Financial Performance - Total revenues for the three months ended March 31, 2022, were $2,995,512, a decrease of 12.4% compared to $3,419,580 for the same period in 2021[12] - Gross profit for Q1 2022 was $376,065, down 63.1% from $1,019,650 in Q1 2021[12] - Net loss for the three months ended March 31, 2022, was $2,078,307, compared to a net income of $270,815 in the same period of 2021[12] - For the three months ended March 31, 2022, total revenue was $2,995,512, a decrease of 12.4% from $3,419,580 in the same period of 2021[38] - The net loss for the three months ended March 31, 2022, was $2,078,307, compared to a net loss of $577,394 for the same period in 2021[63] - Basic loss per share for the three months ended March 31, 2022, was $(0.12), while it was $0.02 for the same period in 2021[81] Cash and Assets - Cash and cash equivalents decreased to $2,999,201 as of March 31, 2022, from $4,931,302 at the end of 2021, representing a decline of 39.3%[13] - Total assets decreased to $21,222,990 as of March 31, 2022, down from $23,362,643 as of December 31, 2021, a reduction of 9.2%[10] - Accounts receivable as of March 31, 2022, totaled $1,672,072, with billed receivables from the federal government amounting to $1,625,138[40] - As of March 31, 2022, the balance of deferred costs of revenue was $101,656, down from $154,218 as of December 31, 2021, reflecting a decrease of approximately 34%[45] Liabilities and Expenses - Total liabilities as of March 31, 2022, were $5,521,150, a decrease from $5,921,471 at the end of 2021, reflecting a decline of 6.8%[10] - Selling, general and administrative expenses surged to $2,714,342 in Q1 2022, compared to $680,250 in Q1 2021, an increase of 299.0%[12] - The total expense incurred related to operating leases was $56,414 for the three months ended March 31, 2022, compared to $26,122 for the same period in 2021, representing an increase of approximately 116%[51] Acquisitions and Strategic Initiatives - The acquisition of Gray Matters, Inc. in December 2021 is part of the company's strategy to expand its offerings beyond systems modernization services[17] - The total purchase price for Tellenger, Inc. was $2,515,357, which included $2,315,357 in cash and $200,000 in common shares[55] - The acquisition of Gray Matters, Inc. had a total purchase price of $11,005,100, which included net cash consideration of $7,240,100 and common stock valued at $1,500,000[57] - The total assets acquired from Gray Matters included goodwill of $4,560,099, reflecting the value of human capital and strategic opportunities[60] Revenue Sources - Revenue from prime contracts with U.S. government agencies represented 34.3% of total revenue, while subcontracts under federal procurements accounted for 65.1%[24] - The company recognized revenue from services under time and materials arrangements at $1,912,996, representing 64.0% of total revenue for the three months ended March 31, 2022[38] - One prime contract accounted for 27.9% of total revenue, while three subcontracts represented 26.9%, 16.0%, and 11.0% of revenue, respectively[24] - The company sold third-party software and maintenance contracts that accounted for 30.5% of total revenue during the three months ended March 31, 2022[26] Stock-Based Compensation - The company reported stock-based compensation of $312,176 for the three months ended March 31, 2022, compared to $27,711 in the same period of 2021[14] - Total stock-based compensation expense for the three months ended March 31, 2022, was $312,176, compared to $27,711 for the same period in 2021[70] - There were 912,000 options granted with a total fair value of $2,074,670 during the three months ended March 31, 2022[69] - The company has three stock-based compensation plans, with the latest plan approved in December 2021[66] Tax and Compliance - The company has no material uncertain tax positions and no interest or penalties accrued as of March 31, 2022[23] - The effective tax rate for the three-month period ended March 31, 2022, was 25.89%, while it was 0% for the same period in 2021[79] COVID-19 Impact - The company continues to monitor the impact of the COVID-19 pandemic on its business, although no significant adverse effects have been reported as of March 31, 2022[29] Lease Obligations - The present value of lease liabilities as of March 31, 2022, was $652,633, with total future lease payments amounting to $716,649[51] - The company has a weighted average remaining lease term of 42 months and a weighted average discount rate of 4.5% as of March 31, 2022[51]
WaveDancer(WAVD) - 2022 Q1 - Quarterly Report