Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
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, $0.01 Par Value | |
Trading Symbol | GVP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,802,296 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,775 | $ 2,789 |
Restricted cash, current | 500 | 1,052 |
Contract receivables, net of allowance for credit loss | 10,190 | 10,064 |
Prepaid expenses and other current assets | 830 | 2,165 |
Total current assets | 13,295 | 16,070 |
Equipment, software and leasehold improvements, net | 682 | 772 |
Software development costs, net | 646 | 574 |
Goodwill | 6,299 | 6,299 |
Intangible assets, net | 1,395 | 1,687 |
Restricted cash - long term | 1,080 | 535 |
Operating lease right-of-use assets, net | 609 | 506 |
Other assets | 42 | 53 |
Total assets | 24,048 | 26,496 |
Current liabilities: | ||
Current portion of long-term note | 851 | 3,038 |
Accounts payable | 1,719 | 1,262 |
Accrued expenses | 2,490 | 2,084 |
Accrued compensation | 1,842 | 1,071 |
Billings in excess of revenue earned | 3,157 | 4,163 |
Accrued warranty | 276 | 370 |
Income taxes payable | 1,731 | 1,774 |
Derivative liabilities | 1,718 | 603 |
Other current liabilities | 483 | 1,286 |
Total current liabilities | 14,267 | 15,651 |
Long-term note, less current portion | 1,670 | 310 |
Operating lease liabilities noncurrent | 358 | 160 |
Other noncurrent liabilities | 214 | 144 |
Total liabilities | 16,509 | 16,265 |
Commitments and contingencies (Note 16) | ||
Stockholders' 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, 26,401,207 and 24,046,806 shares issued, 24,802,296 and 22,447,895 shares outstanding, respectively | 264 | 240 |
Additional paid-in capital | 84,641 | 82,911 |
Accumulated deficit | (74,433) | (69,927) |
Accumulated other comprehensive income | 66 | 6 |
Treasury stock at cost, 1,598,911 shares | (2,999) | (2,999) |
Total stockholders' equity | 7,539 | 10,231 |
Total liabilities and stockholders' equity | $ 24,048 | $ 26,496 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Stockholders' 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) | 26,401,207 | 24,046,806 |
Common stock, shares outstanding (in shares) | 24,802,296 | 22,447,895 |
Treasury stock at cost (in shares) | 1,598,911 | 1,598,911 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Revenue | $ 12,387 | $ 12,745 | $ 23,260 | $ 25,020 |
Cost of revenue | 9,172 | 9,573 | 17,650 | 19,421 |
Gross profit | 3,215 | 3,172 | 5,610 | 5,599 |
Operating expenses: | ||||
Selling, general and administrative | 3,653 | 4,410 | 8,441 | 8,917 |
Research and development | 154 | 182 | 335 | 324 |
Depreciation | 53 | 72 | 101 | 144 |
Amortization of intangible assets | 131 | 231 | 292 | 491 |
Total operating expenses | 3,991 | 4,895 | 9,169 | 9,876 |
Operating loss | (776) | (1,723) | (3,559) | (4,277) |
Other income and (expenses), net | ||||
Interest expense, net | (767) | (358) | (1,053) | (506) |
Change in fair value of derivative instruments, net | 171 | 695 | 240 | 114 |
Other loss, net | (98) | (72) | (88) | (56) |
Loss before income taxes | (1,470) | (1,458) | (4,460) | (4,725) |
Provision for (benefit from) income taxes | 28 | (57) | (11) | 110 |
Net loss | $ (1,498) | $ (1,401) | $ (4,449) | $ (4,835) |
Net loss per common share - basic (in dollars per share) | $ (0.06) | $ (0.07) | $ (0.19) | $ (0.23) |
Net loss per common share - diluted (in dollars per share) | $ (0.06) | $ (0.07) | $ (0.19) | $ (0.23) |
Weighted average shares outstanding used to compute net loss per share - basic (in shares) | 24,188,265 | 21,033,447 | 23,564,133 | 21,006,910 |
Weighted average shares outstanding used to compute net loss per share - diluted (in shares) | 24,188,265 | 21,033,447 | 23,564,133 | 21,006,910 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||||
Net loss | $ (1,498) | $ (1,401) | $ (4,449) | $ (4,835) |
Cumulative translation adjustment | 70 | (106) | 60 | 75 |
Comprehensive loss | $ (1,428) | $ (1,507) | $ (4,389) | $ (4,760) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Common Stock [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Additional Paid-in Capital [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Deficit [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Other Comprehensive Loss [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Loss [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Treasury Stock [Member] | Treasury Stock [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Treasury Stock [Member] Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] |
Balance at Dec. 31, 2021 | $ 225 | $ 80,505 | $ (54,584) | $ (104) | $ (2,999) | $ 23,043 | ||||||||||||
Balance (in shares) at Dec. 31, 2021 | 22,533,000 | |||||||||||||||||
Balance (in shares) at Dec. 31, 2021 | (1,599,000) | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation expense | $ 0 | 1,025 | 0 | 0 | $ 0 | 1,025 | ||||||||||||
Common stock issued for RSUs vested | $ 3 | (3) | 0 | 0 | 0 | 0 | ||||||||||||
Common stock issued for RSUs vested (in shares) | 317,000 | |||||||||||||||||
Shares withheld to pay taxes | $ 0 | (203) | 0 | 0 | 0 | (203) | ||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 75 | 0 | 75 | ||||||||||||
Net (loss) income | 0 | 0 | (4,835) | 0 | 0 | (4,835) | ||||||||||||
Balance at Jun. 30, 2022 | $ 228 | 81,324 | (59,419) | (29) | $ (2,999) | 19,105 | ||||||||||||
Balance (in shares) at Jun. 30, 2022 | 22,850,000 | |||||||||||||||||
Balance (in shares) at Jun. 30, 2022 | (1,599,000) | |||||||||||||||||
Balance at Dec. 31, 2021 | $ 225 | 80,505 | (54,584) | (104) | $ (2,999) | 23,043 | ||||||||||||
Balance (in shares) at Dec. 31, 2021 | 22,533,000 | |||||||||||||||||
Balance (in shares) at Dec. 31, 2021 | (1,599,000) | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Accounting Standards Update [Extensible Enumeration] | ASC 326 [Member] | ASC 326 [Member] | ||||||||||||||||
Balance at Dec. 31, 2022 | $ 240 | $ 0 | $ 240 | 82,911 | $ 0 | $ 82,911 | (69,927) | $ (57) | $ (69,984) | 6 | $ 0 | $ 6 | $ (2,999) | $ 0 | $ (2,999) | $ 10,231 | $ (57) | $ 10,174 |
Balance (in shares) at Dec. 31, 2022 | 24,047,000 | 0 | 24,047,000 | 24,046,806 | ||||||||||||||
Balance (in shares) at Dec. 31, 2022 | (1,599,000) | 0 | (1,599,000) | (1,598,911) | ||||||||||||||
Balance at Mar. 31, 2022 | $ 226 | 80,777 | (58,018) | 77 | $ (2,999) | $ 20,063 | ||||||||||||
Balance (in shares) at Mar. 31, 2022 | 22,609,000 | |||||||||||||||||
Balance (in shares) at Mar. 31, 2022 | (1,599,000) | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation expense | $ 0 | 666 | 0 | 0 | $ 0 | 666 | ||||||||||||
Common stock issued for RSUs vested | $ 2 | (2) | 0 | 0 | 0 | 0 | ||||||||||||
Common stock issued for RSUs vested (in shares) | 241,000 | |||||||||||||||||
Shares withheld to pay taxes | $ 0 | (117) | 0 | 0 | 0 | (117) | ||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | (106) | 0 | (106) | ||||||||||||
Net (loss) income | 0 | 0 | (1,401) | 0 | 0 | (1,401) | ||||||||||||
Balance at Jun. 30, 2022 | $ 228 | 81,324 | (59,419) | (29) | $ (2,999) | 19,105 | ||||||||||||
Balance (in shares) at Jun. 30, 2022 | 22,850,000 | |||||||||||||||||
Balance (in shares) at Jun. 30, 2022 | (1,599,000) | |||||||||||||||||
Balance at Dec. 31, 2022 | $ 240 | $ 0 | $ 240 | 82,911 | $ 0 | $ 82,911 | (69,927) | $ (57) | $ (69,984) | 6 | $ 0 | $ 6 | $ (2,999) | $ 0 | $ (2,999) | $ 10,231 | $ (57) | $ 10,174 |
Balance (in shares) at Dec. 31, 2022 | 24,047,000 | 0 | 24,047,000 | 24,046,806 | ||||||||||||||
Balance (in shares) at Dec. 31, 2022 | (1,599,000) | 0 | (1,599,000) | (1,598,911) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation expense | $ 0 | 537 | 0 | 0 | $ 0 | $ 537 | ||||||||||||
Common stock issued for RSUs vested | $ 4 | (4) | 0 | 0 | 0 | 0 | ||||||||||||
Common stock issued for RSUs vested (in shares) | 380,000 | |||||||||||||||||
Shares withheld to pay taxes | $ 0 | (77) | 0 | 0 | 0 | (77) | ||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 60 | 0 | 60 | ||||||||||||
Repayment of convertible note in shares | $ 20 | 1,274 | 0 | 0 | 0 | 1,294 | ||||||||||||
Repayment of convertible note in shares (in shares) | 1,974,000 | |||||||||||||||||
Net (loss) income | $ 0 | 0 | (4,449) | 0 | 0 | (4,449) | ||||||||||||
Balance at Jun. 30, 2023 | $ 264 | 84,641 | (74,433) | 66 | $ (2,999) | $ 7,539 | ||||||||||||
Balance (in shares) at Jun. 30, 2023 | 26,401,000 | 26,401,207 | ||||||||||||||||
Balance (in shares) at Jun. 30, 2023 | (1,599,000) | (1,598,911) | ||||||||||||||||
Balance at Mar. 31, 2023 | $ 252 | 83,860 | (72,935) | (4) | $ (2,999) | $ 8,174 | ||||||||||||
Balance (in shares) at Mar. 31, 2023 | 25,160,000 | |||||||||||||||||
Balance (in shares) at Mar. 31, 2023 | (1,599,000) | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation expense | $ 0 | 263 | 0 | 0 | $ 0 | 263 | ||||||||||||
Common stock issued for RSUs vested | $ 2 | (2) | 0 | 0 | 0 | 0 | ||||||||||||
Common stock issued for RSUs vested (in shares) | 259,000 | |||||||||||||||||
Shares withheld to pay taxes | $ 0 | (19) | 0 | 0 | 0 | (19) | ||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 70 | 0 | 70 | ||||||||||||
Repayment of convertible note in shares | $ 10 | 539 | 0 | 0 | 0 | 549 | ||||||||||||
Repayment of convertible note in shares (in shares) | 982,000 | |||||||||||||||||
Net (loss) income | $ 0 | 0 | (1,498) | 0 | 0 | (1,498) | ||||||||||||
Balance at Jun. 30, 2023 | $ 264 | $ 84,641 | $ (74,433) | $ 66 | $ (2,999) | $ 7,539 | ||||||||||||
Balance (in shares) at Jun. 30, 2023 | 26,401,000 | 26,401,207 | ||||||||||||||||
Balance (in shares) at Jun. 30, 2023 | (1,599,000) | (1,598,911) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,498) | $ (1,401) | $ (4,449) | $ (4,835) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation | 53 | 72 | 101 | 144 |
Amortization of intangible assets | 131 | 231 | 292 | 491 |
Amortization of capitalized software development costs | 167 | 167 | ||
Amortization of deferred financing costs | 15 | 7 | ||
Amortization of debt discount | 556 | 482 | ||
Loss on debt settled in shares | 145 | 0 | ||
Stock-based compensation expense | 531 | 1,101 | ||
Credit loss expense | (2) | 97 | 30 | 97 |
Change in fair value of derivative instruments, net | (240) | (114) | ||
Foreign currency transaction (gain) loss | 135 | 187 | ||
Deferred income taxes | 6 | 77 | ||
Changes in assets and liabilities: | ||||
Contract receivables, net | (254) | 1,578 | ||
Prepaid expenses and other assets | 1,472 | 3,020 | ||
Accounts payable, accrued compensation and accrued expenses | 1,724 | 379 | ||
Billings in excess of revenue earned | (992) | (588) | ||
Accrued warranty | (72) | (138) | ||
Other liabilities | 10 | (416) | ||
Net cash (used in) provided by operating activities | (823) | 1,639 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (13) | (134) | ||
Capitalized software development costs | (239) | (206) | ||
Net cash used in investing activities | (252) | (340) | ||
Cash flows from financing activities: | ||||
Repayment of line of credit | 0 | (1,817) | ||
Repayment of insurance premium financing | (486) | (594) | ||
Proceeds from issuance of long-term debt and warrants | 1,800 | 5,750 | ||
Payments of debt issuance and original discount on issuance of long-term debt and warrants | (386) | (968) | ||
Principal repayment of convertible note | (768) | 0 | ||
Tax paid for shares withheld | (77) | (203) | ||
Net cash provided by financing activities | 83 | 2,168 | ||
Effect of exchange rate changes on cash | (29) | (70) | ||
Net (decrease) increase in cash, cash equivalents and restricted cash | (1,021) | 3,397 | ||
Cash, cash equivalents and restricted cash at beginning of the period | 4,376 | 3,550 | ||
Cash, cash equivalents and restricted cash at the end of the period | 3,355 | 6,947 | 3,355 | 6,947 |
Cash and cash equivalents | 1,775 | 5,364 | 1,775 | 5,364 |
