Item 1. Financial Statements
Item 1.
FINANCIAL STATEMENTS
TRANSACT TECHNOLOGIES INCORPORATED
C ONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, 2024
December 31, 2023
Assets:
(In thousands, except share data)
Current assets:
Cash and cash equivalents
$
11,343
$
12,321
Accounts receivable, net of allowance for expected credit losses of $ 662 and $ 768
7,421
9,824
Inventories
16,851
17,759
Prepaid income taxes
713
322
Other current assets
1,079
773
Total current assets
37,407
40,999
Fixed assets, net of accumulated depreciation of $ 19,305
and $ 18,646
1,986
2,421
Right-of-use assets, net
1,380
1,602
Goodwill
2,621
2,621
Deferred tax assets
7,034
6,304
Intangible assets, net of accumulated amortization of $ 1,606 and $ 1,518
–
88
Other assets
75
163
13,096
13,199
Total assets
$
50,503
$
54,198
Liabilities and Shareholders’ Equity:
Current liabilities:
Revolving loan payable
$
2,250
$
2,250
Accounts payable
3,210
4,431
Accrued liabilities
3,883
4,947
Lease liabilities
983
929
Deferred revenue
926
1,079
Total current liabilities
11,252
13,636
Deferred revenue, net of current portion
240
209
Lease liabilities, net of current portion
438
720
Other liabilities
219
219
897
1,148
Total liabilities
12,149
14,784
Commitments and contingencies (see Notes 5 and 7)
Shareholders’ equity:
Common stock, $ 0.01 par value,
20,000,000 shares authorized; 14,055,199
and 14,003,653 shares issued, respectively; 10,010,357 and 9,958,811 shares outstanding, respectively
141
140
Additional paid-in capital
57,857
57,055
Retained earnings
12,472
14,378
Accumulated other comprehensive loss, net of tax
( 6
)
( 49
)
Treasury stock, at cost ( 4,044,842
shares)
( 32,110
)
( 32,110
)
Total shareholders’ equity
38,354
39,414
Total liabilities and shareholders’ equity
$
50,503
$
54,198
See notes to Condensed Consolidated Financial Statements.
3
Index
TRANSACT TECHNOLOGIES INCORPORATED
CONDE NSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands, except per share data)
Net sales
$
10,867
$
17,190
$
33,153
$
59,366
Cost of sales
5,640
8,274
16,192
27,337
Gross profit
5,227
8,916
16,961
32,029
Operating expenses:
Engineering, design and product development
1,640
2,509
5,405
7,283
Selling and marketing
1,880
2,397
6,160
7,838
General and administrative
2,544
2,819
7,972
10,680
6,064
7,725
19,537
25,801
Operating (loss) income
( 837
)
1,191
( 2,576
)
6,228
Interest and other income (expense):
Interest, net
42
( 73
)
116
( 207
)
Other, net
96
( 43
)
43
( 22
)
138
( 116
)
159
( 229
)
(Loss) income before income taxes
( 699
)
1,075
( 2,417
)
5,999
Income tax benefit (expense)
148
( 169
)
511
( 1,189
)
Net (loss) income
$
( 551
)
$
906
$
( 1,906
)
$
4,810
Net (loss) income per common share:
Basic
$
( 0.06
)
$
0.09
$
( 0.19
)
$
0.48
Diluted
$
( 0.06
)
$
0.09
$
( 0.19
)
$
0.48
Shares used in per-share calculation:
Basic
10,006
9,958
9,992
9,948
Diluted
10,006
10,052
9,992
10,023
See notes to Condensed Consolidated Financial Statements.
4
Index
TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLI DATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands)
Net (loss) income
$
( 551
)
$
906
$
( 1,906
)
$
4,810
Foreign currency translation adjustment, net of tax
47
( 35
)
43
( 24
)
Comprehensive (loss) income
$
( 504
)
$
871
$
( 1,863
)
$
4,786
See notes to Condensed Consolidated Financial Statements.
