| Summary of Significant Accounting Policies | The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. Significant intercompany accounts and transactions are eliminated
in consolidation. Earnings Per Share (EPS) We calculate earnings per share in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 260 –
EPS, which requires that basic net income per common share be computed by dividing net income for the period by the weighted average
number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for
the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Shares
issuable upon the exercise of stock options and restricted stock units totaling 41,000 and 79,334 were excluded in the computation
of diluted earnings per common share during the three and nine-month periods ended September 30, 2018, respectively, because their
impact was anti-dilutive. Shares issuable upon the exercise of stock options and restricted stock units totaling 89,667 were excluded
in the computation of diluted earnings per common share during both the three and nine-month periods ended September 30, 2017,
because their impact was anti-dilutive. Revenue Recognition The Company adopted ASC Topic 606, Revenue from
Contracts with Customers, on January 1, 2018, using the modified retrospective approach. Substantially all of the Company’s revenue
comes from contracts with customers for subscriptions to its cloud-based products or contracts to perform compliance or other services.
Customers consist primarily of corporate issuers and professional firms, such as investor relations and public relations firms.
In the case of our news distribution offering, our customers also include private companies. The Company accounts for a contract
with a customer when there is an enforceable contract between the Company and the customer, the rights of the parties are identified,
the contract has economic substance, and collectability of the contract consideration is probable. The Company's revenues are measured
based on consideration specified in the contract with each customer. The Company's contracts include either a subscription
to our entire platform or certain modules within our platform, or an agreement to perform services or any combination thereof,
and often contain multiple subscriptions and services. For these bundled contracts, the Company accounts for individual subscriptions
and services as separate performance obligations if they are distinct, which is when a product or service is separately identifiable
from other items in the bundled package, and a customer can benefit from it on its own or with other resources that are readily
available to the customer. The Company separates revenue from its contracts into two revenue streams: i) Platform and Technology
and ii) Services. Performance obligations of Platform and Technology contracts include providing subscriptions to certain modules
or the entire Platform id. The Company recognizes revenue for subscriptions
evenly over the contract period, upon distribution for per release contracts and upon event completion for webcasting events. For
service contracts that include stand ready obligations, revenue is recognized evenly over the contract period. For all other services
delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing
revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s
performance in satisfying the obligations. For bundled contracts, revenue is allocated to
each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices
at which the Company separately sells the subscription or services. If a standalone selling price is not directly observable, the
Company uses the residual method to allocate any remaining costs to that subscription or service. The Company regularly reviews
standalone selling prices and updates these estimates if necessary. The Company invoices its customers based on the
billing schedules designated in its contracts, typically upfront on either a monthly, quarterly or annual basis or per transaction
at the completion of the performance obligation. Deferred revenue for the periods presented was primarily related to subscription
and service contracts, which are billed upfront, quarterly or annually, however the revenue has not yet been recognized. The associated
deferred revenue is generally recognized ratably over the billing period. Deferred revenue as of September 30, 2018 and December
31, 2017 was $1,389,000 and $887,000, respectively, and is expected to be recognized within one year. Revenue recognized for the
nine months ended September 30, 2018 and 2017, that was included in the deferred revenue balance at the beginning of each reporting
period, was $826,000 and $807,000, respectively. Accounts receivable related to contracts with customers was $1,643,000 and $1,275,000
as of September 30, 2018 and December 31, 2017, respectively. Since substantially all of the contracts have terms of one year or
less, the Company has elected to use the practical expedient regarding the existence of a significant financing. Costs to obtain contracts with customers consist
primarily of sales commissions. As of September 30, 2018, the Company capitalized $15,000 of costs to obtain contracts that are
expected to be amortized over more than one year. For contract costs expected to be amortized in less than one year, the Company
has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense
when incurred. The Company has considered historical renewal rates, expectations of future renewals and economic factors in making
these determinations. Allowance for Doubtful Accounts We provide an allowance for doubtful accounts,
which is based upon a review of outstanding receivables as well as historical collection information. Credit is granted on an unsecured
basis. In determining the amount of the allowance, management is required to make certain estimates and assumptions. The allowance
is made up of specific reserves, as deemed necessary, on customer account balances, and a reserve based on our historical experience. Use of Estimates The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant estimates include the allowance for doubtful accounts and the valuation of goodwill,
intangible assets, deferred tax assets, and stock-based compensation. Actual results could differ from those estimates. Income Taxes We comply with the FASB ASC No. 740 – Income
Taxes which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax
assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income
tax assets to the amounts expected to be realized. For any uncertain tax positions, we recognize the impact of a tax position,
only if it is more likely than not of being sustained upon examination, based on the technical merits of the position. Our policy
regarding the classification of interest and penalties is to classify them as income tax expense in our financial statements, if
