What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 67 added, 45 removed, 290 unchanged (28% of the section changed)

6 unchanged sentences

Accounts receivable (net of allowance for doubtful accounts of $ 640 and $ 657 , respectively)

Income tax receivable

Other current assets

17 unchanged sentences

Stockholders' equity:

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,765,975 and 3,770,752 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,786,525 and 3,770,752 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Cost of revenues

7 unchanged sentences

Interest income, net

Net income before income taxes

Income before taxes

Income tax expense

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Foreign currency translation adjustment

4 unchanged sentences

(in thousands, except share and per share amounts)

Accumulated Other Comprehensive

Additional Paid-in

Other Accumulated Comprehensive

Total Stockholders’

5 unchanged sentences

Balance at March 31, 2020

Stock-based compensation expense

Exercise of stock awards, net of tax

Stock repurchase and retirement

Foreign currency translation

Balance at June 30, 2020

Balance at December 31, 2020

4 unchanged sentences

Balance at March 31, 2021

Stock-based compensation expense

Exercise of stock awards, net of tax

Foreign currency translation

Balance at June 30, 2021

The accompanying notes are an integral part of these unaudited financial statements.

2 unchanged sentences

(in thousands)

For the Three Months Ended

For the Six Months Ended

Cash flows from operating activities:

13 unchanged sentences

Cash flows from investing activities:

Capitalized software

Purchase of fixed assets

14 unchanged sentences

Basis of Presentation

The unaudited interim consolidated balance sheet as of March 31, 2021 and consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended March 31, 2021 and 2020 included herein, have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act.

The unaudited interim consolidated balance sheet as of June 30, 2021 and consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the three-month and six-month periods ended June 30, 2021 and 2020 included herein, have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act.

In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the financial statements.

8 unchanged sentences

Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period.

There were no shares issuable upon the exercise of stock options excluded in the computation of diluted earnings per common share during the three-month period ended March 31, 2021 because their impact was anti-dilutive.

Shares issuable upon the exercise of stock options totaling 93,000 were excluded in the computation of diluted earnings per common share during the three-month period ended March 31, 2020 because their impact was anti-dilutive.

There were no shares issuable upon the exercise of stock options excluded in the computation of diluted earnings per common share during the three and six-month period ended June 30, 2021, because their impact was anti-dilutive.

Shares issuable upon the exercise of stock options totaling 93,000 were excluded in the computation of diluted earnings per common share during the three and six-month period ended June 30, 2020, because their impact was anti-dilutive.

Revenue Recognition

Substantially all the Company’s revenue comes from contracts with customers for subscriptions to its cloud-based products or contracts for Communications and Compliance products and services.

Customers consist of public corporate issuers and professional firms, such as investor relations and public relations firms.

Customers consist of public corporate issuers and professional firms, such as investor and public relations firms.

In the case of our news distribution and webcasting offerings, our customers also include private companies.

25 unchanged sentences

The Company invoices its customers based on the billing schedules designated in its contracts, typically upfront on either a monthly, quarterly or annual basis or per transaction at the completion of the performance obligation.

Deferred revenue for the periods presented was primarily related to subscription and service contracts, which are billed upfront, quarterly or annually, however the revenue has not yet been recognized and press release packages which have been prepaid, however the releases have not been disseminated.

The associated deferred revenue is generally recognized ratably over the billing period for subscriptions and as releases are disseminated for press release packages.

Deferred revenue as of March 31, 2021 and December 31, 2020 was $ 2,383,000 and $ 2,212,000 , respectively, and is expected to be recognized within one year.

Revenue recognized for the three months ended March 31, 2021 and 2020, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 1,075,000 and $ 877,000 , respectively.

Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $ 2,966,000 and $ 2,514,000 as of March 31, 2021 and December 31, 2020, respectively.

Deferred revenue as of June 30, 2021, and December 31, 2020, was $ 2,699,000 and $ 2,212,000 , respectively, and is expected to be recognized within one year.

Revenue recognized for the six months ended June 30, 2021, and 2020, that was included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 1,597,000 and $ 1,375,000 , respectively.

Accounts receivable, net of allowance for doubtful accounts, related to contracts with customers was $ 3,599,000 and $ 2,514,000 as of June 30, 2021, and December 31, 2020, respectively.

