of unamortized debt issuance costs, approximates fair value based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill We account for goodwill in accordance with FASB Accounting Standards Codification 350, or ASC 350, as amended by ASU 2017-04, Simplifying the Test for Goodwill Impairment (effective January 1, 2020, as described in recent accounting pronouncements below). Goodwill is not amortized. Annually, we test goodwill for impairment at the reporting unit level using December 31 as the measurement date, and will also evaluate throughout the year if any indicators of a potential impairment are identified. We operate as a single reporting unit with $12,712,000 of goodwill. As of June 30, 2020 and December 31, 2019, this single reporting unit had a negative carrying value. When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: • Macroeconomic conditions. • Industry and market considerations. • Cost factors and trends for labor and other expenses of operating our business. • Our overall financial performance and outlook for the future. • Trends in the quoted market value and trading of our common stock. In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing, in accordance with GAAP. If we conclude otherwise, we proceed to perform a quantitative goodwill impairment test to identify both the existence of impairment and the amount of impairment loss. In a quantitative test, the fair value of a reporting unit is compared to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered unimpaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Capitalized Software Development Costs When we complete research and development for a software product, have in place a program plan and a detailed program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. We periodically assess the carrying value of capitalized software development costs and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. |
Cost of Goods and Service [Policy Text Block] | Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development |
Advertising Cost [Policy Text Block] | Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was approximately $31,000 and $44,000 in the 2020 quarter and the 2019 quarter, respectively, and $90,000 and $95,000 in the 2020 six months and the 2019 six months, respectively. |
Share-based Payment Arrangement [Policy Text Block] | Stock-Based Compensation We measure the cost of stock-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: • We estimate expected volatility based on historical volatility of our common stock. • We primarily use the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. • We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. • We estimate a dividend yield based on our historical and expected future dividend payments. For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award. |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-02, Leases (Topic 842): |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): June 30, 2020 December 31, 2019 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 20,347 $ 19,161 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,129 ) (906 ) Total deferred revenue $ 19,218 $ 18,255 Deferred revenue, current portion $ 16,500 $ 15,683 Deferred revenue, non-current portion 2,718 2,572 Total deferred revenue $ 19,218 $ 18,255 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized amount at June 30, 2020 $ 11,828 $ 469 Accumulated amortization (9,727 ) - Net capitalized cost at June 30, 2020 $ 2,101 $ 469 |
Incremental Costs of Obtaining a Contract to Deliver Goods and Services [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred expense, beginning of period $ 933 $ 979 $ 943 $ 1,009 Deferred expense resulting from new contracts with customers 226 206 444 385 Deferred expense amortized to expense (221 ) (222 ) (449 ) (431 ) Deferred expense, end of period $ 938 $ 963 $ 938 $ 963 |
Software License Arrangement [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The activity in our deferred revenue balances has been as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Deferred revenue, beginning of period $ 18,208 $ 16,544 $ 18,255 $ 16,237 Deferred revenue resulting from new contracts with customers 8,827 7,841 16,558 14,943 Deferred revenue at the beginning of the period that was amortized to revenue (7,009 ) (6,164 ) (13,830 ) (11,796 ) Deferred revenue arising during the period that was amortized to revenue (808 ) (1,235 ) (1,765 ) (2,398 ) Deferred revenue, end of period $ 19,218 $ 16,986 $ 19,218 $ 16,986 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accordingly, we determine our accounts receivable, net, as follows ($ in thousands): June 30, 2020 December 31, 2019 Total invoices issued and unpaid $ 7,537 $ 8,245 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,129 ) (906 ) Gross accounts receivable 6,408 7,339 Allowance for doubtful accounts (100 ) (100 ) Accounts receivable, net $ 6,308 $ 7,239 |
