What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-09 compared with 2022-11-07 · 61 added, 121 removed, 216 unchanged (46% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

September 30, 2022

March 31, 2023

December 31, 2022

2 unchanged sentences

Accounts receivable, net of allowance for doubtful accounts of $ 40 and $ 60 as of

September 30, 2022 and December 31, 2021, respectively

March 31, 2023 and December 31, 2022, respectively

Prepaid expenses and other current assets

16 unchanged sentences

Preferred stock—$ 0.001 par value, 10,000,000 shares authorized, and 0 shares

issued and outstanding, as of September 30, 2022 and December 31, 2021

issued and outstanding, as of March 31, 2023 and December 31, 2022

Common stock—$ 0.001 par value, 200,000,000 shares authorized, 13,961,643 and

13,488,540 shares issued, 13,873,406 and 13,488,540 shares outstanding, as of

September 30, 2022 and December 31, 2021

Treasury stock, at cost, 1,000 and 0 shares as of September 30, 2022 and

13,956,404 shares issued, and 13,950,706 and 13,956,404 shares outstanding, as of

March 31, 2023 and December 31, 2022

Treasury stock, at cost, 10,937 and 0 shares as of March 31, 2023 and

December 31, 2022

7 unchanged sentences

(Amounts in thousands, except share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Costs and expenses:

5 unchanged sentences

Income from operations

Interest income (expense), net

Gain on extinguishment of debt

Interest income, net

Income before income taxes

Income tax expense

Income tax (benefit) expense

Earnings per share:

6 unchanged sentences

Additional paid-in

Balance at June 30, 2021

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Retirement of treasury stock

Share-based compensation

Balance at September 30, 2021

Balance at June 30, 2022

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Common stock repurchased

Retirement of treasury stock

Share-based compensation

Balance at September 30, 2022

Treasury stock

Additional paid-in

Balance at December 31, 2021

5 unchanged sentences

Share-based compensation

Balance at September 30, 2021

Balance at March 31, 2022

Balance at December 31, 2022

6 unchanged sentences

Share-based compensation

Balance at September 30, 2022

Balance at March 31, 2023

See notes to condensed consolidated financial statements

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Noncash lease expenses

Interest expense

Deferred income tax expense

Gain on extinguishment of debt

Deferred income tax (benefit) expense

Changes in assets and liabilities:

45 unchanged sentences

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for unvested shares.

Common equivalent shares are excluded from the calculation in the loss periods as their effects would be anti-dilutive.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands, except share data)

1 unchanged sentence

Earnings per share:

(1) For the three and nine months ended September 30, 2022 and 2021, diluted weighted average shares outstanding are calculated by the inclusion of unvested restricted stock units ("RSUs").

(1) For the three months ended March 31, 2023 and 2022, diluted weighted average shares outstanding are calculated by the inclusion of unvested restricted stock units ("RSUs").

Intangible assets, net

Intangible assets other than goodwill consist of the following:

September 30, 2022

March 31, 2023

December 31, 2022

4 unchanged sentences

The gross amount associated with software developed for internal use represents capitalized costs of internally-developed software, including eligible salaries and staff benefits, share-based compensation, travel expenses incurred by relevant employees, and other relevant costs.

Amortization expenses of $ 1,659 and $ 1,288 for the three months ended September 30, 2022 and 2021, respectively, and $ 4,682 and $ 3,763 for the nine months ended September 30, 2022 and 2021, respectively, were included in depreciation and amortization expense.

As of September 30, 2022, intangible assets of $ 4,629 , included in the gross amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use.

The Company capitalized costs of software developed for internal use of $ 2,716 and $ 1,457 during the three months ended September 30, 2022 and 2021, respectively, and $ 7,332 and $ 4,572 during the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, estimated amortization expense related to the Company’s intangible assets for the remainder of 2022 through 2027 and thereafter are as follows:

Amortization expenses of $ 1,858 and $ 1,472 for the three months ended March 31, 2023 and 2022, respectively, were included in depreciation and amortization expense.

As of March 31, 2023, intangible assets of $ 5,359 , included in the gross amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use.

The Company capitalized costs of software developed for internal use of $ 2,732 and $ 2,095 during the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, estimated amortization expense related to the Company’s intangible assets for the remainder of 2023 through 2028 and thereafter are as follows:

(In thousands)

September 30, 2022

March 31, 2023

Remainder of 2023

1 unchanged sentence

Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination.

As of September 30, 2022 and December 31, 2021, the balance of goodwill of $ 5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014.

As of March 31, 2023 and December 31, 2022, the balance of goodwill of $ 5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014.

In accordance with ASC 350, “Intangibles - Goodwill and Other,”

1 unchanged sentence

The measurement date of the Company’s annual goodwill impairment test is October 1 .

For the periods ended September 30, 2022 and 2021, no goodwill impairment charges were recorded.

The Company did no t record a goodwill impairment loss during the three months ended March 31, 2023 and 2022, and as of March 31, 2023, there was no accumulated goodwill impairment loss.

Revenue recognition

10 unchanged sentences

practical expedient, available within Topic 606, as its measure of progress, since it has a right to payment from a customer in an amount that corresponds directly with the value of its performance completed-to-date.

In some arrangements, a right to consideration for the Company's performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts receivable.

As of March 31, 2023, the current and noncurrent portion unbilled accounts receivable of $ 733 and $ 757 , respectively, were included within accounts receivable and other noncurrent assets, respectively, on the condensed consolidated balance sheets .

As of December 31, 2022, the current and noncurrent portion unbilled accounts receivable of $ 923 and $ 464 , respectively, were included within accounts receivable and other noncurrent assets, respectively, on the condensed consolidated balance sheets .

The Company's revenue arrangements do not contain significant financing components.

For the three months ended September 30, 2022 and 2021, 68 % and 80 % of total revenue was attributable to customers with pricing contracts, respectively, versus 32 % and 20 % attributable to transactional customers, respectively.

For the nine months ended September 30, 2022 and 2021, 74 % and 80 % of total revenue was attributable to customers with pricing contracts, respectively, versus 26 % and 20 % attributable to transactional customers, respectively.

For the three months ended March 31, 2023 and 2022, 75 % and 77 % of total revenue was attributable to customers with pricing contracts, respectively, versus 25 % and 23 % attributable to transactional customers, respectively.

Pricing contracts are generally annual contracts or longer, with auto renewal.

If a customer pays consideration before the Company transfers services to the customer, those amounts are classiﬁed as deferred revenue.

As of September 30, 2022 and December 31, 2021, the balance of deferred revenue was $ 539 and $ 841 , respectively, all of which is expected to be realized in the next 12 months.

In relation to the deferred revenue balance as of December 31, 2021, $ 115 and $ 583 was recognized into revenue during the three and nine months ended September 30, 2022, respectively.

As of September 30, 2022, $ 8,776 of revenue is expected to be recognized in the future for performance obligations that are unsatisfied or partially unsatisfied , related to pricing contracts that have a term of more than 12 months, of which, $ 1,875 of revenue will be recognized in the remainder of 2022, $ 5,386 in 2023, $ 1,393 in 2024, and $ 122 in 2025.

As of March 31, 2023 and December 31, 2022, the balance of deferred revenue was $ 763 and $ 670 , respectively, all of which is expected to be realized in the next 12 months.

In relation to the deferred revenue balance as of December 31, 2022, $ 283 was recognized into revenue during the three months ended March 31, 2023.

As of March 31, 2023, $ 10,614 of revenue is expected to be recognized in the future for performance obligations that are unsatisfied or partially unsatisfied , related to pricing contracts that have a term of more than 12 months, of which, $ 5,904 of revenue will be recognized in the remainder of 2023, $ 3,858 in 2024, $ 708 in 2025, $ 136 in 2026, and $ 8 in 2027.

The actual timing of recognition may vary due to factors outside of the Company’s control.

6 unchanged sentences

In each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter.

For the three and nine months ended September 30, 2022 and 2021, the Company concluded that, due to a recent history of operating losses, a valuation allowance should be applied to reduce its deferred tax assets to the amount that is more likely than not to be realized.

The Company’s effective income tax rate was 1 % and 0 % for the three months ended September 30, 2022 and 2021, respectively, and 10 % and 0 % for the nine months ended September 30, 2022 and 2021, respectively, differing from the U.S.

corporate statutory federal income tax rate of 21 %.

The Company’s income tax expense for the three and nine months ended September 30, 2022 was primarily a result of the remeasurement of its valuation allowance, which differed from the income tax that would result from applying the U.S.

corporate statutory federal income tax rate of 21% to its income before income taxes.

For the three months ended March 31, 2023 and 2022, the Company concluded that, due to a recent history of operating losses, a valuation allowance should be applied to reduce its deferred tax assets to the amount that is more likely than not to be realized.

The Company’s effective income tax rate was ( 4 %) and 62 % for the three months ended March 31, 2023 and 2022, respectively, differing from the U.S.

corporate statutory federal income tax rate of 21 %, and the difference is primarily the result of the valuation allowance applied to reduce the Company’s deferred tax assets to the amount that is more likely than not to be realized.

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date.

2 unchanged sentences

The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

All of the Company’s income tax filings since 2018 remain open for tax examinations.

The Company does no t have any material unrecognized tax benefits as of September 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, the number of issued shares of common stock was 13,874,406 and 13,488,540 , respectively.

The change in the number of issued shares of common stock was due to the following factors:

An aggregate of 605,899 shares of common stock issued as a result of the vesting of RSUs, of which, 200,033 shares of common stock were withheld to pay withholding taxes upon such vesting, which were reflected in treasury stock, with a cost of $ 4,310 .

The treasury stock of 200,033 shares was then retired during the nine months ended September 30, 2022.

In May 2022, the board of directors of the Company authorized the repurchase of up to $ 5.0 million of the Company's common stock from time to time (the “Stock Repurchase Program”).

Due to the existence of net operating loss carryforwards since inception, all of the Company’s income tax filings remain open for tax examinations.

The Company does no t have any material unrecognized tax benefits as of March 31, 2023 and December 31, 2022.

Common stock and treasury stock

As of March 31, 2023 and December 31, 2022, the number of issued shares of common stock was 13,961,643 and 13,956,404 , respectively, which included shares of treasury stock of 10,937 and 0 , respectively.

The changes in the number of issued shares of common stock and treasury stock were due to the following factors:

An aggregate of 6,800 shares of common stock were issued as a result of the vesting of RSUs, of which, 1,561 shares of common stock were withheld to pay withholding taxes upon such vesting, which were reflected in treasury stock, with a cost of $ 31 .

The treasury stock of 1,561 shares was then retired during the three months ended March 31, 2023.

On May 2, 2022, the board of directors of the Company authorized the repurchase of up to $ 5.0 million of the Company's common stock from time to time (the “Stock Repurchase Program”).

The Stock Repurchase Program does not obligate the Company to repurchase any shares and may be modified, suspended or terminated at any time and for any reason at the discretion of the board of directors.

During the nine months ended September 30, 2022, the Company repurchased 21,000 shares of common stock under the Stock Repurchase Program at a net average price of $ 18.22 per share, which was reflected in treasury stock, with a cost of $ 383 .

The treasury stock of 20,000 shares was then retired during the nine months ended September 30, 2022, with the remaining treasury stock cost balance of $ 18 as of September 30, 2022.

During the three months ended March 31, 2023, the Company repurchased 10,937 shares of common stock under the Stock Repurchase Program, which was reflected in treasury stock, with a cost of $ 201 .

Share-based compensation

On March 22, 2018, the board of directors of the Company and Cogint, Inc.

(“cogint”) (now known as Fluent, Inc.) , in its capacity as sole stockholder of the Company prior to the Company’s spin-off from cogint on March 26, 2018, approved the Red Violet, Inc.

(“cogint”) (now known as Fluent, Inc.), in its capacity as sole stockholder of the Company prior to the Company’s spin-off from cogint on March 26, 2018 (the “Spin-off”), approved the Red Violet, Inc.

2018 Stock Incentive Plan (the “2018 Plan”), which became effective immediately prior to the Spin-off.

1 unchanged sentence

On June 3, 2020, the Company’s stockholders approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance under the 2018 Plan from 3,000,000 shares to 4,500,000 shares, and on May 25, 2022, the Company's stockholders approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance under the 2018 Plan from 4,500,000 shares to 6,500,000 shares.

The primary purpose of the 2018 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

As of September 30, 2022, there were 2,718,037 shares of common stock available for future issuance under the 2018 Plan, as amended.

The primary purpose of the 2018 Plan, as amended, is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

As of March 31, 2023, there were 2,299,607 shares of common stock available for future issuance under the 2018 Plan, as amended.

To date, all stock incentives issued under the 2018 Plan have been in the form of RSUs.

1 unchanged sentence

The time-based condition for these awards is generally satisfied over three or four years with annual vesting.

Details of unvested RSU activity during the nine months ended September 30, 2022 were as follows:

Details of unvested RSU activity during the three months ended March 31, 2023 were as follows:

Number of units

4 unchanged sentences

Withheld as treasury stock (2)

Vested not delivered

Unvested as of September 30, 2022 (3)

(1) During the nine months ended September 30, 2022, the Company granted an aggregate of 117,750 RSUs to certain employees at grant date fair values ranging from $ 16.71 to $ 28.75 per share, with a vesting period ranging from two to four years .

(2) During the period from August 29, 2019 to November 20, 2020, the Company granted an aggregate of 455,000 RSUs.

Such RSU grants shall not vest unless and until the Company has, for any fiscal quarter in which the RSUs are outstanding, (i) gross revenue determined in accordance with the Company’s reviewed or audited financial statements in excess of $ 12.5 million for such fiscal quarter, and (ii) positive adjusted EBITDA of at least $ 2.0 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter, subject to the recipient continuing to provide services to the Company either as an employee, director or consultant on the last day of the quarter that the performance criteria are met.

Provided the respective performance criteria are met, the RSUs will vest in accordance with the time-based requirements contained in the award agreement over three years.

In the event of a change of control, all RSUs which have not vested on the date of such change of control shall immediately vest even if the performance criteria have not been met.

As of the respective grant dates, the Company determined that it was probable that such performance criteria would be met and therefore, began to record the related amortization expense on the grant dates.

The Company determined that the performance criteria were met as of March 31, 2022.

As a result, 259,138 RSUs were included above in "Vested and delivered" and 165,862 RSUs were included above in "Withheld as treasury stock."

(3) On July 30, 2021, the Company granted 120,000 RSUs, subject to performance-based requirements, to one non-executive employee, which was subsequently modified on February 18, 2022, with a fair value of $ 27.23 per share as of the modification date.

Such RSU grants shall no t vest unless and until the Company has achieved certain revenue for a portion of its business prior to the achievement date deadline for each performance milestone.

No amortization of share-based compensation expense has been recognized for these RSUs, because, as of September 30, 2022, the Company determined that it is not probable that such performance criteria will be met.

The 120,000 RSUs were included in "Unvested as of September 30, 2022" with a fair value of $ 27.23 per share.

As of September 30, 2022, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 14,221 , which is expected to be recognized over a remaining weighted average period of 2.5 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30,

Nine Months Ended September 30,

Unvested as of March 31, 2023

(1) During the three months ended March 31, 2023, the Company granted an aggregate of 17,500 RSUs to certain employees at grant date fair values ranging from $ 18.59 to $ 19.59 per share, with a vesting period of four years .

(2) Withheld as treasury stock represents shares withheld to pay statutory taxes upon the vesting of RSUs.

Refer to Note 7, "Common stock and treasury stock," for details.

As of March 31, 2023, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 15,809 , which is expected to be recognized over a remaining weighted average period of 2.3 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

(In thousands)

3 unchanged sentences

Capitalized in intangible assets

Related party transactions

Services Agreement

On August 7, 2018, the Company entered into a services agreement (the “Services Agreement”) with Mr.

Michael Brauser (the “Consultant”), a greater than 10 % stockholder, pursuant to which, the Consultant received cash compensation of $ 30 per month and was entitled to participate in the Company’s incentive compensation plan.

The Services Agreement terminated on August 6, 2021, as further detailed below.

On February 16, 2021, the Company entered into a Separation Agreement (the "Separation Agreement") with the Consultant.

Pursuant to the Separation Agreement, the parties agreed that the Services Agreement which expired on August 6, 2021 (“Expiration Date”), would not be renewed, but would continue in force and effect until the Expiration Date.

As part of the Separation Agreement, the Consultant agreed (i) to certain non-solicitation obligations contained therein, (ii) that he and his affiliates would not disparage or assist or cooperate with any person or entity seeking to publicly disparage or economically harm the Company, (iii) that the Consultant and his affiliates would not initiate any lawsuit, claim, or proceeding with respect to any claims against the Company, except (with designated exceptions) for any legal proceeding initiated solely to remedy a breach of or to enforce the Separation Agreement, and (iv) with respect to each annual or special meeting of the Company's stockholders until the Expiration Date of the Separation Agreement, the Consultant agreed to vote the shares of the Company's common stock or any other securities entitled to vote then held by him or his affiliates in accordance with the board of directors' recommendations on director proposals (subject to certain board of directors change thresholds), and the ratification of the appointment of the Company’s independent registered public accounting firm.

The Company agreed (i) that the remaining unvested 166,666 RSUs previously granted to Consultant in accordance with the 2018 RSU agreement would continue to vest on July 1, 2021, in accordance with and subject to all other provisions and conditions of such grant, (ii) to amend the 2020 RSU agreement, previously granting Consultant 30,000 RSUs such that the 30,000 RSUs would continue to vest 33 -1/3% on November 1, 2021, 66 -2/3% on November 1, 2022, and 100 % on November 1, 2023, without certain Company performance criteria, subject to all other provisions and conditions of such grant, (iii) to include shares of the Company's common stock held by the Consultant or his affiliates in any registration statement the Company files for the benefit of selling stockholders at any time when the Consultant or his affiliates beneficially own 10 % or more of the Company's common stock, and (iv) to not initiate any lawsuit, claim, or proceeding with respect to any claims against the Consultant and his affiliates, except (with designated exceptions) for any legal proceeding initiated solely to remedy a breach of or to enforce the Separation Agreement.

As a result of the modification to the 2020 RSU agreement, beginning February 16, 2021, the Company recognized an aggregate of $ 723 in share-based compensation expense over the remaining service period which ended on the Expiration Date.

The Company recognized consulting service fees relating to the Services Agreement of a total of $ 36 and $ 216 during the three and nine months ended September 30, 2021, respectively.

In addition, amortization of share-based compensation expense of $ 160 and $ 1,432 (inclusive of the amortization of share-based compensation expense in relation with the modification of RSUs mentioned above) for the three and nine months ended September 30, 2021, respectively, was recognized in relation to the RSUs previously granted to the Consultant.

There were no such expenses recognized during the three and nine months ended September 30, 2022.

The Company leases its corporate headquarters of 21,020 rentable square feet in accordance with a non-cancelable 89 -month operating lease agreement as amended and effective in January 2017, with an option to extend for an additional 60 months.

1 unchanged sentence

The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised.

For the three and nine months ended September 30, 2022 and 2021, a summary of the Company’s lease information is shown below:

Three Months Ended September 30,

Nine Months Ended September 30,

For the three months ended March 31, 2023 and 2022, a summary of the Company’s lease information is shown below:

Three Months Ended March 31,

(In thousands)

2 unchanged sentences

Cash paid for operating leases

As of September 30, 2022, the weighted average remaining operating lease term was 2.1 years.

As of September 30, 2022, scheduled future maturities and present value of the operating lease liabilities are as follows:

As of March 31, 2023, the weighted average remaining operating lease term was 1.6 years.

As of March 31, 2023, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)

September 30, 2022

March 31, 2023

Remainder of 2023

7 unchanged sentences

(a) Capital commitment

The Company incurred data costs of $ 2,332 and $ 2,107 for the three months ended September 30, 2022 and 2021, respectively, and $ 6,832 and $ 6,337 for the nine months ended September 30, 2022 and 2021, respectively, under certain data licensing agreements.

As of September 30, 2022, material capital commitments under certain data licensing agreements were $ 28,668 , shown as follows:

The Company incurred data costs of $ 2,361 and $ 2,248 for the three months ended March 31, 2023 and 2022, respectively , under certain data licensing agreements.

As of March 31, 2023, material capital commitments under certain data licensing agreements were $ 24,983 , shown as follows:

(In thousands)

September 30, 2022

March 31, 2023

Remainder of 2023

6 unchanged sentences

However, the results of such matters cannot be predicted with certainty and the Company cannot assure you that the ultimate resolution of any legal or administrative proceeding or dispute will not have a material adverse effect on its business, financial condition, results of operations and cash flows.

During 2020, the Company experienced significantly reduced commercial activity in numerous aspects of its business as a result of the preventative and protective actions taken by federal, state and local governments to combat Covid-19, including the implementation of stay-at-home orders, social distancing policies and certain temporary government-imposed moratoria on collection customers’

During 2021 and the nine months ended September 30, 2022, the Company saw ongoing improvement in its results of operations, with the exception of the Company's idiVERIFIED service, which is an ancillary collections market offering that is purely transactional and of a lower margin profile.

The Company expects its idiVERIFIED service volume to return to pre-Covid levels in the first half of 2023.

To further support the Company’s liquidity, beginning April 1, 2020, the Company elected, under Section 2302 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), to defer payment of the employer portion of Social Security payroll tax.

Under the CARES Act, employers could forgo timely payment of the employer portion of Social Security taxes that would otherwise be due from March 27, 2020 through December 31, 2020, without penalty or interest charges.

Employers must pay 50 % of the deferred amount by December 31, 2021, and the remainder by December 31, 2022.

The Company paid 50% of the deferred amount in December 2021.

On May 5, 2020, the Company received funding under a promissory note dated May 5, 2020 evidencing an unsecured non-recourse loan under the CARES Act, which was fully forgiven by Legacy Bank of Florida and the U.S.

Small Business Administration in June 2021, resulting in a gain on extinguishment of debt of $ 2,175 during the nine months ended September 30, 2021 .

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