Cover
Cover - AUD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-04321 | ||
Entity Registrant Name | Limeade, Inc. | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 06-1771116 | ||
Entity Address, Address Line One | 10885 NE 4th Street | ||
Entity Address, Address Line Two | Suite #400 | ||
Entity Address, City or Town | Bellevue | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98004 | ||
City Area Code | 425 | ||
Local Phone Number | 908-0216 | ||
Title of 12(b) Security | None | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 68,791,560 | ||
Entity Common Stock, Shares Outstanding | 257,396,022 | ||
Documents Incorporated by Reference | The information required by Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K is incorporated by reference from the registrant’s definitive proxy statement for its 2023 annual meeting to be filed with the Securities and Exchange Commission pursuant to Regulation 14A. | ||
Entity Central Index Key | 0001381507 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
No Trading Symbol Flag | true |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Seattle, Washington |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 2,559 | $ 13,939 |
Accounts receivable, net of allowance for doubtful accounts of $268 and $93, respectively | 10,862 | 8,709 |
Capitalized sales commissions | 716 | 271 |
Prepaid expenses and other current assets | 6,105 | 5,433 |
Total current assets | 20,242 | 28,352 |
Property and equipment, net | 413 | 441 |
Capitalized software development costs, net | 14,634 | 8,895 |
Capitalized sales commissions, net of current portion | 1,023 | 399 |
Operating lease right-of-use assets | 1,236 | 2,638 |
Goodwill | 8,562 | 8,562 |
Intangible assets, net | 2,830 | 3,926 |
Other non-current assets | 411 | 327 |
Total assets | 49,351 | 53,540 |
Current liabilities | ||
Trade payables | 2,719 | 2,058 |
Accrued expenses and other current liabilities | 13,056 | 10,703 |
Operating lease liabilities | 1,328 | 1,531 |
Deferred revenue | 16,344 | 13,528 |
Customer deposits | 3,152 | 2,578 |
Revolving credit facility | 2,450 | 0 |
Acquisition earnout liability | 0 | 110 |
Total current liabilities | 39,049 | 30,508 |
Operating lease liabilities, net of current portion | 38 | 1,363 |
Acquisition earnout liability, net of current portion | 0 | 790 |
Deferred tax liability | 13 | 10 |
Total liabilities | 39,100 | 32,671 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Preferred stock (no par value, 10,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2022 and 2021, respectively) | 0 | 0 |
Common stock (no par value, 550,000,000 shares authorized, 257,245,284 and 253,621,067 shares issued and outstanding as of December 31, 2022 and 2021, respectively) | 0 | 0 |
Additional paid-in capital | 72,735 | 70,241 |
Accumulated other comprehensive income | 148 | 35 |
Accumulated deficit | (62,632) | (49,407) |
Total stockholders' equity | 10,251 | 20,869 |
Total liabilities and stockholders' equity | $ 49,351 | $ 53,540 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts, current | $ 268 | $ 93 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 550,000,000 | 550,000,000 |
Common stock, shares, issued (in shares) | 257,245,284 | 253,621,067 |
Common stock, shares outstanding (in shares) | 257,245,284 | 253,621,067 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | ||
Total revenue | $ 56,017 | $ 55,196 |
Cost of revenue | 17,210 | 15,032 |
Gross profit | 38,807 | 40,164 |
Operating expenses: | ||
Sales and marketing | 16,903 | 17,713 |
Research and development | 22,062 | 20,400 |
General and administrative | 14,031 | 11,847 |
Total operating expenses | 52,996 | 49,960 |
Loss from operations | (14,189) | (9,796) |
Other income (expense), net | 1,002 | (144) |
Loss before income taxes | (13,187) | (9,940) |
Income tax benefit (expense) | (38) | (25) |
Net loss | $ (13,225) | $ (9,965) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.05) | $ (0.04) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.05) | $ (0.04) |
Weighted-average shares of common stock outstanding, basic (in shares) | 255,366,730 | 250,356,000 |
Weighted-average shares of common stock outstanding, diluted (in shares) | 255,366,730 | 250,356,000 |
Subscription services | ||
Revenue: | ||
Total revenue | $ 54,029 | $ 52,172 |
Other | ||
Revenue: | ||
Total revenue | $ 1,988 | $ 3,024 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (13,225) | $ (9,965) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 113 | 248 |
Total comprehensive loss | $ (13,112) | $ (9,717) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2020 | 247,420,156 | ||||
Beginning balance at Dec. 31, 2020 | $ 27,931 | $ 0 | $ 67,586 | $ (39,442) | $ (213) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and release of restricted stock units (in shares) | 6,200,911 | ||||
Exercise of stock options and release of restricted stock units | 768 | 768 | |||
Stock-based compensation | 1,887 | 1,887 | |||
Gain/(loss) on translation adjustments | 248 | 248 | |||
Net loss | $ (9,965) | (9,965) | |||
Ending balance (in shares) at Dec. 31, 2021 | 253,621,067 | 253,621,067 | |||
Ending balance at Dec. 31, 2021 | $ 20,869 | $ 0 | 70,241 | (49,407) | 35 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and release of restricted stock units (in shares) | 3,624,217 | ||||
Exercise of stock options and release of restricted stock units | 70 | 70 | |||
Stock-based compensation | 2,424 | 2,424 | |||
Gain/(loss) on translation adjustments | 113 | 113 | |||
Net loss | $ (13,225) | (13,225) | |||
Ending balance (in shares) at Dec. 31, 2022 | 257,245,284 | 257,245,284 | |||
Ending balance at Dec. 31, 2022 | $ 10,251 | $ 0 | $ 72,735 | $ (62,632) | $ 148 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (13,225) | $ (9,965) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 2,996 | 2,077 |
Stock-based compensation | 2,424 | 1,887 |
Non-cash operating lease expense | 1,403 | 1,013 |
Amortization of capitalized sales commissions | 362 | 47 |
Change in fair value of acquisition earnout liability | (900) | 0 |
Foreign currency transactions | (24) | 35 |
Other | 0 | (19) |
Changes in operating assets and liabilities | ||
Accounts receivable | (2,155) | 713 |
Prepaid expenses and other current assets | (671) | (1,537) |
Capitalized sales commission | (1,430) | (717) |
Other non-current assets | (85) | 64 |
Trade payables | 661 | (2,114) |
Accrued expenses and other current liabilities | 2,356 | 1,645 |
Deferred revenue | 2,816 | 2,389 |
Customer deposits | 565 | 79 |
Operating lease liabilities | (1,529) | (805) |
Net cash provided by (used in) operating activities | (6,436) | (5,208) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capitalized software development costs | (7,330) | (3,655) |
Purchases of property and equipment | (285) | (181) |
Cash paid for acquisition, net | 0 | (9,091) |
Net cash provided by (used in) investing activities | (7,615) | (12,927) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings (net of issuance costs) under revolving credit facility | 2,450 | 0 |
Proceeds from exercise of stock options | 70 | 601 |
Net cash provided by (used in) financing activities | 2,520 | 601 |
Foreign currency effect on cash and cash equivalents | 151 | (24) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (11,380) | (17,558) |
CASH AND CASH EQUIVALENTS | ||
Beginning of year | 13,939 | 31,497 |
End of year | 2,559 | 13,939 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||
Cash paid for interest | 59 | 1 |
Cash paid for taxes | 22 | 28 |
NON-CASH OPERATING, INVESTING, AND FINANCING ACTIVITIES | ||
Property and equipment included in accounts payable | 16 | 2 |
Fair value of acquisition earnout liability | $ 0 | $ 900 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Description of Business Limeade, Inc. (the “Company” or “Limeade”) was incorporated in the state of Washington on February 23, 2006, and is headquartered in Bellevue, Washington. Limeade is an immersive employee well-being company that creates healthy employee experiences. By putting well-being at the heart of the employee experience, Limeade helps reduce burnout and turnover while increasing well-being and engagement — ultimately elevating business performance. The Company generates revenue through the sale of its software solutions to customers, which are provided via the cloud, under a subscription-based revenue model. The Company has wholly owned subsidiaries in Canada, Germany, Vietnam, and a branch registered in Australia. These entities provide business development, software development, and support services. Certain Significant Risks and Uncertainties The Company operates in a dynamic industry and accordingly, can be affected by a variety of factors. Management believes that changes in several areas could have a significant negative effect on the Company in terms of the Company’s future financial position and results of operations or cash flows. These areas include increasing demand for the Company’s products and services, reliance on key personnel including the ability to attract and retain qualified employees and key personnel, competition from other companies with greater financial, technical, and marketing resources, scaling and adaptation of existing technology and network infrastructure, management of the Company’s stabilization, and protection of the Company’s brand and intellectual property, among other things. In light of the current weak economic conditions, including as a result of recessions, or other adverse economic changes, financial and credit market fluctuations, military conflict, including the continuing war between Russia and Ukraine, and public health crises, such as the COVID-19 pandemic, the Company is currently unable to fully determine its future impact on the Company’s business. However, the Company is monitoring these factors and its potential effect on the Company’s financial position, results of operations, and cash flows. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Liquidity The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of December 31, 2022, as reflected in the accompanying consolidated financial statements, the Company had a cash balance of $2.6 million, a net loss of $13.2million, a working capital deficit of $18.8 million, net cash used in operating activities of $6.4 million, and an accumulated deficit of $62.6 million. As such, we signed the amendment in February 2023 extending the maturity date, implemented a reduction-in-force affecting approximately 15% of our employees in January 2023 which will result in additional cost savings, and have further plans to manage other headcount-related costs. Management believes that its current cash position, the available line of credit supplemented by its cost savings from the reduction in force, when combined with prudent expense management, will be sufficient to meet our working capital and capital expenditure needs for at least one year from the date these consolidated financial statements are issued. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates include revenue recognition, allowances for doubtful accounts, useful lives of property and equipment and capitalized software development costs, assumptions used in stock-based compensation, measurement of the valuation allowance for deferred tax assets and estimates of fair value of acquired assets and liabilities. Actual results could differ from management’s estimates and assumptions. Recent market conditions and the COVID-19 pandemic has introduced significant additional uncertainty with respect to estimates, judgments and assumptions, which may materially impact the estimates previously listed. Concentration of Credit Risk and Significant Customers The Company maintains its cash accounts with financial institutions where, at times, deposits exceed federal insurance limits. The Company generally places its cash and cash equivalents with high-credit-quality counterparties and by policy, limits the amount deposited based on the Company’s analysis of the counterparty’s relative credit standing to manage credit risk with any one counterparty where deposits may exceed the Federal Deposit Insurance Corporation limits. Credit risk with respect to accounts receivable is dispersed based on the number of the customers. No single customer represented more than 10% of total revenue during the years ended December 31, 2022 and 2021. Segments The Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate discrete financial information is evaluated regularly by the chief operating decision maker (“CODM”), who is the chief executive officer. The CODM assesses the performance of the Company and makes allocation decisions. The Company’s long-lived assets are primarily located in the US. Revenue by geographical region is included in Note 7. Foreign Currency Translation The Company’s consolidated financial statements are reported in U.S. dollars. The financial statements of the Company’s foreign subsidiaries with a functional currency other than U.S. dollars have been translated into U.S. dollars. Assets and liabilities of these subsidiaries are translated at the exchange rates in effect at each period-end. Income statement amounts are translated at the average exchange rate during the period. Translation adjustments resulting from this process are included in other comprehensive income (loss). Fair Value Measurements U.S. GAAP has established a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 – Quoted prices in active markets for identical assets and liabilities Level 2 – Observable inputs other than quoted prices included in Level 1 Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of an allowance for doubtful accounts and are generally due within 30 to 75 days. The allowance for doubtful accounts reflects the Company’s best estimate of losses inherent in the gross accounts receivable balance. The Company considers accounts outstanding longer than the contractual payment terms as past due. The Company determines the allowance by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations, and the condition of the general economy and industry as a whole. Accounts receivable ultimately deemed uncollectible are written off against their allowance in the period in which they are deemed uncollectible. Accounts receivable include outstanding invoices issued to customers according to the terms of the Company’s contractual arrangements. The Company reviews accounts receivable regularly to determine if any receivable will be potentially uncollectible. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is reported in the consolidated statement of operations within the operating expense category that benefits from the use of the asset. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Useful Life (Years) Computer equipment and software 3 years Furniture and equipment 3 - 5 years Leasehold improvements Shorter of remaining lease term or 5 years Internally Developed Software All costs related to the development of internal use software, other than those incurred during the application development stage, are expensed as incurred. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software, which is typically seven years. The estimated useful lives of internally developed software are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. Capitalized internally developed software costs are amortized on a straight-line basis over their expected economic lives. Amortization of these costs begins once the product is ready for its intended use. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period. Goodwill, Intangible Assets, and Other Long-Lived Assets The Company’s long-lived assets with finite lives consist primarily of property and equipment, capitalized software development costs, operating lease right-of-use assets and acquired intangible assets. Acquired finite-lived intangible assets consist of acquired technology and customer relationships, which are amortized over their estimated useful lives. Amortization expense for these intangible assets is included in the cost of revenue and sales & marketing lines of the consolidated statements of operations. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows which the assets are expected to generate. If the carrying value is not recoverable, the fair value is determined, and an impairment is recognized for the amount by which the carrying value exceeds the fair value. Impairment testing is performed at the reporting unit level. Management has determined that there was no impairment of long-lived assets for the years ended December 31, 2022 and 2021. Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition and is not amortized. The Company reviews goodwill for impairment at least annually in the fourth quarter, or more frequently, if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. Goodwill impairment is recognized when the quantitative assessment results in the carrying value of the reporting unit exceeding its fair value, in which case an impairment charge is recorded to goodwill to the extent the carrying value exceeds the fair value, limited to the amount of goodwill. There was no impairment of goodwill recorded for the years ended December 31, 2022 and 2021, respectively. Business Combinations The Company accounts for business acquisitions using the acquisition method of accounting, which requires that the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recorded at the date of acquisition at their respective fair values. Goodwill is recorded when consideration paid in a purchase acquisition exceeds the fair value of the net assets acquired. Revenue Recognition The Company generates revenue from two primary sources: (1) software-as-a-service ("SaaS”) subscriptions (“subscription revenues”), and (2) add-on services (“other revenues”). Revenue is recognized when promised goods and services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: 1. Identify a contract(s) with a customer 2. Identify the performance obligation in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) the Company satisfies a performance obligation Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the products sold, customer demographics, geographic locations, and the number and types of users within the Company’s contracts. The following describes the nature of the Company’s revenue and related revenue recognition policies. Subscription Revenue SaaS subscriptions provide customers with a right to access software hosted by the Company on the web, and services that include when-and-if-available updates and technical support; customers do not have a contractual right to take possession of the software. We typically enter into agreements with a term of three years with our customers but the substantial majority of these contracts allow the customer to terminate at the anniversaries without penalty. Effectively, our subscription arrangements are considered one-year contracts under the revenue recognition standard. Subscription fees may be invoiced annually, quarterly, or monthly. The nature of the SaaS subscription promise to the customer is to provide continuous access to the Company’s application platform. As such, our SaaS offerings are generally viewed as a stand-ready performance obligation comprised of a series of distinct daily services. Customers are granted continuous access to the platform over the contractual period and accordingly revenue related to subscription fees is recognized on a straight-line basis over the subscription term, beginning when the customer first has access to the software. The Company also sells third-party SaaS subscriptions such as health coaching and content subscription services, which are contracted for and billed to the customer by the Company. In these arrangements, the Company is considered the agent, and therefore, revenue is recognized net of costs charged by the third-party providers to the Company on a ratable basis over the subscription period. Other Revenue Other revenue includes services pertaining to (i) onsite client program managers which are billed based on the number of managers and the associated fees as stated in the contract and (ii) add-on services like biometric data collection, and onsite screenings which are usage-based and billed based on the number of participants. Billings or payments received in advance of other revenue service performance are deferred and are recognized as the services are performed, or ratably over the contract period, depending on the service. Performance Obligations The Company provides multiple services under its contracts with customers comprising subscription, implementation services and onsite management. The Company identifies performance obligations in its contracts with customers by evaluating whether individual services are distinct. The Company considers a service distinct if it is (i) capable of being distinct and (ii) distinct within the context of the agreement. Services that are not distinct are combined into a single performance obligation. The Company determines the transaction price based on the amount of consideration it expects to receive in exchange for transferring the promised goods or services to the customer. It allocates the transaction price in the contract to each distinct performance obligation in an amount that depicts the relative amount of consideration it expects to receive in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. Remaining Performance Obligations Remaining performance obligations represent contracted revenues that have not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenues in future periods. A substantial majority of our subscription arrangements contain a stated contract period of three years, with the customer’s right to terminate without penalty at each anniversary resulting in an effective contract period of one year. Services included in other revenue are billed a year in advance and revenue is recognized over the year. As such the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Judgments and Estimates Contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately from one another requires judgment. The Company’s contracts often require it to perform certain setup and implementation services so that its customers can appropriately utilize its subscription products. Implementation services are not capable of being distinct from the subscription service. Instead, they are combined with the Company’s subscription services and recognized ratably over the term of the customer contract. In future periods, these services may qualify as distinct performance obligations which may require further transaction price allocation and earlier recognition of revenue for a portion of customer contracts. Judgment is also required to determine the standalone selling price (“SSP”) for each distinct performance obligation. The Company typically has more than one SSP for each of its products and services based on customer stratification, which is based on the size of the customer, their geographic region, and market segment. For cloud-based subscriptions, SSP is generally observable using standalone sales and/or renewals. The Company evaluates contracts with customers that include options to purchase additional goods or services to determine whether the options give rise to a material right, which is a separate performance obligation. If the Company determines the options give rise to a material right, the revenue allocated to such right is not recognized until the option is exercised or the option expires. Finally, the Company’s contracts with customers generally include performance or service level guarantees, which obligate the Company to certain service performance deliverables such as minimum engagement rates, minimum scores on customer satisfaction surveys and web-site uptime requirements. These guarantees are treated as variable consideration, which reduces the total transaction price for individual contracts. The Company monitors compliance with performance guarantees throughout the duration of each contract and has a history of meeting contract performance guarantees. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company’s commission plans through June 30, 2021 include substantive service conditions that need to be met before a commission associated with a contract (or group of contracts) is actually earned by the salesperson. In such cases, some or all of the sales commission may not be incremental costs incurred to obtain a contract with the customer since the costs were not actually incurred solely as a result of obtaining a contract with a customer. Rather the costs were incurred as a result of obtaining a contract with a customer and the salesperson providing ongoing services to the entity for a substantive period. In the second quarter of 2021, the substantive service conditions were removed from the commission plans. Accordingly, sales commissions paid for the acquisition of the initial subscription contract relating to sales made in the second half of 2021 and full year 2022 were capitalized and will be amortized over the estimated customer life of 36 months. Contract Assets Contract assets represent the portion of the transaction price from a contract with a customer where control has transferred, but for which the Company currently does not have the contractual right to invoice. The Company reduces the gross contract asset balance for any impairments identified based on its consideration of a combination of factors including past collection experience, credit quality of the customer, age of other receivables balances due from the customer and current economic conditions. Deferred Revenue Deferred revenue represents billings or payments received in advance of revenue recognition from subscription and other revenue. The Company generally invoices customers monthly, semi-annually, or annually in advance of providing services. Customer Deposits Customer deposits represents payments received in advance of revenue recognition from subscription and third-party services that are subject to cancellation and refund provisions. Income Taxes The Company accounts for income taxes under the asset and liability method. The Company’s deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and income tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company assesses its income tax positions and records income taxes based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The Company determines whether its uncertain tax positions are more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions not meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company does not have any uncertain tax positions as of December 31, 2022 or December 31, 2021. Stock-based Compensation The Company accounts for stock-based payment awards made to employees and directors under Accounting Standards Codification ("ASC") Share-Based Payments ("ASC 718"), which requires measurement and recognition of compensation expense for all share-based payment awards based on fair value. The Company estimates the fair value of stock-based payment awards using the Black-Scholes option-pricing model. The Black-Scholes model incorporates various assumptions, including expected volatility, dividend yields, risk-free interest rates, weighted-average expected lives, and estimated forfeitures of options. Under ASC 718, stock-based compensation expense is recognized based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. The Company recognizes compensation expense for all stock-based payment awards made to employees and directors using a straight-line method, generally over a service period of four years. Stock-based compensation cost for restricted stock units (“RSUs”) is recognized on a straight-line basis in the consolidated statements of operations over the period during which the participant is required to perform services in exchange for the award, based on the fair value of the underlying common stock on the date of grant. The vesting period of each RSU grant is generally four years and stock-based compensation is adjusted for the impact of estimated forfeitures. Research and Development Expenses Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with product development. Research and development costs are expensed as incurred. Leases The Company adopted ASC Topic 842, Leases (“ASC 842”) on January 1, 2019. Under ASC 842, the Company determines if an arrangement is a lease at inception, and leases are classified at commencement as either operating or finance leases. Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. Operating lease ROU assets are presented in long-term assets in the consolidated balance sheets and operating lease expense is recognized on a straight-line basis over the lease term. As most of the Company’s operating leases do not provide an implicit rate, management uses its incremental borrowing rate, available at the commencement date, in determining the present value of future payments. This rate is an estimate of the collateralized borrowing rate it would incur on the future lease payments over a similar term based on the information available at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company utilizes certain practical expedients and policy elections available under the lease accounting standard. It does not record right-of-use assets or lease liabilities for leases with terms of 12 months or less, and it combines lease and non-lease components for contracts containing real estate leases. Right-of-use assets are subject to evaluation for impairment or disposal on a basis consistent with other long-lived assets. Contingencies A loss contingency is recorded if it is probable and the amount of the loss can be reasonably estimated. The Company assesses, among other factors, the probability of an adverse outcome and its ability to make a reasonable estimate of the ultimate loss. Net Loss per Share Attributable to Common Stockholders The Company calculates basic net loss per share by dividing net loss by the weighted-average number of the Company’s common stock shares outstanding during the respective period. The Company calculates diluted net loss per share by adjusting basic net loss per share for the potential dilutive impacts of outstanding stock options and restricted stock units (“RSUs”).The denominator of the diluted net loss per share calculation is adjusted for these securities if the impact of doing so increases net loss per share. During the periods presented, the impact is to decrease net loss per share and therefore the Company is precluded from adjusting its calculation for these securities. As a result, diluted net loss per share is calculated using the same formula as basic net loss per share. The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because of the impact of including them would have been anti-dilutive: December 31, 2022 2021 Stock options 26,753,357 20,249,586 RSUs 9,391,808 7,184,250 Total 36,145,165 27,433,836 Accounting Pronouncements Not Yet Adopted In June 2020, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments . As a smaller reporting company, this guidance requires an entity to measure and recognize expected credit losses for certain financial instruments and financial assets, including trade receivables. This guidance is effective for the Company on January 1, 2023 with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures and does not expect a material impact. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Cash equivalents invested in money market funds are classified as Level 1. Acquisition earnout liabilities are classified as Level 3 because the Company uses unobservable inputs to value them, reflecting its assessment of the assumptions market participants would use to value these liabilities (refer to Note 14). Changes in the fair value of earnout liabilities are recorded in other income (loss), net in the consolidated statements of operations. The following tables summarizes the valuation of financial instruments within the fair-value hierarchy as of December 31, 2022 and December 31, 2021. December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ — $ — $ — $ — Liabilities: Acquisition earnout liability $ — $ — $ — $ — December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 379 $ 379 $ — $ — Liabilities: Acquisition earnout liability $ 900 $ — $ — $ 900 |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: December 31, (in thousands) 2022 2021 Prepaid gift card costs $ 4,001 $ 3,296 Prepaid software 1,386 1,556 Prepaid insurance 150 97 Prepaid marketing 57 164 Other 511 320 Total prepaid expenses and other current assets $ 6,105 $ 5,433 A way in which our customer can enhance their employees’ experiences utilizing our software solutions is to reward their employees through third-party gift cards. When the customer is invoiced for the third-party gift cards earned by their employees, the Company recognizes an accrued gift card liability. When the customer pays the invoice, the Company deposits the funds into the customer’s account with the third-party provider and a prepaid gift card asset is recognized. As employees of our customers redeem their earned third-party gift cards the balance of the asset and liability are both decreased until the deposit for the customer is exhausted or until the customer terminates the service and requests a refund of their unused balance. Revenue related to commissions earned from selling the third-party gift cards to our customers is recognized when the third-party gift cards are redeemed by our customers employees, which is immaterial for all periods presented. If a customer was to terminate their contract, the unused balances in their gift cards would be refunded. The Company does not expect to be entitled to a breakage amount, and to date, the likelihood of customers exercising their remaining rights is not remote. Property and Equipment Property and equipment consists of the following: December 31, (in thousands) 2022 2021 Computer equipment and software $ 2,001 $ 1,745 Furniture and equipment 660 660 Leasehold improvements 606 607 Total 3,267 3,012 Less: accumulated depreciation and amortization (2,854) (2,571) Total property and equipment, net $ 413 $ 441 Depreciation and amortization expense for property and equipment wa s $0.3 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively. Capitalized Software Development Costs The Company capitalized $7.3 million and $3.7 million of internally developed software costs for the years ended December 31, 2022 and 2021, respectively. Amortization expense related to capitalized software was $1.6 million and $1.1 million for the years ended December 31, 2022 and 2021, respectively, and is included in cost of revenue in the consolidated statements of operations. Further the Company recorded accumulated amortization of $3.8 million and $2.2 million as of December 31, 2022 and 2021, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, (in thousands) 2022 2021 Accrued gift card liability $ 5,390 $ 3,978 Accrued compensation 4,057 3,748 Accrued vendor costs 2,036 1,927 Performance guarantee liability 1,150 710 Other 423 340 Total accrued expenses and other current liabilities $ 13,056 $ 10,703 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Intangible Assets Finite-lived intangible assets consisted of the following: December 31, 2022 (in thousands) Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 5 $ 4,878 $ (2,478) $ 2,400 Technology 5 600 (170) 430 Total intangible assets $ 5,478 $ (2,648) $ 2,830 December 31, 2021 (in thousands) Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 5 $ 4,878 $ (1,502) $ 3,376 Technology 5 600 (50) 550 Total intangible assets $ 5,478 $ (1,552) $ 3,926 Amortization expense for finite-lived intangible assets for the years ended December 31, 2022 and 2021, was $1.1 million, and $0.7 million, respectively. Estimated future amortization expense of intangible assets as of December 31, 2022 is as follows: (in thousands) 2023 $ 970 2024 720 2025 720 2026 420 Total $ 2,830 |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) PlanIn September 2011, the Company adopted a retirement plan (the "401(k) Plan") under Section 401(k) of the Internal Revenue Code. The Plan covers substantially all employees of the Company who meet minimum age and service requirements and allows for participants to defer a portion of their annual compensation on a pre-tax basis subject to annual regulatory contribution limitations. Plan assets are held separately from those of the Company in funds under the control of a third-party trustee.In October 2020, the Company amended the 401(k) Plan to include an employer matching contribution retroactive to January 1, 2020, with 100% immediate vesting. The Company will make matching contributions of 50% to each participant's before-tax and Roth elective contributions, limited to 3% of the participant's compensation each pay period for each employee who has met the match contribution eligibility criteria. For the years ended December 31, 2022 and 2021, the Company had accrued $0.2 million and $0.1 million, respectively, related to the Company matching contribution. These amounts are included in accrued expenses and other current liabilities in the consolidated balance sheets. |
REVENUE AND DEFERRED REVENUE
