Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 02, 2023 | Jun. 30, 2022 | |
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, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 3,791,020 | ||
Entity Public Float | $ 92,850,125 | ||
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 $0.001 per share | ||
Trading Symbol | ISDR | ||
Security Exchange Name | NYSE | ||
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,832 | $ 23,852 |
Accounts receivable (net of allowance for doubtful accounts of $745 and $675, respectively) | 2,978 | 3,291 |
Income tax receivable | 51 | 0 |
Other current assets | 1,559 | 750 |
Total current assets | 9,420 | 27,893 |
Capitalized software (net of accumulated amortization of $3,363 and $3,301, respectively) | 138 | 201 |
Fixed assets (net of accumulated depreciation of $610 and $456, respectively) | 625 | 713 |
Right-of-use asset - leases (See Note 9) | 1,277 | 1,533 |
Other long-term assets | 136 | 94 |
Goodwill | 22,498 | 6,376 |
Intangible assets (net of accumulated amortization of $6,821 and $6,005, respectively) | 32,231 | 2,447 |
Total assets | 66,325 | 39,257 |
Current liabilities: | ||
Accounts payable | 1,374 | 695 |
Accrued expenses | 2,255 | 1,975 |
Income taxes payable | 157 | 46 |
Note payable | 22,000 | 0 |
Deferred revenue | 5,405 | 3,086 |
Total current liabilities | 31,191 | 5,802 |
Deferred income tax liability | 572 | 176 |
Lease liabilities - long-term (See Note 9) | 1,339 | 1,659 |
Total liabilities | 33,102 | 7,637 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and 2021, respectively. | 0 | |
Common stock $0.001 par value, 20,000,000 shares authorized, 3,791,020 and 3,793,538 shares issued and outstanding as of December 31, 2022 and 2021, respectively. | 4 | 4 |
Additional paid-in capital | 22,147 | 22,401 |
Other accumulated comprehensive loss | (96) | (19) |
Retained earnings | 11,168 | 9,234 |
Total stockholders' equity | 33,223 | 31,620 |
Total liabilities and stockholders' equity | $ 66,325 | $ 39,257 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance For Accounts Receivables | $ 745 | $ 675 |
Accumulated Amortization - Capitalized Software | 3,364 | 3,301 |
Accumulated Depreciation - Fixed Assets | 610 | 456 |
Accumulated Amortization - Intangible Assets | $ 6,821 | $ 6,005 |
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 | 3,791,020 | 3,793,538 |
Common Stock Shares, Outstanding | 3,791,020 | 3,793,538 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
Revenues | $ 23,514 | $ 21,883 |
Cost of revenues | 5,684 | 5,748 |
Gross margin | 17,830 | 16,135 |
Operating costs and expenses: | ||
General and administrative | 6,963 | 5,821 |
Sales and marketing | 5,922 | 4,893 |
Product development | 1,306 | 1,075 |
Depreciation and amortization | 970 | 603 |
Total operating costs and expenses | 15,161 | 12,392 |
Operating income | 2,669 | 3,743 |
Other income (expense) | ||
Interest income (expense), net | (11) | 3 |
Other income (See Note 2) | 366 | |
Income before income taxes | 2,658 | 4,112 |
Income tax expense | 724 | 821 |
Net income | $ 1,934 | $ 3,291 |
Income per share - basic | $ 0.52 | $ 0.87 |
Income per share - diluted | $ 0.52 | $ 0.86 |
Weighted average number of common shares outstanding - basic | 3,720 | 3,780 |
Weighted average number of common shares outstanding - diluted | 3,740 | 3,820 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||
Net income | $ 1,934 | $ 3,291 |
Foreign currency translation adjustment | (77) | 0 |
Comprehensive income | $ 1,857 | $ 3,291 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital | Accumulated other comprehensive Loss | Retained Earnings |
Balance, shares at Dec. 31, 2020 | 3,770,752 | ||||
Balance, amount at Dec. 31, 2020 | $ 28,142 | $ 4 | $ 22,214 | $ (19) | $ 5,943 |
Stock-based compensation expense | 333 | $ 0 | 333 | 0 | 0 |
Exercise of stock awards, net of tax, shares | 42,563 | ||||
Exercise of stock awards, net of tax, amount | 307 | $ 0 | 307 | 0 | 0 |
Stock repurchase and retirement (see Note 7), shares | 19,777 | ||||
Stock repurchase and retirement (see Note 7), amount | (453) | $ 0 | (453) | 0 | 0 |
Foreign currency translation | 0 | 0 | 0 | 0 | 0 |
Net income | 3,291 | $ 0 | 0 | 0 | 3,291 |
Stock repurchase and retirement (see Note 7), shares | (19,777) | ||||
Balance, shares at Dec. 31, 2021 | 3,793,538 | ||||
Balance, amount at Dec. 31, 2021 | 31,620 | $ 4 | 22,401 | (19) | 9,234 |
Stock-based compensation expense | 763 | $ 0 | 763 | 0 | 0 |
Exercise of stock awards, net of tax, shares | 25,265 | ||||
Exercise of stock awards, net of tax, amount | $ 91 | $ 0 | 91 | 0 | 0 |
Stock repurchase and retirement (see Note 7), shares | 207,964 | 207,964 | |||
Stock repurchase and retirement (see Note 7), amount | $ (5,000) | $ 0 | (5,000) | 0 | 0 |
Foreign currency translation | (77) | 0 | 0 | (77) | 0 |
Net income | 1,934 | $ 0 | 0 | 0 | 1,934 |
Shares issued upon acquisition of Newswire (see Note 4), shares | 180,181 | ||||
Shares issued upon acquisition of Newswire (see Note 4), amount | $ 3,892 | $ 0 | 3,892 | 0 | 0 |
Stock repurchase and retirement (see Note 7), shares | (207,964) | (207,964) | |||
Balance, shares at Dec. 31, 2022 | 3,791,020 | ||||
Balance, amount at Dec. 31, 2022 | $ 33,223 | $ 4 | $ 22,147 | $ (96) | $ 11,168 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 1,934,000 | $ 3,291,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense | 406,000 | 257,000 |
Depreciation and amortization | 1,033,000 | 1,143,000 |
Deferred income taxes | (278,000) | (106,000) |
Stock-based compensation expense | 763,000 | 333,000 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | (9,000) | (1,042,000) |
Decrease (increase) in other assets | (282,000) | (160,000) |
Increase (decrease) in accounts payable | 35,000 | 393,000 |
Increase (decrease) in deferred revenue | 564,000 | 887,000 |
Increase (decrease) in accrued expenses and other liabilities | (147,000) | (265,000) |
Net cash provided by operating activities | 4,019,000 | 4,731,000 |
Cash flows from investing activities | ||
Purchase of fixed assets | (66,000) | (62,000) |
Capitalized software | 0 | (215,000) |
Purchase of acquired business, net of cash received (See note 4) | (17,963,000) | 0 |
Net cash used in investing activities | (18,029,000) | (277,000) |
Cash flows from financing activities | ||
Payment for stock repurchase and retirement (see Note 7) | (5,000,000) | (453,000) |
Proceeds from exercise of stock options, net of income taxes | 91,000 | 307,000 |
Net cash used in financing activities | (4,909,000) | (146,000) |
Net change in cash | (18,919,000) | 4,308,000 |
Cash- beginning | 23,852,000 | 19,556,000 |
Currency translation adjustment | (101,000) | (12,000) |
Cash- ending | 4,832,000 | 23,852,000 |
Supplemental disclosures: | ||
Cash paid for income taxes | 954,000 | 1,050,000 |
Shares issued in acquisition of Newswire (see Note 4) | 3,892 | 0 |
Issuance of secured promissory note in acquisition of Newswire (see Note 4) | $ 22,000,000 | $ 0 |
Description, Background and Bas
Description, Background and Basis of Operations | 12 Months Ended |
Dec. 31, 2022 | |
Description, Background and Basis of Operations | |
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 a leading communications and compliance company providing solutions for both public relations and investor relations professionals. The Company operates under several brands in the market, including Direct Transfer, Interwest, ACCESSWIRE and Newswire. The Company leverages its securities compliance and regulatory expertise to provide a comprehensive set of services that enhance a customer’s ability to communicate effectively with its shareholder base while meeting all reporting regulations required. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
