Red Violet (RDVT) 10-Q 8 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 06, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	RDVT
Entity Registrant Name	RED VIOLET, INC.
Entity Central Index Key	1,720,116
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,266,613

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 15,837	$ 65
Accounts receivable, net of allowance for doubtful accounts of $115 and $228 at June 30, 2018 and December 31, 2017, respectively	2,031	1,650
Prepaid expenses and other current assets	843	559
Total current assets	18,711	2,274
Property and equipment, net	928	1,091
Intangible assets, net	17,632	15,353
Goodwill	5,227	5,227
Other non-current assets	1,098	1,180
Total assets	43,596	25,125
Current liabilities:
Trade accounts payable	1,390	919
Accrued expenses and other current liabilities	3,144	6,437
Deferred revenue	56	33
Total current liabilities	4,590	7,389
Other non-current liabilities	189
Total liabilities	4,779	7,389
Shareholders' equity:
Preferred stock—$0.001 par value, 10,000,000 and 0 authorized, and 0 shares issued and outstanding, at June 30, 2018 and December 31, 2017, respectively
Common stock—$0.001 par value, 200,000,000 and 5,000 shares authorized, and 10,266,613 and 1,000 shares issued and outstanding, at June 30, 2018 and December 31, 2017, respectively	10
Additional paid-in capital	40,301
Accumulated deficit	(1,494)
Member's capital		17,736
Total shareholders' equity	38,817	17,736
Total liabilities and shareholders' equity	$ 43,596	$ 25,125

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 115	$ 228
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	5,000
Common stock, shares issued	10,266,613	1,000
Common stock, shares outstanding	10,266,613	1,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenue	$ 3,909	$ 1,993	$ 7,234	$ 3,565
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)	2,084	1,843	4,101	3,244
Sales and marketing expenses	1,228	1,165	2,317	1,983
General and administrative expenses	1,742	10,898	3,594	12,928
Depreciation and amortization	478	220	929	436
Total costs and expenses	5,532	14,126	10,941	18,591
Loss from operations	(1,623)	(12,133)	(3,707)	(15,026)
Other income, net	129		129
Loss before income taxes	(1,494)	(12,133)	(3,578)	(15,026)
Net loss	$ (1,494)	$ (12,133)	$ (3,578)	$ (15,026)
Loss per share:
Basic and diluted	$ (0.15)	$ (1.18)	$ (0.35)	$ (1.46)
Weighted average number of shares outstanding:
Basic and diluted	10,266,613	10,266,613	10,266,613	10,266,613

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Member's capital
Beginning balance at Dec. 31, 2017	$ 17,736				$ 17,736
Beginning balance, shares at Dec. 31, 2017	1,000	1,000
Contribution by Fluent, Inc., including allocation of expenses	$ 24,264				24,264
Share-based compensation	395		$ 49		346
Net loss	(3,578)			$ (1,494)	(2,084)
Spin-off from Fluent, Inc.		$ 10	40,252		$ (40,262)
Spin-off from Fluent, Inc., shares		10,265,613
Ending balance at Jun. 30, 2018	$ 38,817	$ 10	$ 40,301	$ (1,494)
Ending balance, shares at Jun. 30, 2018	10,266,613	10,266,613

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,578)	$ (15,026)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	929	436
Share-based compensation expense	214	1,683
Write-off of long-lived assets	61
Provision for bad debts	155	94
Allocation of expenses from Fluent, Inc.	325	1,888
Changes in assets and liabilities:
Accounts receivable	(536)	(311)
Prepaid expenses and other current assets	(284)	(50)
Other non-current assets	82	93
Trade accounts payable	471	50
Accrued expenses and other current liabilities	(3,293)	6,837
Deferred revenue	23	(30)
Other non-current liabilities	189	500
Net cash used in operating activities	(5,242)	(3,836)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(37)	(289)
Capitalized costs included in intangible assets	(2,888)	(3,281)
Net cash used in investing activities	(2,925)	(3,570)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributed by Fluent, Inc.	23,939	7,354
Net cash provided by financing activities	23,939	7,354
Net increase (decrease) in cash and cash equivalents	15,772	(52)
Cash and cash equivalents at beginning of period	65	226
Cash and cash equivalents at end of period	15,837	174
SUPPLEMENTAL DISCLOSURE INFORMATION
Share-based compensation capitalized in intangible assets	$ 181	$ 393