REVENUE AND DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND DEFERRED REVENUE | REVENUE AND DEFERRED REVENUE Disaggregation of Revenue The following table summarizes revenue by geographic area, which is based on the billing address of the customer: December 31, (in thousands) 2022 2021 Revenue: United States $ 52,522 $ 53,061 Other 3,495 2,135 Total revenue $ 56,017 $ 55,196 Performance Guarantees Reserves for estimated contract performance guarantees are established based on historical performance and are recognized as a reduction of revenue and as accrued expenses and other current liabilities in the consolidated balance sheets. The performance guarantee reserve liability is $1.2 million and $0.7 million as of December 31, 2022 and 2021, respectively. Contract Costs The activity of the deferred contract acquisition costs consisted of the following: December 31, (in thousands) 2022 2021 Beginning balance $ 670 $ — Capitalization of contract acquisition costs 1,430 717 Amortization of deferred contract acquisition costs (362) (47) Ending balance $ 1,738 $ 670 Contract Assets and Contract Liabilities Contract assets represent the portion of the transaction price from a contract with a customer where control has transferred, but for which the Company currently does not have the contractual right to invoice. The Company did not have any contract assets as of December 31, 2022 or December 31, 2021. Contract liabilities consist of deferred revenue. Timing may differ between the satisfaction of performance obligations and the billing and collection of amounts related to contracts with customers. Revenue is deferred for amounts that are billed in advance of the satisfaction of performance obligations. Deferred revenue as of December 31, 2022, is expected to be recognized within the next 12 months as the revenue recognition criteria are met. A summary of the activity impacting deferred revenue balances are presented below: December 31, (in thousands) 2022 2021 Beginning balance $ 13,528 $ 10,089 Additional amounts deferred 58,833 58,635 Revenue recognized (56,017) (55,196) Ending balance $ 16,344 $ 13,528 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Domestic and foreign components of loss before income tax are as follows: December 31, (in thousands) 2022 2021 Domestic $ (11,051) $ (9,863) Foreign (2,136) (77) Total $ (13,187) $ (9,940) Major components of the income tax provision are as follows: December 31, (in thousands) 2022 2021 Current Federal $ — $ — State 29 5 Foreign 5 15 Total current income tax provision 34 20 Deferred Federal 4 5 State — — Foreign — — Total deferred income tax provision (benefit) 4 5 Total $ 38 $ 25 The statutory tax rate used was 21% at December 31, 2022 and 2021. A reconciliation of the U.S. federal statutory tax rate to the Company's provision for income taxes is as follows: December 31, (in thousands) 2022 2021 Tax at statutory rate $ (2,776) $ (2,207) State taxes 23 4 Stock-based compensation 88 129 Federal tax credits 728 (688) Foreign rate differential 29 (70) Transaction cost - TINYpulse — 64 Deferred — 99 Change in valuation allowance 2,675 2,675 Other (729) 19 Total $ 38 $ 25 Operating Loss Carryforwards At December 31, 2022 and 2021, the Company had federal net operating loss carryforwards of approximately $46.9 million and $50.9 million, respectively, which may be used to offset future taxable income. The carryforwards, excluding $17.8 million of operating loss carryforwards that are indefinite-lived, will expire starting in 2028. The Company’s ability to utilize its carryforwards is dependent on generating sufficient taxable income prior to their expiration. A full valuation allowance has been established to reflect the uncertainty of generating future taxable income necessary to realize the Company’s tax loss carryforwards and other deferred tax assets. Current tax laws impose substantial restrictions on the utilization of net operating loss carryforwards in the event of an ownership change, as defined by Section 382 of the Internal Revenue Code. Since the losses incurred are fully reserved by a valuation allowance, any limitation related to Section 382 will not have a material impact on the financial statement. The limitation on net operating loss carryforwards could impact the deferred tax asset and corresponding valuation allowance below. Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, (in thousands) 2022 2021 Deferred tax assets: Net operating loss $ 11,804 $ 12,268 174 Capitalization 2,764 — Nondeductible reserves 844 396 Research and development credit carryforward 2,525 3,252 Lease liabilities 203 485 Equity Compensation 831 363 Other 90 82 Total deferred tax assets 19,061 16,846 Deferred tax liabilities: Software development costs (1,563) (1,988) Right-of-use assets (186) (419) TINYpulse intangible assets (594) (773) Other (400) (20) Total deferred tax liabilities (2,743) (3,200) Net deferred tax assets before valuation allowance 16,318 13,646 Valuation allowance (16,331) (13,656) Net deferred tax liability $ (13) $ (10) Net operating loss carryforward $ 46,873 $ 50,930 The Company adheres to requirements for uncertain tax positions, which had no financial statement impact to the Company upon adoption due to the existing valuation allowance on deferred tax assets. The Company files income tax returns in the U.S. federal and several state jurisdictions. As of December 31, 2022 and 2021, there is no accrued interest or penalties recorded in the consolidated financial statements. Due to the Company’s net operating loss and tax credit carryforwards, all federal and state tax returns are subject to tax examinations since the Company’s inception. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY The Company is authorized to issue two classes of stock designated as common stock and preferred stock. No shares of preferred stock were outstanding as of December 31, 2022 and 2021. Common Stock As of December 31, 2022, there were 257,245,284 shares of common stock issued and outstanding. At December 31, 2021, there were 253,621,067 shares of common stock issued and outstanding. Common stock of the Company has no preferences or privileges and is not redeemable. Holders of common stock of the Company are entitled to one vote for each share of common stock held. Common Shares Reserved for Future Issuance The following shares of common stock have been reserved for future issuance: December 31, 2022 2021 Common stock options and restricted stock units outstanding 36,145,165 27,628,500 Common stock and restricted stock units available for grant 18,135,949 23,885,495 Total common shares reserved for future issuance 54,281,114 51,513,995 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Effective December 20, 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “2019 Plan”) and terminated the Company’s authority to grant new awards under the 2006 Stock Plan (the “2006 Plan”) and the 2016 Stock Plan (the “2016 Plan”). The 2016 Plan and 2006 Plan were stockholder approved plans that authorized shares of the Company’s common stock for issuance to employees, directors, and consultants through incentive stock options, non-statutory stock options, or stock purchase right agreements. The 2019 Plan has a total of 46,822,211 shares reserved and available for issuance to employees, directors, and consultants through incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock grants, restricted stock unit grants, performance grants, and other grants, of which 18,135,949 and 23,885,495 shares remained available for grant as of December 31, 2022 and 2021, respectively. The Board of Directors determines the option exercise price and generally grants stock options at exercise prices that equal or exceed the fair value of the common stock on the date of grant. The terms of the options may not exceed ten years. Vesting terms are determined by the Board of Directors and generally vest over four years, with 25% vesting after 12 months and 75% vesting ratably over the remaining 36 months. In determining the fair value of stock options granted to employees, the following assumptions were used in the Black-Scholes option-pricing model for the following: December 31, 2022 2021 Per share value of common stock $0.10 — $0.34 $0.47 — $1.22 Risk-free interest rates 1.67% — 3.38% 0.71% — 0.99% Expected term (in years) 5.60 5.43 — 5.60 Dividend rate —% —% Volatility 74.40% 71.55% — 79.23% The per share value of common stock was based on the Company's stock price as of each grant date. The risk-free interest rates are based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. The Company estimates the weighted-average expected life of the options to employees based on past option exercise behavior and expectations about future behavior. Forfeiture rates were derived from historical employee termination behavior. As the Company has limited historical trading data regarding the volatility of its common stock, the expected volatility is based on the Company’s trading data since IPO. The Company has not declared or paid dividends in the past and does not currently expect to do so in the foreseeable future. The impact on results of operations of recording stock-based compensation expense was as follows: December 31, (in thousands) 2022 2021 Cost of revenue $ 382 $ 343 Sales and marketing 509 426 Research and development 830 758 General and administrative 703 360 Total stock-based compensation $ 2,424 $ 1,887 The following table summarizes stock option activity for the year ended December 31, 2022: Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2021 20,249,586 $ 0.51 7.81 $ 1,459 Options granted 11,365,468 0.21 Options forfeited (3,588,765) 0.59 Options expired (682,683) 0.46 Options exercised (590,249) 0.13 Outstanding at December 31, 2022 26,753,357 $ 0.38 7.32 $ 34 Options vested or expected to vest at December 31, 2022 25,434,496 $ 0.38 7.24 $ 34 Exercisable at December 31, 2022 11,303,516 $ 0.41 4.90 $ 15 At December 31, 2022, total compensation cost related to stock options granted to employees but not yet recognized was $1.7 million, net of estimated forfeitures. This cost will be amortized using the straight-line method over a weighted-average period of approximately 2.3 years. The aggregate intrinsic value represents the difference between the exercise price of the underlying options and the fair value of common stock for the number of options that were in-the-money at year end. The Company issues new shares of common stock upon exercise of stock options. The following table summarizes certain information about stock options for the following: December 31, (in thousands, except shares and per share data) 2022 2021 Weighted-average grant date fair value for options granted during the period $ 0.09 $ 0.44 Options in the money at period-end 217,672 7,430,263 Aggregate intrinsic value of options exercised $ 95 $ 3,441 In May 2020, the Company began granting RSUs under the 2019 Plan. The following table summarizes the RSU activity for the year ended December 31, 2022: Number of Shares Weighted Average Grant Date Fair Value Restricted stock units unvested at December 31, 2021 7,184,250 $ 0.68 Restricted stock units granted 7,899,854 0.13 Restricted stock units vested (3,033,968) 0.46 Restricted stock units forfeited (2,658,328) 0.55 Restricted stock units unvested at December 31, 2022 9,391,808 $ 0.32 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company’s leasing arrangements are primarily for corporate offices and automobiles, and these arrangements have agreements that include lease components (e.g., fixed rent) and non-lease components (e.g., common area maintenance), which are accounted for as a single component. The Company’s leases have various expiration dates through 2024. Certain lease agreements include options to extend the lease term for up to an additional 5 years, which are not reasonably certain to be exercised. December 31, 2022 2021 Weighted-average remaining lease term (in years) for operating leases 0.8 1.9 Weighted-average discount rate 6.0 % 5.9 % For the years ended December 31, 2022 and 2021, the Company expensed $2.1 million and $1.7 million respectively related to operating leases costs. Included in the operating lease expenses are certain variable payments related to common area maintenance and property taxes. Expenses for variable payments were $0.4 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively. The following table presents the Company’s future lease payments for long-term operating leases as of December 31, 2022: (in thousands) Operating Leases 2023 $ 1,359 2024 39 Thereafter — Total 1,398 Less: Imputed interest (32) Total operating lease liabilities $ 1,366 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The Company is not aware of any pending legal proceedings that individually or in the aggregate would have a material adverse effect on the Company’s business, operating results, or financial conditions. The Company may in the future be party to litigation arising in the ordinary course of business. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Guarantees and Other The Company includes indemnification provisions in its contracts entered into with customers and business partners. Generally, these provisions require the Company to defend claims arising out of its products’ infringement of third-party intellectual property rights, breach of contractual obligations, and/or unlawful or otherwise culpable conduct. The indemnity obligations generally cover damages, costs, and attorneys’ fees arising out of such claims. In most (but not all) cases, the total liability under such provisions is limited to either the value of the contract or a specified, agreed-upon amount. In some cases, the total liability under such provisions is not specified. In many (but not all) cases, the term of the indemnity provision is perpetual. While the maximum potential amount of future payments the Company could be required to make under all the indemnification provisions is unlimited, the Company believes the estimated fair value of these provisions is minimal, as these provisions have never been triggered. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Loan and Security Agreement On May 10, 2019, the Company entered into a loan and security agreement with Comerica Bank (as amended or otherwise modified from time to time, the Credit Facility) that consists of a $15.0 million Credit Facility. On August 3, 2022 the Company entered into Amendment No. 4 to its Credit Facility. Pursuant to the terms of the amendment, the maturity date of the Credit Facility was extended to December 31, 2023 and replaces the requirement regarding minimum annual contract value with a borrowing base calculation based on the Company’s balance of accounts receivables. The obligations under the Credit Facility are collateralized by substantially all assets of the Company, including intellectual property, receivables and other tangible and intangible assets. The Credit Facility includes affirmative and negative covenants. The Company has executed a couple of amendments to the Credit Facility after December 31, 2022, as discussed in Note 15. Interest on outstanding borrowings is the Prime Referenced Rate and is equal to the prime rate in effect on such day and the Prime Referenced Rate shall not be less than the greater of (i) the sum of Secured Overnight Financing Rate (SOFR Rate) plus 2.50% per annum, or (ii) two and one-half percent (2.50%) per annum. If, at any time, Bank determines that it is unable to determine or ascertain the SOFR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%) per annum. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On July 28, 2021 the Company acquired TINYpulse, a Seattle based leader in listening software. The merger allows the Company to expand its technology offerings and gain traction in the small to medium customer market segment. The TINYpulse products, Limeade Listening, will continue to be offered and supported to existing customers, while also being expanded to new customers and markets. The total consideration transferred related to this transaction was $9.1 million of cash consideration and an additional estimated earnout consideration of $0.9 million. The earnout consideration has defined evaluation periods at six twelve The TINYpulse acquisition has been accounted for as a business combination under the acquisition method in which Limeade was determined to be the acquirer, and assets acquired and liabilities assumed were recorded at their estimated fair values as of July 28, 2021. Goodwill, which represents the expected synergies from combining the acquired assets and operations of the acquirer, as well as intangible assets that do not qualify for separate recognition, is measured as of the acquisition date as the excess of consideration transferred, which is also measured at fair value, over the net of the fair values of the assets acquired and the liabilities assumed as of the acquisition date. The goodwill has been determined to be deductible for tax purposes. Acquisition-related costs incurred, which primarily included legal, accounting and other external costs directly related to the acquisition, are included within general and administrative operating expenses within our consolidated statements of operations and were expensed as incurred. The financial results of the acquired business are included in the Company’s consolidated results from the date of acquisition. The total purchase price has been allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the acquisition date. The total purchase price was allocated as follows: (in thousands) Amount Assets acquired: Cash and cash equivalents $ 83 Accounts receivable 775 Prepaid expenses and other current assets 257 Property and equipment 9 Operating lease right-of-use asset 1,381 Other non-current asset 29 Developed technology and customer relationship intangibles 3,600 Goodwill 7,127 Total assets acquired 13,261 Liabilities assumed: Trade payables 46 Accrued compensation 721 Accrued expenses and other current liabilities 72 Operating lease right-of-use liability 1,381 Deferred revenue 1,050 Total liabilities acquired 3,270 Net assets acquired $ 9,991 The Company utilizes different valuation approaches and methodologies to determine fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the TINYpulse merger are provided in the table below (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Technology $ 600 Relief from royalty 18.6% 5 years Customer relationships $ 3,000 Multi-period excess earnings 18.6% 5 years The excess of purchase price over the net identified tangible and intangible assets is $7.1 million and has been recorded as goodwill, which includes synergies expected from the new customer segments and additional software capabilities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 12, 2023, the Company announced a restructuring plan to reduce the Company's operations to preserve financial resources, resulting in a reduction of the Company’s workforce by 15% and restructure of Research and Development, Product, Customer Operations, Customer Success, Marketing and Sales teams. Costs are anticipated to be approximately $1.3 million and annualized savings are anticipated to be approximately $7.0 million. On January 19, 2023 and February 22, 2023, the Company executed the fifth and sixth amendment, respectively, to our revolving credit facility with Comerica. These amendments reduce the borrowing capacity from $15.0 million to $10.0 million and adds an adjusted EBITDA requirement wherein the Company is required to achieve and maintain certain minimum adjusted EBITDA at the various measurement periods outlined in the amendment and the maturity date of the Credit Facility is extended to March 31, 2024. The amendments limits the borrowing capacity up to $6.0 million until the Company performs certain administrative tasks and thereafter the borrowing capacity increases to $10.0 million. On January 20, 2023, the Company borrowed $2.5 million through its Credit Facility bringing the total outstanding balance to $5.0 million. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates include revenue recognition, allowances for doubtful accounts, useful lives of property and equipment and capitalized software development costs, assumptions used in stock-based compensation, measurement of the valuation allowance for deferred tax assets and estimates of fair value of acquired assets and liabilities. Actual results could differ from management’s estimates and assumptions. Recent market conditions and the COVID-19 pandemic has introduced significant additional uncertainty with respect to estimates, judgments and assumptions, which may materially impact the estimates previously listed. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers The Company maintains its cash accounts with financial institutions where, at times, deposits exceed federal insurance limits. The Company generally places its cash and cash equivalents with high-credit-quality counterparties and by policy, limits the amount deposited based on the Company’s analysis of the counterparty’s relative credit standing to manage credit risk with any one counterparty where deposits may exceed the Federal Deposit Insurance Corporation limits. |
Segments | SegmentsThe Company operates in one operating segment. Operating segments are defined as components of an enterprise about which separate discrete financial information is evaluated regularly by the chief operating decision maker (“CODM”), who is the chief executive officer. The CODM assesses the performance of the Company and makes allocation decisions. |
Foreign Currency Translation | Foreign Currency Translation The Company’s consolidated financial statements are reported in U.S. dollars. The financial statements of the Company’s foreign subsidiaries with a functional currency other than U.S. dollars have been translated into U.S. dollars. Assets and liabilities of these subsidiaries are translated at the exchange rates in effect at each period-end. Income statement amounts are translated at the average exchange rate during the period. Translation adjustments resulting from this process are included in other comprehensive income (loss). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of an allowance for doubtful accounts and are generally due within 30 to 75 days. The allowance for doubtful accounts reflects the Company’s best estimate of losses inherent in the gross accounts receivable balance. The Company considers accounts outstanding longer than the contractual payment terms as past due. The Company determines the allowance by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations, and the condition of the general economy and industry as a whole. Accounts receivable ultimately deemed uncollectible are written off against their allowance in the period in which they are deemed uncollectible. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is reported in the consolidated statement of operations within the operating expense category that benefits from the use of the asset. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Useful Life (Years) Computer equipment and software 3 years Furniture and equipment 3 - 5 years Leasehold improvements Shorter of remaining lease term or 5 years |
Internally Developed Software | Internally Developed Software All costs related to the development of internal use software, other than those incurred during the application development stage, are expensed as incurred. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software, which is typically seven years. The estimated useful lives of internally developed software are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. Capitalized internally developed software costs are amortized on a straight-line basis over their expected economic lives. Amortization of these costs begins once the product is ready for its intended use. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period. |
Goodwill, Intangible Assets, and Other Long-Lived Assets | Goodwill, Intangible Assets, and Other Long-Lived Assets The Company’s long-lived assets with finite lives consist primarily of property and equipment, capitalized software development costs, operating lease right-of-use assets and acquired intangible assets. Acquired finite-lived intangible assets consist of acquired technology and customer relationships, which are amortized over their estimated useful lives. Amortization expense for these intangible assets is included in the cost of revenue and sales & marketing lines of the consolidated statements of operations. |
Business Combinations | Business Combinations The Company accounts for business acquisitions using the acquisition method of accounting, which requires that the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recorded at the date of acquisition at their respective fair values. Goodwill is recorded when consideration paid in a purchase acquisition exceeds the fair value of the net assets acquired. |
Revenue Recognition and Customer Deposits | Revenue Recognition The Company generates revenue from two primary sources: (1) software-as-a-service ("SaaS”) subscriptions (“subscription revenues”), and (2) add-on services (“other revenues”). Revenue is recognized when promised goods and services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: 1. Identify a contract(s) with a customer 2. Identify the performance obligation in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) the Company satisfies a performance obligation Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the products sold, customer demographics, geographic locations, and the number and types of users within the Company’s contracts. The following describes the nature of the Company’s revenue and related revenue recognition policies. Subscription Revenue SaaS subscriptions provide customers with a right to access software hosted by the Company on the web, and services that include when-and-if-available updates and technical support; customers do not have a contractual right to take possession of the software. We typically enter into agreements with a term of three years with our customers but the substantial majority of these contracts allow the customer to terminate at the anniversaries without penalty. Effectively, our subscription arrangements are considered one-year contracts under the revenue recognition standard. Subscription fees may be invoiced annually, quarterly, or monthly. The nature of the SaaS subscription promise to the customer is to provide continuous access to the Company’s application platform. As such, our SaaS offerings are generally viewed as a stand-ready performance obligation comprised of a series of distinct daily services. Customers are granted continuous access to the platform over the contractual period and accordingly revenue related to subscription fees is recognized on a straight-line basis over the subscription term, beginning when the customer first has access to the software. The Company also sells third-party SaaS subscriptions such as health coaching and content subscription services, which are contracted for and billed to the customer by the Company. In these arrangements, the Company is considered the agent, and therefore, revenue is recognized net of costs charged by the third-party providers to the Company on a ratable basis over the subscription period. Other Revenue Other revenue includes services pertaining to (i) onsite client program managers which are billed based on the number of managers and the associated fees as stated in the contract and (ii) add-on services like biometric data collection, and onsite screenings which are usage-based and billed based on the number of participants. Billings or payments received in advance