Since substantially all the contracts have terms of one year or less, the Company has elected to use the practical expedient regarding the existence of a significant financing.

Costs to obtain contracts with customers consist primarily of sales commissions.

As of March 31, 2021, and December 31, 2020, the Company has capitalized $ 53,000 and $ 44,000 , respectively, of costs to obtain contracts that are expected to be amortized over more than one year.

As of June 30, 2021, and December 31, 2020, the Company has capitalized $ 54,000 and $ 44,000 , respectively, of costs to obtain contracts that are expected to be amortized over more than one year.

For contract costs expected to be amortized in less than one year, the Company has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense when incurred.

10 unchanged sentences

Concentration of Credit Risk

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivables.

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable.

The Company places its cash and temporary cash investments with credit quality institutions.

1 unchanged sentence

To reduce its risk associated with the failure of such financial institutions, each quarter the Company evaluates the rating of the financial institution in which it holds deposits.

As of March 31, 2021, the total amount exceeding such limit was $ 19,123,000 .

The Company also had cash-on-hand of $ 108,000 in Europe and $ 886,000 in Canada as of March 31, 2021.

As of June 30, 2021, the total amount exceeding such limit was $ 19,709,000 .

The Company also had cash-on-hand of $ 165,000 in Europe and $ 861,000 in Canada as of June 30, 2021.

The Company believes it did not have any financial instruments that could have potentially subjected us to significant concentrations of credit risk for any relevant period.

13 unchanged sentences

Costs related to design or maintenance of the software are expensed as incurred.

The Company did not capitalize any costs for software development during the three-month periods ended March 31, 2021 and 2020.

The Company recorded amortization expense of $ 132,000 and $ 170,000 during the three-month periods ended March 31, 2021 and 2020, respectively, all of which was recorded in Cost of revenues on the Consolidated Statements of Income, except for $ 5,000 during the three months ended March 31, 2020, which is included in Depreciation and amortization.

Capitalized costs and amortization for the three and six-month periods ended June 30, 2021 and 2020, are as follows (in thousands):

For the Three Months Ended

For the Six Months Ended

Capitalized software development costs

Amortization included in cost of revenues

Amortization included in depreciation and amortization

Impairment of Long-lived Assets

25 unchanged sentences

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

As of March 31, 2021 and December 31, 2020, we believe that the fair value of our financial instruments other than cash and cash equivalents, such as, accounts receivable, our line of credit, and accounts payable approximate their carrying amounts.

As of June 30, 2021 and December 31, 2020, we believe that the fair value of our financial instruments, such as, accounts receivable, our line of credit, and accounts payable approximate their carrying amounts.

Translation of Foreign Financial Statements

26 unchanged sentences

The 2014 Plan is effective through March 31, 2024.

As of March 31, 2021, there are 236,583 shares which remain to be granted under the 2014 Plan.

The following table summarizes information about stock options outstanding and exercisable at March 31, 2021:

As of June 30, 2021, there are 218,818 shares which remain eligible to be granted under the 2014 Plan.

The following table summarizes information about stock options outstanding and exercisable at June 30, 2021:

Options Outstanding

1 unchanged sentence

Exercise Price Range

Weighted Average

Remaining Contractual

Life (in Years)

Weighted Average Remaining

Contractual Life (in Years)

Weighted Average

2 unchanged sentences

15.01 - 17.40

$ 8.01 - 12.00

$ 12.01 - 15.00

$ 15.01 - 17.40

As of March 31, 2021, the Company had unrecognized stock compensation related to the options of $ 2,000 , which will be recognized in the second quarter of 2021.

During the three months ended March 31, 2021 and 2020, the Company did not grant any restricted stock units.

As of March 31, 2021, there was $ 41,000 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized in the second quarter of 2021.

As of June 30, 2021, the Company did not have any unrecognized stock compensation related to the options.

During the three and six months ended June 30, 2021, the Company granted 17,765 restricted stock units with an intrinsic value of $ 25.92 per share.

Non-employee directors were granted 12,765 restricted stock units, which vest on the earlier of the 2022 annual meeting of the shareholders or one year.

The other 5,000 restricted stock units were granted to an employee and vest 50 % during each of the first and second anniversary dates of the date of grant.

During the three and six months ended June 30, 2021, 19,000 restricted stock units with an intrinsic value of $ 10.78 vested.