Restricted cash, current | 500 | 632 | 500 | 632 |
Restricted cash included in other long-term assets | 1,080 | 951 | 1,080 | 951 |
Total cash, cash equivalents and restricted cash | 3,355 | 6,947 | 3,355 | 6,947 |
Non-cash financing activities | ||||
Repayment of convertible note in shares | 1,293 | 0 | ||
Establishment of new right-of-use assets | 1,294 | 0 | ||
Establishment of new operating lease liability | (333) | 0 | ||
Discount on issuance of convertible note | $ 300 | $ 750 | $ 300 | $ 750 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies Basis of Presentation 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” or “we” or “our” or “the Company” are to GSE Systems, Inc. and our subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE and are unaudited. In the opinion of our management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2022 was derived from our audited financial statements, but it does not include all disclosures required by U.S. GAAP. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission on April 17, 2023. The preparation of financial statements in conformity with 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 financial statements, as well as reported amounts of revenues and expenses during the reporting period. Our most significant estimates relate to revenue recognition on contracts with customers, product warranties, valuation of goodwill and intangible assets acquired including the determination of fair value in impairment tests, valuation of long-lived assets to be disposed of, valuation of stock-based compensation awards, the recoverability of deferred tax assets, and valuation of warrants and derivative liabilities related to our convertible notes. Actual results of these and other items not listed could differ from these estimates and those differences could be material. 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 U.S. GAAP. 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 (“FASB”) 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 August 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 8-K on November 8, 2022, to disclose receipt of this letter. The Company had 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, and if compliance was not achieved within the initial 180 calendar days we could petition NASDAQ for an additional period of 180 calendar days in which to increase the stock price. Anticipating that it would not regain compliance with the NASDAQ minimum closing bid price requirement by May 3, 2023, on April 19, 2023, the Company submitted a request for an additional 180-day period within which to regain compliance. On May 4, 2023, the Company received a letter from NASDAQ advising that the 180-day extension – expiring on October 30, 2023 – had been granted due to the facts that the Company: • had met the market value of publicly held shares requirement for continuing listing, • had met all other listing requirements for NASDAQ (other than bid price requirement), and • had provided written notice to NASDAQ with a plan of how it intends to regain compliance with the bid price requirement during the second 180-day period. The Company’s plan to regain compliance includes continuing to monitor the closing bid price of its Common Stock and, if appropriate, implementing available options including, but not limited to, undertaking a reverse stock split of its outstanding securities at a ratio within the range of one-for-five to one-to-ten, which will have the initial effect of multiplying the trading price of the Company’s Common Stock by the same ratio. Because such an action requires stockholder approval, the Company put the matter before its stockholders for approval at the 2023 annual meeting of stockholders, which was held on June 12, 2023. The Company’s stockholders approved the proposal and, unless the Company’s Common Stock maintains a closing bid price of $1 per share for at least 10 consecutive trading days, the Company intends to effect a reverse stock split of its outstanding Common Stock at a ratio within the range of one-for-five to one-to-ten prior to October 30, 2023. We believe that compliance with the NASDAQ minimum bid price listing requirement will be achieved before the expiration of the second 180-day period. If compliance is not achieved prior to October 30, 2023, and consequently a delisting letter is issued, the Company may request a hearing before the NASDAQ Hearing Panel with regard to delisting, which may have the effect of staying the delisting and provide the Company with the opportunity to present its further plans to regain compliance. If the Company’s Common Stock ceases to be listed on NASDAQ, Lind Global Fund II LP (“Lind Global”), as the holder of that certain convertible promissory note in the amount of $5,750,000 (as amended, the “2022 Convertible Note”) and that certain convertible promissory note in the amount of $1,800,000 (the “2023 Convertible Note” and, together with the 2022 Convertible Note, the “Convertible Notes”) (see Note 10 for further details), may deliver a notice of event of default together with a demand for payment to the Company for payment in full. 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. During the six months ended June 30, 2023, the Company generated a $0.8 million loss on net cash used in operating activities. As of June 30, 2023, the Company had domestic unrestricted cash and cash equivalents of $1.8 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 | 6 Months Ended |
Jun. 30, 2023 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 2 - Recent Accounting Pronouncements Accounting pronouncements recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be incurred before it is recognized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard will apply to accounts receivable, loans, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. The Company adopted the new guidance starting January 1, 2023 on a modified retrospective basis. The impact of this ASU is reflected in the consolidated financial statements and was not material. 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. |
Basic and Diluted Loss per Shar
Basic and Diluted Loss per Share | 6 Months Ended |
Jun. 30, 2023 | |
Basic and Diluted Loss per Share [Abstract] | |
Basic and Diluted Loss per Share | Note 3 - Basic and Diluted Loss 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 RSU’s, stock options and warrants 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 per common share were as follows: (in thousands, except for share data) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Numerator: Net loss attributed to common stockholders $ (1,498 ) $ (1,401 ) $ (4,449 ) $ (4,835 ) Denominator: Weighted-average shares outstanding for basic earnings per share 24,188,265 21,033,447 23,564,133 21,006,910 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 24,188,265 21,033,447 23,564,133 21,006,910 Total shares considered for dilution 11,769,795 5,352,245 12,263,781 5,352,245 |
Coronavirus Aid, Relief and Eco
Coronavirus Aid, Relief and Economic Security Act | 6 Months Ended |
Jun. 30, 2023 | |
Coronavirus Aid, Relief and Economic Security Act [Abstract] | |
Coronavirus Aid, Relief and Economic Security Act | Note 4 - Coronavirus Aid, Relief and Economic Security Act 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. During the three months ended June 30, 2023, we received $0.1 million refund, closing out our Employee tax refund credits totaling $5.0 million. |
Contract Receivables
Contract Receivables | 6 Months Ended |
Jun. 30, 2023 | |
Contract Receivables [Abstract] | |
Contract Receivables | Note 5 - Contract Receivables Contract receivables represent our unconditional rights to consideration due from our domestic and international customers. We expect to collect all contract receivables within the next twelve months. The components of contract receivables were as follows: (in thousands) June 30, 2023 December 31, 2022 Billed receivables $ 4,059 $ 6,074 Unbilled receivables 6,590 5,146 Allowance for credit loss (459 ) (1,156 ) Total contract receivables, net $ 10,190 $ 10,064 During the first quarter of 2023, the Company adopted ASU 2016-13, “Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including accounts receivable. Under the new guidance, an entity recognizes its estimate of lifetime expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its contract receivables based on three portfolio segments by customer geographic location: North America, China, Rest of World (ROW). The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables. The following table sets forth the activity in the allowance for credit losses for the three months ended June 30, 2023. (in thousands) Beginning balance at January 1, 2023 $ 1,156 Adoption of ASC326 Current Expected Credit Losses (CECL) 57 Adjusted balance at January 1, 2023 1,213 Current period provision for expected credit loss 7 Write-offs charged against the allowance, net of recoveries (722 ) Currency adjustment (39 ) Balance at June 30 2023 $ 459 During the three months ended June 30, 2023 and 2022, we recorded credit (recovery) loss expense of $(2) thousand and $97 thousand, respectively. During the six months ended June 30, 2023 and 2022, we recorded credit loss expense of $30 thousand and $97 thousand, respectively. The write-offs charged against the allowance, net of recoveries is related to a an unbilled receivable balance for a customer contract with our GSE Beijing entity, and had been fully reserved during the year ended 2021. During the three and six months ended June 30, 2023, management determine this amount to be fully uncollectible and has been written off against the allowance. During the month of July 2023, we invoiced $3.8 million of the unbilled receivables as of June 30, 2023. Our foreign currency denominated contract receivables, billings in excess of revenue earned and subcontractor accruals that are related to the outstanding foreign exchange contracts are remeasured at the end of each reporting period into our functional currency, using the current exchange rate at the end of the period. The gain or loss resulting from such remeasurement is included in other income, net in the consolidated statements of operations. During the three months ended June 30, 2023 and 2022, we recognized a (loss) gain on remeasurement of these foreign exchange contracts of ($55) thousand and $51 thousand, respectively. During the six months ended June 30, 2023 and 2022, we recognized a gain on remeasurement of these foreign exchange contracts of $17 thousand and $54 thousand, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 6 - Goodwill and Intangible Assets The Company monitors operating results and events and circumstances that may indicate potential impairment of intangible assets . Management concluded that no triggering events that occurred during the six months ended June and During the three months ended September 30, 2022, we determined that the deterioration in sales, decline in revenues, 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. We performed an interim analysis and determined an impairment existed at September 30, 2022 in accordance with ASC 350 & ASC 360. As such, we recorded an impairment Goodwill The following table shows the gross carrying amount and impairment of goodwill: (in thousands) Goodwill Accumulated Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 (7,040 ) 1,391 Net book value at June 30, 2023 $ 16,709 $ (10,410 ) $ 6,299 (in thousands) Goodwill Accumulated 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 Intangible assets The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets: (in thousands) As of June 30, 2023 Gross Carrying Amount Accumulated Amortization Impairment Net Amortized intangible assets: Customer relationships $ 8,628 $ (7,242 ) $ (464 ) $ 922 Trade names 1,689 (1,239 ) - 450 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 527 (504 ) - 23 Alliance agreement 527 (527 ) - - Others 167 (167 ) - - Total $ 12,442 $ (10,583 ) $ (464 ) $ 1,395 (in thousands) As of December 31, 2022 Gross Carrying Amount Accumulated Amortization 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 Amortization expense related to definite-lived intangible assets totaled $0.1 million and $0.2 million for the three months ended June 30, 2023 and 2022 and $0.3 million and $0.5 million for the six months ended June 30, 2023 and 2022, respectively. The following table shows the estimated amortization expense of the definite-lived intangible assets for the next five years and thereafter: (in thousands) Years ended December 31: 2023 remainder $ 215 2024 332 2025 255 2026 204 2027 169 Thereafter 220 Total $ 1,395 |