of other revenue service performance are deferred and are recognized as the services are performed, or ratably over the contract period, depending on the service. Performance Obligations The Company provides multiple services under its contracts with customers comprising subscription, implementation services and onsite management. The Company identifies performance obligations in its contracts with customers by evaluating whether individual services are distinct. The Company considers a service distinct if it is (i) capable of being distinct and (ii) distinct within the context of the agreement. Services that are not distinct are combined into a single performance obligation. The Company determines the transaction price based on the amount of consideration it expects to receive in exchange for transferring the promised goods or services to the customer. It allocates the transaction price in the contract to each distinct performance obligation in an amount that depicts the relative amount of consideration it expects to receive in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. Remaining Performance Obligations Remaining performance obligations represent contracted revenues that have not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenues in future periods. A substantial majority of our subscription arrangements contain a stated contract period of three years, with the customer’s right to terminate without penalty at each anniversary resulting in an effective contract period of one year. Services included in other revenue are billed a year in advance and revenue is recognized over the year. As such the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Judgments and Estimates Contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately from one another requires judgment. The Company’s contracts often require it to perform certain setup and implementation services so that its customers can appropriately utilize its subscription products. Implementation services are not capable of being distinct from the subscription service. Instead, they are combined with the Company’s subscription services and recognized ratably over the term of the customer contract. In future periods, these services may qualify as distinct performance obligations which may require further transaction price allocation and earlier recognition of revenue for a portion of customer contracts. Judgment is also required to determine the standalone selling price (“SSP”) for each distinct performance obligation. The Company typically has more than one SSP for each of its products and services based on customer stratification, which is based on the size of the customer, their geographic region, and market segment. For cloud-based subscriptions, SSP is generally observable using standalone sales and/or renewals. The Company evaluates contracts with customers that include options to purchase additional goods or services to determine whether the options give rise to a material right, which is a separate performance obligation. If the Company determines the options give rise to a material right, the revenue allocated to such right is not recognized until the option is exercised or the option expires. Finally, the Company’s contracts with customers generally include performance or service level guarantees, which obligate the Company to certain service performance deliverables such as minimum engagement rates, minimum scores on customer satisfaction surveys and web-site uptime requirements. These guarantees are treated as variable consideration, which reduces the total transaction price for individual contracts. The Company monitors compliance with performance guarantees throughout the duration of each contract and has a history of meeting contract performance guarantees. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company’s commission plans through June 30, 2021 include substantive service conditions that need to be met before a commission associated with a contract (or group of contracts) is actually earned by the salesperson. In such cases, some or all of the sales commission may not be incremental costs incurred to obtain a contract with the customer since the costs were not actually incurred solely as a result of obtaining a contract with a customer. Rather the costs were incurred as a result of obtaining a contract with a customer and the salesperson providing ongoing services to the entity for a substantive period. In the second quarter of 2021, the substantive service conditions were removed from the commission plans. Accordingly, sales commissions paid for the acquisition of the initial subscription contract relating to sales made in the second half of 2021 and full year 2022 were capitalized and will be amortized over the estimated customer life of 36 months. Contract Assets Contract assets represent the portion of the transaction price from a contract with a customer where control has transferred, but for which the Company currently does not have the contractual right to invoice. The Company reduces the gross contract asset balance for any impairments identified based on its consideration of a combination of factors including past collection experience, credit quality of the customer, age of other receivables balances due from the customer and current economic conditions. Deferred Revenue Deferred revenue represents billings or payments received in advance of revenue recognition from subscription and other revenue. The Company generally invoices customers monthly, semi-annually, or annually in advance of providing services. Customer Deposits Customer deposits represents payments received in advance of revenue recognition from subscription and third-party services that are subject to cancellation and refund provisions. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. The Company’s deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and income tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company assesses its income tax positions and records income taxes based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The Company determines whether its uncertain tax positions are more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions not meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company does not have any uncertain tax positions as of December 31, 2022 or December 31, 2021. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based payment awards made to employees and directors under Accounting Standards Codification ("ASC") Share-Based Payments ("ASC 718"), which requires measurement and recognition of compensation expense for all share-based payment awards based on fair value. The Company estimates the fair value of stock-based payment awards using the Black-Scholes option-pricing model. The Black-Scholes model incorporates various assumptions, including expected volatility, dividend yields, risk-free interest rates, weighted-average expected lives, and estimated forfeitures of options. Under ASC 718, stock-based compensation expense is recognized based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. The Company recognizes compensation expense for all stock-based payment awards made to employees and directors using a straight-line method, generally over a service period of four years. Stock-based compensation cost for restricted stock units (“RSUs”) is recognized on a straight-line basis in the consolidated statements of operations over the period during which the participant is required to perform services in exchange for the award, based on the fair value of the underlying common stock on the date of grant. The vesting period of each RSU grant is generally four years and stock-based compensation is adjusted for the impact of estimated forfeitures. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with product development. Research and development costs are expensed as incurred. |
Leases | Leases The Company adopted ASC Topic 842, Leases (“ASC 842”) on January 1, 2019. Under ASC 842, the Company determines if an arrangement is a lease at inception, and leases are classified at commencement as either operating or finance leases. Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. Operating lease ROU assets are presented in long-term assets in the consolidated balance sheets and operating lease expense is recognized on a straight-line basis over the lease term. As most of the Company’s operating leases do not provide an implicit rate, management uses its incremental borrowing rate, available at the commencement date, in determining the present value of future payments. This rate is an estimate of the collateralized borrowing rate it would incur on the future lease payments over a similar term based on the information available at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company utilizes certain practical expedients and policy elections available under the lease accounting standard. It does not record right-of-use assets or lease liabilities for leases with terms of 12 months or less, and it combines lease and non-lease components for contracts containing real estate leases. Right-of-use assets are subject to evaluation for impairment or disposal on a basis consistent with other long-lived assets. |
Contingencies | Contingencies A loss contingency is recorded if it is probable and the amount of the loss can be reasonably estimated. The Company assesses, among other factors, the probability of an adverse outcome and its ability to make a reasonable estimate of the ultimate loss. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The Company calculates basic net loss per share by dividing net loss by the weighted-average number of the Company’s common stock shares outstanding during the respective period. The Company calculates diluted net loss per share by adjusting basic net loss per share for the potential dilutive impacts of outstanding stock options and restricted stock units (“RSUs”).The denominator of the diluted net loss per share calculation is adjusted for these securities if the impact of doing so increases net loss per share. During the periods presented, the impact is to decrease net loss per share and therefore the Company is precluded from adjusting its calculation for these securities. As a result, diluted net loss per share is calculated using the same formula as basic net loss per share. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In June 2020, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments . As a smaller reporting company, this guidance requires an entity to measure and recognize expected credit losses for certain financial instruments and financial assets, including trade receivables. This guidance is effective for the Company on January 1, 2023 with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures and does not expect a material impact. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Useful Life (Years) Computer equipment and software 3 years Furniture and equipment 3 - 5 years Leasehold improvements Shorter of remaining lease term or 5 years Property and equipment consists of the following: December 31, (in thousands) 2022 2021 Computer equipment and software $ 2,001 $ 1,745 Furniture and equipment 660 660 Leasehold improvements 606 607 Total 3,267 3,012 Less: accumulated depreciation and amortization (2,854) (2,571) Total property and equipment, net $ 413 $ 441 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because of the impact of including them would have been anti-dilutive: December 31, 2022 2021 Stock options 26,753,357 20,249,586 RSUs 9,391,808 7,184,250 Total 36,145,165 27,433,836 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarizes the valuation of financial instruments within the fair-value hierarchy as of December 31, 2022 and December 31, 2021. December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ — $ — $ — $ — Liabilities: Acquisition earnout liability $ — $ — $ — $ — December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 379 $ 379 $ — $ — Liabilities: Acquisition earnout liability $ 900 $ — $ — $ 900 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: December 31, (in thousands) 2022 2021 Prepaid gift card costs $ 4,001 $ 3,296 Prepaid software 1,386 1,556 Prepaid insurance 150 97 Prepaid marketing 57 164 Other 511 320 Total prepaid expenses and other current assets $ 6,105 $ 5,433 |
