What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-11 compared with 2021-05-11 · 121 added, 62 removed, 150 unchanged (55% of the section changed)

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Our intelligent platform, CORE TM , is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence.

We drive wokflow efficiency and enable organizations to make better data-driven decisions.

We drive workflow efficiency and enable organizations to make better data-driven decisions.

Organizations are challenged by the structure, volume and disparity of data.

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FOREWARN is an app-based solution currently tailored for the real estate industry, providing instant knowledge prior to face-to-face engagement with a consumer, helping professionals identify and mitigate risk.

As of March 31, 2021 and 2020, idiCORE had 5,902 and 5,326 billable customers and FOREWARN had 58,831 and 36,506 users, respectively.

As of June 30, 2021 and 2020, idiCORE had 6,141 and 5,375 billable customers and FOREWARN had 67,578 and 40,857 users, respectively.

The Company defines a billable customer of idiCORE as a single entity that generated revenue during the last three months of the period.

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

Revenue from pricing contracts represented 80 % and 69 % of total revenue for the three months ended March 31, 202 1 and 20 20 , respectively .

Revenue from pricing contracts represented 81 % and 80 % of total revenue for the three and six months ended June 30, 202 1 , respectively, as compared to 79 % and 73 % for the three and six months ended June 30, 20 20 , respectively .

We endeavor to understand our customers’ needs at the moment of first engagement.

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We have taken numerous steps, and will continue to take further actions as appropriate, to minimize the impact of the Covid-19 pandemic on our business, results of operations and financial performance.

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

In accordance with best practices and guidance from the Centers for Disease Control and Prevention, we have implemented certain protective safeguards to protect the well-being of our employees, our customers, and the communities in which we operate.

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

Starting in the second quarter of 2020, we 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 that resulted in significantly reduced commercial activity, and certain temporary government-imposed moratoria on collection customers’ activities, we experienced reduced transaction volume in the second and third quarters of 2020.

Transaction volume returned to pre-Covid levels by the end of the third quarter 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 our 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.

We expect collection customer transaction volume, including that of our idiVERIFIED service, to return to pre-Covid levels in the second half of 2021.

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 returned to pre-Covid levels during the second quarter of 2021, with the exception of our idiVERIFIED service, which is an ancillary collections market offering that is purely transactional and of a lower margin profile.

idiVERIFIED service revenue was down $0.9 million for the three months ended June 30, 2021, compared to the three months ended March 31, 2020.

We expect idiVERIFIED service volume to return to pre-Covid levels in the first half of 2022.

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

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

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

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

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

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

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We will continue to evaluate the nature and extent of the impact of the Covid-19 pandemic to our business.

To further support our liquidity, b eginning April 1, 2020, we 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.

To further support our liquidity, beginning April 1, 2020, we 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 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.

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

On May 5, 2020, we received funding under a promissory note dated May 5, 2020 evidencing an unsecured non-recourse loan in the principal amount of $2.2 million under the CARES Act (the “Loan”) .

We submitted an application for forgiveness of the Loan in November 2020.

On May 5, 2020, we received funding under a promissory note dated May 5, 2020 evidencing an unsecured non-recourse loan in the principal amount of $2.2 million under the CARES Act (the “Loan”), which was fully forgiven by Legacy Bank of Florida (the “Lender”) and the U.S.

Small Business Administration in June 2021, resulting in a gain on extinguishment of debt of $2.2 million during the three months ended June 30, 2021.

We 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, we implemented protective safeguards, including daily temperature checks, mandatory wearing of masks, social distancing, plexiglass protective barriers, and an entire office HVAC UV-C system .

We began our 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.

We 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 our ongoing business, results of operations and overall financial performance cannot be reasonably estimated at this time.

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See Note 1(b), “ Recently issued accounting standards,” in “Notes to Condensed Consolidated Financial Statements.”

First Quarter Financial Results

For the three months ended March 31, 2021 as compared to the three months ended March 31, 2020:

Second Quarter Financial Results

For the three months ended June 30, 2021 as compared to the three months ended June 30, 2020:

Total revenue increased 54% to $10.9 million.

Platform revenue increased 54% to $10.6 million.