Equipment, Software and Leaseho
Equipment, Software and Leasehold Improvements | 6 Months Ended |
Jun. 30, 2023 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | Note 7 - Equipment, Software and Leasehold Improvements Equipment, software and leasehold improvements, net consist of the following: (in thousands) June 30, 2023 December 31, 2022 Computer and equipment $ 2,372 $ 2,363 Software 2,291 2,291 Leasehold improvements 659 659 Furniture and fixtures 839 838 6,161 6,151 Accumulated depreciation (5,479 ) (5,379 ) Equipment, software and leasehold improvements, net $ 682 $ 772 Depreciation expense was $53 thousand and $72 thousand for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense was $101 thousand and $144 thousand for the six months ended June 30, 2023 and 2022, respectively |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 8 - 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 June 30, 2023 and December 31, 2022, 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, amended in June 2023 and our new convertible debt issued in June 2023 (see Note 10) 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 (see Note 10) and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants as of June 30, 2023 was estimated with the following assumptions. Amended 2022 Convertible Note 2023 Convertible Note Exercise Price $ 1.94 $ 0.50 Common Stock Price $ 0.36 $ 0.36 Risk Free Rate 4.31% 4.13% Volatility 70.0% 75.0% Term (in years) 3.7 yrs. 2.0 yrs. The following table presents assets and liabilities measured at fair value at June 30, 2023 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Derivative liability $ - $ - $ 664 $ 664 Warrant liability - - 1,054 1,054 Cash settled performance-vesting restricted stock units - - 89 89 Total liabilities $ - $ - $ 1,807 $ 1,807 The following table presents assets and liabilities measured at fair value at December 31, 2022 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Derivative liability $ - $ - $ 285 $ 285 Warrant liability - - 267 267 Cash settled performance-vesting restricted stock units - - 51 51 Total liabilities $ - $ - $ 603 $ 603 The following table summarizes changes in the fair value of our Level 3 liabilities during the six months ended June 30, 2023 (in thousands) Embedded Redemption Features Warrant Cash Settled PRSUs Level 3 Total Balance at December 31, 2022 $ 285 $ 267 $ 51 $ 603 FV of derivatives with new convertible note issuance 286 1,120 - 1,406 Change in FV included in gain on derivative instruments, net 93 (333 ) - (240 ) Stock compensation less payments made - - 38 38 Balance at June 30, 2023 $ 664 $ 1,054 $ 89 $ 1,807 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 9 - Stock-Based Compensation 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 three months ended June 30, 2023 and 2022, we recognized $0.3 million and $0.7 million of stock-based compensation expense related to equity awards, respectively, under the fair value method. We recognized $0.5 million and $1.0 million of stock-based compensation expense related to equity awards for the six months ended June 30, 2023 and 2022, respectively. During the three and six months ended June 30, 2023, we granted approximately 408,270 and 453,270 time-based restricted stock units (“RSUs”) with an aggregate fair value of approximately $0.2 million and $0.2 million, respectively. During the three and six months ended June 30, 2022, we granted approximately 946,653 and 960,250 time-based RSUs with an aggregate fair value of approximately $1.4 million and $1.5 million June 30, 2023 and 2022 approximately 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 GSE’s 1995 long-term incentive program (“LTIP”) provides for the issuance of performance-vesting and time-vesting RSUs 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 three and six months ended June 30, 2023 , we granted approximately 597,665 PRSU’s. These grants are subject to multiple vesting criteria including reaching a 20-day VWAP of $1.50 prior to the expiration of the awards, and a time-vesting restriction, which will vest in equal parts over the next 18 quarters. During the three months ended June 30, 2022, there were no PRSUs granted during the six months ended June 30, 2022 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 six months ended June 30 , 2023 and 2022 criteria for the Q1 2022 PRSU grant was achieved in April 2022 for the 800,000 PRSUs which will fully vest over the next 10 quarters . We did not grant any stock options for the six months ended |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt [Abstract] | |
Debt | Note 10 - Debt Convertible Note On February 23, 2022, we entered into a Securities Purchase Agreement, as amended, with Lind Global, pursuant to which we issued to Lind Global the 2022 Convertible Note (see Note 1) and a common stock purchase warrant to acquire 1,283,732 shares of our Common Stock (the “2022 Warrant”). The 2022 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. On June 23, 2023, we entered into a Amended & Restated Agreement to amend the February 23, 2022 Securities Purchase Agreement (Original Note). 2022 Convertible Note 2023 Convertible Note Total Convertible Notes Amount Amount Amount Convertible Note issued $ 5,750 1,800 7,550 Debt discount (750 ) (300 ) (1,050 ) Issuance cost: Commitment fee (175 ) (52 ) (227 ) Balance of investor’s counsel fees (43 ) (34 ) (77 ) Net proceeds of Convertible Note $ 4,782 1,414 6,196 Additional OID costs not in original funds flow (121 ) (15 ) (136 ) Fair value of Warrant Liabilities on issuance (724 ) (1,119 ) (1,843 ) Fair value of Conversion Feature on issuance (306 ) (286 ) (592 ) A 25 30 55 A dditional OID costs not in original funds flow (660 ) 660 - Interest expense accrued on Convertible Note as of June 30, 2023 2,346 9 2,355 Principal and interest payments through June 30, 2023 (3,514 ) - (3,514 ) Balance of Convertible Note as of June 30, 2023 $ 1,828 693 2,521 The Convertible Note provides for 18 monthly principal repayments of $319 thousand beginning 180 days from issuance. Payments could be made in the form of cash, shares, or a combination of both at the discretion of GSE. The 2022 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 2022 Convertible Note is equal to $1.94 per share, subject to customary adjustments. The 2022 Convertible Note matures in February of 2024 one third On June 23, 2023, the Company and Lind Global agreed to amend and restate the 2022 Convertible Note. The 2022 Convertible Note, as now amended, is now secured, interest free convertible promissory note in the principal amount of $2,747,228, such amount being the outstanding balance of the 2022 Convertible Note as of June 23, 2023. The 2022 Convertible Note now has a maturity date of August 23, 2024 and is now payable, commencing on July 23, 2023, in twelve (12) consecutive monthly payments of $186,343 each and two (2) final payments of $255,556 each. The remainder of the terms of the 2022 Convertible Note, including terms around payment, prepayment, default and conversion, are unchanged. The 2022 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 8). 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. On June 23, 2023 in connection with the 2022 amended and restated Convertible Note transaction, the Company evaluated the amendment and concluded it qualified as a troubled debt restructuring. The restructuring did not result in a gain or loss but revised the effective interest rate used to amortized the note going forward. On June 23, 2023, the Company entered into a second Securities Purchase Agreement (the “2023 Purchase Agreement”) with Lind Global, pursuant to which the Company issued to Lind Global the 2023 Convertible Note. The Company and Lind Global also amended and restated the 2022 Convertible Note. The closings of the transactions contemplated under the 2023 Purchase Agreement may occur in tranches. The first closing occurred on June 23, 2023, and consisted of the issuance of a secured, two-year interest free convertible promissory note with a funding amount of $1,500,000 and a principal amount of $1,800,000 (the 2023 Convertible Note) and the issuance of common stock purchase warrant to acquire 4,264,271 shares of the Company’s common stock (the “2023 Warrant” and, together with the 2022 Warrant, the “Warrants”). The proceeds from the transactions contemplated by the 2023 Purchase Agreement were for general working capital purposes and other corporate purposes. Commencing one year after the issuance of the 2023 Convertible Note, the Company shall pay the outstanding principal amount of the 2023 Convertible Note in twelve (12) consecutive monthly payments of $150,000 each. At the option of the Company, the monthly payment can be made in cash, shares of the common stock of the Company (the “Repayment Shares”) at a price based on 90% of the average five (5) consecutive daily VWAPs during the twenty (20) days prior to the payment date, or a combination of cash and Repayment Shares, subject to the terms of the 2023 Convertible Note. The Repayment Shares must either be eligible for immediate resale under Rule 144 or be registered. The number of Repayment Shares is limited such that, when added to the number of shares of common stock issued and issuable pursuant to the transactions contemplated by the 2023 Purchase Agreement, it may not exceed 4,937,271 shares of common stock unless the Company obtains stockholder approval to issue additional Repayment Shares. The holder of the 2023 Convertible Note may elect with respect to no more than two (2) of the above described monthly payments to increase the amount of such monthly payment up to $300,000 each in Repayment Shares upon notice to the Company. Any such increased payment shall be deducted from the amount of the last monthly payment owed under the 2023 Convertible Note. The Company can prepay Lind Global all the outstanding principal amount of the 2023 Convertible Note, provided that Lind Global shall have the option to convert up to one third Upon the occurrence of an event of default as described in the 2023 Convertible Note, the 2023 Convertible Note will become immediately due and payable at the default premium described in the 2023 Convertible Note, subject to any cure periods described in the 2023 Convertible Note. Events of default include, but are not limited to, a payment default on any other indebtedness in excess of $250,000; the shares no longer publicly being traded or cease to be listed on a trading market; if after six months, the shares are not available for immediate resale under Rule 144; and the Company’s market capitalization is below $7,000,000 for ten six The 2023 Warrant entitles Lind Global to purchase up to 4,264,271 shares of common stock of the Company until the earlier of (a) June 23, 2028 and (b) a merger, sale event or other reclassification of the Company’s common stock, at an exercise price of $0.50 per share, subject to customary adjustments described therein. The 2023 Warrant is in addition to the 2022 Warrant. The Company evaluated the Convertible Notes 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 Upon issuance of the 2023 Convertible Note, the Company re-evaluated the 2022 Convertible Note, in accordance with ASC 815-40-25-10 and its sequencing policy, and concluded that the embedded conversion option is required to be bifurcated and accounted for as a derivative liability as a result of the Company not being able to assert that it would have sufficient shares in all cases to be able to settle the conversion of the 2022 Convertible Note. The embedded conversion option will be combined with the bifurcated redemption features as a single derivative and is classified as a current liability to be remeasured at each reporting period. The discount resulting from bifurcating the embedded conversion option will be amortized as additional interest expense over the term of the 2022 Convertible Note. 