Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 21, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Information [Line Items] | |||
Entity Registrant Name | DECISIONPOINT SYSTEMS, INC. | ||
Entity Central Index Key | 0001505611 | ||
Entity File Number | 001-41376 | ||
Entity Tax Identification Number | 37-1644635 | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 32.9 | ||
Entity Contact Personnel [Line Items] | |||
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 | ||
Entity Phone Fax Numbers [Line Items] | |||
City Area Code | (561) | ||
Local Phone Number | 900-3723 | ||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | DPSI | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 7,680,334 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor [Table] | |
Auditor Name | Haskell & White LLP |
Auditor Firm ID | 200 |
Auditor Location | Irvine, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 4,300 | $ 7,642 |
Accounts receivable, net of allowance of $267 and $262 as of December 31, 2023 and December 31,2022, respectively | 23,768 | 17,085 |
Inventory, net | 2,133 | 4,417 |
Deferred costs | 3,826 | 2,729 |
Prepaid expenses and other current assets | 630 | 399 |
Total current assets | 34,657 | 32,272 |
Operating lease assets | 3,392 | 2,681 |
Property and equipment, net | 2,973 | 1,817 |
Deferred costs, net of current portion | 3,689 | 2,868 |
Deferred tax assets, net | 1,161 | 848 |
Intangible assets, net | 7,815 | 4,531 |
Goodwill | 22,081 | 10,499 |
Other assets | 172 | 41 |
Total assets | 75,940 | 55,557 |
Current liabilities: | ||
Accounts payable | 16,857 | 19,755 |
Accrued expenses and other current liabilities | 6,566 | 4,528 |
Deferred revenue | 8,066 | 6,021 |
Current portion of earnout consideration | 5,370 | 829 |
Current portion of long-term debt | 1,003 | 3 |
Current portion of operating lease liabilities | 874 | 529 |
Total current liabilities | 38,736 | 31,665 |
Deferred revenue, net of current portion | 5,307 | 4,331 |
Revolving line of credit | 1,300 | |
Long-term debt, net of current portion | 3,639 | 143 |
Noncurrent portion of operating lease liabilities | 3,093 | 2,706 |
Long-term portion of earnout consideration | 4,316 | |
Other liabilities | 6 | 130 |
Total liabilities | 56,397 | 38,975 |
Commitments and contingencies (Note 13) | ||
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; 7,680 and 7,416 shares issued and outstanding, respectively | 8 | 7 |
Additional paid-in capital | 38,902 | 38,429 |
Accumulated deficit | (19,367) | (21,854) |
Total stockholders’ equity | 19,543 | 16,582 |
Total liabilities and stockholders’ equity | $ 75,940 | $ 55,557 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance (in Dollars) | $ 267 | $ 262 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 7,680,000 | 7,416,000 |
Common stock, shares outstanding | 7,680,334 | 7,416,071 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Net sales: | ||
Net sales | $ 115,594 | $ 97,415 |
Cost of sales: | ||
Cost of sales | 86,769 | 74,320 |
Gross profit | 28,825 | 23,095 |
Operating expenses: | ||
Sales and marketing expense | 9,957 | 9,218 |
General and administrative expenses | 14,093 | 9,430 |
Total operating expenses | 24,050 | 18,648 |
Operating income | 4,775 | 4,447 |
Interest expense, net | (1,156) | (56) |
Other expense | (15) | |
Income before income taxes | 3,619 | 4,376 |
Income tax expense | (1,132) | (1,265) |
Net income and comprehensive income attributable to common stockholders | $ 2,487 | $ 3,111 |
Earnings per share attributable to stockholders: | ||
Basic (in Dollars per share) | $ 0.33 | $ 0.43 |
Diluted (in Dollars per share) | $ 0.32 | $ 0.41 |
Weighted average common shares outstanding | ||
Basic (in Shares) | 7,555 | 7,261 |
Diluted (in Shares) | 7,679 | 7,562 |
Product | ||
Net sales: | ||
Net sales | $ 73,494 | $ 79,079 |
Cost of sales: | ||
Cost of sales | 59,607 | 62,214 |
Service | ||
Net sales: | ||
Net sales | 42,100 | 18,336 |
Cost of sales: | ||
Cost of sales | $ 27,162 | $ 12,106 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - 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 | 3,111 | 3,111 | ||
Share-based compensation expense | 577 | 577 | ||
Exercise of stock options | 154 | 154 | ||
Exercise of stock options (in Shares) | 79 | |||
Cashless exercise of stock options (Note 12) | (1,518) | (1,518) | ||
Cashless exercise of stock options (Note 12) (in Shares) | 232 | |||
Cashless exercise of warrants (Note 11 ) | ||||
Cashless exercise of warrants (Note 11 ) (in Shares) | 98 | |||
Balance at Dec. 31, 2022 | $ 7 | 38,429 | (21,854) | 16,582 |
Balance (in Shares) at Dec. 31, 2022 | 7,416 | |||
Net income | 2,487 | 2,487 | ||
Share-based compensation expense | 283 | 283 | ||
Exercise of stock options | 38 | 38 | ||
Exercise of stock options (in Shares) | 15 | |||
Exercise of warrants | $ 1 | 219 | 220 | |
Exercise of warrants (in Shares) | 211 | |||
Cashless exercise of stock options (Note 12) | (67) | (67) | ||
Cashless exercise of stock options (Note 12) (in Shares) | 24 | |||
Cashless exercise of warrants (Note 11 ) | ||||
Cashless exercise of warrants (Note 11 ) (in Shares) | 14 | |||
Balance at Dec. 31, 2023 | $ 8 | $ 38,902 | $ (19,367) | $ 19,543 |
Balance (in Shares) at Dec. 31, 2023 | 7,680 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 2,487 | $ 3,111 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,971 | 2,465 |
Loss on fixed asset disposal | 22 | |
Share-based compensation expense | 283 | 577 |
Deferred income taxes, net | (1,924) | 254 |
Provision for credit losses | 240 | 249 |
Provision for inventory obsolescence | 89 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,201 | (3,630) |
Inventory, net | 4,825 | (2,177) |
Deferred costs | (1,918) | (1,984) |
Prepaid expenses and other current assets | (207) | (54) |
Accounts payable | (5,707) | 8,924 |
Accrued expenses and other current liabilities | (1,644) | 914 |
Operating lease liabilities | (92) | 543 |
Deferred revenue | 1,877 | 3,095 |
Net cash provided by operating activities | 4,481 | 12,309 |
Cash flows from investing activities | ||
Purchases of property and equipment | (893) | (1,477) |
Cash paid for acquisitions, net of cash acquired | (12,917) | (4,525) |
Net cash used in investing activities | (13,810) | (6,002) |
Cash flows from financing activities | ||
Proceeds from term loan | 5,000 | |
Repayment of term debt | (504) | (3) |
Line of credit, net | 1,300 | |
Proceeds from exercise of warrants | 220 | |
Taxes paid in lieu of shares issued for share-based compensation | (67) | (1,403) |
Proceeds from exercise of stock options | 38 | 154 |
Net cash provided by (used in) financing activities | 5,987 | (1,252) |
Change in cash | (3,342) | 5,055 |
Cash, beginning of year | 7,642 | 2,587 |
Cash, end of year | 4,300 | 7,642 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 461 | 45 |
Cash paid for income taxes | 388 | 1,065 |
Supplemental disclosure of non-cash activities | ||
Leased assets obtained in exchange for new operating lease liabilities | 3,211 | |
Disposals of depreciated property and equipment | 420 | |
Cashless exercise of stock options | $ 115 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 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 sells, installs, deploys and repairs mobile computing, POS equipment 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 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. In April 2023, we acquired 100% of the issued and outstanding shares of Macro Integration Services, Inc. (“Macro”). Macro is a value-added reseller (“VAR”) that buys point of sale mobile computing, scanning, printing, and wireless products from various manufacturers and distributors. Macro also provides professional services for project management, implementation, deployment, installations, upgrades, training, and support. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 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 The consolidated financial statements of DecisionPoint Systems, Inc. and its subsidiaries have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying 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”), Royce Digital Systems, Inc. (“RDS”) ExtenData Solutions, LLC (“ExtenData”), AMG, and Macro. Macro was acquired on April 1, 2023, and as such, has been consolidated into our financial position and results of operations beginning April 1, 2023. All our identifiable assets are in the United States and all intercompany transactions have been eliminated in consolidation. 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. Concentration of Credit Risk Credit is extended to all customers based on financial condition, and collateral is generally not required. Concentrations of credit risk with respect to trade receivables are limited because of the large number of customers comprising our customer base and dispersion across many different industries and geographies. Accordingly, we continually monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. Although credit losses have historically been within our expectations and the provisions established, we cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. The following tables summarizes the allowance for credit losses activity for the years ending December 31, 2023 and 2022 (in thousands): Balance at December 31, 2021 $ 22 Charges to operations 249 Deductions (9 ) Balance at December 31, 2022 $ 262 Charges to operations 240 Deductions (235 ) Balance at December 31, 2023 $ 267 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 a reduction of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $131,000 and $42,000 as of December 31, 2023 and 2022, respectively. We recorded a fair value adjustment of approximately $359,000 to reflect the acquired cost of inventory related to the April 1, 2023 acquisition of Macro, and $359,000 was amortized during the year ended December 31, 2023, and is included in total cost of sales in the consolidated statements income and comprehensive income. Deferred Costs Deferred costs consist primarily of customer-related third-party extended hardware and software maintenance services which we have paid for in advance. The costs are ratably amortized over the life of the contract, generally one to five years. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally from three to five years. Leasehold improvements are recorded at cost and amortized over the shorter of the lease term or the life of the improvements. Cost incurred for repairs and maintenance are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of disposed assets are removed from the accounts and any resulting gain or loss is included in other income or expense. Operating Leases At the inception of a contract we assesses whether the contract is, or contains, a lease. Our assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. The commencement date of the contract is the date the lessor makes the underlying asset available for use by the lessee. Right-of-use (“ROU”) assets represent our right to use an underlying asset during the lease term and lease liabilities represent obligations to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the net present value of fixed lease payments over the lease term. ROU assets also include any initial direct costs and advance lease payments made and exclude lease incentives. Lease liabilities also include terminal purchase options when deemed reasonably certain to exercise. Our lease term includes options to extend when it is reasonably certain that it will exercise that option. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less; we recognize lease expense for these leases on a straight-line basis over the lease term. As most of our operating leases do not have an implicit rate that can be readily determined, we use our secured incremental borrowing rate for the same term as the underlying lease based on information available at lease commencement. The lease classification affects the expense recognition on the consolidated statements of operations. Operating lease charges are recorded in “General and administrative” expense. Capitalized Software Development Costs The capitalization of software development costs for external use begins when technological feasibility has been established and ends when the software is available for sale. Software development costs are amortized on a straight-line line basis over the remaining economic life, generally three years. Amortization of the capitalized software is classified within cost of sales for services in the consolidated statements of income and comprehensive income. Intangible Assets and Long-lived Assets We evaluate our intangible and long-lived assets for impairment when events or circumstances arise that indicate intangible and long-lived assets may be impaired. Indicators of impairment include, but are not limited to, a significant deterioration in overall economic conditions, a decline in the market capitalization, the loss of significant business, or other significant adverse changes in industry or market conditions. We completed the qualitative assessment for impairment and determined that there was no impairment during the years ended December 31, 2023 and 2022. There can be no assurance, however, that market conditions will not change or demand for our products will continue, which could result in an impairment of intangible and long-lived assets in the future. Intangible assets with finite useful lives are amortized over their respective estimated useful lives primarily using the straight-line method to their estimated residual values, if any. Our intangible assets consist of customer lists, customer relationships and trade names. Refer to Note 4 for further information on our intangible assets. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired. Goodwill is not amortized but tested for impairment at least annually or whenever events or changes in circumstance indicate that carrying values may not be recoverable. We assess the impairment of goodwill annually at each year-end and when indicators of impairment are present. We completed our annual assessment for goodwill impairment and determined that goodwill was not impaired as of December 31, 2023 and 2022. Factors that we consider important that could trigger an impairment assessment include, but not limited to, the following: ● significant under-performance relative to historical and projected operating results; ● significant changes in the manner of use of the acquired assets or business strategy; and ● significant negative industry or general economic trends. When performing the impairment review, we determine the carrying amount of a reporting unit by assigning assets and liabilities, including the existing goodwill, to each reporting unit. To evaluate whether goodwill is impaired, we compare the estimated fair value of each reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount. If the carrying amount of a reporting unit exceeds its fair value, the amount of the impairment loss will be recognized as the difference of the estimated fair value and the carrying value of the reporting unit. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include determining enterprise fair value and the allocation of enterprise fair value to the Company’s operating segments, revenue and expense growth rates, capital expenditures and the depreciation and amortization related to capital expenditures, changes in working capital, discount rates, risk-adjusted discount rates, future economic and market conditions and the determination of appropriate comparable companies. Due to the inherent uncertainty involved in making these estimates, actual future results related to assumed variables could differ from these estimates. Fair Value Measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. ● Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, and line of credit approximate fair value due to the short-term nature of these financial instruments. The carrying amount of our debt approximates its fair value as the credit markets have not materially changed since the original borrowing dates. Business Combinations We utilize the acquisition method of accounting for business combinations which allocates the purchase price of an acquisition to the various tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. We primarily establish fair value using the income approach based upon a discounted cash flow model. The income approach requires the use of many assumptions and estimates including future revenues and expenses, as well as discount factors and income tax rates. Other estimates include: ● Estimated step-ups or write-downs for fixed assets and inventory; ● Estimated fair values of intangible assets; ● Estimated liabilities assumed from the target; and ● Estimated earnout obligations. While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business acquisition date, these estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the purchase price allocation period, which is generally no more than one year from the business acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Revenue Recognition We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied. We combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. We estimate the amount of total contract consideration we expect to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide, and the contractual pricing based on those quantities. We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. We consider the sensitivity of the estimate, our relationship and experience with our client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. As discussed in more detail below, revenue is recognized 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 December 31, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations under our service contracts was approximately $13.4 million, of which approximately $8.1 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 under our service contracts was approximately $10.4 million, of which approximately $6.0 million is expected to be recognized over the next 12 months. Hardware, consumables, and software products - We recognize product revenue at the point in time when a client takes control of the hardware, consumables and/or software, which typically occurs when title and risk of loss have passed to the client. Our selling terms and conditions reflect that F.O.B ‘dock’ contractual terms establish that control is transferred from us at the point in time when the product is shipped to the customer. Revenues from software license sales are recognized as a single performance obligation on a gross basis as we are acting as a principal in these transactions at the point the software license is delivered to the customer. Generally, software licenses are sold with accompanying third-party delivered software assurance, which allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. In most instances, we determined that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license because we do not sell the software license and standard warranty on a standalone basis (which indicates that the customer cannot benefit from the software license and standard warranty on its own), the software license and the standard warranty are not separately identifiable, the software license assurance warranty are inputs of a combined item in the contract, the assurance warranty and software license are highly interdependent and interrelated because the core functionality of the license is dependent on the assurance warranty, and our promise to provide the assurance warranty that is necessary for the software license to continue to provide significant benefit to the customer. As a result, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. We consider several factors to determine whether we are acting as a principal or an agent, including whether we are the primary obligor to the customer, have established our own pricing and have inventory and credit risks. Our internally developed software solution generates SaaS revenues from implementation, training and subscription fees. The initial term of the SaaS agreements is generally one year. The subscription fees are recognized over the subscription period. The implementation fees are necessary and integral for the customer to utilize the software. As such, the implementation fees are deferred and amortized over the subscription period. We also offer third-party SaaS subscriptions to our customers. The third-party subscriptions are recognized on a net basis as we are acting as an agent in these transactions, whereas our internally developed software solution offering is recognized on a gross basis. We leverage drop-ship shipments with many of our partners and suppliers to deliver hardware and consumable products to our clients without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-ship arrangements on a gross basis as the principal in the transaction when the product is received by the client because we control the product prior to transfer to the client. We also assume primary responsibility for the fulfillment in the arrangement, we assume inventory risk if the product is returned by the client, we set the price of the product charged to the client, we assume credit risk for nonpayment by our customer, and we work closely with clients to determine their hardware specifications. Services - We provide Services which include consulting, staging, deployment, installation, repair and customer specified software customization. The arrangement with a customer is based on either a time and material basis or a fixed fee. For our time and materials service contracts, we recognize revenues as those services are provided and consumed, as this is the best output measure of how the services are transferred to the customer. Fixed fee contracts are recognized in the period in which the services are performed or delivered using a proportional service model. Except for installation services that are recognized over the subscription period as previously described, all other Services are recognized on a gross basis in the period in which the services are performed or delivered. Maintenance services - We sell certain Original Equipment Manufacturer (“OEM”) hardware and software maintenance support arrangements to our clients. We also offer an internal maintenance agreement related to hardware. These contracts are support service agreements for the hardware and/or software products that were acquired from us and others. Although these are third-party support agreements for maintenance on the specific hardware and/or software products, our internal help desk and systems engineers assist customers by providing technical assistance on the source of or how to fix the problem. In addition, we provide a turn back feature, deploying replacements as needed while we manage the return and reverse logistics of the product back to the OEM. Revenue related to service contracts is recognized ratably over the term of the agreement, generally over one to three years. We generally act as the principal in the transaction as the primary obligor for fulfillment in the arrangement, we set the price of the service charged to the customer, and we assume credit risk for the amounts invoiced. In addition, we manage back-end warranties, service contracts and repairs for multiple products and suppliers. We leverage our knowledge base of mobility best practices by consolidating multiple supplier’s maintenance requirements under a single point in contact through us. Our internal support team assists our customers first by performing an initial technical triage to determine the source of the problem including, but not limited to, physical damage and software issues and whether they can be handled remotely by the client or returned for repair. Further, we receive the returned products, confirm that the equipment is operational or not, either repair or refurbish the equipment internally or return it to the manufacturer directly to repair. We then obtain the product turn back from the manufacturer and either send it back out to a specific customer location or place in a customer’s spare pool. As a result, we recognize the revenue on a gross basis. For certain of our agreements, the accompanying third-party delivered software assurance is recognized on a net basis when we are acting as an agent in these transactions. The following table summarizes the deferred revenue activity for the years ended December 31 (in thousands): 2023 2022 Beginning Balance $ 10,352 $ 7,109 Additions 27,034 26,105 Revenue recognized from beginning of period (7,811 ) (11,486 ) Revenue recognized from additions (16,202 ) (11,376 ) Ending balance $ 13,373 $ 10,352 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 December 31, 2023 and December 31, 2022, we deferred $237,000 and $204,000, respectively, of related contract acquisition costs. The following table summarizes net sales by revenue source (in thousands): Year Ended 2023 2022 Hardware and software $ 67,551 $ 71,774 Consumables 5,943 7,305 Services 42,100 18,336 $ 115,594 $ 97,415 Concentration of Risk Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash and accounts receivable. All our cash balances are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor at each financial institution. As of December 31, 2023, we had approximately $3.3 million on deposit in excess of the insurance limits. We have not experienced any such losses in these accounts. In 2023, one customer accounted for 15%, or $17.5 million, of our net sales. No other single customer in 2023 accounted for more than 10% of net sales. Accounts receivable from this customer at December 31, 2023 accounted for 10% of total accounts receivable. In 2022, two customers accounted for approximately 17% and 11%, or $16.2 million and $8.3 million, of our net sales. No other single customer in 2022 accounted for more than 10% of net sales. Accounts receivable from one of these two customers at December 31, 2022 accounted for 27% of total accounts receivable. For the year ended December 31, 2023, we had purchases from three suppliers that collectively represented 54% of total purchases and 54% of accounts payable at December 31, 2023. Loss of a significant vendor could have a material adverse effect on our operations. For the year ended December 31, 2022, we had purchases from three suppliers that collectively represented 78% of total purchases and 75% of accounts payable at December 31, 2022. Loss of a significant vendor could have a material adverse effect on our operations. Share-Based Compensation We account for share-based compensation in accordance with the provisions of ASC Topic 718 “Compensation – Stock Compensation”. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). Share-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Given that share-based compensation expense recognized in the accompanying consolidated statements of income and comprehensive income is based on awards ultimately expected to vest. We account for forfeitures as they occur, rather than estimate expected forfeitures. Compensation cost for stock awards, which from time to time includes restricted stock units, is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service period. The fair value of stock awards is based on the estimated fair value of our common stock on the grant date. The estimated fair value of common stock option awards is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, all of which affect the estimated fair values of our common stock option awards. Given a lack of historical stock option exercises, the expected term of options granted is calculated as the average of the weighted vesting period and the contractual expiration date of the option. This calculation is based on a method permitted by the Securities and Exchange Commission in instances where the vesting and exercise terms of options granted meet certain conditions and where limited historical exercise data is available. The expected volatility is based on the historical volatility of the common stock of comparable public companies that operate in similar industries as us. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The expected dividend assumption is based on our history and management’s expectation regarding dividend payouts. Compensation expense for common stock option awards with graded vesting schedules is recognized on a straight-line basis over the requisite service period for the last separately vesting portion of the award, provided that the accumulated cost recognized as of any date at least equals the value of the vested portion of the award. If there are any modifications or cancellations of the underlying vested or unvested stock-based awards, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense, or record additional expense for vested stock-based awards. Future share-based compensation expense and unearned share- based compensation may increase to the extent that we grant additional common stock options or other share-based awards. Income Taxes We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Under ASC Topic 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC Topic 740 provides requirements for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. At December 31, 2023 and 2022, we had no unrecognized tax benefits that, if recognized, would affect our effective income tax rate over the next 12 months. As of December 31, 2023 and 2022, we had no accrued interest or penalties. Accounting Standards Adopted In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which, among other things, deferred the effective da |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions [Abstract] | |
Acquisitions | Note 3: Acquisitions Macro Integration Services, Inc. On March 31, 2023, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the Durwood Wayne Williams Revocable Trust and the Collins Family Living Trust, as sellers (collectively, the “Sellers”) and with Durwood W. Williams and Bartley E. Collins (the respective trustees of the Sellers), individually, pursuant to which the Company acquired all of the issued and outstanding equity of Macro from the Sellers (the “Acquisition”), effective April 1, 2023 (the “Effective Date”). Upon consummation of the Acquisition, Macro, a project management and professional services and integrated solutions company, became a wholly-owned subsidiary of the Company. Total consideration for the acquisition has been recorded as $25.6 million ($26.3 million was recorded at closing and additional $0.1 million was paid during the third quarter of 2023 due to a net working capital adjustment. The total consideration is comprised of the following (in thousands): Purchase price $ 10,623 Working capital excess 5,899 Subtotal 16,522 Earnout 9,008 Other 30 $ 25,560 Earnout payments are subject to the financial performance of Macro in each of the two years following closing and are presented at net present values. At December 31, 2023, we have accrued $5.4 million and $4.3 million for the Year 1 and Year 2 earnouts at their net present values, respectively, which are due June 14, 2024 and June 14, 2025, respectively. The earnout is based on Macro achieving EBITDA targets in years one and two following the Effective Date of $2.8 million and $3.8 million, respectively. The cash due at closing was $13.7 million which reflects the following (in thousands): Purchase price $ 10,500 Working capital excess 5,899 Less: bank indebtedness (1,837 ) Seller party expenses (845 ) $ 13,717 Actual consideration paid on the Effective Date was $11.0 million which reflects cash due at close less holdbacks for cash, accounts receivable, and inventory. An additional $0.1 million in consideration was paid during the third quarter of 2023 due to a net working capital adjustment. Also, customer payments on specified accounts receivable actually received by us through September 30, 2024, are to be remitted to the Sellers on a quarterly basis. The Sellers are also due certain payments from us if certain inventory is utilized by the Company before March 31, 2024. In the fourth quarter of 2023 our estimated earnout to the sellers of Macro for year 1 was reduced by $0.8 million. We also made an election under Section 338(h)(10) of the Internal Revenue Code to treat the acquisition as an asset purchase to step up the tax basis of the assets acquired. To make this election we will pay the seller an additional $1.6 million. The result of these two adjustments was to decrease the total consideration to $25.56 million, reduce our deferred tax liability from $3.3 million to $1.6 million and to adjust goodwill from $14.0 million to $11.6 million. As of December 31, 2023, the allocation of the total consideration to the estimated fair value of acquired net assets as of the acquisition date for Macro was as follows (in thousands): Cash $ 923 Accounts receivable, net 10,124 Inventory, net 2,630 Prepaids and other current assets 111 Operating lease assets 1,390 Property and equipment, net 1,058 Customer lists and relationships 4,080 Trade name 1,380 Other assets 44 Accounts payable (2,809 ) Accrued expenses and other current liabilities (695 ) Deferred tax liability (1,611 ) Operating lease liability (1,503 ) Deferred revenue (1,144 ) Total fair value excluding goodwill 13,978 Goodwill 11,582 Total consideration $ 25,560 The estimated useful lives of intangible assets recorded related to the Macro acquisition are as follows: Expected Customer lists and relationships 7 years Trade name 3 years Pro Forma Information The following unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2023 is presented as if the Macro acquisition had been completed on January 1, 2023, and after giving effect to certain pro forma adjustments. The pro forma condensed consolidated statement of operations is presented for informational purposes only and is not indicative of the results of operations that would have necessarily been achieved if the acquisition had actually been consummated on January 1, 2022 (in thousands). Year Ended Year Ended Net sales $ 126,535 $ 121,774 Net income $ 2,251 $ 2,910 During the year ended December 31, 2023, we incurred transaction costs of $0.5 million. Advanced Mobile Group, LLC On January 31, 2022, we entered into a Membership Unit Purchase Agreement and concurrently closed upon the acquisition of all of the issued and outstanding membership interests of AMG for $5.1 million. The consideration we paid is comprised of cash of $4.6 million, of which $4.4 million was paid as of 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, 2023, the allocation of the total consideration to the estimated fair value of acquired net assets as of the acquisition date for AMG is 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 assets (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 (in thousands): Expected Customer lists and relationships 7 years Trade name 3 years Backlog 11 months Developed technology 3 years |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 4: Intangible Assets Definitive lived intangible assets are as follows (in thousands): December 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amount Amortization Amount Amount Amortization Amount Customer lists and relationships $ 12,020 $ (5,395 ) $ 6,625 $ 7,940 $ (3,850 ) $ 4,090 Trade names 2,740 (1,575 ) 1,165 1,360 (973 ) 387 Developed technology 140 (115 ) 25 140 (86 ) 54 Backlog 340 (340 ) - 340 (340 ) - $ 15,240 $ (7,425 ) $ 7,815 $ 9,780 $ (5,249 ) $ 4,531 The range of useful lives and the weighted-average remaining useful life of amortizable intangible assets at December 31, 2023 is as follows: Expected Weighted Customer lists and relationships 7-15 years 11 years Trade names 3 years 2 years Developed technology 3 years 2 years The amortization expense of the definite lived intangible assets for the years remaining is as follows: Estimated (in thousands) Year ending December 31, 2024 $ 1,993 2025 1,690 2026 1,214 2027 1,028 2028 969 Thereafter 921 Total $ 7,815 Amortization expense recognized during the years ended December 31, 2023 and 2023 was $2.2 million and $2.0 million, respectively. Amortization expense is primarily calculated on a straight-line basis. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Net Income 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 presented 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 years ended December 31, 2023 and 2022 (in thousands, except per share data): Year Ended December 31, 2023 2022 Net income attributable to common stockholders $ 2,487 $ 3,111 Weighted average basic common shares outstanding 7,555 7,261 Dilutive effect of stock options, warrants and restricted stock 124 301 Weighted average shares for diluted earnings per share 7,679 7,562 Basic income per share $ 0.33 $ 0.43 Diluted income per share $ 0.32 $ 0.41 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 6: Property and Equipment Property and equipment consist of the following at December 31 (in thousands): 2023 2022 Software and computer equipment $ 2,167 $ 1,502 Automobiles 1,851 - Leasehold improvements 792 643 Equipment 582 311 Furniture and fixtures 208 176 Property and equipment, gross 5,600 2,632 Accumulated depreciation (2,627 ) (815 ) Property and equipment, net $ 2,973 $ 1,817 Depreciation and amortization expense related to property and equipment during the years ended December 31, 2023 and 2022 was $0.8 million and $0.5 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 7: Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following at December 31 (in thousands): 2023 2022 Salaries and benefits $ 2,967 $ 2,743 Taxes payable 1,661 1,016 Holdback related to acquisition 1,178 - Professional fees 30 188 Vendor purchases 95 44 Customer deposits 454 265 Other 181 272 Total accrued expenses and other current liabilities $ 6,566 $ 4,528 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit [Abstract] | |
Line of Credit | Note 8: 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 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. As of December 31, 2023, there is $1.3 million outstanding on the line of credit. 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 December 31, 2023, the effective interest rate was 7.9%. 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 December 31, 2023, we were in compliance with all of our covenants, were eligible to borrow up to $8.7 million, and had $1.3 million in outstanding borrowings under the Loan Agreement. |
Term Debt
Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Term Debt [Abstract] | |
Term Debt | Note 9: 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 7.9% at December 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 December 31, 2023 and December 31, 2022, outstanding debt under the promissory note was $0.1 million. At December 31, 2023, our total term debt consisted of the following (in thousands): MUFG promissory note $ 4,500 EIDL promissory note 142 Total term debt 4,642 Less: current portion of long-term debt (1,003 ) Long-term debt $ 3,639 The following table sets forth future principal payments for outstanding debt (in thousands): 2024 $ 1,003 2025 1,004 2026 1,004 2027 1,004 2028 504 Thereafter 123 $ 4,642 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 10: Income Taxes The provision for income taxes for the years ended December 31, 2023 and 2022 is as follows (in thousands): 2023 2022 Current: Federal $ 1,069 $ 910 State 377 101 1,446 1,011 Deferred: Federal (184 ) (39 ) State (130 ) 293 (314 ) 254 Valuation allowance - - Total income tax expense $ 1,132 $ 1,265 Our deferred tax assets and liabilities are as follows (in thousands): 2023 2022 Allowance for credit losses $ 70 $ 68 Inventory reserve and uniform capitalization 59 57 Accrued expenses and other liabilities 55 125 Deferred revenue 256 46 Other assets 194 42 ROU Liability 1,046 839 Intangibles 156 (150 ) Property and equipment (596 ) (364 ) ROU Asset (895 ) (696 ) Goodwill (132 ) (121 ) Net operating loss carryforwards 948 1,002 Total deferred tax assets 1,161 848 Valuation allowance - - Net deferred tax assets after valuation allowance $ 1,161 $ 848 A reconciliation of the United States statutory income tax rate to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows (in thousands): Federal taxes at statutory rate $ 898 $ 919 State and local income taxes 295 295 Other Permanent differences 13 51 State rate change (113 ) — PY return to provision differences 39 — Provision for income taxes $ 1,132 $ 1,265 Effective tax rate 26.5 % 28.9 % Our deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We have net operating loss carryforwards available in certain jurisdictions to reduce future taxable income. Future tax benefits for net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. This determination is based on the expectation that related operations will be sufficiently profitable or various tax business and other planning strategies will enable us to utilize the net operating loss carryforwards. Our evaluation of the realizability of deferred tax assets considers both positive and negative evidence. The weight given to potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. As of December 31, 2023, we did not record a valuation allowance related to the U.S. federal and state temporary items. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code under section 382. The annual limitation may result in the expiration of net operating loss carryforwards before utilization. As of December 31, 2023, we had federal and state net operating loss carryforwards of approximately $4.3 million and $0.9 million, respectively. As of December 31, 2022, we had federal and state net operating loss carryforwards of approximately $4.8 million and $0.0 million, respectively. These loss carryforwards will expire in varying amounts beginning 2033. We continue to remain subject to examination by U.S. federal authority for the years 2020 through 2023 and for various state authorities for the years 2019 through 2023, with few exceptions. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ Equity | Note 11: Stockholders’ Equity We are authorized to issue two classes of stock designated as common stock and preferred stock. As of December 31, 2023, we are authorized to issue 60,000,000 total shares of stock. Of this amount, 50,000,000 shares are common stock, each having a par value of $0.001 and 10,000,000 shares are preferred stock, each having a par value of $0.001. Preferred Stock At December 31, 2023 and 2022, there were no Common Stock At December 31, 2023 and 2022, there were 7,680,334 and 7,416,071 shares of common stock outstanding, respectively. Warrants In September 2022, a portion of the common stock warrants issued by the Company in 2018 were exercised by certain of the holders on a cashless basis. As a result of the cashless exercise, 97,408 shares of common stock were issued. In June 2023, the common stock warrants issued by the Company in June 2018 were fully exercised by all of the holders resulting in the issuance of 191,826 shares of common stock. In June 2023, one holder exercised a common stock warrant, issued by the Company in June 2018, on a cashless basis for a total of 12,676 shares of common stock, which was settled in two issuances: 9,247 shares of common stock were issued in June 2023 and an additional 3,429 shares of common stock were issued during the third quarter of 2023. In October 2023, the remaining common stock warrants issued by the Company in 2018 were fully exercised by certain holders resulting in the issuance of 17,063 shares of common stock. Furthermore, in October 2023, one holder exercised his common stock warrants issued by the Company in June 2018, on a cashless basis resulting in the issuance of 966 shares of common stock. All warrants were exercised as of December 31, 2023. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 12: Share-Based Compensation Under our amended 2014 Equity Incentive Plan (the “2014 Plan”), 1,600,000 shares of our common stock are reserved for issuance, of which 587,709 shares of common stock remain available 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 shall not 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 for the year ended December 31, 2023: Stock Grant Date Weighted Aggregate (in years) ($ in thousands) Outstanding at December 31, 2022 458,957 $ 4.08 Granted 60,521 7.26 Exercised (71,665 ) 2.53 Forfeited (31,000 ) 2.85 Outstanding at December 31, 2023 416,813 $ 4.89 3.29 $ 755 Exercisable at December 31, 2023 360,041 $ 5.00 3.30 $ 1,798 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 were estimated using the Black-Scholes option-pricing model with the following assumptions: 2023 2022 Weighted average grant-date fair value per option granted $3.05 to $3.65 $3.13 Expected option term 2.5 years 2.5 years Expected volatility factor 74.0% 83.0% Risk-free interest rate 3.82% to 4.18% 4.27% Expected annual dividend yield —% —% 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 December 31, 2023, there was $125,107 of total unrecognized share-based compensation related to unvested stock options. These costs have a weighted average remaining recognition period of 1.0 years. During the years ended December 31, 2023 and 2022, certain employees exercised vested stock options through a cashless exercise. The options exercised were net settled in satisfaction of the exercise price and employee share-based tax withholding. These shares were issued pursuant to an S-8 Registration Statement dated July 7, 2021 with respect to shares issuable pursuant to the 2014 Plan. The exercised options, utilizing a cashless exercise, are summarized in the following table: Year Exercised Options Weighted Average Shares Net Shares Net Shares Weighted Employee 2023 56,250 $ 2.55 24,371 8,169 23,710 $ 6.43 $ 67,444 2022 596,668 $ 3.46 210,117 154,320 232,231 $ 9.84 $ 1,517,823 (1) Shares withheld for employee taxes of 8,169 and 154,320 represents the equivalent shares for employee tax withholding of $67,444 and $1.5 million, respectively. The employee tax withholding is based on the statutory rates for each employee on the date of exercise. ASU 2016-09 clarifies that employee taxes paid in lieu of shares issued for share-based compensation should be considered similar to a share repurchase. Accordingly, employee taxes paid by us are recorded as a reduction to stockholders’ equity on the date of exercise and classified as a financing activity on the statement of cash flows when taxes are paid to the taxing authorities. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 13: Commitments and Contingencies Operating Leases As of December 31, 2023, we have five operating leases for office and warehouse space. As of December 31, 2023 and 2022, our operating lease asset and liability balances were as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease right-of-use assets $ 3,392 $ 2,681 Current portion of operating lease obligations 874 529 Long-term portion of operating lease obligations 3,093 2,706 Total operating lease liabilities $ 3,967 $ 3,235 The components of lease expense for our operating leases consisted of the following (in thousands): Year Ended December 31, 2023 2022 Lease expense $ 566 $ 637 Sublease income (228 ) (216 ) Total operating leases expense $ 338 $ 421 Supplemental information on operating leases is as follows (in thousands): Year Ended December 31, 2023 2022 Operating cash outflows from operating leases $ 1,078 $ 659 ROU assets obtained in exchange for operating lease liabilities $ - $ 3,211 December 31, December 31, 2022 2023 Weighted-average remaining lease term 5.91 years 4.43 years Weighted-average discount rate 4.75 % 5.60 % The maturities of lease liabilities as of December 31, 2023 are as follows (in thousands): 2024 $ 1,060 2025 1,064 2026 1,016 2027 552 2028 569 Thereafter 190 Total minimum lease payments 4,451 Less: interest (484 ) Present value of operating lease liabilities $ 3,967 Employee Benefit Plan We have a 401(k) retirement plan. Under the terms of the plan, eligible employees may defer up to 25% of their pre-tax earnings, subject to the Internal Revenue Service annual contribution limit. Additionally, the plan allows for discretionary matching contributions by us. In 2023 and 2022, the matching contributions were 100% of the employee’s contribution up to a maximum of 4% of the employee’s eligible compensation. During the years ended December 31, 2023 and 2022, we contributed $385,000 and $255,000, respectively, to the 401(k) plan. Contingencies From time to time, we are subject to litigation incidental to the conduct of our business. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in our opinion, individually or in the aggregate, no such lawsuits are expected to have a material effect on our consolidated financial position or results of operations. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 2,487 | $ 3,111 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements of DecisionPoint Systems, Inc. and its subsidiaries have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying 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”), Royce Digital Systems, Inc. (“RDS”) ExtenData Solutions, LLC (“ExtenData”), AMG, and Macro. Macro was acquired on April 1, 2023, and as such, has been consolidated into our financial position and results of operations beginning April 1, 2023. All our identifiable assets are in the United States and all intercompany transactions have been eliminated in consolidation. |
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. |
Concentration of Credit Risk | Concentration of Credit Risk Credit is extended to all customers based on financial condition, and collateral is generally not required. Concentrations of credit risk with respect to trade receivables are limited because of the large number of customers comprising our customer base and dispersion across many different industries and geographies. Accordingly, we continually monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. Although credit losses have historically been within our expectations and the provisions established, we cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. The following tables summarizes the allowance for credit losses activity for the years ending December 31, 2023 and 2022 (in thousands): Balance at December 31, 2021 $ 22 Charges to operations 249 Deductions (9 ) Balance at December 31, 2022 $ 262 Charges to operations 240 Deductions (235 ) Balance at December 31, 2023 $ 267 |
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 a reduction of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $131,000 and $42,000 as of December 31, 2023 and 2022, respectively. We recorded a fair value adjustment of approximately $359,000 to reflect the acquired cost of inventory related to the April 1, 2023 acquisition of Macro, and $359,000 was amortized during the year ended December 31, 2023, and is included in total cost of sales in the consolidated statements income and comprehensive income. |
Deferred Costs | Deferred Costs Deferred costs consist primarily of customer-related third-party extended hardware and software maintenance services which we have paid for in advance. The costs are ratably amortized over the life of the contract, generally one to five years. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally from three to five years. Leasehold improvements are recorded at cost and amortized over the shorter of the lease term or the life of the improvements. Cost incurred for repairs and maintenance are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of disposed assets are removed from the accounts and any resulting gain or loss is included in other income or expense. |
Operating Leases | Operating Leases At the inception of a contract we assesses whether the contract is, or contains, a lease. Our assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. The commencement date of the contract is the date the lessor makes the underlying asset available for use by the lessee. Right-of-use (“ROU”) assets represent our right to use an underlying asset during the lease term and lease liabilities represent obligations to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the net present value of fixed lease payments over the lease term. ROU assets also include any initial direct costs and advance lease payments made and exclude lease incentives. Lease liabilities also include terminal purchase options when deemed reasonably certain to exercise. Our lease term includes options to extend when it is reasonably certain that it will exercise that option. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less; we recognize lease expense for these leases on a straight-line basis over the lease term. As most of our operating leases do not have an implicit rate that can be readily determined, we use our secured incremental borrowing rate for the same term as the underlying lease based on information available at lease commencement. The lease classification affects the expense recognition on the consolidated statements of operations. Operating lease charges are recorded in “General and administrative” expense. |
Capitalized Software Development Costs | Capitalized Software Development Costs The capitalization of software development costs for external use begins when technological feasibility has been established and ends when the software is available for sale. Software development costs are amortized on a straight-line line basis over the remaining economic life, generally three years. Amortization of the capitalized software is classified within cost of sales for services in the consolidated statements of income and comprehensive income. |
Intangible Assets and Long-lived Assets | Intangible Assets and Long-lived Assets We evaluate our intangible and long-lived assets for impairment when events or circumstances arise that indicate intangible and long-lived assets may be impaired. Indicators of impairment include, but are not limited to, a significant deterioration in overall economic conditions, a decline in the market capitalization, the loss of significant business, or other significant adverse changes in industry or market conditions. We completed the qualitative assessment for impairment and determined that there was no impairment during the years ended December 31, 2023 and 2022. There can be no assurance, however, that market conditions will not change or demand for our products will continue, which could result in an impairment of intangible and long-lived assets in the future. Intangible assets with finite useful lives are amortized over their respective estimated useful lives primarily using the straight-line method to their estimated residual values, if any. Our intangible assets consist of customer lists, customer relationships and trade names. Refer to Note 4 for further information on our intangible assets. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired. Goodwill is not amortized but tested for impairment at least annually or whenever events or changes in circumstance indicate that carrying values may not be recoverable. We assess the impairment of goodwill annually at each year-end and when indicators of impairment are present. We completed our annual assessment for goodwill impairment and determined that goodwill was not impaired as of December 31, 2023 and 2022. Factors that we consider important that could trigger an impairment assessment include, but not limited to, the following: ● significant under-performance relative to historical and projected operating results; ● significant changes in the manner of use of the acquired assets or business strategy; and ● significant negative industry or general economic trends. When performing the impairment review, we determine the carrying amount of a reporting unit by assigning assets and liabilities, including the existing goodwill, to each reporting unit. To evaluate whether goodwill is impaired, we compare the estimated fair value of each reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount. If the carrying amount of a reporting unit exceeds its fair value, the amount of the impairment loss will be recognized as the difference of the estimated fair value and the carrying value of the reporting unit. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include determining enterprise fair value and the allocation of enterprise fair value to the Company’s operating segments, revenue and expense growth rates, capital expenditures and the depreciation and amortization related to capital expenditures, changes in working capital, discount rates, risk-adjusted discount rates, future economic and market conditions and the determination of appropriate comparable companies. Due to the inherent uncertainty involved in making these estimates, actual future results related to assumed variables could differ from these estimates. |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. ● Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, and line of credit approximate fair value due to the short-term nature of these financial instruments. The carrying amount of our debt approximates its fair value as the credit markets have not materially changed since the original borrowing dates. |
Business Combinations | Business Combinations We utilize the acquisition method of accounting for business combinations which allocates the purchase price of an acquisition to the various tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. We primarily establish fair value using the income approach based upon a discounted cash flow model. The income approach requires the use of many assumptions and estimates including future revenues and expenses, as well as discount factors and income tax rates. Other estimates include: ● Estimated step-ups or write-downs for fixed assets and inventory; ● Estimated fair values of intangible assets; ● Estimated liabilities assumed from the target; and ● Estimated earnout obligations. While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business acquisition date, these estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the purchase price allocation period, which is generally no more than one year from the business acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. |
Revenue Recognition | Revenue Recognition We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied. We combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. We estimate the amount of total contract consideration we expect to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide, and the contractual pricing based on those quantities. We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. We consider the sensitivity of the estimate, our relationship and experience with our client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. As discussed in more detail below, revenue is recognized 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 December 31, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations under our service contracts was approximately $13.4 million, of which approximately $8.1 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 under our service contracts was approximately $10.4 million, of which approximately $6.0 million is expected to be recognized over the next 12 months. Hardware, consumables, and software products - We recognize product revenue at the point in time when a client takes control of the hardware, consumables and/or software, which typically occurs when title and risk of loss have passed to the client. Our selling terms and conditions reflect that F.O.B ‘dock’ contractual terms establish that control is transferred from us at the point in time when the product is shipped to the customer. Revenues from software license sales are recognized as a single performance obligation on a gross basis as we are acting as a principal in these transactions at the point the software license is delivered to the customer. Generally, software licenses are sold with accompanying third-party delivered software assurance, which allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. In most instances, we determined that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license because we do not sell the software license and standard warranty on a standalone basis (which indicates that the customer cannot benefit from the software license and standard warranty on its own), the software license and the standard warranty are not separately identifiable, the software license assurance warranty are inputs of a combined item in the contract, the assurance warranty and software license are highly interdependent and interrelated because the core functionality of the license is dependent on the assurance warranty, and our promise to provide the assurance warranty that is necessary for the software license to continue to provide significant benefit to the customer. As a result, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. We consider several factors to determine whether we are acting as a principal or an agent, including whether we are the primary obligor to the customer, have established our own pricing and have inventory and credit risks. Our internally developed software solution generates SaaS revenues from implementation, training and subscription fees. The initial term of the SaaS agreements is generally one year. The subscription fees are recognized over the subscription period. The implementation fees are necessary and integral for the customer to utilize the software. As such, the implementation fees are deferred and amortized over the subscription period. We also offer third-party SaaS subscriptions to our customers. The third-party subscriptions are recognized on a net basis as we are acting as an agent in these transactions, whereas our internally developed software solution offering is recognized on a gross basis. We leverage drop-ship shipments with many of our partners and suppliers to deliver hardware and consumable products to our clients without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-ship arrangements on a gross basis as the principal in the transaction when the product is received by the client because we control the product prior to transfer to the client. We also assume primary responsibility for the fulfillment in the arrangement, we assume inventory risk if the product is returned by the client, we set the price of the product charged to the client, we assume credit risk for nonpayment by our customer, and we work closely with clients to determine their hardware specifications. Services - We provide Services which include consulting, staging, deployment, installation, repair and customer specified software customization. The arrangement with a customer is based on either a time and material basis or a fixed fee. For our time and materials service contracts, we recognize revenues as those services are provided and consumed, as this is the best output measure of how the services are transferred to the customer. Fixed fee contracts are recognized in the period in which the services are performed or delivered using a proportional service model. Except for installation services that are recognized over the subscription period as previously described, all other Services are recognized on a gross basis in the period in which the services are performed or delivered. Maintenance services - We sell certain Original Equipment Manufacturer (“OEM”) hardware and software maintenance support arrangements to our clients. We also offer an internal maintenance agreement related to hardware. These contracts are support service agreements for the hardware and/or software products that were acquired from us and others. Although these are third-party support agreements for maintenance on the specific hardware and/or software products, our internal help desk and systems engineers assist customers by providing technical assistance on the source of or how to fix the problem. In addition, we provide a turn back feature, deploying replacements as needed while we manage the return and reverse logistics of the product back to the OEM. Revenue related to service contracts is recognized ratably over the term of the agreement, generally over one to three years. We generally act as the principal in the transaction as the primary obligor for fulfillment in the arrangement, we set the price of the service charged to the customer, and we assume credit risk for the amounts invoiced. In addition, we manage back-end warranties, service contracts and repairs for multiple products and suppliers. We leverage our knowledge base of mobility best practices by consolidating multiple supplier’s maintenance requirements under a single point in contact through us. Our internal support team assists our customers first by performing an initial technical triage to determine the source of the problem including, but not limited to, physical damage and software issues and whether they can be handled remotely by the client or returned for repair. Further, we receive the returned products, confirm that the equipment is operational or not, either repair or refurbish the equipment internally or return it to the manufacturer directly to repair. We then obtain the product turn back from the manufacturer and either send it back out to a specific customer location or place in a customer’s spare pool. As a result, we recognize the revenue on a gross basis. For certain of our agreements, the accompanying third-party delivered software assurance is recognized on a net basis when we are acting as an agent in these transactions. The following table summarizes the deferred revenue activity for the years ended December 31 (in thousands): 2023 2022 Beginning Balance $ 10,352 $ 7,109 Additions 27,034 26,105 Revenue recognized from beginning of period (7,811 ) (11,486 ) Revenue recognized from additions (16,202 ) (11,376 ) Ending balance $ 13,373 $ 10,352 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 December 31, 2023 and December 31, 2022, we deferred $237,000 and $204,000, respectively, of related contract acquisition costs. The following table summarizes net sales by revenue source (in thousands): Year Ended 2023 2022 Hardware and software $ 67,551 $ 71,774 Consumables 5,943 7,305 Services 42,100 18,336 $ 115,594 $ 97,415 |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash and accounts receivable. All our cash balances are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor at each financial institution. As of December 31, 2023, we had approximately $3.3 million on deposit in excess of the insurance limits. We have not experienced any such losses in these accounts. In 2023, one customer accounted for 15%, or $17.5 million, of our net sales. No other single customer in 2023 accounted for more than 10% of net sales. Accounts receivable from this customer at December 31, 2023 accounted for 10% of total accounts receivable. In 2022, two customers accounted for approximately 17% and 11%, or $16.2 million and $8.3 million, of our net sales. No other single customer in 2022 accounted for more than 10% of net sales. Accounts receivable from one of these two customers at December 31, 2022 accounted for 27% of total accounts receivable. For the year ended December 31, 2023, we had purchases from three suppliers that collectively represented 54% of total purchases and 54% of accounts payable at December 31, 2023. Loss of a significant vendor could have a material adverse effect on our operations. For the year ended December 31, 2022, we had purchases from three suppliers that collectively represented 78% of total purchases and 75% of accounts payable at December 31, 2022. Loss of a significant vendor could have a material adverse effect on our operations. |
Share-Based Compensation | Share-Based Compensation We account for share-based compensation in accordance with the provisions of ASC Topic 718 “Compensation – Stock Compensation”. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). Share-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Given that share-based compensation expense recognized in the accompanying consolidated statements of income and comprehensive income is based on awards ultimately expected to vest. We account for forfeitures as they occur, rather than estimate expected forfeitures. Compensation cost for stock awards, which from time to time includes restricted stock units, is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service period. The fair value of stock awards is based on the estimated fair value of our common stock on the grant date. The estimated fair value of common stock option awards is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, all of which affect the estimated fair values of our common stock option awards. Given a lack of historical stock option exercises, the expected term of options granted is calculated as the average of the weighted vesting period and the contractual expiration date of the option. This calculation is based on a method permitted by the Securities and Exchange Commission in instances where the vesting and exercise terms of options granted meet certain conditions and where limited historical exercise data is available. The expected volatility is based on the historical volatility of the common stock of comparable public companies that operate in similar industries as us. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The expected dividend assumption is based on our history and management’s expectation regarding dividend payouts. Compensation expense for common stock option awards with graded vesting schedules is recognized on a straight-line basis over the requisite service period for the last separately vesting portion of the award, provided that the accumulated cost recognized as of any date at least equals the value of the vested portion of the award. If there are any modifications or cancellations of the underlying vested or unvested stock-based awards, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense, or record additional expense for vested stock-based awards. Future share-based compensation expense and unearned share- based compensation may increase to the extent that we grant additional common stock options or other share-based awards. |
Income Taxes | Income Taxes We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Under ASC Topic 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC Topic 740 provides requirements for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. At December 31, 2023 and 2022, we had no unrecognized tax benefits that, if recognized, would affect our effective income tax rate over the next 12 months. As of December 31, 2023 and 2022, we had no accrued interest or penalties. |
Accounting Standards Adopted | Accounting Standards Adopted In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which, among other things, deferred the effective date of ASU 2016-13 for public filers that are considered smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022, including interim periods within those years. The Company adopted this accounting update in the first quarter of 2023 on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements. This ASU permits private entities with common control arrangements that may contain or be leases to use any written terms and conditions between the parties, without regard to their legal enforceability, to identify, classify and account for common control leases. In addition, all lessees (public or private), in general, amortize leasehold improvements related to a common control lease over their useful life to the common control group, regardless of the ASC 842 lease term, as long as they continue to control the use of the underlying leased asset. The ASU is effective for fiscal years, including interim periods within those years, beginning after December 15, 2023, with early adoption allowed. The adoption of this new ASU is not anticipated to have a material effect on our consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves financial reporting by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included with each reported measure of significant profit or loss on an annual and interim basis. This ASU also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU is required to be applied retrospectively for all prior periods presented in the financial statements. We are evaluating the adoption impact of this ASU on our consolidated financial statements and related disclosures but do not expect any material impact upon adoption. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the guidance in ASC 740, Income Taxes. The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued or made available for issuance.” We are currently evaluating the impact of this ASU but do not expect any material impact upon adoption. There are no other accounting standards that have been issued but not yet adopted that we believe could have a material impact on our consolidated financial statements. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Schedule of Allowance for Credit Losses Activity | The following tables summarizes the allowance for credit losses activity for the years ending December 31, 2023 and 2022 (in thousands): Balance at December 31, 2021 $ 22 Charges to operations 249 Deductions (9 ) Balance at December 31, 2022 $ 262 Charges to operations 240 Deductions (235 ) Balance at December 31, 2023 $ 267 |
Schedule of Deferred Revenue Activity | The following table summarizes the deferred revenue activity for the years ended December 31 (in thousands): 2023 2022 Beginning Balance $ 10,352 $ 7,109 Additions 27,034 26,105 Revenue recognized from beginning of period (7,811 ) (11,486 ) Revenue recognized from additions (16,202 ) (11,376 ) Ending balance $ 13,373 $ 10,352 |
Schedule of Net Sales by Revenue | The following table summarizes net sales by revenue source (in thousands): Year Ended 2023 2022 Hardware and software $ 67,551 $ 71,774 Consumables 5,943 7,305 Services 42,100 18,336 $ 115,594 $ 97,415 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions [Line Items] | |
Schedule of Total consideration for the Acquisition | Total consideration for the acquisition has been recorded as $25.6 million ($26.3 million was recorded at closing and additional $0.1 million was paid during the third quarter of 2023 due to a net working capital adjustment. The total consideration is comprised of the following (in thousands): Purchase price $ 10,623 Working capital excess 5,899 Subtotal 16,522 Earnout 9,008 Other 30 $ 25,560 |
Schedule of Cash Due | The cash due at closing was $13.7 million which reflects the following (in thousands): Purchase price $ 10,500 Working capital excess 5,899 Less: bank indebtedness (1,837 ) Seller party expenses (845 ) $ 13,717 |
Schedule of Statement of Operations | The pro forma condensed consolidated statement of operations is presented for informational purposes only and is not indicative of the results of operations that would have necessarily been achieved if the acquisition had actually been consummated on January 1, 2022 (in thousands). Year Ended Year Ended Net sales $ 126,535 $ 121,774 Net income $ 2,251 $ 2,910 |
Macro Acquisition [Member] | |
Acquisitions [Line Items] | |
Schedule of Estimated Fair Value of Acquired Net Assets | As of December 31, 2023, the allocation of the total consideration to the estimated fair value of acquired net assets as of the acquisition date for Macro was as follows (in thousands): Cash $ 923 Accounts receivable, net 10,124 Inventory, net 2,630 Prepaids and other current assets 111 Operating lease assets 1,390 Property and equipment, net 1,058 Customer lists and relationships 4,080 Trade name 1,380 Other assets 44 Accounts payable (2,809 ) Accrued expenses and other current liabilities (695 ) Deferred tax liability (1,611 ) Operating lease liability (1,503 ) Deferred revenue (1,144 ) Total fair value excluding goodwill 13,978 Goodwill 11,582 Total consideration $ 25,560 |
Schedule of Estimated Useful Lives of Intangible Assets | The estimated useful lives of intangible assets recorded related to the Macro acquisition are as follows: Expected Customer lists and relationships 7 years Trade name 3 years |
AMG acquisition [Member] | |
Acquisitions [Line Items] | |
Schedule of Estimated Fair Value of Acquired Net Assets | As of December 31, 2023, the allocation of the total consideration to the estimated fair value of acquired net assets as of the acquisition date for AMG is 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 assets (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 | The estimated useful lives of intangible assets recorded related to the AMG acquisition are as follows (in thousands): Expected Customer lists and relationships 7 years Trade name 3 years Backlog 11 months Developed technology 3 years |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets [Abstract] | |
Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets | Definitive lived intangible assets are as follows (in thousands): December 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amount Amortization Amount Amount Amortization Amount Customer lists and relationships $ 12,020 $ (5,395 ) $ 6,625 $ 7,940 $ (3,850 ) $ 4,090 Trade names 2,740 (1,575 ) 1,165 1,360 (973 ) 387 Developed technology 140 (115 ) 25 140 (86 ) 54 Backlog 340 (340 ) - 340 (340 ) - $ 15,240 $ (7,425 ) $ 7,815 $ 9,780 $ (5,249 ) $ 4,531 |
Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets | The range of useful lives and the weighted-average remaining useful life of amortizable intangible assets at December 31, 2023 is as follows: Expected Weighted Customer lists and relationships 7-15 years 11 years Trade names 3 years 2 years Developed technology 3 years 2 years |
Schedule of Definite Lived Intangible Assets | The amortization expense of the definite lived intangible assets for the years remaining is as follows: Estimated (in thousands) Year ending December 31, 2024 $ 1,993 2025 1,690 2026 1,214 2027 1,028 2028 969 Thereafter 921 Total $ 7,815 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net Income Per Share [Abstract] | |
Schedule of Reconciliation of the Fully Dilutive Securities Effect | Below is a reconciliation of the fully dilutive securities effect for the years ended December 31, 2023 and 2022 (in thousands, except per share data): Year Ended December 31, 2023 2022 Net income attributable to common stockholders $ 2,487 $ 3,111 Weighted average basic common shares outstanding 7,555 7,261 Dilutive effect of stock options, warrants and restricted stock 124 301 Weighted average shares for diluted earnings per share 7,679 7,562 Basic income per share $ 0.33 $ 0.43 Diluted income per share $ 0.32 $ 0.41 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following at December 31 (in thousands): 2023 2022 Software and computer equipment $ 2,167 $ 1,502 Automobiles 1,851 - Leasehold improvements 792 643 Equipment 582 311 Furniture and fixtures 208 176 Property and equipment, gross 5,600 2,632 Accumulated depreciation (2,627 ) (815 ) Property and equipment, net $ 2,973 $ 1,817 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following at December 31 (in thousands): 2023 2022 Salaries and benefits $ 2,967 $ 2,743 Taxes payable 1,661 1,016 Holdback related to acquisition 1,178 - Professional fees 30 188 Vendor purchases 95 44 Customer deposits 454 265 Other 181 272 Total accrued expenses and other current liabilities $ 6,566 $ 4,528 |
Term Debt (Tables)
Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Term Debt [Abstract] | |
Schedule of Term Debt | At December 31, 2023, our total term debt consisted of the following (in thousands): MUFG promissory note $ 4,500 EIDL promissory note 142 Total term debt 4,642 Less: current portion of long-term debt (1,003 ) Long-term debt $ 3,639 |
Schedule of Future Principal Payments for Outstanding Debt | The following table sets forth future principal payments for outstanding debt (in thousands): 2024 $ 1,003 2025 1,004 2026 1,004 2027 1,004 2028 504 Thereafter 123 $ 4,642 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes for the years ended December 31, 2023 and 2022 is as follows (in thousands): 2023 2022 Current: Federal $ 1,069 $ 910 State 377 101 1,446 1,011 Deferred: Federal (184 ) (39 ) State (130 ) 293 (314 ) 254 Valuation allowance - - Total income tax expense $ 1,132 $ 1,265 |
Schedule of Deferred Tax Assets and Liabilities | Our deferred tax assets and liabilities are as follows (in thousands): 2023 2022 Allowance for credit losses $ 70 $ 68 Inventory reserve and uniform capitalization 59 57 Accrued expenses and other liabilities 55 125 Deferred revenue 256 46 Other assets 194 42 ROU Liability 1,046 839 Intangibles 156 (150 ) Property and equipment (596 ) (364 ) ROU Asset (895 ) (696 ) Goodwill (132 ) (121 ) Net operating loss carryforwards 948 1,002 Total deferred tax assets 1,161 848 Valuation allowance - - Net deferred tax assets after valuation allowance $ 1,161 $ 848 |
Schedule of Income Tax Rate to the Effective Income Tax Rate | A reconciliation of the United States statutory income tax rate to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows (in thousands): Federal taxes at statutory rate $ 898 $ 919 State and local income taxes 295 295 Other Permanent differences 13 51 State rate change (113 ) — PY return to provision differences 39 — Provision for income taxes $ 1,132 $ 1,265 Effective tax rate 26.5 % 28.9 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Compensation [Abstract] | |
Schedule of Employees Exercised Vested Stock Options | The following table summarizes stock option activity for the year ended December 31, 2023: Stock Grant Date Weighted Aggregate (in years) ($ in thousands) Outstanding at December 31, 2022 458,957 $ 4.08 Granted 60,521 7.26 Exercised (71,665 ) 2.53 Forfeited (31,000 ) 2.85 Outstanding at December 31, 2023 416,813 $ 4.89 3.29 $ 755 Exercisable at December 31, 2023 360,041 $ 5.00 3.30 $ 1,798 |
Schedule of the Fair Values of Stock Options Granted were Estimated using the Black-Scholes Option-Pricing Model | 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 were estimated using the Black-Scholes option-pricing model with the following assumptions: 2023 2022 Weighted average grant-date fair value per option granted $3.05 to $3.65 $3.13 Expected option term 2.5 years 2.5 years Expected volatility factor 74.0% 83.0% Risk-free interest rate 3.82% to 4.18% 4.27% Expected annual dividend yield —% —% |
Schedule of Employees Exercised Vested Stock Options | These shares were issued pursuant to an S-8 Registration Statement dated July 7, 2021 with respect to shares issuable pursuant to the 2014 Plan. The exercised options, utilizing a cashless exercise, are summarized in the following table: Year Exercised Options Weighted Average Shares Net Shares Net Shares Weighted Employee 2023 56,250 $ 2.55 24,371 8,169 23,710 $ 6.43 $ 67,444 2022 596,668 $ 3.46 210,117 154,320 232,231 $ 9.84 $ 1,517,823 (1) Shares withheld for employee taxes of 8,169 and 154,320 represents the equivalent shares for employee tax withholding of $67,444 and $1.5 million, respectively. The employee tax withholding is based on the statutory rates for each employee on the date of exercise. ASU 2016-09 clarifies that employee taxes paid in lieu of shares issued for share-based compensation should be considered similar to a share repurchase. Accordingly, employee taxes paid by us are recorded as a reduction to stockholders’ equity on the date of exercise and classified as a financing activity on the statement of cash flows when taxes are paid to the taxing authorities. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Schedule of Operating Lease Asset and Liability | As of December 31, 2023 and 2022, our operating lease asset and liability balances were as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease right-of-use assets $ 3,392 $ 2,681 Current portion of operating lease obligations 874 529 Long-term portion of operating lease obligations 3,093 2,706 Total operating lease liabilities $ 3,967 $ 3,235 |
Schedule of Lease Expense | The components of lease expense for our operating leases consisted of the following (in thousands): Year Ended December 31, 2023 2022 Lease expense $ 566 $ 637 Sublease income (228 ) (216 ) Total operating leases expense $ 338 $ 421 |
Schedule of Supplemental Information | Supplemental information on operating leases is as follows (in thousands): Year Ended December 31, 2023 2022 Operating cash outflows from operating leases $ 1,078 $ 659 ROU assets obtained in exchange for operating lease liabilities $ - $ 3,211 |
Schedule of Weighted Average Lease Term and Rate | December 31, December 31, 2022 2023 Weighted-average remaining lease term 5.91 years 4.43 years Weighted-average discount rate 4.75 % 5.60 % |
Schedule of Maturities of Lease Liabilities | The maturities of lease liabilities as of December 31, 2023 are as follows (in thousands): 2024 $ 1,060 2025 1,064 2026 1,016 2027 552 2028 569 Thereafter 190 Total minimum lease payments 4,451 Less: interest (484 ) Present value of operating lease liabilities $ 3,967 |
Description of Business (Detail
Description of Business (Details) | Apr. 30, 2023 | Jan. 31, 2022 |
Series of Individually Immaterial Business Acquisitions [Member] | ||
Description of Business [Line Items] | ||
Business acquired percentage | 100% | 100% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Apr. 01, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Valuation allowance | $ 131,000 | $ 42,000 | |
Inventory adjustment | $ 359,000 | ||
Amortized in cost of sales | 359,000 | ||
Performance obligation amount | 13,400,000 | 10,400,000 | |
Total aggregate transaction price | 8,100,000 | 6,000,000 | |
Deferred revenue | 237,000 | $ 204,000 | |
Federal Deposit Insurance Corporation Premium Expense | 250,000 | ||
Deposit in excess amount | 3,300,000 | ||
Net sales percentage | 11% | ||
Net sales | $ 17,500,000 | $ 8,300,000 | |
Total accounts receivable percentage | 10% | ||
Total purchases percentage | 54% | 78% | |
Accounts payable percentage | 54% | 75% | |
Income interest percentage | 50% | ||
Minimum [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Deferred costs amortization period | 1 year | ||
Property and equipment useful lives | 3 years | ||
Maximum [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Deferred costs amortization period | 5 years | ||
Property and equipment useful lives | 5 years | ||
One Customer [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Net sales percentage | 15% | ||
Single Customer [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Net sales percentage | 10% | 10% | |
Two Customers [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Net sales percentage | 27% | ||
Net sales | $ 16,200,000 | ||
Concentration Risk [Member] | Two Customers [Member] | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Net sales percentage | 17% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of Allowance for Credit Losses Activity - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Allowance For Credit Losses Activity Abstract | ||
Balance at beginning | $ 262 | $ 22 |
Charges (benefit) to operations | 240 | 249 |
Deductions | (235) | (9) |
Balance at ending | $ 267 | $ 262 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of Deferred Revenue Activity - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Deferred Revenue Activity Abstract | ||
Beginning Balance | $ 10,352 | $ 7,109 |
Additions | 27,034 | 26,105 |
Revenue recognized from beginning of period | (7,811) | (11,486) |
Revenue recognized from additions | (16,202) | (11,376) |
Ending balance | $ 13,373 | $ 10,352 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of Net Sales by Revenue - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Net Sales by Revenue [Line Items] | ||
Net sales | $ 115,594 | $ 97,415 |
Hardware and software [Member] | ||
Schedule of Net Sales by Revenue [Line Items] | ||
Net sales | 67,551 | 71,774 |
Consumables [Member] | ||
Schedule of Net Sales by Revenue [Line Items] | ||
Net sales | 5,943 | 7,305 |
Professional services [Member] | ||
Schedule of Net Sales by Revenue [Line Items] | ||
Net sales | $ 42,100 | $ 18,336 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Acquisitions [Line Items] | ||||||
Total consideration for the acquisition | $ 26,300,000 | $ 25,560,000 | ||||
Additional consideration | 100,000 | |||||
Earnout target | 3,800,000 | |||||
Consideration paid | $ 4,400,000 | 11,000,000 | ||||
Net working capital adjustments | $ 100,000 | |||||
Payments to seller | 1,600,000 | |||||
Goodwill | $ 22,081,000 | 22,081,000 | $ 10,499,000 | |||
Macro Integration Services, Inc [Member] | ||||||
Acquisitions [Line Items] | ||||||
Total consideration for the acquisition | 25,560,000 | |||||
Earnout target | 800,000 | |||||
Cash due | 13,700,000 | |||||
Maximum [Member] | ||||||
Acquisitions [Line Items] | ||||||
Earnout payments | $ 5,400,000 | |||||
Earnout estimated life | 2 years | |||||
Deferred tax liability | 3,300,000 | $ 3,300,000 | ||||
Goodwill | 14,000,000 | 14,000,000 | ||||
Minimum [Member] | ||||||
Acquisitions [Line Items] | ||||||
Earnout payments | $ 4,300,000 | |||||
Earnout estimated life | 1 year | |||||
Deferred tax liability | 1,600,000 | $ 1,600,000 | ||||
Goodwill | 11,600,000 | 11,600,000 | ||||
Advanced Mobile Group, LLC [Member] | ||||||
Acquisitions [Line Items] | ||||||
Consideration paid | 4,600,000 | |||||
Issued and outstanding membership interests | 5,100,000 | |||||
Estimate earnout obligation | $ 500,000 | |||||
Transaction Cost [Member] | ||||||
Acquisitions [Line Items] | ||||||
Transaction costs | $ 0.5 | 0.5 | ||||
Advanced Mobile Group, LLC [Member] | ||||||
Acquisitions [Line Items] | ||||||
Customer lists and relationships | $ 500,000 | |||||
Trade name | 100,000 | |||||
Backlog | 100,000 | |||||
Developed technology | 100,000 | |||||
Deferred revenue | 100,000 | |||||
Deferred tax assets | 900,000 | |||||
Goodwill | $ 1,400,000 | |||||
EBITDA targets [Member] | ||||||
Acquisitions [Line Items] | ||||||
Earnout target | $ 2,800,000 |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of Total consideration for the Acquisition - Macro Integration Services, Inc [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Asset Acquisition, Contingent Consideration [Line Items] | |
Purchase price | $ 10,623 |
Working capital excess | 5,899 |
Subtotal | 16,522 |
Earnout | 9,008 |
Other | 30 |
Total consideration | $ 25,560 |
Acquisitions (Details) - Sche_2
Acquisitions (Details) - Schedule of Cash Due $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Schedule of Cash Due [Abstract] | |
Purchase price | $ 10,500 |
Working capital excess | 5,899 |
Less: bank indebtedness | (1,837) |
Seller party expenses | (845) |
Total cash due | $ 13,717 |
Acquisitions (Details) - Sche_3
Acquisitions (Details) - Schedule of Estimated Fair Value of Acquired Net Assets - Macro [Member] $ in Thousands | Dec. 31, 2023 USD ($) |
Acquisitions (Details) - Schedule of Estimated Fair Value of Acquired Net Assets [Line Items] | |
Cash | $ 923 |
Accounts receivable, net | 10,124 |
Inventory, net | 2,630 |
Prepaids and other current assets | 111 |
Operating lease assets | 1,390 |
Property and equipment, net | 1,058 |
Customer lists and relationships | 4,080 |
Trade name | 1,380 |
Other assets | 44 |
Accounts payable | (2,809) |
Accrued expenses and other current liabilities | (695) |
Deferred tax liability | (1,611) |
Operating lease liability | (1,503) |
Deferred revenue | (1,144) |
Total fair value excluding goodwill | 13,978 |
Goodwill | 11,582 |
Total consideration | $ 25,560 |
Acquisitions (Details) - Sche_4
Acquisitions (Details) - Schedule of Estimated Useful Lives of Intangible Assets - Macro Acquisition [Member] | Dec. 31, 2023 |
Customer Lists and Relationships [Member] | |
Schedule of Estimated Useful Lives of Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 7 years |
Trade Name [Member] | |
Schedule of Estimated Useful Lives of Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Acquisitions (Details) - Sche_5
Acquisitions (Details) - Schedule of Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Statement of Operations [Abstract] | ||
Net sales | $ 126,535 | $ 121,774 |
Net income | $ 2,251 | $ 2,910 |
Acquisitions (Details) - Sche_6
Acquisitions (Details) - Schedule of Estimated Fair Value of Acquired Net Assets - AMG [Member] $ in Thousands | Dec. 31, 2023 USD ($) |
Schedule of Estimated Fair Value of Acquired Net Assets [Line Items] | |
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 assets | (897) |
Deferred revenue | (148) |
Total fair value excluding goodwill | 2,709 |
Goodwill | 2,371 |
Total consideration | $ 5,080 |
Acquisitions (Details) - Sche_7
Acquisitions (Details) - Schedule of Estimated Useful Lives of Intangible Assets - AMG Acquisition [Member] | Dec. 31, 2023 |
Customer Lists and Relationships [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 7 years |
Trade Name [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Backlog [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 11 months |
Developed Technology [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Definite Lived Intangible Assets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 15,240 | $ 9,780 |
Accumulated Amortization | (7,425) | (5,249) |
Net Amount | 7,815 | 4,531 |
Customer lists and relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 12,020 | 7,940 |
Accumulated Amortization | (5,395) | (3,850) |
Net Amount | 6,625 | 4,090 |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 2,740 | 1,360 |
Accumulated Amortization | (1,575) | (973) |
Net Amount | 1,165 | 387 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 140 | 140 |
Accumulated Amortization | (115) | (86) |
Net Amount | 25 | 54 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 340 | 340 |
Accumulated Amortization | (340) | (340) |
Net Amount |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Customer lists and relationships [Member] | |
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life | 11 years |
Customer lists and relationships [Member] | Minimum [Member] | |
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets [Line Items] | |
Expected Life | 7 years |
Customer lists and relationships [Member] | Maximum [Member] | |
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets [Line Items] | |
Expected Life | 15 years |
Trade Names [Member] | |
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets [Line Items] | |
Expected Life | 3 years |
Weighted Average Remaining Useful Life | 2 years |
Developed Technology Rights [Member] | |
Intangible Assets (Details) - Schedule of Weighted-Average Remaining Useful Life of Amortizable Intangible Assets [Line Items] | |
Expected Life | 3 years |
Weighted Average Remaining Useful Life | 2 years |
Intangible Assets (Details) -_3
Intangible Assets (Details) - Schedule of Definite Lived Intangible Assets $ in Thousands | Dec. 31, 2023 USD ($) |
Schedule Of Definite Lived Intangible Assets Abstract | |
2024 | $ 1,993 |
2025 | 1,690 |
2026 | 1,214 |
2027 | 1,028 |
2028 | 969 |
Thereafter | 921 |
Total | $ 7,815 |
Net Income Per Share (Details)
Net Income Per Share (Details) - Schedule of Reconciliation of the Fully Dilutive Securities Effect - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Reconciliation of the Fully Dilutive Securities Effect [Abstract] | ||
Net income attributable to common stockholders | $ 2,487 | $ 3,111 |
Weighted average basic common shares outstanding | 7,555 | 7,261 |
Dilutive effect of stock options, warrants and restricted stock | $ 124 | $ 301 |
Weighted average shares for diluted earnings per share | 7,679 | 7,562 |
Basic income per share | $ 0.33 | $ 0.43 |
Diluted income per share | $ 0.32 | $ 0.41 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and Equipment [Abstract] | ||
Depreciation, Depletion and Amortization | $ 0.8 | $ 0.5 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of Property and Equipment - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,600 | $ 2,632 |
Accumulated depreciation | (2,627) | (815) |
Property and equipment, net | 2,973 | 1,817 |
Software and computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,167 | 1,502 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,851 | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 792 | 643 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 582 | 311 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 208 | $ 176 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued Expenses and Other Current Liabilities - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Accrued Expenses and Other Current Liabilities [Abstract] | ||
Salaries and benefits | $ 2,967 | $ 2,743 |
Taxes payable | 1,661 | 1,016 |
Holdback related to acquisition | 1,178 | |
Professional fees | 30 | 188 |
Vendor purchases | 95 | 44 |
Customer deposits | 454 | 265 |
Other | 181 | 272 |
Total accrued expenses and other current liabilities | $ 6,566 | $ 4,528 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Mar. 27, 2023 | |
Line of Credit [Line Items] | ||||
Line of credit | $ 1,300,000 | |||
Borrowed amount | $ 7,000,000 | |||
Outstanding balance bear interest | 150,000 | |||
Total outstanding during period | $ 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. | |||
Maximum borrowing capacity | $ 8,700,000 | |||
Outstanding borrowings | $ 1,300,000 | |||
MUFG Union Bank [Member] | ||||
Line of Credit [Line Items] | ||||
Maturity date | Jul. 31, 2026 | |||
Interest and Fees [Member] | ||||
Line of Credit [Line Items] | ||||
Interest rate percentage | 2.50% | |||
Effective interest rate percentage | 7.90% | |||
Revolving Credit Facility [Member] | Minimum [Member] | ||||
Line of Credit [Line Items] | ||||
Line of credit | $ 9,000,000 | |||
Revolving Credit Facility [Member] | Maximum [Member] | ||||
Line of Credit [Line Items] | ||||
Line of credit | $ 10,000,000 | |||
MUFG Union Bank [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit [Line Items] | ||||
Line of credit | $ 10,000,000 |
Term Debt (Details)
Term Debt (Details) - USD ($) | 1 Months Ended | |||||
Aug. 27, 2021 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 27, 2023 | Dec. 31, 2022 | Aug. 27, 2020 | |
Term Debt [Line Items] | ||||||
Unsecured promissory note | $ 5,000,000 | |||||
Principal interest amount | $ 250,000 | |||||
Percentage of federal reserve | 7.90% | |||||
Outstanding debt under the promissory note | $ 100,000 | $ 100,000 | ||||
EIDL Promissory Note [Member] | ||||||
Term Debt [Line Items] | ||||||
Outstanding principal annum term | 30 years | |||||
MUFG Promissory Note [Member] | ||||||
Term Debt [Line Items] | ||||||
Interest rate percentage | 2.50% | |||||
EIDL Promissory Note [Member] | ||||||
Term Debt [Line Items] | ||||||
Principal amount | $ 200,000 | |||||
Percentage of interest rate | 3.75% | |||||
Interest amount | $ 731 |
Term Debt (Details) - Schedule
Term Debt (Details) - Schedule of Term Debt - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Term Debt [Line Items] | ||
Total term debt | $ 4,642 | |
Less: current portion of long-term debt | (1,003) | $ (3) |
Long-term debt | 3,639 | $ 143 |
MUFG Promissory Note [Member] | ||
Schedule of Term Debt [Line Items] | ||
Total term debt | 4,500 | |
EIDL Promissory Note [Member] | ||
Schedule of Term Debt [Line Items] | ||
Total term debt | $ 142 |
Term Debt (Details) - Schedul_2
Term Debt (Details) - Schedule of Future Principal Payments for Outstanding Debt $ in Thousands | Dec. 31, 2023 USD ($) |
Schedule of Future Principal Payments for Outstanding Debt [Abstract] | |
2024 | $ 1,003 |
2025 | 1,004 |
2026 | 1,004 |
2027 | 1,004 |
2028 | 504 |
Thereafter | 123 |
Total future principal payments | $ 4,642 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Federal [Member] | ||
Income Taxes [Line Items] | ||
Net operating loss carryforwards | $ 4.3 | $ 4.8 |
State [Member] | ||
Income Taxes [Line Items] | ||
Net operating loss carryforwards | $ 0.9 | $ 0 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Provision for Income Taxes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Provision For Income Taxes Abstract | ||
Federal | $ 1,069 | $ 910 |
State | 377 | 101 |
Total | 1,446 | 1,011 |
Federal | (184) | (39) |
State | (130) | 293 |
Total | (314) | 254 |
Valuation allowance | ||
Total income tax expense | $ 1,132 | $ 1,265 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Deferred Tax Assets And Liabilities [Abstract] | ||
Allowance for credit losses | $ 70 | $ 68 |
Inventory reserve and uniform capitalization | 59 | 57 |
Accrued expenses and other liabilities | 55 | 125 |
Deferred revenue | 256 | 46 |
Other assets | 194 | 42 |
ROU Liability | 1,046 | 839 |
Intangibles | 156 | (150) |
Property and equipment | (596) | (364) |
ROU Asset | (895) | (696) |
Goodwill | (132) | (121) |
Net operating loss carryforwards | 948 | 1,002 |
Total deferred tax assets | 1,161 | 848 |
Valuation allowance | ||
Net deferred tax assets after valuation allowance | $ 1,161 | $ 848 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Income Tax Rate to the Effective Income Tax Rate - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Income Tax Rate To The Effective Income Tax Rate [Abstract] | ||
Federal taxes at statutory rate | $ 898 | $ 919 |
State and local income taxes | 295 | 295 |
Other Permanent differences | 13 | 51 |
State rate change | (113) | |
PY return to provision differences | 39 | |
Total income tax expense | $ 1,132 | $ 1,265 |
Effective tax rate | 26.50% | 28.90% |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2018 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Stockholders’ Equity [Line Items] | |||||||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |||||
Preferred stock shares designated | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares outstanding | |||||||
Common stock, shares outstanding | 7,680,334 | 7,416,071 | |||||
Exercise for common stock shares | 12,676 | ||||||
Shares of common stock | 9,247 | ||||||
Common Stock [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Number Of Authorized Shares Issued | 60,000,000 | ||||||
Share authorized | 50,000,000 | ||||||
Common stock, par value (in Dollars per share) | $ 0.001 | ||||||
Preferred stock shares designated | 10,000,000 | ||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | ||||||
Exercise for common stock shares | 191,826 | 15,000 | 79,000 | ||||
Shares of common stock | 17,063 | ||||||
Additional shares | 3,429 | ||||||
Warrant [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Exercise for common stock shares | 97,408 | ||||||
Shares of common stock | 966 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation [Line Items] | ||
Number of shares issuance | 587,709 | |
Vesting period | 3 years | |
Unrecognized share-based compensation (in Dollars) | $ 125,107 | |
Weighted average remaining recognition period | 1 year | |
Shares withheld for employee taxes | 8,169 | 154,320 |
Employee tax withholding (in Dollars) | $ 67,444 | $ 1,500,000 |
2014 Equity Incentive Plan [Member] | ||
Share Based Compensation [Line Items] | ||
Number of shares issuance | 1,600,000 | |
Share-Based Payment Arrangement, Tranche One [Member] | Minimum [Member] | ||
Share Based Compensation [Line Items] | ||
Exercise price percentage | 10% | |
Share-Based Payment Arrangement, Tranche One [Member] | Maximum [Member] | ||
Share Based Compensation [Line Items] | ||
Exercise price percentage | 110% | |
Stock Option [Member] | ||
Share Based Compensation [Line Items] | ||
Vesting period | 10 years | |
Board of Directors Chairman [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||
Share Based Compensation [Line Items] | ||
Exercise price percentage | 100% |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Schedule of Stock Option activity - Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | |
Share-Based Compensation (Details) - Schedule of Stock Option activity [Line Items] | ||
Stock Options, Outstanding | 458,957 | 416,813 |
Grant Date Weighted Average Exercise Price, Outstanding | $ 4.08 | $ 4.89 |
Weighted Average Remaining Contractual Life, Outstanding | 3 years 3 months 14 days | |
Aggregate Intrinsic Value, Outstanding | $ 755 | |
Stock Options, Exercisable | 360,041 | |
Grant Date Weighted Average Exercise Price, Exercisable | $ 5 | |
Weighted Average Remaining Contractual Life, Exercisable | 3 years 3 months 18 days | |
Aggregate Intrinsic Value, Exercisable | $ 1,798 | |
Stock Options, Granted | 60,521 | |
Grant Date Weighted Average Exercise Price, Granted | $ 7.26 | |
Stock Options, Exercised | (71,665) | |
Grant Date Weighted Average Exercise Price, Exercised | $ 2.53 | |
Stock Options, Forfeited | (31,000) | |
Grant Date Weighted Average Exercise Price, Forfeited | $ 2.85 |
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 - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Employees Exercised Vested Stock Options [Line Items] | ||
Weighted average grant-date fair value per option granted (in Dollars per share) | $ 3.13 | |
Expected option term | 2 years 6 months | 2 years 6 months |
Expected volatility factor | 74% | 83% |
Risk-free interest rate | 4.27% | |
Expected annual dividend yield | ||
Minimum [Member] | ||
Schedule of Employees Exercised Vested Stock Options [Line Items] | ||
Weighted average grant-date fair value per option granted (in Dollars per share) | $ 3.05 | |
Risk-free interest rate | 3.82% | |
Maximum [Member] | ||
Schedule of Employees Exercised Vested Stock Options [Line Items] | ||
Weighted average grant-date fair value per option granted (in Dollars per share) | $ 3.65 | |
Risk-free interest rate | 4.18% |
Share-Based Compensation (Det_4
Share-Based Compensation (Details) - Schedule of Employees Exercised Vested Stock Options - Two Thousand Fourteen Plan [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options Exercised | 56,250 | 596,668 | |
Weighted Average Exercise Price (in Dollars per share) | $ 2.55 | $ 3.46 | |
Shares Net Settled for Exercise | 24,371 | 210,117 | |
Shares Withheld for Taxes | [1] | 8,169 | 154,320 |
Net Shares Issued | 23,710 | 232,231 | |
Weighted Average Share Price (in Dollars per share) | $ 6.43 | $ 9.84 | |
Employee Share-Based Tax Withholding (in Dollars) | $ 67,444 | $ 1,517,823 | |
[1] Shares withheld for employee taxes of 8,169 and 154,320 represents the equivalent shares for employee tax withholding of $67,444 and $1.5 million, respectively. The employee tax withholding is based on the statutory rates for each employee on the date of exercise. ASU 2016-09 clarifies that employee taxes paid in lieu of shares issued for share-based compensation should be considered similar to a share repurchase. Accordingly, employee taxes paid by us are recorded as a reduction to stockholders’ equity on the date of exercise and classified as a financing activity on the statement of cash flows when taxes are paid to the taxing authorities. |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies (Details) [Line Items] | ||
Matching contributions percent | 25% | |
Employee benefit plan contribution (in Dollars) | $ 385,000 | $ 255,000 |
Employee Benefit Plan [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Matching contributions percent | 100% | 100% |
Percentage of employee’s eligible compensation | 4% | 4% |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Operating Lease Asset and Liability - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 3,392 | $ 2,681 |
Current portion of operating lease obligations | 874 | 529 |
Long-term portion of operating lease obligations | 3,093 | 2,706 |
Total operating lease liabilities | $ 3,967 | $ 3,235 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of Lease Expense - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Lease expense | $ 566 | $ 637 |
Sublease income | (228) | (216) |
Total operating leases expense | $ 338 | $ 421 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of Supplemental Information - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Supplemental Information Abstract | ||
Operating cash outflows from operating leases | $ 1,078 | $ 659 |
ROU assets obtained in exchange for operating lease liabilities | $ 3,211 |
Commitments and Contingencies_6
Commitments and Contingencies (Details) - Schedule of Weighted Average Lease Term and Rate | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 4 years 5 months 4 days | 5 years 10 months 28 days |
Weighted-average discount rate | 5.60% | 4.75% |
Commitments and Contingencies_7
Commitments and Contingencies (Details) - Schedule of Maturities of Lease Liabilities - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Maturities of Lease Liabilities [Abstract] | ||
2024 | $ 1,060 | |
2025 | 1,064 | |
2026 | 1,016 | |
2027 | 552 | |
2028 | 569 | |
Thereafter | 190 | |
Total minimum lease payments | 4,451 | |
Less: interest | (484) | |
Present value of operating lease liabilities | $ 3,967 | $ 3,235 |