Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40903 | |
Entity Registrant Name | HEALTHCARE TRIANGLE, INC. | |
Entity Central Index Key | 0001839285 | |
Entity Tax Identification Number | 84-3559776 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 7901 Stoneridge Drive | |
Entity Address, Address Line Two | Suite 220 | |
Entity Address, City or Town | Pleasanton | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94588 | |
City Area Code | (925) | |
Local Phone Number | 270-4812 | |
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | HCTI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,778,762 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 267 | $ 1,341 |
Accounts receivable | 5,512 | 5,592 |
Other current assets | 661 | 816 |
Total current assets | 6,440 | 7,749 |
Property and equipment, net | 67 | 80 |
Intangible assets, net | 9,713 | 10,570 |
Goodwill | 1,289 | 1,289 |
Due from affiliates | 1,351 | 1,075 |
Total assets | 18,860 | 20,763 |
Current liabilities | ||
Accounts payable | 1,307 | 1,481 |
Warrant Liability | 55 | 55 |
Short term borrowing | 2,945 | 2,412 |
Other current liabilities | 3,023 | 2,200 |
Total current liabilities | 7,330 | 6,148 |
Long-term liabilities | ||
Contingent Consideration | 2,227 | 2,227 |
Total current and long-term liabilities | 9,557 | 8,375 |
Stockholders' equity | ||
Preferred stock, par value $ 0.00001 ; 10,000,000 authorized | ||
Common stock, par value $0.00001; 100,000,000 authorized 41,859,531 and 41,709,531 shares issued and outstanding as of March 31, 2023 and December 31, 2022 respectively | 0 | 0 |
Additional paid-in capital | 25,146 | 24,956 |
Retained earnings | (15,843) | (12,568) |
Total stockholders' equity | 9,303 | 12,388 |
Total liabilities and stockholders' equity | 18,860 | 20,763 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, par value $ 0.00001 ; 10,000,000 authorized | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | |
Preferred Stock, Shares Authorized | 10,000,000 | |
Preferred stock voting shares | 6,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | |
Common Stock, Shares Authorized | 100,000,000 | |
Common Stock, Shares, Outstanding | 41,859,531 | 41,709,531 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 9,838 | $ 11,056 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 8,245 | 8,162 |
Operating expenses | ||
Research and development | 539 | 1,066 |
Sales and Marketing | 1,761 | 1,740 |
General and Administrative | 1,628 | 1,351 |
Depreciation and amortization | 874 | 711 |
Total operating expenses | 4,802 | 4,868 |
Loss from operation | (3,209) | (1,974) |
Other income | 12 | |
Interest expense | (62) | (16) |
Loss before income tax | (3,259) | (1,990) |
Provision for Income tax | (19) | (21) |
Net loss | $ (3,278) | $ (2,011) |
Net loss per common share—basic and diluted | $ (0.078) | $ (0.057) |
Weighted average shares outstanding used in per common share computations: | ||
Basic and diluted | 41,859,531 | 35,507,184 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 1 | $ 0 | $ 18,799 | $ (2,664) | $ 16,135 |
Beginning balance, shares at Dec. 31, 2021 | 6,000 | 35,260,834 | |||
Issue of Options (ISO/NSO) | 15 | 15 | |||
Cash collected on ISO/NSO | $ 0 | 10 | 10 | ||
Cash collected on ISO/NSO, shares | 26,136 | ||||
Shares issued for services | $ 0 | 350 | 350 | ||
Shares issued for services, shares | 249,701 | ||||
Net loss | (2,011) | (2,011) | |||
Ending balance, value at Mar. 31, 2022 | $ 1 | $ 0 | 19,174 | (4,675) | 14,499 |
Ending balance, shares at Mar. 31, 2022 | 6,000 | 35,536,671 | |||
Beginning balance, value at Dec. 31, 2022 | $ 1 | $ 0 | 24,956 | (12,568) | 12,388 |
Beginning balance, shares at Dec. 31, 2022 | 6,000 | 41,709,531 | |||
Issue of Options (ISO/NSO) | 142 | 142 | |||
Shares issued for services | $ 0 | 51 | 51 | ||
Shares issued for services, shares | 150,000 | ||||
Net loss | (3,278) | (3,278) | |||
Ending balance, value at Mar. 31, 2023 | $ 1 | $ 0 | $ 25,149 | $ (15,846) | $ 9,303 |
Ending balance, shares at Mar. 31, 2023 | 6,000 | 41,859,531 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (3,278) | $ (2,011) |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 874 | 711 |
Common stock issued for services | 51 | 350 |
Stock compensation expenses | 139 | 15 |
Increase/ (decrease) in: | ||
Accounts receivable | 80 | 2,933 |
Other current assets | 155 | (1,031) |
Due from related party | (276) | (451) |
Accounts payable and accrued expenses | (174) | (295) |
Other current liabilities | 824 | 130 |
Payment of lease liability | ||
Net cash provided by/(used in) operating activities | (1,605) | 351 |
Cash flows from investing activities | ||
(Purchase)/sale of property and equipment | (2) | (20) |
Net cash provided by/(used in) investing activities | (2) | (20) |
Cash flows from financing activities | ||
Employee stock options exercised | 10 | |
Increase/(decrease) in short term borrowing | 533 | (500) |
Payment of lease liabilities | (49) | |
Net cash provided by/(used in) financing activities | 533 | (539) |
Net increase (decrease) in cash and cash equivalents | (1,074) | (208) |
Cash and cash equivalents | ||
Cash and cash equivalents at the beginning of the period | 1,341 | 1,770 |
Cash and cash equivalents at the end of the period | 267 | 1,562 |
Supplementary disclosure of cash flows information | ||
Interest | 62 | 16 |
Income taxes | $ 19 | $ 21 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1) Organization and Description of Business Healthcare Triangle Inc. (“the Company”) was incorporated under the laws of the State of Nevada on October 29, 2019, and then converted into a Delaware corporation on April 24, 2020, to provide IT and data services to the Healthcare and Life Sciences (‘HCLS”) industry. On January 1, 2020, the Company acquired the Life Sciences Business of SecureKloud Technologies Inc. (“Parent”) and on May 8, 2020, the Company acquired Cornerstone Advisors Group LLC (Healthcare Business) from its Parent. Company reinforces healthcare progress through breakthrough technology and extensive industry know-how. Company support healthcare providers and payors, hospitals and pharma/life sciences organizations in their effort to improve health outcomes by enabling the adoption of new technologies, data enlightenment, business agility and accelerate responding to immediate business needs and competitive threats. The highly regulated HCLS industry turn to Company for expertise in digital transformation on the cloud, security and compliance, develops, data lifecycle management, healthcare interoperability, clinical and business performance optimization. Company concentrates on accelerating value to the three healthcare sectors: 1. Pharmaceutical companies, which require improved efficiencies in the clinical trial process. Company modernizes their IT infrastructure to advance the clinical trial process to drug discovery and delivery. 2. Hospitals and health systems, which face interoperability challenges as mergers, acquisitions and partnerships drive increasing need for integrated healthcare infrastructures. Company's health IT expertise optimizes providers' enterprise digital structure needs connecting disparate systems and applying analytics capabilities. 3. Life sciences, payers and all healthcare organizations must protect and secure personal health information (PHI), a regulatory compliance mandate that Company addresses and manages for its customers. As an organization with the deep-rooted cloud expertise, Company’s technology significantly relies on Big Data, Analytics, DevOps, Security/Compliance, Identity Access Management (IAM), Machine Learning (ML), Artificial Intelligence (AI), Internet of Things (IoT) and Blockchain. Devcool Inc Devcool Inc (“the Company”) was incorporated under the laws of the State of California on September 25, 2016. The Company solves complex technology problems and delivers innovation to healthcare industry. The Company has successfully implemented projects for top Healthcare insurance companies and hospitals across United States of America. On December 10, 2021, Healthcare Triangle, Inc (the “Company”) entered into a Share Purchase Agreement (the "Share Purchase Agreement") with Devcool, Inc., a California corporation ("Devcool"), Go To Assistance Inc., a California corporation ("Seller"), and Mr. Sandeep Deokule, current Chief Executive Officer of Devcool (“SD”). Pursuant to the Share Purchase Agreement, the Company will acquire 5,000,000 shares of Devcool’s Class B Common Stock, par value $0.0001, which represents all of the issued and outstanding capital stock of Devcool (the “Acquisition”). The closing of the Acquisition occurred on December 10, 2021 (the “Closing Date”). The Company exercised control by virtue of taking over the operations from November 01, 2021 (effective date) and the financials have been consolidated from this date. Impact of the COVID-19 Pandemic COVID-19 has created uncertainty for our employees, members, and customers. We consider the impact of the pandemic on our business by evaluating the health of our operations, any changes to our revenue outlook, and the degree to which interest in Company’s solutions have evolved during these unprecedented times. We measure our performance through several key metrics; and as gauged these performance metrics, service levels have been high, and customer engagement and satisfaction have remained strong through these tough times. While the COVID-19 pandemic has not had a material adverse impact on our financial condition and results of operations to date, the future impact of the COVID-19 outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our customers and our sales cycles, impact on our marketing efforts, and any reduction in spending by our customers, all of which are uncertain and cannot be predicted. We have a diverse set of customers, while some have faced headwinds, others have experienced growth. Because of COVID-19, Healthcare and Life Sciences organizations are accelerating research, rethinking patient care, and maintaining clinical and operational continuity during this unprecedented time for the global health system. COVID-19 has necessitated the adoption of digital communication channels and remote working technology within the Healthcare and Life Sciences industry at a rapid pace and our proprietary platforms and solutions addresses these challenges. Our business is focused on providing digital platform solutions to healthcare organizations and it is our mission to adequately address COVID-19 challenges for the benefit of our customers and society in general. As a result, consumers have better personal care, convenience, and value. COVID-19 is expected to drive increased utilization of technology during and after the pandemic, and such shift to a virtual approach creates a unique opportunity for our business to shape the new virtual-oriented experiences of businesses through our cloud technology and services and our value proposition resonates with a broader audience of companies as they turn their focus to safely reopening their workplaces and managing the ongoing health and well-being of employees and their families. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2) Summary of Significant Accounting Policies Basis of consolidated financial statements The accompanying condensed consolidated financial statements include the accounts of Healthcare Triangle and its wholly owned subsidiary. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in consolidation. The accompanying statements of operations include expenses for certain functions historically performed by the Parent company, including general corporate services, such as legal, accounting, treasury, information technology, human resources and administration. These expenses are based primarily on direct usage when identifiable, direct capital expenditures or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying condensed consolidated financial statements, including the assumptions regarding these expenses from this related party, are reasonable. Actual results may differ from these expenses, assumptions and estimates. The amounts recorded in the accompanying condensed consolidated financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and the related footnote disclosures have been prepared by us in accordance with GAAP for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2022 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly our financial position as of March 31, 2023, the results of operations, comprehensive income (loss), stockholders’ deficit, and cash flows for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 and 2022 are not necessarily indicative of the results to be expected for the full year. The information contained herein should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. Management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. Accounting Policies Use of Estimates The preparation of financial statements is in conformity with GAAP which requires us to make estimates, judgments and assumptions that affect the financial statements and the notes thereto. These estimates are based on information available as of the date of the financial statements. On a regular basis, management evaluates these estimates and assumptions. Items subject to such estimates and assumptions include, but are not limited to: • the standalone selling price for each distinct performance obligation • the determination of the period of benefit for amortization of deferred costs. • the fair value of assets acquired, and liabilities assumed for business combinations. • Share based compensation including warrants Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (i) December 21, 2026 (the last day of the fiscal year following the fifth anniversary of our IPO), (ii) the last day of the first fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the first fiscal year in which we are deemed to be a “large accelerated filer”, as defined in the rules under the Exchange Act, and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We refer to the Jumpstart Our Business Startups Act of 2012 herein as the “JOBS Act,” and any reference herein to “emerging growth company” has the meaning ascribed to it in the JOBS Act. We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report on Form 10-K and may elect to take advantage of other reduced reporting requirements in our future filings with the SEC. As a result, the information that we provide to our stockholders may be different from the information you might receive from other public reporting companies in which you hold equity interests. In particular, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act) for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, so long as we remain an emerging growth company, we will not be subject to the same implementation timing of new or revised accounting standards as other public companies that are not emerging growth companies until these standards apply to private companies unless we elect to early adopt as permitted by the relevant guidance for private companies. Segment Information The management has chosen to organize the Company around differences in products and services and segregated the reporting segments as Software Services, Managed Services and Support, and Platform Services. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company defines the term ‘chief operating decision maker’ to be the Chief Executive Officer. The Chief Executive Officer along with the management team reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, the Company has determined that it operates in three distinct reportable operating segments, and all required financial segments information can be found in the consolidated financial statements. Expenses included in segment operating profit consist principally of direct selling, delivery costs and research and development expenses. Certain Sales and Marketing expenses, General and Administrative expenses, depreciation, and amortization are not allocated to individual segments in internal management reports used by the chief operating decision maker. Accordingly, such expenses are excluded from segment operating profit and are included below as “unallocated costs” and adjusted against our total income from operations. Additionally, management has determined that it is not practical to allocate identifiable assets by segment, since such assets are used interchangeably among the segments. Schedule of operating segment Three months Ended Changes (In thousands) 2023 2022 Amount % Software Services $ 6,459 $ 5,456 $ 1,003 18 % Managed Services and Support 3,041 4,269 (1,228 ) (29 )% Platform Services 338 1,331 (993 ) (75 )% Revenue $ 9,838 $ 11,056 $ (1,218 ) (11 )% Operating profit by Operating Segment Three months Ended March 31, Changes (In thousands) 2023 2022 Amount % Software Services $ (1,135 ) $ (199 ) $ (936 ) (470 %) Managed Services and Support 552 1,254 (702 ) (56 %) Platform Services (463 ) (572 ) 109 19 % Total segment operating (loss) profit (1,046 ) 483 (1,529 ) (317 %) Less: unallocated costs 2,163 2,457 (294 ) (12 %) Income (loss) from operations (3,209 ) (1,974 ) (1,235 ) (63 %) Other Income 12 — 12 (100 %) Interest expense (62 ) (16 ) (46 ) (288 %) Net income (loss) before income tax expenses $ (3,259 ) $ (1,990 ) $ (1,269 ) (64 %) Revenue from top 5 customers Three Months Ended March 31, 2023 Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 4,930 50 % Customer 2 920 9 % Customer 3 859 9 % Customer 4 792 8 % Customer 5 $ 388 4 % Three Months Ended March 31, 2022 Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 3,833 35 % Customer 2 1,965 18 % Customer 3 966 9 % Customer 4 899 8 % Customer 5 $ 623 6 % Revenue Recognition We recognize revenues as we transfer control of deliverables (services, solutions, and platform) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience. For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Software Services The Company enters into contractual obligations with the customers to perform (i) Strategic advisory services which include assessment of the enterprise network, applications environment and advise on the design and tools; (ii) Implementation services which include deployment, upgrades, enhancements, migration, training, documentation and maintenance of various electronic health record systems and (iii) Development services which include customization of network and applications in the public cloud environment. Revenue from Strategic advisory, Implementation and Development services are distinct performance obligation and is recognized on time-and-material or fixed-price project basis. Revenues related to time-and-material are recognized over the period the services are provided using labor hours. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate. We may enter into contracts that consist of multiple performance obligations. Such contracts may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For contracts with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we estimate standalone selling price by using the expected cost plus a margin approach. We establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. Managed Services and Support The Company has standard contracts for its Managed Services and Support, however the statement of work contained in such contracts is unique for each customer. A typical Managed Services and Support contract would provide for some or all of the following types of services being provided to the customer: Cloud hosting, Continuous monitoring of applications, security and compliance and support. Revenue from Managed services and support is a distinct performance obligation and recognized based on SSP (standalone selling price), rateably on a straight-line basis over the period in which the services are rendered. Contract with customers includes subcontractor services or third-party cloud infrastructure services in certain integrated services arrangements. In these types of arrangements, revenue is recognized net of costs when the Company is acting as an agent between the customer and the vendor, and gross when the Company is the principal for the transaction. In doing so, the Company first evaluates whether it controls the platform or service before it is transferred to the customer. The Company considers whether it has the primary obligation to fulfil the contract, pricing discretion and other factors to determine whether it controls the platform or service and therefore is acting as a principal or an agent. Payment for managed services and support is due monthly. Platform Services The Company has standard contracts for its Platform Services, however the statement of work contained in such contracts is unique for each customer. A typical Platform Services contract would provide for some or all of the following types of services being provided to the customer: Data Analytics, Backup and Recovery, through our Platform. The revenue from Platform services is a distinct performance obligation and recognized based on SSP. During the periods presented the Company generated revenue from Platform services on a fixed-price solutions delivery model. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate. Our contractual terms and conditions for Software services, Managed Services and Support and Platform services mandate that our services are documented and subject to inspection, testing at the time of delivery to customer. In addition, the Company needs to integrate seamlessly into the customers’ systems. Also, the customer has a right to cancel all, or part of the services rendered if it is not in accordance with statement of work and within the stipulated time. Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, generally monthly upon achievement of contractual milestones. Generally, billing occurs after revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These deposits are liquidated when revenue is recognized The beginning and ending contract balances were as follows: Schedule of receivables and contract liabilities March 31, 2023 December 31, 2022 (In thousands) Accounts Receivable 5,512 5,592 Cash and Cash Equivalents The Company considers all highly liquid investments (including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk. Accounts Receivable The Company extends credit to clients based upon management’s assessment of their creditworthiness on an unsecured basis. The Company provides an allowance for uncollectible accounts based on historical experience and management evaluation of trend analysis. The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts. For the quarter ended March 31, 2023 the Company did not provided an allowance for uncollectible accounts and year ended December 31, 2022 the Company provided $222 as allowances for uncollectible accounts. Based on the information available, management believes the Company’s accounts receivable are collectible. Property and Equipment Property and equipment are stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease terms or the useful lives of the improvements. The Company charges repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred. Intangible Assets We capitalize certain costs incurred for the platform development when it is determined that it is probable that the platform will be completed and will be used as intended. Costs related to preliminary project activities, post-implementation activities, training, and maintenance are expensed as incurred. Customer relationship and platform development are amortized based on finite lives using either the straight-line method or based on estimated future cash flows to approximate the pattern in which the economic benefit of the asset will be utilized. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized but is subject to an annual impairment test. The Company performs its annual goodwill impairment test on an annual basis in the fourth quarter of each fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill. The Company’s quarterly goodwill impairment test resulted in no impairment charges in the quarter ended March 31, 2023 and 2022. Allowance for Doubtful Accounts Trade accounts receivable are stated at the amount the Company expects to collect and do not bear interest. The collectability of trade receivable balances is regularly evaluated based on a combination of factors such as customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer payment pattern. Additionally, if it is determined that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material event impacting its business, a specific allowance for doubtful accounts may be recorded to reduce the related receivable to the amount expected to be recovered. Although we believe that our approach to estimates and judgments regarding our allowance for doubtful accounts is reasonable, actual results could differ and we may be exposed to increases or decreases in required allowances that could be material. Business Combinations As per ASC 805-50 a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions are addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented. We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any non-controlling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the date of effective control. Valuation of Contingent Earn-out Consideration. Acquisitions may include contingent consideration payments based on the achievement of certain future financial performance measures of the acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. We evaluate, on a routine, periodic basis, the estimated fair value of the contingent consideration and changes in estimated fair value, subsequent to the initial fair value estimate at the time of the acquisition, will be reflected in income or expense in the consolidated statements of operations. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results. Earnings (Loss) Per Share. Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Fair Value Measurements The Company measures its financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1—Inputs are observable and reflect quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3—Inputs that are unobservable Money market funds and U.S. treasury securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Other debt securities and investments are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Available-for-sale debt securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. In connection with the acquisition of Devcool, Inc., the Company recognized a liability on the acquisition date for the estimated fair value of the contingent consideration based on the probability of achieving certain milestones pursuant to the acquisition agreement. The fair value measurement of the contingent consideration is based on significant unobservable inputs and management judgment; therefore, it is categorized under Level 3 at the balance sheet date in the table below. Schedule of balance sheet March 31, 2023 Fair Value Measured Using (In thousands) Level 1 Level 2 Level 3 Total Financial liabilities: Warrant Liabilities $ 55 $ 55 Acquisition-related contingent consideration — — $ 2,227 $ 2,227 Stock-Based Compensation The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options over the instruments vesting period. Options awarded to purchase shares of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles. The Company adopted the “2020 Stock Incentive Plan” (Plan). The Company has reserved 6,000,000 shares of the Company’s Common stock. Income taxes The provision for income taxes was determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the period. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates applicable in the years in which they are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income in the period that includes the enactment date. Advertising Costs The Company expenses advertising cost as incurred. Advertising expense for the quarters ended March 31, 2023 and 2022 were Nil 0 . Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade receivables. Credit risks associated with trade receivables is minimal due to the Company’s customer base which consist of large customer base and ongoing procedures, which monitor the credit worthiness of its customers. For the quarter ended March 31, 2023 and 2022 revenue from the top five customers accounted for approximately 80 % and 76 % of total revenue respectively. For the quarter ended March 31, 2023 and year ended December 31, 2022 accounts receivable from five major customers accounted for approximately 82 % and 72 % of the total accounts receivables. The Company maintains cash balances in various financial institutions. The balances are generally insured by the Federal Deposit Insurance Corporation up to $ 250,000 (valid through March 31, 2023) per institution. As of March 31, 2023 and December 31, 2022, the Company had Nil 0 and $ 816 respectively, of uninsured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4) Property and Equipment Property and equipment consisted of the following: Schedule of property and equipment March 31, 2023 December 31, 2022 (In thousands) Furniture and Equipment $ 123 $ 119 Less: Accumulated depreciation (56 ) (39 ) Net Fixed Assets $ 67 $ 80 Depreciation expenses for the quarter ended March 31, 2023, and March 31, 2022 were $ 17 and $ 8 respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5) Intangible Assets The Company’s intangible assets consist primarily of intellectual property and customer relationship it acquired through various acquisitions. We capitalize certain costs incurred for the platform development when it is determined that it is probable that the platform will be completed and will be used as intended. We amortize our intangible assets that have finite lives using either the straight-line method or based on estimated future cash flows to approximate the pattern in which the economic benefit of the asset will be utilized Intangible assets consist of the following: Schedule of intangible assets March 31, 2023 December 31, 2022 Weighted average Remaining Useful life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) (In thousands) Customer relationships 2.97 $ 8,667 $ 3,957 $ 4,710 $ 8,667 $ 3,523 $ 5,144 Intellectual property 4.39 7,329 2,349 4,980 7,329 2,013 5,316 Product development 0.5 477 454 23 477 367 110 Total Intangible Assets $ 16,473 $ 6,760 $ 9,713 $ 16,473 $ 5,903 $ 10,570 Amortization expense for the quarter ended March 31, 2023 and March 31, 2022 were $ 857 and $ 660 respectively. This amortization expense relates to capitalized software expenses, intellectual property, and customer lists. Schedule of intangibles asset useful life Nature of Intangibles Useful Life Customer relationships 5 years Intellectual property 5 years Product development 5 years Estimated annual amortization expense (including amortization expense associated with capitalized software costs) for each of the next six years are as follows: Schedule of amortization expense March 31, 2023 $ 1,251 2024 2,114 2026 2,114 2026 2,114 2027 2,114 2028 6 Total $ 9,713 |
Due from Related Party
Due from Related Party | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Due from Related Party | 6) Due from Related Party Securekloud Technologies Inc, (Parent) is a Nevada based corporation, focusing on digital transformation for Avionics, Technology and Manufacturing Industry. As a pioneer in enabling cloud transformation for global enterprises, Securekloud Technologies Inc is building on foundation of cloud capabilities by creating innovative platforms that are time-tested and designed to drive success in its digital transformation journey. HTI uses the capabilities and resources of the parent for the execution of the projects for its customers. Securekloud Technologies Inc owns 60.92 % of Healthcare Triangle Inc as of March 31, 2023. The Company entered into a Master Service Agreement, Shared Services Agreement and Rental Sublease Agreement with its parent. As per the Master Services Agreement, parent provides technical resources according to the statement of work from the Company. The initial term of the agreement is twenty-four months, which is extendable based on mutual consent. The parent charges for the services at cost. The Company received services amounting to $ 3,190 and $ 2,091 for the quarter ended March 31, 2023, and 2022 respectively. The Company has paid for these services during the year. As per the terms of the Shared Services and Rental Sublease Agreement, the cost incurred by the parent on behalf of the Company are settled at cost. The Shared Services Agreement includes Development infrastructure, Sales support, Recruitment and Immigration support, Project coordination, HR and Operation support, Management /Advisory services. The Company received services amounting to $ 146 and $ 49 for the quarter ended March 31, 2023, and 2022 respectively. The Company has paid for these services during the year. The Company does not have any signed lease agreement on its name and currently operates from two office locations leased by the Parent. The Company has entered into a sublease agreement with the Parent and paid rent of $ 67 and $ 49 for the quarter ended March 31, 2023, and 2022 respectively. The Company has earned $ 12 from sale to related parties for the quarter ended March 31, 2023, and $ 131 for the quarter ended March 31, 2022. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | 7) Business Combination Effective May 8, 2020, the Company acquired the entire equity of Cornerstone Advisory Services LLC in exchange for a promissory note. In accordance with the terms of the Equity Purchase Agreement dated May 8, 2020, the Company acquired 100 % of the equity of Cornerstone Advisory Services LLC for a total consideration of $ 7,000 . The total purchase price of $ 7,000 was allocated to net working capital of $ 4,700 and intangibles of $ 2,300 , taking into consideration projected revenue from the acquired list of Subsidiary’s customers over a period of five years. Acquisition of Devcool, Inc. On December 10, 2021, Healthcare Triangle, Inc. (the “Company”) entered into a Share Purchase Agreement (the "Share Purchase Agreement") with Devcool, Inc., a California corporation ("Devcool"), Go To Assistance Inc., a California corporation ("Seller"), and Mr. Sandeep Deokule, current Chief Executive Officer of Devcool (“SD”). Pursuant to the Share Purchase Agreement, the Company will acquire 5,000,000 shares of Devcool’s Class B Common Stock, par value $0.0001, which represents all of the issued and outstanding capital stock of Devcool (the “Acquisition”). The closing of the Acquisition occurred on December 10, 2021 (the “Closing Date”). The Company exercised control by virtue of taking over the operation from November 01, 2021 (effective date) and the financials have been consolidated from this date. The aggregate purchase price for the acquisition of Devcool Inc was $ 777,293 consisting of; 1. $ 4,500 payable to the Seller in cash on the Closing Date; 2. $ 700 worth of equity of the Company’s common stock (the “Common Stock”) whereby the number of shares of common stock issuable to Mr. Deokule will be calculated by dividing $ 700 by the volume weighted average price of the Company’s common stock as reported by Bloomberg Financial Markets or if Bloomberg Financial Markets is not then reporting such prices, by a comparable reporting service of national reputation (“VWAP”) for the 20 trading days immediately prior to the closing date of the Transaction. Such shares of common stock were issued as follows: a) 209,295 shares of unvested Common Stock were issued to the Seller, which shall vest upon Devcool meeting one of two gross revenue targets set forth in the Share Purchase Agreement; and b) 83,718 shares of unvested Common Stock were issued as retention bonus to certain key personnel of Devcool to be retained by Devcool post-Closing (the “Retention Personnel”), subject to the Retention Personnel continuing to perform services to Devcool (or its affiliates) up to and through the second anniversary of the closing date, which shares shall vest equally monthly on the corresponding day of the closing date over a period of 24 successive months; and 3. A sum of up to $ 2,500 as post-closing earnout payment (the “Earnout”), subject to Devcool’s achievement of the applicable yearly earnout targets set forth in the Share Purchase Agreement, which Earnout shall be payable as follows: a) up to $ 250 worth of Common Stock (calculated based on the average of the VWAPs for the 20 trading days immediately prior to December 31, 2022) issuable to SD or the Seller as SD’s nominee for achievement of the Year 1 Equity Earnout (as defined in Annexure B to the Share Purchase Agreement); b) up to $ 1,000 payable to the Seller or its nominees in cash upon achieving the Year 1 Cash Earnout; and c) up to $ 250 worth of Common Stock (calculated based on the average of the VWAPs for the 20 trading days immediately prior to December 31, 2023) issuable to SD or the Seller as SD’s nominee for achievement of the Year 2 Equity Earnout (as defined in Annexure B to the Share Purchase Agreement). d) up to $ 1,000 payable to the Seller or its nominees in cash upon achieving the Year 2 Cash Earnout; and 4. The Company also issued the Seller a secured non-interest-bearing promissory note in the principal amount of $ 2,209 that matures on April 30, 2022 (the “Note”) that reflects an amount owed to the Seller by the Company equal to the difference between the amount of accrued and outstanding accounts receivable on the Closing Date less the amount of accrued and outstanding accounts payable on the Closing Date. Based on the preliminary purchase price allocation, we recorded $ 1,289 of goodwill which is not tax deductible. Presented below is the summary of the foregoing acquisitions Allocation of purchase price Schedule of allocation of purchase price Asset Component March 31, 2023 Intangible Assets $ 6,018 Goodwill 1,289 Working Capital — Current Assets Cash 970 Accounts Receivables 3,142 Other Current Assets Other Current Assets 11,419 Current Liabilities Accounts Payable 758 Short term borrowing 2,209 Other Current liabilities 679 Current liabilities 3,646 Net Working Capital Acquired 7,773 Total Purchase price $ 7,773 |
Debt Securities
Debt Securities | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Securities | 8) Debt Securities A. Common Stock Warrants In connection with the issuance of Convertible Notes, the Company also issued Warrants to each holder of Convertible Notes which entitles the holder thereof to purchase a number of shares of our common stock equal to 50% of the number of shares that Convertible Note issued with such Warrant is convertible into at a price equal to $ 2.88 per share. The warrants are subject to certain customary adjustments in the event of stock dividends and splits, issuance of options, subsequent rights offerings, and pro rata distributions. Warrant holders have “piggyback” registration rights as set forth therein and a breach of such rights with respect to any Warrant would result in an increase by 25% of the shares of our common stock underlying such Warrant. As of March 31, 2023, none of the warrants have been exercised by the note holders and hence no proceeds have been received towards any of the warrants. The Warrants have been valued using the Black-Scholes-Merton Option (“BSM”) pricing model that is based on the individual characteristics of the warrants on the valuation date, which include the Company’s stock fair value and assumptions for expected volatility, expected life and risk-free interest rate, as well as the present value of the minimum cash payment component of the instrument for the warrants, when applicable. Changes in the assumptions used could have a material impact on the resulting fair value of each warrant. The primary inputs affecting the value of the warrant liability are the Company’s stock price and volatility in the Company’s stock price, as well as assumptions about the probability and timing of certain events, such as a change in control or future equity offerings. Increases in the fair value of the underlying stock or increases in the volatility of the stock price generally result in a corresponding increase in the fair value of the warrant liability; conversely, decreases in the fair value of the underlying stock or decreases in the volatility of the stock price generally result in a corresponding decrease in the fair value of the warrant liability. Schedule of common stock warrants Warrants Number of Warrants Weighted Average Exercise price Weighted Average Remaining Contractual Term Aggregate Intrinsic value Outstanding on January 1, 2023 909,225 $ 2.88 — — Granted — — — — Excised — — — — Forfeited or expired — — — — Outstanding on March 31, 2023 909,225 $ 2.88 — — Exercisable on March 31, 2023 909,225 $ 2.88 — — The following table summarizes the activities for our unvested warrants for the quarter ended March 31, 2023 Schedule of unvested warrants Number of Warrants Weighted average Grant Date Fair Value Per warrant Unvested on December 31, 2022 — Granted — $ Vested — $ Forfeited — $ Unvested on March 31, 2023 — The Company has recognized cost of nil for the quarter ended March 31, 2023, and nil for the quarter ended March 31, 2022. B. Warrant Liability The Company has allocated the proceeds from convertible note between promissory notes and warrants; as of March 31, 2023, the Company has reported a Warrant liability of $ 55 at fair value, with subsequent changes in their respective fair values recognized in the consolidated statement of operations at each reporting date. The fair value of the warrant liabilities was measured using a binomial lattice model. Significant inputs into the model at the inception and reporting period measurement dates are as follows: Schedule of fair value of warrant liabilities Fair value assumptions March 31, 2023 Estimated fair value of common stock warrant $ 0.40 Exercise price $ 2.88 Expected volatility 45 %- 52 % Expected terms (in years) 2 Risk-free interest rate 1.48 %- 2.18 % Dividend Yield 0 % C. Short Term borrowing The Company has obtained a credit facility from Seacoast business funding (SBF) a division of Seacoast National Bank . The funding is against the accounts receivables of the company and its subsidiary. The SBF facility charges an interest of prime rate plus 1 % on a floating basis. The balance as of March 31, 2023, is $ 2,945 and $ 2,412 for the period ended December 31, 2022. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | 9) Provision for Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes The Company recognizes the tax benefit from uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters as other expense in the statement of income. Based on management’s evaluations, there are no uncertain tax positions requiring recognition as of the date of these financial statements. The components of the Company’s net deferred tax assets as of March 31, 2023 and December 31, 2022, were as follows (in thousands): Schedule of deferred tax assets March 31, 2023 December 31, 2022 Deferred tax assets: Net Operating loss carry forward $ 880 $ 2,578 Stock-based compensation (38 ) (27 ) Other income (PPP loan forgiveness) 292 Total Deferred tax asset 842 2,843 Less: Valuation allowance $ (842 ) $ (2,843 ) Deferred tax asset. net of valuation allowance — — Deferred tax liabilities — — Net Deferred tax asset — — Income tax expense (benefit) was computed as follows: Schedule of income tax expense benefit March 31, 2023 March 31, 2022 Federal income tax $ — $ — State income tax 19 21 Total Income taxes , Current provision 19 21 Deferred Income taxes (benefit) — — Total Income expenses (benefit) $ 19 $ 21 The Company’s effective tax rate is 0 % for the quarter ended March 31, 2023 and 0 % and for the quarter ended March 31, 2022 The future effective income tax rate depends on various factors, such as the Company’s income (loss) before taxes, tax legislation and the geographic composition of pre-tax income. The Company files a consolidated federal tax return with its parent and records its share of the consolidated federal tax expense on a separate return basis. The Company’s current tax expense is nil. There is no liability in 2022 on account of losses. The Company’s federal and state income tax returns are generally subject to possible examination by the taxing authorities until the expiration of the related statute of limitations on those tax returns which is generally three years from the original filing deadline.The Company regularly reviews its deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2023 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | 10) New Accounting Pronouncements i) ASU 2021-08 —Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. (ii) ASU 2021-10 —Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | 11) Legal Matters The Company is not involved in any action, arbitration and/or other legal proceedings that it expects to have a material adverse effect on the business, financial condition, results of operations or liquidity of the Company. All legal cost is expensed as incurred. |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Compensation Related Costs [Abstract] | |