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 Warrants 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 Notes 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 Notes were evaluated as a potentially dilutive security in both periods of loss and income for diluted earnings per share purposes. The Warrants are considered a participating security and was not included in the calculation of basic earnings per share for the period ended June 30, 2023 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 Notes, which are recorded as a debt discount, are deferred and amortized using the effective interest method as additional interest expense over the terms of the Convertible Note at an effective interest rate of 68.6%. The Company incurred total interest expense related to the Convertible Notes of $1.1 million, including $0.5 million default charge and the amortization of the various discounts for the six months ended June 30, 2023, respectively. Revolving Line of Credit 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 was terminated. Certain letters of credit remain in place with Citizens. As of June 30, 2023, we had four letters of credit totaling $1.1 million outstanding to certain customers which were secured with restricted cash. |
Product Warranty
Product Warranty | 6 Months Ended |
Jun. 30, 2023 | |
Product Warranty [Abstract] | |
Product Warranty | Note 11 - Product Warranty We accrue estimated warranty costs at the time the related revenue is recognized and based on historical experience and projected claims. Our System Design and Build contracts generally include a one year base warranty on the systems. The portion of our warranty provision expected to be incurred within twelve months is classified as current within accrued warranty and totals $276 thousand, and the remaining $151 thousand is classified as long-term within other non-current liabilities. The activity in the accrued warranty accounts during the current period is as follows: (in thousands) Balance at January 1, 2023 $ 503 Current period recovery (46 ) Current period claims (27 ) Currency adjustment (3 ) Balance at June 30, 2023 $ 427 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue [Abstract] | |
Revenue | Note 12 - Revenue We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. We primarily generate revenue through three distinct revenue streams: (1) System Design and Build (“SDB”), (2) Software and (3) Training and Consulting Services across our Engineering and Workforce Solutions segments. We recognize revenue from SDB and software contracts mainly through our Engineering segment. We recognize training and consulting service contracts through both segments. The following table represents a disaggregation of revenue by type of goods or services for the three and six months ended June 30, 2023 and 2022, along with the reporting segment for each category: (in thousands) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Engineering System Design and Build $ 2,139 $ 2,042 $ 3,609 $ 3,443 Over time 2,139 2,042 3,609 3,443 Software and Support 1,100 1,178 2,289 1,937 Point in time 55 87 368 175 Over time 1,045 1,091 1,921 1,762 Training and Consulting Services 5,805 4,733 10,088 8,970 Point in time 101 727 297 1,145 Over time 5,704 4,006 9,791 7,825 Workforce Solutions Training and Consulting Services 3,343 4,792 7,274 10,670 Point in time 90 - 209 - Over time 3,253 4,792 7,065 10,670 Total revenue $ 12,387 $ 12,745 $ 23,260 $ 25,020 The following table reflects revenue recognized in the reporting periods presented that was included in contract liabilities from contracts with customers as of the beginning of the periods presented: ( in thousands Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period $ 1,255 $ 1,036 $ 3,105 $ 2,492 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 13 - Income Taxes The following table presents the provision for income taxes and our effective tax rates: (in thousands) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 (Loss) income before income taxes $ (1,470 ) $ (1,458 ) $ (4,460 ) $ (4,725 ) Provision for (benefit from) income taxes 28 (57 ) (11 ) 110 Effective tax rate (1.90 )% 3.9 % 0.25 % (2.3 )% O ur income tax expense for the interim periods presented is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. Total income tax expense (benefit) for the three and six months ended June 30, 2023 was comprised mainly of current foreign tax benefit, deferred state tax benefit related to the portion of goodwill which cannot be offset by deferred tax assets and state tax expense. Total income tax expense (benefit) for the three and six months ended June 30, 2022 was comprised mainly of current state and foreign tax expense and deferred federal and state tax expense related to the portion of goodwill which cannot be offset by deferred tax assets. Our effective income tax rate was (1.9)% and 0.25% for the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2023, the difference between our income tax expense (benefit) at an effective tax rate of (1.90)% and 0.25% respectively, and the U.S. statutory federal income tax rate of 21% was primarily due to accruals related to uncertain tax positions for certain foreign tax contingencies, a change in valuation allowance in our U.S. entity, the permanent disallowance of interest expense related to disqualified debt, and discrete item adjustments for U.S. and foreign taxes. For the three and six months ended June 30, 2022, the difference between our income tax expense (benefit) at an effective rate of 3.9% and (2.3)% respectively, and the U.S. statutory federal income tax rate of 21% was primarily due to accruals related to uncertain tax positions for certain foreign tax contingencies, a change in tax valuation allowance in our U.S. entity, the disallowance of interest expense related to disqualified debt, and discrete item adjustments for U.S. and foreign taxes. Because of our net operating loss carryforwards, we are subject to U.S. federal and state income tax examinations from the year 2003 and forward and are subject to foreign tax examinations by tax authorities for years 2017 and forward. An uncertain tax position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not (i.e., a likelihood of more than 50%) 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. Interest and penalties related to income taxes are accounted for as income tax expense We recognize deferred tax assets to the extent that it is believed that these assets are more likely than not to be realized. We have evaluated all positive and negative evidence and determined that we will continue to assess a full valuation allowance on our U.S., China, and Slovakia net deferred assets as of June 30, 2023. We have determined that it is not more likely than not that the Company will realize the benefits of its deferred taxes in the U.S. and foreign jurisdictions. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 14 - 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 $230 thousand and $320 thousand for the six months ended June 30, 2023 and 2022, 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) As of Operating Leases Classification June 30, December 31, 2022 Leased Assets Operating lease - right of use assets Long term assets $ 609 $ 506 Lease Liabilities Operating lease liabilities - Current Other current liabilities 228 418 Operating lease liabilities Long term liabilities 358 160 $ 586 $ 578 On June 7, 2023 we entered into an office lease agreement to lease 2,704 square feet in Fort Worth, Texas for an initial lease term ending November 7, 2030. We entered into a lease agreement to lease 2,200 square feet of office space in Columbia, Maryland on September 26, 2022, through November 30, 2024 . On December 15, 2022, 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. As a part of this agreement, we assigned both active subleases to the landlord effective as of the execution date The table below summarizes lease income and expense recorded in the consolidated statements of operations incurred during the three and six months ended June 30, 2023 and 2022, ( in thousands Three months ended Six months ended Lease Cost Classification June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease cost (1) Selling, general and administrative expenses $ 115 $ 174 $ 243 $ 360 Short-term leases costs (2) Selling, general and administrative expenses 10 15 25 30 Sublease income (3) Selling, general and administrative expenses - (19 ) - (37 ) Net lease cost $ 125 $ 170 $ 268 $ 353 (1) Includes variable lease costs which are immaterial. ( 2 ) Includes leases maturing less than twelve months from the report date. (3) Sublease portfolio consists of two tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. The Company is obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of June 30, 2023 are as follows: (in thousands) Gross Future Minimum Lease Payments 2023 remainder $ 123 2024 223 2025 96 2026 92 2027 127 Thereafter - Total lease payments $ 661 Less: Interest 75 Present value of lease payments $ 586 We calculated the weighted-average remaining lease term, presented in years below and the weighted-average discount rate for our operating leases, and we use the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate June 30, 2023 December 31, 2022 Weighted-average remaining lease term (years) Operating leases 3.52 1.51 Weighted-average discount rate Operating leases 6.12% 5.00% The table below sets out the classification of lease payments in the consolidated statement of cash flows. (in thousands) Six months ended Cash paid for amounts included in measurement of liabilities June 30, 2023 June 30, 2022 Operating cash flows used in operating leases $ 358 $ 642 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information [Abstract] | |