Organization

Organization	6 Months Ended
	Jun. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization	1. Organization On March 26, 2018, Fluent, Inc. (“Fluent”), formerly known as Cogint, Inc., a Delaware corporation, completed the previously announced spin-off (the “Spin-off”) of its risk management business from its digital marketing business by way of a distribution of all the shares of common stock of Fluent’s wholly-owned subsidiary, Red Violet, Inc. (“red violet” or the “Company”), a Delaware corporation, to Fluent’s stockholders of record as of March 19, 2018 (the “Record Date”) and certain warrant holders. The distribution occurred by way of a pro rata stock distribution to such common stock and warrant holders, each of whom received one share of red violet’s common stock for every 7.5 shares of Fluent’s common stock held on the Record Date or to which they were entitled to under their warrant, which resulted in a distribution of a total of 10,266,613 shares of red violet common stock. Upon the Spin-off, red violet owns Fluent subsidiaries that previously operated Fluent’s risk manag e ment business. As a result of the Spin-off, red violet is an independent public company and red violet’s common stock began regular-way trading on The NASDAQ Capital Market under the symbol “RDVT” on March 27, 2018. red violet has only one operating segment, as defined by ASC 280, “ Segment Reporting

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of significant accounting policies	2. Summary of significant accounting policies (a) Basis of preparation and liquidity The accompanying unaudited condensed consolidated financial statements have been prepared by red violet in accordance with accounting principles generally accepted in the United States (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to those rules and regulations. red violet accounted for the Spin-off in accordance with ASC 805-50-30-5 Initial Measurement- Transactions Between Entities Under Common Control Transfer Date Measurement The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2018. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated and combined financial statements and accompanying notes of red violet for the year ended December 31, 2017 (“2017 Financials”) included in Exhibit 99.1, Information Statement, to red violet’s current report on Form 8-K filed with the SEC on March 27, 2018. The condensed consolidated balance sheet as of December 31, 2017 included herein was derived from the audited financial statements as of that date included in the 2017 Financials, but does not include all disclosures required by US GAAP. Principles of consolidation Although the Spin-off was completed on March 26, 2018, the Company has reflected the Spin-off in these financial statements as if it occurred on March 31, 2018 as the Company determined that the impact is not material to the condensed consolidated financial statements. The financial statements present the consolidated results of operations, financial condition, and cash flows of red violet and its subsidiaries. For periods prior to the Spin-off, these financial statements were prepared on a consolidated and combined basis because certain of the entities were under common control. All intercompany accounts and transactions have been eliminated between the consolidated and combined entities. The historical condensed consolidated and combined financial results presented prior to the Spin-off may not be indicative of the results that would have been achieved by the Company had it operated as a separate, standalone entity prior to the Spin-off. The condensed consolidated and combined financial statements presented prior to the Spin-off do not reflect any changes that may occur in the Company’s operations in connection with or as a result of the Spin-off. (b) Recently issued accounting standards As an emerging growth company, we have left open the opportunity to take advantage of the extended transition In May 2014, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “ Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In February 2016, FASB issued ASU No. 2016-02 (“ASU 2016-02”), “ Leases (Topic 842) In June 2018, FASB issued ASU No. 2018-07 (“ASU 2018-07”), “ Improvements to Nonemployee Share-Based Payment Accounting (c) Revenue recognition On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to all contracts that were not completed contracts at the date of initial application. There was no impact on the opening accumulated deficit as of January 1, 2018 due to the adoption of Topic 606. Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. In other words, our performance obligation is to provide on demand solutions to our customers by leveraging our proprietary technology and applying machine learning and advanced analytics to our massive data repository. The pricing for the customer contracts is based on usage, a monthly fee, or a combination of both. Available within Topic 606, we have applied the portfolio approach practical expedient in accounting for customer revenue as one collective group, rather than individual contracts. Based on our historical knowledge of the contracts contained in this portfolio and the similar nature and characteristics of the customers, we have concluded the financial statement effects are not materially different than if accounting for revenue on a contract by contract basis. Revenue is recognized over a period of time since the performance obligation is delivered in a series. Our customers simultaneously receive and consume the benefits provided by the Company’s performance as and when provided. Furthermore, we have elected the “right to invoice” practical expedient, available within ASC 606-10-55-18, as our measure of progress, since we have a right to payment from a customer in an amount that corresponds directly with the value of our performance completed-to-date. The Company's revenue arrangements do not contain significant financing components. If a customer pays consideration before we transfer services to the customer, those amounts are classified as deferred revenue. As of June 30, 2018 and December 31, 2017, the balance of deferred revenue was $56 and $33, respectively, all of which are expected to be realized in the next 12 months. In relation to the deferred revenue balance as of December 31, 2017, $10 and $27 was recognized into revenue during the three and six months ended June 30, 2018, respectively. As of June 30, 2018, approximately $1,056 of revenue is expected to be recognized in the future for the outstanding performance obligation, primarily related to revenue for subscription contracts that have a term of more than 12 months. Approximately $271 will be recognized during the remaining six months of 2018, $576 in 2019 and the remainder in 2020. The actual timing of recognition may vary due to factors outside of the Company’s control. The Company has elected to exclude variable consideration related entirely to wholly unsatisfied performance obligations and contracts where revenue is recognized based upon the right to invoice the customer. Sales commissions are recorded at the time revenue is recognized. These costs are recorded in sales and marketing expenses. In addition, we elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Loss Per Share