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 economic consequences of the COVID-19 pandemic and recent economic downturn, 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, 2022 and 2021 (in 000’s): Year Ended December 31, 2022 Year Ended December 31, 2021 Beginning balance $ 675 $ 657 Bad debt expense 406 257 Write-offs (336 ) (239 ) Ending balance $ 745 $ 675 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, 2022, the total amount exceeding such limit was $3,082,000. The Company also had cash-on-hand of $56,000 in Europe and $1,131,000 in Canada as of December 31, 2022. 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, certain modules within the platform or to its Media Advantage Plan (MAP), 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. Communications module, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis. MAP subscription contracts contain two performance obligations of which the first is a series of distinct services that include, but are not limited to, developing specific media plans and creating content to be distributed and the second performance obligation being access to the MAP platform along with distribution of press releases, ongoing support and assessment of performance as a stand-ready obligation. Performance obligations of Compliance contracts include providing subscriptions to its cloud-based Platform id. Compliance module, Whistleblower module or other stand-ready obligations to deliver services and annual report printing and distribution. Additionally, services are provided on a per project basis. Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront. Set up fees for the transfer agent module and investor relations content management module are immaterial. The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period. 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, 2022 and 2021, was $5,405,000 and $3,086,000, respectively, and is expected to be recognized within one year. Revenue recognized for the year ended December 31, 2022 and 2021, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $3,086,000 and $2,212,000, respectively. Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $2,978,000 and $3,291,000 as of December 31, 2022 and 2021, 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, 2022 and 2021, the Company has capitalized $105,000 and $53,000, 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. Shares issuable upon the exercise of stock options totaling 44,250 were excluded in the computation of diluted earnings per common share during the year ended December 31, 2022, because their impact was anti-dilutive. 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. 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. 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, 2022 and 2021, are as follows (in thousands): December 31, 2022 2021 Capitalized software development costs $ — $ 215 Amortization included in cost of revenues 63 540 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, 2022 and 2021, the Company believes the fair value of its financial instruments, such as, accounts receivable, note payable, 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 may be considered an indefinite-lived asset and, as such, are not amortized as there may be no foreseeable limit to cash flows generated from them. For the Newswire acquisition the Company determined the trademark was considered a definite lived asset which will be amortized over a period of 15 years. 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 (5-10 years), customer lists (3 years), distribution partner relationships (10 years), non-compete agreements (5 years) and software and technology (3-7 years) are amortized over their estimated useful lives (See Note 5). Advertising The Company expenses advertising as incurred. During the years ended December 31, 2022 and 2021, advertising expense was $591,000 and $250,000, respectively. Reclassifications Liquidity and Capital Resources As of December 31, 2022, we had $4,832,000 in cash and cash equivalents and $2,978,000 in net accounts receivable. Current liabilities as of December 31, 2022, totaled $31,191,000 including our note payable, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses. As of December 31, 2022, our current liabilities exceeded our current assets by $21,771,000. While our current liabilities exceed current assets, we believe we will be able to refinance the note payable attributed to the Newswire acquisition before maturity due to our historical ability to generate cash as well as benefit from the addition of Newswire operations. We are actively involved in refinancing discussions at the time of this filing. ERC Tax Credit 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 an employee retention credit (“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. We are eligible under ERC provisions of the CARES Act 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 in 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. ASC 105, Generally Accepted Accounting Principles, describes the decision-making framework when no guidance exists in US GAAP for a particular transaction. Specifically, ASC 105-10-05-2 instructs companies to look for guidance for a similar transaction within US GAAP and apply that guidance by analogy. As such, forms of government assistance, such as the ERC, provided to business entities would not be within the scope of ASC 958, but it may be applied by analogy under ASC 105-10-05-2. We accounted for the ERC as a government grant in accordance with Accounting Standards Update 2013-06, Not-for-Profit Entities (Topic 958) by analogy under ASC 105-10-05-2. Under this standard, government grants are recognized when the conditions 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 · We have not used qualifying payroll for both the Paycheck Protection Program and the ERC · We incurred payroll costs to retain employees During the year ended December 31, 2021, we recorded an ERC benefit of $366,000 in other income in our Consolidated statements of operations and in other current assets in our Consolidated balance sheets as of December 30, 2021. Recent Accounting Pronouncements Accounting Standards Update 2016-13 Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) is effective for the Company beginning on January 1, 2023. This update requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The Company is still evaluating the impact of ASU 2016-13, however, at this time the Company does not expect it to have a material impact to the financial statements |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2022 | |
Fixed Assets | |
Fixed Assets | Note 3: Fixed Assets in $000’s December 31, 2022 2021 Computer equipment $ 203 $ 163 Furniture & equipment 327 301 Leasehold improvements 705 705 Total fixed assets, gross 1,235 1,169 Less: Accumulated depreciation (610 ) (456 ) Total fixed assets, net $ 625 $ 713 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, 2022 and 2021 totaled $154,000 and $144,000, respectively. No disposals were made during the years ended December 31, 2022 and 2021. |
Acquisition of iNewswire.com LL
Acquisition of iNewswire.com LLC | 12 Months Ended |
Dec. 31, 2022 | |
Acquisition of iNewswire.com LLC | |
Acquisition of iNewswire.com LLC | Note 4: Acquisition of iNewswire.com LLC On November 1, 2022 (the “Closing Date”), the Company entered into a Membership Interest Purchase Agreement with Lead Capital, LLC, a Delaware limited liability company (the “Seller”), whereby the Company purchased all of the issued and outstanding membership interests of iNewswire.com LLC, a Delaware limited liability company (“Newswire”). Newswire is a leading media and marketing communications technology company that provides press release distribution, media databases, media monitoring, and newsrooms through its Media Advantage Platform. In connection with the transaction (the “Acquisition”), the Company paid to the Seller aggregate consideration of $43.5 million, consisting of the following: (i) a cash payment of $18.0 million subject to a 60-day escrow to secure the payment of any working capital adjustments or any employee bonus obligations of Newswire, (ii) the issuance of a secured promissory note in the principal amount of $22.0 million (the “Secured Note”), and (iii) the issuance of 180,181 shares of the Company’s common stock, par value $0.001, valued at $3.9 million based on the Company’s closing stock price of $21.60 on the Closing Date. The Secured Note is due and payable on November 8, 2023 (the “Maturity Date”) and bears an annual interest rate of 6%. The Secured Note is secured by the intellectual property (with certain exceptions) and the domain names acquired by the Company as part of the acquisition. The Secured Note may be prepaid, however, the 6% interest payment is guaranteed through the Maturity Date even if prepayments are made. The Company has determined that the acquisition of Newswire constitutes a business acquisition as defined by ASC 805, Business