5
Index
TRANSACT TECHNOLOGIES INCORPORATED
CONDE NSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30,
2024
2023
(In thousands)
Cash flows from operating activities:
Net (loss) income
$
( 1,906
)
$
4,810
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Share-based compensation expense
873
611
Depreciation and amortization
844
1,103
Deferred income taxes
( 739
)
746
Unrealized foreign currency transaction (gains) losses
( 43
)
22
Changes in operating assets and liabilities:
Accounts receivable
2,455
1,786
Employee retention credit receivable
–
1,500
Inventories
1,033
( 5,584
)
Prepaid income taxes
( 391
)
( 178
)
Other current and long-term assets
( 247
)
( 344
)
Accounts payable
( 1,199
)
( 1,152
)
Accrued liabilities and other liabilities
( 1,207
)
1,271
Net cash (used in) provided by operating activities
( 527
)
4,591
Cash flows from investing activities:
Capital expenditures
( 311
)
( 788
)
Net cash used in investing activities
( 311
)
( 788
)
Cash flows from financing activities:
Withholding taxes paid on stock issuances
( 71
)
( 86
)
Net cash used in financing activities
( 71
)
( 86
)
Effect of exchange rate changes on cash and cash equivalents
( 69
)
( 58
)
(Decrease) increase in cash and cash equivalents
( 978
)
3,659
Cash and cash equivalents, beginning of period
12,321
7,946
Cash and cash equivalents, end of period
$
11,343
$
11,605
Supplemental schedule of non-cash investing and financing activities:
Non-cash capital expenditure items
$
22
$
36
Right of use asset obtained in exchange for new operating lease liabilities
$
465
$
–
See notes to Condensed Consolidated Financial Statements.
6
Index
TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSO LIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands)
Equity beginning balance
$
38,528
$
38,090
$
39,414
$
33,862
Common stock
Balance, beginning of period
140
140
140
139
Issuance of common stock from restricted stock units
1
–
1
1
Balance, end of period
141
140
141
140
Additional paid-in capital
Balance, beginning of period
57,528
56,594
57,055
56,282
Share-based compensation expense
329
213
873
611
Relinquishment of stock awards to pay for withholding taxes
–
–
( 71
)
( 86
)
Balance, end of period
57,857
56,807
57,857
56,807
Retained earnings
Balance, beginning of period
13,023
13,534
14,378
9,630
Net (loss) income
( 551
)
906
( 1,906
)
4,810
Balance, end of period
12,472
14,440
12,472
14,440
Treasury stock
Balance, beginning and end of period
( 32,110
)
( 32,110
)
( 32,110
)
( 32,110
)
Accumulated other comprehensive loss, net of tax
Balance, beginning of period
( 53
)
( 68
)
( 49
)
( 79
)
Foreign currency translation adjustment, net of tax
47
( 35
)
43
( 24
)
Balance, end of period
( 6
)
( 103
)
( 6
)
( 103
)
Equity ending balance
$
38,354
$
39,174
$
38,354
$
39,174
Supplemental share information
Issuance of shares from stock awards
12
1
62
58
Relinquishment of stock awards to pay withholding taxes
–
–
11
12
See notes to Condensed Consolidated Financial Statements.
7
Index
TRANSACT TECHNOLOGIES INCORPORATED
N OTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of presentation
The accompanying unaudited financial statements of TransAct Technologies Incorporated (“TransAct”,
the “Company”, “we”, “us”, or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the
information and footnotes required by U.S. GAAP to be included in full year financial statements. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the periods presented have been included and
are of a normal recurring nature . The December 31, 2023 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These interim financial statements should
be read in conjunction with the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).
The results of operations for the three and nine months ended September 30, 2024
are not necessarily indicative of the results to be expected for the full year ending December 31, 2024.
