Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 03, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | ISSUER DIRECT CORPORATION | ||
Entity Central Index Key | 0000843006 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 3,793,538 | ||
Entity Public Float | $ 102,690,562 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 1-10185 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 26-1331503 | ||
Entity Address Address Line 1 | One Glenwood Avenue | ||
Entity Address Address Line 2 | Suite 1001 | ||
Entity Address City Or Town | Raleigh | ||
Entity Address State Or Province | NC | ||
Entity Address Postal Zip Code | 27603 | ||
City Area Code | 919 | ||
Auditor Name | Cherry Bekaert LLP | ||
Auditor Location | Raleigh, North Carolina | ||
Auditor Firm Id | 677 | ||
Local Phone Number | 481-4000 | ||
Security 12b Title | Common Stock, par value $0.001 per share | ||
Trading Symbol | isdr | ||
Security Exchange Name | NYSE | ||
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 23,852,000 | $ 19,556,000 |
Accounts receivable (net of allowance for doubtful accounts of $675 and $657, respectively) | 3,291,000 | 2,514,000 |
Other current assets | 750,000 | 298,000 |
Total current assets | 27,893,000 | 22,368,000 |
Capitalized software (net of accumulated amortization of $3,301 and $2,761, respectively) | 201,000 | 526,000 |
Fixed assets (net of accumulated depreciation of $456 and $312, respectively) | 713,000 | 795,000 |
Right-of-use asset - leases (See Note 8) | 1,533,000 | 1,830,000 |
Other long-term assets | 94,000 | 88,000 |
Goodwill | 6,376,000 | 6,376,000 |
Intangible assets (net of accumulated amortization of $6,005 and $5,546, respectively) | 2,447,000 | 2,906,000 |
Total assets | 39,257,000 | 34,889,000 |
Current liabilities: | ||
Accounts payable | 695,000 | 304,000 |
Accrued expenses | 1,975,000 | 1,805,000 |
Income taxes payable | 46,000 | 258,000 |
Deferred revenue | 3,086,000 | 2,212,000 |
Total current liabilities | 5,802,000 | 4,579,000 |
Deferred income tax liability | 176,000 | 197,000 |
Lease liabilities - long-term (See Note 8) | 1,659,000 | 1,971,000 |
Total liabilities | 7,637,000 | 6,747,000 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of December 31, 2021 and 2020, respectively. | 0 | 0 |
Common stock $0.001 par value, 20,000,000 shares authorized, 3,793,538 and 3,770,752 shares issued and outstanding as of December 31, 2021 and 2020, respectively. | 4,000 | 4,000 |
Additional paid-in capital | 22,401,000 | 22,214,000 |
Other accumulated comprehensive loss | (19,000) | (19,000) |
Retained earnings | 9,234,000 | 5,943,000 |
Total stockholders' equity | 31,620,000 | 28,142,000 |
Total liabilities and stockholders' equity | $ 39,257,000 | $ 34,889,000 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Allowance for accounts receivables | $ 675 | $ 657 |
Accumulated amortization - capitalized software | 3,301 | 2,761 |
Accumulated depreciation - fixed assets | 456 | 312 |
Accumulated amortization - intangible assets | $ 6,005 | $ 5,546 |
Stockholders' equity: | ||
Preferred stock shares, par value | $ 0.001 | $ 0.001 |
Preferred stock shares, authorized | 1,000,000 | 1,000,000 |
Preferred stock shares, issued | 0 | 0 |
Preferred stock shares, outstanding | 0 | 0 |
Common stock shares, par value | $ 0.001 | $ 0.001 |
Common stock shares, authorized | 20,000,000 | 20,000,000 |
Common stock shares, issued | 3,793,538 | 3,770,752 |
Common stock shares, outstanding | 3,793,538 | 3,770,752 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | $ 21,883 | $ 18,526 |
Cost of revenues | 5,748 | 5,415 |
Gross margin | 16,135 | 13,111 |
Operating costs and expenses: | ||
General and administrative | 5,491 | 5,029 |
Sales and marketing | 5,079 | 3,812 |
Product development | 1,219 | 825 |
Depreciation and amortization | 603 | 751 |
Total operating costs and expenses | 12,392 | 10,417 |
Operating income | 3,743 | 2,694 |
Other income, net | ||
Other income (See Note 2) | 366 | 80 |
Interest income, net | 3 | 56 |
Income before income taxes | 4,112 | 2,830 |
Income tax expense | 821 | 724 |
Net income | $ 3,291 | $ 2,106 |
Income per share - basic | $ 0.87 | $ 0.56 |
Income per share - diluted | $ 0.86 | $ 0.56 |
Weighted average number of common shares outstanding - basic | 3,780 | 3,755 |
Weighted average number of common shares outstanding - diluted | 3,820 | 3,784 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||
Net income | $ 3,291,000 | $ 2,106,000 |
Foreign currency translation adjustment | 0 | (3,000) |
Comprehensive income | $ 3,291,000 | $ 2,103,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net income | $ 3,291,000 | $ 2,106,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense | 257,000 | 304,000 |
Depreciation and amortization | 1,143,000 | 1,348,000 |
Deferred income taxes | (106,000) | 312,000 |
Non-cash interest expense | 0 | 19,000 |
Stock-based compensation expense | 333,000 | 273,000 |
Gain on extinguishment of debt | 0 | (80,000) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | (1,042,000) | (761,000) |
Decrease (increase) in other assets | (160,000) | 177,000 |
Increase (decrease) in accounts payable | 393,000 | 37,000 |
Increase (decrease) in deferred revenue | 887,000 | 391,000 |
Increase (decrease) in accrued expenses and other liabilities | (265,000) | 260,000 |
Net cash provided by operating activities | 4,731,000 | 4,386,000 |
Cash flows from investing activities | ||
Purchase of fixed assets | (62,000) | (27,000) |
Capitalized software | (215,000) | 0 |
Net cash used in investing activities | (277,000) | (27,000) |
Cash flows from financing activities | ||
Payment for stock repurchase and retirement (see Note 7) | (453,000) | (785,000) |
Payment on notes payable | 0 | (240,000) |
Proceeds from exercise of stock options, net of income taxes | 307,000 | 451,000 |
Net cash used in financing activities | (146,000) | (574,000) |
Net change in cash | 4,308,000 | 3,785,000 |
Cash- beginning | 19,556,000 | 15,766,000 |
Currency translation adjustment | (12,000) | 5,000 |
Cash and cash equivalents - ending | 23,852,000 | 19,556,000 |
Supplemental disclosures: | ||
Cash paid for income taxes | $ 1,050,000 | $ 458,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (UNAUDITED) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive loss | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 3,786,398 | ||||
Balance, amount at Dec. 31, 2019 | $ 26,100,000 | $ 4,000 | $ 22,275,000 | $ (16,000) | $ 3,837,000 |
Stock-based compensation expense | 273,000 | $ 0 | 273,000 | 0 | 0 |
Exercise of stock awards, net of tax, shares | 68,252 | ||||
Exercise of stock awards, net of tax, amount | 451,000 | $ 0 | 451,000 | 0 | 0 |
Stock repurchase and retirement (see Note 6), shares | 83,898 | ||||
Stock repurchase and retirement (see Note 6), amount | (785,000) | $ 0 | (785,000) | 0 | 0 |
Foreign currency translation | (3,000) | 0 | 0 | (3,000) | 0 |
Net income | 2,106,000 | $ 0 | 0 | 0 | 2,106,000 |
Balance, shares at Dec. 31, 2020 | 3,770,752 | ||||
Balance, amount at Dec. 31, 2020 | 28,142,000 | $ 4,000 | 22,214,000 | (19,000) | 5,943,000 |
Stock-based compensation expense | 333,000 | $ 0 | 333,000 | 0 | 0 |
Exercise of stock awards, net of tax, shares | 42,563 | ||||
Exercise of stock awards, net of tax, amount | $ 307,000 | $ 0 | 307,000 | 0 | 0 |
Stock repurchase and retirement (see Note 6), shares | 179,845 | 19,777 | |||
Stock repurchase and retirement (see Note 6), amount | $ (453,000) | $ 0 | (453,000) | 0 | 0 |
Net income | 3,291,000 | $ 0 | 0 | 0 | 3,291,000 |
Balance, shares at Dec. 31, 2021 | 3,793,538 | ||||
Balance, amount at Dec. 31, 2021 | $ 31,620,000 | $ 4,000 | $ 22,401,000 | $ (19,000) | $ 9,234,000 |
Description Background and Basi
Description Background and Basis of Operations | 12 Months Ended |
Dec. 31, 2021 | |
Description Background and Basis of Operations | |
Note Description Background and Basis of Operations | N ote 1: Description, Background and Basis of Operations Nature of Operations Issuer Direct Corporation (the “Company” or “Issuer Direct”) was incorporated in the State of Delaware in October 1988 under the name Docucon Inc. Subsequent to the December 13, 2007 merger with My EDGAR, Inc., the Company changed its name to Issuer Direct Corporation. Today, Issuer Direct is an industry-leading global communications and compliance company focusing on the needs of corporate issuers. Issuer Direct’s principal platform, Platform id. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Note Summary of Significant Accounting Policies | Note 2: 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. Cash Equivalents For purposes of the Company’s financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. Credit is granted on an unsecured basis. The allowance for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable. There is judgment involved with estimating the allowance for doubtful accounts and if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. Given the current environment of the COVID-19 pandemic additional attention has been paid to the financial viability of its customers. The Company generally writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection. The following is a summary of the allowance for doubtful accounts during the years ended December 31, 2021 and 2020 (in 000’s): Year Ended December 31, 2021 Year Ended December 31, 2020 Beginning balance $ 657 $ 700 Bad debt expense 257 304 Write-offs (239 ) (347 ) Ending balance $ 675 $ 657 Concentration of Credit Risk Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivables. The Company places its cash and temporary cash investments with credit quality institutions. Such cash balances are currently in excess of the FDIC insurance limit of $250,000. To reduce its risk associated with the failure of such financial institutions, each quarter the Company evaluates the rating of the financial institution in which it holds deposits. As of December 31, 2021, the total amount exceeding such limit was $22,099,000. The Company also had cash-on-hand of $153,000 in Europe and $1,368,000 in Canada as of December 31, 2021. The Company believes it did not have any financial instruments that could have potentially subjected us to significant concentrations of credit risk for any relevant period. Revenue Recognition Substantially all the Company’s revenue comes from contracts with customers for subscriptions to its cloud-based products or contracts for Communications and Compliance products and services. Customers consist of public corporate issuers and professional firms, such as investor and public relations firms. In the case of news distribution and webcasting offerings, 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 its entire platform or certain modules within the 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) Communications and ii) Compliance. Performance obligations of Communications contracts include providing subscriptions to certain modules or the entire Platform id id The Company recognizes revenue for subscriptions evenly over the contract period, upon distribution for per release contracts and upon event completion for webcasting and virtual annual meeting 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 service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices, at least annually, 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 press release packages which have been prepaid, however the releases have not yet been disseminated, as well as, 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 as releases are disseminated for press release packages and ratably over the billing period for subscriptions. Deferred revenue as of December 31, 2021 and 2020, was $3,086,000 and $2,212,000, respectively, and is expected to be recognized within one year. Revenue recognized for the year ended December 31, 2021 and 2020, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $2,212,000 and $11,812,000, respectively. Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $3,291,000 and $2,514,000 as of December 31, 2021 and 2020, respectively. Since substantially all 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 December 31, 2021 and 2020, the Company has capitalized $53,000 and $44,000, respectively, 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. Fixed Assets Fixed assets are recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follow: Asset Category Depreciation / Amortization Period Computer equipment 3 years Furniture & equipment 3 to 7 years Leasehold improvements lesser of 8 years or the lease term Earnings per Share Earnings per share accounting 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. There were no shares issuable upon the exercise of stock options excluded in the computation of diluted earnings per common share during the year ended December 31, 2021, because their impact was anti-dilutive. Shares issuable upon the exercise of stock options totaling 40,000 were excluded in the computation of diluted earnings per common share during the year ended December 31, 2020, because their impact was anti-dilutive. Use of Estimates The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“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. Gain on Extinguishment of Debt On October 2, 2017, the Company entered into a Stock Purchase Agreement (the “Interwest Purchase Agreement’) to purchase all of the outstanding equity securities of Interwest Transfer Company, Inc., a Utah corporation (“Interwest”) a transfer agent business located in Salt Lake City, Utah. Under the terms of the Interwest Purchase Agreement the Company paid $1,935,000 at closing, $288,000 on the first anniversary of the closing, $320,000 on the second anniversary of the closing and called for another $320,000 to be paid upon the third anniversary date of the closing. The Company also issued 25,235 shares of restricted common stock of the Company at closing. Upon final negotiation and settlement of the third anniversary payment, the Company paid $240,000 to the seller. The difference of $80,000 that was not paid is recorded as Other Income on the Consolidated Statements of Income for the year ended December 31, 2020. 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, the Company recognizes 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. The Company’s policy regarding the classification of interest and penalties is to classify them as income tax expense in the financial statements, if applicable. Capitalized Software Costs incurred to develop the Company’s 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, which is typically four years. Costs related to design or maintenance of the software are expensed as incurred. Capitalized costs and amortization for the years ended December 31, 2021 and 2020, are as follows (in thousands): December 31, 2021 2020 Capitalized software development costs $ 215 $ - Amortization included in cost of revenues 540 599 Amortization included in depreciation and amortization - 9 Impairment of Long-lived Assets In accordance with the authoritative guidance for accounting for long-lived assets, assets such as property and equipment, trademarks, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group. Lease Accounting The Company determines if an arrangement is a lease at inception. Operating lease agreements are primarily for office space and are included within lease right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the 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. Variable lease payments consist of non-lease services related to the lease and payments under operating leases classified as short-term. 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 the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets include any lease payments due 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 Accounting Standards Codification (“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. 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 December 31, 2021 and 2020, the Company believes the fair value of its financial instruments, such as, accounts receivable, the line of credit, and accounts payable approximate their carrying amounts. 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 or director is required to provide service in exchange for the award. 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. Comprehensive Income Comprehensive income consists of net income and other comprehensive loss related to changes in the cumulative foreign currency translation adjustment. Business Combinations, Goodwill and Intangible Assets The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill. The Company records 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 (See Note 4). Advertising The Company expenses advertising as incurred. During the years ended December 31, 2021 and 2020, advertising expense was $250,000 and $245,000, respectively. Recently adopted accounting pronouncements Accounting Standards Update (ASU) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers The Financial Accounting Standards Board (“FASB”) has issued ASU No. 2021-08 to address diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. This ASU addresses these issues by adopting guidance in Topic 805 requiring an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). At the acquisition date, the acquirer should assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts, which would generally mean that an acquirer would recognize and measure the acquired contract assets and contract liabilities in the same manner that they were recognized and measured in the acquiree’s financial statements before the acquisition. The amendments in the ASU improve comparability after a business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. Notably, the ASU does not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with Topic 606, such as refund liabilities, or in a business combination, customer-related intangible assets and contract-based intangible assets. The amendments are effective for fiscal years beginning after December 15, 2022, and for interim periods within those fiscal years, with early implementation permitted, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company has adopted this pronouncement as of January 1, 2021; however, it does not have a significant impact on the Company’s financial statements. ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance The FASB has issued ASU No. 2021-10 to increase transparency in financial reporting by requiring business entities to disclose in notes to their financial statements information about certain types of government assistance that they receive. This ASU requires the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance, such as a grant model within FASB ASC 958, Not-for-Profit Entities, or International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance: (1) information regarding the nature of the transactions and the method applied to account for the government assistance; (2) line items on the balance sheet and income statement that are affected by government assistance and applicable amounts; and (3) significant terms and conditions of the agreement, including commitments and contingencies. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021, with early application permitted. The amendments in this ASU should be applied either (1) prospectively to all transactions with a government accounted for by applying a grant or contribution accounting model by analogy that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application, or (2) retrospectively to those transactions. The Company has adopted this pronouncement as of January 1, 2021 and has applied the guidance to account for the employee retention credit (“ERC”) as discussed below. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including the ERC, which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. The Company is eligible under the CARES Act ERC as an employer that carried on a trade or business during calendar year 2020 and whose business operations were fully or partially suspended during any calendar quarter during 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19. The Company accounted for the ERC as a government grant in accordance with FASB ASC 958. Under this standard, government grants are recognized when the condition or conditions on which they depend are substantially met. The conditions for recognition of the ERC include, but are not limited to: · An entity has been adversely affected by the COVID-19 pandemic · The Company has not used qualifying payroll for both the Paycheck Protection Program and the ERC · The Company incurred payroll costs to retain employees During the year ended December 31, 2021, The Company recorded an ERC benefit of $366,000 in Other income in the Consolidated statements of operations and a receivable in other current assets in the Consolidated balance sheets as of December 31, 2021. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2021 | |