Combinations Fair Measurements and Disclosure A summary of the fair value consideration transferred for the Acquisition and the preliminary allocation to the fair value of the assets and liabilities of Newswire are as follows (in 000's): Consideration transferred: Cash payment $ 18,000 Secured promissory note 22,000 Shares of Issuer Direct common stock based on closing market price prior to the Acquisition 3,892 Net working capital adjustment (350 ) Total consideration transferred $ 43,542 Preliminary allocation of tangible and intangible assets and liabilities: Goodwill $ 16,122 Trademarks/Tradename 27,500 Technology 2,520 Customer relationships 580 Net liabilities assumed (3,180 ) Total amount allocated $ 43,542 Net liabilities assumed: Cash $ 37 Accounts Receivable 90 Other Current Assets 14 Accounts Payable (645 ) Accrued Expenses (226 ) Deferred Revenue (1,775 ) Deferred tax liability (675 ) $ (3,180 ) Supplemental pro forma information The following unaudited supplemental pro forma information summarizes the Company’s results of operations for the current reporting period, as if the Company completed the acquisition as of the beginning of the annual reporting period. Supplemental pro forma information is as follows: in $000’s, except per share amounts 2022 2021 Revenues $ 34,194 $ 31,917 Net income $ 770 $ 729 Basic earnings per share $ 0.20 $ 0.18 Diluted earnings per share $ 0.20 $ 0.18 The unaudited pro forma combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisitions been completed as of the date and for the periods presented and should not be taken as representative of our consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma combined financial information is not intended to project the future financial position or results of operations of the combined company. The unaudited pro forma financial information was prepared using the acquisition method of accounting for the acquisition under existing US GAAP. Issuer Direct has been treated as the acquirer. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 5: Goodwill and Other Intangible Assets The components of intangible assets are as follows (in 000’s): December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ — Customer relationships 5,180 (3,275 ) 1,905 Proprietary software 3,799 (1,173 ) 2,626 Distribution partner relationships 153 (69 ) 84 Non-compete agreement 69 (55 ) 14 Trademarks – definite-lived 27,673 (479 ) 27,194 Trademarks – indefinite-lived 408 — 408 Total intangible assets $ 39,052 $ (6,821 ) $ 32,231 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 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, 2022 and 2021. The amortization of intangible assets is a charge to operating expenses and totaled $816,000 and $459,000 in the years ended 2022 and 2021, respectively. The future amortization of the identifiable intangible assets is as follows (in 000’s): Years Ending December 31: 2023 $ 2,740 2024 2,727 2025 2,628 2026 2,600 2027 2,431 Thereafter 18,697 Total $ 31,823 The balance of goodwill was $6,376,000 as of December 31, 2021. During the year ending December 31, 2022, we acquired Newswire, which added $16,122,000 of goodwill. Along with Newswire, the goodwill balance of $22,498,000 is related to the stock acquisitions of Basset Press in July 2007, PIR in 2013, ACCESSWIRE in 2014, Interwest in 2017 and 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 2022 and 2021 and determined that no goodwill was impaired. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Line of Credit | |
Line of Credit | Note 6: 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, 2022, the interest rate was 5.81% and the Company did not owe any amounts on the Line of Credit. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity | |
Equity | Note 7: Equity Dividends The Company did not pay any dividends during the years ended December 31, 2022 and 2021. Preferred stock and common stock There were no issuances of preferred stock or common stock during the years ended December 31, 2022 and 2021 other than stock awarded to employees and the Board of Directors as well as the shares issued as part of the Newswire acquisition (see Note 4). F-18 Table of Contents Stock repurchase and retirement On August 7, 2019, the Company publicly announced a stock repurchase program under which the Company was 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 $ — On March 1, 2022, the Company’s board of directors authorized a stock repurchase program under which the Company was authorized to repurchase up to $5,000,000 of its common shares. As of August 31, 2022, the Company completed the repurchase program by purchasing a total of 207,964 shares as shown in the table below ($ 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 March 1-31, 2022 6,200 $ 29.35 6,200 $ 4,818 April 1-30, 2022 8,226 27.76 8,226 4,590 May 1-31, 2022 80,748 22.92 80,748 2,739 June 1-30, 2022 74,227 23.98 74,227 959 July 1-31, 2022 32,392 24.88 32,392 153 August 1-31, 2022 6,171 24.79 6,171 — No shares repurchased between September 2022 and December 2022 Total 207,964 $ 24.04 207,964 $ — |
Stock Options and Restricted St
Stock Options and Restricted Stock Units | 12 Months Ended |
Dec. 31, 2022 | |
Stock Options and Restricted Stock Units | |
Stock Options and Restricted Stock Units | Note 8: 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, 2022, there are 130,995 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, 2022 and 2021: Number of Options Outstanding Range of Exercise Price Weighted Average Exercise Price Aggregate Intrinsic Value 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 Options granted 50,250 26.00 – 27.71 26.69 — Options exercised (10,000 ) 7.76 – 13.21 9.12 185,500 Options forfeited/cancelled (6,167 ) 9.26 – 27.71 27.71 — Balance on December 31, 2022 81,250 $ 6.80 – 27.71 $ 20.17 462,390 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, 2022 and 2021 of $25.04 and $29.45, 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, 2022 and 2021. As of December 31, 2022, there was $403,000 of unrecognized compensation cost related to stock options, which will be recognized through 2026. The following is a summary of unvested stock options during the year ended December 31, 2022 and 2021: Number of Options Outstanding Weighted Average Exercise Price Weighted Average Grant Date Fair Value 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 — 12.87 5.47 Options granted 50,250 26.69 12.54 Options vested — — — Options forfeited/cancelled (6,000 ) 27.71 13.53 Balance on December 31, 2022 44,250 $ 26.55 $ 12.41 The following table summarizes information about stock options outstanding and exercisable on December 31, 2022: Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number $0.01 - 8.00 7,500 2.17 7.12 7,500 $8.01 - 11.00 3,500 4.57 10.11 3,500 $11.01 - 16.00 18,000 5.53 13.12 18,000 $16.01 - 27.00 38,000 8.30 24.19 8,000 $27.01 – 27.71 14,250 9.05 27.71 — Total 81,250 7.13 20.31 37,000 Of the 81,250 stock options outstanding, 36,366 are non-qualified stock options. All options have been registered with the SEC. The fair value of common stock options issued during the year ended December 31, 2022 were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used: Year Ended December 31,2022 Expected dividend yield 0 % Expected stock price volatility 46 % Weighted-average risk-free interest rate 1.68 % Weighted-average expected life of options (in years) 6.29 The following is a summary of restricted stock units issued during the years ended December 31, 2022 and 2021: Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value 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 Units granted 48,240 24.99 1,205,525 Units vested/issued (15,265 ) 26.05 377,981 Units forfeited — — — Balance on December 31, 2022 50,740 $ 25.00 $ 1,268,500 During the year ended December 31, 2022, the Company granted 48,240 restricted stock units with an average grant date fair value of $24.99 per share to certain employees and non-employee members of the Board of Directors of the Company. Non-employee directors were granted 12,240 restricted stock units, which vest on the earlier of the 2023 annual meeting of the shareholders or one year. The other 36,000 restricted stock units were granted to employees of the Company. During the year ended December 31, 2022, 15,265 restricted stock units with an average grant date fair value of $26.05 vested. As of December 31, 2022, there was $843,000 of unrecognized compensation cost related to unvested restricted stock units, which will be recognized through 2025. All restricted stock units have been registered with the SEC. During the years ended December 31, 2022 and 2021, the Company recorded compensation expense of $763,000 and $333,000, respectively, related to stock options and restricted stock units. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | Note 9: Leases Leasing activity generally 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 30, 2022 and 2021. 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. Lease liabilities totaled $1,708,000 and $2,017,000 as of December 31, 2022 and 2021, respectively. The current portion of this liability of $369,000 is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $1,339,000 is included in Lease liabilities on the Consolidated Balance Sheet as of December 31, 2022. Rent expense consists of both operating lease expense from amortization of our 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, 2022 Year ended December 31, 2021 Lease expense Operating lease expense $ 304 $ 347 Variable lease expense 98 116 Rent expense $ 402 $ 463 The weighted-average remaining non-cancelable lease term for our operating leases was 5 years as of December 31, 2022. As of December 31, 2022, 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, 2022, are as follows (in 000’s): Year Ended December 31: 2023 $ 370 2024 379 2025 389 2026 400 2027 413 Total lease payments 1,951 Present value adjustment (243 ) Lease liability $ 1,708 We have performed an evaluation of our other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described above, none of our contracts contain a lease. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10: 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, 2022 | |
Revenues | |
Revenues | Note 11: Revenues The Company considers itself to be in a single reportable segment under the authoritative guidance for segment reporting, specifically a 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, 2022 and 2021, the Company generated revenues from the following revenue streams as a percentage of total revenue (in 000’s): Year Ended December 31, 2022 Year Ended December 31, 2021 Amount Percentage Amount Percentage Revenue Communications $ 16,115 68.5 % $ 14,058 64.2 % Compliance 7,399 31.5 % 7,825 35.8 % Total $ 23,514 100.0 % $ 21,883 100.0 % The Company did not have any customers during the years ended December 31, 2022 or 2021 that accounted for more than 10% of revenue. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 12: Income Taxes The provision for income taxes consisted of the following components for the years ended December 31 (in 000’s): 2022 2021 Current: Federal $ 688 $ 632 State 172 186 Foreign 142 109 Total Current 1,002 927 Deferred: Federal (202 ) (40 ) State (37 ) (7 ) Foreign (39 ) (59 ) Total Deferred (278 ) (106 ) Total expense for income taxes $ 724 $ 821 Reconciliation between the statutory rate and the effective tax rate is as follows on December 31 (in 000's, except percentages): 2022 2021 Amount Percentage Amount Percentage Federal statutory tax rate $ 558 21.0 % $ 864 21.0 % State tax rate 114 4.2 % 139 3.4 % Permanent difference – stock-based compensation 25 1.0 % (55 ) (1.3 )% Permanent difference – other 38 1.4 % (83 ) (2.0 )% Foreign tax credit generated (96 ) (3.6 )% (55 ) (1.3 )% Tax on foreign earnings – tax reform 96 3.6 % 55 1.3 % Foreign rate differential 15 0.6 % 13 0.3 % FDII Deduction (26 ) (1.0 )% (57 ) (1.3 )% Total $ 724 27.2 % $ 821 20.1 % Components of net deferred income tax assets are as follows on December 31 (in 000's): 2022 2021 Change Assets: Deferred revenue $ 29 $ 89 $ (60 ) Allowance for doubtful accounts 185 152 33 Stock options 151 88 63 Transaction costs 41 44 (3 ) IRC Section 174 capitalized costs 216 — 216 ROU lease liability 427 496 (69 ) Other 10 48 (38 ) Total deferred tax asset 1,059 917 142 Liabilities Prepaid expenses — (5 ) 5 Basis difference in fixed assets (155 ) (174 ) 19 Capitalized software (35 ) (50 ) 15 ROU Assets (393 ) (464 ) 71 Purchase of intangibles (1,048 ) (400 ) (648 ) Total deferred tax liability (1,631 ) (1,093 ) (538 ) Total net deferred tax asset / (liability) $ (572 ) $ (176 ) $ (396 ) 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, 2022 or December 31, 2021. 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, 2022. Undistributed earnings of the Company are insignificant as of December 31, 2022. 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, 2021, 2020 and 2019 are open to audit by federal and state taxing authorities. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 13: Employee Benefit Plans The Company sponsors two defined contribution 401(k) Profit Sharing Plans 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 $111,000 and $64,000 during the years ended December 31, 2022 and 2021, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 economic consequences of the COVID-19 pandemic and recent economic downturn, 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, 2022 and 2021 (in 000’s): Year Ended December 31, 2022 Year Ended December 31, 2021 Beginning balance $ 675 $ 657 Bad debt expense 406 257 Write-offs (336 ) (239 ) Ending balance $ 745 $ 675 |
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, 2022, the total amount exceeding such limit was $3,082,000. The Company also had cash-on-hand of $56,000 in Europe and $1,131,000 in Canada as of December 31, 2022. 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. |
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: lesser of 8 years or the lease term |
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, certain modules within the platform or to its Media Advantage Plan (MAP), 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. Communications module, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis. MAP subscription contracts contain two performance obligations of which the first is a series of distinct services that include, but are not limited to, developing specific media plans and creating content to be distributed and the second performance obligation being access to the MAP platform along with distribution of press releases, ongoing support and assessment of performance as a stand-ready obligation. Performance obligations of Compliance contracts include providing subscriptions to its cloud-based Platform id. Compliance module, Whistleblower module or other stand-ready obligations to deliver services and annual report printing and distribution. Additionally, services are provided on a per project basis. Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront. Set up fees for the transfer agent module and investor relations content management module are immaterial. The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period. 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, 2022 and 2021, was $5,405,000 and $3,086,000, respectively, and is expected to be recognized within one year. Revenue recognized for the year ended December 31, 2022 and 2021, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $3,086,000 and $2,212,000, respectively. Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $2,978,000 and $3,291,000 as of December 31, 2022 and 2021, 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. |
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. Shares issuable upon the exercise of stock options totaling 44,250 were excluded in the computation of diluted earnings per common share during the year ended December 31, 2022, because their impact was anti-dilutive. 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. |
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. |
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, 2022 and 2021, are as follows (in thousands): December 31, 2022 2021 Capitalized software development costs $ — $ 215 Amortization included in cost of revenues 63 540 |
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, 2022 and 2021, the Company believes the fair value of its financial instruments, such as, accounts receivable, note payable, 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 may be considered an indefinite-lived asset and, as such, are not amortized as there may be no foreseeable limit to cash flows generated from them. For the Newswire acquisition the Company determined the trademark was considered a definite lived asset which will be amortized over a period of 15 years. 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 (5-10 years), customer lists (3 years), distribution partner relationships (10 years), non-compete agreements (5 years) and software and technology (3-7 years) are amortized over their estimated useful lives (See Note 5). |