Capitalized Software Developm_2
Capitalized Software Development Costs, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Our capitalized software development costs balances and activities were as follows ($ in thousands): June 30, 2020 December 31, 2019 Gross capitalized cost $ 12,297 $ 11,529 Accumulated amortization (9,727 ) (8,879 ) Capitalized software development costs, net $ 2,570 $ 2,650 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Amount capitalized $ 404 $ 236 $ 768 $ 437 Amortization expense (442 ) (453 ) (848 ) (806 ) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized amount at June 30, 2020 $ 11,828 $ 469 Accumulated amortization (9,727 ) - Net capitalized cost at June 30, 2020 $ 2,101 $ 469 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization expense: Six months ending December 31, 2020 657 Year ending December 31, 2021 825 2022 535 2023 84 Total $ 2,101 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): June 30, 2020 December 31, 2019 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 20,347 $ 19,161 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,129 ) (906 ) Total deferred revenue $ 19,218 $ 18,255 Deferred revenue, current portion $ 16,500 $ 15,683 Deferred revenue, non-current portion 2,718 2,572 Total deferred revenue $ 19,218 $ 18,255 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | The following table represents the components of our long-term debt disclosed on the condensed consolidated balance sheet as of June 30, 2020. June 30, 2020 Credit facility $ 46,875 Unamortized debt issuance costs (1,842 ) Total long-term debt 45,033 Less current portion of long-term debt 5,825 Total long-term debt, non-current portion $ 39,208 Interest rate 5.4 % |
Stock Options, Restricted Sto_2
Stock Options, Restricted Stock and Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plans [Table Text Block] | Plan Shares outstanding 2010 Employee LT Equity Incentive Plan 23,207 2015 Directors Plan - 2016 Employee LT Equity Incentive Plan 1,565,642 Total shares Outstanding at June 30, 2020 1,588,849 |
Share-based Payment Arrangement, Cost by Plan [Table Text Block] | Under these stock-based compensation plans we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of our Board of Directors. Our stock-based compensation expense was as follows ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock-based compensation expense $ 412 $ 574 $ 909 $ 1,449 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Our stock option activity has been as follows: Weighted Average Weighted Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares Per Share Term in Years (000's) Outstanding at December 31, 2019 1,563,784 $ 5.78 8.69 $ 6,372 Granted 132,000 $ 9.56 Forfeited (18,668 ) $ 7.33 Exercised (210,718 ) $ 3.81 Outstanding at June 30, 2020 1,466,398 $ 6.38 8.45 $ 4,995 Exercisable at June 30, 2020 195,428 $ 4.14 7.30 $ 1,096 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Weighted average fair value of options granted $ 3.72 $ 2.78 $ 3.93 $ 2.76 Intrinsic value of options exercised $ 79,754 $ 297,289 $ 1,299,868 $ 555,390 Cash received from stock options exercised $ 35,307 $ 178,541 $ 803,238 $ 697,725 Number of options that vested 14,334 19,669 57,838 645,947 Fair value of options that vested $ 33,583 $ 32,982 $ 105,310 $ 997,803 Unrecognized compensation expense related to non-vested options at end of period $ 2,511,397 $ 2,651,482 $ 2,511,397 $ 2,651,482 Weighted average years over which non-vested option expense will be recognized 2.61 3.20 2.61 3.20 |
Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block] | As of June 30, 2020 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $2.35 - $3.53 83,649 7.56 $ 3.35 25,355 $ 3.13 $3.54 - $5.31 556,916 7.83 $ 4.03 164,070 $ 4.14 $5.34 - $8.01 328,833 8.80 $ 6.81 2,001 $ 6.99 $8.30 - $12.45 491,000 9.06 $ 9.20 4,002 $ 9.26 $13.07 - $19.61 6,000 9.30 $ 13.21 - $ - Total options 1,466,398 195,428 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Expected volatility 48 % 47 % 48 % 47 % Expected annual dividend yield 0.00 % 1.50 % 1.43 % 1.50 % Risk free rate of return 0.43 % 2.19 % 1.52 % 2.20 % Expected option term (years) 6.00 4.05 6.19 4.10 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | Our restricted stock awards activity has been as follows: Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted shares outstanding at December 31, 2019 184,079 $ 9.32 Shares granted with restrictions - $ - Shares forfeited (1,418 ) $ 9.54 Shares vested and restrictions removed (60,210 ) $ 8.85 $ 576,195 Restricted shares outstanding at June 30, 2020 122,451 $ 9.54 Unrecognized compensation expense for non-vested shares as of June 30, 2020 Expense to be recognized in future periods $ 1,007,577 Weighted average number of months over which expense is expected to be recognized 41.0 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of our income tax expense are as follows ($ in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Current Deferred Total Current Deferred Total Current Deferred Total Current Deferred Total Federal $ (232 ) $ 60 $ (172 ) $ 904 $ (130 ) $ 774 $ 21 $ 152 $ 173 $ 1,550 $ (139 ) $ 1,411 State 119 22 141 167 (15 ) 152 211 46 257 282 (20 ) $ 262 Total $ (113 ) $ 82 $ (31 ) $ 1,071 $ (145 ) $ 926 $ 232 $ 198 $ 430 $ 1,832 $ (159 ) $ 1,673 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income taxes on our consolidated balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): June 30, December 31, 2020 2019 Deferred tax assets: Deferred revenue $ 480 $ 672 Right-of-use operating lease asset 599 609 Share-based compensation 207 200 Compensation and benefits 130 123 Texas franchise tax R&D credit 120 150 Allowance for doubtful accounts 37 37 Deferred state income taxes 29 45 Tangible assets 31 24 Accrued expenses not deducted for tax 10 8 Total deferred tax assets 1,643 1,868 Deferred tax liabilities: Right-of-use operating lease liability 601 610 Intangible assets 550 567 Deferred expenses 197 198 Total deferred tax liabilities 1,348 1,375 Net deferred tax assets $ 295 $ 493 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): Six Months Ended June 30, 2020 2019 Balance at beginning of period $ 24 $ 113 Increases for tax positions related to the current year - - Increases for tax positions related to prior years - - Decreases for tax positions where the statue has expired - - Balance at end of period $ 24 $ 113 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Our income tax expense reconciles to an income tax expense resulting from applying an assumed statutory federal income tax rate of 21% for the 2020 quarter and 2019 quarter to income before income taxes as follows ($ in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Income tax expense at federal statutory rate $ 729 $ 957 $ 1,323 $ 1,622 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 115 117 213 203 TappIn loss (787 ) - (787 ) - Stock based compensation (4 ) (56 ) (202 ) 8 Other 2 4 6 27 Research and development credit (20 ) - (30 ) (17 ) Foreign derived intangible income deduction (66 ) (96 ) (93 ) (170 ) Income tax expense per the statements of operations $ (31 ) $ 926 $ 430 $ 1,673 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Earnings per share for the periods indicated were as follows ($ in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerators Numerator for basic and diluted earnings per share: Net income $ 3,501 $ 3,633 $ 5,870 $ 6,053 Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 18,750 17,268 18,681 17,233 Dilutive potential common shares Stock options and awards 369 1,111 391 887 Denominator for diluted earnings per share 19,119 18,379 19,072 18,120 Net income per common share - basic $ 0.19 $ 0.21 $ 0.31 $ 0.35 Net income per common share – diluted $ 0.18 $ 0.20 $ 0.31 $ 0.33 |
Dividends (Tables)
Dividends (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Dividends [Abstract] | |
Schedule of Dividends Payable [Table Text Block] | The Company did not pay dividends during the 2020 six months. We paid dividends during the 2019 six months as follows: Three Months Ended March 31, 2019 June 30, 2019 Dividend per share of common stock $ 0.015 $ 0.500 Dividend record date March 11, 2019 May 13, 2019 Dividend payment date March 25, 2019 May 28, 2019 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Our non-cancellable, contractual obligations at June 30, 2020 consisted primarily of the following ($ in thousands): Operating Lease 2020 (remaining six months) $ 212 2021 431 2022 442 2023 453 2024 464 Thereafter 2,133 Total lease payments $ 4,135 |
