Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | DecisionPoint Systems, Inc. | |
Trading Symbol | DPSI | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 7,417,342 | |
Amendment Flag | false | |
Entity Central Index Key | 0001505611 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 333-245695 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1644635 | |
Entity Address, Address Line One | 1615 South Congress Avenue Suite 103 | |
Entity Address, City or Town | Delray Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33445 | |
City Area Code | (561) | |
Local Phone Number | 900-3723 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 17,975 | $ 7,642 |
Accounts receivable, net | 26,430 | 17,085 |
Inventory, net | 5,923 | 4,417 |
Deferred costs | 2,718 | 2,729 |
Prepaid expenses and other current assets | 471 | 399 |
Total current assets | 53,517 | 32,272 |
Operating lease assets | 2,576 | 2,681 |
Property and equipment, net | 1,838 | 1,817 |
Deferred costs, net of current portion | 3,092 | 2,868 |
Deferred tax assets | 838 | 848 |
Intangible assets, net | 4,122 | 4,531 |
Goodwill | 10,499 | 10,499 |
Other assets | 45 | 41 |
Total assets | 76,527 | 55,557 |
Current liabilities: | ||
Accounts payable | 23,262 | 19,755 |
Accrued expenses and other current liabilities | 3,612 | 5,357 |
Deferred revenue | 12,159 | 6,021 |
Current portion of long-term debt | 1,003 | 3 |
Current portion of operating lease liabilities | 525 | 529 |
Total current liabilities | 40,561 | 31,665 |
Deferred revenue, net of current portion | 4,587 | 4,331 |
Long-term debt | 11,142 | 143 |
Noncurrent portion of operating lease liabilities | 2,581 | 2,706 |
Other liabilities | 6 | 130 |
Total liabilities | 58,877 | 38,975 |
Commitments and contingencies (Notes 6, 7 and 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 50,000 shares authorized; 7,417 and 7,416 shares issued and outstanding, respectively | 7 | 7 |
Additional paid-in capital | 38,631 | 38,429 |
Accumulated deficit | (20,988) | (21,854) |
Total stockholders’ equity | 17,650 | 16,582 |
Total liabilities and stockholders’ equity | $ 76,527 | $ 55,557 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares shares in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 7,416 | 7,007 |
Common stock, shares outstanding | 7,416 | 7,007 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net sales: | ||
Product | $ 22,166 | $ 15,580 |
Service | 4,873 | 4,141 |
Net sales | 27,039 | 19,721 |
Cost of sales: | ||
Product | 17,885 | 12,422 |
Service | 3,104 | 2,625 |
Cost of sales | 20,989 | 15,047 |
Gross profit | 6,050 | 4,674 |
Operating expenses: | ||
Sales and marketing expense | 2,368 | 2,175 |
General and administrative expenses | 2,494 | 2,261 |
Total operating expenses | 4,862 | 4,436 |
Operating income | 1,188 | 238 |
Interest expense | (13) | (25) |
Other, net | 4 | |
Income before income taxes | 1,175 | 217 |
Income tax (expense) benefit | (309) | 637 |
Net income and comprehensive income attributable to common stockholders | $ 866 | $ 854 |
Earnings per share attributable to stockholders: | ||
Basic (in Dollars per share) | $ 0.12 | $ 0.12 |
Diluted (in Dollars per share) | $ 0.11 | $ 0.11 |
Weighted average common shares outstanding | ||
Basic (in Shares) | 7,417 | 7,104 |
Diluted (in Shares) | 7,789 | 7,664 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ EquityEquity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 7 | $ 39,216 | $ (24,965) | $ 14,258 |
Balance (in Shares) at Dec. 31, 2021 | 7,007 | |||
Net income | 854 | 854 | ||
Share-based compensation expense | 225 | 225 | ||
Cashless exercise of stock options (Note 9) | (1,403) | (1,403) | ||
Cashless exercise of stock options (Note 9) (in Shares) | 214 | |||
Balance at Mar. 31, 2022 | $ 7 | 38,038 | (24,111) | 13,934 |
Balance (in Shares) at Mar. 31, 2022 | 7,221 | |||
Balance at Dec. 31, 2022 | $ 7 | 38,429 | (21,854) | 16,582 |
Balance (in Shares) at Dec. 31, 2022 | 7,416 | |||
Net income | 866 | 866 | ||
Share-based compensation expense | 196 | 196 | ||
Exercise of stock options | 6 | 6 | ||
Exercise of stock options (in Shares) | 1 | |||
Balance at Mar. 31, 2023 | $ 7 | $ 38,631 | $ (20,988) | $ 17,650 |
Balance (in Shares) at Mar. 31, 2023 | 7,417 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 866 | $ 854 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 564 | 452 |
Share-based compensation expense | 196 | 225 |
Allowance for doubtful accounts | 68 | |
Provision for inventory obsolescence | 45 | |
Deferred income taxes, net | 10 | (639) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (9,413) | (2,102) |
Inventory | (1,551) | 1,190 |
Deferred costs | (212) | (3) |
Prepaid expenses and other current assets | (75) | (243) |
Accounts payable | 3,507 | (1,407) |
Accrued expenses and other current liabilities | (1,871) | (901) |
Operating lease liabilities | (24) | 184 |
Deferred revenue | 6,394 | 14,059 |
Net cash (used in) provided by operating activities | (1,496) | 11,669 |
Cash flows from investing activities | ||
Cash paid for acquisitions, net of cash acquired | (4,460) | |
Purchases of property and equipment | (176) | (447) |
Net cash used in investing activities | (176) | (4,907) |
Cash flows from financing activities | ||
Line of credit, net | 7,000 | |
Payment under term loan | (1) | |
Proceeds from term loan | 5,000 | |
Proceeds from exercise of stock options | 6 | |
Net cash provided by financing activities | 12,005 | |
Change in cash | 10,333 | 6,762 |
Cash, beginning of period | 7,642 | 2,587 |
Cash, end of period | 17,975 | 9,349 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 7 | 25 |
Cash paid for income taxes | ||
Non-cash investing and financing activities | ||
Right of use assets obtained in exchange for new operating lease liabilities | 3,211 | |
Cashless exercise of stock options | $ 3,508 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Description of Business [Abstract] | |
