What changed in this filing

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Item 1. Financial Statements

2021-08-11 compared with 2021-05-11 · 92 added, 99 removed, 238 unchanged (45% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

March 31, 2021

June 30, 2021

December 31, 2020

1 unchanged sentence

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 5 and $ 38

as of March 31, 2021 and December 31, 2020, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 11 and $ 38 as of

June 30, 2021 and December 31, 2020, 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 March 31, 2021 and December 31, 2020

issued and outstanding, as of June 30, 2021 and December 31, 2020

Common stock—$ 0.001 par value, 200,000,000 shares authorized, 12,248,794 and

12,167,327 shares issued and outstanding, as of March 31, 2021 and December 31, 2020

12,167,327 shares issued and outstanding, as of June 30, 2021 and December 31, 2020

Additional paid-in capital

6 unchanged sentences

(Amounts in thousands, except share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Costs and expenses:

6 unchanged sentences

Interest (expense) income, net

Loss before income taxes

Loss per share:

Basic and diluted

Gain on extinguishment of debt

Income (loss) before income taxes

Net income (loss)

Earnings (loss) per share:

Weighted average number of shares outstanding:

Basic and diluted

See notes to condensed consolidated financial statements

4 unchanged sentences

Additional paid-in

Balance at December 31, 2019

Balance at March 31, 2020

Vesting of restricted stock units

Share-based compensation

Balance at June 30, 2020

Balance at March 31, 2021

Vesting of restricted stock units

Share-based compensation

Balance at June 30, 2021

Treasury stock

Additional paid-in

Balance at December 31, 2019

1 unchanged sentence

Share-based compensation

Balance at March 31, 2021

Balance at June 30, 2020

Balance at December 31, 2020

Vesting of restricted stock units

Share-based compensation

Balance at June 30, 2021

See notes to condensed consolidated financial statements

2 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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

Net income (loss)

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

Depreciation and amortization

4 unchanged sentences

Interest expense

Gain on extinguishment of debt

Changes in assets and liabilities:

11 unchanged sentences

Net cash used in investing activities

Net decrease in cash and cash equivalents

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from long-term loan

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

11 unchanged sentences

The accompanying unaudited condensed consolidated financial statements of Red Violet, Inc.

(“red violet” or the “Company”), a Delaware corporation, have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations.

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

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

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense.

It also requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals.

This guidance is effective for the Company for annual reporting periods beginning after December 15, 2020, on a retrospective or prospective basis.

The Company adopted it on January 1, 2021 on a prospective basis and this guidance had no material impact on the Company’s condensed consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No.

2019-12 (“ASU 2019-12”), “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes” , which is intended to improve consistent application and simplify the accounting for income taxes.

This ASU removes certain exceptions to the general principals in Topic 740 and clarifies and amends existing guidance.

This standard is effective for the Company for annual reporting periods beginning after December 15, 2020.

The Company adopted it on January 1, 2021 and this guidance had no material impact on the Company’s condensed consolidated financial statements and related disclosures.

Loss per share

Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the periods.

Diluted loss 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.

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the periods.

Diluted earnings (loss) 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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except share data)

Weighted average shares outstanding - Basic and diluted (1)

Loss per share:

Basic and diluted:

A total of 1,686,499 and 2,185,577 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three months ended March 31, 2021 and 2020, respectively, as the impact is anti-dilutive .

Net income (loss)

Weighted average shares outstanding:

Earnings (loss) per share:

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, as the impact is anti-dilutive .

Intangible assets, net

Intangible assets other than goodwill consist of the following:

March 31, 2021

June 30, 2021

December 31, 2020

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 $ 1,203 and $ 850 were included in depreciation and amortization expense for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, intangible assets of $ 2,974 , 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 $ 1,598 and $ 2,126 during the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, estimated amortization expense related to the Company’s intangible assets for the remainder of 2021 through 2026 and thereafter are as follows:

Amortization expenses of $ 1,272 and $ 934 for the three months ended June 30, 2021 and 2020, respectively, and $ 2,475 and $ 1,784 for the six months ended June 30, 2021 and 2020, respectively, were included in depreciation and amortization expense.

As of June 30, 2021, intangible assets of $ 2,905 , 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 $ 1,517 and $ 2,018 during the three months ended June 30, 2021 and 2020, respectively, and $ 3,115 and $ 4,144 during the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, estimated amortization expense related to the Company’s intangible assets for the remainder of 2021 through 2026 and thereafter are as follows:

(In thousands)

March 31, 2021

June 30, 2021

Remainder of 2021

1 unchanged sentence

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

As of March 31, 2021 and December 31, 2020, 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 June 30, 2021 and December 31, 2020, 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 .

For the periods ended March 31, 2021 and 2020, no goodwill impairment charges were recorded.

For the periods ended June 30, 2021 and 2020, 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 March 31, 2021 and 2020, 80 % and 69 % of total revenue was attributable to customers with pricing contracts, respectively, versus 20 % and 31 % attributable to transactional customers, respectively.

For the three months ended June 30, 2021 and 2020, 81 % and 79 % of total revenue was attributable to customers with pricing contracts, respectively, versus 19 % and 21 % attributable to transactional customers, respectively.

