Financial Performance - Total revenue for Q2 2022 was $4,317,382, a decrease of 8.8% from $4,731,961 in Q2 2021[108] - Gross profit for Q2 2022 decreased by 2.7% to $929,781 compared to $955,928 in Q2 2021[109] - Loss from operations in Q2 2022 was $1,724,157, a decrease of $1,778,135 compared to income from operations of $53,979 in Q2 2021[114] - Total revenue for the six months ended June 30, 2022, was $7,312,984, down 10.3% from $8,151,541 in the same period in 2021[115] - Gross profit for the six months ended June 30, 2022, was $1,305,846, a decrease of $669,732 or 33.9% compared to $1,975,578 in the same period of 2021[116] - Loss from operations was $4,509,745 for the six months ended June 30, 2022, a decrease of $4,832,594 from income of $322,849 in the same period of 2021[121] Expenses - Selling, general and administrative expenses increased significantly to $3,240,388 in Q2 2022, up from $819,193 in Q2 2021, reflecting a rise of $2,421,195[111] - SG&A expenses increased significantly to $5,954,730 for the six months ended June 30, 2022, up by $4,455,287 from $1,499,443 in 2021, driven primarily by personnel costs and legal fees[118] - The increase in personnel costs for SG&A was $1,372,917, rising from $904,524 in 2021[118] - Legal and professional fees surged to $1,006,415 in 2022, an increase of $913,071 from $93,344 in 2021[118] - Acquisition costs totaled $790,861 for the six months ended June 30, 2022, compared to $153,286 in the same period of 2021, related to the terminated acquisition of Knowmadics[119] Acquisitions and Growth Strategy - The company incurred acquisition expenses totaling $356,159 in 2022, compared to $82,756 in 2021[112] - The Gray Matters acquisition is expected to generate revenue, but delays in revenue recognition have impacted financial projections[94] - The contingent liability related to the Gray Matters acquisition was recorded at $930,000, with potential additional consideration of up to $4,000,000 based on performance[113] - The contingent liability related to the Gray Matters acquisition was recorded at $930,000, reflecting delays in revenue recognition that do not adversely affect long-term prospects[120] - The company aims to grow through acquisitions and has identified cybersecurity and cloud solutions as key growth areas[106] - The company intends to prioritize acquisition targets that are immediately accretive to operating cash flow while requiring additional capital to support its strategy[123] Working Capital and Financing - As of June 30, 2022, the company had working capital of approximately $1.0 million, including cash and cash equivalents of $0.6 million, and an accumulated deficit of $17.0 million[123] - The company raised $1,875,000 through the sale of 1,562,506 unregistered shares at $1.20 per share in August 2022 to support its growth strategy[123]
WaveDancer(WAVD) - 2022 Q2 - Quarterly Report