Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 07, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38063 | |
Registrant Name | QXO, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 16-1633636 | |
Entity Address, Address Line One | Five American Lane | |
Entity Address, City or Town | Greenwich | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06831 | |
City Area Code | 888 | |
Local Phone Number | 998-6000 | |
Title of 12(b) Security | Common Stock, par value $0.00001 per share | |
Trading Symbol | QXO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Central Index Key | 0001236275 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 409,430,195 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | |
Current assets: | |||
Cash and cash equivalents | $ 971,284,000 | $ 6,143,000 | |
Accounts receivable, net | 3,015,000 | 2,969,000 | |
Prepaid expenses and other current assets | 5,539,000 | 2,684,000 | |
Total current assets | 979,838,000 | 11,796,000 | |
Property and equipment, net | 511,000 | 503,000 | |
Operating lease right-of-use assets | 380,000 | 522,000 | |
Intangible assets, net | 4,486,000 | 4,919,000 | |
Goodwill | 1,140,000 | 1,140,000 | |
Deferred tax assets | 1,614,000 | 1,444,000 | |
Other non-current assets | 216,000 | 171,000 | |
Total assets | 988,185,000 | 20,495,000 | |
Current liabilities: | |||
Accounts payable | 6,194,000 | 4,563,000 | |
Accrued expenses | 5,397,000 | 2,681,000 | |
Deferred revenue | 3,113,000 | 3,161,000 | |
Long-term debt – current portion | 783,600 | 701,700 | |
Finance lease obligations – current portion | 141,000 | 154,000 | |
Operating lease liabilities – current portion | 217,000 | 263,000 | |
Total current liabilities | 15,846,000 | 11,524,000 | |
Long-term debt net of current portion | 693,000 | 994,000 | |
Finance lease obligations net of current portion | 247,000 | 247,000 | |
Operating lease liabilities net of current portion | 164,000 | 259,000 | |
Liabilities | 16,950,000 | 13,024,000 | |
Commitments and contingencies (Note 8) | |||
Stockholders’ equity: | |||
Preferred stock, $0.001 par value; authorized 10,000,000 shares, 1,000,000 and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 498,684,000 | 0 | |
Common stock, $0.00001 par value; authorized 2,000,000,000 shares, 664,284 and 664,448 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | [1] | 0 | 0 |
Additional paid-in capital | 474,951,000 | 9,419,000 | |
Accumulated deficit | (2,400,000) | (1,948,000) | |
Total stockholders’ equity | 971,235,000 | 7,471,000 | |
Total liabilities and stockholders’ equity | $ 988,185,000 | $ 20,495,000 | |
[1] Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Jun. 30, 2024 $ / shares shares | Dec. 31, 2023 $ / shares shares |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 1,000,000 | 0 |
Preferred stock, outstanding (in shares) | 1,000,000 | 0 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 664,284 | 664,448 |
Common stock, outstanding (in shares) | 664,284 | 664,448 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Revenue: | |||||
Total revenue, net | $ 14,540 | $ 13,257 | $ 28,975 | $ 26,385 | |
Cost of revenue: | |||||
Total cost of revenue | 8,745 | 8,072 | 17,523 | 15,843 | |
Operating expenses: | |||||
Selling, general and administrative expenses | 9,835 | 4,525 | 15,024 | 9,305 | |
Depreciation and amortization expenses | 261 | 204 | 501 | 411 | |
Total operating expenses | 10,096 | 4,729 | 15,525 | 9,716 | |
(Loss) income from operations | (4,301) | 456 | (4,073) | 826 | |
Other income (expense), net: | |||||
Interest income (expense), net | 3,470 | (17) | 3,450 | (35) | |
Total other income (expense) | 3,470 | (17) | 3,450 | (35) | |
(Loss) income before taxes | (831) | 439 | (623) | 791 | |
(Benefit) provision for income taxes | (240) | 95 | (171) | 170 | |
Net (loss) income | $ (591) | $ 344 | $ (452) | $ 621 | |
Earnings (loss) per common share – basic (in dollar per shares) | $ (9.93) | $ 0.52 | $ (9.72) | $ 0.95 | |
Earnings (loss) per common share – fully diluted (in dollar per shares) | $ (9.93) | $ 0.52 | $ (9.72) | $ 0.95 | |
Weighted average shares outstanding: | |||||
Weighted average number of shares outstanding, basic (in shares) | [1] | 664,000 | 657,000 | 664,000 | 657,000 |
Weighted average number of shares outstanding, diluted (in shares) | [1] | 664,000 | 657,000 | 664,000 | 657,000 |
Software product, net | |||||
Revenue: | |||||
Total revenue, net | $ 3,776 | $ 3,298 | $ 7,256 | $ 6,620 | |
Cost of revenue: | |||||
Total cost of revenue | 2,369 | 2,027 | 4,568 | 3,960 | |
Service and other, net | |||||
Revenue: | |||||
Total revenue, net | 10,764 | 9,959 | 21,719 | 19,765 | |
Cost of revenue: | |||||
Total cost of revenue | $ 6,376 | $ 6,045 | $ 12,955 | $ 11,883 | |
[1]Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) | Jun. 06, 2024 |
Income Statement [Abstract] | |
Reverse stock split conversion ratio | 0.125 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | |
Shares outstanding, beginning balance at Dec. 31, 2022 | 0 | 657,000 | [1] | |||
Beginning balance at Dec. 31, 2022 | $ 9,553 | $ 0 | $ 0 | $ 10,430 | $ (877) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 41 | |||||
Net loss | 621 | 621 | ||||
Ending balance at Jun. 30, 2023 | 10,215 | $ 0 | $ 0 | 10,471 | (256) | |
Shares outstanding, ending balance at Jun. 30, 2023 | 0 | 657,000 | [2] | |||
Shares outstanding, beginning balance at Mar. 31, 2023 | 0 | 657,000 | [2] | |||
Beginning balance at Mar. 31, 2023 | 9,871 | $ 0 | $ 0 | 10,471 | (600) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 0 | |||||
Net loss | 344 | 344 | ||||
Ending balance at Jun. 30, 2023 | 10,215 | $ 0 | $ 0 | 10,471 | (256) | |
Shares outstanding, ending balance at Jun. 30, 2023 | 0 | 657,000 | [2] | |||
Shares outstanding, beginning balance at Dec. 31, 2023 | 0 | 664,000 | [1] | |||
Beginning balance at Dec. 31, 2023 | 7,471 | $ 0 | $ 0 | 9,419 | (1,948) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs (in shares) | 1,000,000 | |||||
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs | 981,661 | $ 498,684 | 482,977 | |||
Cash paid for fractional shares | (45) | (45) | ||||
Common stock dividend | (17,400) | (17,400) | ||||
Net loss | (452) | (452) | ||||
Ending balance at Jun. 30, 2024 | 971,235 | $ 498,684 | $ 0 | 474,951 | (2,400) | |
Shares outstanding, ending balance at Jun. 30, 2024 | 1,000,000 | 664,000 | [2] | |||
Shares outstanding, beginning balance at Mar. 31, 2024 | 0 | 664,000 | [2] | |||
Beginning balance at Mar. 31, 2024 | 7,610 | $ 0 | $ 0 | 9,419 | (1,809) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs (in shares) | 1,000,000 | |||||