Schedule of Property and Equipment | Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Useful Life (Years) Computer equipment and software 3 years Furniture and equipment 3 - 5 years Leasehold improvements Shorter of remaining lease term or 5 years Property and equipment consists of the following: December 31, (in thousands) 2022 2021 Computer equipment and software $ 2,001 $ 1,745 Furniture and equipment 660 660 Leasehold improvements 606 607 Total 3,267 3,012 Less: accumulated depreciation and amortization (2,854) (2,571) Total property and equipment, net $ 413 $ 441 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: December 31, (in thousands) 2022 2021 Accrued gift card liability $ 5,390 $ 3,978 Accrued compensation 4,057 3,748 Accrued vendor costs 2,036 1,927 Performance guarantee liability 1,150 710 Other 423 340 Total accrued expenses and other current liabilities $ 13,056 $ 10,703 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets consisted of the following: December 31, 2022 (in thousands) Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 5 $ 4,878 $ (2,478) $ 2,400 Technology 5 600 (170) 430 Total intangible assets $ 5,478 $ (2,648) $ 2,830 December 31, 2021 (in thousands) Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 5 $ 4,878 $ (1,502) $ 3,376 Technology 5 600 (50) 550 Total intangible assets $ 5,478 $ (1,552) $ 3,926 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense of intangible assets as of December 31, 2022 is as follows: (in thousands) 2023 $ 970 2024 720 2025 720 2026 420 Total $ 2,830 |
REVENUE AND DEFERRED REVENUE (T
REVENUE AND DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table summarizes revenue by geographic area, which is based on the billing address of the customer: December 31, (in thousands) 2022 2021 Revenue: United States $ 52,522 $ 53,061 Other 3,495 2,135 Total revenue $ 56,017 $ 55,196 |
Capitalized Contract Cost | The activity of the deferred contract acquisition costs consisted of the following: December 31, (in thousands) 2022 2021 Beginning balance $ 670 $ — Capitalization of contract acquisition costs 1,430 717 Amortization of deferred contract acquisition costs (362) (47) Ending balance $ 1,738 $ 670 |
Summary of Deferred Revenue Balances | A summary of the activity impacting deferred revenue balances are presented below: December 31, (in thousands) 2022 2021 Beginning balance $ 13,528 $ 10,089 Additional amounts deferred 58,833 58,635 Revenue recognized (56,017) (55,196) Ending balance $ 16,344 $ 13,528 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Domestic and foreign components of loss before income tax are as follows: December 31, (in thousands) 2022 2021 Domestic $ (11,051) $ (9,863) Foreign (2,136) (77) Total $ (13,187) $ (9,940) |
Schedule of Major Components of Income Tax Provision | Major components of the income tax provision are as follows: December 31, (in thousands) 2022 2021 Current Federal $ — $ — State 29 5 Foreign 5 15 Total current income tax provision 34 20 Deferred Federal 4 5 State — — Foreign — — Total deferred income tax provision (benefit) 4 5 Total $ 38 $ 25 |
Schedule of Effective Income Tax Rate Reconciliation | The statutory tax rate used was 21% at December 31, 2022 and 2021. A reconciliation of the U.S. federal statutory tax rate to the Company's provision for income taxes is as follows: December 31, (in thousands) 2022 2021 Tax at statutory rate $ (2,776) $ (2,207) State taxes 23 4 Stock-based compensation 88 129 Federal tax credits 728 (688) Foreign rate differential 29 (70) Transaction cost - TINYpulse — 64 Deferred — 99 Change in valuation allowance 2,675 2,675 Other (729) 19 Total $ 38 $ 25 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, (in thousands) 2022 2021 Deferred tax assets: Net operating loss $ 11,804 $ 12,268 174 Capitalization 2,764 — Nondeductible reserves 844 396 Research and development credit carryforward 2,525 3,252 Lease liabilities 203 485 Equity Compensation 831 363 Other 90 82 Total deferred tax assets 19,061 16,846 Deferred tax liabilities: Software development costs (1,563) (1,988) Right-of-use assets (186) (419) TINYpulse intangible assets (594) (773) Other (400) (20) Total deferred tax liabilities (2,743) (3,200) Net deferred tax assets before valuation allowance 16,318 13,646 Valuation allowance (16,331) (13,656) Net deferred tax liability $ (13) $ (10) Net operating loss carryforward $ 46,873 $ 50,930 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Future Issuance | The following shares of common stock have been reserved for future issuance: December 31, 2022 2021 Common stock options and restricted stock units outstanding 36,145,165 27,628,500 Common stock and restricted stock units available for grant 18,135,949 23,885,495 Total common shares reserved for future issuance 54,281,114 51,513,995 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Valuation Assumptions for Fair Value of Stock Options | In determining the fair value of stock options granted to employees, the following assumptions were used in the Black-Scholes option-pricing model for the following: December 31, 2022 2021 Per share value of common stock $0.10 — $0.34 $0.47 — $1.22 Risk-free interest rates 1.67% — 3.38% 0.71% — 0.99% Expected term (in years) 5.60 5.43 — 5.60 Dividend rate —% —% Volatility 74.40% 71.55% — 79.23% The following table summarizes certain information about stock options for the following: December 31, (in thousands, except shares and per share data) 2022 2021 Weighted-average grant date fair value for options granted during the period $ 0.09 $ 0.44 Options in the money at period-end 217,672 7,430,263 Aggregate intrinsic value of options exercised $ 95 $ 3,441 |
Schedule of Impact on Results of Operations of Recording Stock-Based Compensation | The impact on results of operations of recording stock-based compensation expense was as follows: December 31, (in thousands) 2022 2021 Cost of revenue $ 382 $ 343 Sales and marketing 509 426 Research and development 830 758 General and administrative 703 360 Total stock-based compensation $ 2,424 $ 1,887 |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2022: Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2021 20,249,586 $ 0.51 7.81 $ 1,459 Options granted 11,365,468 0.21 Options forfeited (3,588,765) 0.59 Options expired (682,683) 0.46 Options exercised (590,249) 0.13 Outstanding at December 31, 2022 26,753,357 $ 0.38 7.32 $ 34 Options vested or expected to vest at December 31, 2022 25,434,496 $ 0.38 7.24 $ 34 Exercisable at December 31, 2022 11,303,516 $ 0.41 4.90 $ 15 |
Schedule of Restricted Stock Unit Activity | The following table summarizes the RSU activity for the year ended December 31, 2022: Number of Shares Weighted Average Grant Date Fair Value Restricted stock units unvested at December 31, 2021 7,184,250 $ 0.68 Restricted stock units granted 7,899,854 0.13 Restricted stock units vested (3,033,968) 0.46 Restricted stock units forfeited (2,658,328) 0.55 Restricted stock units unvested at December 31, 2022 9,391,808 $ 0.32 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Weighted-Average Lease Terms and Discount Rates and Lease Costs | December 31, 2022 2021 Weighted-average remaining lease term (in years) for operating leases 0.8 1.9 Weighted-average discount rate 6.0 % 5.9 % |
Schedule of Future Lease Payments for Long-Term Operating Leases | The following table presents the Company’s future lease payments for long-term operating leases as of December 31, 2022: (in thousands) Operating Leases 2023 $ 1,359 2024 39 Thereafter — Total 1,398 Less: Imputed interest (32) Total operating lease liabilities $ 1,366 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total purchase price was allocated as follows: (in thousands) Amount Assets acquired: Cash and cash equivalents $ 83 Accounts receivable 775 Prepaid expenses and other current assets 257 Property and equipment 9 Operating lease right-of-use asset 1,381 Other non-current asset 29 Developed technology and customer relationship intangibles 3,600 Goodwill 7,127 Total assets acquired 13,261 Liabilities assumed: Trade payables 46 Accrued compensation 721 Accrued expenses and other current liabilities 72 Operating lease right-of-use liability 1,381 Deferred revenue 1,050 Total liabilities acquired 3,270 Net assets acquired $ 9,991 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the TINYpulse merger are provided in the table below (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Technology $ 600 Relief from royalty 18.6% 5 years Customer relationships $ 3,000 Multi-period excess earnings 18.6% 5 years |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 12 Months Ended | ||
Jan. 12, 2023 | Dec. 31, 2022 USD ($) source segment | Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Cash and cash equivalents | $ 2,559,000 | $ 13,939,000 | |
Net loss | 13,225,000 | 9,965,000 | |
Working capital deficit | 18,800,000 | ||
Net cashed used in operating activities | 6,436,000 | 5,208,000 | |
Accumulated deficit | $ 62,632,000 | 49,407,000 | |
Number of operating segments | segment | 1 | ||
Impairment of long-lived assets | $ 0 | 0 | |
Goodwill impairment | $ 0 | $ 0 | |
Number of revenue sources | source | 2 | ||
Amortization period for capitalized contract costs | 36 months | ||
Award requisite service period | 4 years | ||
Subsequent Event | |||
Property, Plant and Equipment [Line Items] | |||
Decrease in workforce, percentage | 15% | ||
RSUs | |||
Property, Plant and Equipment [Line Items] | |||
Award vesting period | 4 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Contract period | 3 years | ||
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Contract period | 1 year | ||
Software Development | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 7 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Depreciation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment and software | |
Property, Plant and Equipment [Line Items] | |
Useful Life (Years) | 3 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful Life (Years) | 3 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful Life (Years) | 5 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful Life (Years) | 5 years |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities (in shares) | 36,145,165 | 27,433,836 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities (in shares) | 26,753,357 | 20,249,586 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities (in shares) | 9,391,808 | 7,184,250 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Valuation of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash equivalents | $ 0 | $ 379 |
Liabilities: | ||
Acquisition earnout liability | 0 | 900 |
Level 1 | ||
Assets: | ||
Cash equivalents | 0 | 379 |
Liabilities: | ||
Acquisition earnout liability | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Liabilities: | ||
Acquisition earnout liability | 0 | 0 |
Level 3 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Liabilities: | ||
Acquisition earnout liability | $ 0 | $ 900 |
BALANCE SHEET COMPONENTS - Sche
BALANCE SHEET COMPONENTS - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid gift card costs | $ 4,001 | $ 3,296 |
Prepaid software | 1,386 | 1,556 |
Prepaid insurance | 150 | 97 |
Prepaid marketing | 57 | 164 |
Other | 511 | 320 |
Total prepaid expenses and other current assets | $ 6,105 | $ 5,433 |
BALANCE SHEET COMPONENTS - Sc_2
BALANCE SHEET COMPONENTS - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 3,267 | $ 3,012 |
Less: accumulated depreciation and amortization | (2,854) | (2,571) |
Total property and equipment, net | 413 | 441 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 2,001 | 1,745 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 660 | 660 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 606 | $ 607 |
BALANCE SHEET COMPONENTS - Narr
BALANCE SHEET COMPONENTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Depreciation and amortization expense | $ 0.3 | $ 0.3 |
Capitalized internally developed software costs | 7.3 | 3.7 |
Capitalized software amortization expense | 1.6 | 1.1 |
Capitalized software accumulated amortization | $ 3.8 | $ 2.2 |
BALANCE SHEET COMPONENTS - Sc_3
BALANCE SHEET COMPONENTS - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued gift card liability | $ 5,390 | $ 3,978 |
Accrued compensation | 4,057 | 3,748 |
Accrued vendor costs | 2,036 | 1,927 |
Performance guarantee liability | 1,150 | 710 |
Other | 423 | 340 |
Total accrued expenses and other current liabilities | $ 13,056 | $ 10,703 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 5,478 | $ 5,478 |
Accumulated Amortization | (2,648) | (1,552) |
Total | $ 2,830 | $ 3,926 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 5 years | 5 years |
Gross | $ 4,878 | $ 4,878 |
Accumulated Amortization | (2,478) | (1,502) |
Total | $ 2,400 | $ 3,376 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 5 years | 5 years |
Gross | $ 600 | $ 600 |
Accumulated Amortization | (170) | (50) |
Total | $ 430 | $ 550 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 1.1 | $ 0.7 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2023 | $ 970 | |
2024 | 720 | |
2025 | 720 | |
2026 | 420 | |
Total | $ 2,830 | $ 3,926 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Employer matching contribution, vesting percentage | 100% | |
Employer matching contribution, percent of match | 50% | |
Employer matching contribution, percent of participant's compensation | 3% | |
Accrued matching contribution | $ 0.2 | $ 0.1 |
REVENUE AND DEFERRED REVENUE -
REVENUE AND DEFERRED REVENUE - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 56,017 | $ 55,196 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 52,522 | 53,061 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,495 | $ 2,135 |