Segment Information | Note 15 - Segment Information We have two reportable business segments. The Engineering segment provides simulation, training and engineering products and services delivered across the breadth of industries we serve. Solutions include simulation for both training and engineering applications. Example engineering services include, but are not limited to, plant design verification and validation, thermal performance evaluation and optimization programs, and engineering programs for plants for American Society of Mechanical Engineers (“ASME”) code and ASME Section XI. The Company provides these services across all market segments through our Performance, True North consulting, and DP Engineering subsidiaries. Example trai ning applications 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 revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant: Three months ended Six months ended (in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue: Engineering $ 9,044 $ 7,953 $ 15,986 $ 14,350 Workforce Solutions 3,343 4,792 7,274 10,670 Total revenue 12,387 12,745 23,260 25,020 Gross Profit Engineering 2,742 2,568 4,622 4,383 Workforce Solutions 473 604 988 1,216 Total gross profit 3,215 3,172 5,610 5,599 Operating loss Engineering (617 ) (1,713 ) (3,041 ) (4,108 ) Workforce Solutions (159 ) (10 ) (518 ) (169 ) Operating loss (776 ) (1,723 ) (3,559 ) (4,277 ) Interest expense, net (767 ) (358 ) (1,053 ) (506 ) Change in fair value of derivative instruments, net 171 695 240 114 Other income, net (98 ) (72 ) (88 ) (56 ) Loss before income taxes $ (1,470 ) $ (1,458 ) $ (4,460 ) $ (4,725 ) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 16 - Commitments and Contingencies Per ASC 450 Accounting for Contingencies , the Company reviews potential items and areas where a loss contingency could arise. In the opinion of management, we are not a party to any legal proceeding, the outcome of which, in management’s opinion, individually or in the aggregate, would have a material effect on our consolidated results of operations, financial position or cash flows. We expense legal defense costs as incurred. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation 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” or “we” or “our” or “the Company” are to GSE Systems, Inc. and our subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE and are unaudited. In the opinion of our management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2022 was derived from our audited financial statements, but it does not include all disclosures required by U.S. GAAP. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission on April 17, 2023. The preparation of financial statements in conformity with 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 financial statements, as well as reported amounts of revenues and expenses during the reporting period. Our most significant estimates relate to revenue recognition on contracts with customers, product warranties, valuation of goodwill and intangible assets acquired including the determination of fair value in impairment tests, valuation of long-lived assets to be disposed of, valuation of stock-based compensation awards, the recoverability of deferred tax assets, and valuation of warrants and derivative liabilities related to our convertible notes. Actual results of these and other items not listed could differ from these estimates and those differences could be material. |
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 U.S. GAAP. 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 (“FASB”) 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 August 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 8-K on November 8, 2022, to disclose receipt of this letter. The Company had 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, and if compliance was not achieved within the initial 180 calendar days we could petition NASDAQ for an additional period of 180 calendar days in which to increase the stock price. Anticipating that it would not regain compliance with the NASDAQ minimum closing bid price requirement by May 3, 2023, on April 19, 2023, the Company submitted a request for an additional 180-day period within which to regain compliance. On May 4, 2023, the Company received a letter from NASDAQ advising that the 180-day extension – expiring on October 30, 2023 – had been granted due to the facts that the Company: • had met the market value of publicly held shares requirement for continuing listing, • had met all other listing requirements for NASDAQ (other than bid price requirement), and • had provided written notice to NASDAQ with a plan of how it intends to regain compliance with the bid price requirement during the second 180-day period. The Company’s plan to regain compliance includes continuing to monitor the closing bid price of its Common Stock and, if appropriate, implementing available options including, but not limited to, undertaking a reverse stock split of its outstanding securities at a ratio within the range of one-for-five to one-to-ten, which will have the initial effect of multiplying the trading price of the Company’s Common Stock by the same ratio. Because such an action requires stockholder approval, the Company put the matter before its stockholders for approval at the 2023 annual meeting of stockholders, which was held on June 12, 2023. The Company’s stockholders approved the proposal and, unless the Company’s Common Stock maintains a closing bid price of $1 per share for at least 10 consecutive trading days, the Company intends to effect a reverse stock split of its outstanding Common Stock at a ratio within the range of one-for-five to one-to-ten prior to October 30, 2023. We believe that compliance with the NASDAQ minimum bid price listing requirement will be achieved before the expiration of the second 180-day period. If compliance is not achieved prior to October 30, 2023, and consequently a delisting letter is issued, the Company may request a hearing before the NASDAQ Hearing Panel with regard to delisting, which may have the effect of staying the delisting and provide the Company with the opportunity to present its further plans to regain compliance. If the Company’s Common Stock ceases to be listed on NASDAQ, Lind Global Fund II LP (“Lind Global”), as the holder of that certain convertible promissory note in the amount of $5,750,000 (as amended, the “2022 Convertible Note”) and that certain convertible promissory note in the amount of $1,800,000 (the “2023 Convertible Note” and, together with the 2022 Convertible Note, the “Convertible Notes”) (see Note 10 for further details), may deliver a notice of event of default together with a demand for payment to the Company for payment in full. 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. During the six months ended June 30, 2023, the Company generated a $0.8 million loss on net cash used in operating activities. As of June 30, 2023, the Company had domestic unrestricted cash and cash equivalents of $1.8 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) | 6 Months Ended |
Jun. 30, 2023 | |
Recent Accounting Pronouncements [Abstract] | |
Accounting pronouncements recently adopted | Accounting pronouncements recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be incurred before it is recognized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard will apply to accounts receivable, loans, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. The Company adopted the new guidance starting January 1, 2023 on a modified retrospective basis. The impact of this ASU is reflected in the consolidated financial statements and was not material. 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. |
Basic and Diluted Loss per Sh_2
Basic and Diluted Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Basic and Diluted Loss per Share [Abstract] | |
Loss Per Share, Basic and Diluted | The number of common shares and common share equivalents used in the determination of basic and diluted loss per common share were as follows: (in thousands, except for share data) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Numerator: Net loss attributed to common stockholders $ (1,498 ) $ (1,401 ) $ (4,449 ) $ (4,835 ) Denominator: Weighted-average shares outstanding for basic earnings per share 24,188,265 21,033,447 23,564,133 21,006,910 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 24,188,265 21,033,447 23,564,133 21,006,910 Total shares considered for dilution 11,769,795 5,352,245 12,263,781 5,352,245 |
Contract Receivables (Tables)
Contract Receivables (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Contract Receivables [Abstract] | |
Contract Receivables | The components of contract receivables were as follows: (in thousands) June 30, 2023 December 31, 2022 Billed receivables $ 4,059 $ 6,074 Unbilled receivables 6,590 5,146 Allowance for credit loss (459 ) (1,156 ) Total contract receivables, net $ 10,190 $ 10,064 |
Allowance For Doubtful Account Rollforward | The following table sets forth the activity in the allowance for credit losses for the three months ended June 30, 2023. (in thousands) Beginning balance at January 1, 2023 $ 1,156 Adoption of ASC326 Current Expected Credit Losses (CECL) 57 Adjusted balance at January 1, 2023 1,213 Current period provision for expected credit loss 7 Write-offs charged against the allowance, net of recoveries (722 ) Currency adjustment (39 ) Balance at June 30 2023 $ 459 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets [Abstract] | |
Net Carrying Amount of Goodwill | The following table shows the gross carrying amount and impairment of goodwill: (in thousands) Goodwill Accumulated Impairment Net Engineering $ 8,278 $ (3,370 ) $ 4,908 Workforce Solutions 8,431 (7,040 ) 1,391 Net book value at June 30, 2023 $ 16,709 $ (10,410 ) $ 6,299 (in thousands) Goodwill Accumulated 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 |
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 June 30, 2023 Gross Carrying Amount Accumulated Amortization Impairment Net Amortized intangible assets: Customer relationships $ 8,628 $ (7,242 ) $ (464 ) $ 922 Trade names 1,689 (1,239 ) - 450 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 527 (504 ) - 23 Alliance agreement 527 (527 ) - - Others 167 (167 ) - - Total $ 12,442 $ (10,583 ) $ (464 ) $ 1,395 (in thousands) As of December 31, 2022 Gross Carrying Amount Accumulated Amortization 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 |
Finite-Lived Intangible Assets, Future Amortization Expense | The following table shows the estimated amortization expense of the definite-lived intangible assets for the next five years and thereafter: (in thousands) Years ended December 31: 2023 remainder $ 215 2024 332 2025 255 2026 204 2027 169 Thereafter 220 Total $ 1,395 |
Equipment, Software and Lease_2
Equipment, Software and Leasehold Improvements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | Equipment, software and leasehold improvements, net consist of the following: (in thousands) June 30, 2023 December 31, 2022 Computer and equipment $ 2,372 $ 2,363 Software 2,291 2,291 Leasehold improvements 659 659 Furniture and fixtures 839 838 6,161 6,151 Accumulated depreciation (5,479 ) (5,379 ) Equipment, software and leasehold improvements, net $ 682 $ 772 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 (see Note 10) and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants as of June 30, 2023 was estimated with the following assumptions. Amended 2022 Convertible Note 2023 Convertible Note Exercise Price $ 1.94 $ 0.50 Common Stock Price $ 0.36 $ 0.36 Risk Free Rate 4.31% 4.13% Volatility 70.0% 75.0% Term (in years) 3.7 yrs. 2.0 yrs. |
Assets and Liabilities Measured at Fair Value | The following table presents assets and liabilities measured at fair value at June 30, 2023 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Derivative liability $ - $ - $ 664 $ 664 Warrant liability - - 1,054 1,054 Cash settled performance-vesting restricted stock units - - 89 89 Total liabilities $ - $ - $ 1,807 $ 1,807 The following table presents assets and liabilities measured at fair value at December 31, 2022 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Derivative liability $ - $ - $ 285 $ 285 Warrant liability - - 267 267 Cash settled performance-vesting restricted stock units - - 51 51 Total liabilities $ - $ - $ 603 $ 603 |
Changes in Fair Value of Level 3 Liabilities | The following table summarizes changes in the fair value of our Level 3 liabilities during the six months ended June 30, 2023 (in thousands) Embedded Redemption Features Warrant Cash Settled PRSUs Level 3 Total Balance at December 31, 2022 $ 285 $ 267 $ 51 $ 603 FV of derivatives with new convertible note issuance 286 1,120 - 1,406 Change in FV included in gain on derivative instruments, net 93 (333 ) - (240 ) Stock compensation less payments made - - 38 38 Balance at June 30, 2023 $ 664 $ 1,054 $ 89 $ 1,807 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt [Abstract] | |