applicable. At the end of each interim period, we estimate the effective tax rate we expect to be applicable for the full year
and this rate is applied to our results for the interim year-to-date period and then adjusted for any discrete period items. Capitalized Software In accordance with FASB ASC No. 350 – Intangibles
– Goodwill and Other, costs incurred to develop our cloud-based platform products are capitalized when the preliminary project
phase is complete, management commits to fund the project and it is probable the project will be completed and used for its intended
purposes. Once the software is substantially complete and ready for its intended use, the software is amortized over its estimated
useful life. Costs related to design or maintenance of the software are expensed as incurred. Capitalized costs and amortization
for the three and nine-month periods ended September 30, 2018 and 2017, are as follows (in thousands):
For the Three Months Ended For the Nine Months Ended
September 30, September 30, September 30, September 30,
2018 2017 2018 2017
Capitalized software development costs $ 21 $ 269 $ 21 $ 948
Capitalized costs related to stock-based compensation — 1 — 57
Amortization included in cost of revenues 198 81 595 222
Amortization included in depreciation and amortization 2 2 7 7 Fair Value Measurements As of September 30, 2018 and December 31, 2017,
we do not have any financial assets or liabilities that are required to be, or that we elected to measure, at fair value. We believe
that the fair value of our financial instruments, which consist of cash and cash equivalents, accounts receivable, accounts payable,
our line of credit and notes payable approximate their carrying amounts. Translation of Foreign Financial Statements The financial statements of the foreign subsidiary
of the Company have been translated into U.S. dollars. All assets and liabilities have been translated at current rates of exchange
in effect at the end of the period. Income and expense items have been translated at the average exchange rates for the year or
the applicable interim period. The gains or losses that result from this process are recorded as a separate component of other
accumulated comprehensive income until the entity is sold or substantially liquidated. Business Combinations, Goodwill and Intangible Assets We account for business combinations under FASB
ASC No. 805 – Business Combinations and the related acquired intangible assets and goodwill under FASB ASC No. 350 –
Intangibles – Goodwill and Other. The authoritative guidance for business combinations specifies the criteria for recognizing
and reporting intangible assets apart from goodwill. We record the assets acquired and liabilities assumed in business combinations
at their respective fair values at the date of acquisition, with any excess purchase price recorded as goodwill. Goodwill is an
asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually
identified and separately recognized. Intangible assets consist of client relationships, customer lists, software, technology and
trademarks that are initially measured at fair value. At the time of the business combination trademarks are considered an indefinite-lived
asset and, as such, are not amortized as there is no foreseeable limit to cash flows generated from them. The goodwill and intangible
assets are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment
will be recognized in the period identified. The client relationships (7-10 years), customer lists (3 years), distribution partner
relationships (10 years) and software and technology (3-5 years) are amortized over their estimated useful lives. In 2015, it was
determined that the trademarks associated with the PIR acquisition were no longer indefinite-lived, and as such began to be amortized
over 3-5 years. Comprehensive Income Comprehensive income consists
of net income and other comprehensive income or loss related to changes in the cumulative foreign currency translation adjustment. Advertising The Company expenses advertising costs as incurred,
except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits. Stock-based compensation We account for stock-based compensation under
FASB ASC No. 718 – Compensation – Stock Compensation. The authoritative guidance for stock compensation requires that
companies estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The associated
cost is recognized over the period during which an employee is required to provide service in exchange for the award. Recently adopted accounting pronouncements In August 2018, the FASB announced Accounting
Standards Update (“ASU”) 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The
amendments in this pronouncement align the requirements for capitalizing implementation costs incurred in a hosting arrangement
that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use
software (and hosting arrangements that include an internal use software license). The accounting for the service element of a
hosting arrangement that is a service contract is not affected by these amendments. This pronouncement is effective for public
business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2019.
Early adoption is permitted, including adoption in any interim period. The amendments should be applied either retrospectively,
or prospectively, to all implementation costs incurred after the date of adoption. The Company elected to adopt ASU 2018-05 as
of July 1, 2018, on a prospective basis. As a result, the Company capitalized $21,000 of costs related to the implementation of
a cloud-based component of Platform id. In June 2018, the FASB announced ASU 2018-07
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the
scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to
include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments
to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity—Equity-Based Payments
to Non-Employees. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim
periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606,
Revenue from Contracts with Customers. The Company elected to adopt ASU 2018-07 as of January 1, 2018. The adoption did not require
the Company to restate any previously reported periods of the Statement of Operations or Balance Sheet. The Company has one contract
with a non-employee to perform services for share-based payments, the compensation of which is properly accounted for in the Statement
of Operations for the three and nine month periods ended September 30, 2018 as well as the Balance Sheet as of September 30, 2018. In March 2018, the FASB announced ASU 2018-05
Income Taxes (Topic 740): Amendments to Securities and Exchange Commission (“SEC”) Paragraphs Pursuant to SEC Staff
Accounting Bulletin No.118 (“SAB 118”). ASU 2018-05 adds guidance indicated in Questions 1 and 2 from SAB 118 to the
codification. SAB 118 addresses the application of US GAAP in situations when a registrant does not have all of the necessary information
