Lendway (LDWY) 10-Q 14 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 08, 2023
Cover [Abstract]
Entity Registrant Name	LENDWAY, INC.
Entity Central Index Key	0000875355
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		1,745,736
Entity File Number	1-13471
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	41-1656308
Entity Address Address Line 1	5000 West 36th Street
Entity Address Address Line 2	Suite 220
Entity Address City Or Town	Minneapolis
Entity Address State Or Province	MN
Entity Address Postal Zip Code	55416
City Area Code	763
Local Phone Number	392-6200
Security 12b Title	Common Stock, $0.01 par value
Trading Symbol	LDWY
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 14,954,000	$ 14,439,000
Restricted cash	85,000	85,000
Receivable from escrow account	200,000	0
Income tax receivable	26,000	28,000
Prepaid expense	123,000	30,000
Other current assets related to discontinued operations	2,199,000	6,171,000
Total Current Assets	17,587,000	20,753,000
Other Assets:
Property and equipment, net	41,000	0
Other, net	10,000	0
Non-current related to discontinued operations	0	215,000
Total Other Assets	51,000	215,000
Total Assets	17,638,000	20,968,000
Current Liabilities:
Accounts payable	96,000	138,000
Accrued liabilities:
Compensation	888,000	264,000
Other	164,000	306,000
Current liabilities related to discontinued operations	547,000	6,666,000
Total Current Liabilities	1,695,000	7,374,000
Long-Term Liabilities:
Accrued income taxes	41,000	53,000
Non-current liabilities related to discontinued operations	0	140,000
Total Long-Term Liabilities	41,000	193,000
Commitments and Contingencies	0	0
Shareholders' Equity:
Common stock, par value $.01: Authorized shares - 5,714,000 Issued and outstanding shares - 1,751,000 at September 30, 2023 and 1,797,000 at December 31, 2022, respectively	18,000	18,000
Additional paid-in capital	16,221,000	16,458,000
Accumulated deficit	(337,000)	(3,075,000)
Total Shareholders' Equity	15,902,000	13,401,000
Total Liabilities and Shareholders' Equity	$ 17,638,000	$ 20,968,000

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
CONDENSED BALANCE SHEETS
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	5,714,000	5,714,000
Common Stock, Shares Issued	1,751,000	1,797,000
Common Stock, Shares Outstanding	1,751,000	1,797,000

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating Expenses:
Sales and marketing	$ 69,000	$ 0	$ 134,000	$ 0
General and administrative	1,564,000	488,000	2,849,000	1,663,000
Total Operating Expenses	1,633,000	488,000	2,983,000	1,663,000
Operating Loss	(1,633,000)	(488,000)	(2,983,000)	(1,663,000)
Interest income	111,000	55,000	325,000	55,000
Loss from continuing operations before income taxes	(1,522,000)	(433,000)	(2,658,000)	(1,608,000)
Income tax (benefit) expense	(11,000)	1,000	(4,000)	5,000
Net loss from continuing operations	(1,511,000)	(434,000)	(2,654,000)	(1,613,000)
(Loss) Income from discontinued operations, net of tax	(333,000)	12,235,000	2,422,000	12,392,000
Gain from sale of discontinued operations, net of tax	2,970,000	0	2,970,000	0
Net Income	$ 1,126,000	$ 11,801,000	$ 2,738,000	$ 10,779,000
Net (loss) income per basic and diluted share:
Continuing operations	$ (0.85)	$ (0.24)	$ (1.48)	$ (0.90)
Discontinued operations	1.48	6.82	3.01	6.92
Basic and diluted earnings per share	$ 0.63	$ 6.58	$ 1.53	$ 6.02
Shares used in calculation of net (loss) income per share:
Basic and diluted	1,785,000	1,795,000	1,793,000	1,790,000