Loss Per Share	6 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Loss per share	3. Loss per share Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the periods. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for stock options and unvested shares. Common equivalent shares are excluded from the calculation in the loss periods as their effects would be anti-dilutive. Prior to the Spin-off, the financial information of red violet represented the consolidated and combined figures of red violet and its subsidiaries. red violet only had 1,000 shares of common stock outstanding, all of which Fluent owned. On March 26, 2018, upon the Spin-off of red violet, an aggregate of 10,266,613 shares of red violet common stock were distributed to Fluent stockholders and certain warrant holders. This number of shares remained outstanding at June 30, 2018, and is utilized to calculate loss per share for the three and six months ended June 30, 2018 and 2017, as shown in the table below. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share data) 2018 2017 2018 2017 Numerator: Net loss $ (1,494 ) $ (12,133 ) $ (3,578 ) $ (15,026 ) Denominator: Weighted average shares outstanding - Basic and diluted 10,266,613 10,266,613 10,266,613 10,266,613 Loss per share: Basic and diluted: $ (0.15 ) $ (1.18 ) $ (0.35 ) $ (1.46 ) A total of 56,000 shares of unvested restricted stock units (“RSUs”) granted during the first quarter of 2018 have been excluded from the diluted loss per share calculation as the impact is anti-dilutive for the three and six months ended June 30, 2018.

Intangible assets, net

Intangible assets, net	6 Months Ended
	Jun. 30, 2018
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible assets, net	4. Intangible assets, net Intangible assets other than goodwill consist of the following: (In thousands) Amortization period June 30, 2018 December 31, 2017 Gross amount: Software developed for internal use 10 years $ 19,711 $ 16,642 Accumulated amortization: Software developed for internal use (2,079 ) (1,289 ) Net intangible assets: Software developed for internal use $ 17,632 $ 15,353 The gross amount associated with software developed for internal use mainly represents capitalized costs of internally-developed software, including eligible salaries and staff benefits, share-based compensation, traveling expenses incurred by relevant employees, and other relevant costs. Amortization expenses of $417 and $155 for the three months ended June 30, 2018 and 2017, respectively, and $790 and $311 for the six months ended June 30, 2018 and 2017, respectively, were included in depreciation and amortization expenses. As of June 30, 2018, intangible assets of $2,809, included in the gross amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use. As of June 30, 2018, estimated amortization expenses related to the Company’s intangible assets for the remainder of 2018 through 2023 and thereafter are as follows: (In thousands) Year June 30, 2018 Remainder of 2018 $ 849 2019 1,974 2020 1,973 2021 1,971 2022 1,970 2023 and thereafter 8,895 Total $ 17,632

Goodwill

Goodwill	6 Months Ended
	Jun. 30, 2018
Goodwill Disclosure [Abstract]
Goodwill	5. Goodwill Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As of June 30, 2018 and December 31, 2017, the balance of goodwill of $5,227 was as a result of the acquisition of Interactive Data, LLC (“Interactive Data”), a wholly-owned subsidiary of red violet, effective on October 2, 2014. In accordance with ASC 350, “Intangibles - Goodwill and Other,” As of June 30, 2018 and December 31, 2017, there are no events or changes in circumstances to indicate that goodwill is impaired.