Description of Business | Note 1: Description of Business DecisionPoint Systems, Inc., which we sometimes refer to as the “Company”, “we” or “us”, is an enterprise mobility systems integrator that, through its subsidiaries, sells, installs, deploys and repairs mobile computing and wireless systems that are used both within a company’s facilities and in the field. These systems generally include mobile computers, mobile application software, and related data capture equipment including bar code scanners and radio frequency identification (“RFID”) readers. We also provide services, consulting, staging, kitting, deployment, maintenance, proprietary and third-party software and software customization as an integral part of our customized solutions for our customers. The suite of products utilizes the latest technologies with the intent to make complex mobile technologies easy to use, understand and keep running within all vertical markets such as merchandising, sales and delivery, field service, logistics and transportation and warehouse management. In June 2018, we acquired 100% of the outstanding stock of Royce Digital Systems, Inc. (“RDS”). RDS provides innovative enterprise print and mobile technologies, deployment services and on-site maintenance. In December 2020, we acquired 100% of the issued and outstanding membership interests of ExtenData Solutions, LLC (“ExtenData”). ExtenData is focused on enterprise mobility solutions and provides software product development, mobile computing, identification and wireless tracking solutions. In January 2022, we acquired 100% of the issued and outstanding membership interests of Advanced Mobile Group, LLC (“AMG”). AMG provides services, hardware, software, integration, and wireless networking solutions, with deep experience in warehousing and distribution, manufacturing, mobile workforce automation, retailing, and healthcare segments. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2: Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation We have prepared the accompanying unaudited condensed consolidated financial statements of DecisionPoint Systems, Inc. and its subsidiaries on the accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying condensed consolidated financial statements include the accounts of DecisionPoint Systems, Inc. and its wholly owned subsidiaries, DecisionPoint Systems International (“DPSI”), DecisionPoint Systems Group, Inc. (“DPS Group”), RDS, ExtenData and AMG. AMG was acquired on January 31, 2022, and as such, has been consolidated into our financial position and results of operations beginning February 1, 2022. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements as permitted by SEC rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the full fiscal year. Operating Segments Under the Financial Accounting Standards Board Accounting Standards Codification 280-10, two or more operating segments may be aggregated into a single operating segment for financial reporting purposes if aggregation is consistent with the objective and basic principles, if the segments have similar characteristics, and if the segments are similar in each of the following areas: (i) the nature of products and services, (ii) the nature of the production processes, (iii) the type or class of customer for their products and services, and (iv) the methods used to distribute their products or provide their services. We believe each of the Company’s segments meet these criteria as they provide similar products and services to similar customers using similar methods of production and distribution. Because we believe each of the criteria set forth above has been met and each of the Company’s segments has similar characteristics, we aggregate results of operations in one reportable operating segment. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. Inventory Inventory consists solely of finished goods and is stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out (FIFO) method. We periodically review our inventory and make provisions as necessary for estimated obsolete and slow-moving goods. The creation of such provisions results in reduction of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying condensed consolidated balance sheets net of a valuation allowance of $87,000 and $42,000 as of March 31, 2023 and December 31, 2022, respectively. Income Taxes Our quarterly provision for income taxes uses an annual effective tax rate based on the expected annual income and statutory tax rates. Our effective tax rate, including discrete items as more fully described below, was 26.7% for the three months ended March 31, 2023 and (291.3%) for the three months ended March 31, 2022. We recognize excess tax benefits (windfalls) and excess tax deficiencies (shortfalls) as discrete items in income taxes in the period that stock options are exercised. For the three months ended March 31, 2023, we recorded no income tax benefit nor deferred tax asset related to excess tax benefits for stock option exercises which represents the difference in deferred tax assets recorded at fair value during the vesting period and the actual deferred tax assets realized based on the intrinsic value on the date of exercise. For the three months ended March 31, 2022, we had recorded an income tax benefit of $0.7 million related to the non-taxable PPP loan forgiveness, which is not taxable at the federal level, but may be at the state level. Operating Leases For non-cancelable operating lease agreements, operating lease assets and operating lease liabilities are established for leases with an expected term greater than one year and we recognize lease expense on a straight-line basis. We have an operating lease for the office and warehouse space in Laguna Hills, California. Pursuant to the lease agreement, the base rent of $39,778 per month began on June 1, 2022 and increases 3% annually. The lease expires on April 30, 2029. In February 2022, we established an operating lease liability of $3.1 million and operating lease assets of $3.0 million, net of the sublease. In connection with this lease agreement, we entered into a sublease agreement for a portion of the Laguna Hills office and warehouse location, in which we receive $24,254 per month commencing in February 2022 with a sublease expiration of October 31, 2023. We also have operating leases for office space in Delray Beach, Florida, Southbury, Connecticut, and Doylestown, Pennsylvania with various fixed minimum monthly payments totaling $5,840. These leases have a combined operating lease liability of $0.1 million and operating lease assets of $0.1 million. At March 31, 2023, the total operating lease liability was $3.1 million and the total operating lease asset was $2.6 million. Revenue Recognition We recognize revenue when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. We recognize contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to our clients. Unbilled receivables are recorded when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive customer cash payments, in advance of performing the related services under the terms of a contract. Remaining performance obligations represent the transaction price allocated to the performance obligations that are unsatisfied as of the end of each reporting period. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation. As of March 31, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations was approximately $16.7 million, of which approximately $12.2 million is expected to be recognized over the next 12 months. As of December 31, 2022, the total aggregate transaction price allocated to the unsatisfied performance obligations was approximately $10.4 million. The following tables summarizes the deferred revenue activity for the three months ending March 31, 2023 (in thousands): Beginning balance at December 31, 2022 $ 10,352 Additions 14,958 Revenue recognized from beginning of period (2,817 ) Revenue recognized from additions (5,747 ) Ending balance at March 31, 2023 $ 16,746 We defer costs to acquire contracts, including commissions, incentives and payroll taxes if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are amortized to sales and marketing expense over the contract term, generally over one to three years. We have elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. We include deferred contract acquisition costs in “Prepaid expenses and other current assets” in the consolidated balance sheets. As of March 31, 2023 and December 31, 2022, we deferred $0.4 million and $0.2 million, respectively, of related contract acquisition costs The following table summarizes net sales by revenue source (in thousands): Three Months Ended March 31, 2023 2022 Hardware and software $ 20,540 $ 14,300 Consumables 1,626 1,280 Professional services 4,873 4,141 $ 27,039 $ 19,721 Recently Adopted Accounting Standards In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Acquisitions [Abstract] | |
Acquisitions | Note 3: Acquisitions Advanced Mobile Group, LLC On January 31, 2022, we entered into a Membership Unit Purchase Agreement and concurrently therewith closed upon the acquisition of all of the issued and outstanding membership interests of AMG for $5.1 million. The consideration we paid was comprised of cash of $4.6 million, of which $4.4 million was paid during the year ended December 31, 2022, and an estimated earn-out obligation valued at $0.5 million, subject to the financial performance of AMG during each of the two years following the closing of the acquisition. As a result of the acquisition, AMG became a wholly owned subsidiary of the Company. In the fourth quarter of 2022, we finalized our analysis of the estimated fair value of the acquisition purchase price (including earn-outs) and the estimated fair value of the assets acquired and liabilities assumed in the acquisition. Relative to the provisional amounts recorded as of March 31, 2022, changes to the fair value of assets and liabilities assumed at the date of AMG acquisition were a result of updating the purchase price allocation and were comprised of (i) $0.5 million decrease in customer lists and relationships, (ii) a $0.1 million decrease in the trade name, (iii) a $0.1 million increase in backlog, (iv) a $0.1 million increase in developed technology, (v) a $0.1 million decrease in deferred revenue, (vi) a $0.9 million decrease in deferred tax assets and (vii) a $1.4 million increase in goodwill. As of December 31, 2022, the allocation of the total consideration to the estimated fair value of acquired net assets as of the acquisition date for AMG was as follows (in thousands): Cash $ 170 Accounts receivable 1,402 Inventory 129 Prepaids and other current assets 123 Customer lists and relationships 1,930 Trade name 360 Backlog 280 Developed technology 70 Accounts payable (558 ) Accrued expenses (152 ) Deferred tax liabilities (897 ) Deferred revenue (148 ) Total fair value excluding goodwill 2,709 Goodwill 2,371 Total consideration $ 5,080 The estimated useful lives of intangible assets recorded related to the AMG acquisition are as follows: Expected Life Customer lists and relationships 7 years Trade name 3 years Backlog 11 months Developed technology 3 years Other acquisition In March 2022, we acquired the customer lists and relationships of Boston Technologies, a provider of mobile order management and route accounting software for direct store delivery (DSD) operations, for cash of $0.3 million. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 4: Intangible Assets Definite lived intangible assets are as follows (in thousands): March 31, 2023 December 31, 2022 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer lists and relationships $ 7,940 $ (4,188 ) $ 3,752 $ 7,940 $ (3,850 ) $ 4,090 Trade names 1,360 (1,037 ) 323 1,360 (973 ) 387 Developed technology 140 (93 ) 47 140 (86 ) 54 Backlog 340 (340 ) - 340 (340 ) - $ 9,780 $ (5,658 ) $ 4,122 $ 9,780 $ (5,249 ) $ 4,531 Amortization expense recognized during the three ended March 31, 2023 and 2022 was $0.4 million and $0.3 million, respectively. Amortization expense is primarily calculated on an accelerated basis. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 5: Net Income Per Share Basic net income per common share is computed by dividing the net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted net income per share is calculated similarly to basic per share amounts, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For periods in which there is a net loss, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. Below is a reconciliation of the fully dilutive securities effect for the three months ended March 31, 2023 and 2022 (in thousands, except per share data): 2023 2022 Net income attributable to common stockholders $ 866 $ 854 Weighted average basic shares outstanding 7,417 7,104 Dilutive effect of stock options and restricted stock 372 560 Weighted average shares for diluted earnings per share 7,789 7,664 Basic income per share $ 0.12 $ 0.12 Diluted income per share $ 0.11 $ 0.11 |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2023 | |
Lineof Credit [Abstract] | |
Line of Credit | Note 6: Line of Credit Our Loan and Security Agreement (the “Loan Agreement”) with MUFG Union Bank, National Association (the “Bank”), as amended, provides for a revolving line of credit of up to $10.0 million with our obligations being secured by a security interest in substantially all of our assets. Loans extended to us under the Loan Agreement are currently scheduled to mature on July 31, 2026. Effective March 27, 2023, we entered into an amendment letter (“Amendment”) with the Bank that served to amend certain terms of the Loan Agreement and increased the revolving line of credit available to us from $9.0 million to $10.0 million. The Amendment also served to modify certain covenants in the original agreement. On March 31, 2023, we drew down $7.0 million (see Note 11) of this facility and amounts borrowed under this credit facility are evidenced, and governed, by the terms of a commercial promissory note in favor of the Bank. Interest and Fees Loans under the Loan Agreement with an outstanding balance of at least $150,000 bear interest, at our