CONDENSED STATEMENTS OF SHAREHO

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Balance, shares at Dec. 31, 2021		1,782,000
Balance, amount at Dec. 31, 2021	$ 3,193,000	$ 18,000	$ 16,296,000	$ (13,121,000)
Issuance of common stock, net, shares		4,000
Issuance of common stock, net, amount	28,000	$ 0	28,000	0
Value of stock-based compensation	30,000	0	30,000	0
Net income	62,000	$ 0	0	62,000
Balance, shares at Mar. 31, 2022		1,786,000
Balance, amount at Mar. 31, 2022	3,313,000	$ 18,000	16,354,000	(13,059,000)
Issuance of common stock, net, shares		1,000
Issuance of common stock, net, amount	11,000	$ 0	11,000	0
Value of stock-based compensation	29,000	0	29,000	0
Net income	(1,084,000)	$ 0	0	(1,084,000)
Issuance of common stock upon vesting of restricted stock units, shares		6,000
Issuance of common stock upon vesting of restricted stock units, amount	0	$ 0	0	0
Balance, shares at Jun. 30, 2022		1,793,000
Balance, amount at Jun. 30, 2022	2,269,000	$ 18,000	16,394,000	(14,143,000)
Value of stock-based compensation	32,000	0	32,000	0
Net income	11,801,000	$ 0	0	11,801,000
Issuance of common stock upon vesting of restricted stock units, shares		3,000
Issuance of common stock upon vesting of restricted stock units, amount	0	$ 0	0	0
Balance, shares at Sep. 30, 2022		1,796,000
Balance, amount at Sep. 30, 2022	14,102,000	$ 18,000	16,426,000	(2,342,000)
Balance, shares at Dec. 31, 2022		1,797,000
Balance, amount at Dec. 31, 2022	13,401,000	$ 18,000	16,458,000	(3,075,000)
Issuance of common stock, net, shares		1,000
Issuance of common stock, net, amount	8,000	$ 0	8,000	0
Value of stock-based compensation	22,000	0	22,000	0
Net income	1,648,000	$ 0	0	1,648,000
Balance, shares at Mar. 31, 2023		1,798,000
Balance, amount at Mar. 31, 2023	15,079,000	$ 18,000	16,488,000	(1,427,000)
Value of stock-based compensation	14,000	0	14,000	0
Net income	(36,000)	$ 0	0	(36,000)
Balance, shares at Jun. 30, 2023		1,798,000
Balance, amount at Jun. 30, 2023	15,057,000	$ 18,000	16,502,000	(1,463,000)
Issuance of common stock, net, shares		22,000
Issuance of common stock, net, amount	149,000	$ 0	149,000	0
Value of stock-based compensation	7,000	0	7,000	0
Net income	1,126,000	$ 0	0	1,126,000
Issuance of common stock upon vesting of restricted stock units, shares		6,000
Issuance of common stock upon vesting of restricted stock units, amount	0	$ 0	0	0
Repurchase of common stock, shares		(75,000)
Repurchase of common stock, amount	(437,000)	$ 0	(437,000)	0
Balance, shares at Sep. 30, 2023		1,751,000
Balance, amount at Sep. 30, 2023	$ 15,902,000	$ 18,000	$ 16,221,000	$ (337,000)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating Activities:
Net loss	$ 2,738,000	$ 10,779,000
Income from discontinued operations, net of tax	(2,422,000)	(12,392,000)
Gain from sale of discontinued operations, net of tax	(2,970,000)	0
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities of continuing operations:
Depreciation and amortization	3,000	0
Stock-based compensation expense	43,000	91,000
Changes in operating assets and liabilities:
Receivable from escrow account	(200,000)	0
Income tax receivable	2,000	4,000
Prepaid expenses and other	(96,000)	64,000
Accounts payable	(41,000)	85,000
Accrued liabilities	630,000	(114,000)
Accrued income taxes	(12,000)	(659,000)
Net cash used in operating activities of continuing operations	(2,325,000)	(2,142,000)
Net cash provided by operating activities of discontinued operations	1,735,000	12,530,000
Net cash (used in) provided by operating activities	(590,000)	10,388,000
Investing Activities:
Proceeds from sale of business	1,581,000	0
Purchases of property and equipment	(24,000)	0
Net cash provided by investing activities of continuing operations	1,557,000	0
Net cash used in investing activities of discontinued operations	(24,000)	(25,000)
Net cash provided by (used in) investing activities	1,533,000	(25,000)
Financing Activities:
Proceeds from issuance of common stock, net	9,000	39,000
Repurchase of common stock, net	(437,000)	0
Net cash (used in) provided by financing activities	(428,000)	39,000
Increase in cash and cash equivalents and restricted cash	515,000	10,402,000
Cash and cash equivalents and restricted cash at beginning of period	14,524,000	3,851,000
Cash and cash equivalents and restricted cash at end of period	15,039,000	14,253,000
Supplemental disclosures for cash flow information:
Cash paid during the period for income taxes	79,000	5,000
Non-cash financing activity:
Purchase of property and equipment included in accounts payable	2,000	0
Common stock issued for accrued liabilities	$ 148,000	$ 0