Share Based Compensation | 12) Share Based Compensation We estimate the fair value of our stock options using the Black-Scholes option pricing model. This requires the input of subjective assumptions, including the fair value of our underlying common stock, the expected term of stock options, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock, the most critical of which, prior to our IPO, was the estimated fair value of common stock. The assumptions used in our option pricing model represent our best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. The resulting fair value, net of actual forfeitures, is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award These assumptions used in the Black-Scholes option pricing model, other than the fair value of our common stock, are estimated as follows: • Expected volatility. Since a public market for our common stock did not exist prior to our IPO in October 2021 and, therefore, we do not have an extensive trading history of our common stock, we estimated the expected volatility based on the volatility of similar publicly-held entities (guideline companies) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available. • Expected term. We estimate the expected term using the simplified method, as we do not have sufficient historical exercise activity to develop reasonable expectations about future exercise patterns and post-vesting employment termination behaviour. The simplified method calculates the average period the stock options are expected to remain outstanding as the midpoint between the vesting date and the contractual expiration date of the award. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for maturities corresponding with the expected term of the option• • Expected dividend yield. We have never declared or paid any dividends and do not presently plan to pay dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero. We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations Historically for all periods prior to our IPO, given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including: • contemporaneous valuations performed at periodic intervals by unrelated third-party specialists • our actual operating and financial performance. • relevant precedent transactions involving our capital stock; • likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given prevailing market conditions and the nature and history of our business; • market multiples of comparable companies in our industry; • stage of development. • industry information such as market size and growth; • illiquidity of stock-based awards involving securities in a private company; and In valuing our common stock prior to our IPO, our board of directors determined the enterprise value of our company using both the income approach and market approach valuation methods. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate based on the cost of capital at a company’s stage of development. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company’s financial results to estimate the enterprise value of the subject company. A summary of option activity under the employee share option plan as of December 31, 2022, and changes during the year then ended is presented below. Schedule of stock option activity Options Shares of Stock No. of Options Weighted Average Price No. of Shares Weighted Average Price Total Balance outstanding as at December 31, 2022 2,085,136 — — — 2,085,136 Additions to the plan 2,000,000 Incentive Stock Options (ISO) — — — 2,000,000 Non-Qualified Stock Options (NSO) 880,757 0.36 — — 880,757 Cancelled/expired/exercised 123,864 0.40 — — 123,864 Balance available under the plan as of March 31, 2023 3,328,243 — — — 3,328,243 The following table summarizes the activities for our unvested options for the quarter ended March 31, 2023 Schedule of unvested options Number of options Weighted average Grant Date Fair Value Per Option Unvested on December 31, 2022 696,000 0.53 Granted 880,757 0.36 Vested (546,625 ) 0.51 Forfeited — — Unvested on March 31, 2023 1,030,132 0.40 The weighted-average grant date fair value of options granted during the quarter ended March 31, 2023 was $ 0.36 . The fair value as of the respective vesting dates of options that vested during the quarter ended March 31, 2023,was $ 277 . As of March 31, 2023, there was $ 377 of unrecognized share-based compensation expense related to unvested options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately two years based on vesting under the award service conditions. The company issued and valued options using the Black-Scholes model for all 2023 and 2022 issuances with the following significant assumptions Schedule of assumptions Fair value assumptions 2023 2022 Expected volatility 45 %- 52 % 45 %- 52 % Expected terms (in years) 2 3 Risk-free interest rate 2.18 %- 3.57 % 1.48 %- 2.18 % Dividend Yield 0 % 0 % The Company issued and valued options using the Black-Scholes model for all 2022 issuances with the following significant assumptions |
Net Income per share
Net Income per share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income per share | 13) Net Income per share The Company presents basic and diluted earnings per share ("EPS") data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements. The Company's unvested restricted stock awards are considered participating securities under FASB Codification topic, Earnings Per Share The company has 909,255 warranties that are excisable at weighted average price of $ 2.80 on March 31, 2023, and 909,255 warrant that are excisable at weighted average price of $ 2.80 at December 31,2022. The company has 1,195,500 options that are vested and excisable on March 31,2023. Schedule of earning per shares Three Months Ended March 31, 2023 2022 Net income attributable to common stockholders $ (3,278 ) $ (2,011 ) Weighted average shares outstanding used in basic per common share computations 41,859,531 35,507,184 Basic /Diluted EPS $ (0.078 ) $ (0.057 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14) Subsequent Events For the quarter ended March 31, 2023, the Company has evaluated subsequent events through May 04, 2023 the date, which the financial statements were available to be issued. No reportable subsequent events have occurred through May 04, 2023, which would have a significant effect on the financial statements as of March 31, 2023. The company has made a private placement of 769,231 shares of its common stock, pursuant to the terms and conditions of the Securities Purchase Agreement, dated as of April 03, 2023. The Purchaser paid $ 0.65 for each Share. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements is in conformity with GAAP which requires us to make estimates, judgments and assumptions that affect the financial statements and the notes thereto. These estimates are based on information available as of the date of the financial statements. On a regular basis, management evaluates these estimates and assumptions. Items subject to such estimates and assumptions include, but are not limited to: • the standalone selling price for each distinct performance obligation • the determination of the period of benefit for amortization of deferred costs. • the fair value of assets acquired, and liabilities assumed for business combinations. • Share based compensation including warrants |
Emerging Growth Company Status | Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (i) December 21, 2026 (the last day of the fiscal year following the fifth anniversary of our IPO), (ii) the last day of the first fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the first fiscal year in which we are deemed to be a “large accelerated filer”, as defined in the rules under the Exchange Act, and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We refer to the Jumpstart Our Business Startups Act of 2012 herein as the “JOBS Act,” and any reference herein to “emerging growth company” has the meaning ascribed to it in the JOBS Act. We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report on Form 10-K and may elect to take advantage of other reduced reporting requirements in our future filings with the SEC. As a result, the information that we provide to our stockholders may be different from the information you might receive from other public reporting companies in which you hold equity interests. In particular, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act) for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, so long as we remain an emerging growth company, we will not be subject to the same implementation timing of new or revised accounting standards as other public companies that are not emerging growth companies until these standards apply to private companies unless we elect to early adopt as permitted by the relevant guidance for private companies. |
Segment Information | Segment Information The management has chosen to organize the Company around differences in products and services and segregated the reporting segments as Software Services, Managed Services and Support, and Platform Services. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company defines the term ‘chief operating decision maker’ to be the Chief Executive Officer. The Chief Executive Officer along with the management team reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, the Company has determined that it operates in three distinct reportable operating segments, and all required financial segments information can be found in the consolidated financial statements. Expenses included in segment operating profit consist principally of direct selling, delivery costs and research and development expenses. Certain Sales and Marketing expenses, General and Administrative expenses, depreciation, and amortization are not allocated to individual segments in internal management reports used by the chief operating decision maker. Accordingly, such expenses are excluded from segment operating profit and are included below as “unallocated costs” and adjusted against our total income from operations. Additionally, management has determined that it is not practical to allocate identifiable assets by segment, since such assets are used interchangeably among the segments. Schedule of operating segment Three months Ended Changes (In thousands) 2023 2022 Amount % Software Services $ 6,459 $ 5,456 $ 1,003 18 % Managed Services and Support 3,041 4,269 (1,228 ) (29 )% Platform Services 338 1,331 (993 ) (75 )% Revenue $ 9,838 $ 11,056 $ (1,218 ) (11 )% Operating profit by Operating Segment Three months Ended March 31, Changes (In thousands) 2023 2022 Amount % Software Services $ (1,135 ) $ (199 ) $ (936 ) (470 %) Managed Services and Support 552 1,254 (702 ) (56 %) Platform Services (463 ) (572 ) 109 19 % Total segment operating (loss) profit (1,046 ) 483 (1,529 ) (317 %) Less: unallocated costs 2,163 2,457 (294 ) (12 %) Income (loss) from operations (3,209 ) (1,974 ) (1,235 ) (63 %) Other Income 12 — 12 (100 %) Interest expense (62 ) (16 ) (46 ) (288 %) Net income (loss) before income tax expenses $ (3,259 ) $ (1,990 ) $ (1,269 ) (64 %) Revenue from top 5 customers Three Months Ended March 31, 2023 Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 4,930 50 % Customer 2 920 9 % Customer 3 859 9 % Customer 4 792 8 % Customer 5 $ 388 4 % Three Months Ended March 31, 2022 Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 3,833 35 % Customer 2 1,965 18 % Customer 3 966 9 % Customer 4 899 8 % Customer 5 $ 623 6 % |