Services revenue decreased 66% to $0.4 million.

Net loss narrowed 61% to $0.6 million.

Services revenue increased 46% to $0.3 million.

Net income was $1.8 million, inclusive of a one-time gain of $2.2 million on the extinguishment of debt from the forgiveness of our Cares Act Loan, compared to a loss of $2.5 million.

Adjusted EBITDA increased 245% to $3.1 million.

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Adjusted gross margin increased to 75% from 63%.

Generated $1.2 million in cash from operating activities in the first quarter.

Cash and cash equivalents were $12.9 million as of March 31, 2021.

First Quarter and Recent Business Highlights

Generated $2.3 million in cash from operating activities in the second quarter.

Cash and cash equivalents were $13.9 million as of June 30, 2021.

Second Quarter and Recent Business Highlights

Revenue attributable to customer contracts reached a record 81%.

Customer contracts are generally annual contracts or longer with auto renewal.

Added over 170 new customers to idiCORE™ during the first quarter, ending the quarter with 5,902 customers.

Added over 10,400 users to FOREWARN ® during the first quarter, ending the quarter with 58,831 users.

Added over 230 new customers to idiCORE™ during the second quarter, ending the quarter with 6,141 customers.

Added over 8,700 users to FOREWARN ® during the second quarter, ending the quarter with 67,578 users.

Over 150 REALTOR ® Associations throughout the U.S.

are now contracted to use FOREWARN.

Added two seasoned business development leaders with deep industry knowledge across multiple verticals we serve today.

Continue to expand leadership talent and depth, with the addition of Jim Greenwell, GM – Identity, and James Frasche, EVP – Property Solutions.

Appointed Lisa Stanton as an independent director of the Board of Directors, strengthening our corporate governance and providing deep expertise in FinTech, identity and security.

Platform revenue consists of both contractual and transactional revenue generated from our technology platform, CORE.

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Use and Reconciliation of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted gross profit and adjusted gross margin.

Adjusted EBITDA is a financial measure equal to net loss, the most directly comparable financial measure based on GAAP, excluding interest expense (income), net, depreciation and amortization, share-based compensation expense, litigation costs and write-off of long-lived assets and others, as noted in the tables below.

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit and adjusted gross margin.

Adjusted EBITDA is a financial measure equal to net income (loss), the most directly comparable financial measure based on GAAP, excluding interest expense (income), net, depreciation and amortization, share-based compensation expense, gain on extinguishment of debt, litigation costs and write-off of long-lived assets and others, as noted in the tables below.

We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue.

We define adjusted gross profit as revenue less cost of revenue (exclusive of depreciation and amortization), and adjusted gross margin as adjusted gross profit as a percentage of revenue.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Net income (loss)

Interest expense (income), net

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Share-based compensation expense

Gain on extinguishment of debt

Litigation costs

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Adjusted EBITDA

Net income (loss) margin

Adjusted EBITDA margin

The following is a reconciliation of gross profit, the most directly comparable GAAP financial measure, to adjusted gross profit:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Adjusted gross margin

In order to assist readers of our condensed consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present non-GAAP measures of adjusted EBITDA, adjusted gross profit and adjusted gross margin as supplemental measures of our operating performance.

In order to assist readers of our condensed consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present non-GAAP measures of adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit and adjusted gross margin as supplemental measures of our operating performance.

We believe they provide useful information to our investors as they eliminate the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance.

In addition, we use them as an integral part of our internal reporting to measure the performance and operating strength of our business.

We believe adjusted EBITDA, adjusted gross profit and adjusted gross margin are relevant and provide useful information frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours and are indicators of the operational strength of our business.

We believe adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit and adjusted gross margin are relevant and provide useful information frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours and are indicators of the operational strength of our business.

We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, share-based compensation expense and the impact of other non-recurring items, providing useful comparisons versus prior periods or forecasts.

Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue .

Our adjusted gross profit is a measure used by management in evaluating the business’s current operating performance by excluding the impact of prior historical costs of assets that are expensed systematically and allocated over the estimated useful lives of the assets, which may not be indicative of the current operating activity.

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Adjusted gross margin is calculated as adjusted gross profit as a percentage of revenue .

Adjusted EBITDA, adjusted gross profit and adjusted gross margin are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with GAAP.

The way we measure adjusted EBITDA, adjusted gross profit and adjusted gross margin may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements .

Adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit and adjusted gross margin are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with GAAP.

The way we measure adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit and adjusted gross margin may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.

Results of Operations

Three months ended March 31, 2021 compared to three months ended March 31, 2020

Revenue increased $0.9 million or 10% to $10.2 million for the three months ended March 31, 2021 from $9.3 million for the three months ended March 31, 2020.

Three months ended June 30, 2021 compared to three months ended June 30, 2020

Revenue increased $3.8 million or 54% to $10.9 million for the three months ended June 30, 2021 from $7.1 million for the three months ended June 30, 2020.

This increase was driven by strong growth in usage from existing customers, with base revenue from existing customers increasing $3.3 million or 66%, and growth revenue from existing customers increasing $0.5 million or 46%.

Our idiCORE billable customer base grew from 5,375 customers as of June 30, 2020 to 6,141 customers as of June 30, 2021, and our FOREWARN user base grew from 40,857 users to 67,578 users during that same period.

Base revenue from existing customers represents the total monthly revenue generated from existing customers in a given period that does not exceed the customers' trailing six-month average revenue.

A customer is defined as an existing customer six months after their initial month of revenue.

Growth revenue from existing customers represents the total monthly revenue generated from existing customers in a given period in excess of the customers' trailing six-month average revenue.

Cost of revenue (exclusive of depreciation and amortization) .

Cost of revenue increased $0.1 million or 5% to $2.7 million for the three months ended June 30, 2021 from $2.6 million for the three months ended June 30, 2020.

Our cost of revenue primarily includes data acquisition costs.

Data acquisition costs consist primarily of the costs to acquire data either on a transactional basis or through flat-fee data licensing agreements, including unlimited usage agreements.

We continue to enhance the breadth and depth of our data through the addition and expansion of relationships with key data suppliers, including our largest data supplier, which accounted for approximately 50% of our total data acquisition costs for the three months ended June 30, 2021 compared to approximately 51% for the three months ended June 30, 2020.

Other cost of revenue items include expenses related to third-party infrastructure fees.

As the construct of our data costs is primarily a flat-fee, unlimited usage model, the cost of revenue as a percentage of revenue decreased to 25% for the three months ended June 30, 2021 from 37% for the three months ended June 30, 2020.

We expect that cost of revenue as a percentage of revenue will continue to decrease over the coming years as our revenue increases.

Historically, at scale, the industry business model’s cost of revenue will trend between 15% and 30% as a percentage of revenue.

Sales and marketing expenses .

Sales and marketing expenses increased $0.6 million or 35% to $2.3 million for the three months ended June 30, 2021 from $1.7 million for the three months ended June 30, 2020.

Sales and marketing expenses consist of salaries and benefits, advertising and marketing, travel expenses, and share-based compensation expense, incurred by our sales team, and provision for bad debts.

The increase during the three months ended June 30, 2021 was primarily attributable to an aggregate of $0.6 million increase in salaries and benefits and sales commissions from increased revenue.

General and administrative expenses .

General and administrative expenses increased $0.6 million or 15% to $4.9 million for the three months ended June 30, 2021 from $4.3 million for the three months ended June 30, 2020.

For the three months ended June 30, 2021 and 2020, our general and administrative expenses consisted primarily of employee salaries and benefits of $1.6 million and $1.0 million, share-based compensation expense of $2.0 million and $2.2 million, and professional fees of $0.7 million and $0.5 million, respectively.

Depreciation and amortization .

Depreciation and amortization expenses increased $0.

3 million or 3 4 % to $ 1 .

3 million for the three months ended June 30 , 20 2 1 from $ 1 .

0 million for the three months ended June 30 , 20 20 .

The increase in depreciation and amortization for the three months ended June 30 , 20 2 1 resulted primarily from the amortization of software developed for internal use that became ready for its intended use after June 30 , 20 20 .

Gain on extinguishment of debt .

On May 5, 2020, we received the Loan in the principal amount of $2.2 million under the CARES Act.