option, at a base interest rate equal to the Term secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) plus 2.50% or a base rate equal to an index offered by the Bank for the interest period selected and is payable at the on the last day of each month, commencing April 30, 2023. The interest rate on the loans adjusts at the end of each SOFR rate period (1, 3, or 6 month term) selected by us. All other loan amounts bear interest at a rate equal to an index rate determined by the Bank, which shall vary when the index rate changes. As of March 31, 2023, the effective interest rate was 7.8%. We have the right to prepay variable interest rate loans, in whole or in part at any time, without penalty or premium. Amounts outstanding with a base interest rate may be prepaid in whole or in part provided we have given the Bank written notice of at least five days prior to prepayment and pay a prepayment fee. At any time prior to the maturity date, we may borrow, repay and reborrow amounts under the Loan Agreement, subject to the prepayment terms, and, as long as the total outstanding does not exceed $10.0 million. Covenants Under the Loan Agreement, as amended by the Amendment, we are subject to a variety of customary affirmative and negative covenants, including that we (i) maintain a ratio of total debt to EBITDA of not greater than 3.0:1.0 measured at the end of each quarter, (ii) maintain a fixed charge coverage ratio of not less than 1.35:1.00 to be measured as of the end of each fiscal quarter, and (iii) submit a pro-forma statement in advance showing compliance and overall satisfactory metrics post acquisition should the Company use any loan under the Loan Agreement for any acquisition with a purchase price in excess of $1,500,000. The Loan Agreement also prohibits us from, or otherwise imposes restrictions on us with respect to, among other things, liquidating, dissolving, entering into any consolidation, merger, division, partnership, or other combination, selling or leasing a majority of our assets or business or purchase or lease all or the greater part of the assets or business of another entity or person. As of March 31, 2023 we were in compliance with all of our covenants, were eligible to borrow up to $3.0 million, and had $7.0 million in outstanding borrowings under the line of credit. |
Term Debt
Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Term Debt | Note 7: Term Debt MUFG Promissory Note We entered into a $5.0 million unsecured promissory note agreement, effective March 27, 2023, with the Bank. Principal and interest payments on this note are due in quarterly installments of $250,000 on the last day of each quarter commencing June 30, 2023, with an interest rate based on Term SOFR plus 2.5% (secured overnight financing rate) as administered by the Federal Reserve Bank of New York, which was 7.8% at March 31, 2023.This note matures March 31, 2028. EIDL Promissory Note On August 27, 2020, we received $0.2 million in connection with a promissory note from the SBA under the Economic Injury Disaster Loan (“EIDL”) program pursuant to the CARES Act. Under the terms of the EIDL promissory note, interest accrues on the outstanding principal at an interest rate of 3.75% per annum and with a term of 30 years with equal monthly payments of principal and interest of $731 beginning on August 27, 2021. As of March 31, 2023 and December 31, 2022, outstanding debt under the promissory note was $0.1 million. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 8: Stockholders’ Equity We are authorized to issue two classes of stock designated as common stock and preferred stock. As of March 31, 2023, we are authorized to issue 60,000,000 total shares of stock. Of this amount, 50,000,000 shares are designated as common stock, each having a par value of $0.001 and 10,000,000 shares are designated as preferred stock, each having a par value of $0.001. Warrants The following table summarizes information about our outstanding common stock warrants as of March 31, 2023: Date Strike Total Total Weighted Issued Expiration Price Exercisable (in thousands) Price Warrants - Common Stock Jun-18 Jun-23 $ 1.00 207,665 $ 208 Warrants - Common Stock Oct-18 Oct-23 1.40 21,000 29 228,665 $ 237 $ 1.04 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment [Abstract] | |
Share-Based Compensation | Note 9: Share-Based Compensation Under our amended 2014 Plan 1,600,000 shares of our common stock are reserved for issuance under the 2014 Plan Under the 2014 Plan, common stock incentives may be granted to our officers, employees, directors, consultants, and advisors (and prospective directors, officers, managers, employees, consultants and advisors) and our affiliates can acquire and maintain an equity interest in us, or be paid incentive compensation, which may (but need not) be measured by reference to the value of our common stock. The 2014 Plan permits us to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock and other stock bonus awards and performance compensation awards. The 2014 Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors, which determines recipients and the number of shares subject to the awards, the exercise price and the vesting schedule. The term of stock options granted under the 2014 Plan cannot exceed ten years. Options cannot have an exercise price less than 100% of the fair market value of our common stock on the grant date, and generally vest over a period of three years. If the individual possesses more than 10% of the combined voting power of all classes of our stock, the exercise price shall not be less than 110% of the fair market of a share of common stock on the date of grant. The following table summarizes stock option activity under the 2014 Plan for the three months ended March 31, 2023: Stock Options Grant Date Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) ($ in Outstanding at December 31, 2022 458,957 $ 4.08 Granted 36,000 7.76 Forfeited or expired - Exercised (1,457 ) 4.15 Outstanding at March 31, 2023 493,500 $ 4.35 2.64 $ 1,308 Exercisable at March 31, 2023 352,884 $ 4.53 2.60 $ 1,142 Share-based compensation cost is measured at the grant date based on the fair value of the award. The fair values of stock options granted during the three months ended March 31, 2023 were estimated using the Black-Scholes option-pricing model with the following assumptions: Weighted average grant-date fair value per option granted $ 7.76 Expected option term in years 2.5 Expected volatility factor 74.0 % Risk-free interest rate 4.18 % Expected annual dividend yield 0.0 % We estimate expected volatility using historical volatility of common stock of our peer group over a period equal to the expected life of the options. The expected term of the awards represents the period of time that the awards are expected to be outstanding. We considered expectations for the future to estimate employee exercise and post-vest termination behavior. We do not intend to pay common stock dividends in the foreseeable future, and therefore have assumed a dividend yield of zero. The risk-free interest rate is the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term of the awards. As of March 31, 2023, there was $0.2 million of total unrecognized share-based compensation related to unvested stock options. These costs have a weighted average remaining recognition period of 1.6 years. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 10: Contingencies Litigation From time to time, we are subject to litigation incidental to the conduct of our business. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in our opinion, individually or in the aggregate, no such lawsuits are expected to have a material effect on our condensed consolidated financial position or results of operations. Concentrations One customer accounted for 20% of consolidated revenue during the three months ended March 31, 2023, and only two customers accounted for more than 10% of consolidated revenue during the three months ended March 31, 2022. Trade accounts receivable from one customer represented 49% of net consolidated receivables at March 31, 2023 and trade accounts receivable from two customers represented approximately 20% and 14% of net consolidated receivables at March 31, 2022. Three vendors accounted for 33%, 26%, and 22% of all consolidated purchases during the three months ended March 31, 2023. For the prior year period, these same vendors accounted for 33%, 27% and 10% of all consolidated purchases for the three months ended March 31, 2022. No other vendor accounted for more than 10% of purchases during the three months ended March 31, 2023 and 2022. As of March 31, 2023, three vendors accounted for 35%, 29% and 20% of total accounts payable. As of March 31, 2022, two of the same vendors accounted for 42% and 29% of the total accounts payable. No other vendor accounted for more than 10% of accounts payable as of March 31, 2023 and 2022. A significant decrease or interruption in business from our significant customers or vendors could have a material adverse effect on our business, financial condition and results of operations. Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable. We sell product to a large number of customers in many different geographic regions. To minimize credit risk, we perform ongoing credit evaluations of our customers’ financial condition. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11: Subsequent Events On March 31, 2023, we entered into a Stock Purchase Agreement to acquire all of the issued and outstanding shares of stock of Macro Integration Services, Inc. (“Macro”), a corporation organized under the laws of the State of North Carolina, for a purchase price of $10.5 million, which was paid at closing, and is subject to certain adjustments for indebtedness and net working capital. In order to the fund this acquisition we increased our line of credit and drew down $7.0 million on March 31, 2023 and entered into a new $5.0 million term loan (see Notes 6 and 7). On April 1, 2023, we closed on the acquisition of Macro and as a result of the acquisition, Macro became a wholly owned subsidiary of the Company. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Description of Business [Abstract] | |
Basis of Presentation | Basis of Presentation We have prepared the accompanying unaudited condensed consolidated financial statements of DecisionPoint Systems, Inc. and its subsidiaries on the accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying condensed consolidated financial statements include the accounts of DecisionPoint Systems, Inc. and its wholly owned subsidiaries, DecisionPoint Systems International (“DPSI”), DecisionPoint Systems Group, Inc. (“DPS Group”), RDS, ExtenData and AMG. AMG was acquired on January 31, 2022, and as such, has been consolidated into our financial position and results of operations beginning February 1, 2022. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements as permitted by SEC rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the full fiscal year. |
Operating Segments | Operating Segments Under the Financial Accounting Standards Board Accounting Standards Codification 280-10, two or more operating segments may be aggregated into a single operating segment for financial reporting purposes if aggregation is consistent with the objective and basic principles, if the segments have similar characteristics, and if the segments are similar in each of the following areas: (i) the nature of products and services, (ii) the nature of the production processes, (iii) the type or class of customer for their products and services, and (iv) the methods used to distribute their products or provide their services. We believe each of the Company’s segments meet these criteria as they provide similar products and services to similar customers using similar methods of production and distribution. Because we believe each of the criteria set forth above has been met and each of the Company’s segments has similar characteristics, we aggregate results of operations in one reportable operating segment. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. |
Inventory | Inventory Inventory consists solely of finished goods and is stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out (FIFO) method. We periodically review our inventory and make provisions as necessary for estimated obsolete and slow-moving goods. The creation of such provisions results in reduction of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying condensed consolidated balance sheets net of a valuation allowance of $87,000 and $42,000 as of March 31, 2023 and December 31, 2022, respectively. |
Income Taxes | Income Taxes Our quarterly provision for income taxes uses an annual effective tax rate based on the expected annual income and statutory tax rates. Our effective tax rate, including discrete items as more fully described below, was 26.7% for the three months ended March 31, 2023 and (291.3%) for the three months ended March 31, 2022. We recognize excess tax benefits (windfalls) and excess tax deficiencies (shortfalls) as discrete items in income taxes in the period that stock options are exercised. For the three months ended March 31, 2023, we recorded no income tax benefit nor deferred tax asset related to excess tax benefits for stock option exercises which represents the difference in deferred tax assets recorded at fair value during the vesting period and the actual deferred tax assets realized based on the intrinsic value on the date of exercise. For the three months ended March 31, 2022, we had recorded an income tax benefit of $0.7 million related to the non-taxable PPP loan forgiveness, which is not taxable at the federal level, but may be at the state level. |