Fixed Assets | |
Note Fixed Assets | Note 3: Fixed Assets in $000’s December 31, 2021 2020 Computer equipment $ 163 $ 122 Furniture & equipment 301 280 Leasehold improvements 705 705 Total fixed assets, gross 1,169 1,107 Less: Accumulated depreciation (456 ) (312 ) Total fixed assets, net $ 713 $ 795 Included in leasehold improvements is $488,000 of tenant improvement allowance associated with a lease signed in March 2019 related to the Company’s new corporate headquarters. Depreciation expense on fixed assets for the years ended December 31, 2021 and 2020 totaled $144,000 and $131,000, respectively. No disposals were made during the years ended December 31, 2021 and 2020. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |
Note Goodwill and Other Intangible Assets | Note 4: Goodwill and Other Intangible Assets The components of intangible assets are as follows (in 000’s): December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ - Customer relationships 4,600 (2,937 ) 1,663 Proprietary software 1,279 (1,031 ) 248 Distribution partner relationships 153 (53 ) 100 Non-compete agreement 69 (41 ) 28 Trademarks - definite-lived 173 (173 ) - Trademarks - indefinite-lived 408 - 408 Total intangible assets $ 8,452 $ (6,005 ) $ 2,447 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ — Customer relationships 4,600 (2,589 ) 2,011 Proprietary software 1,279 (948 ) 331 Distribution partner relationships 153 (38 ) 115 Non-compete agreement 69 (28 ) 41 Trademarks - definite-lived 173 (173 ) - Trademarks - indefinite-lived 408 - 408 Total intangible assets $ 8,452 $ (5,546 ) $ 2,906 The Company performed its annual assessment for impairment of intangible assets and determined there was no impairment as of and for the years ended December 31, 2021 and 2020. The amortization of intangible assets is a charge to operating expenses and totaled $459,000 and $609,000 in the years ended 2021 and 2020, respectively. The future amortization of the identifiable intangible assets is as follows (in 000’s): Years Ending December 31: 2022 $ 431 2023 431 2024 418 2025 319 2026 291 Thereafter 149 Total $ 2,039 The goodwill balance of $6,376,000 on December 31, 2021, was related to the stock acquisitions of Basset Press in July 2007, PIR in 2013, ACCESSWIRE in 2014, Interwest in 2017, Filing Services Canada, Inc. in 2018 and the assets of the Visual Webcasting Platform in 2019. The Company conducted its annual impairment analyses as of October 1, of 2021 and 2020 and determined that no goodwill was impaired. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2021 | |
Line of Credit | |
Note Line of Credit | Note 5: Line of Credit Effective October 3, 2021, the Company renewed its unsecured Line of Credit, which changed the interest rate from LIBOR plus 1.75% to SOFR (Secured Overnight Financing Rate) plus 1.75%. The amount of funds available for borrowing remained $3,000,000 and the term remained two years. As of December 31, 2021, the interest rate was 1.80% and the Company did not owe any amounts on the Line of Credit. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Note Equity | Note 6: Equity Dividends The Company did not pay any dividends during the years ended December 31, 2021 and 2020. Preferred stock and common stock There were no issuances of preferred stock or common stock during the years ended December 31, 2021 and 2020 other than stock awarded to employees and the Board of Directors. Stock repurchase and retirement On August 7, 2019, the Company publicly announced a stock repurchase program under which the Company is authorized to repurchase up to $1,000,000 of its common shares. On March 16, 2020, the Company publicly announced that the Company increased the stock repurchase program to repurchase up to $2,000,000 of its common shares. As of March 31, 2021, the Company completed the repurchase program by purchasing a total of 179,845 shares as shown in the table below ($ in 000’s, except share or per share amounts): Shares Repurchased Period Total Number of Shares Repurchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program August 7 -31, 2019 22,150 $ 9.34 22,150 $ 793 September 1-30, 2019 2,830 $ 10.00 2,830 $ 765 October 1-31, 2019 39,363 $ 10.44 39,363 $ 354 November 1-30, 2019 11,827 $ 10.43 11,827 $ 231 December 1-31, 2019 - - - $ 231 January 1-31, 2020 - - - $ 231 February 1-29, 2020 - - - $ 231 March 1-31, 2020 21,700 $ 9.33 21,700 $ 1,028 April 1-30, 2020 22,698 $ 9.02 22,698 $ 823 May 1-31, 2020 39,500 $ 9.51 39,500 $ 448 No shares repurchased between June 2020 and February 2021 March 1-31, 2021 19,777 $ 22.89 19,777 $ - Total 179,845 $ 11.15 179,845 $ - |
Stock Options and Restricted St
Stock Options and Restricted Stock Units | 12 Months Ended |
Dec. 31, 2021 | |
Stock Options and Restricted Stock Units | |
Note Stock Options and Restricted Stock Units | Note 7: Stock Options and Restricted Stock Units On May 23, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”). Under the terms of the 2014 Plan, the Company is authorized to issue incentive awards for common stock up to 200,000 shares to employees and other personnel. On June 10, 2016 and June 17, 2020, the shareholders of the Company approved an additional 200,000 and 200,000 awards, respectively, to be issued under the 2014 Plan, bringing the total number of shares to be awarded to 600,000. The awards may be in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards. The 2014 Plan is effective through March 31, 2024. As of December 31, 2021, there are 223,818 shares which remain to be granted under the 2014 Plan. The following is a summary of stock options issued during the year ended December 31, 2021 and 2020: Number of Options Outstanding Range of Exercise Price Weighted Average Exercise Price Aggregate Intrinsic Value Balance on December 31, 2019 127,563 $ 6.80 – 17.40 $ 12.63 $ 142,818 Options granted - - - - Options exercised (36,250 ) 7.76 – 17.40 12.47 295,921 Options forfeited/cancelled (16,083 ) 9.26 – 17.40 15.17 22,682 Balance on December 31, 2020 75,230 $ 6.80 – 17.40 $ 12.16 $ 402,275 Options granted - - - - Options exercised (23,563 ) 6.80 – 17.40 13.01 267,300 Options forfeited/cancelled (4,500 ) 9.26 – 13.21 11.45 62,385 Balance on December 31, 2021 47,167 $ 6.80 – 17.40 $ 11.81 $ 832,254 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e. the aggregate difference between the closing price of the Company’s common stock on December 31, 2021 and 2020 of $29.45 and $17.51, respectively, and the exercise price for in-the-money options) that would have been received by the holders if all instruments had been exercised on December 31, 2021 and 2020. As of December 31, 2021, all stock options were vested and there was not any unrecognized compensation cost related to stock options. The following is a summary of unvested stock options during the year ended December 31, 2021 and 2020: Number of Options Outstanding Weighted Average Exercise Price Weighted Average Grant Date Fair Value Balance on December 31, 2019 29,000 $ 12.87 $ 5.47 Options vested (14,500 ) 12.87 5.47 Options forfeited/cancelled - - - Balance on December 31, 2020 14,500 $ 12.87 $ 5.47 Options vested (14,500 ) 12.87 5.47 Options forfeited/cancelled - - - Balance on December 31, 2021 - $ - $ - The following table summarizes information about stock options outstanding and exercisable on December 31, 2021: Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number $0.01 - 7.00 5,000 3.89 $ 6.80 5,000 $7.01 - 8.00 10,000 1.74 $ 7.76 10,000 $8.01 - 12.00 3,667 5.45 $ 10.07 3,667 $12.01 - 15.00 20,500 6.61 $ 13.13 20,500 $15.01 - 17.40 8,000 6.42 $ 17.40 8,000 Total 47,167 5.16 $ 11.81 47,167 Of the 47,167 stock options outstanding, 21,000 are non-qualified stock options. All options have been registered with the SEC. There were no common stock options issued during the years ended December 31, 2021 and 2020. The following is a summary of restricted stock units issued during the years ended December 31, 2021 and 2020: Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Balance on December 31, 2019 48,002 $ 11.55 $ 554,388 Units granted 18,000 10.67 192,060 Units vested/issued (32,002 ) 11.61 353,948 Units forfeited (15,000 ) 11.35 156,665 Balance on December 31, 2020 19,000 $ 10.78 $ 332,690 Units granted 17,765 25.92 460,504 Units vested/issued (19,000 ) 10.78 464,400 Units forfeited - - - Balance on December 31, 2021 17,765 $ 25.92 $ 523,197 During the year ended December 31, 2021, the Company granted 17,765 restricted stock units with a grant date fair value of $25.92 per share to certain employees and non-employee members of the Board of Directors of the Company. Non-employee directors were granted 12,765 restricted stock units, which vest on the earlier of the 2022 annual meeting of the shareholders or one year. The other 5,000 restricted stock units were granted to an employee and vest 50% during each of the first and second anniversary dates of the date of grant, which was May 17, 2021. During the year ended December 31, 2021, 19,000 restricted stock units with a grant date fair value of $10.78 vested. As of December 31, 2021, there was $234,000 of unrecognized compensation