Description of Business and Bas

Description of Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2023
Description of Business and Basis of Presentation
Description of Business and Basis of Presentation	1. Description of Business and Basis of Presentation. Description of Business . As described in Note 2, on August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s legacy business of providing in-store advertising solutions to brands, retailers, shopper marketing agencies and brokerages (the “In-Store Marketing Business”) for a price of $3.5 million, subject to escrows and a post-closing adjustment. Basis of Presentation . The operations of the In-Store Marketing Business are presented as discontinued operations beginning with this Quarterly Report on Form 10-Q for the three months ended September 30, 2023, the period in which the sale of the In-Store Marketing Business met the criteria as discontinued operations. All prior periods presented have been restated to present the In-Store Marketing Business as discontinued operations. The condensed consolidated financial statements include the accounts of the Company, its subsidiary, Farmland Credit, Inc., a Minnesota corporation (“FCI”), and FCI’s subsidiaries, Farmland Credit FR, LLC and Farmland Credit AV, LLC.

Sale of In-Store Marketing Busi

Sale of In-Store Marketing Business and Presentation as Discontinued Operations	9 Months Ended
	Sep. 30, 2023
Sale of In-Store Marketing Business and Presentation as Discontinued Operations
Sale of In-Store Marketing Business and Presentation as Discontinued Operations	2. Sale of In-Store Marketing Business and Presentation as Discontinued Operations. On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s In-Store Marketing Business for a price of $3.5 million to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”), under an Asset Purchase Agreement (the “Purchase Agreement”). The Company retained accounts receivable, as well as cash, cash equivalents and marketable securities. The cash consideration for the sale was subject to a post-closing adjustment depending on the net balance of (i) cash received by the Company for programs that remained unexecuted as of August 3, 2023, minus (ii) the payments made by the Company to vendors for unexecuted programs. The final purchase adjustment for the net balance was to reduce the cash consideration by $1.5 million, with the Company retaining an equal amount of cash that had been received for unexecuted programs. Under the Purchase Agreement, $200,000 was escrowed for a twelve-month period for any future claims, as defined in the Purchase Agreement, by the Buyer against the Company. The gain on sale of the In-Store Marketing Business before income taxes was determined as follows: Sale price $ 3,500,000 Carrying value of assets sold, less liablities (247,000 ) Transaction costs not previously expensed (209,000 ) Gain on sale of In-Store Marketing Business $ 3,044,000 The Company incurred transaction-related severance and other separation benefits in connection with the termination of certain officers and employees of the discontinued operations of approximately $490,000, as well as retention award payouts totaling $343,000, of which $48,000 was included in continuing operations, and employee bonuses totaling $164,000, each of which was recorded as expense in the three months ended September 30, 2023. The results of the In-Store Marketing Business have been presented as discontinued operations and the related assets and liabilities have been classified as related to discontinued operations for all periods presented. The carrying amounts of major classes of assets and liabilities that were reclassified as related to discontinued operations on the Condensed Consolidated Balance Sheet were as follows: December 31, 2022 Current Assets: Accounts receivable $ 5,557,000 Inventories 29,000 Prepaid production costs 535,000 Other prepaid expense 50,000 Current assets related to discontinued operations $ 6,171,000 Other Assets: Property and equipment, net $ 71,000 Operating lease right-of-use assets 144,000 Non-current assets related to discontinued operations $ 215,000 Current Liabilities: Accounts payable $ 2,515,000 Sales tax 717,000 Accrued liabilities 1,003,000 Current portion of operating lease liabilities 4,000 Deferred revenue 2,427,000 Current liabilities related to discontinued operations $ 6,666,000 Long-Term Liabilities: Operating lease liabilities $ 140,000 Non-current liabilities related to discontinued operations $ 140,000 Results of discontinued operations are summarized below: Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Net services revenues $ 1,976,000 $ 4,869,000 $ 21,018,000 $ 14,271,000 Cost of services 1,568,000 4,031,000 16,067,000 11,737,000 Gross Profit 408,000 838,000 4,951,000 2,534,000 Operating Expenses: Selling 410,000 294,000 1,135,000 926,000 Marketing 210,000 249,000 806,000 787,000 General and administrative 142,000 268,000 642,000 647,000 Total Operating Expenses 762,000 811,000 2,583,000 2,360,000 Gain from litigation settlement, net — 12,000,000 — 12,000,000 Operating Income (Loss) (354,000 ) 12,027,000 2,368,000 12,174,000 Other income 21,000 17,000 54,000 45,000 (Loss) income from discontinued operations before income taxes (333,000 ) 12,044,000 2,422,000 12,219,000 Income tax benefit — (191,000 ) — (173,000 ) (Loss) income from discontinued operations, net of tax $ (333,000 ) $ 12,235,000 $ 2,422,000 $ 12,392,000 Gain from sale of discontinued operations before income taxes 3,044,000 — 3,044,000 — Income tax expense 74,000 — 74,000 — Gain from sale of discontinued operations, net of tax $ 2,970,000 $ — $ 2,970,000 $ — The accounting policies for the discontinued In-Store Marketing Business, including for revenue recognition, are disclosed in the notes to financial statements included in the Company’s Annual Report on Form 10-K. In July 2019, the Company filed suit against News Corporation, News America Marketing FSI L.L.C., and News America Marketing In-Store Services L.L.C. (collectively, “News America”), alleging violations of federal and state antitrust and tort laws by News America. On July 1, 2022, the Company entered into a $20 million settlement agreement with News America. The agreement resulted in net proceeds before income tax of $12,000,000 for the Company, which was recorded as a gain on litigation settlement in the discontinued operations of the In-Store Marketing Business during the three months ended September 30, 2022. For the three and nine months ended September 30, 2023, the Company recorded income tax expense on discontinued operations of $74,000 and $74,000, respectively. For the three and nine months ended September 30, 2022, the Company recorded income tax benefit from discontinued operations of $191,000 and $173,000 respectively. The income tax benefit for 2022 included a decrease of approximately $678,000 in unrecognized tax benefits related to state exposure in the third quarter of 2022, which reduced accrued income taxes and increased the current tax benefit.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Summary of Significant Accounting Policies
Summary Of Significant Accounting Policies	3. Summary of Significant Accounting Policies. Cash and Cash Equivalents and Restricted Cash. September 30, December 31, 2023 2022 Cash and cash equivalents $ 14,954,000 $ 14,439,000 Restricted cash 85,000 85,000 Total cash, cash equivalents and restricted cash $ 15,039,000 $ 14,524,000 Subsequent to September 30, 2023 the restriction on the cash was released back to the Company, as it was related to a lease that transferred to the Buyer of the In-Store Marketing Business. Stock-Based Compensation During the nine-month periods ended September 30, 2023 and 2022 no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors in August 2022. In August 2022, non-employee members of the Board of Directors received restricted stock grants totaling 6,248 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $9.60 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $60,000. The shares vested on July 26, 2023. In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Equity Incentive Plan. The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000. The shares vested on June 1, 2022. The Company estimated the fair value of stock-based awards granted during the three and nine months ended September 30, 2023, under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 95.2%, dividend yield of 0% and risk-free interest rate of 4.7%. Due to the sale of the In-Store Marketing Business, the plan year for the Company’s employee stock purchase plan was amended to end on July 31, 2023. At July 31, 2023 participants purchased 338 shares. During the three months ended September 30, 2023, the Company issued 22,382 shares of common stock in settlement of $148,000 of total deferred fees due to two non-employee director’s departure from the Board of Directors. Total stock-based compensation expense recorded for the three and nine months ended September 30, 2023 was $7,000 and $43,000, respectively, and for the three and nine months ended September 30, 2022 was $32,000 and $91,000, respectively. Net (Loss) Income per Share . In determining diluted net income (loss) per share, whether net income from continuing operations is positive or negative controls whether dilutive shares are included in the determination. For all periods presented, net income from continuing operations is negative, a net loss. Accordingly, since including dilutive shares would dilute the loss from continuing operations, no dilutive shares are included in any of the per share calculations. Due to the net loss from continuing operations incurred during the three and nine months ended September 30, 2023 and 2022, all outstanding stock awards were considered anti-dilutive for those periods. At September 30, 2022 and 2023 options to purchase 14,086 shares of common stock with a weighted average exercise price of $14.17, were outstanding. Weighted average common shares outstanding for the three and nine months ended September 30, 2023 and 2022 were as follows: Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Denominator for basic net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000 Restructuring. .