Current Business Trends
After strong demand during most of 2023 due in part to our primary competitor’s struggle to deliver products in
the face of supply chain constraints, in late 2023, we began to see indications of a temporary slowdown in demand in the casino and gaming market, as customers that had built up excess inventory due to supply chain concerns advised us that they would
temporarily reduce orders until their stock normalized. This slowdown impacted our results in the fourth quarter of 2023 and the first nine months of 2024 . During the third
quarter of 2024, we believe all customers, with the exception of one large customer, were able to sell through their on-hand inventory and resumed ordering again. As a result, we expect this trend to continue to impact results during at
least through the end of 2024 until this one remaining customer is able to sell their on-hand inventory. Further, our primary competitor in the casino and gaming
market has resumed supplying product and continued to increase volume at what we believe is full capacity, which has resulted in some downward pricing pressure in that market and could exacerbate the demand slowdown, which has negatively impacted our
worldwide casino and gaming sales. In addition, during 2023 we experienced cost increases as a result of supply chain constraints , most of which we have been able to offset by increasing prices of our products. However, there can be no guarantee that we will be able to increase prices sufficiently to offset any future
cost increases that cannot be predicted, and we may be further impacted by supply chain disruptions, inflationary pressures and other global economic conditions that may affect the markets we serve and from which we source our supplies and parts.
Balance Sheet, Cash Flow and Liquidity. During the
third quarter of 2023, we began a cost reduction initiative to reduce our overall level of operating expenses that included reducing employee headcount, trade show expenses, advertising and other promotional marketing expenses, certain third-party
engineering resources and other expenses, and to a lesser extent, certain general and administrative expenses. We began experiencing the full impact of these actions
in the first quarter of 2024 and expect they will result in approximately $ 3 million of annualized savings during 2024 compared to the 2023 levels, partially offset by typical annual inflationary and cost of living increases in operating expenses.
We also began an additional cost reduction initiative in the
second quarter of 2024 focused largely on further reducing employee headcount and other external third-party resources. Savings from this initiative were realized beginning in the third quarter of 2024 and are expected to be approximately $ 2 million on an annualized basis. Notwithstanding the foregoing, there is no assurance that the cost-cutting efforts we have taken to bring
expenses in line with our revenue and mitigate the impact of global economic conditions such as inflation and conditions in our markets will be sufficient or adequate, and we may be required to take additional measures, as the ultimate extent of the
effects of these risks on the Company, our financial condition, results of operations, liquidity, and cash flows are uncertain and are dependent on evolving developments which cannot be predicted at this time.
After reviewing whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations over the 12 months following the date on
which the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q were issued, including consideration of the actions to manage expenses and liquidity, we believe that our net cash to be provided by operations
combined with our cash and cash equivalents and borrowing availability under our revolving credit facility will provide sufficient liquidity to fund our current obligations, capital spending, and working capital requirements and to comply with the
financial covenants of our credit facility over at least 12 months following the date that the Condensed Consolidated Financial Statements were issued.
8
Index
Use of Assumptions and Estimates
Management’s belief that the Company will be able to fund its planned operations over the 12 months following the date on which the unaudited Condensed Consolidated
Financial Statements were issued is based on assumptions which involve significant judgment and estimates of future revenues, inflation, rising interest rates, capital expenditures and other operating costs. We cannot predict the ultimate impact of the
current economic environment, including inflation, and rising interest rates on our customers, which may impact sales. We believe that we are positioned to withstand the impact of any potential future economic downturn and we would be able to take
additional financial and operational actions to cut costs and/or increase liquidity.
In addition, the presentation of the accompanying unaudited Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of
contingent assets and liabilities. Our estimates include those related to revenue recognition, accounts receivable, inventory obsolescence, goodwill and intangible assets, the valuation of deferred tax assets and liabilities, depreciable lives of
equipment, share-based compensation and contingent liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates
used.
2. Significant accounting policies
For a discussion of our significant accounting policies, see Note 2, Summary of significant accounting policies within Part II,
Item 8. “Financial Statements and Supplementary Data” in the 2023 Form 10-K. There have been no changes to our significant accounting policies since the 2023 Form 10-K.
Recently issued accounting pronouncements:
On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) . The amendments improve reportable segment disclosures requirements and clarify circumstances in which an entity can disclose
multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements. These amendments are effective for fiscal years beginning after
December 15, 2023 and for interim periods beginning after December 15, 2024. These segment disclosure requirements must be applied retrospectively to all periods presented in the financial statements. We are currently evaluating the impact of
adopting this standard; however, we do not expect it to have a material impact on our Consolidated Financial Statements.