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs | 981,661 | $ 498,684 | 482,977 | |||
Cash paid for fractional shares | (45) | (45) | ||||
Common stock dividend | (17,400) | (17,400) | ||||
Net loss | (591) | (591) | ||||
Ending balance at Jun. 30, 2024 | $ 971,235 | $ 498,684 | $ 0 | $ 474,951 | $ (2,400) | |
Shares outstanding, ending balance at Jun. 30, 2024 | 1,000,000 | 664,000 | [2] | |||
[1] Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details. Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) | Jun. 06, 2024 |
Statement of Stockholders' Equity [Abstract] | |
Reverse stock split conversion ratio | 0.125 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||||
Net loss | $ (591,000) | $ 344,000 | $ (452,000) | $ 621,000 | |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |||||
Deferred income taxes | (171,000) | 220,000 | |||
Depreciation | 74,900 | 85,500 | 141,800 | 178,100 | |
Amortization of intangibles | 228,400 | 162,000 | 432,400 | 323,900 | |
Non-cash lease expense | 140,000 | 188,000 | |||
Provision for expected losses | 25,000 | (68,000) | $ 115,000 | ||
Share-based compensation | 0 | 41,000 | |||
Changes in assets and liabilities: | |||||
Accounts receivable | (71,000) | 73,000 | |||
Prepaid expenses and other current assets | (2,855,000) | (611,000) | |||
Other assets | (144,000) | 0 | |||
Accounts payable | 1,631,000 | (452,000) | |||
Accrued expenses | 829,000 | (257,000) | |||
Deferred revenue | (48,000) | (393,000) | |||
Operating lease liabilities | (141,000) | (188,000) | |||
Net cash used in operating activities | (683,000) | (324,000) | |||
Cash flows from investing activities: | |||||
Purchase of property and equipment | (62,000) | (24,000) | |||
Net cash used in investing activities | (62,000) | (24,000) | |||
Cash flows from financing activities: | |||||
Payment of long-term debt | (219,000) | (422,000) | |||
Proceeds from issuance of preferred stock and warrants, net of offering costs | 983,650,000 | 0 | |||
Payment of common-stock dividend | (17,400,000) | 0 | |||
Cash payment for fractional shares | (45,000) | 0 | |||
Payment of finance lease obligations | (100,000) | (109,000) | |||
Net cash provided by (used in) financing activities | 965,886,000 | (531,000) | |||
Net increase (decrease) in cash | 965,141,000 | (879,000) | |||
Cash, beginning of period | $ 971,284,000 | $ 7,130,000 | 971,284,000 | 7,130,000 | 6,143,000 |
Cash, end of period | 6,143,000 | 8,009,000 | $ 8,009,000 | ||
Cash paid during period for: | |||||
Interest | 23,000 | 58,000 | |||
Income taxes | $ 0 | $ 23,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS QXO, Inc. ("QXO", "we", or the "Company") was formerly known as SilverSun Technologies, Inc. ("SilverSun"). On June 6, 2024, we changed the Company's name from SilverSun to QXO and changed its ticker symbol on the Nasdaq Capital Market from SSNT to QXO, upon completing a $1.0 billion cash investment in SilverSun by Jacobs Private Equity II, LLC ("JPE") and certain minority co-investors. Refer to Note 3 - Equity of the "Notes to Condensed Consolidated Financial Statements" for further details about the investment and related to changes to our capital structure. QXO is a technology solutions and professional services company that helps businesses manage and monetize their enterprise assets. We do this through our legacy operations, which provide critical software applications, consulting and other professional services, including specialized programming, training, and technical support. Our customers are primarily small and mid-size companies in the manufacturing, distribution and services industries. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to state fairly the financial position of the Company as of June 30, 2024, the results of operations for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023 in accordance with accounting principles generally accepted in the United States (“GAAP”). These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and consequently have been condensed and do not include all disclosures normally made in an Annual Report on Form 10-K. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 14, 2024. All significant inter-company transactions and accounts have been eliminated in consolidation. Significant Accounting Policies Other than policies noted herein, there have been no material changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the Company's Annual Report on Form 10-K. Reclassifications The Company has reclassified certain prior period amounts to conform with the current period presentation in the unaudited condensed consolidated balance sheets related to unbilled services and deferred charges which are now presented within prepaid expenses and other current assets. Additionally, the Company has reclassified certain prior period amounts to conform with the current period presentation in the unaudited condensed consolidated statements of operations related to selling and marketing expenses, general and administrative expenses, and share-based compensation which is now presented within selling, general, and administrative expenses. As further discussed in Note 3 – Equity , all per share amounts and common share amounts have been adjusted on a retroactive basis to reflect the Reverse Stock Split (as defined below). Use of Estimates The preparation of unaudited financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances across a diversified portfolio of global financial institutions that exceed FDIC insured limits. The Company has not experienced any losses in such accounts. Prepaid Expenses and Other Current Assets The following table presents the components of prepaid expenses and other current assets: As of (in thousands) June 30, 2024 December 31, 2023 Unbilled services $ 585 $ 194 Deferred charges 700 736 Prepaid expenses and other current assets 4,254 1,754 Total prepaid expenses and other current assets $ 5,539 $ 2,684 Accrued Expenses The following table presents the components of accrued expenses: As of (in thousands) June 30, 2024 December 31, 2023 Accrued interest $ 34 $ 25 Accrued expenses 5,363 2,656 Total accrued expenses $ 5,397 $ 2,681 Interest Income (Expense), net The following table presents the components of interest income (expense), net: Three Months Ending June 30, Six Months Ending June 30, (in thousands) 2024 2023 2024 2023 Interest income $ 3,492 $ 6 $ 3,494 $ 9 Interest expense (22) (23) (44) (44) Interest income (expense), net $ 3,470 $ (17) $ 3,450 $ (35) Revenue Recognition Components of revenue: The following table presents the components of revenue: Three Months Ending June 30, Six Months Ending June 30, (in thousands) 2024 2023 2024 2023 Software revenue $ 