Revenue Recognition | Revenue Recognition We recognize revenues as we transfer control of deliverables (services, solutions, and platform) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience. For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. |
Software Services | Software Services The Company enters into contractual obligations with the customers to perform (i) Strategic advisory services which include assessment of the enterprise network, applications environment and advise on the design and tools; (ii) Implementation services which include deployment, upgrades, enhancements, migration, training, documentation and maintenance of various electronic health record systems and (iii) Development services which include customization of network and applications in the public cloud environment. Revenue from Strategic advisory, Implementation and Development services are distinct performance obligation and is recognized on time-and-material or fixed-price project basis. Revenues related to time-and-material are recognized over the period the services are provided using labor hours. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate. We may enter into contracts that consist of multiple performance obligations. Such contracts may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For contracts with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we estimate standalone selling price by using the expected cost plus a margin approach. We establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. |
Managed Services and Support | Managed Services and Support The Company has standard contracts for its Managed Services and Support, however the statement of work contained in such contracts is unique for each customer. A typical Managed Services and Support contract would provide for some or all of the following types of services being provided to the customer: Cloud hosting, Continuous monitoring of applications, security and compliance and support. Revenue from Managed services and support is a distinct performance obligation and recognized based on SSP (standalone selling price), rateably on a straight-line basis over the period in which the services are rendered. Contract with customers includes subcontractor services or third-party cloud infrastructure services in certain integrated services arrangements. In these types of arrangements, revenue is recognized net of costs when the Company is acting as an agent between the customer and the vendor, and gross when the Company is the principal for the transaction. In doing so, the Company first evaluates whether it controls the platform or service before it is transferred to the customer. The Company considers whether it has the primary obligation to fulfil the contract, pricing discretion and other factors to determine whether it controls the platform or service and therefore is acting as a principal or an agent. Payment for managed services and support is due monthly. |
Platform Services | Platform Services The Company has standard contracts for its Platform Services, however the statement of work contained in such contracts is unique for each customer. A typical Platform Services contract would provide for some or all of the following types of services being provided to the customer: Data Analytics, Backup and Recovery, through our Platform. The revenue from Platform services is a distinct performance obligation and recognized based on SSP. During the periods presented the Company generated revenue from Platform services on a fixed-price solutions delivery model. Revenues related to fixed-price contracts are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized based on the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate. Our contractual terms and conditions for Software services, Managed Services and Support and Platform services mandate that our services are documented and subject to inspection, testing at the time of delivery to customer. In addition, the Company needs to integrate seamlessly into the customers’ systems. Also, the customer has a right to cancel all, or part of the services rendered if it is not in accordance with statement of work and within the stipulated time. |
Contract Balances | Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, generally monthly upon achievement of contractual milestones. Generally, billing occurs after revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These deposits are liquidated when revenue is recognized The beginning and ending contract balances were as follows: Schedule of receivables and contract liabilities March 31, 2023 December 31, 2022 (In thousands) Accounts Receivable 5,512 5,592 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments (including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk. |
Accounts Receivable | Accounts Receivable The Company extends credit to clients based upon management’s assessment of their creditworthiness on an unsecured basis. The Company provides an allowance for uncollectible accounts based on historical experience and management evaluation of trend analysis. The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts. For the quarter ended March 31, 2023 the Company did not provided an allowance for uncollectible accounts and year ended December 31, 2022 the Company provided $222 as allowances for uncollectible accounts. Based on the information available, management believes the Company’s accounts receivable are collectible. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease terms or the useful lives of the improvements. The Company charges repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred. |
Intangible Assets | Intangible Assets We capitalize certain costs incurred for the platform development when it is determined that it is probable that the platform will be completed and will be used as intended. Costs related to preliminary project activities, post-implementation activities, training, and maintenance are expensed as incurred. Customer relationship and platform development are amortized based on finite lives using either the straight-line method or based on estimated future cash flows to approximate the pattern in which the economic benefit of the asset will be utilized. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Goodwill | Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized but is subject to an annual impairment test. The Company performs its annual goodwill impairment test on an annual basis in the fourth quarter of each fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill. The Company’s quarterly goodwill impairment test resulted in no impairment charges in the quarter ended March 31, 2023 and 2022. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Trade accounts receivable are stated at the amount the Company expects to collect and do not bear interest. The collectability of trade receivable balances is regularly evaluated based on a combination of factors such as customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer payment pattern. Additionally, if it is determined that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material event impacting its business, a specific allowance for doubtful accounts may be recorded to reduce the related receivable to the amount expected to be recovered. Although we believe that our approach to estimates and judgments regarding our allowance for doubtful accounts is reasonable, actual results could differ and we may be exposed to increases or decreases in required allowances that could be material. |
Business Combinations | Business Combinations As per ASC 805-50 a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions are addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented. We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any non-controlling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the date of effective control. |
Valuation of Contingent Earn-out Consideration. | Valuation of Contingent Earn-out Consideration. Acquisitions may include contingent consideration payments based on the achievement of certain future financial performance measures of the acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. We evaluate, on a routine, periodic basis, the estimated fair value of the contingent consideration and changes in estimated fair value, subsequent to the initial fair value estimate at the time of the acquisition, will be reflected in income or expense in the consolidated statements of operations. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results. |
Earnings (Loss) Per Share. | Earnings (Loss) Per Share. Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. |
Fair Value Measurements | Fair Value Measurements The Company measures its financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1—Inputs are observable and reflect quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3—Inputs that are unobservable Money market funds and U.S. treasury securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Other debt securities and investments are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Available-for-sale debt securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. In connection with the acquisition of Devcool, Inc., the Company recognized a liability on the acquisition date for the estimated fair value of the contingent consideration based on the probability of achieving certain milestones pursuant to the acquisition agreement. The fair value measurement of the contingent consideration is based on significant unobservable inputs and management judgment; therefore, it is categorized under Level 3 at the balance sheet date in the table below. Schedule of balance sheet March 31, 2023 Fair Value Measured Using (In thousands) Level 1 Level 2 Level 3 Total Financial liabilities: Warrant Liabilities $ 55 $ 55 Acquisition-related contingent consideration — — $ 2,227 $ 2,227 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options over the instruments vesting period. Options awarded to purchase shares of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles. The Company adopted the “2020 Stock Incentive Plan” (Plan). The Company has reserved 6,000,000 shares of the Company’s Common stock. |
Income taxes | Income taxes The provision for income taxes was determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the period. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates applicable in the years in which they are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income in the period that includes the enactment date. |