cost related to unvested restricted stock units, which will be recognized through 2023. All restricted stock units have been registered with the SEC. During the years ended December 31, 2021 and 2020, the Company recorded compensation expense of $333,000 and $273,000, respectively, related to stock options and restricted stock units. Note 8: Leases Generally, leasing activity consists of office leases. In March 2019, a new lease was signed to move the corporate headquarters to Raleigh, North Carolina. The new lease, which had a lease commencement date of October 2, 2019, expires December 31, 2027. Minimum lease payments are $2,997,000, not including a tenant improvement allowance of $488,000, which is included in fixed assets as of December 31, 2021 and 2020. The Company recognized a ROU asset and corresponding lease liability of $2,596,000, which represents the present value of minimum lease payments discounted at 3.77%, the Company’s incremental borrowing rate at lease inception. As of December 31, 2021, the Company had a three-year office lease in Florida. This lease was signed on January 4, 2019, at which time a ROU asset and corresponding lease liability was recognized of $125,000, which represents the present value of minimum lease payments discounted at 4.25%, the Company’s incremental borrowing rate at lease inception. This lease subsequently ended on January 3, 2022 and was not renewed. The Company also has facilities in Salt Lake City, Utah, and New York, which are on short-term leases that are less than twelve months. As a result, the Company elected the short-term lease recognition exemption for these leases, which means, for those leases not expected to extend beyond twelve months, the Company will not recognize ROU assets or lease liabilities. Lease liabilities totaled $2,017,000 and $2,361,000 as of December 31, 2021 and 2020, respectively. The current portion of this liability of $358,000 is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $1,659,000 is included in Lease liabilities on the Consolidated Balance Sheets. Rent expense consists of both operating lease expense from amortization of ROU assets as well as variable lease expense which consists of non-lease components of office leases (i.e. common area maintenance) or rent expense associated with short- term leases. The components of lease expense were as follows (in 000’s): Year ended December 31, 2021 Year ended December 31, 2020 Lease expense Operating lease expense $ 347 $ 347 Variable lease expense 116 132 Rent expense $ 463 $ 479 The weighted-average remaining non-cancelable lease term for operating leases was 6.0 years as of December 31, 2021. As of December 31, 2021, the weighted-average discount rate used to determine the lease liability was 3.77%. The future minimum lease payments to be made under non-cancelable operating leases on December 31, 2021, are as follows (in 000’s): Year Ended December 31: 2022 $ 359 2023 369 2024 379 2025 389 2026 399 Thereafter 413 Total lease payments $ 2,308 Present value adjustment (291 ) Lease liability 2,017 The Company performed an evaluation of other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described above, none of the contracts contain a lease. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and contingencies (see Note 9) | |
Note Commitments and Contingencies | Note 9: Commitments and Contingencies From time to time, the Company may be involved in litigation that arises through the normal course of business. The Company is neither a party to any litigation nor is aware of any such threatened or pending litigation that might result in a material adverse effect to the Company’s business. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2021 | |
Revenues | |
Note Revenues | Note 10: Revenues The Company considers itself to be in a single reportable segment under the authoritative guidance for segment reporting, specifically a shareholder communications and compliance company for publicly traded and private companies. The following tables present revenue disaggregated by revenue stream in (000’s): For the years ended December 31, 2021 and 2020, the Company generated revenues from the following revenue streams as a percentage of total revenue (in 000’s): Year Ended December 31, 2021 Year Ended December 31, 2020 Amount Percentage Amount Percentage Revenue Communications $ 14,058 64.2 % $ 11,870 64.1 % Compliance 7,825 35.8 % 6,656 35.9 % Total $ 21,883 100.0 % $ 18,526 100.0 % The Company did not have any customers during the years ended December 31, 2021 or 2020 that accounted for more than 10% of revenue. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Note Income Taxes | Note 11: Income Taxes The provision for income taxes consisted of the following components for the years ended December 31 (in 000’s): 2021 2020 Current: Federal $ 632 $ 307 State 186 84 Foreign 109 21 Total Current 927 412 Deferred: Federal (40 ) 283 State (7 ) 50 Foreign (59 ) (21 ) Total Deferred (106 ) 312 Total expense for income taxes $ 821 $ 724 Reconciliation between the statutory rate and the effective tax rate is as follows on December 31 (in 000’s, except percentages): 2021 2020 Amount Percentage Amount Percentage Federal statutory tax rate $ 864 21.0 % $ 594 21.0 % State tax rate 139 3.4 % 117 4.1 % Permanent difference - stock-based compensation (55 ) (1.3 )% 29 1.1 % Permanent difference - other (83 ) (2.0 )% 16 0.5 % Foreign tax credit generated (55 ) (1.3 )% (15 ) (0.5 )% Tax on foreign earnings - tax reform 55 1.3 % 17 0.6 % Foreign rate differential 13 0.3 % (2 ) (0.1 )% FDII Deduction (57 ) (1.3 )% (32 ) (1.1 )% Total $ 821 20.1 % $ 724 25.6 % Components of net deferred income tax assets are as follows on December 31 (in 000’s): 2021 2020 Change Assets: Deferred revenue $ 89 $ 24 $ 65 Allowance for doubtful accounts 152 149 3 Stock options 88 108 (20 ) Transaction costs 44 46 (2 ) Other 80 138 (58 ) Total deferred tax asset 453 465 (12 ) Liabilities Prepaid expenses (5 ) (15 ) 10 Basis difference in fixed assets (174 ) (188 ) 14 Capitalized software (50 ) - (50 ) Purchase of intangibles (400 ) (459 ) 59 Total deferred tax liability (629 ) (662 ) 33 Total net deferred tax asset / (liability) $ (176 ) $ (197 ) $ 21 As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. It has been determined that is more likely than not that the Company’s deferred tax assets are able to be realized based on future positive earnings and reversal of existing temporary differences. The Company had no unrecognized tax benefits as of December 31, 2021 or December 31, 2020. Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. There are no accruals for interest and penalties on December 31, 2021. Undistributed earnings of the Company are insignificant as of December 31, 2021. With the enactment of the 2017 Act, the Company does not consider any of its foreign earnings as indefinitely reinvested. The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2020, 2019 and 2018 are open to audit by federal and state taxing authorities. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefit Plans | |
Note Employee Benefit Plans | Note 12: Employee Benefit Plans The Company sponsors a defined contribution 401(k) Profit Sharing Plan and allows all employees in the United States to participate. Matching and profit-sharing contributions to the plan are at the discretion of management, but are limited to the amount deductible for federal income tax purposes. The Company made contributions to the plan of $64,000 and $24,000 during the years ended December 31, 2021 and 2020, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | Note 13: Subsequent Events The Company has evaluated subsequent events for the potential recognition or disclosure through March 3, 2022, the date the financial statements were available to be issued, and has determined that the following matter should be disclosed to accompany the consolidated financial statements: Executive Employment Agreement with Timothy Pitoniak (the “Pitoniak Agreement”) On January 12, 2022, the Company entered into the Pitoniak Agreement with Timothy Pitoniak to serve as the Company’s Chief Financial Officer effective as of January 24, 2022 (the “Effective Date”). As of the Effective Date, Steven Knerr, the Company’s then current Chief Financial Officer, assumed the role of the Company’s Vice President of Finance and Controller. Under the Pitoniak Agreement, Mr. Pitoniak is entitled to an annual base salary of $235,000. The base salary will be reviewed annually by the Company’s Board of Directors or Compensation Committee for increase as part of its annual compensation review. Mr. Pitoniak is also eligible to receive an annual bonus of 45% of his annual base salary upon the achievement of reasonable target objectives and performance goals, to be determined by the Board of Directors or Compensation Committee in consultation with Mr. Pitoniak on or before the end of the first quarter of the fiscal year to which the bonus relates. In addition, Mr. Pitoniak is eligible to receive such additional bonus or incentive compensation as the Board of Directors may establish from time to time in its sole discretion. Under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”), and as of the Effective Date, Mr. Pitoniak was also granted the following: (i) 20,000 restricted stock units (the “RSU Grant”) pursuant to a Restricted Stock Unit Award Agreement which is valued at $26.00 per share, the closing price of the Company’s common stock as of the Effective Date and (ii) an incentive stock option to purchase 30,000 shares of the Company’s common stock at a per share exercise price of $26.00 per share, the closing price of the Company’s common stock as of the Effective Date (the “Option Grant”) pursuant to an Incentive Stock Option Grant and Agreement. Provided Mr. Pitoniak is employed on each of the following dates by the Company or one of its affiliates, the entire RSU Grant will vest three years from the Effective Date and the Option Grant shall vest over a four-year period, at a rate of 7,500 