Convertible Note | On February 23, 2022, we entered into a Securities Purchase Agreement, as amended, with Lind Global, pursuant to which we issued to Lind Global the 2022 Convertible Note (see Note 1) and a common stock purchase warrant to acquire 1,283,732 shares of our Common Stock (the “2022 Warrant”). The 2022 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. On June 23, 2023, we entered into a Amended & Restated Agreement to amend the February 23, 2022 Securities Purchase Agreement (Original Note). 2022 Convertible Note 2023 Convertible Note Total Convertible Notes Amount Amount Amount Convertible Note issued $ 5,750 1,800 7,550 Debt discount (750 ) (300 ) (1,050 ) Issuance cost: Commitment fee (175 ) (52 ) (227 ) Balance of investor’s counsel fees (43 ) (34 ) (77 ) Net proceeds of Convertible Note $ 4,782 1,414 6,196 Additional OID costs not in original funds flow (121 ) (15 ) (136 ) Fair value of Warrant Liabilities on issuance (724 ) (1,119 ) (1,843 ) Fair value of Conversion Feature on issuance (306 ) (286 ) (592 ) A 25 30 55 A dditional OID costs not in original funds flow (660 ) 660 - Interest expense accrued on Convertible Note as of June 30, 2023 2,346 9 2,355 Principal and interest payments through June 30, 2023 (3,514 ) - (3,514 ) Balance of Convertible Note as of June 30, 2023 $ 1,828 693 2,521 |
Product Warranty (Tables)
Product Warranty (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Product Warranty [Abstract] | |
Activities in the Accrued Warranty Accounts | The activity in the accrued warranty accounts during the current period is as follows: (in thousands) Balance at January 1, 2023 $ 503 Current period recovery (46 ) Current period claims (27 ) Currency adjustment (3 ) Balance at June 30, 2023 $ 427 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table represents a disaggregation of revenue by type of goods or services for the three and six months ended June 30, 2023 and 2022, along with the reporting segment for each category: (in thousands) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Engineering System Design and Build $ 2,139 $ 2,042 $ 3,609 $ 3,443 Over time 2,139 2,042 3,609 3,443 Software and Support 1,100 1,178 2,289 1,937 Point in time 55 87 368 175 Over time 1,045 1,091 1,921 1,762 Training and Consulting Services 5,805 4,733 10,088 8,970 Point in time 101 727 297 1,145 Over time 5,704 4,006 9,791 7,825 Workforce Solutions Training and Consulting Services 3,343 4,792 7,274 10,670 Point in time 90 - 209 - Over time 3,253 4,792 7,065 10,670 Total revenue $ 12,387 $ 12,745 $ 23,260 $ 25,020 |
Balance of Contract Liabilities and Revenue Recognized in Reporting Period | The following table reflects revenue recognized in the reporting periods presented that was included in contract liabilities from contracts with customers as of the beginning of the periods presented: ( in thousands Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period $ 1,255 $ 1,036 $ 3,105 $ 2,492 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Provision for (Benefit from) Income Taxes | The following table presents the provision for income taxes and our effective tax rates: (in thousands) Three months ended Six months ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 (Loss) income before income taxes $ (1,470 ) $ (1,458 ) $ (4,460 ) $ (4,725 ) Provision for (benefit from) income taxes 28 (57 ) (11 ) 110 Effective tax rate (1.90 )% 3.9 % 0.25 % (2.3 )% |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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) As of Operating Leases Classification June 30, December 31, 2022 Leased Assets Operating lease - right of use assets Long term assets $ 609 $ 506 Lease Liabilities Operating lease liabilities - Current Other current liabilities 228 418 Operating lease liabilities Long term liabilities 358 160 $ 586 $ 578 |
Lease Income and Expenses | The table below summarizes lease income and expense recorded in the consolidated statements of operations incurred during the three and six months ended June 30, 2023 and 2022, ( in thousands Three months ended Six months ended Lease Cost Classification June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease cost (1) Selling, general and administrative expenses $ 115 $ 174 $ 243 $ 360 Short-term leases costs (2) Selling, general and administrative expenses 10 15 25 30 Sublease income (3) Selling, general and administrative expenses - (19 ) - (37 ) Net lease cost $ 125 $ 170 $ 268 $ 353 (1) Includes variable lease costs which are immaterial. ( 2 ) Includes leases maturing less than twelve months from the report date. (3) Sublease portfolio consists of two tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. |
Future Minimum Lease Payments | The Company is obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of June 30, 2023 are as follows: (in thousands) Gross Future Minimum Lease Payments 2023 remainder $ 123 2024 223 2025 96 2026 92 2027 127 Thereafter - Total lease payments $ 661 Less: Interest 75 Present value of lease payments $ 586 |
Operating Lease Weighted Average Remaining Lease Term And Discount Rate | We calculated the weighted-average remaining lease term, presented in years below and the weighted-average discount rate for our operating leases, and we use the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate June 30, 2023 December 31, 2022 Weighted-average remaining lease term (years) Operating leases 3.52 1.51 Weighted-average discount rate Operating leases 6.12% 5.00% |
Classification of Lease Payments in the Statement of Cash Flows | The table below sets out the classification of lease payments in the consolidated statement of cash flows. (in thousands) Six months ended Cash paid for amounts included in measurement of liabilities June 30, 2023 June 30, 2022 Operating cash flows used in operating leases $ 358 $ 642 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information [Abstract] | |
Reconciliation of Segment Revenue to Consolidated Revenue and Operating Results to Consolidated Income Before Income Taxes | The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant: Three months ended Six months ended (in thousands) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenue: Engineering $ 9,044 $ 7,953 $ 15,986 $ 14,350 Workforce Solutions 3,343 4,792 7,274 10,670 Total revenue 12,387 12,745 23,260 25,020 Gross Profit Engineering 2,742 2,568 4,622 4,383 Workforce Solutions 473 604 988 1,216 Total gross profit 3,215 3,172 5,610 5,599 Operating loss Engineering (617 ) (1,713 ) (3,041 ) (4,108 ) Workforce Solutions (159 ) (10 ) (518 ) (169 ) Operating loss (776 ) (1,723 ) (3,559 ) (4,277 ) Interest expense, net (767 ) (358 ) (1,053 ) (506 ) Change in fair value of derivative instruments, net 171 695 240 114 Other income, net (98 ) (72 ) (88 ) (56 ) Loss before income taxes $ (1,470 ) $ (1,458 ) $ (4,460 ) $ (4,725 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Prices $ / shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | 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 | $ 1 | $ 1 | |||
Number of consecutive trading days | 10 days | |||||
Additional period to increase stock price | 180 days | |||||
Number of extension days | 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 | $ (776) | $ (1,723) | $ (3,559) | $ (4,277) | $ (14,400) | |
Loss on net cash used in operating activities | (823) | 1,639 | ||||
Cash and cash equivalents | 1,775 | 5,364 | 1,775 | 5,364 | 2,789 | |
Convertible Note [Member] | ||||||
Liquidity and Going Concern [Abstract] | ||||||
Convertible promissory note | 6,196 | 6,196 | ||||
2022 Convertible Promissory Note [Member] | ||||||
Liquidity and Going Concern [Abstract] | ||||||
Convertible promissory note | 5,750 | 5,750 | ||||
2023 Convertible Promissory Note. [Member] | ||||||
Liquidity and Going Concern [Abstract] | ||||||
Convertible promissory note | 1,800 | $ 1,800 | ||||
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 | 1,800 | $ 1,800 | ||||
Workforce Solutions [Member] | ||||||
Liquidity and Going Concern [Abstract] | ||||||
Operating loss | $ (159) | $ (10) | $ (518) | $ (169) | ||
Long-lived assets and goodwill impairment | $ 7,500 |
Basic and Diluted Loss per Sh_3
Basic and Diluted Loss per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator [Abstract] | ||||
Net loss attributed to common stockholders | $ (1,498) | $ (1,401) | $ (4,449) | $ (4,835) |
Denominator [Abstract] | ||||
Weighted-average shares outstanding for basic earnings per share (in shares) | 24,188,265 | 21,033,447 | 23,564,133 | 21,006,910 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) | 24,188,265 | 21,033,447 | 23,564,133 | 21,006,910 |
Total shares considered for dilution (in shares) | 11,769,795 | 5,352,245 | 12,263,781 | 5,352,245 |
Coronavirus Aid, Relief and E_2
Coronavirus Aid, Relief and Economic Security Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2021 | |
Employee Retention Credits [Abstract] | |||||
Tax benefit recognized | $ 28 | $ (57) | $ (11) | $ 110 | |
Employee Retention Credits [Member] | |||||
Employee Retention Credits [Abstract] | |||||
Refund of employee retention credit | 5,000 | 5,000 | $ 5,000 | ||
Tax benefit recognized | 2,200 | ||||
Other income | $ 7,200 | ||||
Refund of employee retention credit receivable | $ 100 | $ 100 |
Contract Receivables (Details)
Contract Receivables (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jul. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) Segment | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Contract Receivables [Abstract] | |||||||
Maximum term of contract receivables | 12 months | ||||||
Components of contract receivables [Abstract] | |||||||
Billed receivables | $ 4,059 | $ 4,059 | $ 6,074 | ||||
Unbilled receivables | 6,590 | 6,590 | 5,146 | ||||
Allowance for credit loss | (459) | (459) | (1,156) | ||||
Total contract receivables, net | 10,190 | 10,190 | 10,064 | ||||
Number of geographic portfolio segments | Segment | 3 | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||||
Beginning balance | $ 1,156 | 1,156 | |||||
Current period provision for expected credit loss | 7 | ||||||
Write-offs charged against the allowance, net of recoveries | (722) | ||||||
Currency adjustment | (39) | ||||||
Ending balance | 459 | 459 | |||||
Credit (recovery) loss expense | (2) | $ 97 | 30 | $ 97 | |||
Unbilled Contract Receivables [Abstract] | |||||||
(Loss) gain on foreign exchange contracts | $ (55) | $ 51 | 17 | $ 54 | |||
Subsequent Event [Member] | |||||||
Unbilled Contract Receivables [Abstract] | |||||||
Subsequent billing | $ 3,800 | ||||||
ASC 326 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
Components of contract receivables [Abstract] | |||||||
Allowance for credit loss | (57) | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||||
Beginning balance | 57 | 57 | |||||
ASC 326 [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||||
Components of contract receivables [Abstract] | |||||||
Allowance for credit loss | $ (1,213) | ||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||||
Beginning balance | $ 1,213 | $ 1,213 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill, Impaired [Abstract] | |||||
Goodwill | $ 16,709 | $ 16,709 | $ 16,709 | ||
Accumulated Impairment | (10,410) | (10,410) | (10,410) | ||
Net | 6,299 | 6,299 | 6,299 | ||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 12,442 | 12,442 | 12,442 | ||
Accumulated amortization | (10,583) | (10,583) | (10,291) | ||
Impairment | $ (464) | (464) | |||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Intangible assets, net | ||||
Total | 1,395 | $ 1,395 | 1,687 | ||
Amortization of intangible assets | 131 | $ 231 | 292 | $ 491 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
2023 remainder | 215 | 215 | |||