Leases

Leases	9 Months Ended
	Sep. 30, 2023
Leases
Leases	4. Leases. At September 30, 2023, the Company has a month-to-month operating lease with a related party with monthly payments of $375. As part of the sale of the in-store marketing business, the headquarters lease was assigned to the Buyer as a part of the sale of the In-Store Marketing Business, and the other significant lease was terminated. The amounts included in “Other” below relate to an office lease that was terminated effective September 30, 2023. The cost components in continuing operations of the Company’s operating leases were as follows for the three and nine month periods ended September 30, 2023 and 2022: Three months ended September 30 Nine months ended September 30 2023 2022 2023 2022 Related party lease $ 1,000 $ - $ 2,000 $ - Other 5,000 3,000 13,000 11,000 Total $ 6,000 $ 3,000 $ 15,000 $ 11,000

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Taxes
Income Taxes	5. Income Taxes. For the three and nine months ended September 30, 2023, the Company recorded income tax (benefit) of $(11,000) and $(4,000), respectively, or 0.6% and 0.1% of loss from continuing operations before taxes, respectively. For the three and nine months ended September 30, 2022, the Company recorded income tax expense of $1,000 and $5,000 respectively, or (0.2)% and (0.3)% of loss from continuing operations before taxes, respectively. The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 is comprised of federal and state taxes. The Company reassesses its effective rate each reporting period and adjusts the annual effective rate if deemed necessary, based on projected annual income (loss). The actual tax expense attributable to from continuing operations income before taxes differs from the expected tax expense computed by applying the U.S. federal corporate income tax rate of 21% as follows: Nine months ended September 30, 2023 2022 Federal statutory rate 21.0 % 21.0 % Stock-based awards 0.0 (0.6 ) State taxes 3.5 3.6 Impact of uncertain tax positions 0.5 0.0 Valuation allowance (24.5 ) (24.6 ) Other (0.4 ) 0.3 Effective federal income tax rate 0.1 % (0.3 )% Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of enacted tax laws. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which it operates, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustment to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. As of September 30, 2023, and December 31, 2022, the Company had unrecognized tax benefits totaling $41,000 and $53,000, respectively, including interest, which relates to state nexus issues. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $41,000. The Company recorded a decrease of $16,000 in unrecognized tax benefits related to state income tax exposure in the third quarter of 2023 which reduced accrued income taxes and increased income tax benefit. At December 31, 2022, the Company had Federal net operating loss (NOL) to carry forward of approximately $2,900,000. As of September 30, 2023, the Company estimates remaining Federal NOL carryforwards to be approximately $1,390,000. Federal NOL utilization is limited to 80% of estimated taxable income. The estimated NOL carry forward will be adjusted at year end for actual results.

Stock Repurchase Plan

Stock Repurchase Plan	9 Months Ended
	Sep. 30, 2023
Stock Repurchase Plan
Stock Repurchase Plan	6. Stock Repurchase Plan. On August 28, 2023, the Company’s Board of Directors authorized the repurchase of up to 400,000 shares of the Company’s common stock. The plan allows the purchases to be made in the open market or in privately negotiated transactions. The plan does not obligate the Company to repurchase any particular number of shares; and may be suspended anytime at the Company’s discretion. For the three months ended September 30, 2023 the Company repurchased 75,345 shares for $437,000.