For the six months ended June 30, 2021 and 2020, 80 % and 73 % of total revenue was attributable to customers with pricing contracts, respectively, versus 20 % and 27 % 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 March 31, 2021 and December 31, 2020, the balance of deferred revenue was $ 453 and $ 504 , 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, 2020, $ 252 was recognized into revenue during the three months ended March 31, 2021.

As of March 31, 2021, $ 3,164 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 June 30, 2021 and December 31, 2020, the balance of deferred revenue was $ 427 and $ 504 , 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, 2020, $ 66 and $ 318 was recognized into revenue during the three and six months ended June 30, 2021, respectively.

As of June 30, 2021, $ 2,602 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.

$ 1,419 of revenue will be recognized in the remainder of 2021, $ 1,058 in 2022, $ 116 in 2023, and $ 9 in 2024.

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.

For the three months ended March 31, 2021 and 2020, 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.

For the three and six months ended June 30, 2021 and 2020, 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 March 31, 2021 and December 31, 2020.

As of March 31, 2021 and December 31, 2020, the number of issued and outstanding shares of common stock was 12,208,077 and 12,167,327 , respectively.

The Company does no t have any unrecognized tax benefits as of June 30 , 20 2 1 and December 31, 20 20 .

As of June 30, 2021 and December 31, 2020, the number of issued and outstanding shares of common stock was 12,248,794 and 12,167,327 , respectively.

The change in the number of issued and outstanding shares of common stock was due to an aggregate of 81,467 shares of common stock issued as a result of the vesting of RSUs.

6 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.

As of March 31, 2021, there were 1,270,415 shares of common stock available for future issuance under the 2018 Plan, as amended.

As of June 30, 2021, there were 1,272,315 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 three months ended March 31, 2021 were as follows:

Details of unvested RSU activity during the six months ended June 30, 2021 were as follows:

Number of units

4 unchanged sentences

Vested not delivered

Unvested as of March 31, 2021

Unvested as of June 30, 2021

During the period from August 29, 2019 to September 8, 2020, the Company granted an aggregate of 277,500 RSUs to its employees.

3 unchanged sentences

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

As of March 31, 2021, the Company determined that the performance criteria were met, and 33,200 shares were included in “Vested not delivered” in the table above.

The Company determined that the performance criteria were met as of March 31, 2021, and 33,200 shares were included in “Vested and delivered” in the table above.

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

As of March 31, 2021, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 9,446 , 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, 2021 and 2020:

Three Months Ended March 31,

As of June 30, 2021, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 6,864 , which is expected to be recognized over a remaining weighted average period of 2.0 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, 2021 and 2020:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

13 unchanged sentences

The Company agreed (i) that the remaining unvested 166,666 RSUs previously granted to Consultant in accordance with the 2018 RSU agreement will 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 will 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 expects to recognize an aggregate of $ 723 in share-based compensation expense over the remaining service period which ends on the Expiration Date.

The Company recognized consulting service fees relating to the Services Agreement of a total of $ 90 during the three months ended March 31, 2021 and 2020.

In addition, amortization of share-based compensation expense of $ 548 and $ 339 for the three months ended March 31, 2021 and 2020, respectively, was recognized in relation to the RSUs previously granted to the Consultant.

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

The Company recognized consulting service fees relating to the Services Agreement of a total of $ 90 during the three months ended June 30, 2021 and 2020, and $ 180 during the six months ended June 30, 2021 and 2020.

In addition, amortization of share-based compensation expense of $ 724 and $ 338 for the three months ended June 30, 2021 and 2020, respectively, and $ 1,272 and $ 679 for the six months ended June 30, 2021 and 2020, 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”).

On May 5, 2020, the Company received funding under a promissory note dated May 5, 2020 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 was made through Legacy Bank of Florida (the “Lender”).

Long-term loan consists of the following:

As of December 31, 2020, long-term loan consists of the following:

(In thousands)

March 31, 2021

December 31, 2020

3 unchanged sentences

Long-term loan (non-current)

The Loan has a two-year term and matures on May 5, 2022 .

The Loan had a two-year term and a contractual maturity of May 5, 2022 .

The interest rate on the Loan is 1.0 % per annum.

Pursuant to the Promissory Note, payments shall be deferred for the first six months of the term of the Loan, followed by 18 approximately equal monthly installments of principal and interest.

The Promissory Note contains customary events of default relating to, among other things, payment defaults, and breach of representations and warranties, or other provisions of the Promissory Note.

As a result of the passage of the Paycheck Protection Program Flexibility Act of 2020 on June 5, 2020, the U.S.

Small Business Administration (“SBA”), provided updated guidance that payments can be deferred until the loan forgiveness is determined, or if the Company does not apply for forgiveness, then 10 months after the Covered Period (as defined below) ends.

The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll, rent and utility costs incurred during the 24-week period that commenced on the date of funding (the “Covered Period”), and if at least 60 % of the proceeds are used for covered payroll costs.

Any forgiveness of the Loan will be subject to approval by the SBA and the Lender.

The Company applied for forgiveness of the Loan in November 2020.