shares of common stock underlying the Option Grant on the first, second, third and fourth anniversary of the Effective Date. In the event of a Corporate Transaction (as defined in the Plan), any unvested portion of the RSU Grant and Option Grant shall be immediately vested. The Pitoniak Agreement is more fully described in a Current Report on Form 8-K filed by the Company with the SEC on January 19, 2022. Stock Repurchase Program On March 1, 2022, the Company’s board of directors authorized a stock repurchase program under which the Company may repurchase up to $5,000,000 of its common shares. Under this stock repurchase program, the Company may repurchase shares in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The extent and timing of repurchases, if any, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations as determined by the Company’s management. The repurchase program does not obligate the Company to acquire any particular amount of its common shares and may be extended, suspended or discontinued at any time by the board of directors. The Company expects to fund the repurchase program from its existing cash flows from operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Cash Equivalents | For purposes of the Company’s financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. Credit is granted on an unsecured basis. The allowance for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable. There is judgment involved with estimating the allowance for doubtful accounts and if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. Given the current environment of the COVID-19 pandemic additional attention has been paid to the financial viability of its customers. The Company generally writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection. The following is a summary of the allowance for doubtful accounts during the years ended December 31, 2021 and 2020 (in 000’s): Year Ended December 31, 2021 Year Ended December 31, 2020 Beginning balance $ 657 $ 700 Bad debt expense 257 304 Write-offs (239 ) (347 ) Ending balance $ 675 $ 657 |
Concentration of Credit Risk | Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivables. The Company places its cash and temporary cash investments with credit quality institutions. Such cash balances are currently in excess of the FDIC insurance limit of $250,000. To reduce its risk associated with the failure of such financial institutions, each quarter the Company evaluates the rating of the financial institution in which it holds deposits. As of December 31, 2021, the total amount exceeding such limit was $22,099,000. The Company also had cash-on-hand of $153,000 in Europe and $1,368,000 in Canada as of December 31, 2021. The Company believes it did not have any financial instruments that could have potentially subjected us to significant concentrations of credit risk for any relevant period. |
Revenue Recognition | Substantially all the Company’s revenue comes from contracts with customers for subscriptions to its cloud-based products or contracts for Communications and Compliance products and services. Customers consist of public corporate issuers and professional firms, such as investor and public relations firms. In the case of news distribution and webcasting offerings, 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 its entire platform or certain modules within the 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) Communications and ii) Compliance. Performance obligations of Communications contracts include providing subscriptions to certain modules or the entire Platform id id The Company recognizes revenue for subscriptions evenly over the contract period, upon distribution for per release contracts and upon event completion for webcasting and virtual annual meeting 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 service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices, at least annually, 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 press release packages which have been prepaid, however the releases have not yet been disseminated, as well as, 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 as releases are disseminated for press release packages and ratably over the billing period for subscriptions. Deferred revenue as of December 31, 2021 and 2020, was $3,086,000 and $2,212,000, respectively, and is expected to be recognized within one year. Revenue recognized for the year ended December 31, 2021 and 2020, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $2,212,000 and $11,812,000, respectively. Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $3,291,000 and $2,514,000 as of December 31, 2021 and 2020, respectively. Since substantially all 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 December 31, 2021 and 2020, the Company has capitalized $53,000 and $44,000, respectively, 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. |
Fixed Assets | Fixed assets are recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follow: Asset Category Depreciation / Amortization Period Computer equipment 3 years Furniture & equipment 3 to 7 years Leasehold improvements lesser of 8 years or the lease term |
Earnings per Share (EPS) | Earnings per share accounting 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. There were no shares issuable upon the exercise of stock options excluded in the computation of diluted earnings per common share during the year ended December 31, 2021, because their impact was anti-dilutive. Shares issuable upon the exercise of stock options totaling 40,000 were excluded in the computation of diluted earnings per common share during the year ended December 31, 2020, because their impact was anti-dilutive. |
Use of Estimates | The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“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. |
Gain on Extinguishment of Debt | On October 2, 2017, the Company entered into a Stock Purchase Agreement (the “Interwest Purchase Agreement’) to purchase all of the outstanding equity securities of Interwest Transfer Company, Inc., a Utah corporation (“Interwest”) a transfer agent business located in Salt Lake City, Utah. Under the terms of the Interwest Purchase Agreement the Company paid $1,935,000 at closing, $288,000 on the first anniversary of the closing, $320,000 on the second anniversary of the closing and called for another $320,000 to be paid upon the third anniversary date of the closing. The Company also issued 25,235 shares of restricted common stock of the Company at closing. Upon final negotiation and settlement of the third anniversary payment, the Company paid $240,000 to the seller. The difference of $80,000 that was not paid is recorded as Other Income on the Consolidated Statements of Income for the year ended December 31, 2020. |
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, the Company recognizes 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. The Company’s policy regarding the classification of interest and penalties is to classify them as income tax expense in the financial statements, if applicable. |
Capitalized Software | Costs incurred to develop the Company’s 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, which is typically four years. Costs related to design or maintenance of the software are expensed as incurred. Capitalized costs and amortization for the years ended December 31, 2021 and 2020, are as follows (in thousands): December 31, 2021 2020 Capitalized software development costs $ 215 $ - Amortization included in cost of revenues 540 599 Amortization included in depreciation and amortization - 9 |
Impairment of Long-lived Assets | In accordance with the authoritative guidance for accounting for long-lived assets, assets such as property and equipment, trademarks, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group. |
Lease Accounting | The Company determines if an arrangement is a lease at inception. Operating lease agreements are primarily for office space and are included within lease right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the 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. Variable lease payments consist of non-lease services related to the lease and payments under operating leases classified as short-term. 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 the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets include any lease payments due 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 | Accounting Standards Codification (“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. 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 December 31, 2021 and 2020, the Company believes the fair value of its financial instruments, such as, accounts receivable, the line of credit, and accounts payable approximate their carrying amounts. |
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 or director is required to provide service in exchange for the award. |
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. |
Comprehensive Income | Comprehensive income consists of net income and other comprehensive loss related to changes in the cumulative foreign currency translation adjustment. |
Business Combinations, Goodwill and Intangible Assets | The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill. The Company records 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 (See Note 4). |
Advertising | The Company expenses advertising as incurred. During the years ended December 31, 2021 and 2020, advertising expense was $250,000 and $245,000, respectively. |
Recently Adopted Accounting Pronouncements | Accounting Standards Update (ASU) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers The Financial Accounting Standards Board (“FASB”) has issued ASU No. 2021-08 to address diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. This ASU addresses these issues by adopting guidance in Topic 805 requiring an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). At the acquisition date, the acquirer should assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts, which would generally mean that an acquirer would recognize and measure the acquired contract assets and contract liabilities in the same manner that they were recognized and measured in the acquiree’s financial statements before the acquisition. The amendments in the ASU improve comparability after a business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. Notably, the ASU does not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with Topic 606, such as refund liabilities, or in a business combination, customer-related intangible assets and contract-based intangible assets. The amendments are effective for fiscal years beginning after December 15, 2022, and for interim periods within those fiscal years, with early implementation permitted, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company has adopted this pronouncement as of January 1, 2021; however, it does not have a significant impact on the Company’s financial statements. ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance The FASB has issued ASU No. 2021-10 to increase transparency in financial reporting by requiring business entities to disclose in notes to their financial statements information about certain types of government assistance that they receive. This ASU requires the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance, such as a grant model within FASB ASC 958, Not-for-Profit Entities, or International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance: (1) information regarding the nature of the transactions and the method applied to account for the government assistance; (2) line items on the balance sheet and income statement that are affected by government assistance and applicable amounts; and (3) significant terms and conditions of the agreement, including commitments and contingencies. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021, with early application permitted. The amendments in this ASU should be applied either (1) prospectively to all transactions with a government accounted for by applying a grant or contribution accounting model by analogy that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application, or (2) retrospectively to those transactions. The Company has adopted this pronouncement as of January 1, 2021 and has applied the guidance to account for the employee retention credit (“ERC”) as discussed below. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including the ERC, which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. The Company is eligible under the CARES Act ERC as an employer that carried on a trade or business during calendar year 2020 and whose business operations were fully or partially suspended during any calendar quarter during 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19. The Company accounted for the ERC as a government grant in accordance with FASB ASC 958. Under this standard, government grants are recognized when the condition or conditions on which they depend are substantially met. The conditions for recognition of the ERC include, but are not limited to: · An entity has been adversely affected by the COVID-19 pandemic · The Company has not used qualifying payroll for both the Paycheck Protection Program and the ERC · The Company incurred payroll costs to retain employees During the year ended December 31, 2021, The Company recorded an ERC benefit of $366,000 in Other income in the Consolidated statements of operations and a receivable in other current assets in the Consolidated balance sheets as of December 31, 2021. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of allowance for doubtful accounts | Year Ended December 31, 2021 Year Ended December 31, 2020 Beginning balance $ 657 $ 700 Bad debt expense 257 304 Write-offs (239 ) (347 ) Ending balance $ 675 $ 657 |
Schedule of estimated useful lives for fixed assets | Asset Category Depreciation / Amortization Period Computer equipment 3 years Furniture & equipment 3 to 7 years Leasehold improvements lesser of 8 years or the lease term |
Schedule of Capitalized Costs and Amortization | December 31, 2021 2020 Capitalized software development costs $ 215 $ - Amortization included in cost of revenues 540 599 Amortization included in depreciation and amortization - 9 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fixed Assets | |
Schedule of fixed assets | in $000’s December 31, 2021 2020 Computer equipment $ 163 $ 122 Furniture & equipment 301 280 Leasehold improvements 705 705 Total fixed assets, gross 1,169 1,107 Less: Accumulated depreciation (456 ) (312 ) Total fixed assets, net $ 713 $ 795 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |
Schedule of amortizable intangible assets | December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ - Customer relationships 4,600 (2,937 ) 1,663 Proprietary software 1,279 (1,031 ) 248 Distribution partner relationships 153 (53 ) 100 Non-compete agreement 69 (41 ) 28 Trademarks - definite-lived 173 (173 ) - Trademarks - indefinite-lived 408 - 408 Total intangible assets $ 8,452 $ (6,005 ) $ 2,447 December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ — Customer relationships 4,600 (2,589 ) 2,011 Proprietary software 1,279 (948 ) 331 Distribution partner relationships 153 (38 ) 115 Non-compete agreement 69 (28 ) 41 Trademarks - definite-lived 173 (173 ) - Trademarks - indefinite-lived 408 - 408 Total intangible assets $ 8,452 $ (5,546 ) $ 2,906 |
Schedule of future amortization of intangible assets | Years Ending December 31: 2022 $ 431 2023 431 2024 418 2025 319 2026 291 Thereafter 149 Total $ 2,039 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Schedule of shares repurchased | Shares Repurchased Period Total Number of Shares Repurchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program August 7 -31, 2019 22,150 $ 9.34 22,150 $ 793 September 1-30, 2019 2,830 $ 10.00 2,830 $ 765 October 1-31, 2019 39,363 $ 10.44 39,363 $ 354 November 1-30, 2019 11,827 $ 10.43 11,827 $ 231 December 1-31, 2019 - - - $ 231 January 1-31, 2020 - - - $ 231 February 1-29, 2020 - - - $ 231 March 1-31, 2020 21,700 $ 9.33 21,700 $ 1,028 April 1-30, 2020 22,698 $ 9.02 22,698 $ 823 May 1-31, 2020 39,500 $ 9.51 39,500 $ 448 No shares repurchased between June 2020 and February 2021 March 1-31, 2021 19,777 $ 22.89 19,777 $ - Total 179,845 $ 11.15 179,845 $ - |
Stock Options and Restricted _2
Stock Options and Restricted Stock Units (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock Options and Restricted Stock Units | |
Summary of stock options activity | Number of Options Outstanding Range of Exercise Price Weighted Average Exercise Price Aggregate Intrinsic Value Balance on December 31, 2019 127,563 $ 6.80 – 17.40 $ 12.63 $ 142,818 Options granted - - - - Options exercised (36,250 ) 7.76 – 17.40 12.47 295,921 Options forfeited/cancelled (16,083 ) 9.26 – 17.40 15.17 22,682 Balance on December 31, 2020 75,230 $ 6.80 – 17.40 $ 12.16 $ 402,275 Options granted - - - - Options exercised (23,563 ) 6.80 – 17.40 13.01 267,300 Options forfeited/cancelled (4,500 ) 9.26 – 13.21 11.45 62,385 Balance on December 31, 2021 47,167 $ 6.80 – 17.40 $ 11.81 $ 832,254 |
Schedule of unvested stock options | Number of Options Outstanding Weighted Average Exercise Price Weighted Average Grant Date Fair Value Balance on December 31, 2019 29,000 $ 12.87 $ 5.47 Options vested (14,500 ) 12.87 5.47 Options forfeited/cancelled - - - Balance on December 31, 2020 14,500 $ 12.87 $ 5.47 Options vested (14,500 ) 12.87 5.47 Options forfeited/cancelled - - - Balance on December 31, 2021 - $ - $ - |
Schedule of stock options | Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number $0.01 - 7.00 5,000 3.89 $ 6.80 5,000 $7.01 - 8.00 10,000 1.74 $ 7.76 10,000 $8.01 - 12.00 3,667 5.45 $ 10.07 3,667 $12.01 - 15.00 20,500 6.61 $ 13.13 20,500 $15.01 - 17.40 8,000 6.42 $ 17.40 8,000 Total 47,167 5.16 $ 11.81 47,167 |
Summary of restricted stock units issued | Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Balance on December 31, 2019 48,002 $ 11.55 $ 554,388 Units granted 18,000 10.67 192,060 Units vested/issued (32,002 ) 11.61 353,948 Units forfeited (15,000 ) 11.35 156,665 Balance on December 31, 2020 19,000 $ 10.78 $ 332,690 Units granted 17,765 25.92 460,504 Units vested/issued (19,000 ) 10.78 464,400 Units forfeited - - - Balance on December 31, 2021 17,765 $ 25.92 $ 523,197 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases (Tables) | |
Schedule of lease expense | Year ended December 31, 2021 Year ended December 31, 2020 Lease expense Operating lease expense $ 347 $ 347 Variable lease expense 116 132 Rent expense $ 463 $ 479 |
Schedule of future minimum lease payments | Year Ended December 31: 2022 $ 359 2023 369 2024 379 2025 389 2026 399 Thereafter 413 Total lease payments $ 2,308 Present value adjustment (291 ) Lease liability 2,017 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenues (Tables) | |
Disaggregation of revenue | Year Ended December 31, 2021 Year Ended December 31, 2020 Amount Percentage Amount Percentage Revenue Communications $ 14,058 64.2 % $ 11,870 64.1 % Compliance 7,825 35.8 % 6,656 35.9 % Total $ 21,883 100.0 % $ 18,526 100.0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of components of income tax expense | 2021 2020 Current: Federal $ 632 $ 307 State 186 84 Foreign 109 21 Total Current 927 412 Deferred: Federal (40 ) 283 State (7 ) 50 Foreign (59 ) (21 ) Total Deferred (106 ) 312 Total expense for income taxes $ 821 $ 724 |
Schedule of effective income tax rate reconciliation | 2021 2020 Amount Percentage Amount Percentage Federal statutory tax rate $ 864 21.0 % $ 594 21.0 % State tax rate 139 3.4 % 117 4.1 % Permanent difference - stock-based compensation (55 ) (1.3 )% 29 1.1 % Permanent difference - other (83 ) (2.0 )% 16 0.5 % Foreign tax credit generated (55 ) (1.3 )% (15 ) (0.5 )% Tax on foreign earnings - tax reform 55 1.3 % 17 0.6 % Foreign rate differential 13 0.3 % (2 ) (0.1 )% FDII Deduction (57 ) (1.3 )% (32 ) (1.1 )% Total $ 821 20.1 % $ 724 25.6 % |