Advertising | The Company expenses advertising as incurred. During the years ended December 31, 2022 and 2021, advertising expense was $591,000 and $250,000, respectively. |
Reclassifications | Certain amounts for prior years have been reclassified to conform with the current year financial statement presentation. Included in sales marketing and product development expenses were $186,000 and $144,000 respectively, which has been reclassified to general and administrative expenses during the year ended December 31, 2021. |
Liquidity and Capital Resources | As of December 31, 2022, we had $4,832,000 in cash and cash equivalents and $2,978,000 in net accounts receivable. Current liabilities as of December 31, 2022, totaled $31,191,000 including our note payable, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses. As of December 31, 2022, our current liabilities exceeded our current assets by $21,771,000. While our current liabilities exceed current assets, we believe we will be able to refinance the note payable attributed to the Newswire acquisition before maturity due to our historical ability to generate cash as well as benefit from the addition of Newswire operations. We are actively involved in refinancing discussions at the time of this filing. |
Recent Accounting Pronouncements | Accounting Standards Update 2016-13 Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) is effective for the Company beginning on January 1, 2023. This update requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The Company is still evaluating the impact of ASU 2016-13, however, at this time the Company does not expect it to have a material impact to the financial statements |
ERC Tax Credit | 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 an employee retention credit (“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. We are eligible under ERC provisions of the CARES Act 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 in 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. ASC 105, Generally Accepted Accounting Principles, describes the decision-making framework when no guidance exists in US GAAP for a particular transaction. Specifically, ASC 105-10-05-2 instructs companies to look for guidance for a similar transaction within US GAAP and apply that guidance by analogy. As such, forms of government assistance, such as the ERC, provided to business entities would not be within the scope of ASC 958, but it may be applied by analogy under ASC 105-10-05-2. We accounted for the ERC as a government grant in accordance with Accounting Standards Update 2013-06, Not-for-Profit Entities (Topic 958) by analogy under ASC 105-10-05-2. Under this standard, government grants are recognized when the conditions 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 · We have not used qualifying payroll for both the Paycheck Protection Program and the ERC · We incurred payroll costs to retain employees During the year ended December 31, 2021, we recorded an ERC benefit of $366,000 in other income in our Consolidated statements of operations and in other current assets in our Consolidated balance sheets as of December 30, 2021. Recent Accounting Pronouncements Accounting Standards Update 2016-13 Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) is effective for the Company beginning on January 1, 2023. This update requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The Company is still evaluating the impact of ASU 2016-13, however, at this time the Company does not expect it to have a material impact to the financial statements |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Estimated lives of paroperty and equipment | 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 |
Capitalized costs and amortization | Year Ended December 31, 2022 Year Ended December 31, 2021 Beginning balance $ 675 $ 657 Bad debt expense 406 257 Write-offs (336 ) (239 ) Ending balance $ 745 $ 675 December 31, 2022 2021 Capitalized software development costs $ — $ 215 Amortization included in cost of revenues 63 540 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fixed Assets | |
Schedule of fixed assets | in $000’s December 31, 2022 2021 Computer equipment $ 203 $ 163 Furniture & equipment 327 301 Leasehold improvements 705 705 Total fixed assets, gross 1,235 1,169 Less: Accumulated depreciation (610 ) (456 ) Total fixed assets, net $ 625 $ 713 |
Acquisition of iNewswire.com _2
Acquisition of iNewswire.com LLC (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Acquisition of iNewswire.com LLC | |
Schedule of fair value consideration transferred for the Acquisition | Consideration transferred: Cash payment $ 18,000 Secured promissory note 22,000 Shares of Issuer Direct common stock based on closing market price prior to the Acquisition 3,892 Net working capital adjustment (350 ) Total consideration transferred $ 43,542 Preliminary allocation of tangible and intangible assets and liabilities: Goodwill $ 16,122 Trademarks/Tradename 27,500 Technology 2,520 Customer relationships 580 Net liabilities assumed (3,180 ) Total amount allocated $ 43,542 Net liabilities assumed: Cash $ 37 Accounts Receivable 90 Other Current Assets 14 Accounts Payable (645 ) Accrued Expenses (226 ) Deferred Revenue (1,775 ) Deferred tax liability (675 ) $ (3,180 ) |
Schedule of of the results of operations | in $000’s, except per share amounts 2022 2021 Revenues $ 34,194 $ 31,917 Net income $ 770 $ 729 Basic earnings per share $ 0.20 $ 0.18 Diluted earnings per share $ 0.20 $ 0.18 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Schedule of effective intengibale assets | December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer lists $ 1,770 $ (1,770 ) $ — Customer relationships 5,180 (3,275 ) 1,905 Proprietary software 3,799 (1,173 ) 2,626 Distribution partner relationships 153 (69 ) 84 Non-compete agreement 69 (55 ) 14 Trademarks – definite-lived 27,673 (479 ) 27,194 Trademarks – indefinite-lived 408 — 408 Total intangible assets $ 39,052 $ (6,821 ) $ 32,231 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 |
Schedule of amortization of the identofiable intengible assets | Years Ending December 31: 2023 $ 2,740 2024 2,727 2025 2,628 2026 2,600 2027 2,431 Thereafter 18,697 Total $ 31,823 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity | |
Stock Options Outstanding And Exercisable | 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 $ — 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 March 1-31, 2022 6,200 $ 29.35 6,200 $ 4,818 April 1-30, 2022 8,226 27.76 8,226 4,590 May 1-31, 2022 80,748 22.92 80,748 2,739 June 1-30, 2022 74,227 23.98 74,227 959 July 1-31, 2022 32,392 24.88 32,392 153 August 1-31, 2022 6,171 24.79 6,171 — No shares repurchased between September 2022 and December 2022 Total 207,964 $ 24.04 207,964 $ — |
Stock Options and Restricted _2
Stock Options and Restricted Stock Units (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Options and Restricted Stock Units | |
Summary of restricted stock units issued | Number of RSUs Outstanding Weighted Average Grant Date Fair Value Aggregate Intrinsic Value 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 Units granted 48,240 24.99 1,205,525 Units vested/issued (15,265 ) 26.05 377,981 Units forfeited — — — Balance on December 31, 2022 50,740 $ 25.00 $ 1,268,500 |
Schedule of Black-Scholes option pricing | Year Ended December 31,2022 Expected dividend yield 0 % Expected stock price volatility 46 % Weighted-average risk-free interest rate 1.68 % Weighted-average expected life of options (in years) 6.29 |
summarizes information about stock options outstanding and exercisable | Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number $0.01 - 8.00 7,500 2.17 7.12 7,500 $8.01 - 11.00 3,500 4.57 10.11 3,500 $11.01 - 16.00 18,000 5.53 13.12 18,000 $16.01 - 27.00 38,000 8.30 24.19 8,000 $27.01 – 27.71 14,250 9.05 27.71 — Total 81,250 7.13 20.31 37,000 |
Summary of stock options activity | Number of Options Outstanding Range of Exercise Price Weighted Average Exercise Price Aggregate Intrinsic Value 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 Options granted 50,250 26.00 – 27.71 26.69 — Options exercised (10,000 ) 7.76 – 13.21 9.12 185,500 Options forfeited/cancelled (6,167 ) 9.26 – 27.71 27.71 — Balance on December 31, 2022 81,250 $ 6.80 – 27.71 $ 20.17 462,390 |
Schedule of unvested stock options | The following is a summary of unvested stock options during the year ended December 31, 2022 and 2021: Number of Options Outstanding Weighted Average Exercise Price Weighted Average Grant Date Fair Value 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 — 12.87 5.47 Options granted 50,250 26.69 12.54 Options vested — — — Options forfeited/cancelled (6,000 ) 27.71 13.53 Balance on December 31, 2022 44,250 $ 26.55 $ 12.41 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Lease Expense | Year ended December 31, 2022 Year ended December 31, 2021 Lease expense Operating lease expense $ 304 $ 347 Variable lease expense 98 116 Rent expense $ 402 $ 463 |
Future Minimum Lease Payments | Year Ended December 31: 2023 $ 370 2024 379 2025 389 2026 400 2027 413 Total lease payments 1,951 Present value adjustment (243 ) Lease liability $ 1,708 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues | |
Disaggregated Revenue | Year Ended December 31, 2022 Year Ended December 31, 2021 Amount Percentage Amount Percentage Revenue Communications $ 16,115 68.5 % $ 14,058 64.2 % Compliance 7,399 31.5 % 7,825 35.8 % Total $ 23,514 100.0 % $ 21,883 100.0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of income tax expense | 2022 2021 Current: Federal $ 688 $ 632 State 172 186 Foreign 142 109 Total Current 1,002 927 Deferred: Federal (202 ) (40 ) State (37 ) (7 ) Foreign (39 ) (59 ) Total Deferred (278 ) (106 ) Total expense for income taxes $ 724 $ 821 |
Schedule of effective income tax rate reconciliation | 2022 2021 Amount Percentage Amount Percentage Federal statutory tax rate $ 558 21.0 % $ 864 21.0 % State tax rate 114 4.2 % 139 3.4 % Permanent difference – stock-based compensation 25 1.0 % (55 ) (1.3 )% Permanent difference – other 38 1.4 % (83 ) (2.0 )% Foreign tax credit generated (96 ) (3.6 )% (55 ) (1.3 )% Tax on foreign earnings – tax reform 96 3.6 % 55 1.3 % Foreign rate differential 15 0.6 % 13 0.3 % FDII Deduction (26 ) (1.0 )% (57 ) (1.3 )% Total $ 724 27.2 % $ 821 20.1 % |
Schedule of deferred tax assets and liabilities | 2022 2021 Change Assets: Deferred revenue $ 29 $ 89 $ (60 ) Allowance for doubtful accounts 185 152 33 Stock options 151 88 63 Transaction costs 41 44 (3 ) IRC Section 174 capitalized costs 216 — 216 ROU lease liability 427 496 (69 ) Other 10 48 (38 ) Total deferred tax asset 1,059 917 142 Liabilities Prepaid expenses — (5 ) 5 Basis difference in fixed assets (155 ) (174 ) 19 Capitalized software (35 ) (50 ) 15 ROU Assets (393 ) (464 ) 71 Purchase of intangibles (1,048 ) (400 ) (648 ) Total deferred tax liability (1,631 ) (1,093 ) (538 ) Total net deferred tax asset / (liability) $ (572 ) $ (176 ) $ (396 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | ||
Allowance for doubtful accounts, beginning | $ 675 | $ 657 |
Bad debt expense | 406 | 257 |
Write-offs | (336) | (239) |
Allowance for doubtful accounts, ending | $ 745 | $ 675 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Equipment [Member] | |
Property Plant and Equipment Estimated Useful Lives | 3 years |
Furniture & equipment [Member] | Minimum [Member] | |
Property Plant and Equipment Estimated Useful Lives | 3 years |
Furniture & equipment [Member] | Maximum [Member] | |
Property Plant and Equipment Estimated Useful Lives | 7 years |
Leasehold Improvements | |
Property Plant and Equipment Estimated Useful Lives | lesser of 8 years or the lease term |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | ||
Capitalized Software Development Costs | $ 0 | $ 215 |
Amortization Included in Depreciation and Amortization | $ 63 | $ 540 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
FDIC insurance limit | $ 250,000 | |
FDIC exceeding limit | 3,082,000 | |
Capitalized costs | 105,000 | $ 53,000 |
Cash and cash equivalents | 4,832,000 | 23,852,000 |
Accounts receivable net | 2,978,000 | 3,291,000 |
Advertising Expense | 591,000 | 250,000 |
Deferred revenue | 5,405,000,000 | 3,086,000 |
Revenue Recognized Included in the Deferred Revenue | 3,086,000 | 2,212,000 |
Accounts receivable related to contracts with customers | 2,978,000 | 3,291,000 |
ERC benefit | 366,000 | |
Sales and Marketing product development expenses | $ 186,000 | 144,000 |
Antidilutive securities excluded from computation of earnings per common share | 44,250 | |
Total current liabilities | $ 31,191,000 | $ 5,802,000 |
Liquidity and Capital Resources | ||
Cash and cash equivalents | 4,832,000,000 | |
Accounts receivable net | 2,978,000 | |
Total current liabilities | 31,191,000 | |
Exceeded liability | 21,771,000 | |
Canada [Member] | ||
Cash-on-hand | 1,131,000 | |
Europe | ||
Cash-on-hand | $ 56,000 | |
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 | |
Minimum Member | Customer Relationships | ||
Intangible asset estimated useful lives | 5 years | |
Minimum Member | Software and Technology | ||
Intangible asset estimated useful lives | 3 years | |
Maximum Member | Customer Relationships | ||
Intangible asset estimated useful lives | 10 years | |
Maximum Member | Software and Technology | ||
Intangible asset estimated useful lives | 7 years |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fixed Assets | ||
Computers equipment | $ 203 | $ 163 |
Furniture & equipment | 327 | 301 |
Leasehold improvements | 705 | 705 |
Total fixed assets, gross | 1,235 | 1,169 |
Less: accumulated depreciation | (610) | (456) |
Total fixed assets, net | $ 625 | $ 713 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fixed Assets | ||
Depreciation expense | $ 154,000 | $ 144,000 |
Disposal of fixed assets | 0 | $ 0 |
Leasehold improvements | $ 488,000 |
Acquisition of iNewswire.com _3
Acquisition of iNewswire.com LLC (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
Consideration transferred: | ||
Goodwill | $ 6,376,000 | $ 22,498,000 |
Other Current Assets | 750,000 | 1,559,000 |
Accounts Payable | (695,000) | (1,374,000) |
Deferred Revenue | (3,086,000) | (5,405,000,000) |
Deferred tax liability | (1,093,000) | (1,631,000) |
Fair Value Of Assets And Liabilities [Member] | ||
Consideration transferred: | ||
Cash payment | $ 18,000,000 | |
Secured promissory note | 22,000,000 | |
Shares of Issuer Direct common stock based on closing market price prior to the Acquisition | 3,892,000 | |
Net working capital adjustment and other costs paid on behalf of Seller, net of cash | (350,000) | |
Total consideration transferred | 43,542,000 | |
Goodwill | 16,122,000 | |
Trademarks/Tradename | 27,500,000 | |
Technology | 2,520,000 | |
Customer relationships | 580,000 | |
Net liabilities assumed | (3,180,000) | |
Total amount allocated | 43,542,000 | |
Cash | 37,000 | |
Accounts Receivable | 90,000 | |
Other Current Assets | 14,000 | |
Accounts Payable | (645,000) | |
Accrued Expenses | (226,000) | |
Deferred Revenue | (1,775,000) | |
Deferred tax liability | (675,000) | |
Total | $ (3,180,000) |
Acquisition of iNewswire.com _4
Acquisition of iNewswire.com LLC (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consideration transferred: | ||
Revenues | $ 23,514,000 | $ 21,883,000 |
Net income | $ 1,934,000 | $ 3,291,000 |
Basic earnings per share | $ 0.52 | $ 0.87 |
Diluted earnings per share | $ 0.52 | $ 0.86 |
2014 Plan Member | ||
Consideration transferred: | ||
Revenues | $ 34,194 | $ 31,917 |
Net income | $ 770,000 | $ 729,000 |
Basic earnings per share | $ 0.20 | $ 0.18 |
Diluted earnings per share | $ 0.20 | $ 0.18 |
Acquisition of iNewswire.com _5
Acquisition of iNewswire.com LLC (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Based | $ 763,000 | $ 333,000 |
November 1-30 2022 | ||
Principal amount | 22,000,000 | |
Cash payment | 18,000,000 | |
Based | 3,900,000 | |
Total expenses | $ 140,000 | |
Interest rate | 6% | |
Common stock shares | 180,181 | |
Seller aggregate consideration | $ 43,500,000 | |
Common stock | $ 0.001 | |
Closing stock price | $ 21.60 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accumulated amortization | $ 6,821 | $ 6,005 |
Net carrying amount | 31,823 | |
Trademarks - Definite-Lived | ||
Gross carrying amount | 27,673 | 173 |