Lease, Cost [Table Text Block] | Supplemental other information related to leases: Three Months Ended June 30, Six Months Ended June 30, 2020 2020 Operating lease cost $ 101 $ 202 Weighted-average remaining lease term (years) 8.8 8.8 Weighted-average discount rate (%) 5 % 5 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 105 $ 208 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | Apr. 18, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Significant Accounting Policies (Details) [Line Items] | ||||||
Deferred Costs, Current | $ 584,000 | $ 584,000 | $ 577,000 | |||
Deferred Costs, Noncurrent | 354,000 | 354,000 | 366,000 | |||
Lessee, Operating Lease, Term of Contract | 10 years | |||||
Operating Leases, Rent Expense, Minimum Rentals | $ 462,000 | |||||
Operating Lease, Right-of-Use Asset | $ 3,000,000 | 2,864,000 | 2,864,000 | 2,905,000 | ||
Notes Payable | 46,875,000 | 46,875,000 | ||||
Goodwill | 12,712,000 | 12,712,000 | 12,712,000 | |||
Goodwill, Impairment Loss | $ 0 | |||||
Advertising Expense | $ 31,000 | $ 44,000 | $ 90,000 | $ 95,000 | ||
Probability of occurrence of event | 50.00% | |||||
Furniture and Fixtures [Member] | Minimum [Member] | ||||||
Significant Accounting Policies (Details) [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Furniture and Fixtures [Member] | Maximum [Member] | ||||||
Significant Accounting Policies (Details) [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 7 years | |||||
Computer Equipment [Member] | ||||||
Significant Accounting Policies (Details) [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||
Software and Software Development Costs [Member] | ||||||
Significant Accounting Policies (Details) [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 3 years |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Deferred Revenue, by Arrangement, Disclosure [Abstract] | ||||
Deferred revenue, beginning of period | $ 18,208 | $ 16,544 | $ 18,255 | $ 16,237 |
Deferred revenue resulting from new contracts with customers | 8,827 | 7,841 | 16,558 | 14,943 |
Deferred revenue at the beginning of the period that was amortized to revenue | (7,009) | (6,164) | (13,830) | (11,796) |
Deferred revenue arising during the period that was amortized to revenue | (808) | (1,235) | (1,765) | (2,398) |
Deferred revenue, end of period | $ 19,218 | $ 16,986 | $ 19,218 | $ 16,986 |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Abstract] | ||||
Deferred expense, beginning of period | $ 933 | $ 979 | $ 943 | $ 1,009 |
Deferred expense resulting from new contracts with customers | 226 | 206 | 444 | 385 |
Deferred expense amortized to expense | (221) | (222) | (449) | (431) |
Deferred expense, end of period | $ 938 | $ 963 | $ 938 | $ 963 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Accounts, Notes, Loans and Financing Receivable [Abstract] | ||
Total invoices issued and unpaid | $ 7,537 | $ 8,245 |
Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date | (1,129) | (906) |
Gross accounts receivable | 6,408 | 7,339 |
Allowance for doubtful accounts | (100) | (100) |
Accounts receivable, net | $ 6,308 | $ 7,239 |
Capitalized Software Developm_3
Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Finite-Lived Intangible Assets [Abstract] | ||
Gross capitalized cost | $ 12,297 | $ 11,529 |
Accumulated amortization | (9,727) | (8,879) |
Capitalized software development costs, net | $ 2,570 | $ 2,650 |
Capitalized Software Developm_4
Capitalized Software Development Costs, Net (Details) - Finite-lived Intangible Assets Amortization Expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-lived Intangible Assets Amortization Expense [Abstract] | ||||
Amount capitalized | $ 404 | $ 236 | $ 768 | $ 437 |
Amortization expense | $ (442) | $ (453) | $ (848) | $ (806) |
Capitalized Software Developm_5
Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure - Computer Software, Intangible Asset [Member] $ in Thousands | Jun. 30, 2020USD ($) |
Released Products [Member] | |
Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized amount | $ 11,828 |
Accumulated amortization | (9,727) |
Net capitalized cost | 2,101 |
Unreleased Products [Member] | |
Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized amount | 469 |
Accumulated amortization | 0 |