On June 16, 2021, we received a notice from the Lender that the full principal amount of the Loan and its accrued interest had been fully forgiven, resulting in a gain on extinguishment of debt of $2.2 million during the three months ended June 30, 2021.

Income (loss) before income taxes .

Income before income taxes was $1.8 million, inclusive of a one-time gain of $2.2 million on the extinguishment of debt from the forgiveness of the Loan, for the three months ended June 30, 2021 compared to a loss of $2.5 million for the three months ended June 30, 2020.

The significant decrease in loss before income taxes (exclusive of the one-time gain on extinguishment of debt) was primarily attributable to the increase in revenue, decrease in our cost of revenue as a percentage of revenue, which was partially offset by the increase in employee salaries and benefits and sales commission of $1.2 million, and depreciation and amortization of $0.3 million.

Income taxes .

Income tax expense of $0 was recognized for the three months ended June 30, 2021 and 2020.

A full valuation allowance on the deferred tax assets was recognized as of June 30, 2021 and 2020.

See Note 6, “Income Taxes,” included in “Notes to Condensed Consolidated Financial Statements,” for details.

Net income (loss) .

Net income was $1.8 million, inclusive of a one-time gain of $2.2 million on the extinguishment of debt from the forgiveness of the Loan, for the three months ended June 30, 2021 compared to a loss of $2.5 million for the three months ended June 30, 2020, as a result of the foregoing .

Six months ended June 30, 2021 compared to six months ended June 30, 2020

Revenue increased $4.7 million or 29% to $21.1 million for the six months ended June 30, 2021 from $16.4 million for the six months ended June 30, 2020.

This increase was driven by strong growth in usage from existing customers, with base revenue from existing customers increasing $4.0 million or 35%, and growth revenue from existing customers increasing $1.1 million or 49%.

This growth was partially offset by a decrease in revenue from new customers of $0.4 million or 19%.

As a result of certain Covid-19 related government mandated collections moratoria remaining in place during the period, collection customer volume was down $0.7 million for the three months ended March 31, 2021.

This was primarily attributable to our idiVERIFIED service, which is an ancillary collections market offering that is purely transactional and of a lower margin profile.

We expect collection customer transaction volume, including that of our idiVERIFIED service, to return to pre-Covid levels in the second half of 2021.

Our idiCORE billable customer base grew from 5,326 customers as of March 31, 2020 to 5,902 customers as of March 31, 2021, and our FOREWARN user base grew from 36,506 users to 58,831 users during that same period.

As a result of certain Covid-19 related government mandated collections moratoria remaining in place during the period, our idiVERIFIED service, which is an ancillary collections market offering that is purely transactional and of a lower margin profile, was down $0.7 million for the six months ended June 30, 2021.

We expect our idiVERIFIED service volume to return to pre-Covid levels in the first half of 2022.

Revenue from new customers represents the total monthly revenue generated from new customers in a given period.

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Cost of revenue (exclusive of depreciation and amortization) .

Cost of revenue decreased $0.5 million or 16% to $2.8 million for the three months ended March 31, 2021 from $3.3 million for the three months ended March 31, 2020.

Cost of revenue decreased $0.4 million or 7% to $5.5 million for the six months ended June 30, 2021 from $5.9 million for the six months ended June 30, 2020.

Our cost of revenue primarily includes data acquisition costs.

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The decrease in cost of revenue was primarily attributable to the decrease in transactional based data acquisition costs associated with the reduction in our idiVERIFIED services revenue.

We continue to enhance the breadth and depth of our data through the addition and expansion of relationships with key data suppliers, including our largest data supplier, which accounted for approximately 45% of our total data acquisition costs for the three months ended March 31, 2021 compared to approximately 39% for the three months ended March 31, 2020.

We continue to enhance the breadth and depth of our data through the addition and expansion of relationships with key data suppliers, including our largest data supplier, which accounted for approximately 49% of our total data acquisition costs for the six months ended June 30, 2021 compared to approximately 44% for the six months ended June 30, 2020.

Other cost of revenue items include expenses related to third-party infrastructure fees.