Legal Proceedings

Legal Proceedings	9 Months Ended
	Sep. 30, 2023
Legal Proceedings
Legal Proceedings	7. Legal Proceedings. The Company is subject to various legal matters in the normal course of business. The outcome of these matters is not expected to have a material effect on the Company’s financial position or results of operations.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Summary of Significant Accounting Policies
Cash And Cash Equivalents And Restricted Cash	Cash and Cash Equivalents and Restricted Cash. September 30, December 31, 2023 2022 Cash and cash equivalents $ 14,954,000 $ 14,439,000 Restricted cash 85,000 85,000 Total cash, cash equivalents and restricted cash $ 15,039,000 $ 14,524,000 Subsequent to September 30, 2023 the restriction on the cash was released back to the Company, as it was related to a lease that transferred to the Buyer of the In-Store Marketing Business.
Stock-based Compensation	Stock-Based Compensation During the nine-month periods ended September 30, 2023 and 2022 no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors in August 2022. In August 2022, non-employee members of the Board of Directors received restricted stock grants totaling 6,248 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $9.60 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $60,000. The shares vested on July 26, 2023. In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Equity Incentive Plan. The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000. The shares vested on June 1, 2022. The Company estimated the fair value of stock-based awards granted during the three and nine months ended September 30, 2023, under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 95.2%, dividend yield of 0% and risk-free interest rate of 4.7%. Due to the sale of the In-Store Marketing Business, the plan year for the Company’s employee stock purchase plan was amended to end on July 31, 2023. At July 31, 2023 participants purchased 338 shares. During the three months ended September 30, 2023, the Company issued 22,382 shares of common stock in settlement of $148,000 of total deferred fees due to two non-employee director’s departure from the Board of Directors. Total stock-based compensation expense recorded for the three and nine months ended September 30, 2023 was $7,000 and $43,000, respectively, and for the three and nine months ended September 30, 2022 was $32,000 and $91,000, respectively.
Net Income (Loss) per Share	Net (Loss) Income per Share . In determining diluted net income (loss) per share, whether net income from continuing operations is positive or negative controls whether dilutive shares are included in the determination. For all periods presented, net income from continuing operations is negative, a net loss. Accordingly, since including dilutive shares would dilute the loss from continuing operations, no dilutive shares are included in any of the per share calculations. Due to the net loss from continuing operations incurred during the three and nine months ended September 30, 2023 and 2022, all outstanding stock awards were considered anti-dilutive for those periods. At September 30, 2022 and 2023 options to purchase 14,086 shares of common stock with a weighted average exercise price of $14.17, were outstanding. Weighted average common shares outstanding for the three and nine months ended September 30, 2023 and 2022 were as follows: Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Denominator for basic net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000
Restructuring	Restructuring. .

Sale of In-Store Marketing Bu_2

Sale of In-Store Marketing Business and Presentation as Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2023
Sale of In-Store Marketing Business and Presentation as Discontinued Operations
Summary of gain on sale of buiness	Sale price $ 3,500,000 Carrying value of assets sold, less liablities (247,000 ) Transaction costs not previously expensed (209,000 ) Gain on sale of In-Store Marketing Business $ 3,044,000
Summary of balance sheet adjustments	December 31, 2022 Current Assets: Accounts receivable $ 5,557,000 Inventories 29,000 Prepaid production costs 535,000 Other prepaid expense 50,000 Current assets related to discontinued operations $ 6,171,000 Other Assets: Property and equipment, net $ 71,000 Operating lease right-of-use assets 144,000 Non-current assets related to discontinued operations $ 215,000 Current Liabilities: Accounts payable $ 2,515,000 Sales tax 717,000 Accrued liabilities 1,003,000 Current portion of operating lease liabilities 4,000 Deferred revenue 2,427,000 Current liabilities related to discontinued operations $ 6,666,000 Long-Term Liabilities: Operating lease liabilities $ 140,000 Non-current liabilities related to discontinued operations $ 140,000
Summary of operations adjustments	Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Net services revenues $ 1,976,000 $ 4,869,000 $ 21,018,000 $ 14,271,000 Cost of services 1,568,000 4,031,000 16,067,000 11,737,000 Gross Profit 408,000 838,000 4,951,000 2,534,000 Operating Expenses: Selling 410,000 294,000 1,135,000 926,000 Marketing 210,000 249,000 806,000 787,000 General and administrative 142,000 268,000 642,000 647,000 Total Operating Expenses 762,000 811,000 2,583,000 2,360,000 Gain from litigation settlement, net — 12,000,000 — 12,000,000 Operating Income (Loss) (354,000 ) 12,027,000 2,368,000 12,174,000 Other income 21,000 17,000 54,000 45,000 (Loss) income from discontinued operations before income taxes (333,000 ) 12,044,000 2,422,000 12,219,000 Income tax benefit — (191,000 ) — (173,000 ) (Loss) income from discontinued operations, net of tax $ (333,000 ) $ 12,235,000 $ 2,422,000 $ 12,392,000 Gain from sale of discontinued operations before income taxes 3,044,000 — 3,044,000 — Income tax expense 74,000 — 74,000 — Gain from sale of discontinued operations, net of tax $ 2,970,000 $ — $ 2,970,000 $ —

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2023
Summary of Significant Accounting Policies
Schdule of Cash And Cash Equivalents And Restricted Cash	September 30, December 31, 2023 2022 Cash and cash equivalents $ 14,954,000 $ 14,439,000 Restricted cash 85,000 85,000 Total cash, cash equivalents and restricted cash $ 15,039,000 $ 14,524,000
Schdule of Weighted Average Common Shares Outstanding	Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Denominator for basic net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net income (loss) per share - weighted average shares 1,785,000 1,795,000 1,793,000 1,790,000

Lease (Tables)

Lease (Tables)	9 Months Ended
	Sep. 30, 2023
Leases
Cost components of operating leases	Three months ended September 30 Nine months ended September 30 2023 2022 2023 2022 Related party lease $ 1,000 $ - $ 2,000 $ - Other 5,000 3,000 13,000 11,000 Total $ 6,000 $ 3,000 $ 15,000 $ 11,000

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2023
Income Taxes
Schedule Of Reconciliation of effective federal income tax rate	Nine months ended September 30, 2023 2022 Federal statutory rate 21.0 % 21.0 % Stock-based awards 0.0 (0.6 ) State taxes 3.5 3.6 Impact of uncertain tax positions 0.5 0.0 Valuation allowance (24.5 ) (24.6 ) Other (0.4 ) 0.3 Effective federal income tax rate 0.1 % (0.3 )%

Sale of In-Store Marketing Bu_3

Sale of In-Store Marketing Business and Presentation as Discontinued Operations (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)
Sale of In-Store Marketing Business and Presentation as Discontinued Operations
Sale price	$ 3,500,000
Carrying value of assets sold, Less liabilities	(247,000)
Transaction cost not previously expensed	(209,000)
Gain on sale of in-store marketing business	$ 3,044,000

Sale of In-Store Marketing Bu_4

Sale of In-Store Marketing Business and Presentation as Discontinued Operations (Details 1) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Sale of In-Store Marketing Business and Presentation as Discontinued Operations
Accounts receivable		$ 5,557,000
Inventories		29,000
Prepaid production costs		535,000
Other prepaid expense		50,000
Current assets related to discountinued operation	$ 2,199,000	6,171,000
Property and equipment, net		71,000
Operating lease right-of-use assets		144,000
Non-Current assets related to discontinued opration	0	215,000
Accounts payable		2,515,000
Sales tax		717,000
Accrued liabilities		1,003,000
Current portion of operating lease liabilities		4,000
Deferred revenue		2,427,000
Current liabilities related to discontinued operation	547,000	6,666,000
Operating lease liabilities		140,000
Total Long-Term Liabilities	$ 0	$ 140,000

Sale of In-Store Marketing Bu_5

Sale of In-Store Marketing Business and Presentation as Discontinued Operations (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Sale of In-Store Marketing Business and Presentation as Discontinued Operations
Net services revenues	$ 1,976,000	$ 4,869,000	$ 21,018,000	$ 14,271,000
Cost of services	1,568,000	4,031,000	16,067,000	11,737,000
Gross Profit	408,000	838,000	4,951,000	2,534,000
Selling	410,000	294,000	1,135,000	926,000
Marketing	210,000	249,000	806,000	787,000
General and administrative	142,000	268,000	642,000	647,000
Total Operating Expenses	762,000	811,000	2,583,000	2,360,000
Gain from litigation settlement, net	0	12,000,000	0	12,000,000
Operating Income	(354,000)	12,027,000	2,368,000	12,174,000
Other income	21,000	17,000	54,000	45,000
(Loss) income from discontinued operations before income taxes	(333,000)	12,044,000	2,422,000	12,219,000
Income tax expense	0	(191,000)	0	(173,000)
(Loss) income from discontinued operations, net of tax	(333,000)	12,235,000	2,422,000	12,392,000
Gain from sale of discountinued operation before income taxs	3,044,000	0	3,044,000	0
Income tax expense	74,000	0	74,000	0
Gain from sale of discountinued operation, net of tax	$ 2,970,000	$ 0	$ 2,970,000	$ 0