2024 | 332 | 332 | |||
2025 | 255 | 255 | |||
2026 | 204 | 204 | |||
2027 | 169 | 169 | |||
Thereafter | 220 | 220 | |||
Total | 1,395 | 1,395 | 1,687 | ||
Engineering [Member] | |||||
Goodwill, Impaired [Abstract] | |||||
Goodwill | 8,278 | 8,278 | 8,278 | ||
Accumulated Impairment | (3,370) | (3,370) | (3,370) | ||
Net | 4,908 | 4,908 | 4,908 | ||
Workforce Solutions [Member] | |||||
Goodwill, Impaired [Abstract] | |||||
Goodwill | 8,431 | 8,431 | 8,431 | ||
Accumulated Impairment | (7,040) | (7,040) | (7,040) | ||
Net | 1,391 | 1,391 | 1,391 | ||
Customer Relationships [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 8,628 | 8,628 | 8,628 | ||
Accumulated amortization | (7,242) | (7,242) | (7,050) | ||
Impairment | (464) | (464) | |||
Total | 922 | 922 | 1,114 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 922 | 922 | 1,114 | ||
Trade Names [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 1,689 | 1,689 | 1,689 | ||
Accumulated amortization | (1,239) | (1,239) | (1,196) | ||
Impairment | 0 | 0 | |||
Total | 450 | 450 | 493 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 450 | 450 | 493 | ||
Developed Technology [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 471 | 471 | 471 | ||
Accumulated amortization | (471) | (471) | (471) | ||
Impairment | 0 | 0 | |||
Total | 0 | 0 | 0 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 0 | 0 | 0 | ||
Non-Contractual Customer Relationships [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 433 | 433 | 433 | ||
Accumulated amortization | (433) | (433) | (433) | ||
Impairment | 0 | 0 | |||
Total | 0 | 0 | 0 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 0 | 0 | 0 | ||
Noncompete Agreement [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 527 | 527 | 527 | ||
Accumulated amortization | (504) | (504) | (486) | ||
Impairment | 0 | 0 | |||
Total | 23 | 23 | 41 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 23 | 23 | 41 | ||
Alliance Agreement [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 527 | 527 | 527 | ||
Accumulated amortization | (527) | (527) | (488) | ||
Impairment | 0 | 0 | |||
Total | 0 | 0 | 39 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | 0 | 0 | 39 | ||
Others [Member] | |||||
Amortized Intangible Assets [Abstract] | |||||
Gross carrying amount | 167 | 167 | 167 | ||
Accumulated amortization | (167) | (167) | (167) | ||
Impairment | 0 | 0 | |||
Total | 0 | 0 | 0 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Total | $ 0 | $ 0 | $ 0 |
Equipment, Software and Lease_3
Equipment, Software and Leasehold Improvements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | $ 6,161 | $ 6,161 | $ 6,151 | ||
Accumulated depreciation | (5,479) | (5,479) | (5,379) | ||
Equipment, software and leasehold improvements, net | 682 | 682 | 772 | ||
Depreciation expense | 53 | $ 72 | 101 | $ 144 | |
Computer and Equipment [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 2,372 | 2,372 | 2,363 | ||
Software [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 2,291 | 2,291 | 2,291 | ||
Leasehold Improvements [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 659 | 659 | 659 | ||
Furniture and Fixtures [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | $ 839 | $ 839 | $ 838 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | |
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | $ 1,807 | $ 603 |
Changes in Fair Value of Level 3 Liabilities [Abstract] | ||
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 liabilities | $ 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 1,807 | 603 |
Changes in Fair Value of Level 3 Liabilities [Abstract] | ||
Balance, Beginning Period | 603 | |
FV of derivatives with new convertible note issuance | 1,406 | |
Change in fair value included in gain on derivative instruments, net | (240) | |
Stock compensation less payments made | 38 | |
Balance, Ending Period | 1,807 | |
Embedded Redemption Features [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Changes in Fair Value of Level 3 Liabilities [Abstract] | ||
Balance, Beginning Period | 285 | |
FV of derivatives with new convertible note issuance | 286 | |
Change in fair value included in gain on derivative instruments, net | 93 | |
Stock compensation less payments made | 0 | |
Balance, Ending Period | 664 | |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 89 | 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 liabilities | 0 | 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 liabilities | 0 | 0 |
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 89 | 51 |
Changes in Fair Value of Level 3 Liabilities [Abstract] | ||
Balance, Beginning Period | 51 | |
FV of derivatives with new convertible note issuance | 0 | |
Change in fair value included in gain on derivative instruments, net | 0 | |
Stock compensation less payments made | 38 | |
Balance, Ending Period | 89 | |
Derivative Liability [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 664 | 285 |
Derivative Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 0 | 0 |
Derivative Liability [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 0 | 0 |
Derivative Liability [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 664 | 285 |
Warrant Liability [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 1,054 | 267 |
Warrant Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 0 | 0 |
Warrant Liability [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 0 | 0 |
Warrant Liability [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Total liabilities | 1,054 | $ 267 |
Changes in Fair Value of Level 3 Liabilities [Abstract] | ||
Balance, Beginning Period | 267 | |
FV of derivatives with new convertible note issuance | 1,120 | |
Change in fair value included in gain on derivative instruments, net | (333) | |
Stock compensation less payments made | 0 | |
Balance, Ending Period | $ 1,054 | |
Warrant Liability [Member] | Amended 2022 Convertible Notes [Member] | ||
Fair Value Measurements [Abstract] | ||
Term (in years) | 3 years 8 months 12 days | |
Warrant Liability [Member] | 2023 Convertible Note [Member] | ||
Fair Value Measurements [Abstract] | ||
Term (in years) | 2 years | |
Warrant Liability [Member] | Exercise Price [Member] | Amended 2022 Convertible Notes [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | $ / shares | 1.94 | |
Warrant Liability [Member] | Exercise Price [Member] | 2023 Convertible Note [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | $ / shares | 0.5 | |
Warrant Liability [Member] | Common Stock Price [Member] | Amended 2022 Convertible Notes [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | $ / shares | 0.36 | |
Warrant Liability [Member] | Common Stock Price [Member] | 2023 Convertible Note [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | $ / shares | 0.36 | |
Warrant Liability [Member] | Risk Free Rate [Member] | Amended 2022 Convertible Notes [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.0431 | |
Warrant Liability [Member] | Risk Free Rate [Member] | 2023 Convertible Note [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.0413 | |
Warrant Liability [Member] | Volatility [Member] | Amended 2022 Convertible Notes [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.70 | |
Warrant Liability [Member] | Volatility [Member] | 2023 Convertible Note [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.75 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2022 qtr shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) qtr d $ / shares shares | Jun. 30, 2022 USD ($) qtr d $ / shares shares | |
Share-based Compensation [Abstract] | |||||
Stock options granted (in shares) | 0 | 0 | |||
Convertible Note [Member] | |||||
Share-based Compensation [Abstract] | |||||
Number of trading days | d | 20 | 20 | |||
Exercise price (in dollars per share) | $ / shares | $ 1.5 | $ 1.94 | $ 1.5 | $ 1.94 | |
Stock Option [Member] | |||||
Share-based Compensation [Abstract] | |||||
Stock-based compensation expense | $ | $ 300 | $ 700 | $ 500 | $ 1,000 | |
Restricted Stock Units [Member] | |||||
Share-based Compensation [Abstract] | |||||
Stock-based compensation expense | $ | $ 597,665 | $ 597,665 | $ 200,000 | ||
Granted time-based RSUs (in shares) | 408,270 | 946,653 | 453,270 | 960,250 | |
Aggregate fair value for time-based RSUs | $ | $ 200 | $ 1,400 | $ 200 | $ 1,500 | |
Number of quarters time-based RSU's will vest quarterly | qtr | 8 | ||||
Granted performance-based RSUs (in shares) | 800,000 | 0 | 800,000 | ||
RSUs vested (in shares) | 269,000 | 258,000 | 434,000 | 380,000 | |
Period to fully vest performance RSUs | qtr | 10 | 18 | 15 | ||
Restricted Stock Units [Member] | Minimum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Period in which time-based RSU's will vest annually in equal amounts | 1 year | ||||
Restricted Stock Units [Member] | Maximum [Member] | |||||
Share-based Compensation [Abstract] | |||||
Period in which time-based RSU's will vest annually in equal amounts | 3 years | ||||
PRSUs [Member] | |||||
Share-based Compensation [Abstract] | |||||
RSUs vested (in shares) | 100,000 | 100,000 | |||
Cash Settled PRSUs [Member] | |||||
Share-based Compensation [Abstract] | |||||
RSUs vested (in shares) | 25,000 | 25,000 |
Debt, Convertible Note (Details
Debt, Convertible Note (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 23, 2023 USD ($) $ / shares shares | Feb. 23, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2023 USD ($) Repayment d $ / shares | Jun. 30, 2022 USD ($) d $ / shares | |
Convertible Debt [Abstract] | |||||
Percentage of outstanding principal amount to become due | 120% | ||||
Amortization of debt discount | $ 556,000 | $ 482,000 | |||
Maximum number of monthly repayments | Repayment | 2 | ||||
Minimum market capitalization requirement amount | $ 7,000,000 | $ 7,000,000 | |||
Number of consecutive trading days | 10 days | ||||
Maximum beneficial ownership percentage | 50% | ||||
Maximum percentage of beneficial ownership of outstanding shares of common stock | 4.99% | ||||
Maximum [Member] | |||||
Convertible Debt [Abstract] | |||||
Indebtedness to be maintained in event of default to avoid triggering of default terms | 250,000 | $ 250,000 | |||
Convertible Note [Member] | |||||
Convertible Debt [Abstract] | |||||
Convertible Note issued | 7,550,000 | 7,550,000 | |||
Debt discount | (1,050,000) | (1,050,000) | |||
Balance of Convertible Note | 6,196,000 | 6,196,000 | |||
Additional OID costs not in original funds flow | (136,000) | (136,000) | |||
Allocated OID costs to Warrants | 55,000 | 55,000 | |||
Additional OID costs not in original funds flow | 0 | 0 | |||
Interest expense accrued on Convertible Note | 2,355,000 | ||||
Principal and interest payments | (3,514,000) | ||||
Balance of Convertible Note | $ 2,521,000 | $ 2,521,000 | |||
Number of monthly payments | Repayment | 18 | ||||
Monthly principal repayments | $ 319,000 | ||||
Period for repayment of convertible note from issuance | 180 days | ||||
Number of trading days | d | 20 | 20 | |||
Exercise price (in dollars per share) | $ / shares | $ 1.5 | $ 1.5 | $ 1.94 | ||
Effective interest rate | 68.60% | 68.60% | |||
Amortization of debt discount | $ 1,100,000 | ||||
Default charge | 500,000 | $ 500,000 | |||
Convertible Note [Member] | Embedded Redemption Features [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Conversion Feature on issuance | (592,000) | (592,000) | |||
Convertible Note [Member] | Warrant Liability [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Warrant Liabilities on issuance | (1,843,000) | (1,843,000) | |||
Convertible Note [Member] | Commitment Fee [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | (227,000) | (227,000) | |||
Convertible Note [Member] | Investor's Counsel Fees [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | (77,000) | (77,000) | |||
2022 Convertible Note [Member] | |||||