Advertising Costs | Advertising Costs The Company expenses advertising cost as incurred. Advertising expense for the quarters ended March 31, 2023 and 2022 were Nil 0 . |
Concentrations | Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade receivables. Credit risks associated with trade receivables is minimal due to the Company’s customer base which consist of large customer base and ongoing procedures, which monitor the credit worthiness of its customers. For the quarter ended March 31, 2023 and 2022 revenue from the top five customers accounted for approximately 80 % and 76 % of total revenue respectively. For the quarter ended March 31, 2023 and year ended December 31, 2022 accounts receivable from five major customers accounted for approximately 82 % and 72 % of the total accounts receivables. The Company maintains cash balances in various financial institutions. The balances are generally insured by the Federal Deposit Insurance Corporation up to $ 250,000 (valid through March 31, 2023) per institution. As of March 31, 2023 and December 31, 2022, the Company had Nil 0 and $ 816 respectively, of uninsured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of operating segment | Schedule of operating segment Three months Ended Changes (In thousands) 2023 2022 Amount % Software Services $ 6,459 $ 5,456 $ 1,003 18 % Managed Services and Support 3,041 4,269 (1,228 ) (29 )% Platform Services 338 1,331 (993 ) (75 )% Revenue $ 9,838 $ 11,056 $ (1,218 ) (11 )% |
Operating profit by Operating Segment | Operating profit by Operating Segment Three months Ended March 31, Changes (In thousands) 2023 2022 Amount % Software Services $ (1,135 ) $ (199 ) $ (936 ) (470 %) Managed Services and Support 552 1,254 (702 ) (56 %) Platform Services (463 ) (572 ) 109 19 % Total segment operating (loss) profit (1,046 ) 483 (1,529 ) (317 %) Less: unallocated costs 2,163 2,457 (294 ) (12 %) Income (loss) from operations (3,209 ) (1,974 ) (1,235 ) (63 %) Other Income 12 — 12 (100 %) Interest expense (62 ) (16 ) (46 ) (288 %) Net income (loss) before income tax expenses $ (3,259 ) $ (1,990 ) $ (1,269 ) (64 %) |
Schedule of concentration | Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 4,930 50 % Customer 2 920 9 % Customer 3 859 9 % Customer 4 792 8 % Customer 5 $ 388 4 % Three Months Ended March 31, 2022 Schedule of concentration Customer Amount (In thousands) % of Revenue Customer 1 $ 3,833 35 % Customer 2 1,965 18 % Customer 3 966 9 % Customer 4 899 8 % Customer 5 $ 623 6 % |
Schedule of receivables and contract liabilities | Schedule of receivables and contract liabilities March 31, 2023 December 31, 2022 (In thousands) Accounts Receivable 5,512 5,592 |
Schedule of balance sheet | Schedule of balance sheet March 31, 2023 Fair Value Measured Using (In thousands) Level 1 Level 2 Level 3 Total Financial liabilities: Warrant Liabilities $ 55 $ 55 Acquisition-related contingent consideration — — $ 2,227 $ 2,227 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment March 31, 2023 December 31, 2022 (In thousands) Furniture and Equipment $ 123 $ 119 Less: Accumulated depreciation (56 ) (39 ) Net Fixed Assets $ 67 $ 80 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets March 31, 2023 December 31, 2022 Weighted average Remaining Useful life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) (In thousands) Customer relationships 2.97 $ 8,667 $ 3,957 $ 4,710 $ 8,667 $ 3,523 $ 5,144 Intellectual property 4.39 7,329 2,349 4,980 7,329 2,013 5,316 Product development 0.5 477 454 23 477 367 110 Total Intangible Assets $ 16,473 $ 6,760 $ 9,713 $ 16,473 $ 5,903 $ 10,570 |
Schedule of intangibles asset useful life | Schedule of intangibles asset useful life Nature of Intangibles Useful Life Customer relationships 5 years Intellectual property 5 years Product development 5 years |
Schedule of amortization expense | Schedule of amortization expense March 31, 2023 $ 1,251 2024 2,114 2026 2,114 2026 2,114 2027 2,114 2028 6 Total $ 9,713 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of allocation of purchase price | Schedule of allocation of purchase price Asset Component March 31, 2023 Intangible Assets $ 6,018 Goodwill 1,289 Working Capital — Current Assets Cash 970 Accounts Receivables 3,142 Other Current Assets Other Current Assets 11,419 Current Liabilities Accounts Payable 758 Short term borrowing 2,209 Other Current liabilities 679 Current liabilities 3,646 Net Working Capital Acquired 7,773 Total Purchase price $ 7,773 |
Debt Securities (Tables)
Debt Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of common stock warrants | Schedule of common stock warrants Warrants Number of Warrants Weighted Average Exercise price Weighted Average Remaining Contractual Term Aggregate Intrinsic value Outstanding on January 1, 2023 909,225 $ 2.88 — — Granted — — — — Excised — — — — Forfeited or expired — — — — Outstanding on March 31, 2023 909,225 $ 2.88 — — Exercisable on March 31, 2023 909,225 $ 2.88 — — |
Schedule of unvested warrants | Schedule of unvested warrants Number of Warrants Weighted average Grant Date Fair Value Per warrant Unvested on December 31, 2022 — Granted — $ Vested — $ Forfeited — $ Unvested on March 31, 2023 — |
Schedule of fair value of warrant liabilities | Schedule of fair value of warrant liabilities Fair value assumptions March 31, 2023 Estimated fair value of common stock warrant $ 0.40 Exercise price $ 2.88 Expected volatility 45 %- 52 % Expected terms (in years) 2 Risk-free interest rate 1.48 %- 2.18 % Dividend Yield 0 % |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | Schedule of deferred tax assets March 31, 2023 December 31, 2022 Deferred tax assets: Net Operating loss carry forward $ 880 $ 2,578 Stock-based compensation (38 ) (27 ) Other income (PPP loan forgiveness) 292 Total Deferred tax asset 842 2,843 Less: Valuation allowance $ (842 ) $ (2,843 ) Deferred tax asset. net of valuation allowance — — Deferred tax liabilities — — Net Deferred tax asset — — |
Schedule of income tax expense benefit | Schedule of income tax expense benefit March 31, 2023 March 31, 2022 Federal income tax $ — $ — State income tax 19 21 Total Income taxes , Current provision 19 21 Deferred Income taxes (benefit) — — Total Income expenses (benefit) $ 19 $ 21 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Compensation Related Costs [Abstract] | |
Schedule of stock option activity | Schedule of stock option activity Options Shares of Stock No. of Options Weighted Average Price No. of Shares Weighted Average Price Total Balance outstanding as at December 31, 2022 2,085,136 — — — 2,085,136 Additions to the plan 2,000,000 Incentive Stock Options (ISO) — — — 2,000,000 Non-Qualified Stock Options (NSO) 880,757 0.36 — — 880,757 Cancelled/expired/exercised 123,864 0.40 — — 123,864 Balance available under the plan as of March 31, 2023 3,328,243 — — — 3,328,243 |
Schedule of unvested options | Schedule of unvested options Number of options Weighted average Grant Date Fair Value Per Option Unvested on December 31, 2022 696,000 0.53 Granted 880,757 0.36 Vested (546,625 ) 0.51 Forfeited — — Unvested on March 31, 2023 1,030,132 0.40 |
Schedule of assumptions | Schedule of assumptions Fair value assumptions 2023 2022 Expected volatility 45 %- 52 % 45 %- 52 % Expected terms (in years) 2 3 Risk-free interest rate 2.18 %- 3.57 % 1.48 %- 2.18 % Dividend Yield 0 % 0 % |
Net Income per share (Tables)
Net Income per share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earning per shares | Schedule of earning per shares Three Months Ended March 31, 2023 2022 Net income attributable to common stockholders $ (3,278 ) $ (2,011 ) Weighted average shares outstanding used in basic per common share computations 41,859,531 35,507,184 Basic /Diluted EPS $ (0.078 ) $ (0.057 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Product Information [Line Items] | ||
Revenue | $ 9,838 | $ 11,056 |
Changes amount | $ (1,218) | |
Changes percentage | (11.00%) | |
Software Services [Member] | ||
Product Information [Line Items] | ||
Revenue | $ 6,459 | 5,456 |
Changes amount | $ 1,003 | |
Changes percentage | 18% | |
Managed Services And Support [Member] | ||
Product Information [Line Items] | ||
Revenue | $ 3,041 | 4,269 |
Changes amount | $ (1,228) | |
Changes percentage | (29.00%) | |
Platform Services [Member] | ||
Product Information [Line Items] | ||
Revenue | $ 338 | $ 1,331 |
Changes amount | $ (993) | |
Changes percentage | (75.00%) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Product Information [Line Items] | ||
Total segment operating profit | $ (1,046) | $ 483 |
Total segment operating profit amount changes | $ (1,529) | |
Total Segment Operating Profit Percentage Changes | (317.00%) | |
Less: unallocated costs | $ 2,163 | 2,457 |
Less: unallocated costs amount changes | $ (294) | |
Less Unallocated Costs Percentage Changes | (12.00%) | |
Income from operations | $ (3,209) | (1,974) |
Income from operations amount changes | $ (1,235) | |
Income From Operations Percentage Changes | (63.00%) | |
Other income | $ 12 | |
Other income amount changes | $ 12 | |
Other Income | (100.00%) | |
Interest expense | $ (62) | (16) |
Interest expense amount changes | $ (46) | |
Interest Expense Percentage Changes | (288.00%) | |
Net income (loss) before income tax expenses | $ (3,259) | (1,990) |
Net income (loss) before income tax expenses amount changes | $ (1,269) | |
Net Income Loss Before Income Tax Expenses Percentage Changes | (64.00%) | |
Software Services [Member] | ||
Product Information [Line Items] | ||
Total segment operating profit | $ (1,135) | (199) |
Total segment operating profit amount changes | $ (936) | |
Total Segment Operating Profit Percentage Changes | (470.00%) | |
Managed Services And Support [Member] | ||
Product Information [Line Items] | ||
Total segment operating profit | $ 552 | 1,254 |
Total segment operating profit amount changes | $ (702) | |
Total Segment Operating Profit Percentage Changes | (56.00%) | |
Platform Services [Member] | ||
Product Information [Line Items] | ||
Total segment operating profit | $ (463) | $ (572) |
Total segment operating profit amount changes | $ 109 | |
Total Segment Operating Profit Percentage Changes | 19% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | $ 9,838 | $ 11,056 |
Customer 1 [Member] | ||
Revenue | $ 4,930 | $ 3,833 |
Concentration Risk, Percentage | 50% | 35% |
Customer 2 [Member] | ||
Revenue | $ 920 | $ 1,965 |
Concentration Risk, Percentage | 9% | 18% |
Customer 3 [Member] | ||
Revenue | $ 859 | $ 966 |
Concentration Risk, Percentage | 9% | 9% |
Customer 4 [Member] | ||
Revenue | $ 792 | $ 899 |
Concentration Risk, Percentage | 8% | 8% |
Customer 5 [Member] | ||
Revenue | $ 388 | $ 623 |
Concentration Risk, Percentage | 4% | 6% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Accounts Receivable | $ 5,512 | $ 5,592 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) $ in Thousands | Mar. 31, 2023 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Warrant liabilities | $ 55 |
Contingent consideration | 2,227 |
Fair Value, Inputs, Level 3 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Warrant liabilities | 55 |
Contingent consideration | 2,227 |
Fair Value, Inputs, Level 1 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent consideration | |