Sale of In-Store Marketing Bu_6

Sale of In-Store Marketing Business and Presentation as Discontinued Operations (Detail Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Aug. 03, 2023	Jul. 01, 2022
Cash consideration					$ 1,500,000
Escrowed amount					200,000
Market price of business					$ 3,500,000
Tax benefit from discontinued operations		$ 191,000		$ 173,000
Addition in continuing operations and employee bonuses	$ 48,000
Employees bonuses	164,000
Retention payout	343,000
Other benefits	490,000
Income tax expense	$ 74,000	$ 0	$ 74,000	0
Decrease in income ax benefit				678,000
News America
Note payble						$ 20,000,000
Proceed from notes payble				$ 12,000,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 14,954,000	$ 14,439,000
Restricted cash	85,000	85,000
Total cash, cash equivalents and retricted cash	$ 15,039,000	$ 14,524,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Summary of Significant Accounting Policies
Denominator for basic net loss per share - weighted average shares	1,785,000	1,795,000	1,793,000	1,790,000
Effect of dilutive securities: stock options, restricted stock and restricted stock units	0	0	0	0
Denominator for diluted net loss per share - weighted average shares	1,785,000	1,795,000	1,793,000	1,790,000

Summary of Significant Accoun_6

Summary of Significant Accounting Policies (Details Narratives) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
General and administrative		$ 1,564,000	$ 488,000	$ 2,849,000	$ 1,663,000
Accured compensation		888,000		888,000		$ 264,000
Stock-based Compensation Expense		7,000	$ 32,000	$ 43,000	$ 91,000
Weighted average exercise price				$ 14.17	$ 14.17
Options to purchase				14,086	14,086
Expected life				1 year
Expected volatility				95.20%
Divdend Rate				0%
Risk-free interest rate				4.70%
Board of Directors
Deferred fees due		$ 148,000		$ 148,000
Stock issued during period		22,382
CEO, Kristine A. Glancy
General and administrative				926,000
Accured compensation		$ 650,000		$ 650,000
2018 Equity Incentive Plan | June 2021
Exercise price		$ 8.16		$ 8.16
Grant date fair value Shares of common stock		$ 45,000		$ 45,000
Restricted stock grants totaling		5,514		5,514
2018 Equity Incentive Plan | August 2022
Exercise price		$ 9.60		$ 9.60
Grant date fair value Shares of common stock		$ 60,000		$ 60,000
Restricted stock grants totaling		6,248		6,248
Employee stock purchase plan
Shares purchased	338

Leases (Details)

Leases (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases
Related party lease	$ 1,000	$ 0	$ 2,000	$ 0
Other	5,000	3,000	13,000	11,000
Total	$ 6,000	$ 3,000	$ 15,000	$ 11,000

Leases (Details Narrative)

Leases (Details Narrative)	9 Months Ended
	Sep. 30, 2023 USD ($)
Leases
Monthly payments of lease	$ 375

Income Taxes (Details)

Income Taxes (Details)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Taxes
Federal statutory rate	21%	21%
Stock based awards	0%	(0.60%)
State taxes	3.50%	3.60%
Impact of uncertain tax positions	0.50%	0%
Valuation allowance	(24.50%)	(24.60%)
Other	(0.40%)	0.30%
Effective federal income tax rate	0.10%	(0.30%)

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Taxes
Income Tax Benefit (expense)	$ (11,000)	$ 1,000	$ (4,000)	$ 5,000
Income Tax Rate, Percentage	0.60%	(0.20%)	0.10%	(0.30%)
Unrecognized Tax Benefits	$ 41,000		$ 41,000		$ 53,000
Decrease in unrecognized tax benefits			16,000
Unrecognized Tax Benefits Effective Income Tax Rates Of Future Periods			41,000
Net operating loss to carry forward	$ 1,390,000		$ 1,390,000		$ 2,900,000
Federal statutory rate			21%	21%

Stock Repurchase Plan (Details

Stock Repurchase Plan (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2023	Aug. 28, 2023
Stock repurchesd during period, value	$ 437,000
Board of Directors | Stock Repurchase Plan
Repurchase limit		400,000
Stock repurchesd during period, shares	75,345
Stock repurchesd during period, value	$ 437,000