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

Department of Treasury will audit the loan.

Although the Company used the proceeds of the Loan for such covered purposes and applied for forgiveness as required, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.

The fair value of the Loan approximates its carrying amount as of March 31, 2021 as the interest rate approximates market rates for similar loans.

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.

The Company elected the practical expedients to not reassess whether any existing contracts are or contain leases, not reassess the lease classification for any existing leases, and not reassess initial direct costs for any existing leases, upon the adoption of Leases (Topic 842).

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.

The Company also leases an additional office space of 6,003 rentable square feet in accordance with a non-cancellable 90 -month operating lease agreement entered into in April 2017, with an option to extend for additional 60 months.

On June 16, 2021, the Company received a notice from the Lender that the full principal amount of the Loan of $ 2,152 and the accrued interest of $ 23 had been fully forgiven, and the U.S.

Small Business Administration remitted the forgiveness payment to the Lender, resulting in a gain on extinguishment of debt of $ 2,175 during the three months ended June 30, 2021.

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.

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 months ended March 31, 2021 and 2020, a summary of the Company’s lease information is shown below:

Three Months Ended March 31,

For the three and six months ended June 30, 2021 and 2020, a summary of the Company’s lease information is shown below:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2 unchanged sentences

Cash paid for operating leases

As of March 31, 2021, the weighted average remaining operating lease term was 3.6 years.

As of March 31, 2021, scheduled future maturities and present value of the operating lease liabilities are as follows:

As of June 30, 2021, the weighted average remaining operating lease term was 3.3 years.

As of June 30, 2021, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)

March 31, 2021

June 30, 2021

Remainder of 2021

7 unchanged sentences

(a) Capital commitment

The Company incurred data costs of $ 2,122 and $ 2,132 for the three months ended March 31, 2021 and 2020, respectively, under certain data licensing agreements.

As of March 31, 2021, material capital commitments under certain data licensing agreements were $ 8,688 , shown as follows:

The Company incurred data costs of $ 2,108 and $ 2,171 for the three months ended June 30, 2021 and 2020, respectively, and $ 4,230 and $ 4,303 for the six months ended June 30, 2021 and 2020, respectively, under certain data licensing agreements.

As of June 30, 2021, material capital commitments under certain data licensing agreements were $ 12,491 , shown as follows:

(In thousands)

March 31, 2021

June 30, 2021

Remainder of 2021

11 unchanged sentences

The Company has taken numerous steps, and will continue to take further actions as appropriate, to minimize 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.

In accordance with best practices and guidance from the Centers for Disease Control and Prevention, the Company has implemented certain protective safeguards to protect the well-being of its employees, customers, and the communities in which it operates.

The Company will continue to assess the need and timing of these protective measures.

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.

1 unchanged sentence

Transaction volume returned to pre-Covid levels by the end of the third quarter of 2020, except for collection customer volume.

Collection customer transaction volume remained below pre-Covid levels during the first quarter of 2021, down $ 0.7 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 March 31, 2021, 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 second half of 2021.

Collection customer transaction volume returned to pre-Covid levels during the second quarter of 2021, 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.

idiVERIFIED service revenue was down $ 900 for the three months ended June 30, 2021, compared to the three months ended March 31, 2020.

The Company expects its idiVERIFIED service volume to return to pre-Covid levels in the first half of 2022.

Beginning the second quarter of 2020, the Company took a proactive customer-centric approach working with customers who were impacted by Covid-19.

2 unchanged sentences

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.

During the fourth quarter of 2020, the Company provided concessions to a total of 7 customers, representing a $ 32 reduction in minimum committed spend.

The Company continues to work with customers who have been impacted by Covid-19 and consider potential concessions on a case-by-case basis.

During the second quarter of 2021, the Company provided concessions to a total of 5 customers, representing a $ 14 reduction in minimum committed spend.

The Company continues to work with customers who have been impacted by Covid-19 and considers potential concessions on a case-by-case basis.

The Company continues to take precautionary measures intended to minimize the risk of the Covid-19 pandemic to its employees, its customers, and the communities in which it operates.

5 unchanged sentences

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

On May 5, 2020, the Company received the Loan under the CARES Act as discussed in Note 10 above.

On May 5, 2020, the Company received the Loan under the CARES Act , which was fully forgiven in June 2021, as discussed in Note 1 0 above.

The Company will continue to assess the CARES Act and other applicable government legislation aimed at assisting businesses during the Covid-19 pandemic.

In accordance with best practices and guidance from the Centers for Disease Control and Prevention, the Company implemented protective safeguards, including daily temperature checks, mandatory wearing of masks, social distancing, plexiglass protective barriers, and an entire office HVAC UV-C system.

The Company began its first phase of employees returning to the Boca Raton, Florida office in June 2020.

By the end of the first quarter of 2021, nearly all of the Boca Raton office employees have returned to an in-office work environment.

The Company will continue to assess the need and timing of additional employees returning to an in-office work environment.

Given the dynamic nature of this health emergency, the full impact of the Covid-19 pandemic on the Company’s ongoing business, results of operations and overall financial performance cannot be reasonably estimated at this time.

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