Income taxes

Income taxes	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income taxes	6. Income taxes red violet is a “C” corporation, while its subsidiaries are all limited liability companies. Before the Spin-off, red violet and its subsidiaries, were consolidated with Fluent for U.S. federal income tax purposes. However, for purposes of these financial statements, the income tax provisions were prepared assuming the entities filed separate tax returns. The Company is subject to federal and state income taxes in the United States. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate changes, we make a cumulative adjustment in that quarter. On December 22, 2017, the tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Act”) The Company’s effective income tax rate differed from the statutory federal income tax rate of 21% for the three and six months ended June 30, 2018 and 34% for the three and six months ended June 30, 2017. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the Company’s financial statements. red violet continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative red violet does not have any unrecognized tax benefits as of June 30, 2018 and December 31, 2017.

Common Stock and Preferred Stoc

Common Stock and Preferred Stock	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Common stock and preferred stock	7. Common stock and preferred stock Common stock As of June 30, 2018 and December 31, 2017, the number of authorized shares of common stock was 200,000,000 and 5,000, with a par value of $0.001 per share, respectively, of which, 10,266,613 and 1,000 shares of common stock were issued and outstanding, respectively. On March 26, 2018, Fluent completed the Spin-off of its risk management business from its digital marketing business by way of a distribution of all the shares of common stock of red violet to Fluent’s stockholders of record as of March 19, 2018, the Record Date, and certain warrant holders, which resulted in a distribution of a total of 10,266,613 shares of red violet common stock. Preferred stock As of June 30, 2018, we had 10,000,000 shares of preferred stock with par value of $0.001 per share authorized, and there were no shares of preferred stock issued or outstanding. There was no preferred stock authorized as of December 31, 2017.

Share-based Compensation

Share-based Compensation	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Share-based Compensation	8. Share-based compensation On March 22, 2018, the board of directors of red violet and Fluent, in its capacity as sole stockholder of red violet prior to the Spin-off, approved the Red Violet, Inc. 2018 Stock Incentive Plan, (the “2018 Plan”), which became effective immediately prior to the Spin-off. A total of 3,000,000 shares of common stock were authorized to be issued under the 2018 Plan. The primary purpose of the 2018 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company. On March 29, 2018, an aggregate of 56,000 shares of RSUs were granted to certain nonemployee directors, at a grant date fair value of $6.10 per share, under the 2018 Plan, with vesting periods ranging from one to three years. The fair value of the RSUs was estimated using the market value of the Company’s common stock on the date of grant, which was equivalent to the closing price of the common stock on the grant date. In July 2018, an aggregate of 602,000 shares of RSUs were granted to certain employees of the Company, at a grant date fair value ranging from $7.53 to $8.60 per share, under the 2018 Plan, with vesting periods ranging from three to four years. As of June 30, 2018, unrecognized share-based compensation expense associated with the granted RSUs amounted to $291, which is expected to be recognized over a weighted average period of 2.2 years. Share-based compensation of $49 and $1,427 for the three months ended June 30, 2018 and 2017, respectively, and $395 and $2,076 for the six months ended June 30, 2018 and 2017, respectively, was recognized. The amount recorded includes an allocation of share-based compensation related to the share-based awards granted by Fluent to company employees or non-employees prior to the Spin-off. Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Sales and marketing expenses $ - $ 77 $ 41 $ 162 General and administrative expenses 49 1,148 173 1,521 Share-based compensation expense 49 1,225 214 1,683 Capitalized in intangible assets - 202 181 393 Total $ 49 $ 1,427 $ 395 $ 2,076