5,354 $ 3,298 $ 7,273 $ 6,620 Professional consulting revenue 4,807 4,556 9,711 8,893 Maintenance revenue 1,229 1,235 2,802 2,618 Ancillary service revenue 3,150 4,168 9,189 8,254 Total revenue, net $ 14,540 $ 13,257 $ 28,975 $ 26,385 Roll-forward of Allowance for Expected Credit Losses The following table represents the roll-forward of the allowance for expected credit losses for the six months ended June 30, 2024 and the year ended December 31, 2023: (in thousands) June 30, 2024 December 31, 2023 Balance at beginning of period $ 510 $ 490 Current period provision for expected losses 25 115 Write-offs (13) (95) Balance at end of period $ 522 $ 510 Advertising and Marketing Advertising and marketing expenses consist of advertising and payroll related expenses for personnel engaged in marketing, business development and selling activities. These costs are expensed as incurred. Deferred Revenue Deferred revenue consists of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services that will be earned as such services are performed over the contractual or stated period, which generally ranges from three to twelve months. As of June 30, 2024, there were $591,100 in deferred maintenance and support services and $2.5 million in deposits for future consulting services. As of December 31, 2023, there were $943,000 in maintenance and support services, and $2.2 million in deposits for future consulting services. Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. Property and Equipment Property and equipment is summarized as follows: As of (in thousands) June 30, 2024 December 31, 2023 Leasehold improvements $ 99 $ 166 Equipment, furniture, and fixtures 4,157 3,943 Property and equipment 4,256 4,109 Less: Accumulated depreciation and amortization (3,745) (3,606) Property and equipment, net $ 511 $ 503 Depreciation expense related to these assets for the three and six months ended June 30, 2024 was $74,900 and $141,800, respectively, compared with $85,500 and $178,100 for the three and six months ended June 30, 2023, respectively. Recent Authoritative Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective beginning with the Company's 2025 annual reporting period. The Company is currently evaluating the timing and impacts of adoption of this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosure , which updates the required disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss. ASU 2023-07 requires that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. ASU 2023-07 additionally requires that a public entity with a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. This ASC is effective for fiscal years beginning after December 15, 2023, and will be effective for interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of this standard will have a material impact on the Company’s condensed consolidated financial statements. In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock . This update requires the: i) disclosure and presentation of income or loss related to common stock transactions on the face of the income statement, ii) modification of the existing classification and measurement of redeemable preferred shares and redeemable equity-classified shares, and iii) modification of accounting treatment for stock-based compensation. The FASB has not set an effective date for ASU 2023-03 and early adoption is permitted. The Company is currently evaluating the impact of the provisions of ASU 2023-03 on its consolidated financial statement disclosures. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
EQUITY | EQUITY Investment Agreement On April 14, 2024, the Company entered into the Amended and Restated Investment Agreement (the "Investment Agreement") among the Company, JPE and the other investors party thereto (collectively, the "Investors"), providing for, among other things, an aggregate investment by the Investors of $1.0 billion in cash in the Company. Pursuant to the Investment Agreement, we issued and sold an aggregate of 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $0.001 per share (the "Convertible Preferred Stock"), which are initially convertible into an aggregate of 219,010,074 shares of common stock at an initial conversion price of $4.566 per share and issued and sold warrants exercisable for an aggregate of 219,010,074 shares of common stock (the "Warrants"). Additionally, we amended the Company’s certificate of incorporation to, among other things, effect an 8:1 reverse stock split with respect to the Company’s common stock (the “Reverse Stock Split”). The Investment Agreement and related transactions closed on June 6, 2024 (the "Equity Investment") and generated gross proceeds of approximately $1.0 billion before deducting fees and offering expenses. Following the closing of the Equity Investment, the Board of Directors of the Company was reconstituted such that: i) the number of seats on the Board was designated by JPE, ii) each of the directors (including Mr. Jacobs) was designated by JPE, iii) each standing committee of the Board was reconstituted in a manner designated by JPE, and iv) Mr. Jacobs was appointed as Chairman of the Board of Directors and Chief Executive Officer of the Company. Issuance of Convertible Preferred Stock On June 6, 2024, under the terms of the Investment Agreement, the Company issued 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $0.001 per share (the “Convertible Preferred Stock”). The Convertible Preferred Stock has an initial liquidation preference of $1.0 thousand per share, for an aggregate initial liquidation preference of $1 billion. The Convertible Preferred Stock is convertible at any time, in whole or in part and from time to time, at the option of the holder thereof into a number of shares of common stock equal to the then-applicable liquidation preference divided by the conversion price, which initially is $4.566 per share of common stock (subject to customary anti-dilution adjustments). Shares of Convertible Preferred Stock are initially convertible into an aggregate of 219,010,074 shares of common stock (after giving effect to the Reverse Stock Split). The Convertible Preferred Stock is not redeemable or subject to any required offer to purchase. The Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company’s common stock. Holders of Convertible Preferred Stock will vote together with the holders of the Company’s common stock on an “as-converted” basis on all matters, except as otherwise required by law. In addition, the approval of holders of at least a majority of the outstanding shares of the Convertible Preferred Stock, voting separately as a single class, will be required for certain