available, prepared and analyzed (including computations) in reasonable detail to complete the accounting for certain income tax
effects of the Tax Cuts and Jobs Act of 2017 (the “2017 Act”), which was signed into law on December 22, 2017. In previous
quarters the Company included a best estimate of the effects of the 2017 Act, and has now completed the calculation as of the most
recent provision. The Company has determined the impact of the 2017 Act to be a benefit of $316,000. The Company recognized a provisional
tax benefit of $351,000 during the year ended December 31, 2017 and recorded an expense of $35,000, during the three and nine months
ended September 30, 2018. ASU 2018-05 is effective immediately upon addition to the FASB codification. In May 2014, the FASB issued ASU 2014-09 Revenue
from Contracts with Customers, which supersedes previous revenue recognition guidance. The new standard requires that a company
recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company
expects to receive in exchange for those goods or services. In-depth reviews of customer contracts were completed and analyzed
to meet the standard’s reporting and disclosure requirements. Disclosures related to the nature, amount and timing of revenue
and cash flows arising from contracts with customers are included in this Note under the subheading Revenue Recognition as well
as Note 7, Revenues. The adoption of ASU 2014-09 did not require the
Company to restate any previously reported periods of the Statement of Operations or Balance Sheet related to a change in the timing
of revenue recognition. The adoption also did not affect liquidity. However, the adoption did impact the allocation of revenue
associated with the Company’s shareholder outreach offering that included both electronic dissemination and physical delivery
of a customer’s annual reports. Historically, revenue from these bundled contracts was reported in the Services revenue stream
because an allocation between electronic and physical hardcopy distribution was not made, however, under ASC 606, a portion of
the revenue from these contracts is required to be allocated to the Platform and Technology revenue stream in accordance with stand-alone
contracts for the shareholder outreach subscription. A comparison of revenue under previously reported legacy GAAP and revenue
under current GAAP is provide below for comparability purposes (in 000’s):
For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018
Legacy Current Legacy Current
Revenue: GAAP Adjustments GAAP GAAP Adjustments GAAP
Platform and Technology $ 1,978 $ 107 $ 2,085 $ 6,002 $ 361 $ 6,363
Services 1,277 (107 ) 1,170 4,582 (361 ) 4,221
Total Revenue $ 3,255 $ — $ 3,255 $ 10,584 $ — $ 10,584
For the Three Months Ended September 30, 2017 For the Nine Months Ended September 30, 2017
Legacy Current Legacy Current
Revenue: GAAP Adjustments GAAP GAAP Adjustments GAAP
Platform and Technology $ 1,619 $ 157 $ 1,776 $ 4,736 $ 550 $ 5,286
Services 1,312 (157 ) 1,155 4,493 (550 ) 3,943
Total Revenue $ 2,931 $ — $ 2,931 $ 9,229 $ — $ 9,229 In analyzing the impact of adoption, the Company
used the practical expedient that allows the Company to only apply the new revenue standard to contracts that are not completed
as of the date of initial application, January 1, 2018. A completed contract is defined as a contract for which all (or substantially
all) of the revenue was recognized in accordance with revenue guidance that was in effect before the date of initial application. Recently issued accounting pronouncements not yet adopted The SEC has released SEC Final Rule Release No.
33-10532 Disclosure Update and Simplification, which adopts amendments to certain disclosure requirements that have become redundant,
duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, U.S. GAAP, or changes in the
information environment. The amendments also refer certain SEC disclosure requirements that overlap with, but require information
incremental to U.S. GAAP to the FASB for potential incorporation into U.S. GAAP. The amendments are intended to facilitate the
disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided
to investors. These amendments are part of an initiative by the Division of Corporation Finance to review disclosure requirements
applicable to issuers to consider ways to improve the requirements for the benefit of investors and issuers. The amendments are
effective November 5, 2018 and are not expected to have a material impact to the Company. The FASB has issued a new leases standard, ASU
2016-02 Leases (Topic 842) as well as several updates to the ASU. ASU 2016-02 and its updates (the “new Lease Standard”)
are intended to improve financial reporting about leasing transactions. The new Lease Standard affects all companies and other
organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The new Lease Standard will require
organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities
for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial
statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative
and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the
new Lease Standard, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months.
Consistent with current US GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease
by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current US GAAP which
requires only capital leases to be recognized on the balance sheet the new Lease Standard will require both types of leases (i.e.
operating and capital) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both
types of leases. The capital lease will be accounted for in substantially the same manner as capital leases are accounted for under
existing US GAAP. The operating lease will be accounted for in a manner similar to operating leases under existing US GAAP, except
that lessees will recognize a lease liability and a lease asset for all of those leases. Public companies will be required to adopt
the new Lease Standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For
calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously
issued annual and interim financial statements for 2018, however, early adoption is permitted. Lessees with a large portfolio of
leases are likely to see a significant increase in balance sheet assets and liabilities. The Company currently has one long-term
lease on its corporate facilities which ends October 31, 2019. Absent any renewal of the lease or new leases entered into before
January 1, 2019, the Company will be required to record a right-to-use asset and corresponding lease liability associated with
the remaining lease payments beginning with the first interim period of 2019. This will increase both balance sheet assets and
liabilities by insignificant amounts and will not have a significant impact on the income statement or affect any covenant calculations. |
