| 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) Earnings per share guidance 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 115,000 and 41,000 were excluded in the computation of diluted earnings per common share during
the three and six-month periods ended June 30, 2019 and 2018, respectively, because their impact was anti-dilutive. Revenue Recognition 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 and webcasting offerings, 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 June 30, 2019 and December 31,
2018 was $1,624,000 and $1,249,000, respectively, and is expected to be recognized within one year. Revenue recognized for the
six months ended June 30, 2019 and 2018, that was included in the deferred revenue balance at the beginning of each reporting period,
was approximately $785,000 and $714,000, respectively. Accounts receivable related to contracts with customers was $2,422,000 and
$1,593,000 as of June 30, 2019 and December 31, 2018, 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 June 30, 2019 and December 31, 2018, the Company has capitalized $21,000 and $18,000 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 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 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 six-month periods ended June 30, 2019 and 2018,
are as follows (in thousands):
For the Three Months Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
2019 2018 2019 2018
Capitalized software development costs $ 20 $ — $ 20 $ —
Amortization included in cost of revenues 201 198 401 396
Amortization included in depreciation and amortization 5 2 9 5 Lease Accounting We determine if an arrangement is a lease at
inception. Our operating lease agreements are primarily for office space and are included within operating lease right-of-use (“ROU”)
assets and operating lease liabilities on the consolidated balance sheets. ROU assets represent our right to use an underlying
asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets
and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
Our variable lease payments consist of non-lease services related to the lease. Variable lease payments are excluded from the ROU
assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of
our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement
date in determining the present value of lease payments. ROU assets also include any lease payments made and exclude lease incentives.
Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Fair Value Measurements ASC Topic 820 establishes a fair value hierarchy
that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels
of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of
subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
● Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes debt and equity securities that are traded in an active market. Our cash and cash equivalents are quoted at Level 1.
● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.
● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. As of June 30, 2019 and December 31, 2018, we
believe that the fair value of our financial instruments other than cash and cash equivalents, such as, accounts receivable, our
line of credit, notes payable, and accounts payable approximate their carrying amounts. Translation of Foreign Financial Statements The financial statements of the foreign subsidiaries
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, distribution partner relationships,
software, technology, non-compete agreements 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), non-compete agreements (5 years) and software
and technology (3-6 years) are amortized over their estimated useful lives. Comprehensive Income Comprehensive income consists
of net income and other comprehensive income 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 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 February 2016, the FASB established Topic
842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet
and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical
Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted
Improvements. The new standard establishes a right-of-use model that requires a lessee to recognize an ROU asset and lease liability
on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with
classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company
on January 1, 2019, which is also the day we elected to adopt the new standard. A modified retrospective transition approach is
required, applying the new standard to all leases existing at the date of initial application. We chose the effective date as our
date of initial application. Consequently, financial information will not be updated and the disclosures required under the new
standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients permitted
under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease
classification of those leases in place as of January 1, 2019. See the table below for the impact of adoption of the lease standard
on our balance sheet accounts as of the day of adoption, January 1, 2019 ($ in 000’s):
As Previously Reported New Lease Standard Adjustment As Adjusted
ROU asset $ — $ 102 $ 102
Lease liability — 135 135
Deferred rent 33 (33 ) — |