matters set forth in the Certificate of Designation for the Convertible Preferred Stock. Dividends on the Convertible Preferred Stock are payable quarterly, when, as and if declared by the Board of Directors of the Company at the rate per annum of 9% per share on the then-applicable liquidation preference (subject to certain exceptions in the event that the Company pays dividends on shares of its common stock). Subsequent to the close of the quarter ended June 30, 2024, the Company paid $9.8 million of quarterly dividends to holders of Convertible Preferred Stock. Warrants The aggregate number of shares of the Company’s common stock subject to the Warrants is 219,010,074 shares. The Warrants are exercisable at the option of the holder at any time until June 6, 2034. The Warrants have an exercise price of $4.566 per share of common stock with respect to 50% of the Warrants, $6.849 per share of common stock with respect to 25% of the Warrants, and $13.698 per share of common stock with respect to the remaining 25% of the Warrants. Each Warrant may be exercised, in whole or in part, at any time or times on or after the issuance date and on or before the expiration date at the election of the holder (in such holder’s sole discretion) by means of a “cashless exercise” in which the holder will be entitled to receive a number of shares of the Company’s common stock equal to the quotient of the product of the Closing Sale Price (as defined in the Warrant Certificate) of a share of the Company’s common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant, less the adjusted exercise price, multiplied by the number of shares of the Company’s common stock issuable upon exercise of such Warrant, divided by the aforementioned Closing Sale Price of a share of the Company’s common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant. Equity Investment Dividend Under the terms of the Investment Agreement, the Company declared a $17.4 million aggregate cash dividend to its stockholders of record as of the day before the closing of the Equity Investment. The dividend was paid on June 12, 2024 from proceeds received by the Company from the Equity Investment. Reverse Stock Split On June 6, 2024, as contemplated by the Investment Agreement, the Company effected an 8:1 Reverse Stock Split, which reduced the Company's issued and outstanding share count of common stock from 5,315,581 to 664,284 shares (par value $0.00001 per share). The Company has recast all share and per-share data and amounts to show the effects of the Reverse Stock Split. Private Placements On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340,932,212 shares of our common stock at a price of $9.14 per share, and pre-funded warrants (the "Pre-Funded Warrants") to purchase 42,000,000 shares of our common stock at a price of $9.13999 per Pre-Funded Warrant. Each Pre-Funded Warrant has an exercise price of $0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full. The closing of the issuance and sale of these securities was consummated on July 19, 2024, and generated gross proceeds of approximately $3.5 billion before deducting agent fees and offering expenses. On July 22, 2024, we entered into additional purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 67,833,699 shares of our common stock at a price of $9.14 per share. The closing of the issuance and sale of these securities was consummated on July 25, 2024, and generated gross proceeds of approximately $620 million, before deducting agent fees and offering expenses. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE The Company’s Convertible Preferred Stock is classified as a participating security in accordance with ASC 260. Basic and diluted earnings (loss) per share is computed using the two-class method, which is an earnings allocation method that determines earnings (loss) per share for common shares and participating securities. Both basic and diluted earnings (loss) per common share are adjusted on a retroactive basis to reflect the Reverse Stock Split as discussed in Note 2 – Basis of Presentation and Significant Accounting Policies. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share data) Basic earnings per share computation: Net (loss) income $ (591) $ 344 $ (452) $ 621 Less: Convertible Preferred Stock dividends (6,000) — (6,000) — Less: Undistributed earnings allocated to participating securities — — — — (Loss) income attributable to common shareholders (6,591) 344 (6,452) 621 Weighted-average common shares outstanding 664 657 664 657 Basic earnings per share $ (9.93) $ 0.52 $ (9.72) $ 0.95 Diluted earnings per share computation: (Loss) income attributable to common shareholders per above $ (6,591) $ 344 $ (6,452) $ 621 Weighted-average common shares outstanding 664 657 664 657 Dilutive potential common shares — — — — Total diluted adjusted weighted-average shares 664 657 664 657 Diluted earnings per share $ (9.93) $ 0.52 $ (9.72) $ 0.95 The following table summarizes securities that, if exercised, would have a dilutive effect on earnings per share. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Stock options — 20 — 20 Convertible Preferred Stock 219,010 — 219,010 — Warrants 219,010 — 219,010 — Total potential dilutive securities not included in earnings per share 438,020 20 438,020 20 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consist of proprietary developed software, intellectual property, and customer lists. Proprietary developed software is carried at cost less accumulated amortization; intellectual property, customer lists and acquired contracts are carried at acquisition date fair value less accumulated amortization. Intangible assets at June 30, 2024, and December 31, 2023, consisted of the following: As of (in thousands) June 30, 2024 December 31, 2023 Proprietary developed software $ 390 $ 390 Intellectual property, customer lists, and acquired contracts 9,069 9,069 Accumulated amortization (4,973) (4,540) Total intangible assets $ 4,486 $ 4,919 Amortization expense related to the above intangible assets for the three and six months ended June 30, 2024 was $228,400 and $432,400, respectively, as compared with $162,000 and $323,900 for the three and six months ended June 30, 2023. |
LONG TERM DEBT
LONG TERM DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