Schedule of deferred tax assets and liabilities | 2021 2020 Change Assets: Deferred revenue $ 89 $ 24 $ 65 Allowance for doubtful accounts 152 149 3 Stock options 88 108 (20 ) Transaction costs 44 46 (2 ) Other 80 138 (58 ) Total deferred tax asset 453 465 (12 ) Liabilities Prepaid expenses (5 ) (15 ) 10 Basis difference in fixed assets (174 ) (188 ) 14 Capitalized software (50 ) - (50 ) Purchase of intangibles (400 ) (459 ) 59 Total deferred tax liability (629 ) (662 ) 33 Total net deferred tax asset / (liability) $ (176 ) $ (197 ) $ 21 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Allowance for doubtful accounts, beginning | $ 657 | $ 700 |
Bad debt expense | 257 | 304 |
Write-offs | (239) | (347) |
Allowance for doubtful accounts, ending | $ 675 | $ 657 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant and Equipment Estimated Useful Lives | lesser of 8 years or the lease term |
Leasehold Improvements | |
Property Plant and Equipment Estimated Useful Lives | lesser of 8 years or the lease term |
Computer Equipment | |
Property Plant and Equipment Estimated Useful Lives | 3 years |
Furniture & Equipment | |
Property Plant and Equipment Estimated Useful Lives | 3 to 7 years |
Furniture & Equipment | Minimum [Member] | |
Property Plant and Equipment Estimated Useful Lives | 3 |
Furniture & Equipment | Equipment | |
Property Plant and Equipment Estimated Useful Lives | 7 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Capitalized Software Development Costs | $ 215,000 | $ 0 |
Summary of Capitalized Costs and Amortization | 540,000 | 599,000 |
Amortization Included in Depreciation and Amortization | $ 0 | $ 9,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) shares in Thousands | Oct. 02, 2017 | Dec. 31, 2021 | Dec. 31, 2020 |
FDIC insurance limit | $ 250,000 | ||
FDIC exceeding limit | 22,099,000 | ||
Capitalized costs | 53,000 | $ 44,000 | |
Gain losses on extinguishment of debt | 0 | (80,000) | |
Advertising Expense | 250,000 | 245,000 | |
Deferred revenue | 3,086,000 | 2,212,000 | |
Revenue Recognized Included in the Deferred Revenue | 2,212,000 | 11,812,000 | |
Accounts receivable related to contracts with customers | 3,291,000 | $ 2,514,000 | |
Stock Purchase Agreement Description | Company paid $1,935,000 at closing, $288,000 on the first anniversary of the closing, $320,000 on the second anniversary of the closing and called for another $320,000 to be paid upon the third anniversary date of the closing. The Company also issued 25,235 shares of restricted common stock of the Company at closing. | ||
Antidilutive securities excluded from computation of earnings per common share | 40,000 | ||
Canada [Member] | |||
Cash-on-hand | $ 1,368,000 | ||
Europe | |||
Cash-on-hand | $ 153,000 | ||
Software and Technology | Equipment | |||
Intangible asset estimated useful lives | 6 years | ||
Software and Technology | Minimum [Member] | |||
Intangible asset estimated useful lives | 3 years | ||
Customer Relationships | |||
Intangible asset estimated useful lives | 7 years | ||
Customer Relationships | Equipment | |||
Intangible asset estimated useful lives | 10 years | ||
Customer Lists | |||
Intangible asset estimated useful lives | 3 years | ||
Distribution Partner Relationships | |||
Intangible asset estimated useful lives | 10 years | ||
Non-compete Agreements | |||
Intangible asset estimated useful lives | 5 years |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fixed Assets | ||
Computers equipment | $ 163 | $ 122 |
Furniture & equipment | 301 | 280 |
Leasehold improvements | 705 | 705 |
Total fixed assets, gross | 1,169 | 1,107 |
Less: accumulated depreciation | 456 | 312 |
Total fixed assets, net | $ 713 | $ 795 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fixed Assets | ||
Depreciation expense | $ 144,000 | $ 131,000 |
Disposal of fixed assets | $ 0 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accumulated amortization | $ 6,005,000 | $ 5,546,000 |
Net carrying amount | 2,039,000 | |
Trademarks - Definite-Lived | ||
Gross carrying amount | 173,000 | 173,000 |
Accumulated amortization | 173,000 | 173,000 |
Net carrying amount | 0 | 0 |
Trademarks - Indefinite-Lived | ||
Gross carrying amount | 408,000 | 408,000 |
Accumulated amortization | 0 | 0 |
Net carrying amount | 408,000 | 408,000 |
Total Intangible Assets | ||
Gross carrying amount | 8,452,000 | 8,452,000 |
Accumulated amortization | 6,005,000 | 5,546,000 |
Net carrying amount | 2,447,000 | 2,906,000 |
Customer Relationships | ||
Gross carrying amount | 4,600,000 | 4,600,000 |
Accumulated amortization | 2,937,000 | 2,589,000 |
Net carrying amount | 1,663,000 | 2,011,000 |
Customer Lists | ||
Gross carrying amount | 1,770,000 | 1,770,000 |
Accumulated amortization | 1,770,000 | 1,770,000 |
Net carrying amount | 0 | 0 |
Distribution Partner Relationships | ||
Gross carrying amount | 153,000 | 153,000 |
Accumulated amortization | 53,000 | 38,000 |
Net carrying amount | 100,000 | 115,000 |
Non-compete Agreements | ||
Gross carrying amount | 69,000 | 69,000 |
Accumulated amortization | 41,000 | 28,000 |
Net carrying amount | 28,000 | 41,000 |
Proprietary Software | ||
Gross carrying amount | 1,279,000 | 1,279,000 |
Accumulated amortization | 1,031,000 | 948,000 |
Net carrying amount | $ 248,000 | $ 331,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 1) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Other Intangible Assets | |
2022 | $ 431 |
2023 | 431 |
2024 | 418 |
2025 | 319 |
2026 | 291 |
Thereafter | 149 |
Total | $ 2,039 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | ||
Amortization of intangible assets | $ 459,000 | $ 609,000 |
Goodwill | $ 6,376,000 | $ 6,376,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | Dec. 31, 2021USD ($) |
Line of credit facility, interest rate at period end | 1.80% |
Line of credit, maximum borrowing capacity | $ 3,000,000,000 |
LIBOR | |
Line of credit facility, interest rate at period end | 1.75% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
Total number of shares repurchased | 179,845 | |
Average price paid per share | $ 11.15 | |
Total number of shares purchased as part of publicly announced program | 179,845 | |
Maximum dollar value of shares that may yet be purchased under the program | $ 0 | |
August 7-31, 2019 | ||
Total number of shares repurchased | 22,150 | |
Average price paid per share | $ 9.34 | |
Total number of shares purchased as part of publicly announced program | 22,150 | |
Maximum dollar value of shares that may yet be purchased under the program | 793 | |
September 1-30, 2019 | ||
Total number of shares repurchased | 2,830 | |
Average price paid per share | $ 10 | |
Total number of shares purchased as part of publicly announced program | 2,830 | |
Maximum dollar value of shares that may yet be purchased under the program | 765 | |
October 1-31, 2019 | ||
Total number of shares repurchased | 39,363 | |
Average price paid per share | $ 10.44 | |
Total number of shares purchased as part of publicly announced program | 39,363 | |
Maximum dollar value of shares that may yet be purchased under the program | 354 | |
November 1-30, 2019 | ||
Total number of shares repurchased | 11,827 | |
Average price paid per share | $ 10.43 | |
Total number of shares purchased as part of publicly announced program | 11,827 | |
Maximum dollar value of shares that may yet be purchased under the program | 231 | |
March 1-31, 2020 | ||
Total number of shares repurchased | 21,700 | |
Average price paid per share | $ 9.33 | |
Total number of shares purchased as part of publicly announced program | 21,700 | |
Maximum dollar value of shares that may yet be purchased under the program | 1,028 | |
April 1-30, 2020 | ||
Total number of shares repurchased | 22,698 | |
Average price paid per share | $ 9.02 | |
Total number of shares purchased as part of publicly announced program | 22,698 | |
Maximum dollar value of shares that may yet be purchased under the program | 823 | |
December 1-31, 2019 | ||
Total number of shares repurchased | 0 | |
Average price paid per share | $ 0 | |
Total number of shares purchased as part of publicly announced program | 0 | |
Maximum dollar value of shares that may yet be purchased under the program | 231 | |
January 1-31, 2020 | ||
Total number of shares repurchased | 0 | |
Average price paid per share | $ 0 | |
Total number of shares purchased as part of publicly announced program | 0 | |
Maximum dollar value of shares that may yet be purchased under the program | 231 | |
February 1-29, 2020 | ||
Total number of shares repurchased | 0 | |
Average price paid per share | $ 0 | |
Maximum dollar value of shares that may yet be purchased under the program | 231 | |
May 1-31, 2020 | ||
Total number of shares repurchased | 39,500 | |
Average price paid per share | $ 9.51 | |
Total number of shares purchased as part of publicly announced program | 39,500 | |
Maximum dollar value of shares that may yet be purchased under the program | 448 | |
March 1-31, 2021 | ||
Total number of shares repurchased | 19,777 | |
Average price paid per share | $ 22.89 | |
Total number of shares purchased as part of publicly announced program | 19,777 | |
Maximum dollar value of shares that may yet be purchased under the program | $ 0 |
Equity (Details Narrative)
Equity (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Equity | |
Cash dividends paid | $ | $ 0 |
Shares repurchased | shares | 179,845 |
Stock Options and Restricted _3
Stock Options and Restricted Stock Units (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options outstanding, ending | 47,167 | |
Weighted average exercise price outstanding, ending | $ 11.81 | |
Option [Member] | ||
Number of options outstanding, beginning | 75,230 | 127,563 |
Number of options granted | 0 | |
Number of options exercised | (23,563) | (36,250) |
Number of options forfeited/cancelled | (4,500) | (16,083) |
Number of options outstanding, ending | 47,167 | 75,230 |
Range of exercise price options outstanding, beginning | 6.80 – 17.40 | 6.80 – 17.40 |
Range of exercise price options granted | 0 | 0 |
Range of exercise price options exercised | 6.80 – 17.40 | 7.76 – 17.40 |
Range of exercise price options forfeited/cancelled | 9.26 – 13.21 | 9.26 – 17.40 |
Range of exercise price options outstanding, ending | 6.80 – 17.40 | |
Weighted average exercise price outstanding, beginning | $ 12.16 | $ 12.63 |
Weighted average exercise price granted | 0 | 0 |
Weighted average exercise price exercised | 13.01 | 12.47 |
Weighted average exercise price forfeited/cancelled | 11.45 | 15.17 |
Weighted average exercise price outstanding, ending | 11.81 | |
Aggregate intrinsic value granted | $ 0 | $ 0 |
Aggregate intrinsic value exercised | $ 295,921 | $ 267,300 |
Aggregate intrinsic value forfeited/cancelled | 22,682 | 62,385 |
Aggregate intrinsic value, ending | $ 832,254 | $ 402,275 |
Stock Options and Restricted _4
Stock Options and Restricted Stock Units (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options and Restricted Stock Units | ||
Number of unvested options outstanding, beginning | 14,500 | 29,000 |
Number of unvested options vested | (14,500) | (14,500) |
Number of unvested options forfeited/cancelled | 0 | 0 |
Number of unvested options outstanding, ending | 0 | 14,500 |
Weighted average exercise price outstanding, beginning | $ 12.87 | $ 12.87 |
Weighted average exercise price vested | 12.87 | 12.87 |
Weighted average exercise price forfeited/cancelled | 0 | 0 |
Weighted average exercise price outstanding, ending | 0 | 12.87 |
Weighted average grant date fair value, beginning | 5.47 | 5.47 |
Weighted average grant date fair value vested | 5.47 | 5.47 |
Weighted average grant date fair value forfeited/cancelled | 0 | 0 |
Weighted average grant date fair value, ending | $ 0 | $ 5.47 |
Stock Options and Restricted _5
Stock Options and Restricted Stock Units (Details 2) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of options outstanding | 47,167 |
Weighted average remaining contractual life (in years) | 5 years 1 month 28 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 11.81 |
Number of options exercisable | 47,167 |
Option 1 | |
Number of options outstanding | 5,000 |
Weighted average remaining contractual life (in years) | 3 years 10 months 20 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 6.80 |
Number of options exercisable | 5,000 |
Exercise price range | 0.01 - 7.00 |
Option 2 | |
Number of options outstanding | 10,000 |
Weighted average remaining contractual life (in years) | 1 year 8 months 26 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 7.76 |
Number of options exercisable | 10,000 |
Exercise price range | 7.01 - 8.00 |
Option 3 | |
Number of options outstanding | 3,667 |
Weighted average remaining contractual life (in years) | 5 years 5 months 12 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 10.07 |
Number of options exercisable | 3,667 |
Exercise price range | 8.01 - 12.00 |
Option 4 | |
Number of options outstanding | 20,500 |
Weighted average remaining contractual life (in years) | 6 years 7 months 9 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 13.13 |
Number of options exercisable | 20,500 |
Exercise price range | 12.01 - 15.00 |
Option 5 | |
Number of options outstanding | 8,000 |
Weighted average remaining contractual life (in years) | 6 years 5 months 1 day |
Weighted average exercise price outstanding, beginning | $ / shares | $ 17.40 |
Number of options exercisable | 8,000 |
Exercise price range | 15.01 - 17.40 |
Stock Options and Restricted _6
Stock Options and Restricted Stock Units (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options and Restricted Stock Units | ||
Number of restricted stock units outstanding, beginning | 19,000 | 48,002 |
Number of restricted stock units granted | 17,765 | 18,000 |
Number of restricted stock units vested/issued | (19,000) | (32,002) |
Number of restricted stock units forfeited | 0 | (15,000) |
Number of restricted stock units outstanding, ending | 17,765 | 19,000 |
Weighted average exercise price outstanding, beginning | $ 10.78 | $ 11.55 |
Weighted average exercise price granted | 25.92 | 10.67 |
Weighted average exercise price vested/issued | 10.78 | 11.61 |
Weighted average exercise price forfeited | 0 | 11.35 |
Weighted average exercise price outstanding, ending | $ 25.92 | $ 10.78 |
Aggregate intrinsic value outstanding, beginning | $ 332,690 | $ 554,388 |
Aggregate intrinsic value granted | 460,504 | 192,060 |
Aggregate intrinsic value vested/issued | 464,400 | 353,948 |
Aggregate intrinsic value forfeited | 0 | 156,665 |
Aggregate intrinsic value outstanding, ending | $ 523,197 | $ 332,690 |
Stock Options and Restricted _7
Stock Options and Restricted Stock Units (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock closing price | $ 29.45 | $ 17.51 |
Non employee stock shares granted | $ 12,765 | |
Description of restricted stock units | The other 5,000 restricted stock units were granted to an employee and vest 50% during each of the first and second anniversary dates of the date of grant, which was May 17, 2021 | |
Number of restricted stock units granted | 17,765 | 18,000 |
Grant date fair value | $ 25.92 | |
Stock Op?ons outstanding | 47,167 | |
Non-qualified stock options | 21,000 | |
Number of restricted stock units vested/issued | (19,000) | (32,002) |
Weighted average exercise price vested/issued | $ 10.78 | $ 11.61 |
Unrecognized compensation expense, restricted stock units | $ 234,000,000 | |
Stock options and restricted stock units expense | $ 333,000 | $ 273,000 |
2014 Plan Member | Mr Pitoniak [Member] | ||
Shares available to be issued under plan | 223,818 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases (Tables) | ||
Rent expense | $ 463 | $ 479 |
Operating lease expense | 347 | 347 |
Variable lease expense | $ 116 | $ 132 |
Leases (Details 1)
Leases (Details 1) $ in Thousands | Dec. 31, 2021USD ($) |
Leases (Tables) | |
2022 | $ 359 |
2023 | 369 |
2024 | 379 |
2025 | 389 |
2026 | 399 |
Thereafter | 413 |
Total lease payments | 2,308 |
Present value adjustment | (291) |
Lease liability | $ 2,017 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease liability, current portion | $ 358,000 | |
Weighted average non cancelable lease term | 6 years | |
Weighted-average discount rate | 3.77% | |
Right-of-use asset - leases | $ 1,659,000,000 | |
Operating lease liability, total | 2,017,000 | |
Lease Liability | ||
Operating lease liability, total | $ 2,017,000 | $ 2,361,000 |
March 2019 | ||
Weighted-average discount rate | 3.77% | |
Right-of-use asset - leases | $ 2,596,000 | |
Lease payments | 2,997,000 | |
Improvment allowance of lease payments | $ 488,000 | |
January 4, 2019 | ||
Weighted-average discount rate | 4.25% | |
Right-of-use asset - leases | $ 125,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 21,883 | $ 18,526 |
Percentage of revenue from revenue streams | 100.00% | 100.00% |
Communication | ||
Revenues | $ 14,058 | $ 11,870 |
Percentage of revenue from revenue streams | 64.20% | 64.10% |
Compliance | ||
Revenues | $ 7,825 | $ 6,656 |
Percentage of revenue from revenue streams | 35.80% | 35.90% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 632 | $ 307 |
State | 186 | 84 |
Foreign | 109 | 21 |
Total current | 927 | 412 |
Deferred: | ||
Federal | (40) | 283 |
State | (7) | 50 |
Foreign | (59) | (21) |
Total deferred | (106) | 312 |
Total expense for income taxes | $ 821 | $ 724 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Federal statutory tax rate, amount | $ 864 | $ 594 |
State tax rate, amount | 139 | 117 |
Permanent difference - stock-based compensation, amount | (55) | 29 |
Permanent difference - other, amount | (83) | 16 |
Foreign tax credit generated, amount | (55) | (15) |
Tax on foreign earnings - tax reform, amount | 55 | 17 |
Foreign rate differential, amount | 13 | (2) |
FDII deduction, amount | (57) | (32) |
Total, amount | $ 821 | $ 724 |
Federal statutory tax rate, percentage | 21.00% | 21.00% |
State tax rate, percentage | 3.40% | 4.10% |
Permanent difference - stock-based compensation, percentage | (1.30%) | 1.10% |
Permanent difference - other, percentage | (2.00%) | 0.50% |
Foreign tax credit generated, percentage | (1.30%) | (0.50%) |
Tax on foreign earnings - tax reform, percentage | 1.30% | 0.60% |
Foreign rate differential, percentage | 0.30% | (0.10%) |
FDII deduction, percentage | (1.30%) | (1.10%) |
Total, percentage | 20.10% | 25.60% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Deferred revenue | $ 89,000 | $ 24,000 |
Allowance for doubtful accounts | 152,000 | 149,000 |
Stock options | 88,000 | 108,000 |
Transaction costs | 44,000 | 46,000 |
Other | 80,000 | 138,000 |
Total deferred tax asset | 453,000 | 465,000 |
Liabilities: | ||
Prepaid expenses | (5,000) | (15,000) |
Basis difference in fixed assets | (174,000) | (188,000) |
Capitalized software | (50,000) | 0 |
Purchase of intangibles | (400,000) | (459,000) |
Other | 0 | |
Total deferred tax liability | (629,000) | (662,000) |
Total net deferred tax asset/(liability) | (176,000) | (197,000) |
Change | ||
Assets: | ||
Deferred revenue | 65,000 | |
Allowance for doubtful accounts | 3,000 | |
Stock options | 20,000 | |
Transaction costs | (58,000) | (2,000) |
Other | $ (12,000) | |
Liabilities: | ||
Prepaid expenses | (10,000) | |
Basis difference in fixed assets | (14,000) | |
Capitalized software | (50,000) | |
Purchase of intangibles | (59,000) | |
Total deferred tax liability | (33,000) | |
Total net deferred tax asset/(liability) | $ (21,000) |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Benefit Plans | ||
401(k) contribution amount | $ 64,000 | $ 24,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 12, 2022 | Mar. 01, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock shares underlying | 3,793,538 | 3,770,752 | ||
2014 Plan Member | Mr Pitoniak [Member] | ||||
Annual salary | $ 235,000 | |||
Restricted stock | 20,000 | |||
Restricted stock, per share | $ 26 | |||
Incentive stock option shares | 30,000 | |||
Exercise price | $ 26 | |||
Common stock shares underlying | 7,500 | |||
Subsequent Event [Member] | ||||
Common stock shares repurchase authorized | $ 5,000,000 |