As the construct of our data costs is primarily a flat-fee, unlimited usage model, the cost of revenue as a percentage of revenue decreased to 27% for the three months ended March 31, 2021 from 35% for the three months ended March 31, 2020.

As the construct of our data costs is primarily a flat-fee, unlimited usage model, the cost of revenue as a percentage of revenue decreased to 26% for the six months ended June 30, 2021 from 36% for the six months ended June 30, 2020.

We expect that cost of revenue as a percentage of revenue will continue to decrease over the coming years as our revenue increases.

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Sales and marketing expenses .

Sales and marketing expenses remained consistent at $2.2 million for the three months ended March 31, 2021 and 2020.

Sales and marketing expenses increased $0.

7 million or 17 % to $ 4 .

6 million for the six months ended June 30, 2021 from $ 3 .

9 million for the six months ended June 30, 2020 .

The increase during the six months ended June 30, 202 1 was primarily attributable to an aggregate of $0.

8 million increase in salaries and benefits and sales commissions from increased revenue , which was partially offset by the decrease in provision for bad debts of $0.2 million .

General and administrative expenses .

General and administrative expenses increased $0.2 million or 3% to $4.6 million for the three months ended March 31, 2021 from $4.4 million for the three months ended March 31, 2020.

For the three months ended March 31, 2021 and 2020, our general and administrative expenses consisted primarily of employee salaries and benefits of $1.5 million and $1.2 million, share-based compensation expense of $1.9 million and $2.1 million, and professional fees of $0.7 million and $0.6 million, respectively.

General and administrative expenses increased $0.7 million or 9% to $9.4 million for the six months ended June 30, 2021 from $8.7 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021 and 2020, our general and administrative expenses consisted primarily of employee salaries and benefits of $3.0 million and $2.2 million, share-based compensation expense of $3.9 million and $4.3 million, and professional fees of $1.5 million and $1.2 million, respectively.

Depreciation and amortization .

Depreciation and amortization expenses increased $0.4 million or 38% to $1.3 million for the three months ended March 31, 2021 from $0.9 million for the three months ended March 31, 2020.

The increase in depreciation and amortization for the three months ended March 31, 2021 resulted primarily from the amortization of software developed for internal use that became ready for its intended use after March 31, 2020.

Loss before income taxes .

L oss before income taxes narrowed $0.9 million or 61% to $0.6 million for the three months ended March 31, 2021 from $1.5 million for the three months ended March 31, 2020.

The decrease in loss before income taxes was primarily attributable to the increase in revenue, decrease in our cost of revenue as a percentage of revenue, and decrease in share-based compensation expense, which was partially offset by the increase in employee salaries and benefits and sales commission of $0.5 million, and depreciation and amortization of $0.4 million.

Depreciation and amortization expenses increased $0.7 million or 36% to $2.6 million for the six months ended June 30, 2021 from $1.9 million for the six months ended June 30, 2020.

The increase in depreciation and amortization for the six months ended June 30, 2021 resulted primarily from the amortization of software developed for internal use that became ready for its intended use after June 30, 2020.

Gain on extinguishment of debt .

On May 5, 2020, we received the Loan in the principal amount of $2.2 million under the CARES Act.

Income (loss) before income taxes .

Income before income taxes was $1.2 million , inclusive of a one-time gain of $2.2 million on the extinguishment of debt from the forgiveness of the Loan, for the six months ended June 30, 2021 compared to a loss of $4.0 million for the six months ended June 30, 2020.

The significant decrease in loss before income taxes (exclusive of the one-time gain on extinguishment of debt) was primarily attributable to the increase in revenue, decrease in our cost of revenue as a percentage of revenue, and decrease in share-based compensation expense, which was partially offset by the increase in employee salaries and benefits and sales commission of $1.6 million, and depreciation and amortization of $0.7 million.

Income taxes .

Income tax expense of $0 was recognized for the three months ended March 31, 2021 and 2020 .

A full valuation allowance on the deferred tax assets was recognized as of March 31, 2021 and 2020 .

Income tax expense of $0 was recognized for the six months ended June 30, 2021 and 2020.

A full valuation allowance on the deferred tax assets was recognized as of June 30, 2021 and 2020.