Related party transactions

Related party transactions	6 Months Ended
	Jun. 30, 2018
Related Party Transactions [Abstract]
Related party transactions	9. Related party transactions Contribution by Fluent, Inc., recorded in the condensed consolidated statement of changes in shareholders’ equity, represents cash funding provided or the portion of certain expenses allocated by Fluent to red violet, on or prior to the Spin-off. These allocated expenses are primarily corporate employee salaries and benefits of the functional groups (inclusive of executive management, accounting, administrative and information technology) and corporate administrative expenses (inclusive of legal services, accounting and finance services and other corporate and infrastructure services). Corporate employee salaries and benefits were allocated on the basis of time spent, and corporate administrative expenses were allocated on the basis of relative percentage of services utilized or benefit received. red violet recorded expenses of $0 and $1,048 for the three months ended June 30, 2018 and 2017, respectively, and $325 and $1,888 for the six months ended June 30, 2018 and 2017, respectively, as a result of the allocation of expenses from Fluent. Upon the Spin-off, Fluent no longer allocates any expenses to red violet. In addition, share-based compensation of $0 and $1,427 for the three months ended June 30, 2018 and 2017, respectively, and $344 and $2,076 for the six months ended June 30, 2018 and 2017, respectively, relating to the share-based awards granted by Fluent prior to the Spin-off, were recorded. Management believes the assumptions and allocations underlying the condensed consolidated financial statements are reasonable and appropriate under the circumstances. The expense allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided to or the benefit received by red violet during the periods presented relative to the total costs and expenses incurred by Fluent. However, these expenses may not be reflective of the expenses that would have been recorded had red violet been an entity that operated independently of Fluent, and not been a subsidiary of Fluent. Consequently, future results of operations of red violet after the Spin-off will include costs and expenses that may be materially different than red violet’s historical results of operations, financial position, and cash flows. Accordingly, the financial statements for these periods are not indicative of red violet’s future results of operations, financial position, and cash flow. MDB Agreement and Executive Chairman Agreement On April 26, 2018, the Company entered into a consulting agreement with MDB Management, Inc. (“MDB”), a company owned by Michael Brauser, the then chairman of the Company’s board of directors, and one of his sons, for MDB to provide consulting services to the Company related to business development, future acquisitions, and strategic transactions (“MDB Agreement”), f or a term of , automatically renewing for additional six month periods unless either party provides written notice to the other of its intent not to renew not fewer than 30 days prior to the expiration of the then current term On August 7, 2018, the MDB Agreement was terminated by mutual agreement of the parties with no further liability under the MDB Agreement by either party. On the same day, the board of directors of the Company appointed Michael Brauser Executive Chairman of the Company and the Company entered into the executive chairman services agreement with Mr. Brauser, pursuant to which Mr. Brauser will be providing recommendations on organizational and capital structure, future acquisitions and strategic transactions (“Executive Chairman Agreement”), for a term of one year, automatically renewing for additional one-year periods unless either party provides written notice to the other of its intent not to renew not fewer than 30 days prior to the expiration of the then current term. Under the Executive Chairman Agreement, Mr. Brauser receives cash compensation of $30 per month and is entitled to participate in the Company’s incentive compensation plan.

Commitments

Commitments	6 Months Ended
	Jun. 30, 2018
Commitments And Contingencies Disclosure [Abstract]
Commitments	10. Commitments The Company incurred data costs of $1,361 and $1,148 for the three months ended June 30, 2018 and 2017, respectively, and $2,653 and $2,179 for the six months ended June 30, 2018 and 2017, respectively, under certain data licensing agreements. As of June 30, 2018, material capital commitments under certain data licensing agreements were $21,295, shown as follows: (In thousands) Year June 30, 2018 Remainder of 2018 $ 2,663 2019 6,230 2020 6,325 2021 4,775 2022 1,302 Total $ 21,295