On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This
ASU requires the use of consistent categories and greater disaggregation in tax rate reconciliations and income taxes paid disclosures. These amendments are effective for fiscal years beginning after December 15, 2024. These income tax disclosure
requirements can be applied either prospectively or retrospectively to all periods presented in the financial statements. We are currently evaluating the impact of adopting this standard; however, we do not expect it to have a material impact on
our Consolidated Financial Statements.
3. Revenue
We account for revenue in accordance with Financial Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers.
Disaggregation of revenue
The following tables disaggregate our revenue by market type, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash
flows are affected by economic factors. Sales and usage-based taxes are excluded from revenues.
Three Months Ended
September 30,
2024
2023
(In thousands)
United States
International
Total
United States
International
Total
Food service technology
$
3,982
$
339
$
4,321
$
4,049
$
192
$
4,241
POS automation
1,148
–
1,148
1,575
69
1,644
Casino and gaming
2,757
1,777
4,534
5,411
3,608
9,019
Transact Services Group
707
157
864
2,087
199
2,286
Total net sales
$
8,594
$
2,273
$
10,867
$
13,122
$
4,068
$
17,190
9
Index
Nine Months Ended
September 30,
2024
2023
(In thousands)
United States
International
Total
United States
International
Total
Food service technology
$
10,784
$
1,015
$
11,799
$
10,937
$
657
$
11,594
POS automation
2,950
–
2,950
5,261
84
5,345
Casino and gaming
9,173
6,416
15,589
26,455
10,547
37,002
TransAct Services Group
2,271
544
2,815
4,791
634
5,425
Total net sales
$
25,178
$
7,975
$
33,153
$
47,444
$
11,922
$
59,366
Contract balances
Contract assets consist of unbilled receivables. Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer being invoiced.
An unbilled receivable is recorded to reflect revenue that is recognized when such revenue exceeds the amount invoiced to the customer. Unbilled receivables are separated into current and non-current assets and included within “Accounts receivable,
net” and “Other assets” in the Condensed Consolidated Balance Sheets.
Contract liabilities consist of customer pre-payments and deferred revenue. Customer prepayments are reported as “Accrued liabilities” in current liabilities in the
Condensed Consolidated Balance Sheets and represent customer payments made in advance of performance obligations in instances where credit has not been extended and are recognized as revenue when the performance obligation is complete. Deferred
revenue is reported separately in current liabilities and non-current liabilities and consists of our extended warranty contracts, technical support for our food service technology terminals, EPICENTRAL maintenance contracts and prepaid software
subscriptions for our BOHA! software applications and is recognized as revenue as (or when) we perform under the contract. For the nine
months ended September 30, 2024, we recognized revenue of $ 0.9 million related to our contract liabilities at December 31, 2023. Total
net contract liabilities consisted of the following:
September 30, 2024
December 31, 2023
(In thousands)
Unbilled receivables, current
$
138
$
145
Unbilled receivables, net of current portion
45
120
Customer pre-payments
( 19
)
( 155
)
Deferred revenue, current
( 926
)
( 1,079
)
Deferred revenue, net of current portion
( 240
)
( 209
)
Total net contract liabilities
$
( 1,002
)
$
( 1,178
)
Remaining performance obligations
R emaining performance obligations represent the transaction price of firm orders for which a good or service has not been delivered to our customer. As of September 30, 2024, the aggregat e amount of transaction prices allo cated t o rem aining performance obligations was $ 3.0 million. The Company expects to recognize revenue of $ 2.7 million of its
remaining performance obligations within the next 12 months following September 30, 2024, $ 0.2 million within the next 24 months following September 30, 2024
and the balance of these remaining performance obligations recognized within the next 36 months following September 30, 2024.