LONG TERM DEBT | LONG-TERM DEBT |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | LEASES The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included in property and equipment in the accompanying unaudited condensed consolidated balance sheets. The Company leases space in four different locations and has an equipment lease rental with monthly payments ranging from $3,000 to $10,500 that expire at various dates through September 2026. On January 3, 2024, the Company extended its office lease for two years ended April 30, 2026. Monthly base rent is $10,300 for the first year and $10,500 for the second year. Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $236,900 during the year ended December 31, 2023. The table below presents the operating and financing lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheets: (in thousands) As of Leases Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating Operating lease right-of-use assets $ 380 $ 522 Financing Property and equipment, net 246 332 Total lease assets $ 626 $ 854 Liabilities Current: Finance Finance lease obligations – current portion $ 141 $ 154 Operating Operating lease liabilities – current portion 217 263 Non-current: Finance Finance lease obligations net of current portion 247 247 Operating Operating lease liabilities net of current portion 164 259 Total lease liabilities $ 769 $ 923 Total rent expense under operating leases for the three and six months ended June 30, 2024 was $68,100 and $175,400, respectively, as compared with $103,200 and $213,100 for the three and six months ended June 30, 2023, respectively. On June 2, 2023 , the Company entered into an operating lease to extend the lease for its Arizona location with Exeter 17319 DE, LLC. Accordingly, operating lease right-of-use assets and operating lease liabilities were recognized in the amount of $108,300 during the period ended June 30, 2023 . |
LEASES | LEASES The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included in property and equipment in the accompanying unaudited condensed consolidated balance sheets. The Company leases space in four different locations and has an equipment lease rental with monthly payments ranging from $3,000 to $10,500 that expire at various dates through September 2026. On January 3, 2024, the Company extended its office lease for two years ended April 30, 2026. Monthly base rent is $10,300 for the first year and $10,500 for the second year. Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $236,900 during the year ended December 31, 2023. The table below presents the operating and financing lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheets: (in thousands) As of Leases Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating Operating lease right-of-use assets $ 380 $ 522 Financing Property and equipment, net 246 332 Total lease assets $ 626 $ 854 Liabilities Current: Finance Finance lease obligations – current portion $ 141 $ 154 Operating Operating lease liabilities – current portion 217 263 Non-current: Finance Finance lease obligations net of current portion 247 247 Operating Operating lease liabilities net of current portion 164 259 Total lease liabilities $ 769 $ 923 Total rent expense under operating leases for the three and six months ended June 30, 2024 was $68,100 and $175,400, respectively, as compared with $103,200 and $213,100 for the three and six months ended June 30, 2023, respectively. On June 2, 2023 , the Company entered into an operating lease to extend the lease for its Arizona location with Exeter 17319 DE, LLC. Accordingly, operating lease right-of-use assets and operating lease liabilities were recognized in the amount of $108,300 during the period ended June 30, 2023 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Matters Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable, and does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT | 6 Months Ended |
Jun. 30, 2024 | |
Asset Acquisition [Abstract] | |
ASSET PURCHASE AGREEMENT | ASSET PURCHASE AGREEMENT On November 13, 2023, SWK Technologies, Inc. acquired the customer list and prepaid time from clients of JCS Computer Resource Corporation ("JCS") pursuant to an Asset Purchase Agreement for cash of $278,500 and a promissory note in the amount of $1.0 million (the “JCS Note”) for a total consideration of $1.3 million. The customer list was recognized as an intangible asset and will be amortized over its estimated useful life. The JCS Note balance was paid in full on July 24, 2024. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY -BASED COMPENSATION At the special meeting of the Company's stockholders on May 30, 2024, the stockholders approved the QXO, Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”). The 2024 Plan provides for the grant of options intended to qualify as incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted share awards, restricted stock units (“RSUs”), performance awards, cash incentive awards, deferred share units and other equity-based and equity-related awards, as well as cash-based awards. Subject to adjustment for changes in capitalization, the maximum aggregate number of shares of common stock that may be delivered pursuant to awards granted under the 2024 Plan shall be equal to 30,000,000 (the “Plan Share Limit”), of which 30,000,000 shares of common stock may be delivered pursuant to ISOs granted under the 2024 Plan (such amount, the “Plan ISO Limit”). The number of shares of common stock covered by the Plan Share Limit shall automatically increase on January 1 of each calendar year commencing with January 1, 2025 and on each January 1 thereafter until the 2024 Plan expiration date in an amount equal to 3% of the sum of: i) the number of shares of common stock outstanding as of December 31 of the preceding calendar year, and ii) the number of shares of common stock into which the Convertible Preferred Stock outstanding on December 31 of the preceding calendar year are convertible. The Company recorded compensation expense of $0 for both the three and six months ended June 30, 2024, compared with compensation expense of $0 and $41,500 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, there were no outstanding grants under the 2024 Plan. As of December 31, 2023, there were no outstanding stock options |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Upon the closing of the Equity Investment, pursuant to the execution of the Investment Agreement, the Company reimbursed JPE for certain transactional, market research and employee costs related to establishing the foundation for QXO to move forward. These costs, as defined in the Investment Agreement, equated to a total reimbursement of $15.3 million, which was treated as a reduction of the proceeds received from the Equity Investment. In connection with the Equity Investment, Mark Meller was terminated as CEO of SilverSun Technologies, Inc. and entered into a new employment agreement to serve as President of SWK Technologies, a wholly-owned subsidiary of QXO. Mr. Meller received a lump-sum payment of $2.8 million in connection with this agreement. In connection with the private placement that closed on July 25, 2024, certain directors and officers of the Company purchased an aggregate of 262,585 shares of common stock for $2.4 million. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to state fairly the financial position of the Company as of June 30, 2024, the results of operations for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023 in accordance with accounting principles generally accepted in the United States (“GAAP”). These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and consequently have been condensed and do not include all disclosures normally made in an Annual Report on Form 10-K. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 14, 2024. All significant inter-company transactions and accounts have been eliminated in consolidation. |