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Basis of preparation and liquidity	(a) Basis of preparation and liquidity The accompanying unaudited condensed consolidated financial statements have been prepared by red violet in accordance with accounting principles generally accepted in the United States (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to those rules and regulations. red violet accounted for the Spin-off in accordance with ASC 805-50-30-5 Initial Measurement- Transactions Between Entities Under Common Control Transfer Date Measurement The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2018. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated and combined financial statements and accompanying notes of red violet for the year ended December 31, 2017 (“2017 Financials”) included in Exhibit 99.1, Information Statement, to red violet’s current report on Form 8-K filed with the SEC on March 27, 2018. The condensed consolidated balance sheet as of December 31, 2017 included herein was derived from the audited financial statements as of that date included in the 2017 Financials, but does not include all disclosures required by US GAAP. Principles of consolidation Although the Spin-off was completed on March 26, 2018, the Company has reflected the Spin-off in these financial statements as if it occurred on March 31, 2018 as the Company determined that the impact is not material to the condensed consolidated financial statements. The financial statements present the consolidated results of operations, financial condition, and cash flows of red violet and its subsidiaries. For periods prior to the Spin-off, these financial statements were prepared on a consolidated and combined basis because certain of the entities were under common control. All intercompany accounts and transactions have been eliminated between the consolidated and combined entities. The historical condensed consolidated and combined financial results presented prior to the Spin-off may not be indicative of the results that would have been achieved by the Company had it operated as a separate, standalone entity prior to the Spin-off. The condensed consolidated and combined financial statements presented prior to the Spin-off do not reflect any changes that may occur in the Company’s operations in connection with or as a result of the Spin-off.
Recently issued accounting standards	(b) Recently issued accounting standards As an emerging growth company, we have left open the opportunity to take advantage of the extended transition In May 2014, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “ Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In February 2016, FASB issued ASU No. 2016-02 (“ASU 2016-02”), “ Leases (Topic 842) In June 2018, FASB issued ASU No. 2018-07 (“ASU 2018-07”), “ Improvements to Nonemployee Share-Based Payment Accounting
Revenue recognition	(c) Revenue recognition On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to all contracts that were not completed contracts at the date of initial application. There was no impact on the opening accumulated deficit as of January 1, 2018 due to the adoption of Topic 606. Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. In other words, our performance obligation is to provide on demand solutions to our customers by leveraging our proprietary technology and applying machine learning and advanced analytics to our massive data repository. The pricing for the customer contracts is based on usage, a monthly fee, or a combination of both. Available within Topic 606, we have applied the portfolio approach practical expedient in accounting for customer revenue as one collective group, rather than individual contracts. Based on our historical knowledge of the contracts contained in this portfolio and the similar nature and characteristics of the customers, we have concluded the financial statement effects are not materially different than if accounting for revenue on a contract by contract basis. Revenue is recognized over a period of time since the performance obligation is delivered in a series. Our customers simultaneously receive and consume the benefits provided by the Company’s performance as and when provided. Furthermore, we have elected the “right to invoice” practical expedient, available within ASC 606-10-55-18, as our measure of progress, since we have a right to payment from a customer in an amount that corresponds directly with the value of our performance completed-to-date. The Company's revenue arrangements do not contain significant financing components. If a customer pays consideration before we transfer services to the customer, those amounts are classified as deferred revenue. As of June 30, 2018 and December 31, 2017, the balance of deferred revenue was $56 and $33, respectively, all of which are expected to be realized in the next 12 months. In relation to the deferred revenue balance as of December 31, 2017, $10 and $27 was recognized into revenue during the three and six months ended June 30, 2018, respectively. As of June 30, 2018, approximately $1,056 of revenue is expected to be recognized in the future for the outstanding performance obligation, primarily related to revenue for subscription contracts that have a term of more than 12 months. Approximately $271 will be recognized during the remaining six months of 2018, $576 in 2019 and the remainder in 2020. The actual timing of recognition may vary due to factors outside of the Company’s control. The Company has elected to exclude variable consideration related entirely to wholly unsatisfied performance obligations and contracts where revenue is recognized based upon the right to invoice the customer. Sales commissions are recorded at the time revenue is recognized. These costs are recorded in sales and marketing expenses. In addition, we elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Loss Per Share (Tables)

Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Loss Per Share	This number of shares remained outstanding at June 30, 2018, and is utilized to calculate loss per share for the three and six months ended June 30, 2018 and 2017, as shown in the table below. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share data) 2018 2017 2018 2017 Numerator: Net loss $ (1,494 ) $ (12,133 ) $ (3,578 ) $ (15,026 ) Denominator: Weighted average shares outstanding - Basic and diluted 10,266,613 10,266,613 10,266,613 10,266,613 Loss per share: Basic and diluted: $ (0.15 ) $ (1.18 ) $ (0.35 ) $ (1.46 )

Intangible assets, net (Tables)

Intangible assets, net (Tables)	6 Months Ended
	Jun. 30, 2018
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible Assets Other than Goodwill	Intangible assets other than goodwill consist of the following: (In thousands) Amortization period June 30, 2018 December 31, 2017 Gross amount: Software developed for internal use 10 years $ 19,711 $ 16,642 Accumulated amortization: Software developed for internal use (2,079 ) (1,289 ) Net intangible assets: Software developed for internal use $ 17,632 $ 15,353
Schedule of Estimated Amortization Expenses	As of June 30, 2018, estimated amortization expenses related to the Company’s intangible assets for the remainder of 2018 through 2023 and thereafter are as follows: (In thousands) Year June 30, 2018 Remainder of 2018 $ 849 2019 1,974 2020 1,973 2021 1,971 2022 1,970 2023 and thereafter 8,895 Total $ 17,632