Net capitalized cost | $ 469 |
Capitalized Software Developm_6
Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense $ in Thousands | Jun. 30, 2020USD ($) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
Six months ending December 31, 2020 | $ 657 |
2021 | 825 |
2022 | 535 |
2023 | 84 |
Total | $ 2,101 |
Deferred Revenue (Details) - Sc
Deferred Revenue (Details) - Schedule of Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Deferred Revenue, by Arrangement, Disclosure [Abstract] | ||||||
Total invoiced for M&S contracts for which revenue will be recognized in future periods | $ 20,347 | $ 19,161 | ||||
Less: Unpaid invoices relating to M&S agreements with a start date subsequent to the balance sheet date | (1,129) | (906) | ||||
Total deferred revenue | 19,218 | $ 18,208 | 18,255 | $ 16,986 | $ 16,544 | $ 16,237 |
Deferred revenue, current portion | 16,500 | 15,683 | ||||
Deferred revenue, non-current portion | $ 2,718 | $ 2,572 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 05, 2019 | Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Apr. 13, 2020 |
Notes Payable (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 50,000 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000 | |||||||
Common Stock, Dividends, Per Share, Cash Paid (in Dollars per share) | $ 3.35 | $ 3.365 | $ 0.015 | $ 0.500 | $ 0.015 | |||
Borrowings under Guaranteed Investment Agreements | $ 2,000 | |||||||
Notes and Loans Payable | $ 46,900 | |||||||
Long-term Line of Credit | 0 | |||||||
Long-Term Debt, Maturity, Year One | 2,500 | |||||||
Long-Term Debt, Maturity, Year Two | 7,500 | |||||||
Long-Term Debt, Maturity, Year Three | 7,500 | |||||||
Long-Term Debt, Maturity, Year Four | 10,000 | |||||||
Long-Term Debt, Maturity, Year Five | $ 19,400 | |||||||
Debt Instrument, Payment Terms | Interest payments under the credit facility are due monthly. Principal payments are due quarterly. The loans may be prepaid at any time without penalty. | |||||||
Debt Instrument, Restrictive Covenants | The Loan Agreement contains the following financial covenants: ● We must not exceed a Total Leverage Ratio of 3.25x. This ratio decreases to 3.0x at September 30, 2020, 2.75x at March 31, 2021 and 2.25x at March 31, 2022. This ratio is defined in the Loan Agreement as the ratio of consolidated total funded indebtedness to consolidated EBITDA minus capitalized software expenditures for the period of the four most recent consecutive fiscal quarters. As of June 30, 2020, this debt service coverage ratio was 2.57x. ● We must maintain a Fixed Coverage Charge Ratio of 1.25x. This ratio is defined in the Loan Agreement as the ratio of consolidated EBITDA minus unfinanced capital expenditures to cash interest expense plus scheduled principal payments made plus taxes paid in cash plus restricted payments made in cash. As of June 30, 2020, this debt to tangible net worth ratio was 2.69x. | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of Long-term Debt Instruments - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Long-term Debt Instruments [Abstract] | ||
Credit facility | $ 46,875 | |
Unamortized debt issuance costs | (1,842) | |
Total long-term debt | 45,033 | |
Less current portion of long-term debt | 5,825 | $ 4,575 |
Total long-term debt, non-current portion | $ 39,208 | $ 42,745 |
Interest rate | 5.40% |
Stock Options, Restricted Sto_3
Stock Options, Restricted Stock and Share-Based Compensation (Details) | 6 Months Ended |
Jun. 30, 2020shares | |
2015 Directors Plan [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 500,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 80,000 |
2016 Employee LT Equity Incentive Plan [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,581,925 |
Share-based Payment Arrangement, Option [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | Stock options we issue generally become exercisable ratably over a three-year period or following a four-year period |
Share-based Payment Arrangement, Option [Member] | Long-Term Equity Incentive Plans [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 90 days |
Stock Options, Restricted Sto_4
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan | Jun. 30, 2020shares |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |
Options Outstanding | 1,588,849 |
2010 Employee LT Equity Incentive Plan [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |
Options Outstanding | 23,207 |
2015 Directors Plan [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |
Options Outstanding | 0 |
2016 Employee LT Equity Incentive Plan [Member] | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |
Options Outstanding | 1,565,642 |
Stock Options, Restricted Sto_5
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Abstract] | ||||
Stock-based compensation expense | $ 412 | $ 574 | $ 909 | $ 1,449 |
Stock Options, Restricted Sto_6
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity - Share-based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Jun. 30, 2020 |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity [Line Items] | ||
Number of Shares, Outstanding | 1,563,784 | |
Weighted Average Exercise Price, Outstanding | $ 5.78 | |
Weighted Average Remaining Contractual Term, Outstanding | 8 years 8 months 8 days | 8 years 5 months 12 days |
Aggregate Intrinsic Value, Outstanding | $ 6,372 | |
Number of Shares, Exercisable | 195,428 | |
Weighted Average Exercise Price, Exercisable | $ 4.14 | |
Weighted Average Remaining Contractual Term, Exercisable | 7 years 3 months 18 days | |
Aggregate Intrinsic Value, Exercisable | $ 1,096 | |
Number of Shares, Granted | 132,000 | |
Weighted Average Exercise Price, Granted | $ 9.56 | |
Number of Shares, Forfeitures | (18,668) | |
Weighted Average Exercise Price, Forfeitures | $ 7.33 | |
Number of Shares, Exercised | (210,718) | |
Weighted Average Exercise Price, Exercised | $ 3.81 | |
Number of Shares, Outstanding | 1,466,398 | |
Weighted Average Exercise Price, Outstanding | $ 6.38 | |
Aggregate Intrinsic Value, Outstanding | $ 4,995 |
Stock Options, Restricted Sto_7
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Abstract] | ||||
Weighted average fair value of options granted (in Dollars per share) | $ 3.72 | $ 2.78 | $ 3.93 | $ 2.76 |
Intrinsic value of options exercised | $ 79,754 | $ 297,289 | $ 1,299,868 | $ 555,390 |
Cash received from stock options exercised | $ 35,307 | $ 178,541 | $ 803,238 | $ 697,725 |
Number of options that vested (in Shares) | 14,334 | 19,669 | 57,838 | 645,947 |
Fair value of options that vested | $ 33,583 | $ 32,982 | $ 105,310 | $ 997,803 |
Unrecognized compensation expense related to non-vested options at end of period | $ 2,511,397 | $ 2,651,482 | $ 2,511,397 | $ 2,651,482 |
Weighted average years over which non-vested option expense will be recognized | 2 years 7 months 9 days | 3 years 2 months 12 days | 2 years 7 months 9 days | 3 years 2 months 12 days |
Stock Options, Restricted Sto_8
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Underlying Shares Outstanding (in Shares) | shares | 1,466,398 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 195,428 |
$2.35 - $3.53 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $ 2.35 |
Range of Exercise Prices, Upper Limit | $ 3.53 |
Underlying Shares Outstanding (in Shares) | shares | 83,649 |
Options Outstanding, Weighted Average Remaining Contractual Life | 7 years 6 months 21 days |
Options Outstanding, Weighted Average Exercise Price | $ 3.35 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 25,355 |
Options Exercisable, Weighted Average Exercise Price | $ 3.13 |
$3.54 - $5.31 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 3.54 |
Range of Exercise Prices, Upper Limit | $ 5.31 |
Underlying Shares Outstanding (in Shares) | shares | 556,916 |
Options Outstanding, Weighted Average Remaining Contractual Life | 7 years 9 months 29 days |
Options Outstanding, Weighted Average Exercise Price | $ 4.03 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 164,070 |
Options Exercisable, Weighted Average Exercise Price | $ 4.14 |
$5.34 - $8.01 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 5.34 |
Range of Exercise Prices, Upper Limit | $ 8.01 |
Underlying Shares Outstanding (in Shares) | shares | 328,833 |
Options Outstanding, Weighted Average Remaining Contractual Life | 8 years 9 months 18 days |
Options Outstanding, Weighted Average Exercise Price | $ 6.81 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 2,001 |
Options Exercisable, Weighted Average Exercise Price | $ 6.99 |
$8.30 - $12.45 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 8.30 |
Range of Exercise Prices, Upper Limit | $ 12.45 |
Underlying Shares Outstanding (in Shares) | shares | 491,000 |
Options Outstanding, Weighted Average Remaining Contractual Life | 9 years 21 days |
Options Outstanding, Weighted Average Exercise Price | $ 9.20 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 4,002 |
