Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-14785 | ||
Entity Registrant Name | GSE Systems, Inc. | ||
Entity Central Index Key | 0000944480 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 52-1868008 | ||
Entity Address, Address Line One | 6940 Columbia Gateway Dr. | ||
Entity Address, Address Line Two | Suite 470 | ||
Entity Address, City or Town | Columbia | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 21046 | ||
City Area Code | 410 | ||
Local Phone Number | 970-7800 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | ||
Trading Symbol | GVP | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 26,563,826 | ||
Entity Common Stock, Shares Outstanding | 23,560,807 | ||
Auditor Firm ID | 686 | ||
Auditor Name | FORVIS, LLP | ||
Auditor Location | Tysons, VA |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 2,789 | $ 3,550 |
Restricted cash, current | 1,052 | 0 |
Contract receivables, net | 10,064 | 11,257 |
Prepaid expenses and other current assets | 2,165 | 5,262 |
Total current assets | 16,070 | 20,069 |
Equipment, software and leasehold improvements, net | 772 | 839 |
Software development costs, net | 574 | 532 |
Goodwill | 6,299 | 13,339 |
Intangible assets, net | 1,687 | 3,020 |
Restricted cash - long term | 535 | 0 |
Operating lease right-of-use assets, net | 506 | 1,200 |
Other assets | 53 | 52 |
Total assets | 26,496 | 39,051 |
Current liabilities: | ||
Line of credit | 0 | 1,817 |
Current portion of long-term note | 3,038 | 0 |
Accounts payable | 1,262 | 1,179 |
Accrued expenses | 2,084 | 1,358 |
Accrued compensation | 1,071 | 1,452 |
Billings in excess of revenue earned | 4,163 | 5,029 |
Accrued warranty | 370 | 667 |
Income taxes payable | 1,774 | 1,654 |
Derivative liabilities | 603 | 0 |
Other current liabilities | 1,286 | 1,883 |
Total current liabilities | 15,651 | 15,039 |
Long-term note, less current portion | 310 | 0 |
Operating lease liabilities noncurrent | 160 | 790 |
Other noncurrent liabilities | 144 | 179 |
Total liabilities | 16,265 | 16,008 |
Commitments and contingencies (Note 22) | ||
Shareholders' equity: | ||
Preferred stock $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock $0.01 par value; 60,000,000 shares authorized, 24,046,806 and 22,533,005 shares issued, 22,447,895 and 20,934,094 shares outstanding, respectively | 240 | 225 |
Additional paid-in capital | 82,911 | 80,505 |
Accumulated deficit | (69,927) | (54,584) |
Accumulated other comprehensive income (loss) | 6 | (104) |
Treasury stock at cost, 1,598,911 shares | (2,999) | (2,999) |
Total shareholders' equity | 10,231 | 23,043 |
Total liabilities and shareholders' equity | $ 26,496 | $ 39,051 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 24,046,806 | 22,533,005 |
Common stock, shares outstanding (in shares) | 22,447,895 | 20,934,094 |
Treasury stock at cost (in shares) | 1,598,911 | 1,598,911 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Revenue | $ 47,734 | $ 55,183 |
Cost of revenue | 35,824 | 43,325 |
Gross profit | 11,910 | 11,858 |
Operating expenses | ||
Selling, general and administrative | 17,028 | 14,908 |
Research and development | 611 | 626 |
Restructuring charges | 0 | 798 |
Goodwill and intangible asset impairment charge | 7,505 | 3 |
Depreciation | 304 | 284 |
Amortization of definite-lived intangible assets | 868 | 1,213 |
Total operating expenses | 26,316 | 17,832 |
Operating loss | (14,406) | (5,974) |
Other income and expenses, net | ||
Interest expense | (1,272) | (159) |
Change in fair value of derivative instruments, net | 477 | 19 |
Other (loss) income, net | (91) | 16,884 |
(Loss) income before taxes | (15,292) | 10,770 |
Provision for income taxes | 51 | 163 |
Net (loss) income | $ (15,343) | $ 10,607 |
Net (loss) income per common share - basic (in dollars per share) | $ (0.72) | $ 0.51 |
Diluted (loss) income per common share (in dollars per share) | $ (0.72) | $ 0.51 |
Weighted average shares outstanding used to compute net loss per share - basic (in shares) | 21,362,897 | 20,761,191 |
Weighted average shares outstanding - Diluted (in shares) | 21,362,897 | 20,761,191 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Abstract] | ||
Net (loss) income | $ (15,343) | $ 10,607 |
Cumulative translation adjustment | 110 | 1,110 |
Comprehensive (loss) income | $ (15,233) | $ 11,717 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2020 | $ 222 | $ 79,687 | $ (65,191) | $ (1,214) | $ (2,999) | $ 10,505 |
Balance (in shares) at Dec. 31, 2020 | 22,193 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 1,043 | 0 | 0 | $ 0 | 1,043 |
Common stock issued for RSUs vested | $ 3 | (3) | 0 | 0 | 0 | 0 |
Common stock issued for RSUs vested (in shares) | 340 | |||||
Shares withheld to pay taxes | $ 0 | (222) | 0 | 0 | 0 | (222) |
Foreign currency translation adjustment | 0 | 0 | 0 | 1,110 | 0 | 1,110 |
Net (loss) income | 0 | 0 | 10,607 | 0 | 0 | 10,607 |
Balance at Dec. 31, 2021 | $ 225 | 80,505 | (54,584) | (104) | $ (2,999) | 23,043 |
Balance (in shares) at Dec. 31, 2021 | 22,533 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 1,859 | 0 | 0 | $ 0 | 1,859 |
Common stock issued for RSUs vested | $ 5 | (5) | 0 | 0 | 0 | 0 |
Common stock issued for RSUs vested (in shares) | 525 | |||||
Shares withheld to pay taxes | $ 0 | (263) | 0 | 0 | 0 | (263) |
Foreign currency translation adjustment | 0 | 0 | 0 | 110 | 0 | 110 |
Repayment of convertible note in shares | $ 10 | 815 | 0 | 0 | 0 | 825 |
Repayment of convertible note in shares (in shares) | 989 | |||||
Net (loss) income | $ 0 | 0 | (15,343) | 0 | 0 | (15,343) |
Balance at Dec. 31, 2022 | $ 240 | $ 82,911 | $ (69,927) | $ 6 | $ (2,999) | $ 10,231 |
Balance (in shares) at Dec. 31, 2022 | 24,047 | (1,599) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (15,343) | $ 10,607 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Goodwill and intangible asset impairment charge | 7,505 | 3 |
Depreciation | 304 | 284 |
Amortization of intangible assets | 868 | 1,213 |
Amortization of capitalized software development costs | 339 | 368 |
Amortization of deferred financing costs | 17 | 11 |
Amortization of debt discount | 1,289 | 0 |
Gain on PPP loan forgiveness | 0 | (10,127) |
Stock-based compensation expense | 1,954 | 1,043 |
Bad debt expense | 221 | 691 |
Gain on derivative instruments, net | (477) | (19) |
Deferred income taxes | (86) | 93 |
Changes in assets and liabilities: | ||
Contract receivables, net | 908 | (1,397) |
Prepaid expenses and other assets | 3,710 | (3,517) |
Accounts payable, accrued compensation and accrued expenses | 472 | 805 |
Billings in excess of revenue earned | (829) | (270) |
Accrued warranty | (239) | (176) |
Other liabilities | 125 | 235 |
Net cash provided by (used in) operating activities | 738 | (153) |
Cash flows from investing activities: | ||
Capital expenditures | (238) | (506) |
Capitalized software development costs | (380) | (270) |
Net cash used in investing activities | (618) | (776) |
Cash flows from financing activities: | ||
Proceeds from line of credit | 0 | 800 |
Repayment of line of credit | (1,817) | (1,989) |
Repayment of insurance premium financing | (1,068) | (812) |
Proceeds from issuance of long-term debt and warrants | 5,750 | 0 |
Payments of debt issuance and original discount on issuance of long-term debt and warrants | (968) | 0 |
Principal repayment of convertible note | (839) | 0 |
Tax paid for shares withheld | (263) | (222) |
Net cash provided by (used in) financing activities | 795 | (2,223) |
Effect of exchange rate changes on cash | (89) | 0 |
Net increase (decrease) in cash and cash equivalents | 826 | (3,152) |
Cash, cash equivalents and restricted cash at beginning of year | 3,550 | 6,702 |
Cash, cash equivalents and restricted cash at the end of year | 4,376 | 3,550 |
Cash and cash equivalents | 2,789 | 3,550 |
Restricted cash, current | 1,052 | 0 |
Restricted cash included in other long-term assets | 535 | 0 |
Total cash, cash equivalents and restricted cash | $ 4,376 | $ 3,550 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Principles of consolidation GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems, Inc. and its subsidiaries, collectively. All intercompany balances and transactions have been eliminated in consolidation. Accounting estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate the estimates used, including, but not limited to those related to revenue recognition on long-term contracts, allowance for doubtful accounts, product warranties, valuation of goodwill and intangible assets acquired, impairment of long-lived assets to be disposed of, valuation of stock-based compensation awards and the recoverability of deferred tax assets. Actual results could differ from these estimates. Business combinations Business combinations are accounted for in accordance with the Financial Accounting Standards Board ( “ ” Business Combinations, Revenues and the results of operations of the acquired business are included in the accompanying consolidated statements of operations commencing on the date of acquisition. Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Under ASC 805, contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. Revenue recognition We derive our revenue through three broad revenue streams: 1) System Design and Build (“SDB”), 2) software, and 3) training and consulting services. We recognize revenue from SDB and software contracts mainly through the Engineering segment and the training and consulting service contracts through both the Engineering segment and Workforce Solutions segment. The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and PCS on the software. We generally have two main performance obligations for an SDB contract: (1) the training simulator build and (2) the PCS period. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue over time as control transfers to a customer. Estimated contract costs are reviewed and revised periodically during the contract period, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses become known. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to our revenue recognition as a significant change in the estimates can cause our revenue and related margins to change significantly from previous estimates. Management judgments and estimates involved in the initial creation and subsequent updates to our estimates-at-completion and related profit recognized are critical for our revenue recognition associated with SDB contracts. Inputs and assumptions requiring significant management judgment included anticipated direct labor, subcontract labor, and other direct costs required to deliver on unfinished performance obligations. The SDB contracts generally provide a one-year base warranty on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance that the completed project complies with agreed-upon specifications. Warranties extended beyond our typical one-year period will be evaluated on a case-by-case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation. Revenue from the sale of perpetual standalone and term software licenses, which do not require significant modification or customization, is recognized upon its delivery to the customer. Revenue from the sale of cloud-based, subscription-based software licenses is recognized ratably over the term of such licenses following delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software. A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services, and PCS. The total transaction price of a software license sale contract is typically fixed and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue are recognized when the installation and training are completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. The contracts within the training and consulting services revenue stream are either T&M based or fixed-price based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed by type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with ASC 606-10-55-18, Revenue from contracts with customers For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. We recognize training and consulting services revenue as services are performed and bill our customers for services that we have provided on a regular basis (i.e. weekly, biweekly or monthly). Contract asset relates to performance under the contract for obligations that are satisfied but not yet billed, which we classify as contract receivables, net. Contract liability, which we classify as billing-in-excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied. Cash and cash equivalents Cash and cash equivalents represent cash and highly liquid investments including money market accounts with maturities of three months or less at the date of purchase. Cash and cash equivalents may at times exceed the FDIC insured limits. Contract receivables, net and contract liabilities Contract receivables, net include recoverable costs for both billed and unbilled receivables. Unbilled receivables include amounts earned in performance of services that have not been invoiced. Contract liabilities include billings in excess of revenue earned on contracts in advance of work performed. Generally, such amounts will be earned and recognized over the next twelve months. Billed receivables are recorded at invoiced amounts. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, specific identification and review of customer accounts. Impairment of long-lived assets Long-lived assets, such as equipment, purchased software, capitalized software development costs, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. Development expenditures Development expenditures incurred to meet customer specifications under contracts are charged to cost of revenue. Company sponsored development expenditures are either charged to operations as incurred and are included in research and development expenses or are capitalized as software development costs. The amounts incurred for Company sponsored development activities relating to the development of new products and services or the improvement of existing products and services, were approximately $1.0 million and $0.9 million for the year ended December 31, 2022 and 2021, respectively. Of these amounts, the Company capitalized approximately $0.4 million and $0.3 million for the year ended December 31, 2022 and 2021, respectively. Equipment, software and leasehold improvements, net Equipment and purchased software are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from three years to ten years. Leasehold improvements are amortized over the term of the lease or the estimated useful life, whichever is shorter, using the straight-line method. Upon sale or retirement, the cost and related depreciation are eliminated from the respective accounts and any resulting gain or loss is included in operations. Maintenance and repairs are charged to expense as incurred. Software development costs Certain computer software development costs, including direct labor costs, are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically . On an annual basis, or more frequently as conditions indicate, we assess the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software cost we will write-down the carrying amount of such asset to its estimated fair value based on the future discounted cash flows. The excess of any unamortized computer software costs over the related fair value is written down and charged to operations. Significant changes in the sales projections could result in an impairment with respect to the capitalized software that is reported on our consolidated balance sheets. Goodwill and intangible assets Our intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, trade names, non-compete agreements and alliance agreements. Our intangible assets impairment analysis includes the use of undiscounted and discounted cash flow models that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows. Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible asset, except for contract backlog and contractual customer relations, which are recognized in proportion to the related project revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. We do not have any intangible assets with indefinite useful lives. Goodwill represents the excess of costs over fair value of assets of businesses acquired. We review goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. We have determined that we have two reporting units, which are the same as our two operating segments: (i) Engineering and (ii) Workforce Solutions. We completed our annual quantitative step 1 analysis as of December 31, 2022 and 2021 and concluded that the fair values of each of our reporting units exceeded their respective carrying values. Our goodwill impairment analysis includes the use of a discounted cash flow model that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows, and risk-adjusted discount rates. We make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Foreign currency translation The United States Dollar (USD) is our functional currency and that of our subsidiaries operating in the United States. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the average exchange rate for the year. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are cumulative translation adjustments, which are reported as a component of accumulated other comprehensive (loss) income included in the consolidated statements of changes in shareholders’ equity. For any business transaction that is in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled) to the foreign currency realized gain (loss) account in the consolidated statements of operations. Income taxes Income taxes are provided under the asset and liability method. Under this method, deferred income taxes are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. A provision is made for our current liability for federal, state and foreign income taxes and the change in our deferred income tax assets and liabilities. We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is not more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense. Stock-based compensation Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, Compensation-Stock Compensation . Compensation expense related to restricted stock unit (RSU) awards is recognized on a pro rata straight-line basis based of the fair value of share awards that are scheduled to vest during the requisite service period. Compensation expense related to performance-vesting restricted stock unit (PRSU) awards is recognized on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. The Company can also elect to issue cash-settled RSUs or PRSUs which are subject to fair value remeasurement at each reporting date Significant customers and concentration of credit risk For the year ended December 31, 2022, we have a concentration of revenue from one individual customer, which accounted for 13.6% of our consolidated revenue. For the year ended December 31, 2021, we have a concentration of revenue from one individual customer, which accounted for 13.8% of our consolidated revenue. No other individual customer accounted for more than 10% of our consolidated revenue in 2022 or 2021. As of December 31, 2022 and 2021, we have no customer that accounted over 10% of the Company’s consolidated contract receivables. Fair values of financial instruments The carrying amounts of current assets and current liabilities reported in the consolidated balance sheets approximate fair value due to their short term duration. Liquidity and Going Concern The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and satisfy its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, are only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management determined that the implemented plans to mitigate relevant conditions may not alleviate management’s concerns that raise substantial doubt about the Company’s ability to continue as a going concern within the twelve months ended April 17, 2024. On November 4, 2022, the Company received a notification letter from NASDAQ related to NASDAQ Listing Rules informing us that the Company no longer meets the requirement to maintain a minimum bid price of $1.00 per share. The Company filed a Form 8K on November 8, 2022, to disclose receipt of this letter. The Company has an initial 180-day period (or until May 3, 2023) to cure this deficiency by maintaining a closing bid price of $1 per share for at least 10 consecutive trading days. If compliance is not achieved within these 180 calendar days we can petition NASDAQ for an additional period of 180 calendar days in which to increase the stock price. The second 180-day period may be available and will expire on October 30, 2023, if the Company: • Meets the market value of publicly held shares requirement for continuing listing • Meets all other listing requirements for NASDAQ (other than bid price requirement), and • Provides written notice to NASDAQ with a plan how it intends to regain compliance with the bid price requirement during the second 180-day period; provided, however, that if it does not appear to NASDAQ this it is possible for the Company to cure the deficiency, GSE will not be eligible for the additional grace period. GSE will submit its request for the additional 180-day compliance period on or about April 19, 2023. The Company’s plan to regain compliance will include implementing a one-for-five to one-to-ten reverse stock split, which will have the initial effect of tripling the trading price of the Company’s stock. Such an action requires stockholder approval, so the Company will put the matter before its stockholders for approval at the 2023 annual meeting of stockholders to be held on June 12, 2023. If the stockholders approve the measure, we believe that compliance with the NASDAQ minimum bid price listing requirement will be achieved well before the expiration of the second 180-day period. Thus, as part of the Company’s petition for additional time within which to regain compliance, the Company will notify NASDAQ of the following specific planned steps: • The Company’s Board of Directors considered and approved a resolution on April 3, 2023, to conduct a reverse stock split of 1-for-5 to 1-for-10, to put the matter before stockholders at the June 2023 annual meeting, and authorizing Management to file the necessary Proxy Statements to effectuate submission of the matter to stockholders • We will prepare and file a Preliminary Proxy Statement with the SEC containing this measure in April 2023 • We will file and mail a Definitive Proxy Statement to stockholders containing the reverse stock split proposal on or about May 2, 2023 • Stockholders will vote on the proposed reverse stock split on June 12, 2023 • If the reverse stock split is approved by stockholders, the Company will effectuate it as quickly thereafter as administratively possible, and • Following effectuation of the reverse stock split, the Company would expect to regain compliance with the NASDAQ minimum bid price listing requirement with a few weeks, well before the end of the second 180-day period. If compliance within the prescribed period is not achieved, or if NASDAQ does not approve the Company’s petition for an additional 180-day period in which to achieve compliance, and consequently a delisting letter is issued the Company will request a hearing before the NASDAQ Hearing Panel which will stay the delisting and GSE will present its plan to regain compliance. Such plan will include the Company’s Board implementing the reverse stock split described above to regain compliance with the minimum bid price requirement, or taking additional measures that may be available. If our common stock ceases to be listed on NASDAQ, Lind may deliver a demand for payment to the Company for payment in full of our Convertible Note held with them and, if such a demand is delivered, the Company shall, within ten twenty The Company has incurred operating losses and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. During the year ended December 31, 2022, the Company generated a loss from operations of $14.4 million, which includes non-cash impairment charges of long-lived assets and goodwill from our Workforce Solutions segment totaling $7.5 million. As of December 31, 2022, the Company had domestic unrestricted cash and cash equivalents of $2.0 million which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited consolidated financial statements are issued. In making this assessment we performed a comprehensive analysis of our current circumstances and to alleviate these conditions, management is monitoring the Company’s performance and evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, restructuring of operations to grow revenues and decrease expenses, obtaining equity financing, issuing debt, or entering into other financing arrangements. The analysis used to determine the Company’s ability to continue as a going concern does not include cash sources outside the Company’s direct control that management expects to be available within the next twelve months. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2022 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which introduces new guidance for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables, held-to-maturity debt securities, loans and net investments in leases. The new guidance also modifies the impairment model for available-for-sale debt securities and requires the entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. The standard also indicates that entities may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. On October 16, 2019, the FASB voted to defer the deadlines for private companies and certain small public companies, including smaller reporting companies, to implement the new accounting standards on credit losses. The effective date is January 1, 2023. We are adopting in the quarter ending March 31, 2023. We are evaluating the effect this standard may have on our consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share [Abstract] | |
Earnings per Share | 3. Earnings per share Basic earnings per share is based on the weighted average number of outstanding common shares for the period. Diluted earnings per share adjusts the weighted average shares outstanding for the potential dilution that could occur if outstanding vested stock options were exercised. Basic and diluted earnings per share are based on the weighted average number of outstanding shares for the period. The number of common shares and common share equivalents used in the determination of basic and diluted (loss) earnings per share were as follows: (in thousands, except for per share data) Years ended December 31, 2022 2021 Numerator: Net income (loss) attributed to common shareholders $ (15,343 ) $ 10,607 Denominator: Weighted-average shares outstanding for basic earnings per share 21,362,897 20,761,191 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 21,362,897 20,761,191 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 2,525,420 - |
Coronavirus Aid, Relief and Eco
Coronavirus Aid, Relief and Economic Security Act | 12 Months Ended |
Dec. 31, 2022 | |
Coronavirus Aid, Relief and Economic Security Act [Abstract] | |
Coronavirus Aid, Relief and Economic Security Act | 4. Coronavirus Aid, Relief and Economic Security Act Paycheck Protection Program Loan (PPP Loan) On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) to extend liquidity to small businesses and assist in retaining employees during the COVID-19 pandemic. We applied for and, on April 23, 2020, received a payroll protection program loan in the amount of $10.0 million (the “PPP Loan”) under the CARES Act, as administered by the U.S. Small Business Administration (the “SBA”). The application for receipt of the PPP Loan required us to certify, in good faith, that the economic uncertainty made the loan necessary to support our ongoing operations. The PPP Loan was serviced by Citizens Bank, N.A. (the “Citizens”). The PPP Loan bore interest at a rate of 1% per annum and would mature on April 23, 2022, with the first payment deferred until September 2021. We used the proceeds of the PPP Loan for payroll and related costs, rent and utilities. Pursuant to the regulations promulgated by the SBA, in order to request forgiveness of the PPP Loan, we were required to submit an application to Citizens substantiating that we were entitled to the PPP Loan and used the proceeds of the PPP Loan as permitted under the CARES Act. Citizens reviewed our application for forgiveness and associated documentation, and on February 26, 2021 forwarded our application to the SBA with Citizens’ determination that the loan is fully forgivable. On August 5, 2021, we received notice that full principal amount and all accrued interest thereon of the PPP Loan was formally forgiven by the SBA. We recognized other income of $10.1 million related to this forgiveness during the third quarter of fiscal 2021 . Employee Retention Credits (ERC) Employee retention tax credits, made available under the CARES Act, allow eligible employers to claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees, initially from March 27, 2020 until June 30, 2021, and extended through September 30, 2021. In 2021, we applied for $5.0 million in refunds from the Internal Revenue Service with filing of our 941s and achieved $2.2 million in credits from unremitted payroll taxes as allowed . We recorded other income of $7.2 million related to the employee retention tax credits earned for the year ended December 31, 2021. As of December 31, 2022, Subsequently, in January 2023, we received a refund of $0.9 million. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue [Abstract] | |
Revenue | 5. Revenue We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers Engineering Engineering The following table represents a disaggregation of revenue by type of goods or services for the years ended December 31, 2022 and 2021, along with the reportable segment for each category: ( in thousands Twelve Months Ended December 31, 2022 2021 Engineering System Design and Build - Over time $ 6,595 $ 6,168 Software 4,684 4,767 Point in time 921 343 Over time 3,763 4,424 Training and Consulting Services 18,640 17,316 Point in time 245 1,846 Over time 18,395 15,470 Workforce Solutions segment Training and Consulting Services 17,815 26,932 Point in time 62 476 Over time 17,753 26,456 Total revenue $ 47,734 $ 55,183 The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers: ( in thousands December 31, 2022 December 31, 2021 Billings in excess of revenue earned (BIE) $ 4,163 $ 5,029 Revenue recognized in the period from amounts included in BIE at the beginning of the period $ 3,785 $ 4,708 As of December 31, 2022, the aggregate amount of transaction price allocated to the remaining performance obligations of SDB, software and fixed-price training and consulting services contracts is $15.6 million. We will recognize the revenue as the performance obligations are satisfied, which is expected to occur over the next twelve months. Part of the training and consulting services contracts are T&M based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates, which are fixed by type of work, as well as approved expenses incurred. We have elected to use the optional exemption under ASC 606-10-50-14(b) Revenue from contracts with customers |
Restructuring expenses
Restructuring expenses | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring expenses [Abstract] | |
Restructuring expenses | 6. Restructuring expenses International Restructuring On December 27, 2017, the Board of Directors approved an international restructuring plan to streamline and optimize our global operations. Beginning in December 2017, we have been in the process of consolidating our engineering services and R&D activities to Maryland and ceasing an unprofitable non-core business in the United Kingdom (UK). As a result, we have closed our offices in Nyköping, Sweden; Chennai, India; and Stockton-on-Tees, UK. These actions are designed to improve our productivity by eliminating duplicate employee functions, increasing our focus on our core business, improving efficiency and maintaining the full range of engineering capabilities while reducing costs and organizational complexity. We eliminated approximately 40 positions due to these changes, primarily in Europe and India, and have undertaken other related cost-savings measures. As a result of these efforts, we have recorded total restructuring charges of approximately $3.9 million, primarily related to workforce reductions, contracts termination costs and asset write-offs due to the exit activities. We recorded a restructuring charge of $0.8 million for the year ended December 31, 2021. In addition to the restructuring costs incurred to date, we charged $1.2 million of cumulative translation adjustments against net (loss) income and an approximately $0.8 million of tax benefit was realized upon liquidation of these foreign entities for the year ended December 31, 2021. There were no restructuring costs incurred in the year ended December 31, 2022. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company monitors operating results and events and circumstances that may indicate potential impairment of intangible assets. During the three months ended September 30, 2022, we determined that the deterioration in sales delayed pipeline opportunities, and overall downward performance results and the forecast related to the Workforce Solutions business segment was material enough to be considered a triggering event that could result in impairment of our long-lived assets. As such, we performed an interim analysis to determine if an impairment existed at September 30, 2022 in accordance with ASC 350 & ASC 360. ASC 350 Indefinite-Lived Asset Testing – Based on the triggering event indicated above we performed an interim analysis to determine if an impairment of the Workforce Solutions business unit existed at September 30, 2022. Our Goodwill impairment analysis, which includes the use of discounted cash flow models that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows, and risk-adjusted discount rates determined the carrying value of Workforce Solutions exceeded the Fair Value by $7.0 million. As such, impairment of the related goodwill was recorded in the three months ended September 30, 2022. ASC 360 Long-Lived Asset Testing – Based on the triggering event indicated above we also performed an interim analysis to determine if an impairment existed at September 30, 2022 by its individual asset groupings, which we determined to be at the subsidiary level. We used a discounted cash flow analysis to determine the fair value of our asset group, and we concluded that the carrying value of the definite-lived intangible assets of Absolute, a business unit of the Workforce Solutions segment, exceeded its fair value by $0.5 million, and we recorded a loss on impairment Management determined no additional triggering impact occurred during the year ended December 31, 2022. The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets: (in thousands) As of December 31, 2022 Gross Carrying Amount Accumulated Amortization Impact of Impairment Net Amortized intangible assets Customer relationships $ 8,628 $ (7,050 ) $ (464 ) $ 1,114 Trade names 1,689 (1,196 ) - 493 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 527 (486 ) - 41 Alliance agreement 527 (488 ) - 39 Others 167 (167 ) - - Total $ 12,442 $ (10,291 ) $ (464 ) $ 1,687 (in thousands) As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets Customer relationships $ 8,628 $ (6,432 ) $ 2,196 Trade names 1,689 (1,108 ) 581 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreement 527 (429 ) 98 Alliance agreement 527 (382 ) 145 Others 167 (167 ) - Total $ 12,442 $ (9,422 ) $ 3,020 Amortization expense related to definite-lived intangible assets totaled 0.9 million and $1.2 million for the years ended December 31, 2022 and 2021, respectively. The following table details the estimated amortization expense of the definite-lived intangible assets for the next five years: (in thousands) Years ended December 31: 2023 $ 508 2024 332 2025 255 2026 204 2027 169 Thereafter 219 $ 1,687 Goodwill (in thousands) Goodwill Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 (7,040 ) 1,391 Net book value at December 31, 2022 $ 16,709 $ (10,410 ) $ 6,299 Goodwill Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 - 8,431 Net book value at December 31, 2021 $ 16,709 $ (3,370 ) $ 13,339 |