Convertible Debt [Abstract] | |||||
Purchase of warrant to acquire shares of common stock (in shares) | shares | 1,283,732 | ||||
Convertible Note issued | 5,750,000 | 5,750,000 | |||
Debt discount | (750,000) | (750,000) | |||
Balance of Convertible Note | 4,782,000 | 4,782,000 | |||
Additional OID costs not in original funds flow | (121,000) | (121,000) | |||
Allocated OID costs to Warrants | 25,000 | 25,000 | |||
Additional OID costs not in original funds flow | (660,000) | (660,000) | |||
Interest expense accrued on Convertible Note | 2,346,000 | ||||
Principal and interest payments | (3,514,000) | ||||
Balance of Convertible Note | $ 1,828,000 | $ 1,828,000 | |||
Period for conversion | 6 months | ||||
Conversion price (in dollars per share) | $ / shares | $ 1.94 | ||||
Debt Instrument, Debt Default, Percentage | 20% | 20% | |||
Maturity date | Feb. 29, 2024 | ||||
Conversion ratio | 0.33 | ||||
Percentage of outstanding principal amount to become due | 120% | ||||
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 | ||||
Fair value | $ 700,000 | ||||
Net proceeds from issuance of convertible note | $ 4,800,000 | ||||
2022 Convertible Note [Member] | Embedded Redemption Features [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Conversion Feature on issuance | $ (306,000) | $ (306,000) | |||
2022 Convertible Note [Member] | Warrant Liability [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Warrant Liabilities on issuance | (724,000) | (724,000) | |||
2022 Convertible Note [Member] | Commitment Fee [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | (175,000) | (175,000) | |||
2022 Convertible Note [Member] | Investor's Counsel Fees [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | (43,000) | $ (43,000) | |||
Amended Convertible Note 2022 [Member] | |||||
Convertible Debt [Abstract] | |||||
Balance of Convertible Note | $ 2,747,228 | ||||
Number of monthly payments | Repayment | 12 | ||||
Monthly principal repayments | $ 186,343 | ||||
Maturity date | Aug. 23, 2024 | ||||
Number of final payments | Repayment | 2 | ||||
Amended Convertible Note 2022 [Member] | Payment One [Member] | |||||
Convertible Debt [Abstract] | |||||
Monthly principal repayments | 255,556 | ||||
Amended Convertible Note 2022 [Member] | Payment Two [Member] | |||||
Convertible Debt [Abstract] | |||||
Monthly principal repayments | $ 255,556 | ||||
2023 Convertible Note [Member] | |||||
Convertible Debt [Abstract] | |||||
Purchase of warrant to acquire shares of common stock (in shares) | shares | 4,264,271 | ||||
Convertible Note issued | $ 1,800,000 | 1,800,000 | $ 1,800,000 | ||
Debt discount | (300,000) | (300,000) | |||
Balance of Convertible Note | 1,500,000 | 1,414,000 | 1,414,000 | ||
Additional OID costs not in original funds flow | (15,000) | (15,000) | |||
Allocated OID costs to Warrants | 30,000 | 30,000 | |||
Additional OID costs not in original funds flow | 660,000 | 660,000 | |||
Interest expense accrued on Convertible Note | 9,000 | ||||
Principal and interest payments | 0 | ||||
Balance of Convertible Note | 693,000 | $ 693,000 | |||
Number of monthly payments | Repayment | 12 | ||||
Monthly principal repayments | $ 150,000 | ||||
Period for conversion | 1 year | ||||
Conversion price (in dollars per share) | $ / shares | $ 0.5 | ||||
Conversion ratio | 0.33 | ||||
Percentage of volume-weighted average price | 90% | 85% | |||
Average of trading days | d | 5 | ||||
Number of trading days | d | 20 | ||||
Exercise price (in dollars per share) | $ / shares | $ 0.5 | ||||
Debt instrument term | 2 years | ||||
Number of repayment shares issued and issuable (in shares) | shares | 4,937,271 | ||||
Threshold period for shares available for resale | 6 months | ||||
Lowest trading days | d | 3 | ||||
2023 Convertible Note [Member] | Embedded Redemption Features [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Conversion Feature on issuance | (286,000) | $ (286,000) | |||
2023 Convertible Note [Member] | Warrant Liability [Member] | |||||
Convertible Debt [Abstract] | |||||
Fair value of Warrant Liabilities on issuance | (1,119,000) | (1,119,000) | |||
2023 Convertible Note [Member] | Commitment Fee [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | (52,000) | (52,000) | |||
2023 Convertible Note [Member] | Investor's Counsel Fees [Member] | |||||
Convertible Debt [Abstract] | |||||
Issuance cost | $ (34,000) | $ (34,000) | |||
2023 Convertible Note [Member] | Payment One [Member] | |||||
Convertible Debt [Abstract] | |||||
Monthly principal repayments | $ 300,000 | ||||
2023 Convertible Note [Member] | Payment Two [Member] | |||||
Convertible Debt [Abstract] | |||||
Monthly principal repayments | $ 300,000 |
Debt, Revolving Line of Credit
Debt, Revolving Line of Credit (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2022 USD ($) | Jun. 30, 2023 USD ($) Letter | Jun. 30, 2022 USD ($) | |
Line of Credit Facility [Abstract] | |||
Repayment on line of credit | $ 0 | $ 1,817 | |
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 |
Product Warranty (Details)
Product Warranty (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Product warranty provision [Abstract] | |
Warranty terms for SDB contracts | 1 year |
Accrued warranty, current | $ 276 |
Accrued warranty, noncurrent | 151 |
Activities in product warranty account [Abstract] | |
Balance at beginning of period | 503 |
Current period recovery | (46) |
Current period claims | (27) |
Currency adjustment | (3) |
Balance at end of period | $ 427 |
Revenue (Details)
Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Stream | Jun. 30, 2022 USD ($) | |
Disaggregation of Revenue [Abstract] | ||||
Number of distinct revenue streams | Stream | 3 | |||
Revenue | $ 12,387 | $ 12,745 | $ 23,260 | $ 25,020 |
Contract with Customer, Asset and Liability [Abstract] | ||||
Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period | 1,255 | 1,036 | 3,105 | 2,492 |
Engineering [Member] | System Design and Build [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 2,139 | 2,042 | 3,609 | 3,443 |
Engineering [Member] | System Design and Build [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 2,139 | 2,042 | 3,609 | 3,443 |
Engineering [Member] | Software and Support [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 1,100 | 1,178 | 2,289 | 1,937 |
Engineering [Member] | Software and Support [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 55 | 87 | 368 | 175 |
Engineering [Member] | Software and Support [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 1,045 | 1,091 | 1,921 | 1,762 |
Engineering [Member] | Training and Consulting Services [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 5,805 | 4,733 | 10,088 | 8,970 |
Engineering [Member] | Training and Consulting Services [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 101 | 727 | 297 | 1,145 |
Engineering [Member] | Training and Consulting Services [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 5,704 | 4,006 | 9,791 | 7,825 |
Workforce Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 3,343 | 4,792 | 7,274 | 10,670 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 3,343 | 4,792 | 7,274 | 10,670 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 90 | 0 | 209 | 0 |
Workforce Solutions [Member] | Training and Consulting Services [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | $ 3,253 | $ 4,792 | $ 7,065 | $ 10,670 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes [Abstract] | ||||
(Loss) income before income taxes | $ (1,470) | $ (1,458) | $ (4,460) | $ (4,725) |
Provision for (benefit from) income taxes | $ 28 | $ (57) | $ (11) | $ 110 |
Effective tax rate | (1.90%) | 3.90% | 0.25% | (2.30%) |
Statutory federal income tax rate | 21% | 21% | 21% | 21% |
Income Tax Examination [Abstract] | ||||
Probability of uncertain tax position to be recognized | 50% | |||
Percentage of tax position realized upon ultimate settlement | 50% | |||
Federal [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2003 | |||
State [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2003 | |||
Foreign [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2017 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 07, 2023 ft² | Sep. 26, 2022 ft² | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Tenant | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | ||
Lessee, Lease, Description [Line Items] | ||||||||
Operating lease ROU amortization | $ 109 | $ 134 | $ 230 | $ 320 | ||||
Leased Assets [Abstract] | ||||||||
Operating lease - right of use assets | $ 609 | $ 609 | $ 506 | |||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Operating lease - right of use assets | Operating lease - right of use assets | Operating lease - right of use assets | |||||
Lease Liabilities [Abstract] | ||||||||
Operating lease liabilities - current | $ 228 | $ 228 | $ 418 | |||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | Other current liabilities | |||||
Operating lease liabilities | $ 358 | $ 358 | $ 160 | |||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating lease liabilities | Operating lease liabilities | Operating lease liabilities | |||||
Lease liabilities | $ 586 | $ 586 | $ 578 | |||||
Consolidated Statement of Operations Information [Abstract] | ||||||||
Operating lease cost | [1] | 115 | 174 | 243 | 360 | |||
Short-term leases costs | [2] | 10 | 15 | 25 | 30 | |||
Sublease income | [3] | 0 | (19) | 0 | (37) | |||
Net lease cost | 125 | $ 170 | $ 268 | 353 | ||||
Number of tenants | Tenant | 2 | |||||||
Minimum Lease Payments [Abstract] | ||||||||
2023 remainder | 123 | $ 123 | ||||||
2024 | 223 | 223 | ||||||
2025 | 96 | 96 | ||||||
2026 | 92 | 92 | ||||||
2027 | 127 | 127 | ||||||
Thereafter | 0 | 0 | ||||||
Total lease payments | 661 | 661 | ||||||
Less: Interest | 75 | 75 | ||||||
Lease liabilities | $ 586 | $ 586 | $ 578 | |||||
Lease Term and Discount Rate [Abstract] | ||||||||
Weighted-average remaining lease term (in years) | 3 years 6 months 7 days | 3 years 6 months 7 days | 1 year 6 months 3 days | |||||
Weighted-average discount rate | 6.12% | 6.12% | 5% | |||||
Cash paid for amounts included in measurement of liabilities [Abstract] | ||||||||
Operating cash flows used in operating leases | $ 358 | $ 642 | ||||||
Fort Worth, Texas [Member] | ||||||||
Lease Liabilities [Abstract] | ||||||||
Area of office space leased | ft² | 2,704 | |||||||
Lease expiration date | Nov. 07, 2030 | |||||||
Columbia, Maryland [Member] | ||||||||
Lease Liabilities [Abstract] | ||||||||
Area of office space leased | ft² | 2,200 | |||||||
Lease agreement date | Sep. 26, 2022 | |||||||
Lease expiration date | Nov. 30, 2024 | |||||||
[1] Includes variable lease costs which are immaterial. Includes leases maturing less than twelve months from the report date. |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Number of reportable business segments | Segment | 2 | ||||
Contract term | 2 years | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||
Revenue | $ 12,387 | $ 12,745 | $ 23,260 | $ 25,020 | |
Gross profit | 3,215 | 3,172 | 5,610 | 5,599 | |
Operating loss | (776) | (1,723) | (3,559) | (4,277) | $ (14,400) |
Interest expense, net | (767) | (358) | (1,053) | (506) | |
Change in fair value of derivative instruments, net | 171 | 695 | 240 | 114 | |
Other loss, net | (98) | (72) | (88) | (56) | |
Loss before income taxes | (1,470) | (1,458) | (4,460) | (4,725) | |
Engineering [Member] | |||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||
Revenue | 9,044 | 7,953 | 15,986 | 14,350 | |
Gross profit | 2,742 | 2,568 | 4,622 | 4,383 | |
Operating loss | (617) | (1,713) | (3,041) | (4,108) | |
Workforce Solutions [Member] | |||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||
Revenue | 3,343 | 4,792 | 7,274 | 10,670 | |
Gross profit | 473 | 604 | 988 | 1,216 | |
Operating loss | $ (159) | $ (10) | $ (518) | $ (169) |