4. Inventories
The components of inventories were:
September 30, 2024
December 31, 2023
(In thousands)
Raw materials and purchased component parts
$
9,343
$
9,382
Finished goods
7,508
8,377
$
16,851
$
17,759
10
Index
5. Borrowings
Credit Facility
On March 13, 2020, we entered into the Loan and Security Agreement governing a credit facility (the “Sien a Credit Facility”) with Siena Lending Group
LLC (the “Lender”). The Siena Credit Facility provides for a revolving credit line of up to $ 10.0 million and was originally scheduled to
expire on March 13, 2023, prior to being extended, as discussed below. Borrowings under the Siena Credit Facility bear a floating rate of interest equal to the greatest of (i) the prime rate plus 1.75 %, (ii) the federal funds rate plus 2.25 %, and (iii) 6.50 %. The total deferred financing costs related to expenses incurred to complete the Siena Credit Facility were $ 245 thousand which were reported as “Other current assets” in current assets and “Other assets” in non-current assets in the Condensed Consolidated
Balance Sheets. We also pay a fee of 0.50 % on unused borrowings under the Siena Credit Facility. Borrowings under the Siena Credit
Facility are secured by a lien on substantially all the assets of the Company. Borrowings under the Siena Credit Facility are subject to a borrowing base based on 85 % of eligible accounts receivable plus the lesser of (a) $ 5.0
million and (b) 50 % of eligible raw material and 60 % of finished goods inventory.
The Siena Credit Facility imposes a financial covenant on the Company and restricts, among other things, our ability to incur additional indebtedness and create other
liens. On July 21, 2021, the Company entered into an amendment (“Siena Credit Facility Amendment No. 1”) to the Siena Credit Facility. Siena Credit Facility Amendment No. 1 changed the financial covenant under the Siena Credit Facility from a minimum
EBITDA covenant to an excess availability covenant requiring that the Company maintain excess availability of at least $ 750 thousand under
the Siena Credit Facility, tested as of the end of each calendar month, beginning with the calendar month ended July 31, 2021. From July 31, 2021 through September 30, 2024, we remained in compliance with our excess availability covenant. As of September 30, 2024, we had $ 2.3 million of outstanding borrowings under the Siena Credit Facility and $ 4.2 million of net borrowing capacity available under the Siena Credit Facility.
On July 19, 2022, the Company and the Lender entered into Amendment No. 2 (“Siena Credit Facility Amendment No. 2”) to the Siena Credit Facility as amended by Siena
Credit Facility Amendment No. 1. Also on July 19, 2022, the Company and the Lender entered into an Amended and Restated Fee Letter (the “Amended Fee Letter”) in connection with Siena Credit Facility Amendment No. 2. Siena Credit Facility Amendment
No. 2 did not modify the aggregate amount of the revolving commitment or the interest rate applicable to the loans .
The changes to the Siena Credit Facility provided for in Siena Credit Facility Amendment No. 2 include, among other things, the following:
(i)
The extension of the maturity date from March 13, 2023 to March 13, 2025; and
(ii)
The termination of the existing blocked account control agreement and entry into a new “springing” deposit account control agreement,
permitting the Company to direct the use of funds in its deposit account until such time as (a) the sum of excess availability under the Siena Credit Facility as amended and unrestricted cash is less than $ 5 million for 3 consecutive
business days or (b) an event of default occurs and is continuing.
In addition, the Amended Fee Letter requires the Company, while it retains the ability to direct the use of funds in the deposit account, to maintain outstanding
borrowings of at least $ 2,250,000 in principal amount. If the Company does not have the ability to direct the use of funds in the deposit
account, then the Amended Fee Letter requires the Company to pay interest on at least $ 2,250,000 principal amount of loans, whether or not
such amount of loans is actually outstanding.
On May 1, 2023, the Company and the Lender agreed to a letter amendment to the Loan and Security Agreement governing the Siena Credit Facility. Prior to such amendment, Section 7.1(m) of the Loan
and Security Agreement governing the Siena Credit Facility required that any successor to the Company’s former Chief Executive Officer be reasonably acceptable to the Lender. This amendment confirmed that Mr. John Dillon, the Company’s current
Chief Executive Officer, is an acceptable successor, and applied the same requirement to any future successor to Mr. Dillon as Chief Executive Officer .