Share-based Compensation (Table

Share-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Allocated Share-based Compensation	Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Sales and marketing expenses $ - $ 77 $ 41 $ 162 General and administrative expenses 49 1,148 173 1,521 Share-based compensation expense 49 1,225 214 1,683 Capitalized in intangible assets - 202 181 393 Total $ 49 $ 1,427 $ 395 $ 2,076

Commitments (Tables)

Commitments (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments And Contingencies Disclosure [Abstract]
Future Minimum Capital Payments under Certain Data Licensing Agreements	The Company incurred data costs of $1,361 and $1,148 for the three months ended June 30, 2018 and 2017, respectively, and $2,653 and $2,179 for the six months ended June 30, 2018 and 2017, respectively, under certain data licensing agreements. As of June 30, 2018, material capital commitments under certain data licensing agreements were $21,295, shown as follows: (In thousands) Year June 30, 2018 Remainder of 2018 $ 2,663 2019 6,230 2020 6,325 2021 4,775 2022 1,302 Total $ 21,295

Organization - Additional Infor

Organization - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018Segment	Mar. 26, 2018shares
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Spin-off completed date	Mar. 26, 2018
Spin-off record date	Mar. 19, 2018
Common stock distribution ratio at spin-off	13.33%
Common stock shares distributed at spin-off | shares		10,266,613
Operating segments | Segment	1

Summary of significant accoun23

Summary of significant accounting policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Deferred revenue	$ 56	$ 56	$ 33
Deferred revenue realization period		12 months
Revenue recognized, previously reported as deferred	$ 10	$ 27

Summary of significant accoun24

Summary of significant accounting policies - Additional Information 1 (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-07-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Estimated revenue expected to be recognized in the future	$ 271
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Estimated revenue expected to be recognized in the future	$ 576
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Estimated revenue expected to be recognized in the future
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: (nil)
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Estimated revenue expected to be recognized in the future	$ 1,056
Period over which subscription contract terms exceed	12 months

Loss Per Share - Additional Inf

Loss Per Share - Additional Information (Details) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Mar. 26, 2018	Dec. 31, 2017
Earnings Per Share [Line Items]
Common stock, shares outstanding	10,266,613	10,266,613		1,000
Common stock shares distributed at spin-off			10,266,613
Restricted Stock Units (RSUs)
Earnings Per Share [Line Items]
Shares excluded from the diluted loss per share calculation	56,000	56,000

Loss Per Share - Schedule of Ba

Loss Per Share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net loss	$ (1,494)	$ (12,133)	$ (3,578)	$ (15,026)
Weighted average shares outstanding - Basic and diluted	10,266,613	10,266,613	10,266,613	10,266,613
Loss per share:
Basic and diluted:	$ (0.15)	$ (1.18)	$ (0.35)	$ (1.46)

Intangible assets, net - Intang

Intangible assets, net - Intangible Assets Other than Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Finite Lived Intangible Assets [Line Items]
Net intangible assets	$ 17,632	$ 15,353
Software Developed for Internal Use
Finite Lived Intangible Assets [Line Items]
Estimated useful life of intangible assets	10 years
Gross amount	$ 19,711	16,642
Accumulated amortization	(2,079)	(1,289)
Net intangible assets	$ 17,632	$ 15,353

Intangible assets, net - Additi

Intangible assets, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Finite Lived Intangible Assets [Line Items]
Amortization expenses	$ 417	$ 155	$ 790	$ 311
Software Developed for Internal Use
Finite Lived Intangible Assets [Line Items]
Intangible assets that have not started amortization	$ 2,809		$ 2,809

Intangible assets, net - Schedu

Intangible assets, net - Schedule of Estimated Amortization Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Intangible Assets Net Excluding Goodwill [Abstract]
Remainder of 2018	$ 849
2,019	1,974
2,020	1,973
2,021	1,971
2,022	1,970
2023 and thereafter	8,895
Net intangible assets	$ 17,632	$ 15,353