Fair Value, Inputs, Level 2 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contingent consideration |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||
Advertising Expense | $ 0 | ||
Cash, FDIC Insured Amount | $ 250,000 | ||
Cash Equivalents, at Carrying Value | $ 0 | $ 816,000 | |
Five Major Customers [Member] | Revenue Benchmark [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 80% | 76% | |
Five Major Customers [Member] | Accounts Receivable [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 82% | 72% | |
Stock Incentive Plan 2020 [Member] | |||
Product Information [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 6,000,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Furniture and Equipment | $ 123 | $ 119 |
Less: Accumulated depreciation | (56) | (39) |
Net Fixed Assets | $ 67 | $ 80 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 17 | $ 8 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross | $ 16,473 | $ 16,473 |
Accumulated amortization | 6,760 | 5,903 |
Net Intangible Assets | $ 9,713 | 10,570 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 2 years 11 months 19 days | |
Intangible assets gross | $ 8,667 | 8,667 |
Accumulated amortization | 3,957 | 3,523 |
Net Intangible Assets | $ 4,710 | 5,144 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 4 years 4 months 20 days | |
Intangible assets gross | $ 7,329 | 7,329 |
Accumulated amortization | 2,349 | 2,013 |
Net Intangible Assets | $ 4,980 | 5,316 |
Product Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 6 months | |
Intangible assets gross | $ 477 | 477 |
Accumulated amortization | 454 | 367 |
Net Intangible Assets | $ 23 | $ 110 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | 3 Months Ended |
Mar. 31, 2023 | |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Product Development [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,251 | |
2024 | 2,114 | |
2026 | 2,114 | |
2026 | 2,114 | |
2027 | 2,114 | |
2028 | 6 | |
Total | $ 9,713 | $ 10,570 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 857 | $ 660 |
Due from Related Party (Details
Due from Related Party (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Related Party Transaction [Line Items] | ||
[custom:DueFromOtherRelatedPartyNoncurrent-0] | $ 3,190 | $ 2,091 |
Operating Leases, Rent Expense, Net | 67 | 49 |
Due from Related Parties | 12 | 131 |
Advisory Services [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Other Related Parties, Noncurrent | $ 146 | $ 49 |
Securekloud Technologies Inc [Member] | ||
Related Party Transaction [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 60.92% |
Business Combination (Details)
Business Combination (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Intangible Assets | $ 6,018 |
Goodwill | 1,289 |
Working Capital | |
Current Assets | |
Cash | 970 |
Accounts Receivables | 3,142 |
Other Current Assets | 11,419 |
Current Liabilities | |
Accounts Payable | 758 |
Short term borrowing | 2,209 |
Other Current liabilities | 679 |
Current liabilities | 3,646 |
Net Working Capital Acquired | 7,773 |
Total Purchase price | $ 7,773 |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
May 08, 2020 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | ||
Proceeds from Sale of Other Assets | $ 4,500 | |
Weighted average price of stock amount | $ 700 | |
Unvested common stock | 83,718 | |
Earnout payment | $ 2,500 | |
Debt Instrument, Face Amount | $ 2,209 | |
Debt Instrument, Maturity Date | Apr. 30, 2022 | |
Goodwill, Gross | $ 1,289 | |
Year 1 Equity Earnout [Member] | ||
Business Acquisition [Line Items] | ||
Proceeds from Sale of Other Assets | 1,000 | |
Stock Issued During Period, Value, New Issues | 250 | |
Year 2 Equity Earnout [Member] | ||
Business Acquisition [Line Items] | ||
Proceeds from Sale of Other Assets | 1,000 | |
Stock Issued During Period, Value, New Issues | 250 | |
Devcool Inc [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate purchase price | $ 777,293 | |
Share Purchase Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Unvested common stock | 209,295 | |
Cornerstone Advisory Services L L C [Member] | ||
Business Acquisition [Line Items] | ||
Equity Method Investment, Ownership Percentage | 100% | |
Cornerstone Advisory Services L L C [Member] | Equity Purchase Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 7,000 | |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 7,000 | |
Net working capital | 4,700 | |
Intangibles consideration | $ 2,300 | |
Mr. Deokule [Member] | ||
Business Acquisition [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 700 |
Debt Securities (Details)
Debt Securities (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of warrants outstanding, beginning balance | shares | 909,225 |
Weighted average exercise price, beginning balance | $ / shares | $ 2.88 |
Number of warrants, granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Number of warrants, excised | shares | |
Weighted average exercise price, excised | $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period | shares | |
Weighted average exercise price, forfeited or expired | $ / shares | |
Number of warrants outstanding, endingbalance | shares | 909,225 |
Weighted average exercise price, ending balance | $ / shares | $ 2.88 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | shares | 909,225 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 2.88 |
Debt Securities (Details 1)
Debt Securities (Details 1) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of warrants unvested, beginning balance | |
Number of warrants unvested, granted | |
Number of warrants unvested, vested | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period | |
Number of warrants unvested, ending balance |
Debt Securities (Details 2)
Debt Securities (Details 2) | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Debt Instrument [Line Items] | |
Estimated fair value of common stock warrant | $ 0.40 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 2.88 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 2 years |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 45% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.48% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 52% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.18% |
Debt Securities (Details Narrat
Debt Securities (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt Instrument, Convertible, Conversion Price | $ 2.88 | |
Fair Value Adjustment of Warrants | $ 55 | |
Short-Term Debt, Interest Rate Increase | 1% | |
Short-Term Bank Loans and Notes Payable | $ 2,945 | $ 2,412 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net Operating loss carry forward | $ 880 | $ 2,578 |
Stock-based compensation | (38) | (27) |
Other income (PPP loan forgiveness) | 292 | |
Total Deferred tax asset | 842 | 2,843 |
Less: Valuation allowance | (842) | (2,843) |
Deferred tax asset. net of valuation allowance | ||
Deferred tax liabilities | ||
Net Deferred tax asset |
Provision for Income Taxes (D_2
Provision for Income Taxes (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax | ||
State income tax | 19 | 21 |
Total Income taxes , Current provision | 19 | 21 |
Deferred Income taxes (benefit) | ||
Total Income expenses (benefit) | $ 19 | $ 21 |
Provision for Income Taxes (D_3
Provision for Income Taxes (Details Narrative) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 0% | 0% |
Share Based Compensation (Detai
Share Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Outstanding beginning | 2,085,136 |
Incentive Stock Options (ISO) | 2,000,000 |
Non-Qualified Stock Options (NSO) | 880,757 |
Cancelled/expired/exercised | 123,864 |
Number of Shares Outstanding ending | 3,328,243 |
Equity Option [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Outstanding beginning | 2,085,136 |
Weighted average exercise price, beginning balance | $ / shares | |
Additions to the plan | 2,000,000 |
Weighted Average Price, Incentive Stock Options (ISO) | $ / shares | |
Non-Qualified Stock Options (NSO) | 880,757 |
Weighted Average Price, Non-Qualified Stock Options (NSO) | $ / shares | $ 0.36 |
Cancelled/expired/exercised | 123,864 |
Weighted average price cancelled/expired/exercised | $ / shares | $ 0.40 |
Number of Shares Outstanding ending | 3,328,243 |
Weighted average exercise price, ending balance | $ / shares |
Share Based Compensation (Det_2
Share Based Compensation (Details 1) - Equity Option [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares unvested, beginning balance | shares | 696,000 |
Weighted average grant date fair value per share, unvested beginning balance | $ / shares | $ 0.53 |
Number of shares, granted | shares | 880,757 |
Weighted average grant date fair value per share, granted | $ / shares | $ 0.36 |
Number of shares, vested | shares | (546,625) |
Weighted average grant date fair value per share, vested | $ / shares | $ 0.51 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value | $ / shares | |
Number of shares unvested, ending balance | shares | 1,030,132 |
Weighted average grant date fair value per share, unvested ending balance | $ / shares | $ 0.40 |
Share Based Compensation (Det_3
Share Based Compensation (Details 2) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% | |
Options Held [Member] | ||
[custom:SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionExpectedTerm1] | 2 years | 3 years |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% | 0% |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 45% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.48% | |
Minimum [Member] | Options Held [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 45% | 45% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.18% | 1.48% |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 52% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.18% | |
Maximum [Member] | Options Held [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 52% | 52% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.57% | 2.18% |
Share Based Compensation (Det_4
Share Based Compensation (Details Narrative) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 377 |
Venkatachari [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Share-Based Payment Arrangement, Noncash Expense | $ 277 |
Equity Option [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 0.36 |
Net Income per share (Details)
Net Income per share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income attributable to common stockholders | $ (3,278) | $ (2,011) |
Weighted average shares outstanding used in basic per common share computations | 41,859,531 | 35,507,184 |
Basic /Diluted EPS | (0.078) | (0.057) |
Net Income per share (Details N
Net Income per share (Details Narrative) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Warrants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Warrants excisable | 909,255 | 909,255 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 2.80 | $ 2.80 |
Equity Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 1,195,500 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Apr. 03, 2023 $ / shares shares |
Subsequent Event [Line Items] | |
Shares Issued, Price Per Share | $ / shares | $ 0.65 |
Private Placement [Member] | |
Subsequent Event [Line Items] | |
Stock Issued During Period, Shares, New Issues | shares | 769,231 |