See Note 6, “Income Taxes,” included in “Notes to Condensed Consolidated Financial Statements,” for details.

Net loss narrowed $0.9 million or 61% to $0.6 million for the three months ended March 31, 2021 from $1.5 million for the three months ended March 31, 2020, as a result of the foregoing .

Net income (loss) .

Net income was $1.2 million, inclusive of a one-time gain of $2.2 million on the extinguishment of debt from the forgiveness of the Loan, for the six months ended June 30, 2021 compared to a loss of $4.0 million for the six months ended June 30, 2020, as a result of the foregoing .

Effect of Inflation

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Cash flows provided by operating activities .

For the three months ended March 31, 2021, net cash provided by operating activities was $1.2 million, primarily the result of the net loss of $0.6 million, adjusted for certain non-cash items (consisting of share-based compensation expense, depreciation and amortization, write-off of long-lived assets, provision for bad debts, and noncash lease expenses) totaling $3.5 million, and the cash used as a result of changes in assets and liabilities of $1.7 million, primarily the result of the increase in accounts receivable and prepaid expenses and other current assets, and the decrease in accounts payable, accrued expenses and other current liabilities and operating lease liabilities.

For the three months ended March 31, 2020, net cash provided by operating activities was $1.2 million, primarily the result of the net loss of $1.5 million, adjusted for certain non-cash items, as mentioned above, totaling $3.4 million, and the cash used as a result of changes in assets and liabilities of $0.7 million, primarily the result of the increase in prepaid expenses and other current assets, and the decrease in accrued expenses and other current liabilities and operating lease liabilities.

For the six months ended June 30, 2021, net cash provided by operating activities was $3.5 million, primarily the result of the net income of $1.2 million, adjusted for certain non-cash items (consisting of share-based compensation expense, depreciation and amortization, write-off of long-lived assets, provision for bad debts, noncash lease expenses, and gain on extinguishment of debt) totaling $5.0 million, and the cash used as a result of changes in assets and liabilities of $2.6 million, primarily the result of the increase in accounts receivable and prepaid expenses and other current assets, and the decrease in accounts payable, accrued expenses and other current liabilities and operating lease liabilities.

For the six months ended June 30, 2020, net cash provided by operating activities was $3.0 million, primarily the result of the net loss of $4.0 million, adjusted for certain non-cash items, as mentioned above, totaling $7.1 million.

Cash flows used in investing activities .

For the three months ended March 31, 2021 and 2020, net cash used in investing activities was $1.3 million and $1.6 million, respectively, primarily as a result of capitalized costs included in intangible assets.

As of March 31, 2021, we had material commitments under certain data licensing agreements of $8.7 million.

For the six months ended June 30, 2021 and 2020, net cash used in investing activities was $2.6 million and $3.1 million, respectively, primarily as a result of capitalized costs included in intangible assets.

Cash flows provided by financing activities .

For the six months ended June 30, 2021 and 2020, net cash provided by financing activities was $0 and $2.2 million, respectively.

On May 5, 2020, we received the Loan in the principal amount of $2.2 million under the CARES Act.

As of June 30 , 20 2 1 , we had material commitments under certain data licensing agreements of $ 12.5 million.

We anticipate funding our operations using available cash and cash flow generated from operations within the next twelve months.

We reported net loss of $0.6 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, we had a total shareholders’ equity balance of $45.2 million.

As of March 31, 2021, we had cash and cash equivalents of approximately $12.9 million.

We reported net income of $1.8 million and net loss of $2.5 million for the three months ended June 30, 2021 and 2020, respectively, and net income of $1.2 million and net loss of $4.0 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, we had a total shareholders’ equity balance of $49.4 million.

As of June 30, 2021, we had cash and cash equivalents of approximately $13.9 million.

Based on projections of growth in revenue and operating results in the next twelve months, and the available cash and cash equivalents held by us, we believe that we will have sufficient cash resources to finance our operations and expected capital expenditures for the next twelve months.

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Off-Balance Sheet Arrangements

As of March 31, 2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

As of June 30, 2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Quantitative and Qualitative Disclosures About Market Risk.

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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 2. Management’s Discussion and Analysis