Goodwill - Additional Informati

Goodwill - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Goodwill Disclosure [Abstract]
Goodwill	$ 5,227	$ 5,227
Date of annual goodwill impairment test	October 1

Income taxes - Additional Infor

Income taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Taxes [Line Items]
Statutory federal income tax rate	21.00%	34.00%	21.00%	34.00%
Effective income tax rate, percentage	0.00%	0.00%	0.00%	0.00%
Percentage of tax benefits likelihood of being realized upon settlement of tax authority			greater than 50%
Unrecognized tax benefits	$ 0		$ 0		$ 0
Interactive Data, LLC | State Tax Returns | Earliest Tax Year
Income Taxes [Line Items]
Open tax year for examination			2,014

Common Stock and Preferred St32

Common Stock and Preferred Stock - Additional Information (Details) - $ / shares	6 Months Ended
	Jun. 30, 2018	Mar. 26, 2018	Dec. 31, 2017
Equity [Abstract]
Common stock, shares authorized	200,000,000		5,000
Common stock, par value	$ 0.001		$ 0.001
Common stock, shares issued	10,266,613		1,000
Common stock, shares outstanding	10,266,613		1,000
Spin-off transaction completed date	Mar. 26, 2018
Spin-off transaction record date	Mar. 19, 2018
Common stock shares distributed at spin-off		10,266,613
Preferred stock, shares authorized	10,000,000		0
Preferred stock, par value	$ 0.001		$ 0.001
Preferred stock, shares issued	0		0
Preferred stock, shares outstanding	0		0

Share-based compensation - Addi

Share-based compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 29, 2018	Jul. 31, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Mar. 22, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation amount			$ 49	$ 1,427	$ 395	$ 2,076
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized share-based compensation costs in respect of granted RSUs			$ 291		$ 291
Unrecognized share-based compensation weighted average period					2 years 2 months 12 days
2018 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common stock authorized							3,000,000
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted		602,000
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Non-employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	56,000
Grant date fair value	$ 6.10
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Minimum | Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant date fair value		$ 7.53
Vesting period		3 years
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Minimum | Non-employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	1 year
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Maximum | Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant date fair value		$ 8.60
Vesting period		4 years
2018 Stock Incentive Plan | Restricted Stock Units (RSUs) | Maximum | Non-employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years

Share-based Compensation - Summ

Share-based Compensation - Summary of Allocated Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based compensation recognized
Share-based compensation expense	$ 49	$ 1,225	$ 214	$ 1,683
Capitalized in intangible assets		202	181	393
Total	49	1,427	395	2,076
Sales and Marketing Expenses
Share-based compensation recognized
Share-based compensation expense		77	41	162
General and Administrative Expenses
Share-based compensation recognized
Share-based compensation expense	$ 49	$ 1,148	$ 173	$ 1,521

Related party transactions - Ad

Related party transactions - Additional Information (Details) - USD ($) $ in Thousands	Aug. 07, 2018	Apr. 26, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Related Party Transaction [Line Items]
Share-based compensation amount			$ 49	$ 1,427	$ 395	$ 2,076
Fluent, Inc.
Related Party Transaction [Line Items]
Allocation of expenses from Fluent			0	1,048	325	1,888
Share-based compensation amount			0	$ 1,427	344	$ 2,076
MDB Management Group Inc. [Member]
Related Party Transaction [Line Items]
Consulting service fee monthly payment		$ 30
Term of agreement, related party		6 months
Renewal term of agreement, related party		6 months
Consulting service fee recognized amount			$ 60		$ 60
Executive Chairman Services Agreement | Subsequent Event
Related Party Transaction [Line Items]
Consulting service fee monthly payment	$ 30
Term of agreement, related party	1 year
Renewal term of agreement, related party	1 year

Commitments - Additional Inform

Commitments - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments And Contingencies Disclosure [Abstract]
Data cost incurred	$ 1,361	$ 1,148	$ 2,653	$ 2,179
Total capital commitment under certain data licensing agreements	$ 21,295		$ 21,295

Commitments - Future Minimum Ca

Commitments - Future Minimum Capital Payments under Certain Data Licensing Agreements (Details) $ in Thousands	Jun. 30, 2018USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2018	$ 2,663
2,019	6,230
2,020	6,325
2,021	4,775
2,022	1,302
Total	$ 21,295