Operating Leases | Operating Leases For non-cancelable operating lease agreements, operating lease assets and operating lease liabilities are established for leases with an expected term greater than one year and we recognize lease expense on a straight-line basis. We have an operating lease for the office and warehouse space in Laguna Hills, California. Pursuant to the lease agreement, the base rent of $39,778 per month began on June 1, 2022 and increases 3% annually. The lease expires on April 30, 2029. In February 2022, we established an operating lease liability of $3.1 million and operating lease assets of $3.0 million, net of the sublease. In connection with this lease agreement, we entered into a sublease agreement for a portion of the Laguna Hills office and warehouse location, in which we receive $24,254 per month commencing in February 2022 with a sublease expiration of October 31, 2023. We also have operating leases for office space in Delray Beach, Florida, Southbury, Connecticut, and Doylestown, Pennsylvania with various fixed minimum monthly payments totaling $5,840. These leases have a combined operating lease liability of $0.1 million and operating lease assets of $0.1 million. At March 31, 2023, the total operating lease liability was $3.1 million and the total operating lease asset was $2.6 million. |
Revenue Recognition | Revenue Recognition We recognize revenue when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. We recognize contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to our clients. Unbilled receivables are recorded when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive customer cash payments, in advance of performing the related services under the terms of a contract. Remaining performance obligations represent the transaction price allocated to the performance obligations that are unsatisfied as of the end of each reporting period. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation. As of March 31, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations was approximately $16.7 million, of which approximately $12.2 million is expected to be recognized over the next 12 months. As of December 31, 2022, the total aggregate transaction price allocated to the unsatisfied performance obligations was approximately $10.4 million. The following tables summarizes the deferred revenue activity for the three months ending March 31, 2023 (in thousands): Beginning balance at December 31, 2022 $ 10,352 Additions 14,958 Revenue recognized from beginning of period (2,817 ) Revenue recognized from additions (5,747 ) Ending balance at March 31, 2023 $ 16,746 We defer costs to acquire contracts, including commissions, incentives and payroll taxes if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are amortized to sales and marketing expense over the contract term, generally over one to three years. We have elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. We include deferred contract acquisition costs in “Prepaid expenses and other current assets” in the consolidated balance sheets. As of March 31, 2023 and December 31, 2022, we deferred $0.4 million and $0.2 million, respectively, of related contract acquisition costs The following table summarizes net sales by revenue source (in thousands): Three Months Ended March 31, 2023 2022 Hardware and software $ 20,540 $ 14,300 Consumables 1,626 1,280 Professional services 4,873 4,141 $ 27,039 $ 19,721 |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Schedule of deferred revenue activity | Beginning balance at December 31, 2022 $ 10,352 Additions 14,958 Revenue recognized from beginning of period (2,817 ) Revenue recognized from additions (5,747 ) Ending balance at March 31, 2023 $ 16,746 |
Schedule of net sales by revenue | Three Months Ended March 31, 2023 2022 Hardware and software $ 20,540 $ 14,300 Consumables 1,626 1,280 Professional services 4,873 4,141 $ 27,039 $ 19,721 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Acquisitions [Abstract] | |
Schedule of estimated fair value of acquired net assets | Cash $ 170 Accounts receivable 1,402 Inventory 129 Prepaids and other current assets 123 Customer lists and relationships 1,930 Trade name 360 Backlog 280 Developed technology 70 Accounts payable (558 ) Accrued expenses (152 ) Deferred tax liabilities (897 ) Deferred revenue (148 ) Total fair value excluding goodwill 2,709 Goodwill 2,371 Total consideration $ 5,080 |
Schedule of estimated useful lives of intangible assets | Expected Life Customer lists and relationships 7 years Trade name 3 years Backlog 11 months Developed technology 3 years |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets [Abstract] | |
Schedule of definite lived intangible assets | March 31, 2023 December 31, 2022 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer lists and relationships $ 7,940 $ (4,188 ) $ 3,752 $ 7,940 $ (3,850 ) $ 4,090 Trade names 1,360 (1,037 ) 323 1,360 (973 ) 387 Developed technology 140 (93 ) 47 140 (86 ) 54 Backlog 340 (340 ) - 340 (340 ) - $ 9,780 $ (5,658 ) $ 4,122 $ 9,780 $ (5,249 ) $ 4,531 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the fully dilutive securities effect | 2023 2022 Net income attributable to common stockholders $ 866 $ 854 Weighted average basic shares outstanding 7,417 7,104 Dilutive effect of stock options and restricted stock 372 560 Weighted average shares for diluted earnings per share 7,789 7,664 Basic income per share $ 0.12 $ 0.12 Diluted income per share $ 0.11 $ 0.11 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of outstanding common stock warrants | Date Strike Total Total Weighted Issued Expiration Price Exercisable (in thousands) Price Warrants - Common Stock Jun-18 Jun-23 $ 1.00 207,665 $ 208 Warrants - Common Stock Oct-18 Oct-23 1.40 21,000 29 228,665 $ 237 $ 1.04 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Compensation [Abstract] | |
Schedule of stock option activity | Stock Options Grant Date Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in years) ($ in Outstanding at December 31, 2022 458,957 $ 4.08 Granted 36,000 7.76 Forfeited or expired - Exercised (1,457 ) 4.15 Outstanding at March 31, 2023 493,500 $ 4.35 2.64 $ 1,308 Exercisable at March 31, 2023 352,884 $ 4.53 2.60 $ 1,142 |