Options Exercisable, Weighted Average Exercise Price | $ 9.26 |
$13.07 - $19.61 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 13.07 |
Range of Exercise Prices, Upper Limit | $ 19.61 |
Underlying Shares Outstanding (in Shares) | shares | 6,000 |
Options Outstanding, Weighted Average Remaining Contractual Life | 9 years 3 months 18 days |
Options Outstanding, Weighted Average Exercise Price | $ 13.21 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 0 |
Options Exercisable, Weighted Average Exercise Price | $ 0 |
Stock Options, Restricted Sto_9
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract] | ||||
Expected volatility | 48.00% | 47.00% | 48.00% | 47.00% |
Expected annual dividend yield | 0.00% | 1.50% | 1.43% | 1.50% |
Risk free rate of return | 0.43% | 2.19% | 1.52% | 2.20% |
Expected option term (years) | 6 years | 4 years 18 days | 6 years 2 months 8 days | 4 years 1 month 6 days |
Stock Options, Restricted St_10
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity [Line Items] | |||||
Restricted Shares Outstanding | 122,451 | 122,451 | 184,079 | ||
Restricted Shares Outstanding | $ 9.54 | $ 9.54 | $ 9.32 | ||
Weighted average number of months over which expense is expected to be recognized | 2 years 7 months 9 days | 3 years 2 months 12 days | 2 years 7 months 9 days | 3 years 2 months 12 days | |
Number of Shares, Shares granted with restrictions | 0 | ||||
Grant Date Fair Value Per Share, Shares granted with restrictions | $ 0 | ||||
Number of Shares, Shares forfeited | (1,418) | ||||
Grant Date Fair Value Per Share, Shares forfeited | $ 9.54 | ||||
Number of Shares, Shares vested and restrictions removed | (60,210) | ||||
Grant Date Fair Value Per Share, Shares vested and restrictions removed | $ 8.85 | ||||
Total Fair Value of Shares That Vested, Shares vested and restrictions removed | $ 576,195 | ||||
Restricted Stock [Member] | |||||
Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity [Line Items] | |||||
Expense to be recognized in future periods | $ 1,007,577 | $ 1,007,577 | |||
Weighted average number of months over which expense is expected to be recognized | 41 months |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Income Taxes (Details) [Line Items] | ||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 120,000 | $ 120,000 | $ 150,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | ||
Research Tax Credit Carryforward [Member] | ||||
Income Taxes (Details) [Line Items] | ||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 120,000 | $ 120,000 | ||
Research Tax Credit Carryforward [Member] | Minimum [Member] | ||||
Income Taxes (Details) [Line Items] | ||||
Franchise Tax Credit Carryforwards Expiration Date | 2034 | |||
Research Tax Credit Carryforward [Member] | Maximum [Member] | ||||
Income Taxes (Details) [Line Items] | ||||
Franchise Tax Credit Carryforwards Expiration Date | 2039 |
Income Taxes (Details) - Sched
Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||||
Federal | $ (232) | $ 904 | $ 21 | $ 1,550 |
Federal | 60 | (130) | 152 | (139) |
Federal | (172) | 774 | 173 | 1,411 |
State | 119 | 167 | 211 | 282 |
State | 22 | (15) | 46 | (20) |
State | 141 | 152 | 257 | 262 |
Total | (113) | 1,071 | 232 | 1,832 |
Total | 82 | (145) | 198 | (159) |
Total | $ (31) | $ 926 | $ 430 | $ 1,673 |
Income Taxes (Details) - Sch_2
Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Deferred Tax Assets and Liabilities [Abstract] | ||
Deferred revenue | $ 480 | $ 672 |
Right-of-use operating lease asset | 599 | 609 |
Share-based compensation | 207 | 200 |
Compensation and benefits | 130 | 123 |
Texas franchise tax R&D credit | 120 | 150 |
Allowance for doubtful accounts | 37 | 37 |
Deferred state income taxes | 29 | 45 |
Tangible assets | 31 | 24 |
Accrued expenses not deducted for tax | 10 | 8 |
Total deferred tax assets | 1,643 | 1,868 |
Right-of-use operating lease liability | 601 | 610 |
Intangible assets | 550 | 567 |
Deferred expenses | 197 | 198 |
Total deferred tax liabilities | 1,348 | 1,375 |
Net deferred tax assets | $ 295 | $ 493 |
Income Taxes (Details) - Sch_3
Income Taxes (Details) - Schedule of Unrecognized Tax Benefits Roll Forward - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | ||
Balance at beginning of period | $ 24 | $ 113 |
Balance at end of period | 24 | 113 |
Increases for tax positions related to the current year | 0 | 0 |
Increases for tax positions related to prior years | 0 | 0 |