Accumulated amortization | (479) | (173) |
Net carrying amount | 27,194 | 0 |
Trademarks - Indefinite-Lived | ||
Gross carrying amount | 408 | 408 |
Accumulated amortization | 0 | 0 |
Net carrying amount | 408 | 408 |
Total Intangible Assets | ||
Gross carrying amount | 39,052 | 8,452 |
Accumulated amortization | (6,821) | (6,005) |
Net carrying amount | 32,231 | 2,447 |
Customer Lists | ||
Gross carrying amount | 1,770 | 1,770 |
Accumulated amortization | (1,770) | (1,770) |
Net carrying amount | 0 | 0 |
Distribution Partner Relationships | ||
Gross carrying amount | 153 | 153 |
Accumulated amortization | (69) | (53) |
Net carrying amount | 84 | 100 |
Non-compete Agreements | ||
Gross carrying amount | 69 | 69 |
Accumulated amortization | (55) | (41) |
Net carrying amount | 14 | 28 |
Customer Relationships | ||
Gross carrying amount | 5,180 | 4,600 |
Accumulated amortization | (3,275) | (2,937) |
Net carrying amount | 1,905 | 1,663 |
Proprietary Software | ||
Gross carrying amount | 3,799 | 1,279 |
Accumulated amortization | (1,173) | (1,031) |
Net carrying amount | $ 2,626 | $ 248 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Other Intangible Assets | |
2023 | $ 2,740 |
2024 | 2,727 |
2025 | 2,628 |
2026 | 2,600 |
2027 | 2,431 |
Thereafter | 18,697 |
Total | $ 31,823 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | ||
Amortization of intangible assets | $ 816,000 | $ 459,000 |
Goodwill | 22,498,000,000 | $ 6,376,000,000 |
Goodwill | $ 16,122,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | Dec. 31, 2022 USD ($) |
Line of Credit | |
Line of credit facility, interest rate at period end | 5.81% |
Line of credit, maximum borrowing capacity | $ 3,000,000 |
Equity (Details)
Equity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Total number of shares repurchased | 179,845 |
Average price paid per share | $ / shares | $ 11.15 |
Maximum dollar value of shares that may yet be purchased under the program | $ | $ 0 |
December 1-31, 2019 | |
Average price paid per share | $ / shares | $ 0 |
Maximum dollar value of shares that may yet be purchased under the program | $ | $ 231 |
January 1-31, 2020 | |
Average price paid per share | $ / shares | $ 0 |
Maximum dollar value of shares that may yet be purchased under the program | $ | $ 231 |
February 1-29, 2020 | |
Average price paid per share | $ / shares | $ 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 | $ / shares | $ 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 |
October 1-31, 2019 | |
Total number of shares repurchased | 39,363 |
Average price paid per share | $ / shares | $ 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 |
March 1-31, 2020 | |
Total number of shares repurchased | 21,700 |
Average price paid per share | $ / shares | $ 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 | $ / shares | $ 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 |
August 7-31, 2019 | |
Total number of shares repurchased | 22,150 |
Average price paid per share | $ / shares | $ 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 1-31, 2019 | |
Total number of shares repurchased | 2,830 |
Average price paid per share | $ / shares | $ 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 |
November 1-30, 2019 | |
Total number of shares repurchased | 11,827 |
Average price paid per share | $ / shares | $ 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, 2021 | |
Total number of shares repurchased | 19,777 |
Average price paid per share | $ / shares | $ 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 1)
Equity (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | |
Total number of shares repurchased | 207,964 | ||
Average price paid per share | $ 24.04 | ||
Total number of shares purchased as part of publicly announced program | 179,845 | 179,845 | 207,964 |
Maximum dollar value of shares that may yet be purchased under the program | $ 0 | ||
December 1-31, 2019 | |||
Total number of shares repurchased | 32,392 | ||
Average price paid per share | $ 24.88 | ||
Total number of shares purchased as part of publicly announced program | 32,392 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 153 | ||
May 1-31, 2020 | |||
Total number of shares repurchased | 80,748 | ||
Average price paid per share | $ 22.92 | ||
Total number of shares purchased as part of publicly announced program | 80,748 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 2,739 | ||
October 1-31, 2019 | |||
Total number of shares repurchased | 74,227 | ||
Average price paid per share | $ 23.98 | ||
Total number of shares purchased as part of publicly announced program | 74,227 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 959 | ||
August 7-31, 2019 | |||
Total number of shares repurchased | 6,171 | ||
Average price paid per share | $ 24.79 | ||
Total number of shares purchased as part of publicly announced program | 6,171 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 0 | ||
March 1-31, 2022 | |||
Total number of shares repurchased | 6,200 | ||
Average price paid per share | $ 29.35 | ||
Total number of shares purchased as part of publicly announced program | 6,200 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 4,818 | ||
April 1-30, 2022 | |||
Total number of shares repurchased | 8,226 | ||
Average price paid per share | $ 27.76 | ||
Total number of shares purchased as part of publicly announced program | 8,226 | ||
Maximum dollar value of shares that may yet be purchased under the program | $ 4,590 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 16, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 01, 2022 | Aug. 07, 2019 | |
Shares Repurchased | $ 1,000,000 | ||||||
Increased In Repurchases Shares | $ 2,000,000 | ||||||
Purchased Shares | 179,845 | 179,845 | 207,964 | ||||
Cash dividends paid | $ 0 | $ 0 | |||||
March 1, 2022 | |||||||
Shares Repurchased | $ 179,845 | $ 5,000,000 | |||||
Purchased Shares | 207,964 |
Stock Options and Restricted _3
Stock Options and Restricted Stock Units (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options outstanding, ending | 81,250 | |
Option [Member] | ||
Range of exercise price options outstanding, beginning | 6.80-17.40 | 6.80 – 17.40 |
Number of options outstanding, beginning | 47,167 | 75,230 |
Number of options granted | 50,250 | 0 |
Number of options exercised | 10,000 | 23,563 |
Number of options forfeited/cancelled | (6,167) | (4,500) |
Number of options outstanding, ending | 81,250 | 47,167 |
Range of exercise price options granted | 26.00 – 27.71 | 0 |
Range of exercise price options exercised | 7.76 – 13.21 | 6.80 – 17.40 |
Range of exercise price options forfeited/cancelled | 9.26 – 27.71 | 9.26 – 13.21 |
Range of exercise price options outstanding, ending | 6.80 – 27.71 | 6.80 – 17.40 |
Weighted average exercise price outstanding, beginning | $ 11.81 | $ 12.16 |
Weighted average exercise price granted | 26.69 | 0 |
Weighted average exercise price exercised | 9.12 | 13.01 |
Weighted average exercise price forfeited/cancelled | 27.71 | 11.45 |
Weighted average exercise price outstanding, ending | $ 20.17 | $ 11.81 |
Aggregate intrinsic value, beginning | $ 832,254 | $ 402,275 |
Aggregate intrinsic value granted | $ 0 | $ 0 |
Aggregate intrinsic value exercised | $ 185,500 | $ 267,300 |
Aggregate intrinsic value forfeited/cancelled | 0 | 62,385 |
Aggregate intrinsic value, ending | $ 462,390 | $ 832,254 |
Stock Options and Restricted _4
Stock Options and Restricted Stock Units (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options and Restricted Stock Units | ||
Number of unvested options outstanding, beginning | 0 | 14,500 |
Number of unvested options vested | 0 | (14,500) |
Number of unvested options Granted | 50,250 | |
Number of unvested options forfeited/cancelled | (6,000) | 0 |
Number of unvested options outstanding, ending | 44,250 | 0 |
Weighted average exercise price outstanding, beginning | $ 12.87 | $ 12.87 |
Weighted average exercise price granted | 26.69 | |
Weighted average exercise price vested | 0 | 12.87 |
Weighted average exercise price forfeited/cancelled | 27.71 | 0 |
Weighted average exercise price outstanding, ending | 26.55 | 12.87 |
Weighted average grant date fair value, beginning | 5.47 | 5.47 |
Weighted average grant date fair value granted | 12.54 | |
Weighted average grant date fair value vested | 0 | 5.47 |
Weighted average grant date fair value forfeited/cancelled | 13.53 | 0 |