REVENUE AND DEFERRED REVENUE _2
REVENUE AND DEFERRED REVENUE - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Performance guarantee liability | $ 1,150,000 | $ 710,000 |
Amortization of capitalized sales commissions | 362,000 | 47,000 |
Contract assets | $ 0 | $ 0 |
REVENUE AND DEFERRED REVENUE _3
REVENUE AND DEFERRED REVENUE - Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Captailzed Contract Costs [Roll Forward] | ||
Beginning balance | $ 670 | $ 0 |
Capitalization of contract acquisition costs | 1,430 | 717 |
Amortization of deferred contract acquisition costs | (362) | (47) |
Ending balance | $ 1,738 | $ 670 |
REVENUE AND DEFERRED REVENUE _4
REVENUE AND DEFERRED REVENUE - Deferred Revenue Balances Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 13,528 | $ 10,089 |
Additional amounts deferred | 58,833 | 58,635 |
Revenue recognized | (56,017) | (55,196) |
Ending balance | $ 16,344 | $ 13,528 |
INCOME TAXES - Loss Before Inco
INCOME TAXES - Loss Before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (11,051) | $ (9,863) |
Foreign | (2,136) | (77) |
Loss before income taxes | $ (13,187) | $ (9,940) |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current | ||
Federal | $ 0 | $ 0 |
State | 29 | 5 |
Foreign | 5 | 15 |
Total current income tax provision | 34 | 20 |
Deferred | ||
Federal | 4 | 5 |
State | 0 | 0 |
Foreign | 0 | 0 |
Total deferred income tax provision (benefit) | 4 | 5 |
Total | $ 38 | $ 25 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory rate | $ (2,776) | $ (2,207) |
State taxes | 23 | 4 |
Stock-based compensation | 88 | 129 |
Federal tax credits | 728 | (688) |
Foreign rate differential | 29 | (70) |
Transaction cost - TINYpulse | 0 | 64 |
Deferred | 0 | 99 |
Change in valuation allowance | 2,675 | 2,675 |
Other | (729) | 19 |
Total | $ 38 | $ 25 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 46,873,000 | $ 50,930,000 |
Indefinite-lived operating loss carryforwards | 17,800,000 | 17,800,000 |
Accrued interest and penalties | $ 0 | $ 0 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss | $ 11,804 | $ 12,268 |
174 Capitalization | 2,764 | 0 |
Nondeductible reserves | 844 | 396 |
Research and development credit carryforward | 2,525 | 3,252 |
Lease liabilities | 203 | 485 |
Equity Compensation | 831 | 363 |
Other | 90 | 82 |
Total deferred tax assets | 19,061 | 16,846 |
Deferred tax liabilities: | ||
Software development costs | (1,563) | (1,988) |
Right-of-use assets | (186) | (419) |
TINYpulse intangible assets | (594) | (773) |
Other | (400) | (20) |
Total deferred tax liabilities | (2,743) | (3,200) |
Net deferred tax assets before valuation allowance | 16,318 | 13,646 |
Valuation allowance | (16,331) | (13,656) |
Net deferred tax liability | (13) | (10) |
Net operating loss carryforward | $ 46,873 | $ 50,930 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) | Dec. 31, 2022 class shares | Dec. 31, 2021 shares |
Equity [Abstract] | ||
Classes of stock | class | 2 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares, issued (in shares) | 257,245,284 | 253,621,067 |
Common stock, shares outstanding (in shares) | 257,245,284 | 253,621,067 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 54,281,114 | 51,513,995 |
Common stock options and restricted stock units outstanding | ||
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 36,145,165 | 27,628,500 |
Common stock and restricted stock units available for grant | ||
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 18,135,949 | 23,885,495 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 20, 2019 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total common shares reserved for future issuance (in shares) | 54,281,114 | 51,513,995 | |
Compensation costs not yet recognized related to stock options | $ 1.7 | ||
2019 Omnibus Incentive Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total common shares reserved for future issuance (in shares) | 18,135,949 | 23,885,495 | 46,822,211 |
Stock options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
Award vesting period | 4 years | ||
Period for recognition for compensation costs not yet recognized | 2 years 3 months 18 days | ||
Stock options | Share-Based Payment Arrangement, Tranche One | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Award vesting period | 12 months | ||
Award vesting percentage | 25% | ||
Stock options | Share-Based Payment Arrangement, Tranche Two | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Award vesting period | 36 months | ||
Award vesting percentage | 75% | ||
RSUs | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Period for recognition for compensation costs not yet recognized | 2 years 8 months 8 days | ||
Compensation costs not yet recognized related to RSUs | $ 2.8 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted Average Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rates, minimum | 1.67% | 0.71% |
Risk-free interest rates, maximum | 3.38% | 0.99% |
Expected term (in years) | 5 years 7 months 6 days | |
Dividend rate | 0% | 0% |
Volatility | 74.40% | |
Volatility, minimum | 71.55% | |
Volatility, maximum | 79.23% | |
Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Estimated per share value of common stock (in dollars per share) | $ 0.10 | $ 0.47 |
Expected term (in years) | 5 years 5 months 4 days | |
Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Estimated per share value of common stock (in dollars per share) | $ 0.34 | $ 1.22 |
Expected term (in years) | 5 years 7 months 6 days |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 2,424 | $ 1,887 |
Cost of revenue | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total stock-based compensation | 382 | 343 |
Sales and marketing | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total stock-based compensation | 509 | 426 |
Research and development | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total stock-based compensation | 830 | 758 |
General and administrative | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 703 | $ 360 |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options Outstanding | ||
Beginning balance (in shares) | 20,249,586 | |
Options granted (in shares) | 11,365,468 | |
Options forfeited (in shares) | (3,588,765) | |
Options expired (in shares) | (682,683) | |
Options exercised (in shares) | (590,249) | |
Ending balance (in shares) | 26,753,357 | 20,249,586 |
Options outstanding, vested and expected to vest (in shares) | 25,434,496 | |
Options outstanding, exercisable (in shares) | 11,303,516 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 0.51 | |
Options granted (in dollars per share) | 0.21 | |
Options forfeited (in dollars per share) | 0.59 | |
Options expired (in dollars per share) | 0.46 | |
Options exercised (in dollars per share) | 0.13 | |
Ending balance (in dollars per share) | 0.38 | $ 0.51 |
Options outstanding, vested or expected to vest, Weighted-Average Exercise Price (in dollars per share) | 0.38 | |
Options outstanding, exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 0.41 | |
Weighted Average Remaining Contractual Life | ||
Options outstanding | 7 years 3 months 25 days | 7 years 9 months 21 days |
Options outstanding, vested and expected to vest | 7 years 2 months 26 days | |
Options outstanding, exercisable | 4 years 10 months 24 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ 34 | $ 1,459 |
Options outstanding, vested or expected to vest | 34 | |
Options outstanding, exercisable | $ 15 |
STOCK-BASED COMPENSATION - St_3
STOCK-BASED COMPENSATION - Stock Option Summarized Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Weighted-average grant date fair value for options granted during the period (in dollars per share) | $ 0.09 | $ 0.44 |
Options in the money at period-end (in shares) | 217,672 | 7,430,263 |
Aggregate intrinsic value of options exercised | $ 95 | $ 3,441 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) - RSUs | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 7,184,250 |
Restricted stock units granted (in shares) | shares | 7,899,854 |
Restricted stock units vested (in shares) | shares | (3,033,968) |
Restricted stock units forfeited (in shares) | shares | (2,658,328) |
Ending balance (in shares) | shares | 9,391,808 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 0.68 |
Restricted stock units granted, Weighted average grant date fair value (in dollars per share) | $ / shares | 0.13 |
Restricted stock units vested, Weighted average grant date fair value (in dollars per share) | $ / shares | 0.46 |
Restricted stock units forfeited, Weighted average grant date fair value (in dollars per share) | $ / shares | 0.55 |
Ending balance (in dollars per share) | $ / shares | $ 0.32 |
LEASES - Lease Information (Det
LEASES - Lease Information (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) for operating leases | 9 months 18 days | 1 year 10 months 24 days |
Weighted-average discount rate | 6% | 5.90% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Lease extension term | 5 years | |
Operating lease costs | $ 2.1 | $ 1.7 |
Expenses for variable payments | 0.4 | 0.5 |
Cash paid for operating lease liabilities | $ 1.7 | $ 1 |
LEASES - Schedule of Future Ope
LEASES - Schedule of Future Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2023 | $ 1,359 |
2024 | 39 |
Thereafter | 0 |
Total | 1,398 |
Less: Imputed interest | (32) |
Total operating lease liabilities | $ 1,366 |
DEBT (Details)
DEBT (Details) - Revolving Credit Facility - Line of Credit - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | May 10, 2019 | |
Line of Credit Facility [Line Items] | ||
Revolving credit facility | $ 15 | |
Floor rate | 2.50% | |
Stated interest rate | 2.50% | |
Long-term debt | $ 2.5 | |
Secured Overnight Financing Rate (SOFR) | ||
Line of Credit Facility [Line Items] | ||
Variable interest rate | 2.50% |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 8,562 | $ 8,562 | |
Evaluation Period One | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred, Liabilities Incurred, Evaluation Period | 6 months | ||
Evaluation Period Two | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred, Liabilities Incurred, Evaluation Period | 12 months | ||
Evaluation Period Three | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred, Liabilities Incurred, Evaluation Period | 18 months | ||
TINYpulse | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 9,100 | ||
Consideration transferred, liabilities incurred | 900 | ||
Goodwill | $ 7,127 |
BUSINESS COMBINATION - Prelimin
BUSINESS COMBINATION - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 28, 2021 |
Assets acquired: | |||
Goodwill | $ 8,562 | $ 8,562 | |
TINYpulse | |||
Assets acquired: | |||
Cash and cash equivalents | $ 83 | ||
Accounts receivable | 775 | ||
Prepaid expenses and other current assets | 257 | ||
Property and equipment | 9 | ||
Operating lease right-of-use asset | 1,381 | ||
Other non-current asset | 29 | ||
Developed technology and customer relationship intangibles | 3,600 | ||
Goodwill | 7,127 | ||
Total assets acquired | 13,261 | ||
Liabilities assumed: | |||
Trade payables | 46 | ||
Accrued compensation | 721 | ||
Accrued expenses and other current liabilities | 72 | ||
Operating lease right-of-use liability | 1,381 | ||
Deferred revenue | 1,050 | ||
Total liabilities acquired | 3,270 | ||
Net assets acquired | $ 9,991 |
BUSINESS COMBINATION - Acquired
BUSINESS COMBINATION - Acquired Intangible Assets (Details) - TINYpulse $ in Thousands | Jul. 28, 2021 USD ($) |
Business Acquisition [Line Items] | |
Assigned Value | $ 3,600 |
Technology | |
Business Acquisition [Line Items] | |
Assigned Value | $ 600 |
Estimated Useful Life | 5 years |
Technology | Measurement Input, Discount Rate | |
Business Acquisition [Line Items] | |
Discount Rate | 0.186 |
Customer relationships | |
Business Acquisition [Line Items] | |
Assigned Value | $ 3,000 |
Estimated Useful Life | 5 years |
Customer relationships | Measurement Input, Discount Rate | |
Business Acquisition [Line Items] | |
Discount Rate | 0.186 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Jan. 20, 2023 | Jan. 12, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 22, 2023 | Jan. 19, 2023 | May 10, 2019 | |
Subsequent Event [Line Items] | |||||||
Borrowings (net of issuance costs) under revolving credit facility | $ 2,450 | $ 0 | |||||
Revolving Credit Facility | Line of Credit | |||||||
Subsequent Event [Line Items] | |||||||
Revolving credit facility | $ 15,000 | ||||||
Long-term debt | $ 2,500 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Decrease in workforce, percentage | 15% | ||||||
Restructuring costs | $ 1,300 | ||||||
Expected annualized savings | $ 7,000 | ||||||
Borrowings (net of issuance costs) under revolving credit facility | $ 2,500 | ||||||
Subsequent Event | Revolving Credit Facility | Line of Credit | |||||||
Subsequent Event [Line Items] | |||||||
Revolving credit facility | $ 10,000 | $ 15,000 | |||||
Net loan availability | $ 6,000 | ||||||
Long-term debt | $ 5,000 |