Reclassifications | Reclassifications The Company has reclassified certain prior period amounts to conform with the current period presentation in the unaudited condensed consolidated balance sheets related to unbilled services and deferred charges which are now presented within prepaid expenses and other current assets. Additionally, the Company has reclassified certain prior period amounts to conform with the current period presentation in the unaudited condensed consolidated statements of operations related to selling and marketing expenses, general and administrative expenses, and share-based compensation which is now presented within selling, general, and administrative expenses. As further discussed in Note 3 – Equity |
Use of Estimates | Use of Estimates The preparation of unaudited financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances across a diversified portfolio of global financial institutions that exceed FDIC insured limits. The Company has not experienced any losses in such accounts. |
Advertising and Marketing | Advertising and Marketing |
Deferred Revenues | Deferred Revenue |
Financial Instruments | Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Recent Authoritative Pronouncements | Recent Authoritative Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective beginning with the Company's 2025 annual reporting period. The Company is currently evaluating the timing and impacts of adoption of this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosure , which updates the required disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss. ASU 2023-07 requires that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. ASU 2023-07 additionally requires that a public entity with a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. This ASC is effective for fiscal years beginning after December 15, 2023, and will be effective for interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of this standard will have a material impact on the Company’s condensed consolidated financial statements. In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock . This update requires the: i) disclosure and presentation of income or loss related to common stock transactions on the face of the income statement, ii) modification of the existing classification and measurement of redeemable preferred shares and redeemable equity-classified shares, and iii) modification of accounting treatment for stock-based compensation. The FASB has not set an effective date for ASU 2023-03 and early adoption is permitted. The Company is currently evaluating the impact of the provisions of ASU 2023-03 on its consolidated financial statement disclosures. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Other Current Assets | The following table presents the components of prepaid expenses and other current assets: As of (in thousands) June 30, 2024 December 31, 2023 Unbilled services $ 585 $ 194 Deferred charges 700 736 Prepaid expenses and other current assets 4,254 1,754 Total prepaid expenses and other current assets $ 5,539 $ 2,684 |
Schedule of Accrued Liabilities | The following table presents the components of accrued expenses: As of (in thousands) June 30, 2024 December 31, 2023 Accrued interest $ 34 $ 25 Accrued expenses 5,363 2,656 Total accrued expenses $ 5,397 $ 2,681 |
Interest and Other Income | The following table presents the components of interest income (expense), net: Three Months Ending June 30, Six Months Ending June 30, (in thousands) 2024 2023 2024 2023 Interest income $ 3,492 $ 6 $ 3,494 $ 9 Interest expense (22) (23) (44) (44) Interest income (expense), net $ 3,470 $ (17) $ 3,450 $ (35) |
Disaggregation of Revenue | The following table presents the components of revenue: Three Months Ending June 30, Six Months Ending June 30, (in thousands) 2024 2023 2024 2023 Software revenue $ 5,354 $ 3,298 $ 7,273 $ 6,620 Professional consulting revenue 4,807 4,556 9,711 8,893 Maintenance revenue 1,229 1,235 2,802 2,618 Ancillary service revenue 3,150 4,168 9,189 8,254 Total revenue, net $ 14,540 $ 13,257 $ 28,975 $ 26,385 |
Accounts Receivable, Allowance for Credit Loss | The following table represents the roll-forward of the allowance for expected credit losses for the six months ended June 30, 2024 and the year ended December 31, 2023: (in thousands) June 30, 2024 December 31, 2023 Balance at beginning of period $ 510 $ 490 Current period provision for expected losses 25 115 Write-offs (13) (95) Balance at end of period $ 522 $ 510 |
Property, Plant and Equipment | Property and equipment is summarized as follows: As of (in thousands) June 30, 2024 December 31, 2023 Leasehold improvements $ 99 $ 166 Equipment, furniture, and fixtures 4,157 3,943 Property and equipment 4,256 4,109 Less: Accumulated depreciation and amortization (3,745) (3,606) Property and equipment, net $ 511 $ 503 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share data) Basic earnings per share computation: Net (loss) income $ (591) $ 344 $ (452) $ 621 Less: Convertible Preferred Stock dividends (6,000) — (6,000) — Less: Undistributed earnings allocated to participating securities — — — — (Loss) income attributable to common shareholders (6,591) 344 (6,452) 621 Weighted-average common shares outstanding 664 657 664 657 Basic earnings per share $ (9.93) $ 0.52 $ (9.72) $ 0.95 Diluted earnings per share computation: (Loss) income attributable to common shareholders per above $ (6,591) $ 344 $ (6,452) $ 621 Weighted-average common shares outstanding 664 657 664 657 Dilutive potential common shares — — — — Total diluted adjusted weighted-average shares 664 657 664 657 Diluted earnings per share $ (9.93) $ 0.52 $ (9.72) $ 0.95 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes securities that, if exercised, would have a dilutive effect on earnings per share. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Stock options — 20 — 20 Convertible Preferred Stock 219,010 — 219,010 — Warrants 219,010 — 219,010 — Total potential dilutive securities not included in earnings per share 438,020 20 438,020 20 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets at June 30, 2024, and December 31, 2023, consisted of the following: As of (in thousands) June 30, 2024 December 31, 2023 Proprietary developed software $ 390 $ 390 Intellectual property, customer lists, and acquired contracts 9,069 9,069 Accumulated amortization (4,973) (4,540) Total intangible assets $ 4,486 $ 4,919 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The table below presents the operating and financing lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheets: (in thousands) As of Leases Balance Sheet Classification June 30, 2024 December 31, 2023 Assets Operating Operating lease right-of-use assets $ 380 $ 522 Financing Property and equipment, net 246 332 Total lease assets $ 626 $ 854 Liabilities Current: Finance Finance lease obligations – current portion $ 141 $ 154 Operating Operating lease liabilities – current portion 217 263 Non-current: Finance Finance lease obligations net of current portion 247 247 Operating Operating lease liabilities net of current portion 164 259 Total lease liabilities $ 769 $ 923 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) $ in Billions | 2 Months Ended |
Jun. 06, 2024 USD ($) | |
Public stock offering | |
Capital Unit [Line Items] | |
Consideration received on transaction | $ 1 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Unbilled services | $ 585 | $ 194 |
Deferred charges | 700 | 736 |
Prepaid expenses and other current assets | 4,254 | 1,754 |
Total prepaid expenses and other current assets | $ 5,539 | $ 2,684 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Accrued interest | $ 34 | $ 25 |
Accrued expenses | 5,363 | 2,656 |
Accrued expenses | $ 5,397 | $ 2,681 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Interest income and expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accounting Policies [Abstract] | ||||
Interest income | $ 3,492 | $ 6 | $ 3,494 | $ 9 |
Interest expense | (22) | (23) | (44) | (44) |
Interest income (expense), net | $ 3,470 | $ (17) | $ 3,450 | $ (35) |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Components of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue, net | $ 14,540 | $ 13,257 | $ 28,975 | $ 26,385 |
Software revenue | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue, net | 5,354 | 3,298 | 7,273 | 6,620 |
Professional consulting revenue | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue, net | 4,807 | 4,556 | 9,711 | 8,893 |
Maintenance revenue | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue, net | 1,229 | 1,235 | 2,802 | 2,618 |
Ancillary service revenue | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue, net | $ 3,150 | $ 4,168 | $ 9,189 | $ 8,254 |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Allowance for expected credit losses (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of period | $ 510 | $ 490 | $ 490 |
Provision for expected losses | 25 | $ (68) | 115 |
Write-offs | (13) | (95) | |
Balance at end of period | $ 522 | $ 510 |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Depreciation | $ 74,900 | $ 85,500 | $ 141,800 | $ 178,100 | |
Maintenance revenue | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Contract with customer, liability | 591,100 | 591,100 | $ 943,000,000 | ||
Professional consulting revenue | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Contract with customer, liability | $ 2,500,000 | $ 2,500,000 | $ 2,200,000 |
BASIS OF PRESENTATION AND SI_10
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Property plant and equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 4,256 | $ 4,109 |
Less: Accumulated depreciation and amortization | (3,745) | (3,606) |
Property and equipment, net | 511 | 503 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 99 | 166 |
Equipment, furniture, and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 4,157 | $ 3,943 |
EQUITY (Details)
EQUITY (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 2 Months Ended | |||||||||
Jul. 25, 2024 USD ($) | Jul. 22, 2024 $ / shares shares | Jul. 19, 2024 USD ($) | Jun. 13, 2024 $ / shares shares | Jun. 06, 2024 USD ($) $ / shares shares | Aug. 14, 2024 USD ($) | Jun. 06, 2024 USD ($) $ / shares shares | Jun. 30, 2024 $ / shares shares | Jun. 05, 2024 shares | Dec. 31, 2023 $ / shares shares | Dec. 03, 2023 USD ($) | |
Capital Unit [Line Items] | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Convertible preferred stock, shares issued upon conversion (in shares) | shares | 219,010,074 | 219,010,074 | |||||||||
Preferred stock, conversion price (USD per share) | $ 4.566 | $ 4.566 | |||||||||
Securities called by warrants (in shares) | shares | 219,010,074 | 219,010,074 | 219,010,074 | ||||||||
Preferred stock, liquidation preference (USD per share) | $ 1,000 | $ 1,000 | |||||||||
Preferred stock, liquidation preference, value | $ | $ 1,000 | $ 1,000 | |||||||||
Preferred stock, dividend rate | 9% | ||||||||||
Dividends payable | $ | $ 17.4 | ||||||||||
Reverse stock split conversion ratio | 0.125 | ||||||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||
Common stock, outstanding (in shares) | shares | 664,284 | 664,284 | 664,284 | 5,315,581 | 664,448 | ||||||
Common stock, issued (in shares) | shares | 664,284 | 664,284 | 664,284 | 5,315,581 | 664,448 | ||||||
Convertible Preferred Stock | |||||||||||
Capital Unit [Line Items] | |||||||||||
Stock issued during period (in shares) | shares | 1,000,000 | ||||||||||
Warrants exercise price one | |||||||||||
Capital Unit [Line Items] | |||||||||||
Exercise price of warrants (in USD per share) | $ 4.566 | ||||||||||
Temporary equity, percentage of warrants authorized | 50% | ||||||||||
Warrants exercise price two | |||||||||||
Capital Unit [Line Items] | |||||||||||
Exercise price of warrants (in USD per share) | $ 6.849 | ||||||||||
Temporary equity, percentage of warrants authorized | 25% | ||||||||||
Warrants exercise price three | |||||||||||
Capital Unit [Line Items] | |||||||||||
Exercise price of warrants (in USD per share) | $ 13.698 | ||||||||||
Temporary equity, percentage of warrants authorized | 25% | ||||||||||
Subsequent event | |||||||||||
Capital Unit [Line Items] | |||||||||||
Dividends, preferred stock | $ | $ 9.8 | ||||||||||
Public stock offering | |||||||||||
Capital Unit [Line Items] | |||||||||||
Consideration received on transaction | $ | $ 1,000 | ||||||||||
Shares issued in transaction (in shares) | shares | 1,000,000 | ||||||||||
Private placement | |||||||||||
Capital Unit [Line Items] | |||||||||||
Shares issued in transaction (in shares) | shares | 340,932,212 | ||||||||||
Sale of stock, price per share (in USD per share) | $ 9.14 | ||||||||||
Private placement | Pre-funded warrants | |||||||||||
Capital Unit [Line Items] | |||||||||||
Securities called by warrants (in shares) | shares | 42,000,000 | ||||||||||
Exercise price of warrants (in USD per share) | $ 0.00001 | ||||||||||
Price of warrants (in USD per share) | $ 9.13999 | ||||||||||
Private placement | Subsequent event | |||||||||||
Capital Unit [Line Items] | |||||||||||
Consideration received on transaction | $ | $ 620 | $ 3,500 | |||||||||
Shares issued in transaction (in shares) | shares | 67,833,699 | ||||||||||
Sale of stock, price per share (in USD per share) | $ 9.14 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Basic earnings per share computation: | |||||
Net loss | $ (591) | $ 344 | $ (452) | $ 621 | |
Less: Convertible Preferred Stock dividends | (6,000) | 0 | (6,000) | 0 | |
Less: Undistributed earnings allocated to participating securities | 0 | 0 | 0 | 0 | |
(Loss) income attributable to common shareholders | $ (6,591) | $ 344 | $ (6,452) | $ 621 | |
Weighted-average common shares outstanding (in shares) | [1] | 664,000 | 657,000 | 664,000 | 657,000 |
Basic earnings per share (in USD per share) | $ (9.93) | $ 0.52 | $ (9.72) | $ 0.95 | |
Diluted earnings per share computation: | |||||
(Loss) income attributable to common shareholders per above | $ (6,591) | $ 344 | $ (6,452) | $ 621 | |
Weighted-average common shares outstanding (in shares) | [1] | 664,000 | 657,000 | 664,000 | 657,000 |
Dilutive potential common shares (in shares) | 0 | 0 | 0 | 0 | |
Total diluted adjusted weighted-average shares (in shares) | [1] | 664,000 | 657,000 | 664,000 | 657,000 |
Diluted earnings per share (in USD per share) | $ (9.93) | $ 0.52 | $ (9.72) | $ 0.95 | |
[1]Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details. |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential dilutive securities not included in earnings per share (in shares) | 438,020,000 | 20,000 | 438,020,000 | 20,000 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential dilutive securities not included in earnings per share (in shares) | 0 | 20,000 | 0 | 20,000 |
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential dilutive securities not included in earnings per share (in shares) | 219,010,000 | 0 | 219,010,000 | 0 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential dilutive securities not included in earnings per share (in shares) | 219,010,000 | 0 | 219,010,000 | 0 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (4,973) | $ (4,540) |
Total intangible assets | 4,486 | 4,919 |
Proprietary developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 390 | 390 |
Intellectual property, customer lists, and acquired contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 9,069 | $ 9,069 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Amortization of intangibles | $ 228,400 | $ 162,000 | $ 432,400 | $ 323,900 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Long-term debt | $ 1,480,000 | $ 1,700,000 |
Long-term debt – current portion | $ 783,600 | $ 701,700 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Operating | $ 380 | $ 522 |
Financing | 246 | 332 |
Total lease assets | 626 | 854 |
Liabilities | ||
Finance | 141 | 154 |
Operating | 217 | 263 |
Finance | 247 | 247 |
Operating | 164 | 259 |
Total lease liabilities | $ 769 | $ 923 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 03, 2024 USD ($) | Jun. 30, 2024 USD ($) leasedSpace | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) leasedSpace | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Number of leased spaces | leasedSpace | 4 | 4 | ||||
Right-of-use asset obtained in exchange for operating lease liability | $ 108,300 | $ 236,900 | ||||
Operating lease right-of-use assets | $ 380,000 | $ 380,000 | $ 522,000 | |||
Operating lease, expense | $ 68,100 | $ 103,200 | 175,400 | $ 213,100 | ||
Building | ||||||
Operating Leased Assets [Line Items] | ||||||
Lessee, operating lease, renewal term | 2 years | |||||
First year | Building | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, monthly rental payments | $ 10,300 | |||||
Second year | Building | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, monthly rental payments | $ 10,500 | |||||
Minimum | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, monthly rental payments | 3,000 | |||||
Maximum | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, monthly rental payments | $ 10,500 |
ASSET PURCHASE AGREEMENT (Detai
ASSET PURCHASE AGREEMENT (Details) | Nov. 13, 2023 USD ($) |
Asset Acquisition [Abstract] | |
Payments to acquire productive assets | $ 278,500 |
Asset acquisition, consideration transferred, other assets | 1,000,000 |
Asset acquisition, consideration transferred | $ 1,300,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 28.90% | 21.60% | 27.30% | 21.50% |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) | May 30, 2024 shares | Dec. 31, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of additional shares authorized, percentage of increase (in percentage) | 0.03 | |||||
Share-based payment arrangement, expense | $ | $ 0 | $ 0 | $ 0 | $ 41,500 | ||
Share-based compensation arrangement by share-based payment award, options, outstanding (in shares) | 0 | 0 | 0 | |||
Plan Share Limit | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 30,000,000 | |||||
Plan ISO Limit | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 30,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Jul. 25, 2024 | Jul. 22, 2024 | Jul. 19, 2024 | Jun. 13, 2024 | Apr. 14, 2024 |
Private placement | |||||
Related Party Transaction [Line Items] | |||||
Shares issued in transaction (in shares) | 340,932,212 | ||||
Subsequent event | Private placement | |||||
Related Party Transaction [Line Items] | |||||
Shares issued in transaction (in shares) | 67,833,699 | ||||
Consideration received on transaction | $ 620 | $ 3,500 | |||
Subsequent event | Private placement | Director | |||||
Related Party Transaction [Line Items] | |||||
Shares issued in transaction (in shares) | 262,585 | ||||
Consideration received on transaction | $ 2.4 | ||||
Cost reimbursement | |||||
Related Party Transaction [Line Items] | |||||
Amounts of related party transaction | $ 15.3 | ||||
Employee agreement incentive pay | |||||
Related Party Transaction [Line Items] | |||||
Amounts of related party transaction | $ 2.8 |