Contract Receivables
Contract Receivables | 12 Months Ended |
Dec. 31, 2022 | |
Contract Receivables [Abstract] | |
Contract Receivables | 8. Contract Receivables Contract receivables represent our unconditional rights to consideration due from a broad base of both domestic and international customers. Net contract receivables are considered to be collectible within twelve months. Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows: (in thousands) December 31, 2022 2021 Billed receivables $ 6,074 $ 6,124 Unbilled receivables 5,146 6,143 Allowance for doubtful accounts (1,156 ) (1,010 ) Total contract receivables, net $ 10,064 $ 11,257 Management reviews collectability of receivables periodically and records an allowance for doubtful accounts to reduce our receivables to their net realizable value when it is probable that we will not be able to collect all amounts due according to the contractual terms of the receivable. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, and specific identification and review of customer accounts. During the years ended December 31, 2022 and 2021, we recorded bad debt expense of $221 thousand and $677 thousand, respectively. During January 2023, we invoiced $1.9 million of the unbilled amounts related to the balance at December 31, 2022. The activity in the allowance for doubtful accounts is as follows: (in thousands) As of and for the Years ended December 31, 2022 2021 Beginning balance $ 1,010 $ 360 Current year provision 221 677 Current year write-offs (7 ) (28 ) Currency adjustment (68 ) 1 Ending balance $ 1,156 $ 1,010 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | 9. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: (in thousands) December 31, 2022 2021 Income tax receivable $ 78 $ 129 Prepaid expenses 947 933 ERC receivable 1,028 4,064 Other current assets 112 136 Total $ 2,165 $ 5,262 Other current assets primarily include Employee Retention Credits not yet received as of December 31, 2022. Subsequent to the year end, we received the employee retention tax credit refunds of $0.9 million, which was included in the other current assets balance at December 31, 2022. Prepaid expenses primarily include prepayment for insurance and other subscription-based services. |
Equipment, Software and Leaseho
Equipment, Software and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2022 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | 10. Equipment, Software and Leasehold Improvements Equipment, software and leasehold improvements, net consist of the following: (in thousands) December 31, 2022 2021 Computer and equipment $ 2,363 $ 2,270 Software 2,291 2,150 Leasehold improvements 659 659 Furniture and fixtures 838 839 6,151 5,918 Accumulated depreciation (5,379 ) (5,079 ) Equipment, software and leasehold improvements, net $ 772 $ 839 Depreciation expense was approximately $0.3 million for the years ended December 31, 2022 and 2021. Capitalization of internal-use software costs of $0.1 million and $0.5 million related to the ongoing systems upgrade and implementation effort were recorded in software for the twelve months ended December 31, 2022 and 2021, respectively . |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranty [Abstract] | |
Product Warranty | 11. Product Warranty Accrued warranty For contracts that contain a warranty provision, we provide an accrual for estimated future warranty costs based on historical experience and projected claims. Our contracts may contain warranty provisions ranging from one year to five years. The current portion of the accrued warranty is presented separately on the consolidated balance sheets within current liabilities whereas the noncurrent portion is included in other liabilities. The activity in the accrued warranty accounts is as follows: (in thousands) As of and for the years ended December 31, 2022 2021 Beginning balance $ 748 $ 922 Current year provision (44 ) (43 ) Current year claims (195 ) (133 ) Currency adjustment (7 ) 2 Ending balance $ 502 $ 748 The current and non-current warranty balance is as follows: December 31, 2022 2021 Current $ 370 $ 667 Non-current 132 81 Total Warranty $ 502 $ 748 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments ASC 820, Fair Value Measurement The levels of the fair value hierarchy established by ASC 820 are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. As of December 31, 2022 and 2021, we considered the recorded value of certain of our financial assets and liabilities, which consist primarily of cash and cash equivalents, contract receivable and accounts payable, to approximate fair value based upon their short-term nature. Our convertible debt issued in February 2022 (See Note 13) includes certain embedded redemption features that are required to be bifurcated as embedded derivatives and measured at fair value on a recurring basis. We estimate the fair value using a Monte Carlo simulation based on estimates of our future stock price and assumptions about the possible redemption scenarios. The Company used the Monte Carlo simulation model to determine the fair value of the Warrants and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants as of December 31, 2022 was estimated with the following assumptions. Exercise Price $ 1.94 Common Stock Price $ 0.72 Risk Free Rate 4.0% Volatility 65.0% Term (in years) 4.2yrs. The following table presents assets measured at fair value at December 31, 2022: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Derivative liability $ - $ - $ 285 $ 285 Warrant liability - - 267 267 Cash settled performance-vesting restricted stock units - - 51 51 Total assets $ - $ - $ 603 $ 603 The following table presents assets measured at fair value at December 31, 2021: (in thousands) Embedded Redemption Features Warrant Cash Settled PRSUs Level 3 Total Balance at December 31, 2021 $ - $ - $ - $ - Derivative liabilities 306 - - 306 Warrant liabilities at issuance date - 724 - 724 Change in FV included in gain on derivative instruments, net (21 ) (457 ) - (478 ) Stock compensation less payments made - - 51 51 Balance at December 31, 2022 $ 285 $ 267 $ 51 $ 603 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt [Abstract] | |
Debt | 13. Debt Convertible Note On February 23, 2022, we entered into a Securities Purchase Agreement, as amended, with Lind Global Fund II LP (“Lind Global”), pursuant to which we issued to Lind Global a two-year, secured, interest-free convertible promissory note in the amount of $5.75 million (the “Convertible Note”) and a common stock purchase warrant to acquire 1,283,732 shares of our common stock (the “Warrant”). The Convertible Note does not bear interest but was issued at a $0.75 million discount (“OID”). We received proceeds of approximately $4.8 million net of the OID and expenses. Amount Convertible Note issued $ 5,750 Debt discount (750 ) Issuance cost: Commitment fee (175 ) Balance of investor’s counsel fees (43 ) Net proceeds of Convertible Note $ 4,782 Fair value of Warrant Liabilities on issuance (724 ) Fair value of Conversion Feature on issuance (306 ) Allocated OID costs to Convertible Note (96 ) Interest expense accrued on Convertible Note as of December 31, 2022 1,289 Principal and interest payments for the year ended December 31, 2022 (1,597 ) Balance of Convertible Note as of December 31, 2022 $ 3,348 The Convertible Note provides for monthly principal repayments of $319 thousand beginning 180 days from issuance. Payments can be made in the form of cash, shares, or a combination of both at the discretion of GSE. The following table details the future principal payments of the Convertible Note: (in thousands) Years ended December 31: 2023 $ 3,833 2024 320 Thereafter - $ 4,153 The Convertible Note is convertible into our common stock at any time after the earlier of six months from issuance of the Convertible Note or the date of an effective registration statement filed with the SEC covering the underlying shares. The conversion price of the Convertible Note is initially equal to $1.94 per share, subject to customary adjustments. The Convertible Note matures in February of 2024 one third A portion of the proceeds of the Convertible Note were used to repay, in full, all outstanding indebtedness owed to Citizens Bank, N.A. (“Citizens”), and the Amended and Restated Credit and Security Agreement between us, our subsidiaries, and Citizens was terminated. We will continue to maintain a cash management account and certain letters of credit with Citizens and, accordingly, have entered into a certain Cash Management Agreement with Citizens, as well as certain Cash Pledge Agreements in amounts corresponding to the current outstanding letters of credits with customers. The Warrant entitles Lind Global to purchase up to 1,283,732 shares of our common stock until February 23, 2027, at an exercise price of $1.94 per share, subject to customary adjustments described therein. The Warrant is recorded at fair value upon issuance of $0.7 million and is classified as a current liability to be remeasured at each reporting period (see Note 12). The discount created by allocating proceeds to the Warrant results in a debt discount to be amortized as additional interest expense over the term of the Convertible Note. The Company evaluated the Convertible Note and concluded that certain embedded redemption features are required to be accounted for as a derivative liability. Embedded redemption features were recorded at fair value upon issuance of $0.3 million and are classified as current liabilities to be remeasured at each reporting period (see Note 12). The discount created by allocating proceeds to the derivative liability results in a debt discount to be amortized as additional interest expense over the term of the Convertible Notes. The Warrant is accounted for as a derivative liability based on certain features included within the Convertible Note which caused the Company to not be able to assert that it would have sufficient shares in all cases to be able to settle the warrant. As such, the initial proceeds (approximately $4.8 million, net of original issue discounts and other payments to lender) were allocated first to the fair value of the Warrant with the residual allocated to the Convertible Note host instrument. The proceeds allocated to the Convertible Note were further allocated first to the bifurcated derivative liability based on its fair value with the residual being allocated to the Convertible Note host instrument. The direct and incremental costs incurred are allocated to the Convertible Note and the Warrant based on a systematic and rational approach. The costs allocated to the Warrant have been expensed as incurred while those allocated to the Convertible Note have been capitalized and will be amortized as interest expense over the life of the Convertible Note based on the effective interest rate. The Company will record ongoing changes to the fair value of the derivative liabilities as other non-operating income (expense). The Convertible Note was evaluated as a potentially dilutive security in both periods of loss and income for diluted earnings per share purposes. The Warrant is considered a participating security and was not included in the calculation of basic earnings per share for the period ended December 31, 2022 as Company reflected net loss for this period. The Warrant will be included in the calculation of basic earnings per share in periods of net income. The issuance costs with respect to the Convertible Note, which are recorded as a debt discount, are deferred and amortized using effective interest method as additional interest expense over the terms of the Convertible Note. At December 31, 2022, the outstanding debt under the Convertible Note agreement was as follows: Principal Debt Discounts Net Current portion of Long-Term Debt $ 3,833 $ (795 ) $ 3,038 Long-Term Debt less current portion 320 (10 ) 310 Balance of Convertible Note as of December 31, 2022 $ 4,153 $ (805 ) $ 3,348 The Company incurred total interest expense related to the Convertible Note, including the amortization of the various discounts, of $1.3 million for the year ended December 31, 2022. Revolving Line of Credit (“RLOC”) On March 29, 2021, we signed the Ninth Amendment and Reaffirmation Agreement with an effective date of March 29, 2021. Pursuant to the Ninth Amendment and Reaffirmation Agreement, the Citizens Bank, N.A. (the "Bank") waived the fixed charge coverage ratio and leverage ratio for the quarters ended March 31 and June 30, 2021, and we agreed, for each quarter thereafter, that the fixed charge coverage ratio shall not be less than 1.10 to 1.00. In addition, we agreed to not exceed a maximum leverage ratio starting on September 30, 2021. We were also required to maintain a minimum of $2.5 million in aggregate USA liquidity. As part of the amendment, we agreed, at closing, (i) to make a $0.5 million pay down of RLOC; (ii) RLOC commitment to be reduced to $4.25 million; and (iii) $0.5 million of RLOC will only be available for issuance of Letters of Credit. We also agreed to pay $0.5 million to reduce RLOC to $3.75 million by June 30, 2021 and to $3.5 million by September 30, 2021. Commencing December 31, 2021 and on the last day of each quarter, we will pay $75 thousand to reduce the RLOC. We incurred $25 thousand fees related to this amendment during the year ended December 31, 2021. On November 12, 2021, we signed the Tenth Amendment and Reaffirmation Agreement with our bank to waive the fixed charge coverage ratio and leverage ratio for the quarters ending September 30 and December 31, 2021, and we agreed, (i) interest on the outstanding principal amount of the RLOC shall accrue at the interest rate in effect for the RLOC from time to time, but the interest due and payable on the RLOC on each Interest Payment Date shall be determined by subtracting seventy-five (75) basis points from the Applicable Margin and (ii) the seventy-five (75) basis points of accrued interest on the RLOC not paid on any Interest Payment Date pursuant to clause (i) above shall be due and payable on the Termination Date or the date of payment in full of the RLOC. In addition, we agreed, by December 31, 2021, to pay the Bank $0.25 million to be applied to the principal amount outstanding under the RLOC. We incurred $15 thousand of amendment fee related to this amendment. In February 2022, using proceeds from the Convertible Note, we repaid in full, all outstanding indebtedness of $1.8 million owed to Citizens, and the Amended and Restated Credit and Security Agreement between us, our subsidiaries, and Citizens has been terminated. Certain letters of credit remain in place with Citizens. As of December 31, 2022, we had which were secured with restricted cash |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | 14. Income Taxes The consolidated income before income taxes, by domestic and foreign sources, is as follows: (in thousands) Years ended December 31, 2022 2021 Domestic $ (15,128 ) $ 13,351 Foreign (164 ) (2,581 ) Total $ (15,292 ) $ 10,770 The provision (benefit) for income taxes is as follows: (in thousands) Years ended December 31, 2022 2021 Current: Federal $ - $ (75 ) State 42 74 Foreign 95 71 Subtotal 137 70 Deferred: Federal (47 ) 48 State (39 ) 45 Foreign - - Subtotal (86 ) 93 Total $ 51 $ 163 The effective income tax rate for the years ended December 31, 2022 and 2021 differed from the statutory federal income tax rate as presented below: Effective Tax Rate percentage (%) Years ended December 31, 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.4 % 2.1 % Effect of foreign operations (0.3 )% (0.2 )% Effect of foreign restructuring 0.0 % 2.3 % Change in valuation allowance (20.7 )% 2.3 % PPP loan forgiveness 0.0 % (19.5 )% Stock-based compensation (0.9 )% 1.0 % Convertible Note transactions (1.2 )% 0.0 % Uncertain tax positions (0.7 )% (7.5 )% Other 0.1 % 0.0 % Effective tax rate (0.3 )% 1.5 % The difference between the effective tax rate and statutory rate in 2022 primarily resulted from a change in valuation allowance, permanent differences related to disallowed interest expense and mark-to-market adjustments on the Convertible Note which is a disqualified debt instrument for tax purposes, accruals related to uncertain tax positions, the tax impact of stock compensation vests and forfeitures, and state tax expense . Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. A summary of the tax effect of the significant components of the deferred income tax assets and liabilities is as follows: (in thousands) As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 7,853 $ 6,180 Accruals 62 122 Reserves 409 434 Stock-based compensation expense 283 172 Intangible assets 2,356 2,368 Goodwill 1,551 892 Operating lease liability 132 472 Fixed assets 65 29 Sec. 174 R&D costs 129 - Other 231 243 Total deferred tax asset 13,071 10,912 Valuation allowance (12,572 ) (9,410 ) Total deferred tax asset less valuation allowance 499 1,502 Deferred tax liabilities: Software development costs (59 ) (135 ) Indefinite-lived intangibles (346 ) (1,190 ) Operating lease - right of use asset (100 ) (253 ) Other - (17 ) Total deferred tax liability (505 ) (1,595 ) Net deferred tax liability $ (6 ) $ (93 ) We file tax returns in the United States federal jurisdiction and in several state and foreign jurisdictions. Because of the net operating loss carryforwards, we are subject to U.S. federal and state income tax examinations for tax years 2003 2017 In assessing the ability to realize our deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Our ability to realize the deferred tax assets depends primarily upon the preponderance of positive evidence that could be demonstrated by three-year cumulative positive earnings, reversal of existing deferred temporary differences, and generation of sufficient future taxable income to allow for the utilization of deductible temporary differences. As of each reporting date, our management considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. This analysis is performed on a jurisdiction by jurisdiction basis. We performed an analysis of the valuation allowance position for its worldwide deferred tax assets and determined that a valuation allowance continues to be necessary on its U.S. and foreign deferred tax assets at December 31, 2022. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (the TCJA) eliminated the option to deduct research and development expenses currently and requires taxpayers to amortize such costs over a period of five years for expenses incurred in the United States and a period of 15 years for expenses incurred outside the United States. While it is possible the federal government may enact future legislation which would defer or repeal this provision of the TCJA, there is no assurance such legislation will be enacted or whether, if enacted, such legislation would be enacted on a retrospective basis to 2022. This provision of the TCJA resulted in an increase of $129 thousand in deferred tax assets, and an equal increase to the Company's valuation allowance, during the year ended December 31, 2022 related to research and development expenses incurred during the period. There was no material impact to the Company's current or deferred tax provision or operating cash flows during the year ended December 31, 2022 as a result of this provision of the TCJA given the Company incurred net operating losses (NOLs) during the period. The Company does not currently expect this provision of the TCJA will have a material impact on its tax provision or operating cash flows for the year ended December 31, 2023, however, the actual impact of this provision to future periods is uncertain as of this time . As of December 31, 2022, our largest deferred tax asset was $7.9 million of net operating losses. It primarily relates to a U.S. net operating loss carryforward of $7.8 million; $4.6 million of the net operating loss carryforward expires in various amounts between 2023 2037 As of December 31, 2022 and 2021, our consolidated cash and cash equivalents totaled $2.8 million and $3.6 million, respectively, including cash and cash equivalents held at non-U.S. entities totaling $0.8 million and $1.2 million, respectively. The non-U.S. entities include operating subsidiaries located in China. We do not assert permanent reinvestment in China. Accordingly, we analyzed the cumulative earnings and profits and determined the US deferred liability related to this position is immaterial. Uncertain Tax Positions During 2022 and 2021, we recorded tax liabilities for certain foreign tax contingencies. We recorded these uncertain tax positions in Income taxes payable The following table outlines our uncertain tax liabilities, including accrued interest and penalties for each jurisdiction: China Ukraine South Korea UK U.S. (in thousands) Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Total Balance, January 1, 2021 $ 214 $ 378 $ 14 $ 10 $ 682 $ 274 $ 45 $ 21 $ 793 $ 9 $ 2,440 Increases 6 50 - - - 61 - 9 - 3 129 Decreases - - (14 ) (10 ) (38 ) - - - (793 ) (12 ) (867 ) Balance, December 31, 2021 $ 220 $ 428 $ - $ - $ 644 $ 335 $ 45 $ 30 $ - $ - $ 1,702 Increases - 4 - - - 51 - 61 - - 116 Decreases (17 ) - - - (22 ) - (5 ) - - - (44 ) Balance, December 31, 2022 $ 203 $ 432 $ - $ - $ 622 $ 386 $ 40 $ 91 $ - $ - $ 1,774 |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2022 | |
Capital Stock [Abstract] | |
Capital Stock | 15. Capital Stock The total authorized shares of capital stock we are authorized to issue equals 62,000,000 total shares of stock of which 60,000,000 are designated as common stock and 2,000,000 are designated as preferred stock. Our Board of Directors has the authority to establish one or more classes of preferred stock and to determine, within any class of preferred stock, the preferences, rights and other terms of such class. As of December 31, 2022, the Company has reserved 7,281,758 shares of common stock for issuance; zero are reserved for shares upon exercise of outstanding stock options and 2,124,251 are reserved for shares upon vesting of restricted stock units. There are 1,718,242 shares available for future grants under the Plan (as further defined below). |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 16. Stock-Based Compensation Long-term incentive plan During 1995, we established the 1995 Long-Term Incentive Stock Option Plan (the “Plan”), which permits the granting of stock options (including incentive stock options and nonqualified stock options) stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards or any combination of these to employees, directors or consultants. The Plan was amended and restated effective April 22, 2016 and expires on April 21, 2026; the total number of shares that could be issued under the Plan is 7,281,758. As of December 31, 2022, 5,157,507 shares have been issued under the Plan, zero stock options and 2,124,251 restricted stock units (RSUs) were outstanding under the Plan, while 1,718,242 shares remain for future grants under the Plan. We recognize compensation expense on a pro rata straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We have not capitalized any portion of our stock-based compensation. Our forfeiture rate is based on actuals. During the years ended December 31, 2022 and 2021, we recognized $2.0 million and $1.0 million, respectively, of stock-based compensation expense under the fair value method. Accordingly, we recognized associated deferred income tax expense of $140 thousand and $111 thousand before valuation allowance, respectively, during the years ended December 31, 2022 and 2021. During the years ended December 31, 2022 and 2021, there were no stock-based compensation expense related to the change in fair value of cash-settled RSUs, which we account for as a liability. On February 23, 2022, we entered into a Securities Purchase Agreement with Lind Global Fund II LP (“Lind Global”), pursuant to which we issued to Lind Global a two-year, secured, interest-free convertible promissory note in the amount of $5.75 million (the “Convertible Note”) and a common stock purchase warrant to acquire 1,283,732 shares of our common stock (the “Warrant”) (See Note 13). Restricted Stock Units During the years ended December 31, 2022 and 2021, we issued RSUs to employees which vest upon the achievement of specific market-based or time-based measures. The fair value for RSU's is calculated based on the stock price on the grant date and expensed ratably over the requisite service period as market-based results achieved, which ranges between one year and five years. The following table summarizes the information about vested and unvested restricted stock units for the years ended December 31, 2022 and 2021. Number of Shares Weighted Average Fair Value Nonvested RSUs at January 1, 2021 1,719,732 $ 1.36 RSUs granted 983,661 1.69 RSUs forfeited (631,367 ) 0.88 RSUs vested (476,361 ) 1.71 Nonvested RSUs at December 31, 2021 1,595,665 $ 1.77 Nonvested RSUs at January 1, 2022 1,595,665 $ 1.77 RSUs granted 1,790,250 1.49 RSUs forfeited (472,969 ) 2.13 RSUs vested (788,695 ) 1.68 Nonvested RSUs at December 31, 2022 2,124,251 $ 1.40 As of December 31, 2022, we had $1.2 million of unrecognized compensation expense related to the RSUs expected to be recognized on a pro-rata straight line basis over a weighted average remaining service period of approximately 1.5 years. GSE’s 1995 long-term incentive program (“LTIP”) provides for the issuance of performance-vesting and time-vesting restricted stock units to certain executives and employees. Vesting of the performance-vesting restricted stock units (“PRSU”) is contingent upon the employee’s continued employment and the Company’s achievement of certain performance goals during designated performance periods as established by the Compensation Committee of the Company’s Board of Directors. We recognize compensation expense, net of estimated forfeitures, for PRSUs on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. At the end of each reporting period, we estimate the number of PRSUs that are expected to vest, based on the probability and extent to which the performance goals will be met, and take into account these estimates when calculating the expense for the period. If the number of shares expected to be earned changes during the performance period, we make a cumulative adjustment to compensation expense based on the revised number of shares expected to be earned. During the year ended December 31, 2022, we granted approximately 990,250 RSUs with an aggregate fair value of approximately $1.5 million. During the year ended December 31, 2021, we granted approximately 983,661 time-based RSUs with an aggregate fair value of approximately $1.7 million. During the year ended December 31, 2022, we vested 588,695 RSUs compared to 476,361 RSUs vested during the year ended December 31, 2021. A portion of the time-based RSUs vest quarterly in equal amounts over the course of eight quarters, and the remainder vest annually in equal amounts over the course of one During the year ended December 31, 2022, we granted 800,000 PRSUs including 200,000 cash-settled grants to employees. These grants are subject to multiple vesting criteria including reaching a 20-day VWAP of $1.94 prior to the expiration of the awards, and a time-vesting restriction, which will vest in equal portions over the next 15 quarters ending December 31, 2025. During the year ended December 31, 2022, we vested 200,000 PRSUs, of which, 50,000 PRSUs were cash-settled, respectively. No PRSUs were vested during the year ended December 31, 2021. The market vesting criteria was achieved in April 2022 for the 800,000 PRSUs which will fully vest over the next 12 quarters . During the year ended December 31, 2021, we did not grant any PRSUs to employees. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 17. Leases We have lease agreements with lease and non-lease components, which are accounted for as a single lease. We apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The operating lease ROU amortization was $632 thousand and $605 thousand for the twelve months ended December 31, 2022 and 2021, respectively. Lease contracts are evaluated at inception to determine whether they contain a lease and whether we obtain the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets: (in thousands) Operating Leases Classification December 31, 2022 December 31, 2021 Leased Assets Operating lease - right of use assets Long term assets $ 506 $ 1,200 Lease Liabilities Operating lease liabilities - Current Other current liabilities 418 1,205 Operating lease liabilities Long term liabilities 160 790 $ 578 $ 1,995 We entered into a lease agreement to lease 2,200 square feet of office space on September 26, 2022, and the lease term will end on November 30, 2024. On December 15, 2022, following a March 18, 2022 building fire that impacted our space and ensuing dispute among us and the landlord, we terminated our lease for 1332 Londontown Boulevard, Eldersburg, Maryland (our former headquarters) and entered into a release and settlement agreement whereby we agreed to pay, and the landlord agreed to accept, a reduced monthly payment through May 1, 2023 in exchange for early termination of the lease. The lease termination resulted in a gain of $94 thousand and is reflected in other (loss) income, net for the year ended December 31, 2022. As a part of this agreement, we assigned both active subleases to the landlord effective as of the execution date. The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2022, ( in thousands Lease Cost Classification Twelve months ended December 31, 2022 Operating lease cost (1) Selling, general and administrative expenses $ 700 Short-term leases costs (2) Selling, general and administrative expenses 60 Sublease income (3) Selling, general and administrative expenses (62 ) Net lease cost $ 698 (1) (2) (3) We are obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under our noncancelable operating leases as of December 31, 2022 are as follows: (in thousands) Gross Future Minimum Lease Payments 2023 $ 435 2024 151 2025 10 2026 3 Thereafter - Total $ 599 Less: Interest 21 Present value of lease payments $ 578 We have calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, we use the incremental borrowing rate as the lease discount rate: Lease Term and Discount Rate Twelve months ended December 31, 2022 Weighted-average remaining lease term (years) Operating leases 1.51 Weighted-average discount rate Operating leases 5.00 % There was right-of-use assets obtained in exchange for operating lease liabilities of $60 thousand during the year ended December 31, 2022. The table below sets out the classification of lease payments in the consolidated statements of cash flows: (in thousands) Twelve months ended December 31, Cash paid for amounts included in measurement of liabilities 2022 2021 Cash paid for amounts included in measurement of liabilities $ 1,233 $ 1,326 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefits [Abstract] | |
Employee Benefits | 18. Employee Benefits We have a qualified defined contribution plan that covers all U.S. employees under Section 401(k) of the Internal Revenue Code. Under this plan, our stipulated basic contribution matches a portion of the participants’ contributions based upon a defined schedule for eligible employees. Our contributions to the plan were approximately $293 thousand and $290 thousand for the years ended December 31, 2022 and 2021, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information [Abstract] | |
Segment Information | 19. Segment Information We have two reportable business segments. The Engineering pplications include turnkey and custom training services. Contract terms are typically less than two years. Workforce Solutions segment provides specialized workforce solutions primarily to the nuclear industry, working at clients’ facilities. This business is managed through our Hyperspring and Absolute subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the GSE product and service portfolio. The following table sets forth the revenu (in thousands) Years ended December 31, 2022 2021 Revenue: Engineering $ 29,919 $ 28,140 Workforce Solutions 17,815 27,043 Total revenue 47,734 55,183 Gross profit Engineering 9,557 8,124 Workforce Solutions 2,353 3,734 Total gross profit 11,910 11,858 Operating loss Engineering (6,388 ) (4,425 ) Workforce Solutions (8,018 ) (1,549 ) Operating loss (14,406 ) (5,974 ) Interest expense (1,272 ) (159 ) Change in fair value of derivative instruments, net 477 19 Other (loss) income, net (91 ) 16,884 (Loss) income before taxes $ (15,292 ) $ 10,770 The operating loss above for the year ended December 31, 2022 includes goodwill and intangible asset impairment charge of $7.5 million for Workforce Solutions. There was no impairment recognized for the same periods in 2021 for Workforce Solutions. The operating loss above for the year ended December 31, 2021 includes impairment of ROU assets of $3 thousand for Engineering Engineering Additional information relating to segments is as follows: (in thousands) December 31, 2022 2021 Engineering $ 21,705 $ 23,742 Workforce Solutions 4,791 15,309 Total assets $ 26,496 $ 39,051 For the years ended December 31, 2022 and 2021, 89% and 91%, respectively, of our consolidated revenue was from customers in the nuclear power industry. We design, develop and deliver business and technology solutions to the energy industry worldwide. Revenue, operating (loss) income and total assets for our United States, European, and Asian subsidiaries as of and for the years ended December 31, 2022 and 2021 are as follows: (in thousands) Year ended December 31, 2022 United States Europe Asia Consolidated Revenue $ 46,622 $ - $ 1,112 $ 47,734 Operating loss $ (14,225 ) $ - $ (181 ) $ (14,406 ) Net assets, at December 31 $ 24,631 $ - $ 1,865 $ 26,496 (in thousands) Year ended December 31, 2021 United States Europe Asia Consolidated Revenue $ 54,203 $ - $ 980 $ 55,183 Operating loss $ (3,351 ) $ (1,746 ) $ (877 ) $ (5,974 ) Net assets, at December 31 $ 35,932 $ - $ 3,119 $ 39,051 Revenues by geographic location above are attributed to the contracting entity. Therefore, revenues from a foreign customer that contracted directly with our U.S. entity are included in revenues from the United States. All revenues in Asia were attributable to our Chinese subsidiary. Alternatively, revenue from customers domiciled in foreign countries were approximately 16% and 12%, of our consolidated 2022 and 2021 revenue, respectively. Revenue from foreign countries where our customers reside were all individually less than 10% of our consolidated revenue during 2022 and 2021. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Disclosure of Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Information | 20. Supplemental Disclosure of Cash Flow Information (in thousands) Year ended December 31, 2022 2021 Cash paid for interest and income taxes: Interest $ 546 $ 118 Income taxes $ 47 $ 129 Non-cash financing activities: Financing insurance premium $ - $ 890 Repayment of convertible note in shares $ 758 $ - Discount on issuance of convertible note $ 750 $ - |
Non-consolidated Variable Inter
Non-consolidated Variable Interest Entity | 12 Months Ended |
Dec. 31, 2022 | |
Non-consolidated Variable Interest Entity [Abstract] | |