Weighted average grant date fair value, ending | $ 12.41 | $ 5.47 |
Stock Options and Restricted _5
Stock Options and Restricted Stock Units (Details 2) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of options outstanding | 81,250 |
Option 1 | |
Number of options outstanding | 7,500 |
Weighted average remaining contractual life (in years) | 2 years 2 months 1 day |
Weighted average exercise price outstanding, beginning | $ / shares | $ 7.12 |
Number of options exercisable | 7,500 |
Exercise price range | 0.01 - 8.00 |
Option 2 | |
Number of options outstanding | 3,500 |
Weighted average remaining contractual life (in years) | 4 years 6 months 25 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 10.11 |
Number of options exercisable | 3,500 |
Exercise price range | 8.01 - 11.00 |
Option 3 | |
Number of options outstanding | 18,000 |
Weighted average remaining contractual life (in years) | 5 years 6 months 10 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 13.12 |
Number of options exercisable | 18,000 |
Exercise price range | 11.01 - 16.00 |
Option 4 | |
Number of options outstanding | 38,000 |
Weighted average remaining contractual life (in years) | 8 years 3 months 18 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 24.19 |
Number of options exercisable | 8,000 |
Exercise price range | 16.01 - 27.00 |
Option 5 | |
Number of options outstanding | 14,250 |
Weighted average remaining contractual life (in years) | 9 years 18 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 27.71 |
Number of options exercisable | 0 |
Exercise price range | 27.01 – 27.71 |
Option 6 (Total) | |
Number of options outstanding | 81,250 |
Weighted average remaining contractual life (in years) | 7 years 1 month 17 days |
Weighted average exercise price outstanding, beginning | $ / shares | $ 20.31 |
Number of options exercisable | 37,000 |
Stock Options and Restricted _6
Stock Options and Restricted Stock Units (Details 3) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Options and Restricted Stock Units | |
Expected dividend yield | 0% |
Weighted-average expected life of options (in years) | 6 years 3 months 14 days |
Weighted-average risk-free interest rate | 1.68% |
Expected stock price volatility | 46% |
Stock Options and Restricted _7
Stock Options and Restricted Stock Units (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options and Restricted Stock Units | ||
Number of restricted stock units outstanding, beginning | 17,765 | 19,000 |
Number of restricted stock units granted | 48,240 | 17,765 |
Number of restricted stock units vested/issued | (15,265) | (19,000) |
Number of restricted stock units forfeited | 0 | 0 |
Number of restricted stock units outstanding, ending | 50,740 | 17,765 |
Weighted average exercise price outstanding, beginning | $ 25.92 | $ 10.78 |
Weighted average exercise price granted | 24.99 | 25.92 |
Weighted average exercise price vested/issued | 26.05 | 10.78 |
Weighted average exercise price forfeited | 0 | 0 |
Weighted average exercise price outstanding, ending | $ 25 | $ 25.92 |
Aggregate intrinsic value outstanding, beginning | $ 523,197 | $ 332,690 |
Aggregate intrinsic value granted | 1,205,525 | 460,504 |
Aggregate intrinsic value vested/issued | 377,981 | 464,400 |
Aggregate intrinsic value forfeited | 0 | 0 |
Aggregate intrinsic value outstanding, ending | $ 1,268,500 | $ 523,197 |
Stock Options and Restricted _8
Stock Options and Restricted Stock Units (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 10, 2016 | Jun. 17, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock closing price | $ 25.04 | $ 29.45 | ||
Non employee stock shares granted | $ 12,240 | |||
Description of restricted stock units | The other 36,000 restricted stock units were granted to employees of the Company | |||
Number of restricted stock units granted | 48,240 | 17,765 | ||
Grant date fair value | $ 24.99 | |||
Stock Options outstanding | 81,250 | |||
Non-qualified stock options | 36,366 | |||
Number of restricted stock units vested/issued | (15,265) | (19,000) | ||
Weighted average exercise price vested/issued | $ 26.05 | $ 10.78 | ||
Unrecognized compensation expense, restricted stock units | $ 403,000 | |||
Stock options and restricted stock units expense | $ 763,000 | $ 333,000 | ||
2014 Plan Member | ||||
Shares Available For Grant | 130,995 | |||
Shares Issued For Common Stock | 200,000 | |||
Additional Awards | 200,000 | 200,000 | ||
Total Number Of Shares To Be Awarded | 600,000 | |||
Unvested Restricted Stock Units [Member] | ||||
Unrecognized compensation expense, restricted stock units | $ 843,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Rent expense | $ 402 | $ 463 |
Operating lease expense | 304 | 347 |
Variable lease expense | $ 98 | $ 116 |
Leases (Details 1)
Leases (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases | |
2023 | $ 370 |
2024 | 379 |
2025 | 389 |
2026 | 400 |
2027 | 413 |
Total lease payments | 1,951 |
Present value adjustment | (243) |
Lease liability | $ 1,708 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average non cancelable lease term | 5 years | |
Weighted-average discount rate | 3.77% | |
Right-of-use asset - leases | $ 1,339,000 | |
Operating lease liability, total | 1,708,000 | |
Lease Liability | ||
Lease liability, current portion | 369,000 | |
Operating lease liability, total | $ 1,708,000 | $ 2,017,000 |
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 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | $ 23,514 | $ 21,883 |
Percentage of revenue from revenue streams | 100% | 100% |
Communication | ||
Revenues | $ 16,115 | $ 14,058 |
Percentage of revenue from revenue streams | 68.50% | 64.20% |
Compliance | ||
Revenues | $ 7,399 | $ 7,825 |
Percentage of revenue from revenue streams | 31.50% | 35.80% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 688 | $ 632 |
State | 172 | 186 |
Foreign | 142 | 109 |
Total current | 1,002 | 927 |
Deferred: | ||
Federal | (202) | (40) |
State | (37) | (7) |
Foreign | (39) | (59) |
Total deferred | (278) | (106) |
Total expense for income taxes | $ 724 | $ 821 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Federal statutory tax rate, amount | $ 558 | $ 864 |
State tax rate, amount | 114 | 139 |
Permanent difference - stock-based compensation, amount | 25 | (55) |
Permanent difference - other, amount | 38 | (83) |
Foreign tax credit generated, amount | (96) | (55) |
Tax on foreign earnings - tax reform, amount | 96 | 55 |
Foreign rate differential, amount | 15 | 13 |
FDII deduction, amount | (26) | (57) |
Total, amount | $ 724 | $ 821 |
Federal statutory tax rate, percentage | 21% | 21% |
State tax rate, percentage | 4.20% | 3.40% |
Permanent difference - stock-based compensation, percentage | 1% | (1.30%) |
Permanent difference - other, percentage | 1.40% | (2.00%) |
Foreign tax credit generated, percentage | (3.60%) | (1.30%) |
Tax on foreign earnings - tax reform, percentage | 3.60% | 1.30% |
Foreign rate differential, percentage | 0.60% | 0.30% |
FDII deduction, percentage | (1.00%) | (1.30%) |
Total, percentage | 27.20% | 20.10% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Deferred revenue | $ 29 | $ 89 |
Allowance for doubtful accounts | 185 | 152 |
Stock options | 151 | 88 |
Transaction costs | 41 | 44 |
IRC Section 174 capitalized costs | 216 | 0 |
ROU lease liability | 427 | 496 |
Other | 10 | 48 |
Total deferred tax asset | 1,059 | 917 |
Liabilities: | ||
Prepaid expenses | 0 | (5) |
Basis difference in fixed assets | (155) | (174) |
Capitalized software | (35) | (50) |
ROU Assets | (393) | (464) |
Purchase of intangibles | (1,048) | (400) |
Deferred tax liability | (1,631) | (1,093) |
Total net deferred tax asset/(liability) | (572) | (176) |
Deferred revenue | (29) | $ (89) |
Change | ||
Assets: | ||
Deferred revenue | 60 | |
Allowance for doubtful accounts | 33 | |
Stock options | 63 | |
Transaction costs | (3) | |
IRC Section 174 capitalized costs | 216 | |
ROU lease liability | (69) | |
Other | (38) | |
Total deferred tax asset | 142 | |
Liabilities: | ||
Prepaid expenses | (5) | |
Basis difference in fixed assets | (19) | |
Capitalized software | (15) | |
ROU Assets | 71 | |
Purchase of intangibles | (648) | |
Deferred tax liability | (538) | |
Total net deferred tax asset/(liability) | (396) | |
Deferred revenue | $ (60) |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefit Plans | ||
401(k) contribution amount | $ 111,000 | $ 64,000 |