Decreases for tax positions where the statue has expired | $ 0 | $ 0 |
Income Taxes (Details) - Sch_4
Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||||
Income tax expense at federal statutory rate | $ 729 | $ 957 | $ 1,323 | $ 1,622 |
Increase (decrease) in taxes resulting from: | ||||
State taxes, net of federal benefit | 115 | 117 | 213 | 203 |
TappIn loss | (787) | 0 | (787) | 0 |
Stock based compensation | (4) | (56) | (202) | 8 |
Other | 2 | 4 | 6 | 27 |
Research and development credit | (20) | 0 | (30) | (17) |
Foreign derived intangible income | (66) | (96) | (93) | (170) |
Income tax expense per the statement of operations | $ (31) | $ 926 | $ 430 | $ 1,673 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator for basic and diluted earnings per share: | ||||||||
Net income (in Dollars) | $ 3,501 | $ 2,369 | $ 3,634 | $ 3,580 | $ 3,633 | $ 2,420 | $ 5,870 | $ 6,053 |
Denominators for basic and diluted earnings per share: | ||||||||
Weighted average shares outstanding - basic | 18,750 | 17,268 | 18,681 | 17,233 | ||||
Dilutive potential common shares | ||||||||
Stock options and awards | 369 | 1,111 | 391 | 887 | ||||
Denominator for diluted earnings per share | 19,119 | 18,379 | 19,072 | 18,120 | ||||
Net income per common share - basic (in Dollars per share) | $ 0.19 | $ 0.21 | $ 0.31 | $ 0.35 | ||||
Net income per common share – diluted (in Dollars per share) | $ 0.18 | $ 0.20 | $ 0.31 | $ 0.33 |
Dividends (Details) - Schedule
Dividends (Details) - Schedule of Dividends Payable - $ / shares | Dec. 05, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Schedule of Dividends Payable [Abstract] | |||||
Dividend per share of common stock | $ 3.35 | $ 3.365 | $ 0.015 | $ 0.500 | $ 0.015 |
Dividend record date | May 13, 2019 | Mar. 11, 2019 | |||
Dividend payment date | May 28, 2019 | Mar. 25, 2019 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2020USD ($) |
Minimum [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Other Commitment | $ 700,000 |
Maximum [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Other Commitment | $ 1,500,000 |
Leases (Details)
Leases (Details) | Apr. 18, 2019USD ($) |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Term of Contract | 10 years |
Operating Leases, Rent Expense, Minimum Rentals | $ 462,000 |
Operating Lease, Liability | $ 3,000,000 |
Leases (Details) - Lessee, Oper
Leases (Details) - Lessee, Operating Lease, Liability, Maturity $ in Thousands | Jun. 30, 2020USD ($) |
Lessee, Operating Lease, Liability, Maturity [Abstract] | |
2020 (remaining six months) | $ 212 |
2021 | 431 |
2022 | 442 |
2023 | 453 |
2024 | 464 |
Thereafter | 2,133 |
Total | $ 4,135 |
Leases (Details) - Lease, Cost
Leases (Details) - Lease, Cost $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Lease, Cost [Abstract] | ||
Operating lease cost | $ 101 | $ 202 |
Weighted-average remaining lease term (years) | 8 years 9 months 18 days | 8 years 9 months 18 days |
Weighted-average discount rate (%) | 5.00% | 5.00% |
Operating cash flows from operating leases | $ 105 | $ 208 |
Concentration of Business Vol_2
Concentration of Business Volume and Credit Risk (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||||
Concentration Risk, Percentage | 18.00% | 15.00% | 18.00% | 17.00% |
Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||||
Concentration Risk, Percentage | 21.00% |
Segment and Geographic Disclo_2
Segment and Geographic Disclosures (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment and Geographic Disclosures (Details) [Line Items] | ||||
Number of Operating Segments | 1 | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Segment and Geographic Disclosures (Details) [Line Items] | ||||
Concentration Risk, Percentage | 18.00% | 15.00% | 18.00% | 17.00% |
Customer Concentration Risk [Member] | UNITED STATES | Revenue Benchmark [Member] | ||||
Segment and Geographic Disclosures (Details) [Line Items] | ||||
Concentration Risk, Percentage | 26.00% | 22.00% | 24.00% | 25.00% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Jul. 20, 2020USD ($)$ / shares |
Subsequent Events (Details) [Line Items] | |
Shares Issued, Price Per Share (in Dollars per share) | $ / shares | $ 9.50 |
Gain (Loss) on Contract Termination | $ 11,055,000 |
Maximum [Member] | |
Subsequent Events (Details) [Line Items] | |
Loss on Contract Termination | 5,527,500 |
Minimum [Member] | |
Subsequent Events (Details) [Line Items] | |
Loss on Contract Termination | $ 3,685,000 |