Schedule of the fair values of stock options granted were estimated using the Black-Scholes option-pricing model | Weighted average grant-date fair value per option granted $ 7.76 Expected option term in years 2.5 Expected volatility factor 74.0 % Risk-free interest rate 4.18 % Expected annual dividend yield 0.0 % |
Description of Business (Detail
Description of Business (Details) | Jan. 31, 2022 | Dec. 31, 2020 | Jun. 30, 2018 |
Royce Digital Systems, Inc. [Member] | |||
Description of Business (Details) [Line Items] | |||
Ownership percentage | 100% | 100% | |
Advanced Mobile Group, LLC [Member] | |||
Description of Business (Details) [Line Items] | |||
Ownership percentage | 100% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 01, 2023 | Feb. 28, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Accounts receivable valuation allowance | $ 42,000 | $ 87,000 | |||
Effective tax rate | 26.70% | 291.30% | |||
Income tax benefit | $ 700,000 | ||||
Leases expected term | 1 year | ||||
Lease agreement | $ 39,778 | ||||
Lease agreement percentage | 3% | ||||
Operating lease liability | $ 3,100,000 | $ 3,100,000 | |||
Operating lease assets | 3,000,000 | 2,600,000 | |||
Total payments | 5,840 | ||||
Lease liability | 100,000 | ||||
Lease assets | 100,000 | ||||
Unsatisfied performance obligations | 16,700,000 | 10,400,000 | |||
Total aggregate transaction price | $ 12,200,000 | ||||
Incremental and recoverable costs customer contract term | 1 year | ||||
Related contract acquisition costs | $ 400,000 | $ 200,000 | |||
Laguna Hills [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Operating lease assets | $ 24,254 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of deferred revenue activity $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Schedule Of Deferred Revenue Activity Abstract | |
Beginning balance at December 31, 2022 | $ 10,352 |
Additions | 14,958 |
Revenue recognized from beginning of period | (2,817) |
Revenue recognized from additions | (5,747) |
Ending balance at March 31, 2023 | $ 16,746 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of net sales by revenue - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 27,039 | $ 19,721 |
Hardware and software [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 20,540 | 14,300 |
Consumables [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,626 | 1,280 |
Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,873 | $ 4,141 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Acquisitions (Details) [Line Items] | ||||
Consideration paid cash amount | $ 4.4 | |||
Cash | $ 0.3 | |||
Business Acquisition [Member] | ||||
Acquisitions (Details) [Line Items] | ||||
Acquisition description | In the fourth quarter of 2022, we finalized our analysis of the estimated fair value of the acquisition purchase price (including earn-outs) and the estimated fair value of the assets acquired and liabilities assumed in the acquisition. Relative to the provisional amounts recorded as of March 31, 2022, changes to the fair value of assets and liabilities assumed at the date of AMG acquisition were a result of updating the purchase price allocation and were comprised of (i) $0.5 million decrease in customer lists and relationships, (ii) a $0.1 million decrease in the trade name, (iii) a $0.1 million increase in backlog, (iv) a $0.1 million increase in developed technology, (v) a $0.1 million decrease in deferred revenue, (vi) a $0.9 million decrease in deferred tax assets and (vii) a $1.4 million increase in goodwill. | |||
Advanced Mobile Group, LLC [Member] | ||||
Acquisitions (Details) [Line Items] | ||||
Issued and outstanding membership interests | $ 5.1 | |||
Consideration paid cash amount | 4.6 | |||
Estimate earnout obligation | $ 0.5 |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of estimated fair value of acquired net assets $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Schedule of Estimated Fair Value of Acquired Net Assets [Abstract] | |
Cash | $ 170 |
Accounts receivable | 1,402 |
Inventory | 129 |
Prepaids and other current assets | 123 |
Customer lists and relationships | 1,930 |
Trade name | 360 |
Backlog | 280 |
Developed technology | 70 |
Accounts payable | (558) |
Accrued expenses | (152) |
Deferred tax liabilities | (897) |
Deferred revenue | (148) |
Total fair value excluding goodwill | 2,709 |
Goodwill | 2,371 |
Total consideration | $ 5,080 |
Acquisitions (Details) - Sche_2
Acquisitions (Details) - Schedule of estimated useful lives of intangible assets | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Estimated Useful Lives of Intangible Assets [Abstract] | |
Customer lists and relationships | 7 years |
Trade name | 3 years |
Backlog | 11 years |
Developed technology | 3 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Intangible Assets [Abstract] | ||
Amortization expenses | $ 0.4 | $ 0.3 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of definite lived intangible assets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 9,780 | $ 9,780 |
Accumulated Amortization | (5,658) | (5,249) |
Net Amount | 4,122 | 4,531 |
Customer lists and relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 7,940 | 7,940 |
Accumulated Amortization | (4,188) | (3,850) |
Net Amount | 3,752 | 4,090 |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,360 | 1,360 |
Accumulated Amortization | (1,037) | (973) |
Net Amount | 323 | 387 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 140 | 140 |
Accumulated Amortization | (93) | (86) |
Net Amount | 47 | 54 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 340 | 340 |
Accumulated Amortization | (340) | (340) |
Net Amount |
Net Income Per Share (Details)
Net Income Per Share (Details) - Schedule of reconciliation of the fully dilutive securities effect - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule Of Reconciliation Of The Fully Dilutive Securities Effect Abstract | ||
Net income attributable to common stockholders (in Dollars) | $ 866 | $ 854 |
Weighted average basic shares outstanding | 7,417 | 7,104 |
Dilutive effect of stock options and restricted stock | 372 | 560 |
Weighted average shares for diluted earnings per share | 7,789 | 7,664 |
Basic income per share (in Dollars per share) | $ 0.12 | $ 0.12 |
Diluted income per share (in Dollars per share) | $ 0.11 | $ 0.11 |
Line of Credit (Details)
Line of Credit (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Line of Credit (Details) [Line Items] | |
Line of credit | $ 7,000,000 |
Loan agreement | 9,000,000 |
Loan agreement | 10,000,000 |
Borrowed amount | 7,000,000 |
Outstanding balance | $ 150,000 |
Offered rate, percentage | 2.50% |
Effective interest rate percentage | 7.80% |
Total outstanding | $ 10,000,000 |