As of June 30, 2021, there was $ 434,000 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2023.

Stock repurchase and retirement

3 unchanged sentences

Shares Repurchased

Number of Shares Repurchased

Price Paid Per

Total Number of Shares Repurchased

Average Price Paid Per Share

Total Number of Shares Purchased as Part of Publicly Announced Program

12 unchanged sentences

March 1-31, 2021

We recognized income tax expense of $ 163,000 for the three-month period ended March 31, 2021, compared to income tax expense of $ 80,000 during the same period of 2020.

We recognized income tax expense of $ 256,000 and $ 419,000 for the three and six-month periods ended June 30, 2021, respectively, compared to $ 230,000 and $ 310,000 during the same periods of 2020.

At the end of each interim period, we estimate the effective tax rate we expect to be applicable for the full fiscal year and this rate is applied to our results for the year-to-date period, and then adjusted for any discrete period items.

For the three-month periods ended March 31, 2021 and 2020, the variance between the Company’s effective tax rate and the U.S.

statutory rate of 21 % is primarily attributable to state income tax, partially offset by a benefit related to the Foreign Derived Intangible Income (“FDII”) deduction as well as foreign rate differentials.

For the three and six-month periods ended June 30, 2021, the variance between the Company’s effective tax rate and the U.S.

statutory rate of 21 % is primarily attributable to state income tax, partially offset by an excess stock-based compensation benefit, as well as foreign statutory tax rate differentials.

Generally, our leasing activity consists of office leases.

2 unchanged sentences

The new lease, which had a lease commencement date of October 2, 2019, is for 9,766 square feet and expires December 31, 2027.

Minimum lease payments are $ 2,997,000 , not including a tenant improvement allowance of $ 488,000 , which is included in fixed assets as of March 31, 2021.

Minimum lease payments are $ 2,997,000 , not including a tenant improvement allowance of $ 488,000 , which is included in fixed assets as of June 30, 2021.

We recognized a ROU asset and corresponding lease liability of $ 2,596,000 , which represents the present value of minimum lease payments discounted at 3.77 %, the Company’s incremental borrowing rate at lease inception.

2 unchanged sentences

As a result, we have elected the short-term lease recognition exemption for these leases, which means, for those leases we do not expect to extend beyond twelve months, we will not recognize ROU assets or lease liabilities.

Lease liabilities totaled $ 2,275,000 as of March 31, 2021.

Lease liabilities totaled $ 2,190,000 as of June 30, 2021.

The current portion of this liability of $ 375,000 is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $ 1,815,000 is included in Lease liabilities on the Consolidated Balance Sheets.

2 unchanged sentences

The components of lease expense were as follows (in 000’s):

Three months ended

For the Three Months Ended

For the Six Months Ended

Lease expense

1 unchanged sentence

Variable lease expense

The weighted-average remaining non-cancelable lease term for our operating leases was 6.7 years as of March 31, 2021.

As of March 31, 2021, the weighted-average discount rate used to determine the lease liability was 3.8 %.

The future minimum lease payments to be made under non-cancelable operating leases on March 31, 2021, are as follows (in 000’s):

Total lease expense

The weighted-average remaining non-cancelable lease term for our operating leases was 6.5 years as of June 30, 2021.

As of June 30, 2021, the weighted-average discount rate used to determine the lease liability was 3.8 %.

The future minimum lease payments to be made under non-cancelable operating leases on June 30, 2021, are as follows (in 000’s):

Year Ended December 31:

5 unchanged sentences

The following tables present revenue disaggregated by revenue stream in (000’s):

Three months ended March 31,

Three months ended June 30,

Revenue Streams

Communications

We did not have any customers during the three-month periods ended March 31, 2021 or 2020 that accounted for more than 10% of our revenue.

Six months ended June 30,

Revenue Streams

Communications

We did not have any customers during the three and six-month periods ended June 30, 2021 or 2020 that accounted for more than 10% of our revenue.

Line of Credit

1 unchanged sentence

The amount of funds available for borrowing are $ 3,000,000 and the interest rate is LIBOR plus 1.75 %.

As of March 31, 2021, the interest rate was 1.86 % and the Company did not owe any amounts on the Line of Credit.

As of June 30, 2021, the interest rate was 1.84 % and the Company did not owe any amounts on the Line of Credit.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements