What changed in this filing

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Item 1. Financial Statements

2020-11-10 compared with 2020-08-11 · 99 added, 95 removed, 260 unchanged (43% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

June 30, 2020

September 30, 2020

December 31, 2019

2 unchanged sentences

Accounts receivable, net of allowance for doubtful accounts of $ 20 and $ 40

as of June 30, 2020 and December 31, 2019, respectively

as of September 30, 2020 and December 31, 2019, respectively

Prepaid expenses and other current assets

17 unchanged sentences

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

issued and outstanding, as of June 30, 2020 and December 31, 2019

issued and outstanding, as of September 30, 2020 and December 31, 2019

Common stock—$ 0.001 par value, 200,000,000 shares authorized, 12,371,665 and

11,657,912 shares issued, 12,146,910 and 11,554,765 shares outstanding, as of

June 30, 2020 and December 31, 2019

Treasury stock, at cost, 103,147 shares as of June 30, 2020 and December 31, 2019

September 30, 2020 and December 31, 2019

Treasury stock, at cost, 224,755 and 103,147 shares as of September 30, 2020 and

December 31, 2019

Additional paid-in capital

6 unchanged sentences

(Amounts in thousands, except share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Costs and expenses:

5 unchanged sentences

Loss from operations

Interest income, net

Interest (expense) income, net

Loss before income taxes

9 unchanged sentences

Additional paid-in

Balance at March 31, 2019

Balance at June 30, 2019

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Issuance of common stock upon direct

offering to certain investors, net of

issuance costs of $ 55

Share-based compensation

Balance at September 30, 2019

Balance at June 30, 2020

Balance at March 31, 2020

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Share-based compensation

Balance at June 30, 2020

Balance at September 30, 2020

Treasury stock

2 unchanged sentences

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Issuance of common stock upon direct

offering to certain investors, net of

issuance costs of $ 55

Share-based compensation

Balance at June 30, 2019

Balance at September 30, 2019

Balance at December 31, 2019

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Share-based compensation

Balance at June 30, 2020

Balance at September 30, 2020

See notes to condensed consolidated financial statements

2 unchanged sentences

(Amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

3 unchanged sentences

Noncash lease expenses

Interest expense

Changes in assets and liabilities:

6 unchanged sentences

Operating lease liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

3 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of shares, net of issuance costs

Proceeds from long-term loan

Taxes paid related to net share settlement of vesting of restricted stock units

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

24 unchanged sentences

As an emerging growth company, the Company has left open the opportunity to take advantage of the extended transition period provided to emerging growth companies in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), however, it is the Company’s present intention to adopt any applicable new accounting standards timely.

In June 2016, FASB issued ASU No.

2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.” In November 2018, FASB issued ASU No.

2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which amends the scope and transition requirements of ASU 2016-13.

Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

Topic 326 became effective for public companies beginning January 1, 2020, and the Company adopted it on a modified retrospective approach.

The guidance had no material impact on the Company’s condensed consolidated financial statements and related disclosures.

In August 2018, FASB issued ASU No.

In August 2018, Financial Accounting Standard Board (“FASB”) issued ASU No.

2018-15 (“ASU 2018-15”), “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

7 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except share data)

2 unchanged sentences

Basic and diluted:

A total of 2,189,910 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three and six months ended June 30, 2020, and 2,237,000 RSUs have been excluded for the three and six months ended June 30, 2019, as the impact is anti-dilutive.

A total of 1,529,657 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three and nine months ended September 30, 2020, and 1,954,910 RSUs have been excluded for the three and nine months ended September 30, 2019, as the impact is anti-dilutive.

Intangible assets, net

Intangible assets other than goodwill consist of the following:

June 30, 2020

September 30, 2020

December 31, 2019

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 $ 934 and $ 617 for the three months ended June 30, 2020 and 2019, respectively, and $ 1,784 and $ 1,171 for the six months ended June 30, 2020 and 2019, respectively, were included in depreciation and amortization expense.

As of June 30, 2020, intangible assets of $ 4,322 , 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 $ 2,018 and $ 1,651 during the three months ended June 30, 2020 and 2019, respectively, and $ 4,144 and $ 3,231 during the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows:

Amortization expenses of $ 1,063 and $ 689 for the three months ended September 30, 2020 and 2019, respectively, and $ 2,847 and $ 1,860 for the nine months ended September 30, 2020 and 2019, respectively, were included in depreciation and amortization expense.

As of September 30, 2020, intangible assets of $ 2,635 , 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 $ 1,646 and $ 1,708 during the three months ended September 30, 2020 and 2019, respectively, and $ 5,790 and $ 4,939 during the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows:

(In thousands)

June 30, 2020

September 30, 2020

Remainder of 2020

1 unchanged sentence

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

As of June 30, 2020 and December 31, 2019, 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 September 30, 2020 and December 31, 2019, 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,” goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

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

As of June 30, 2020 and December 31, 2019, no goodwill impairment charges were recorded.

For the periods ended September 30, 2020 and 2019, no goodwill impairment charges were recorded.

Revenue recognition

9 unchanged sentences

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

For the three months ended June 30, 2020 and 2019, 79 % and 62 % of total revenue was attributable to customers with pricing contracts, respectively, versus 21 % and 38 % attributable to transactional customers, respectively.

For the six months ended June 30, 2020 and 2019, 73 % and 64 % of total revenue was attributable to customers with pricing contracts, respectively, versus 27 % and 36 % attributable to transactional customers, respectively.

For the three months ended September 30, 2020 and 2019, 68 % and 66 % of total revenue was attributable to customers with pricing contracts, respectively, versus 32 % and 34 % attributable to transactional customers, respectively.

For the nine months ended September 30, 2020 and 2019, 71 % and 65 % of total revenue was attributable to customers with pricing contracts, respectively, versus 29 % and 35 % 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 June 30, 2020 and December 31, 2019, the balance of deferred revenue was $ 151 and $ 128 , 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, 2019, $ 37 and $ 128 was recognized into revenue during the three and six months ended June 30, 2020, respectively.

As of June 30, 2020, $ 3,105 of revenue is expected to be recognized in the future for outstanding performance obligations, primarily related to pricing contracts that have a term of more than 12 months.

As of September 30, 2020 and December 31, 2019, the balance of deferred revenue was $ 180 and $ 128 , 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, 2019, $ 0 and $ 128 was recognized into revenue during the three and nine months ended September 30, 2020, respectively.

As of September 30, 2020, $ 2,626 of revenue is expected to be recognized in the future for outstanding performance obligations, primarily related to pricing contracts that have a term of more than 12 months.

$ 602 of revenue will be recognized in the remainder of 2020, $ 1,860 in 2021, $ 138 in 2022, and $ 26 in 2023 and thereafter.

7 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.

The Company’s effective income tax rate differed from the statutory federal income tax rate of 21 % for the three and six months ended June 30, 2020 and 2019 .

For the three and six months ended June 30, 2020 and 2019, the effective income tax rate was 0 %, and the difference is primarily the result of the full valuation allowance applied against the Company’s deferred tax assets.

For the three and nine months ended September 30, 2020 and 2019, the Company’s effective income tax rate was 0 %, differing from the statutory federal income tax rate of 21 %, and the difference is primarily the result of the full valuation allowance applied against the Company’s deferred tax assets.

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.

3 unchanged sentences

All of the Company’s income tax filings since 2017 remain open for tax examinations.

The Company does no t have any unrecognized tax benefits as of June 30, 2020 and December 31, 2019.

The Company does no t have any unrecognized tax benefits as of September 30, 2020 and December 31, 2019.

Common stock and treasury stock

As of June 30, 2020 and December 31, 2019, the number of issued shares of common stock was 11,707,829 and 11,657,912 , respectively, which included shares of treasury stock of 103,147 and 103,147 , respectively.

As of September 30, 2020 and December 31, 2019, the number of issued shares of common stock was 12,371,665 and 11,657,912 , respectively, which included shares of treasury stock of 224,755 and 103,147 , respectively.

The change in the number of issued shares of common stock was due to an aggregate of 713,753 shares of common stock issued as a result of the vesting of RSUs.

Treasury stock

As of June 30, 2020 and December 31, 2019, the Company held 103,147 shares of treasury stock, with a cost of $ 1,255 , as a result of the shares withheld to pay withholding taxes upon the vesting of RSUs.

As of September 30, 2020 and December 31, 2019, the Company held 224,755 and 103,147 shares of treasury stock, with a cost of $ 3,083 and $ 1,255 , respectively, as a result of the shares withheld to pay withholding taxes upon the vesting of RSUs.

Share-based compensation

3 unchanged sentences

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.

On June 3, 2020, stockholders of the Company 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 .

As of June 30, 2020, there were 1,533,624 shares of common stock available for future issuance under the 2018 Plan, as amended.

Details of unvested RSU activity during the six months ended June 30, 2020 were as follows:

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 .

As of September 30, 2020, there were 1,525,624 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.

RSUs granted under the 2018 Plan vest and settle upon the satisfaction of a time-based condition or with both time- and performance-based conditions.

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, 2020 were as follows:

Number of units

3 unchanged sentences

Vested and delivered

Withheld as treasury stock

Vested not delivered

Unvested as of June 30, 2020

On September 5, 2018 and January 16, 2019, the Company granted an aggregate of 1,487,500 RSUs and 90,000 RSUs, respectively, subject to both time- and performance-based requirements, to certain of its employees and directors, at a grant date fair value of $ 7.69 per share and $ 7.25 per share, respectively, with a three-year vesting period.

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 $ 7.0 million for such fiscal quarter, (ii) positive adjusted EBITDA, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter, and (iii) the participant continues 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 (collectively, the “2018 Performance Criteria”).

Provided the 2018 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 2018 Performance Criteria have not been met.

As of June 30, 2019, the Company determined that the 2018 Performance Criteria were met and one-third of the applicable awards vested and shares underlying such awards were issued in August 2019.

The remaining shares underlying such awards are expected to vest and be issued in accordance with their time-based vesting requirement.

As a result of meeting the 2018 Performance Criteria as of June 30, 2019, the Company recognized a total of $ 953 and $ 5,684 of share-based compensation expense relating to RSUs with the 2018 Performance Criteria for the three months ended June 30, 2020 and 2019, respectively, and $ 1,924 and $ 5,684 for the six months ended June 30, 2020 and 2019, respectively.

On August 28, 2019 and October 28, 2019, the Company granted an aggregate of 681,000 RSUs, subject to both time- and performance-based requirements, to certain employees, at a grant date fair value of $ 11.42 per share and $ 16.42 per share, respectively, with time vesting periods of either three or four years.

On April 17, 2020, the Company granted an aggregate of 11,000 RSUs, subject to both time- and performance-based requirements, to certain employees, at a grant date fair value of $ 21.82 per share, with time vesting periods of either three or four years.

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 (a) $ 10.0 million for such fiscal quarter and positive adjusted EBITDA of at least $ 1.5 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter for 267,000 RSUs, and (b) $ 12.5 million for such fiscal quarter and 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 for 425,000 RSUs, and (ii) the recipient continues to provide services to the Company either as an employee, director or consultant on the last day of the quarter that the performance criteria is met (collectively, the “2019 Performance Criteria”).

Provided the respective 2019 Performance Criteria are met, the RSUs will vest in accordance with the time-based requirements contained in the award agreement over three or four 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 2019 Performance Criteria have not been met.

As of the respective grant dates, the Company determined that it is probable that the 2019 Performance Criteria will be met and therefore, began to record the related amortization expense on the grant dates.

The Company recognized a total of $ 1,411 and $ 2,800 of share-based compensation expense relating to RSUs with the 2019 Performance Criteria for the three and six months ended June 30, 2020, respectively.

As of June 30, 2020, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 10,086 , which is expected to be recognized over a remaining weighted average period of 1.8 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30,

Six Months Ended June 30,

Unvested as of September 30, 2020

As of September 30, 2020, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 7,969 , which is expected to be recognized over a remaining weighted average period of 1.6 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, 2020 and 2019:

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

8 unchanged sentences

Under the Services Agreement, the Consultant receives cash compensation of $ 30 per month and is entitled to participate in the Company’s incentive compensation plan.

The Company recognized consulting service fees relating to the Services Agreement of a total of $ 90 during the three months ended June 30, 2020 and 2019, and $ 180 during the six months ended June 30, 2020 and 2019.

In addition, amortization of share-based compensation expense of $ 338 and $ 1,115 in relation to the RSUs with the 2018 Performance Criteria previously granted to the Consultant was recognized during the three months ended June 30, 2020 and 2019, respectively, and $ 679 and $ 1,115 recognized during the six months ended June 30, 2020 and 2019, respectively.

The Company recognized consulting service fees relating to the Services Agreement of a total of $ 90 during the three months ended September 30, 2020 and 2019, and $ 270 during the nine months ended September 30, 2020 and 2019.

In addition, amortization of share-based compensation expense of $ 343 and $ 343 for the three months ended September 30, 2020 and 2019, respectively, and $ 1,022 and $ 1,458 for the nine months ended September 30, 2020 and 2019, respectively, was recognized in relation to the RSUs previously granted to the Consultant.

Long-term loan

On May 5, 2020, the Company received funding under a promissory note dated May 5, 2020 (the “Promissory Note”) evidencing an unsecured non-recourse loan in the principal amount of $ 2,152 under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (the “Loan”).

The Loan to the Company is being made through Legacy Bank of Florida (the “Lender”).

Long-term loan as of June 30, 2020 consists of the following:

The Loan to the Company was made through Legacy Bank of Florida (the “Lender”).

Long-term loan as of September 30, 2020 consists of the following:

(In thousands)

June 30, 2020

September 30, 2020

Principal amount

11 unchanged sentences

The Company will be required to apply for such forgiveness within 10 months after the Covered Period.

Because the Loan exceeds $ 2,000 , the Company anticipate the U.S.

Because the Loan exceeds $ 2,000 , the Company anticipates the U.S.

Department of Treasury will audit the loan.

Although the Company intends to use the proceeds of the Loan for such covered purposes, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.

Considering the Loan was effective in May 2020, the fair value of the Loan approximates its carrying amount as of June 30, 2020.

Although the Company used the proceeds of the Loan for such covered purposes and intends to apply for forgiveness by the end of December 2020, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.

As the Loan was effective in May 2020, the fair value of the Loan approximates its carrying amount as of September 30, 2020.

On January 1, 2019, the Company adopted Leases (Topic 842) using the modified retrospective method applied to all leases existing at the date of initial application.

3 unchanged sentences

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 six months ended June 30, 2020 and 2019, a summary of the Company’s lease information is shown below:

Three Months Ended June 30,

Six Months Ended June 30,

For the three and nine months ended September 30, 2020 and 2019, a summary of the Company’s lease information is shown below:

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

6 unchanged sentences

The discount rate was calculated on the basis of information available as of January 1, 2019, the application date.

As of June 30, 2020, the weighted average remaining operating lease term was 4.3 years.

As of June 30, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows:

As of September 30, 2020, the weighted average remaining operating lease term was 4.1 years.

As of September 30, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)

June 30, 2020

September 30, 2020

Remainder of 2020

8 unchanged sentences

(a) Capital commitment

The Company incurred data costs of $ 2,171 and $ 1,867 for the three months ended June 30, 2020 and 2019, respectively, and $ 4,303 and $ 3,555 for the six months ended June 30, 2020 and 2019, respectively, under certain data licensing agreements.

As of June 30, 2020, material capital commitments under certain data licensing agreements were $ 10,762 , shown as follows:

The Company incurred data costs of $ 2,093 and $ 1,946 for the three months ended September 30, 2020 and 2019, respectively, and $ 6,396 and $ 5,501 for the nine months ended September 30, 2020 and 2019, respectively, under certain data licensing agreements.

As of September 30, 2020, material capital commitments under certain data licensing agreements were $ 9,012 , shown as follows:

(In thousands)

June 30, 2020

September 30, 2020

Remainder of 2020

9 unchanged sentences

In March 2020, the World Health Organization characterized Covid-19 as a pandemic.

The Company has taken numerous steps, and will continue to take further actions as appropriate, in its approach to minimizing the impact of the Covid-19 pandemic.

The Company has taken numerous steps, and will continue to take further actions as appropriate, in its approach to minimizing the impact of the Covid-19 pandemic on the Company’s business, results of operations and financial performance.

To ensure the health and well-being of its employees, beginning in March 2020, the Company instructed employees at its offices to work from home on a temporary basis.

During the second quarter of 2020, the Company implemented cost containment strategies across all areas of the organization, including continued curtailment of Company travel and partnering with suppliers, landlords and vendors for price concessions and payment deferrals during this interim period.

As a result of preventative and protective actions taken by federal, state and local governments, including the implementation of stay-at-home orders and social distancing policies which resulted in significantly reduced commercial activity, and certain temporary government-imposed moratoria on collection customers’ activities, the Company experienced reduced transactional volume.

In addition, the Company took a proactive customer-centric approach working with customers who were impacted by Covid-19.

Customers who had minimum contractual commitments and requested concessions because they were temporarily unable to meet their minimum contractual commitments as a result of Covid-19 were granted reductions, or eliminations where applicable, of minimums on a month-to-month basis during the second quarter.

Starting in the second quarter of 2020, the Company implemented cost containment strategies across all areas of the organization, including continued curtailment of Company travel and partnering with suppliers, landlords and vendors for price concessions and payment deferrals during this interim period.

Transaction volume returned to pre-Covid levels by the end of the third quarter 2020, except for collection customer volume, which was down $ 1.0 million, primarily attributable to the Company’s idiVERIFIED service, which is an ancillary collections market offering that is purely transactional and of a lower margin profile, for the three months ended September 30, 2020, compared to the three months ended March 31, 2020.

The Company expects collection customer transaction volume, including that of its idiVERIFIED service, to return to pre-Covid levels in the first half of 2021.

During the second and third quarters of 2020, the Company took a proactive customer-centric approach working with customers who were impacted by Covid-19.

The end date of the customer’s agreement was extended by one month for each month of the temporary concession.

In April 2020, the Company provided concessions to a total of 124 customers, representing $ 130 reduction of minimum committed spend.

In May 2020, the Company provided concessions to a total of 123 customers, representing $ 129 reduction of minimum committed spend.

In June 2020, the Company provided concessions to a total of 72 customers, representing $ 83 reduction of minimum committed spend.

Beginning April 1, 2020, the Company elected, under Section 2302 of the CARES Act, to defer payment of the employer portion of Social Security payroll tax.

During the second quarter of 2020, the Company provided concessions to a total of 152 customers, representing a $ 342 reduction in minimum committed spend.

During the third quarter of 2020, the Company provided concessions to a total of 22 customers, representing a $ 94 reduction in minimum committed spend.

To further support the Company’s liquidity, beginning April 1, 2020, the Company elected, under Section 2302 of the CARES Act, to defer payment of the employer portion of Social Security payroll tax.

Under the CARES Act, employers can 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.

7 unchanged sentences

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