Non-consolidated Variable Interest Entity | 21. Non-consolidated Variable Interest Entity Through our wholly owned subsidiary, DP Engineering, we effectively hold a 48% membership interest in DP-NXA Consultants LLC ( “ DP-NXA was established to provide industrial services that include civil, structural, architectural, electrical, fire protection, plumbing, mechanical consulting engineering services to customers. DP-NXA sub-contracts their work to its two owners, NXA Consultants LLC ( “ We evaluated the nature of DP Engineering’s investment in DP-NXA and determined that DP-NXA is a variable interest entity (“VIE”). Since we do not have the power to direct activities that most significantly impact DP-NXA, we are not DP-NXA’s primary beneficiary. Furthermore, we concluded that we do not hold a controlling financial interest in DP-NXA since NXA, the VIE’s majority owner, makes all operational and business decisions. We account for DP Engineering’s investment in DP-NXA using the equity method of accounting due to the fact DP Engineering exerts significant influence with its 48% of membership interest, but does not control the financial and operating decisions. Our maximum exposure to any losses incurred by DP-NXA is limited to DP Engineering’s investment. As of December 31, 2022, DP Engineering has not made any additional contributions to DP-NXA and we believe DP Engineering’s maximum exposure to any losses incurred by DP-NXA was not material. As of December 31, 2022, we do not have existing guarantee with or to DP-NXA, or any third-party work contracted with it. For the year ended December 31, 2022, the carrying value of the investment in DP-NXA was zero. We do not have any investment income or loss from DP-NXA for the year ended December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 22. Commitments and Contingencies Per ASC 450 Accounting for Contingencies |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems, Inc. and its subsidiaries, collectively. All intercompany balances and transactions have been eliminated in consolidation. |
Accounting estimates | Accounting estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate the estimates used, including, but not limited to those related to revenue recognition on long-term contracts, allowance for doubtful accounts, product warranties, valuation of goodwill and intangible assets acquired, impairment of long-lived assets to be disposed of, valuation of stock-based compensation awards and the recoverability of deferred tax assets. Actual results could differ from these estimates. |
Business combinations | Business combinations Business combinations are accounted for in accordance with the Financial Accounting Standards Board ( “ ” Business Combinations, Revenues and the results of operations of the acquired business are included in the accompanying consolidated statements of operations commencing on the date of acquisition. Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Under ASC 805, contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. |
Revenue recognition | Revenue recognition We derive our revenue through three broad revenue streams: 1) System Design and Build (“SDB”), 2) software, and 3) training and consulting services. We recognize revenue from SDB and software contracts mainly through the Engineering segment and the training and consulting service contracts through both the Engineering segment and Workforce Solutions segment. The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and PCS on the software. We generally have two main performance obligations for an SDB contract: (1) the training simulator build and (2) the PCS period. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue over time as control transfers to a customer. Estimated contract costs are reviewed and revised periodically during the contract period, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses become known. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to our revenue recognition as a significant change in the estimates can cause our revenue and related margins to change significantly from previous estimates. Management judgments and estimates involved in the initial creation and subsequent updates to our estimates-at-completion and related profit recognized are critical for our revenue recognition associated with SDB contracts. Inputs and assumptions requiring significant management judgment included anticipated direct labor, subcontract labor, and other direct costs required to deliver on unfinished performance obligations. The SDB contracts generally provide a one-year base warranty on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance that the completed project complies with agreed-upon specifications. Warranties extended beyond our typical one-year period will be evaluated on a case-by-case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation. Revenue from the sale of perpetual standalone and term software licenses, which do not require significant modification or customization, is recognized upon its delivery to the customer. Revenue from the sale of cloud-based, subscription-based software licenses is recognized ratably over the term of such licenses following delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software. A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services, and PCS. The total transaction price of a software license sale contract is typically fixed and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue are recognized when the installation and training are completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. The contracts within the training and consulting services revenue stream are either T&M based or fixed-price based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed by type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with ASC 606-10-55-18, Revenue from contracts with customers For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. We recognize training and consulting services revenue as services are performed and bill our customers for services that we have provided on a regular basis (i.e. weekly, biweekly or monthly). Contract asset relates to performance under the contract for obligations that are satisfied but not yet billed, which we classify as contract receivables, net. Contract liability, which we classify as billing-in-excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents represent cash and highly liquid investments including money market accounts with maturities of three months or less at the date of purchase. Cash and cash equivalents may at times exceed the FDIC insured limits. |
Contract receivables, net and contract liabilities | Contract receivables, net and contract liabilities Contract receivables, net include recoverable costs for both billed and unbilled receivables. Unbilled receivables include amounts earned in performance of services that have not been invoiced. Contract liabilities include billings in excess of revenue earned on contracts in advance of work performed. Generally, such amounts will be earned and recognized over the next twelve months. Billed receivables are recorded at invoiced amounts. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, specific identification and review of customer accounts. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets, such as equipment, purchased software, capitalized software development costs, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. |
Development expenditures | Development expenditures Development expenditures incurred to meet customer specifications under contracts are charged to cost of revenue. Company sponsored development expenditures are either charged to operations as incurred and are included in research and development expenses or are capitalized as software development costs. The amounts incurred for Company sponsored development activities relating to the development of new products and services or the improvement of existing products and services, were approximately $1.0 million and $0.9 million for the year ended December 31, 2022 and 2021, respectively. Of these amounts, the Company capitalized approximately $0.4 million and $0.3 million for the year ended December 31, 2022 and 2021, respectively. |
Equipment, software and leasehold improvements, net | Equipment, software and leasehold improvements, net Equipment and purchased software are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from three years to ten years. Leasehold improvements are amortized over the term of the lease or the estimated useful life, whichever is shorter, using the straight-line method. Upon sale or retirement, the cost and related depreciation are eliminated from the respective accounts and any resulting gain or loss is included in operations. Maintenance and repairs are charged to expense as incurred. |
Software development costs | Software development costs Certain computer software development costs, including direct labor costs, are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically . On an annual basis, or more frequently as conditions indicate, we assess the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software cost we will write-down the carrying amount of such asset to its estimated fair value based on the future discounted cash flows. The excess of any unamortized computer software costs over the related fair value is written down and charged to operations. Significant changes in the sales projections could result in an impairment with respect to the capitalized software that is reported on our consolidated balance sheets. |
Goodwill and intangible assets | Goodwill and intangible assets Our intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, trade names, non-compete agreements and alliance agreements. Our intangible assets impairment analysis includes the use of undiscounted and discounted cash flow models that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows. Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible asset, except for contract backlog and contractual customer relations, which are recognized in proportion to the related project revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. We do not have any intangible assets with indefinite useful lives. Goodwill represents the excess of costs over fair value of assets of businesses acquired. We review goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. We have determined that we have two reporting units, which are the same as our two operating segments: (i) Engineering and (ii) Workforce Solutions. We completed our annual quantitative step 1 analysis as of December 31, 2022 and 2021 and concluded that the fair values of each of our reporting units exceeded their respective carrying values. Our goodwill impairment analysis includes the use of a discounted cash flow model that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows, and risk-adjusted discount rates. We make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. |
Foreign currency translation | Foreign currency translation The United States Dollar (USD) is our functional currency and that of our subsidiaries operating in the United States. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the average exchange rate for the year. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are cumulative translation adjustments, which are reported as a component of accumulated other comprehensive (loss) income included in the consolidated statements of changes in shareholders’ equity. For any business transaction that is in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled) to the foreign currency realized gain (loss) account in the consolidated statements of operations. |
Income taxes | Income taxes Income taxes are provided under the asset and liability method. Under this method, deferred income taxes are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. A provision is made for our current liability for federal, state and foreign income taxes and the change in our deferred income tax assets and liabilities. We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is not more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense. |
Stock-based compensation | Stock-based compensation Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, Compensation-Stock Compensation . Compensation expense related to restricted stock unit (RSU) awards is recognized on a pro rata straight-line basis based of the fair value of share awards that are scheduled to vest during the requisite service period. Compensation expense related to performance-vesting restricted stock unit (PRSU) awards is recognized on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. The Company can also elect to issue cash-settled RSUs or PRSUs which are subject to fair value remeasurement at each reporting date |
Significant customers and concentration of credit risk | Significant customers and concentration of credit risk For the year ended December 31, 2022, we have a concentration of revenue from one individual customer, which accounted for 13.6% of our consolidated revenue. For the year ended December 31, 2021, we have a concentration of revenue from one individual customer, which accounted for 13.8% of our consolidated revenue. No other individual customer accounted for more than 10% of our consolidated revenue in 2022 or 2021. As of December 31, 2022 and 2021, we have no customer that accounted over 10% of the Company’s consolidated contract receivables. |
Fair values of financial instruments | Fair values of financial instruments The carrying amounts of current assets and current liabilities reported in the consolidated balance sheets approximate fair value due to their short term duration. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and satisfy its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, are only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management determined that the implemented plans to mitigate relevant conditions may not alleviate management’s concerns that raise substantial doubt about the Company’s ability to continue as a going concern within the twelve months ended April 17, 2024. On November 4, 2022, the Company received a notification letter from NASDAQ related to NASDAQ Listing Rules informing us that the Company no longer meets the requirement to maintain a minimum bid price of $1.00 per share. The Company filed a Form 8K on November 8, 2022, to disclose receipt of this letter. The Company has an initial 180-day period (or until May 3, 2023) to cure this deficiency by maintaining a closing bid price of $1 per share for at least 10 consecutive trading days. If compliance is not achieved within these 180 calendar days we can petition NASDAQ for an additional period of 180 calendar days in which to increase the stock price. The second 180-day period may be available and will expire on October 30, 2023, if the Company: • Meets the market value of publicly held shares requirement for continuing listing • Meets all other listing requirements for NASDAQ (other than bid price requirement), and • Provides written notice to NASDAQ with a plan how it intends to regain compliance with the bid price requirement during the second 180-day period; provided, however, that if it does not appear to NASDAQ this it is possible for the Company to cure the deficiency, GSE will not be eligible for the additional grace period. GSE will submit its request for the additional 180-day compliance period on or about April 19, 2023. The Company’s plan to regain compliance will include implementing a one-for-five to one-to-ten reverse stock split, which will have the initial effect of tripling the trading price of the Company’s stock. Such an action requires stockholder approval, so the Company will put the matter before its stockholders for approval at the 2023 annual meeting of stockholders to be held on June 12, 2023. If the stockholders approve the measure, we believe that compliance with the NASDAQ minimum bid price listing requirement will be achieved well before the expiration of the second 180-day period. Thus, as part of the Company’s petition for additional time within which to regain compliance, the Company will notify NASDAQ of the following specific planned steps: • The Company’s Board of Directors considered and approved a resolution on April 3, 2023, to conduct a reverse stock split of 1-for-5 to 1-for-10, to put the matter before stockholders at the June 2023 annual meeting, and authorizing Management to file the necessary Proxy Statements to effectuate submission of the matter to stockholders • We will prepare and file a Preliminary Proxy Statement with the SEC containing this measure in April 2023 • We will file and mail a Definitive Proxy Statement to stockholders containing the reverse stock split proposal on or about May 2, 2023 • Stockholders will vote on the proposed reverse stock split on June 12, 2023 • If the reverse stock split is approved by stockholders, the Company will effectuate it as quickly thereafter as administratively possible, and • Following effectuation of the reverse stock split, the Company would expect to regain compliance with the NASDAQ minimum bid price listing requirement with a few weeks, well before the end of the second 180-day period. If compliance within the prescribed period is not achieved, or if NASDAQ does not approve the Company’s petition for an additional 180-day period in which to achieve compliance, and consequently a delisting letter is issued the Company will request a hearing before the NASDAQ Hearing Panel which will stay the delisting and GSE will present its plan to regain compliance. Such plan will include the Company’s Board implementing the reverse stock split described above to regain compliance with the minimum bid price requirement, or taking additional measures that may be available. If our common stock ceases to be listed on NASDAQ, Lind may deliver a demand for payment to the Company for payment in full of our Convertible Note held with them and, if such a demand is delivered, the Company shall, within ten twenty The Company has incurred operating losses and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. During the year ended December 31, 2022, the Company generated a loss from operations of $14.4 million, which includes non-cash impairment charges of long-lived assets and goodwill from our Workforce Solutions segment totaling $7.5 million. As of December 31, 2022, the Company had domestic unrestricted cash and cash equivalents of $2.0 million which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited consolidated financial statements are issued. In making this assessment we performed a comprehensive analysis of our current circumstances and to alleviate these conditions, management is monitoring the Company’s performance and evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, restructuring of operations to grow revenues and decrease expenses, obtaining equity financing, issuing debt, or entering into other financing arrangements. The analysis used to determine the Company’s ability to continue as a going concern does not include cash sources outside the Company’s direct control that management expects to be available within the next twelve months. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Recent Accounting Pronouncements [Abstract] | |
Accounting pronouncements not yet adopted | Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which introduces new guidance for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables, held-to-maturity debt securities, loans and net investments in leases. The new guidance also modifies the impairment model for available-for-sale debt securities and requires the entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. The standard also indicates that entities may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. On October 16, 2019, the FASB voted to defer the deadlines for private companies and certain small public companies, including smaller reporting companies, to implement the new accounting standards on credit losses. The effective date is January 1, 2023. We are adopting in the quarter ending March 31, 2023. We are evaluating the effect this standard may have on our consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share [Abstract] | |
Earnings (Loss) Per Share, Basic and Diluted | The number of common shares and common share equivalents used in the determination of basic and diluted (loss) earnings per share were as follows: (in thousands, except for per share data) Years ended December 31, 2022 2021 Numerator: Net income (loss) attributed to common shareholders $ (15,343 ) $ 10,607 Denominator: Weighted-average shares outstanding for basic earnings per share 21,362,897 20,761,191 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 21,362,897 20,761,191 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 2,525,420 - |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table represents a disaggregation of revenue by type of goods or services for the years ended December 31, 2022 and 2021, along with the reportable segment for each category: ( in thousands Twelve Months Ended December 31, 2022 2021 Engineering System Design and Build - Over time $ 6,595 $ 6,168 Software 4,684 4,767 Point in time 921 343 Over time 3,763 4,424 Training and Consulting Services 18,640 17,316 Point in time 245 1,846 Over time 18,395 15,470 Workforce Solutions segment Training and Consulting Services 17,815 26,932 Point in time 62 476 Over time 17,753 26,456 Total revenue $ 47,734 $ 55,183 |
Balance of Contract Liabilities and Revenue Recognized in Reporting Period | The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers: ( in thousands December 31, 2022 December 31, 2021 Billings in excess of revenue earned (BIE) $ 4,163 $ 5,029 Revenue recognized in the period from amounts included in BIE at the beginning of the period $ 3,785 $ 4,708 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets: (in thousands) As of December 31, 2022 Gross Carrying Amount Accumulated Amortization Impact of Impairment Net Amortized intangible assets Customer relationships $ 8,628 $ (7,050 ) $ (464 ) $ 1,114 Trade names 1,689 (1,196 ) - 493 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 527 (486 ) - 41 Alliance agreement 527 (488 ) - 39 Others 167 (167 ) - - Total $ 12,442 $ (10,291 ) $ (464 ) $ 1,687 (in thousands) As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets Customer relationships $ 8,628 $ (6,432 ) $ 2,196 Trade names 1,689 (1,108 ) 581 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreement 527 (429 ) 98 Alliance agreement 527 (382 ) 145 Others 167 (167 ) - Total $ 12,442 $ (9,422 ) $ 3,020 |
Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense related to definite-lived intangible assets totaled 0.9 million and $1.2 million for the years ended December 31, 2022 and 2021, respectively. The following table details the estimated amortization expense of the definite-lived intangible assets for the next five years: (in thousands) Years ended December 31: 2023 $ 508 2024 332 2025 255 2026 204 2027 169 Thereafter 219 $ 1,687 |
Goodwill | Goodwill (in thousands) Goodwill Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 (7,040 ) 1,391 Net book value at December 31, 2022 $ 16,709 $ (10,410 ) $ 6,299 Goodwill Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 - 8,431 Net book value at December 31, 2021 $ 16,709 $ (3,370 ) $ 13,339 |
Contract Receivables (Tables)
Contract Receivables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Contract Receivables [Abstract] | |
Contract Receivables | Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows: (in thousands) December 31, 2022 2021 Billed receivables $ 6,074 $ 6,124 Unbilled receivables 5,146 6,143 Allowance for doubtful accounts (1,156 ) (1,010 ) Total contract receivables, net $ 10,064 $ 11,257 |
Allowance For Doubtful Account Rollforward | The activity in the allowance for doubtful accounts is as follows: (in thousands) As of and for the Years ended December 31, 2022 2021 Beginning balance $ 1,010 $ 360 Current year provision 221 677 Current year write-offs (7 ) (28 ) Currency adjustment (68 ) 1 Ending balance $ 1,156 $ 1,010 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: (in thousands) December 31, 2022 2021 Income tax receivable $ 78 $ 129 Prepaid expenses 947 933 ERC receivable 1,028 4,064 Other current assets 112 136 Total $ 2,165 $ 5,262 |
Equipment, Software and Lease_2
Equipment, Software and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | Equipment, software and leasehold improvements, net consist of the following: (in thousands) December 31, 2022 2021 Computer and equipment $ 2,363 $ 2,270 Software 2,291 2,150 Leasehold improvements 659 659 Furniture and fixtures 838 839 6,151 5,918 Accumulated depreciation (5,379 ) (5,079 ) Equipment, software and leasehold improvements, net $ 772 $ 839 |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranty [Abstract] | |
Activities in the Accrued Warranty Accounts | The activity in the accrued warranty accounts is as follows: (in thousands) As of and for the years ended December 31, 2022 2021 Beginning balance $ 748 $ 922 Current year provision (44 ) (43 ) Current year claims (195 ) (133 ) Currency adjustment (7 ) 2 Ending balance $ 502 $ 748 |
Activity in Warranty Accounts | The current and non-current warranty balance is as follows: December 31, 2022 2021 Current $ 370 $ 667 Non-current 132 81 Total Warranty $ 502 $ 748 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Level 3 Fair Value Measurement Inputs | The Company used the Monte Carlo simulation model to determine the fair value of the Warrants and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants as of December 31, 2022 was estimated with the following assumptions. Exercise Price $ 1.94 Common Stock Price $ 0.72 Risk Free Rate 4.0% Volatility 65.0% Term (in years) 4.2yrs. |
Assets Measured at Fair Value | The following table presents assets measured at fair value at December 31, 2022: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Derivative liability $ - $ - $ 285 $ 285 Warrant liability - - 267 267 Cash settled performance-vesting restricted stock units - - 51 51 Total assets $ - $ - $ 603 $ 603 |
Changes in Fair Value of Level 3 Assets | The following table presents assets measured at fair value at December 31, 2021: (in thousands) Embedded Redemption Features Warrant Cash Settled PRSUs Level 3 Total Balance at December 31, 2021 $ - $ - $ - $ - Derivative liabilities 306 - - 306 Warrant liabilities at issuance date - 724 - 724 Change in FV included in gain on derivative instruments, net (21 ) (457 ) - (478 ) Stock compensation less payments made - - 51 51 Balance at December 31, 2022 $ 285 $ 267 $ 51 $ 603 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt [Abstract] | |
Convertible Note | On February 23, 2022, we entered into a Securities Purchase Agreement, as amended, with Lind Global Fund II LP (“Lind Global”), pursuant to which we issued to Lind Global a two-year, secured, interest-free convertible promissory note in the amount of $5.75 million (the “Convertible Note”) and a common stock purchase warrant to acquire 1,283,732 shares of our common stock (the “Warrant”). The Convertible Note does not bear interest but was issued at a $0.75 million discount (“OID”). We received proceeds of approximately $4.8 million net of the OID and expenses. Amount Convertible Note issued $ 5,750 Debt discount (750 ) Issuance cost: Commitment fee (175 ) Balance of investor’s counsel fees (43 ) Net proceeds of Convertible Note $ 4,782 Fair value of Warrant Liabilities on issuance (724 ) Fair value of Conversion Feature on issuance (306 ) Allocated OID costs to Convertible Note (96 ) Interest expense accrued on Convertible Note as of December 31, 2022 1,289 Principal and interest payments for the year ended December 31, 2022 (1,597 ) Balance of Convertible Note as of December 31, 2022 $ 3,348 At December 31, 2022, the outstanding debt under the Convertible Note agreement was as follows: Principal Debt Discounts Net Current portion of Long-Term Debt $ 3,833 $ (795 ) $ 3,038 Long-Term Debt less current portion 320 (10 ) 310 Balance of Convertible Note as of December 31, 2022 $ 4,153 $ (805 ) $ 3,348 |
Future Principal Payments of Convertible Note | The following table details the future principal payments of the Convertible Note: (in thousands) Years ended December 31: 2023 $ 3,833 2024 320 Thereafter - $ 4,153 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Income Before Income Taxes by Domestic and Foreign Sources | The consolidated income before income taxes, by domestic and foreign sources, is as follows: (in thousands) Years ended December 31, 2022 2021 Domestic $ (15,128 ) $ 13,351 Foreign (164 ) (2,581 ) Total $ (15,292 ) $ 10,770 |
Provision for (Benefit from) Income Taxes | The provision (benefit) for income taxes is as follows: (in thousands) Years ended December 31, 2022 2021 Current: Federal $ - $ (75 ) State 42 74 Foreign 95 71 Subtotal 137 70 Deferred: Federal (47 ) 48 State (39 ) 45 Foreign - - Subtotal (86 ) 93 Total $ 51 $ 163 |
Effective Income Tax Rate Reconciliation | The effective income tax rate for the years ended December 31, 2022 and 2021 differed from the statutory federal income tax rate as presented below: Effective Tax Rate percentage (%) Years ended December 31, 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.4 % 2.1 % Effect of foreign operations (0.3 )% (0.2 )% Effect of foreign restructuring 0.0 % 2.3 % Change in valuation allowance (20.7 )% 2.3 % PPP loan forgiveness 0.0 % (19.5 )% Stock-based compensation (0.9 )% 1.0 % Convertible Note transactions (1.2 )% 0.0 % Uncertain tax positions (0.7 )% (7.5 )% Other 0.1 % 0.0 % Effective tax rate (0.3 )% 1.5 % |
Deferred Tax Assets and Liabilities | Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. A summary of the tax effect of the significant components of the deferred income tax assets and liabilities is as follows: (in thousands) As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 7,853 $ 6,180 Accruals 62 122 Reserves 409 434 Stock-based compensation expense 283 172 Intangible assets 2,356 2,368 Goodwill 1,551 892 Operating lease liability 132 472 Fixed assets 65 29 Sec. 174 R&D costs 129 - Other 231 243 Total deferred tax asset 13,071 10,912 Valuation allowance (12,572 ) (9,410 ) Total deferred tax asset less valuation allowance 499 1,502 Deferred tax liabilities: Software development costs (59 ) (135 ) Indefinite-lived intangibles (346 ) (1,190 ) Operating lease - right of use asset (100 ) (253 ) Other - (17 ) Total deferred tax liability (505 ) (1,595 ) Net deferred tax liability $ (6 ) $ (93 ) |
Uncertain Tax Liabilities | The following table outlines our uncertain tax liabilities, including accrued interest and penalties for each jurisdiction: China Ukraine South Korea UK U.S. (in thousands) Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Tax Interest and Penalties Total Balance, January 1, 2021 $ 214 $ 378 $ 14 $ 10 $ 682 $ 274 $ 45 $ 21 $ 793 $ 9 $ 2,440 Increases 6 50 - - - 61 - 9 - 3 129 Decreases - - (14 ) (10 ) (38 ) - - - (793 ) (12 ) (867 ) Balance, December 31, 2021 $ 220 $ 428 $ - $ - $ 644 $ 335 $ 45 $ 30 $ - $ - $ 1,702 Increases - 4 - - - 51 - 61 - - 116 Decreases (17 ) - - - (22 ) - (5 ) - - - (44 ) Balance, December 31, 2022 $ 203 $ 432 $ - $ - $ 622 $ 386 $ 40 $ 91 $ - $ - $ 1,774 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation [Abstract] | |
Restricted Stock Units | During the years ended December 31, 2022 and 2021, we issued RSUs to employees which vest upon the achievement of specific market-based or time-based measures. The fair value for RSU's is calculated based on the stock price on the grant date and expensed ratably over the requisite service period as market-based results achieved, which ranges between one year and five years. The following table summarizes the information about vested and unvested restricted stock units for the years ended December 31, 2022 and 2021. Number of Shares Weighted Average Fair Value Nonvested RSUs at January 1, 2021 1,719,732 $ 1.36 RSUs granted 983,661 1.69 RSUs forfeited (631,367 ) 0.88 RSUs vested (476,361 ) 1.71 Nonvested RSUs at December 31, 2021 1,595,665 $ 1.77 Nonvested RSUs at January 1, 2022 1,595,665 $ 1.77 RSUs granted 1,790,250 1.49 RSUs forfeited (472,969 ) 2.13 RSUs vested (788,695 ) 1.68 Nonvested RSUs at December 31, 2022 2,124,251 $ 1.40 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Classification of Operating ROU Assets and Lease Liabilities on the Balance Sheet | Lease contracts are evaluated at inception to determine whether they contain a lease and whether we obtain the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets: (in thousands) Operating Leases Classification December 31, 2022 December 31, 2021 Leased Assets Operating lease - right of use assets Long term assets $ 506 $ 1,200 Lease Liabilities Operating lease liabilities - Current Other current liabilities 418 1,205 Operating lease liabilities Long term liabilities 160 790 $ 578 $ 1,995 |
Lease Income and Expenses | The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2022, ( in thousands Lease Cost Classification Twelve months ended December 31, 2022 Operating lease cost (1) Selling, general and administrative expenses $ 700 Short-term leases costs (2) Selling, general and administrative expenses 60 Sublease income (3) Selling, general and administrative expenses (62 ) Net lease cost $ 698 (1) (2) (3) |
Future Minimum Lease Payments | We are obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under our noncancelable operating leases as of December 31, 2022 are as follows: (in thousands) Gross Future Minimum Lease Payments 2023 $ 435 2024 151 2025 10 2026 3 Thereafter - Total $ 599 Less: Interest 21 Present value of lease payments $ 578 |
Operating Lease Weighted Average Remaining Lease Term And Discount Rate | We have calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, we use the incremental borrowing rate as the lease discount rate: Lease Term and Discount Rate Twelve months ended December 31, 2022 Weighted-average remaining lease term (years) Operating leases 1.51 Weighted-average discount rate Operating leases 5.00 % |
Classification of Lease Payments in the Statement of Cash Flows | There was right-of-use assets obtained in exchange for operating lease liabilities of $60 thousand during the year ended December 31, 2022. The table below sets out the classification of lease payments in the consolidated statements of cash flows: (in thousands) Twelve months ended December 31, Cash paid for amounts included in measurement of liabilities 2022 2021 Cash paid for amounts included in measurement of liabilities $ 1,233 $ 1,326 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table sets forth the revenu (in thousands) Years ended December 31, 2022 2021 Revenue: Engineering $ 29,919 $ 28,140 Workforce Solutions 17,815 27,043 Total revenue 47,734 55,183 Gross profit Engineering 9,557 8,124 Workforce Solutions 2,353 3,734 Total gross profit 11,910 11,858 Operating loss Engineering (6,388 ) (4,425 ) Workforce Solutions (8,018 ) (1,549 ) Operating loss (14,406 ) (5,974 ) Interest expense (1,272 ) (159 ) Change in fair value of derivative instruments, net 477 19 Other (loss) income, net (91 ) 16,884 (Loss) income before taxes $ (15,292 ) $ 10,770 |
Reconciliation of Assets from Segment to Consolidated | Additional information relating to segments is as follows: (in thousands) December 31, 2022 2021 Engineering $ 21,705 $ 23,742 Workforce Solutions 4,791 15,309 Total assets $ 26,496 $ 39,051 |
Segment Reporting Information, by Segment | For the years ended December 31, 2022 and 2021, 89% and 91%, respectively, of our consolidated revenue was from customers in the nuclear power industry. We design, develop and deliver business and technology solutions to the energy industry worldwide. Revenue, operating (loss) income and total assets for our United States, European, and Asian subsidiaries as of and for the years ended December 31, 2022 and 2021 are as follows: (in thousands) Year ended December 31, 2022 United States Europe Asia Consolidated Revenue $ 46,622 $ - $ 1,112 $ 47,734 Operating loss $ (14,225 ) $ - $ (181 ) $ (14,406 ) Net assets, at December 31 $ 24,631 $ - $ 1,865 $ 26,496 (in thousands) Year ended December 31, 2021 United States Europe Asia Consolidated Revenue $ 54,203 $ - $ 980 $ 55,183 Operating loss $ (3,351 ) $ (1,746 ) $ (877 ) $ (5,974 ) Net assets, at December 31 $ 35,932 $ - $ 3,119 $ 39,051 |
Supplemental Disclosure of Ca_2
Supplemental Disclosure of Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Disclosure of Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Information | (in thousands) Year ended December 31, 2022 2021 Cash paid for interest and income taxes: Interest $ 546 $ 118 Income taxes $ 47 $ 129 Non-cash financing activities: Financing insurance premium $ - $ 890 Repayment of convertible note in shares $ 758 $ - Discount on issuance of convertible note $ 750 $ - |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies, Summary (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Segment Obligation Stream | Dec. 31, 2021 USD ($) | |
Revenue Recognition [Abstract] | ||
Number of broad revenue streams | Stream | 3 | |
Number of performance obligations | Obligation | 2 | |
Warranty terms for SDB contracts | 1 year | |
Development Expenditures [Abstract] | ||
Development expenditures | $ | $ 1,000 | $ 900 |
Capitalized software development costs | $ | $ 380 | $ 270 |
Software Development Costs [Abstract] | ||
Software development costs useful life | 3 years | |
Goodwill and Intangible Assets [Abstract] | ||
Number of reporting segments | Segment | 2 | |
Number of operating segments | Segment | 2 | |
Equipment, Software and Leasehold Improvements, net [Member] | Minimum [Member] | ||
Equipment, Software and Leasehold Improvements [Abstract] | ||
Estimated useful life | 3 years | |
Equipment, Software and Leasehold Improvements, net [Member] | Maximum [Member] | ||
Equipment, Software and Leasehold Improvements [Abstract] | ||
Estimated useful life | 10 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Concentration of Credit Risk (Details) - Revenue [Member] - Customer Concentration Risk [Member] - Customer | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue by major customers [Abstract] | ||
Number of major customers | 1 | 1 |
Customer One [Member] | ||
Revenue by major customers [Abstract] | ||
Percentage contributed by major customers | 13.60% | 13.80% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Liquidity and Going Concern (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Prices | Dec. 31, 2021 USD ($) | Nov. 04, 2022 $ / shares | |
Liquidity and Going Concern [Abstract] | |||
Share price (in dollars per share) | $ / shares | $ 1 | ||
Number of business days to cure deficiency | 180 days | ||
Closing bid share price (in dollars per share) | $ / shares | $ 1 | ||
Number of consecutive trading days | 10 days | ||
Additional period to increase stock price | 180 days | ||
Term to pay a demand for payment | 10 days | ||
Percentage in which conversion price can be adjusted | 80% | ||
Number of lowest daily variable average weighted prices | Prices | 3 | ||
Number of trading days prior to delivery | 20 days | ||
Percentage of outstanding principal amount to become due | 120% | ||
Operating loss | $ (14,406) | $ (5,974) | |
Long-lived assets and goodwill impairment | 7,505 | 3 | |
Cash and cash equivalents | $ 2,789 | 3,550 | |
Minimum [Member] | |||
Liquidity and Going Concern [Abstract] | |||
Reverse stock split | 5 | ||
Maximum [Member] | |||
Liquidity and Going Concern [Abstract] | |||
Reverse stock split | 10 | ||
Domestic [Member] | |||
Liquidity and Going Concern [Abstract] | |||
Cash and cash equivalents | $ 2,000 | ||
Workforce Solutions [Member] | |||
Liquidity and Going Concern [Abstract] | |||
Operating loss | (8,018) | (1,549) | |
Long-lived assets and goodwill impairment | $ 7,500 | $ 0 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator [Abstract] | ||
Net income (loss) attributed to common shareholders | $ (15,343) | $ 10,607 |
Denominator [Abstract] | ||
Weighted-average shares outstanding for basic earnings per share (in shares) | 21,362,897 | 20,761,191 |
Effect of dilutive securities [Abstract] | ||
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) | 21,362,897 | 20,761,191 |
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares) | 2,525,420 | 0 |
Coronavirus Aid, Relief and E_2
Coronavirus Aid, Relief and Economic Security Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2023 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Retention Credits [Abstract] | ||||
Tax benefit recognized | $ 51 | $ 163 | ||
Employee retention credits received | $ 1,028 | 4,064 | ||
Paycheck Protection Program [Member] | ||||
Paycheck Protection Program Loan [Abstract] | ||||
Interest rate | 1% | |||
Amount received from Paycheck Protection Program | $ 10,000 | |||
Debt Instruments [Abstract] | ||||
Other income | $ 10,100 | |||
Employee Retention Credits [Member] | ||||
Debt Instruments [Abstract] | ||||
Other income | 7,200 | |||
Employee Retention Credits [Abstract] | ||||
Refund of employee retention credit | 5,000 | |||
Tax benefit recognized | $ 2,200 | |||
Employee retention credits received | 4,000 | |||
Refund of employee retention credit receivable | $ 1,000 | |||
Employee Retention Credits [Member] | Subsequent Event [Member] | ||||
Employee Retention Credits [Abstract] | ||||
Tax credit refunds received | $ 900 |
Revenue (Details)
Revenue (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Stream | Dec. 31, 2021 USD ($) | |
Disaggregation of Revenue [Abstract] | ||
Number of broad revenue streams | Stream | 3 | |
Revenue | $ 47,734 | $ 55,183 |
Contract with Customer, Asset and Liability [Abstract] | ||
Billings in excess of revenue earned (BIE) | 4,163 | 5,029 |
Revenue recognized in the period from amounts included in Billings-in-Excess of Revenue Earned at the beginning of the period | 3,785 | 4,708 |
Revenue, Performance Obligation [Abstract] | ||
Remaining performance obligation | 15,600 | |
Engineering Segment [Member] | System Design and Build [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 6,595 | 6,168 |
Engineering Segment [Member] | Software [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 4,684 | 4,767 |
Engineering Segment [Member] | Software [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 921 | 343 |
Engineering Segment [Member] | Software [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 3,763 | 4,424 |
Engineering Segment [Member] | Training and Consulting Services [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 18,640 | 17,316 |
Engineering Segment [Member] | Training and Consulting Services [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 245 | 1,846 |
Engineering Segment [Member] | Training and Consulting Services [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 18,395 | 15,470 |
Workforce Solutions [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 17,815 | 27,043 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 17,815 | 26,932 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 62 | 476 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | $ 17,753 | $ 26,456 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-31 | ||
Revenue, Performance Obligation [Abstract] | ||
Expected period to recognize revenue as performance obligations are satisfied | 12 months |
Restructuring expenses (Details
Restructuring expenses (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Position | Dec. 31, 2021 USD ($) | |
Restructuring and Related Cost, Positions Eliminated [Abstract] | ||
Restructuring charges | $ 0 | $ 798 |
International Restructuring [Member] | ||
Restructuring and Related Cost, Positions Eliminated [Abstract] | ||
Restructuring and related cost, expected number of positions eliminated | Position | 40 | |
Total restructuring charges | $ 3,900 | |
Cumulative translation adjustment | 1,200 | |
Tax benefit | 800 | |
Restructuring charges | $ 0 | $ 800 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | $ 12,442 | $ 12,442 |
Accumulated amortization | (10,291) | (9,422) |
Impact of Impairment | $ (464) | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Intangible assets, net | |
Net | $ 1,687 | 3,020 |
Amortization of intangible assets | 868 | 1,213 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 508 | |
2024 | 332 | |
2025 | 255 | |
2026 | 204 | |
2027 | 169 | |
Thereafter | 219 | |
Total | 1,687 | 3,020 |
Goodwill, Impaired [Abstract] | ||
Goodwill | 16,709 | 16,709 |
Impairment | (10,410) | (3,370) |
Net | 6,299 | 13,339 |
Engineering [Member] | ||
Goodwill, Impaired [Abstract] | ||
Goodwill | 8,278 | 8,278 |
Impairment | (3,370) | (3,370) |
Net | 4,908 | 4,908 |
Workforce Solutions [Member] | ||
Goodwill, Impaired [Abstract] | ||
Goodwill | 8,431 | 8,431 |
Impairment | (7,040) | 0 |
Net | 1,391 | 8,431 |
Customer Relationships [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 8,628 | 8,628 |
Accumulated amortization | (7,050) | (6,432) |
Impact of Impairment | (464) | |
Net | 1,114 | 2,196 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 1,114 | 2,196 |
Trade Names [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 1,689 | 1,689 |
Accumulated amortization | (1,196) | (1,108) |
Impact of Impairment | 0 | |
Net | 493 | 581 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 493 | 581 |
Developed Technology [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 471 | 471 |
Accumulated amortization | (471) | (471) |
Impact of Impairment | 0 | |
Net | 0 | 0 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 0 | 0 |
Non Contractual Customer Relationships [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 433 | 433 |
Accumulated amortization | (433) | (433) |
Impact of Impairment | 0 | |
Net | 0 | 0 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 0 | 0 |
Noncompete Agreement [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 527 | 527 |
Accumulated amortization | (486) | (429) |
Impact of Impairment | 0 | |
Net | 41 | 98 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 41 | 98 |
Alliance Agreement [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 527 | 527 |
Accumulated amortization | (488) | (382) |
Impact of Impairment | 0 | |
Net | 39 | 145 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | 39 | 145 |
Others [Member] | ||
Amortized Intangible Assets [Abstract] | ||
Gross carrying amount | 167 | 167 |
Accumulated amortization | (167) | (167) |
Impact of Impairment | 0 | |
Net | 0 | 0 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | $ 0 | $ 0 |
Contract Receivables (Details)
Contract Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Contract Receivables [Abstract] | |||
Maximum term of contract receivables | 12 months | ||
Components of contract receivables [Abstract] | |||
Billed receivables | $ 6,074 | $ 6,124 | |
Unbilled receivables | 5,146 | 6,143 | |
Allowance for doubtful accounts | (1,156) | (1,010) | |
Total contract receivables, net | 10,064 | 11,257 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | 1,010 | 360 | |
Current year provision | 221 | 677 | |
Current year write-offs | (7) | (28) | |
Currency adjustment | (68) | 1 | |
Ending balance | $ 1,156 | $ 1,010 | |
Subsequent Event [Member] | |||
Unbilled Contract Receivables [Abstract] | |||
Subsequent billing | $ 1,900 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets [Abstract] | |||
Income tax receivable | $ 78 | $ 129 | |
Prepaid expenses | 947 | 933 | |
ERC receivable | 1,028 | 4,064 | |
Other current assets | 112 | 136 | |
Total prepaid expenses and other current assets | 2,165 | $ 5,262 | |
Employee Retention Credits [Member] | |||
Prepaid Expenses and Other Current Assets [Abstract] | |||
ERC receivable | $ 4,000 | ||
Employee Retention Credits [Member] | Subsequent Event [Member] | |||
Employee Retention Credits [Abstract] | |||
Refund of employee retention credit received | $ 900 |
Equipment, Software and Lease_3
Equipment, Software and Leasehold Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equipment, Software and Leasehold Improvements, Net [Abstract] | ||
Equipment, software and leasehold improvements | $ 6,151 | $ 5,918 |
Accumulated depreciation | (5,379) | (5,079) |
Equipment, software and leasehold improvements, net | 772 | 839 |
Depreciation expense | 304 | 284 |
Computer and Equipment [Member] | ||
Equipment, Software and Leasehold Improvements, Net [Abstract] | ||
Equipment, software and leasehold improvements | 2,363 | 2,270 |
Software [Member] | ||
Equipment, Software and Leasehold Improvements, Net [Abstract] | ||
Equipment, software and leasehold improvements | 2,291 | 2,150 |
Capitalization of internal-use software cost | 100 | 500 |
Leasehold Improvements [Member] | ||
Equipment, Software and Leasehold Improvements, Net [Abstract] | ||
Equipment, software and leasehold improvements | 659 | 659 |
Furniture and Fixtures [Member] | ||
Equipment, Software and Leasehold Improvements, Net [Abstract] | ||
Equipment, software and leasehold improvements | $ 838 | $ 839 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Activities in product warranty account [Abstract] | ||
Beginning balance | $ 748 | $ 922 |
Current year provision | (44) | (43) |
Current year claims | (195) | (133) |
Currency adjustment | (7) | 2 |
Ending balance | 502 | 748 |
Standard Product Warranty Accrual, Balance Sheet Classification [Abstract] | ||
Current | 370 | 667 |
Non-current | 132 | 81 |
Total Warranty | $ 502 | $ 748 |
Minimum [Member] | ||
Product warranty provision [Abstract] | ||
Warranty provision contract period | 1 year | |
Maximum [Member] | ||
Product warranty provision [Abstract] | ||
Warranty provision contract period | 5 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | $ 603 |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Derivative Liability, Current |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | $ 0 |
Significant Other Observable Inputs (Level 2) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Significant Unobservable Inputs (Level 3) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 603 |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Balance, Beginning Period | 0 |
Derivative liabilities at issuance date | 306 |
Warrant liabilities at issuance date | 724 |
Change in fair value included in gain on derivative instruments, net | (478) |
Stock compensation less payments made | 51 |
Balance, Ending Period | 603 |
Embedded Redemption Features [Member] | |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Warrant liabilities at issuance date | 306 |
Embedded Redemption Features [Member] | Significant Unobservable Inputs (Level 3) [Member] | |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Balance, Beginning Period | 0 |
Derivative liabilities at issuance date | 306 |
Warrant liabilities at issuance date | 0 |
Change in fair value included in gain on derivative instruments, net | (21) |
Stock compensation less payments made | 0 |
Balance, Ending Period | 285 |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 51 |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Significant Other Observable Inputs (Level 2) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Significant Unobservable Inputs (Level 3) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 51 |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Balance, Beginning Period | 0 |
Derivative liabilities at issuance date | 0 |
Warrant liabilities at issuance date | 0 |
Change in fair value included in gain on derivative instruments, net | 0 |
Stock compensation less payments made | 51 |
Balance, Ending Period | 51 |
Derivative Liability [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 285 |
Derivative Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Derivative Liability [Member] | Significant Other Observable Inputs (Level 2) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Derivative Liability [Member] | Significant Unobservable Inputs (Level 3) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | $ 285 |
Warrant Liability [Member] | |
Fair Value Measurements [Abstract] | |
Term (in years) | 4 years 2 months 12 days |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | $ 267 |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Derivative liabilities at issuance date | 724 |
Warrant Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Warrant Liability [Member] | Significant Other Observable Inputs (Level 2) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 0 |
Warrant Liability [Member] | Significant Unobservable Inputs (Level 3) [Member] | |
Assets and Liabilities Measured at Fair Value [Abstract] | |
Total assets | 267 |
Changes in Fair Value of Level 3 Assets [Abstract] | |
Balance, Beginning Period | 0 |
Derivative liabilities at issuance date | 0 |
Warrant liabilities at issuance date | 724 |
Change in fair value included in gain on derivative instruments, net | (457) |
Stock compensation less payments made | 0 |
Balance, Ending Period | $ 267 |
Warrant Liability [Member] | Exercise Price [Member] | |
Fair Value Measurements [Abstract] | |
Measurement input | $ / shares | 1.94 |
Warrant Liability [Member] | Common Stock Price [Member] | |
Fair Value Measurements [Abstract] | |
Measurement input | $ / shares | 0.72 |
Warrant Liability [Member] | Risk Free Rate [Member] | |
Fair Value Measurements [Abstract] | |
Measurement input | 0.04 |
Warrant Liability [Member] | Volatility [Member] | |
Fair Value Measurements [Abstract] | |
Measurement input | 0.65 |
Debt, Convertible Note (Details
Debt, Convertible Note (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Feb. 23, 2022 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) d $ / shares | |
Line of Credit Facility [Line Items] | ||
Purchase of warrant to acquire shares of common stock (in shares) | shares | 1,283,732 | |
Embedded Redemption Features [Member] | ||
Issuance cost: [Abstract] | ||
Fair value of Conversion Feature on issuance | $ (306) | |
Warrant Liability [Member] | ||
Issuance cost: [Abstract] | ||
Fair value of Warrant Liabilities on issuance | $ (724) | |
Convertible Note [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt instrument term | 2 years | |
Purchase of warrant to acquire shares of common stock (in shares) | shares | 1,283,732 | |
Convertible Debt [Abstract] | ||
Convertible Note issued | $ 5,750 | $ 4,153 |
Debt discount | (750) | (805) |
Issuance cost: [Abstract] | ||
Commitment fee | (175) | |
Balance of investor's counsel fees | (43) | |
Balance of Convertible Note | 4,782 | 3,348 |
Allocated OID costs to Convertible Note | (96) | |
Interest expense accrued on Convertible Note | 1,289 | |
Principal and interest payments | $ (1,597) | |
Monthly principal repayments | $ 319 | |
Period for repayment of convertible note from issuance | 180 days | |
Long-Term Debt, Rolling Maturity [Abstract] | ||
2023 | $ 3,833 | |
2024 | 320 | |
Thereafter | 0 | |
Long-term debt | $ 4,153 | |
Period for conversion | 6 months | |
Conversion price (in dollars per share) | $ / shares | $ 1.94 | |
Maturity date | Feb. 29, 2024 | |
Conversion ratio | 0.33 | |
Percentage of volume-weighted average price | 80% | |
Average of trading days | d | 3 | |
Number of trading days | d | 20 | |
Exercise price (in dollars per share) | $ / shares | $ 1.94 | $ 1.94 |
Fair value | $ 700 | |
Net proceeds from issuance of convertible note | $ 4,800 |
Debt, Outstanding Debt under Co
Debt, Outstanding Debt under Convertible Debt Agreement (Details) - Convertible Note [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Feb. 23, 2022 | |
Convertible Debt [Abstract] | ||
Current portion of Long-Term Debt, Principal | $ 3,833 | |
Long-Term Debt less current portion, Principal | 320 | |
Balance of Convertible Note, Principal | 4,153 | $ 5,750 |
Current portion of Long-Term Debt, Debt Discounts | (795) | |
Long-Term Debt less current portion, Debt Discount | (10) | |
Balance of Convertible Note, Debt Discount | (805) | (750) |
Current portion of Long-Term Debt, Net | 3,038 | |
Long-Term Debt less current portion, Net | 310 | |
Balance of Convertible Note | 3,348 | $ 4,782 |
Interest expense | $ 1,289 |
Debt, Revolving Line of Credit
Debt, Revolving Line of Credit (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Nov. 12, 2021 USD ($) | Feb. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 29, 2021 USD ($) | Dec. 31, 2022 USD ($) Letter | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | |
Line of Credit Facility [Abstract] | |||||||||
Repayment on line of credit | $ 1,817 | $ 1,989 | |||||||
Ninth Amendment and Reaffirmation Agreement [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Fixed charge coverage ratio | 1 | 1.1 | |||||||
Revolving Credit Facility [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Repayment on line of credit | $ 1,800 | ||||||||
Number of letters of credit | Letter | 4 | ||||||||
Outstanding letter of credit balance | $ 1,100 | ||||||||
Revolving Credit Facility [Member] | Ninth Amendment and Reaffirmation Agreement [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Liquidity | $ 2,500 | ||||||||
Repayment on line of credit | $ 500 | 500 | |||||||
Line of credit | $ 3,750 | $ 3,500 | $ 4,250 | ||||||
Amount available for issuance of letters of credit only | $ 500 | ||||||||
Periodic payment | $ 75 | ||||||||
Amendment fee amount | 25 | ||||||||
Revolving Credit Facility [Member] | Tenth Amendment and Reaffirmation Agreement [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Periodic payment | $ 250 | ||||||||
Amendment fee amount | $ 15 | ||||||||
Basis points | 0.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income (Loss) Before Income Taxes [Abstract] | ||
Domestic | $ (15,128) | $ 13,351 |
Foreign | (164) | (2,581) |
(Loss) income before taxes | (15,292) | 10,770 |
Current [Abstract] | ||
Federal | 0 | (75) |
State | 42 | 74 |
Foreign | 95 | 71 |
Subtotal | 137 | 70 |
Deferred [Abstract] | ||
Federal | (47) | 48 |
State | (39) | 45 |
Foreign | 0 | 0 |
Subtotal | (86) | 93 |
Total | $ 51 | $ 163 |
Effective Income Tax Rate, Reconciliation [Abstract] | ||
Statutory federal income tax rate | 21% | 21% |
State income taxes, net of federal tax benefit | 2.40% | 2.10% |
Effect of foreign operations | (0.30%) | (0.20%) |
Effect of foreign restructuring | 0% | 2.30% |
Change in valuation allowance | (20.70%) | 2.30% |
PPP loan forgiveness | 0% | (19.50%) |
Stock-based compensation | (0.90%) | 1% |
Convertible note transactions | (1.20%) | 0% |
Uncertain tax positions | (0.70%) | (7.50%) |
Other | 0.10% | 0% |
Effective tax rate | (0.30%) | 1.50% |
Deferred tax assets [Abstract] | ||
Net operating loss carryforwards | $ 7,853 | $ 6,180 |
Accruals | 62 | 122 |
Reserves | 409 | 434 |
Stock-based compensation expense | 283 | 172 |
Intangible assets | 2,356 | 2,368 |
Goodwill | 1,551 | 892 |
Operating lease liability | 132 | 472 |
Fixed assets | 65 | 29 |
Sec. 174 R&D costs | 129 | 0 |
Other | 231 | 243 |
Total deferred tax asset | 13,071 | 10,912 |
Valuation allowance | (12,572) | (9,410) |
Total deferred tax assets less valuation allowance | 499 | 1,502 |
Deferred tax liabilities [Abstract] | ||
Software development costs | (59) | (135) |
Indefinite-lived intangibles | (346) | (1,190) |
Operating lease - right of use asset | (100) | (253) |
Other | 0 | (17) |
Total deferred tax liability | (505) | (1,595) |
Net deferred tax liability | (6) | (93) |
Operating Loss Carryforwards, expiration dates [Line Items] | ||
Net operating loss carryforwards | 7,853 | 6,180 |
Deferred tax assets, operating loss carryforwards, domestic | 7,800 | |
Deferred tax assets, operating loss carryforwards, domestic, expiring | 4,600 | |
Deferred tax assets, operating loss carryforwards, domestic, indefinite lived | 3,200 | |
Income Tax Examination [Line Items] | ||
Provision of increase in deferred tax assets | 129 | |
Cash and cash equivalents | $ 2,789 | 3,550 |
Minimum [Member] | ||
Operating Loss Carryforwards, expiration dates [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2023 | |
Maximum [Member] | ||
Operating Loss Carryforwards, expiration dates [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2037 | |
U.S. Federal and State Tax Authority [Member] | ||
Income Tax Examination [Line Items] | ||
Research and development cost amortization period | 5 years | |
Income tax examination, year under examination | 2003 | |
Foreign [Member] | ||
Income Tax Examination [Line Items] | ||
Research and development cost amortization period | 15 years | |
Income tax examination, year under examination | 2017 | |
Cash and cash equivalents | $ 800 | $ 1,200 |
Income Taxes, Uncertain Tax Lia
Income Taxes, Uncertain Tax Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal [Member] | ||
Tax [Roll Forward] | ||
Beginning balance | $ 0 | $ 793 |
Increases | 0 | 0 |
Decreases | 0 | (793) |
Ending balance | 0 | 0 |
Interest and Penalties [Roll Forward] | ||
Beginning balance | 0 | 9 |
Increases | 0 | 3 |
Decreases | 0 | (12) |
Ending balance | 0 | 0 |
Foreign [Member] | ||
Uncertain Tax Liabilities, Total [Roll Forward] | ||
Beginning balance | 1,702 | 2,440 |
Increases | 116 | 129 |
Decreases | (44) | (867) |
Ending balance | 1,774 | 1,702 |
Foreign [Member] | China [Member] | ||
Tax [Roll Forward] | ||
Beginning balance | 220 | 214 |
Increases | 0 | 6 |
Decreases | (17) | 0 |
Ending balance | 203 | 220 |
Interest and Penalties [Roll Forward] | ||
Beginning balance | 428 | 378 |
Increases | 4 | 50 |
Decreases | 0 | 0 |
Ending balance | 432 | 428 |
Foreign [Member] | Ukraine [Member] | ||
Tax [Roll Forward] | ||
Beginning balance | 0 | 14 |
Increases | 0 | 0 |
Decreases | 0 | (14) |
Ending balance | 0 | 0 |
Interest and Penalties [Roll Forward] | ||
Beginning balance | 0 | 10 |
Increases | 0 | 0 |
Decreases | 0 | (10) |
Ending balance | 0 | 0 |
Foreign [Member] | South Korea [Member] | ||
Tax [Roll Forward] | ||
Beginning balance | 644 | 682 |
Increases | 0 | 0 |
Decreases | (22) | (38) |
Ending balance | 622 | 644 |
Interest and Penalties [Roll Forward] | ||
Beginning balance | 335 | 274 |
Increases | 51 | 61 |
Decreases | 0 | 0 |
Ending balance | 386 | 335 |
Foreign [Member] | U.K. [Member] | ||
Tax [Roll Forward] | ||
Beginning balance | 45 | 45 |
Increases | 0 | 0 |
Decreases | (5) | 0 |
Ending balance | 40 | 45 |
Interest and Penalties [Roll Forward] | ||
Beginning balance | 30 | 21 |
Increases | 61 | 9 |
Decreases | 0 | 0 |
Ending balance | $ 91 | $ 30 |
Capital Stock (Details)
Capital Stock (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Capital Stock [Abstract] | ||
Capital stock, shares authorized (in shares) | 62,000,000 | |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
The Plan [Member] | ||
Share-based Compensation [Abstract] | ||
Common stock reserved for issuance (in shares) | 7,281,758 | |
Shares under options outstanding (in shares) | 0 | |
Shares reserved upon vesting of restricted stock units (in shares) | 2,124,251 | |
Shares available for future grants (in shares) | 1,718,242 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Apr. 30, 2022 qtr shares | Dec. 31, 2022 USD ($) qtr d $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Feb. 23, 2022 USD ($) $ / shares shares | |
Long-term Incentive Plan [Abstract] | ||||
Share based compensation expense | $ | $ 2,000 | $ 1,000 | ||
Deferred income tax expense | $ | 140 | 111 | ||
Stock based compensation expense related to cash-settled RSU's | $ | $ 0 | $ 0 | ||
Purchase of warrant to acquire shares of common stock (in shares) | 1,283,732 | |||
Convertible Promissory Note [Member] | ||||
Long-term Incentive Plan [Abstract] | ||||
Debt instrument term | 2 years | |||
Convertible note issued | $ | $ 4,153 | $ 5,750 | ||
Purchase of warrant to acquire shares of common stock (in shares) | 1,283,732 | |||
Weighted Average Fair Value [Roll Forward] | ||||
Number of trading days | d | 20 | |||
Exercise price (in dollars per share) | $ / shares | $ 1.94 | $ 1.94 | ||
Restricted Stock Units [Member] | ||||
Number of Shares [Roll Forward] | ||||
Nonvested RSUs, beginning balance (in shares) | 1,595,665 | 1,719,732 | ||
RSUs granted (in shares) | 1,790,250 | 983,661 | ||
RSUs forfeited (in shares) | (472,969) | (631,367) | ||
RSUs vested (in shares) | (788,695) | (476,361) | ||
Nonvested RSUs, ending balance (in shares) | 2,124,251 | 1,595,665 | ||
Weighted Average Fair Value [Roll Forward] | ||||
Nonvested RSUs, beginning balance (in dollars per share) | $ / shares | $ 1.77 | $ 1.36 | ||
RSUs granted (in dollars per share) | $ / shares | 1.49 | 1.69 | ||
RSUs forfeited (in dollars per share) | $ / shares | 2.13 | 0.88 | ||
RSUs vested (in dollars per share) | $ / shares | 1.68 | 1.71 | ||
Nonvested RSUs, ending balance (in dollars per share) | $ / shares | $ 1.4 | $ 1.77 | ||
Unrecognized compensation expense | $ | $ 1,200 | |||
Weighted average remaining service period | 1 year 6 months | |||
Granted time-based RSUs (in shares) | 990,250 | 983,661 | ||
Aggregate fair value for time-based RSUs | $ | $ 1,500 | $ 1,700 | ||
Period to fully vest performance RSUs | qtr | 8 | |||
Restricted Stock Units [Member] | Minimum [Member] | ||||
Long-term Incentive Plan [Abstract] | ||||
Requisite service period for time-based RSU's | 1 year | |||
Weighted Average Fair Value [Roll Forward] | ||||
Period in which time-based RSU's will vest annually in equal amounts | 1 year | |||
Restricted Stock Units [Member] | Maximum [Member] | ||||
Long-term Incentive Plan [Abstract] | ||||
Requisite service period for time-based RSU's | 5 years | |||
Weighted Average Fair Value [Roll Forward] | ||||
Period in which time-based RSU's will vest annually in equal amounts | 3 years | |||
PRSUs [Member] | ||||
Weighted Average Fair Value [Roll Forward] | ||||
Granted performance-based RSUs (in shares) | 800,000 | 800,000 | 0 | |
Performance-based RSUs Vested (in shares) | 200,000 | 0 | ||
Period to fully vest performance RSUs | qtr | 12 | 15 | ||
Cash Settled PRSUs [Member] | ||||
Weighted Average Fair Value [Roll Forward] | ||||
Granted performance-based RSUs (in shares) | 200,000 | |||
Performance-based RSUs Vested (in shares) | 50,000 | |||
Time-Based RSUs [Member] | ||||
Number of Shares [Roll Forward] | ||||
RSUs vested (in shares) | (588,695) | |||
1995 Long-Term Incentive Stock Option Plan [Member] | ||||
Long-term Incentive Plan [Abstract] | ||||
Number of shares authorized (in shares) | 7,281,758 | |||
Number of shares issued upon exercise of options (in shares) | 5,157,507 | |||
Stock options outstanding (in shares) | 0 | |||
Shares remaining for future grants (in shares) | 1,718,242 | |||
Number of Shares [Roll Forward] | ||||
Nonvested RSUs, ending balance (in shares) | 2,124,251 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) ft² Tenant | Dec. 31, 2021 USD ($) | ||
Leases [Abstract] | |||
Operating lease ROU amortization | $ 632 | $ 605 | |
Leased Assets [Abstract] | |||
Operating lease - right of use assets | $ 506 | $ 1,200 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Operating lease - right of use assets | Operating lease - right of use assets | |
Lease Liabilities [Abstract] | |||
Operating lease liabilities - current | $ 418 | $ 1,205 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | Other Liabilities, Current | |
Operating lease liabilities | $ 160 | $ 790 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating lease liabilities | Operating lease liabilities | |
Lease liabilities | $ 578 | $ 1,995 | |
Area of office space leased | ft² | 2,200 | ||
Lease agreement date | Sep. 26, 2022 | ||
Lease expiration date | Nov. 30, 2024 | ||
Gain on termination of lease | $ 94 | ||
Consolidated Statement of Operations Information [Abstract] | |||
Operating lease cost | [1] | 700 | |
Short-term leases costs | [2] | 60 | |
Sublease income | [3] | (62) | |
Net lease cost | $ 698 | ||
Number of tenants | Tenant | 2 | ||
Minimum Lease Payments [Abstract] | |||
2023 | $ 435 | ||
2024 | 151 | ||
2025 | 10 | ||
2026 | 3 | ||
Thereafter | 0 | ||
Total | 599 | ||
Less: Interest | 21 | ||
Present value of lease payments | $ 578 | 1,995 | |
Lease Term and Discount Rate [Abstract] | |||
Weighted-average remaining lease term (in years) | 1 year 6 months 3 days | ||
Weighted-average discount rate | 5% | ||
Cash paid for amounts included in measurement of liabilities [Abstract] | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 60 | ||
Cash paid for amounts included in measurement of liabilities | $ 1,233 | $ 1,326 | |
[1]Includes variable lease costs which are immaterial.[2]Include leases maturing less than twelve months from the report date.[3]Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefits [Abstract] | ||
Company's contribution to the plan | $ 293 | $ 290 |
Segment Information, Summary (D
Segment Information, Summary (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Number of reportable business segments | Segment | 2 | |
Contract term | 2 years | |
Goodwill and intangible asset impairment charge | $ 7,505 | $ 3 |
Engineering [Member] | ||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Impairment of ROU assets | 0 | 3 |
Workforce Solutions [Member] | ||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Goodwill and intangible asset impairment charge | $ 7,500 | $ 0 |
Segment Information, Loss Befor
Segment Information, Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Revenues | $ 47,734 | $ 55,183 |
Gross profit | 11,910 | 11,858 |
Operating loss | (14,406) | (5,974) |
Interest expense | (1,272) | (159) |
Change in fair value of derivative instruments, net | 477 | 19 |
Other (loss) income, net | (91) | 16,884 |
(Loss) income before taxes | (15,292) | 10,770 |
Engineering [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Revenues | 29,919 | 28,140 |
Gross profit | 9,557 | 8,124 |
Operating loss | (6,388) | (4,425) |
Workforce Solutions [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Revenues | 17,815 | 27,043 |
Gross profit | 2,353 | 3,734 |
Operating loss | $ (8,018) | $ (1,549) |
Segment Information, Reconcilia
Segment Information, Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Information, Assets [Abstract] | ||
Assets | $ 26,496 | $ 39,051 |
Engineering [Member] | ||
Segment Reporting Information, Assets [Abstract] | ||
Assets | 21,705 | 23,742 |
Workforce Solutions [Member] | ||
Segment Reporting Information, Assets [Abstract] | ||
Assets | $ 4,791 | $ 15,309 |
Segment Information, Geographic
Segment Information, Geographic Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information [Abstract] | ||
Percentage of revenues derived from customers in the nuclear power industry | 89% | 91% |
Segments, Geographical Areas [Abstract] | ||
Revenue | $ 47,734 | $ 55,183 |
Operating loss | (14,406) | (5,974) |
Net assets | $ 26,496 | $ 39,051 |
Percentage of revenues derived from international sales | 16% | 12% |
United States [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Operating loss | $ (14,225) | $ (3,351) |
Net assets | 24,631 | 35,932 |
United States [Member] | Operating Segments [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Revenue | 46,622 | 54,203 |
Europe [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Operating loss | 0 | (1,746) |
Net assets | 0 | 0 |
Europe [Member] | Operating Segments [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Revenue | 0 | 0 |
Asia [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Operating loss | (181) | (877) |
Net assets | 1,865 | 3,119 |
Asia [Member] | Operating Segments [Member] | ||
Segments, Geographical Areas [Abstract] | ||
Revenue | $ 1,112 | $ 980 |
Supplemental Disclosure of Ca_3
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for interest and income taxes: [Abstract] | ||
Interest | $ 546 | $ 118 |
Income taxes | 47 | 129 |
Non-cash financing activities: [Abstract] | ||
Financing insurance premium | 0 | 890 |
Repayment of convertible note in shares | 758 | 0 |
Discount on issuance of convertible note | $ 750 | $ 0 |
Non-consolidated Variable Int_2
Non-consolidated Variable Interest Entity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) Owners | |
Variable Interest Entity [Abstract] | |
Number of owners | Owners | 2 |
DP Engineering Ltd, Co [Member] | |
Variable Interest Entity [Abstract] | |
Ownership percentage | 48% |
Contribution amount | $ 48 |
NXA Consultants LLC [Member] | |
Variable Interest Entity [Abstract] | |
Ownership percentage | 52% |
Contribution amount | $ 52 |
Variable Interest Entity, Not Primary Beneficiary [Member] | DP Engineering Ltd, Co [Member] | |
Variable Interest Entity [Abstract] | |
Carrying amount | $ 0 |