11
Index
6. Earnings per share
The following table sets forth the reconciliation of basic and diluted weighted average shares outstanding:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(In thousands, except per share data)
Net (loss) income
$
( 551
)
$
906
$
( 1,906
)
$
4,810
Shares:
Basic: Weighted average common shares outstanding
10,006
9,958
9,992
9,948
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method
–
94
–
75
Diluted: Weighted average common and common equivalent shares outstanding
10,006
10,052
9,992
10,023
Net (loss) income per common share:
Basic
$
( 0.06
)
$
0.09
$
( 0.19
)
$
0.48
Diluted
$
( 0.06
)
$
0.09
$
( 0.19
)
$
0.48
The computation of diluted earnings per share excludes the effect of the potential exercise of stock
awards, including stock options and restricted stock units, when the average market price of the common stock is lower than the exercise price of the related stock award during the period, as the inclusion of these stock awards in the computation
of diluted earnings would be anti-dilutive. For the three and nine months ended September 30, 2024, when a loss was reported, basic
and diluted EPS are calculated using the same method and as a result, 1.6 million and 1.5 million shares, respectively, of potentially dilutive shares consisting of stock awards were excluded from the calculation of earnings per diluted share. Anti-dilutive
stock awards excluded from the computation of earnings per dilutive share were 0.9 million in each of the three and nine months ended September 30, 2023.
7. Leases
We account for leases in accordance with ASC Topic 842: Leases .
We enter into lease agreements for the use of real estate space and certain equipment under operating leases and we have no financing leases. Our leases
are included in “Right-of-use-assets” and “Lease liabilities” in our Condensed Consolidated Balance Sheets. Our leases have various lease terms, some of which include options to extend. On May 31, 2024, we entered into an amendment to extend the
lease on our facility in Ithaca, New York, which resulted in a right-of-use asset obtained in exchange for a new operating lease liability of $ 465
thousand. The lease amendment provides for an extension of the lease for an additional year from May 31, 2025 to May 31, 2026, with an
option to extend for an additional year. Lease expense is recognized on a straight-line basis over the lease term.
Operating lease expense for the nine months ended September 30, 2024
and 2023 was $ 759 thousand
and $ 742 thousand, respectively, and is reported as “Cost of sales”, “Engineering, design and product development expense”, “Selling and
marketing expense”, and “General and administrative expense” in the Condensed Consolidated Statements of Operations. Operating lease expenses include short-term lease costs, which were immaterial during the periods presented.
The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):
Nine Months Ended,
September 30,
2024
2023
Operating cash outflows from leases
$
767
$
756
12
Index
The following summarizes additional information related to our leases as of September 30, 2024 and December 31, 2023:
September 30, 2024
December 31, 2023
Weighted average remaining lease term (in years)
1.5
1.7
Weighted average discount rate
7.5
%
4.4
%
The maturity of the Company’s operating lease liabilities as of September 30, 2024 and December 31, 2023 were as follows (in thousands):
September 30, 2024
December 31, 2023
2024
$
258
$
985
2025
1,017
713
2026
239
22
Total undiscounted lease payments
1,514
1,720
Less imputed interest
93
71
Total lease liabilities
$
1,421
$
1,649
8. Income taxes
We recorde d an income tax benefit in the third
quarter of 2024 of $ 148
thousand at an effective tax rate of ( 21.2 %) compared to an income tax expense in the third quarter of 2023 of $ 169 thousand at an effective tax rate of 15.7 %.
For the nine months ended September 30, 2024, we recorded income tax benefit of $ 511 thousand at an effective tax rate of ( 21.1 %) , compared to an income tax expense for the nine months ended September 30, 2023 of $ 1.2 million at an effective tax rate of
19.8 % .
We are subject to U.S. federal income tax, as well as income
tax in certain U.S. state and foreign jurisdictions. We have substantially concluded all U.S. federal, state and local income tax, and foreign tax regulatory examination matters through 2020. However, our federal tax returns for the years 2021
through 2023 remain open to examination. Various U.S. state and foreign tax jurisdiction tax years remain open to examination as well, but we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial
Statements. The Company maintains a valuation allowance against certain deferred tax assets where realization is not certain.
9. Subsequent events
The Company has evaluated all events or transactions that occurred up to the date the Condensed Consolidated Financial Statements were available to
be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements.
13
Index
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