Loan agreement, description | Under the Loan Agreement, as amended by the Amendment, we are subject to a variety of customary affirmative and negative covenants, including that we (i) maintain a ratio of total debt to EBITDA of not greater than 3.0:1.0 measured at the end of each quarter, (ii) maintain a fixed charge coverage ratio of not less than 1.35:1.00 to be measured as of the end of each fiscal quarter, and (iii) submit a pro-forma statement in advance showing compliance and overall satisfactory metrics post acquisition should the Company use any loan under the Loan Agreement for any acquisition with a purchase price in excess of $1,500,000. |
Eligible to borrow | $ 3,000,000 |
Outstanding borrowing | 7,000,000 |
MUFG Union Bank [Member] | |
Line of Credit (Details) [Line Items] | |
Line of credit | $ 10,000,000 |
Maturity date | Jul. 31, 2026 |
SOFR [Member] | |
Line of Credit (Details) [Line Items] | |
Offered rate, percentage | 2.50% |
Term Debt (Details)
Term Debt (Details) - USD ($) | 1 Months Ended | |||||
Aug. 27, 2021 | Jun. 30, 2023 | Mar. 31, 2023 | Mar. 27, 2023 | Dec. 31, 2022 | Aug. 27, 2020 | |
Term Debt (Details) [Line Items] | ||||||
Unsecured promissory note | $ 5,000,000 | |||||
Principal interest amount | $ 250,000 | |||||
Interest rate percentage | 2.50% | |||||
Percentage of federal reserve | 7.80% | |||||
Promissory note | $ 100,000 | $ 100,000 | ||||
EIDL Promissory Note [Member] | ||||||
Term Debt (Details) [Line Items] | ||||||
Principal amount | $ 200,000 | |||||
Interest rate | 3.75% | |||||
Interest amount | $ 731 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Stockholders’ Equity (Details) [Line Items] | ||
Total number of authorized shares | 60,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Stock [Member] | ||
Stockholders’ Equity (Details) [Line Items] | ||
Shares of common stock | 50,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.001 | |
Preferred Stock [Member] | ||
Stockholders’ Equity (Details) [Line Items] | ||
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, par value (in Dollars per share) | $ 0.001 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of outstanding common stock warrants $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Total Warrants Outstanding and Exercisable | shares | 228,665 |
Total Exercise Price | $ | $ 237 |
Weighted Average Exercise Price | $ / shares | $ 1.04 |
Warrants - Common Stock [Member] | |
Class of Warrant or Right [Line Items] | |
Date - Issued | Jun-18 |
Date - Expiration | Jun-23 |
Strike Price | $ / shares | 1 |
Total Warrants Outstanding and Exercisable | shares | 207,665 |
Total Exercise Price | $ | $ 208 |
Warrants - Common Stock [Member] | |
Class of Warrant or Right [Line Items] | |
Date - Issued | Oct-18 |
Date - Expiration | Oct-23 |
Strike Price | $ / shares | 1.4 |
Total Warrants Outstanding and Exercisable | shares | 21,000 |
Total Exercise Price | $ | $ 29 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Share-Based Compensation (Details) [Line Items] | |
Term of stock option granted | 10 years |
Fair market value, percentage | 100% |
Vesting period | 3 years |
Voting power, percentage | 10% |
Exercise price, percentage | 110% |
Unrecognized share-based compensation | $ | $ 0.2 |
Weighted average remaining recognition period | 1 year 7 months 6 days |
2014 Equity Incentive Plan [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Number of shares issuance | shares | 1,600,000 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Schedule of stock option activity | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Schedule of Stock Option Activity [Abstract] | |
Stock Options,Outstanding | shares | 458,957,000 |
Grant Date Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.08 |
Stock Options, Granted | shares | 36,000,000 |
Grant Date Weighted Average Exercise Price, Granted | $ / shares | $ 7.76 |
Stock Options, Forfeited or expired | shares | |
Grant Date Weighted Average Exercise Price, Forfeited | $ / shares | |
Stock Options, Exercised | shares | (1,457,000) |
Grant Date Weighted Average Exercise Price, Exercised | $ / shares | $ 4.15 |
Stock Options, Outstanding | shares | 493,500,000 |
Grant Date Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.35 |
Weighted Average Remaining Contractual Life, Outstanding | 2 years 7 months 20 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 1,308,000 |
Stock Options, Exercisable | shares | 352,884,000 |
Grant Date Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.53 |
Weighted Average Remaining Contractual Life, Exercisable | 2 years 7 months 6 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 1,142,000 |
Share-Based Compensation (Det_3
Share-Based Compensation (Details) - Schedule of the fair values of stock options granted were estimated using the Black-Scholes option-pricing model | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Schedule of the Fair Values of Stock Options Granted were Estimated Using the Black-Scholes Option-Pricing Model [Abstract] | |
Weighted average grant-date fair value per option granted (in Dollars per share) | $ 7.76 |
Expected option term | 2 years 6 months |
Expected volatility factor | 74% |
Risk-free interest rate | 4.18% |
Expected annual dividend yield | 0% |
Contingencies (Details)
Contingencies (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Contingencies (Details) [Line Items] | ||
Consolidated revenue | 20% | 14% |
Accounts payable percentage | 10% | 10% |
One Customer [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidated revenue | 2% | |
Three Customers [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidated revenue | 10% | |
One vendors [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidate purchase percentage | 33% | 33% |
Total accounts payable percentage | 35% | |
Vendor Two [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidate purchase percentage | 26% | 27% |
Three vendors [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidate purchase percentage | 22% | 10% |
Total accounts payable percentage | 20% | |
Vendor [Member] | ||
Contingencies (Details) [Line Items] | ||
Accounts payable percentage | 10% | 10% |
Two vendors [Member] | ||
Contingencies (Details) [Line Items] | ||
Total accounts payable percentage | 29% | |
Accounts Receivable [Member] | ||
Contingencies (Details) [Line Items] | ||
Consolidated revenue | 49% | 20% |
Accounts Payable [Member] | One vendors [Member] | ||
Contingencies (Details) [Line Items] | ||
Total accounts payable percentage | 42% | |
Accounts Payable [Member] | Two vendors [Member] | ||
Contingencies (Details) [Line Items] | ||
Total accounts payable percentage | 29% |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Subsequent Events [Abstract] | |
Purchase amount | $ 10.5 |
Line of credit | 7 |
Loan amount | $ 5 |