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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 001-38407

 

RED VIOLET, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

82-2408531

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

 

2650 North Military Trail, Suite 300, Boca Raton, Florida 33431

(Address of Principal Executive Offices) (Zip Code)

(561) 757-4000

(Registrant’s Telephone Number, Including Area Code)

None

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.001 par value per share

RDVT

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      YES      NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      YES      NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    YES      NO  

As of November 4, 2019, the registrant had 11,536,140 shares of common stock outstanding.

 


 

RED VIOLET, INC.

TABLE OF CONTENTS FOR FORM 10-Q

 

 

 

 

 

Page

PART I - FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

 

 

 

Condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018

 

2

 

 

Condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018

 

3

 

 

Condensed consolidated statements of changes in shareholders' equity and member’s capital for the three and nine months ended September 30, 2019 and 2018

 

4

 

 

Condensed consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018

 

5

 

 

Notes to condensed consolidated financial statements

 

6

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

15

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

21

Item 4.

 

Controls and Procedures

 

21

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

22

Item 1A.

 

Risk Factors

 

22

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

22

Item 3.

 

Defaults Upon Senior Securities

 

22

Item 4.

 

Mine Safety Disclosures

 

22

Item 5.

 

Other Information

 

22

Item 6.

 

Exhibits

 

23

 

 

 

 

 

SIGNATURES

 

24

 

1


PART I - FINANCIAL INFORMATION

Unless otherwise indicated or required by the context, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “red violet,” or the “Company,” refer to Red Violet, Inc. and its consolidated subsidiaries.

Item 1. Financial Statements.

 

RED VIOLET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(unaudited)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

ASSETS:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,337

 

 

$

9,950

 

Accounts receivable, net of allowance for doubtful accounts of $30 and $77

  as of September 30, 2019 and December 31, 2018, respectively

 

 

3,325

 

 

 

2,265

 

Prepaid expenses and other current assets

 

 

894

 

 

 

934

 

Total current assets

 

 

17,556

 

 

 

13,149

 

Property and equipment, net

 

 

704

 

 

 

852

 

Intangible assets, net

 

 

23,050

 

 

 

19,971

 

Goodwill

 

 

5,227

 

 

 

5,227

 

Right-of-use assets

 

 

2,729

 

 

 

-

 

Other noncurrent assets

 

 

374

 

 

 

628

 

Total assets

 

$

49,640

 

 

$

39,827

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,481

 

 

$

2,246

 

Accrued expenses and other current liabilities

 

 

2,004

 

 

 

1,277

 

Current portion of operating lease liabilities

 

 

477

 

 

 

-

 

Deferred revenue

 

 

35

 

 

 

26

 

Total current liabilities

 

 

4,997

 

 

 

3,549

 

Noncurrent operating lease liabilities

 

 

2,588

 

 

 

-

 

Total liabilities

 

 

7,585

 

 

 

3,549

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares

  issued and outstanding, as of September 30, 2019 and December 31, 2018

 

 

-

 

 

 

-

 

Common stock—$0.001 par value, 200,000,000 shares authorized, 11,633,662 and

  10,266,613 shares issued, 11,530,515 and 10,266,613 shares outstanding, as of

  September 30, 2019 and December 31, 2018

 

 

12

 

 

 

10

 

Treasury stock, at cost, 103,147 and 0 shares as of September 30, 2019 and

  December 31, 2018

 

 

(1,255

)

 

 

-

 

Additional paid-in capital

 

 

54,302

 

 

 

41,052

 

Accumulated deficit

 

 

(11,004

)

 

 

(4,784

)

Total shareholders' equity

 

 

42,055

 

 

 

36,278

 

Total liabilities and shareholders' equity

 

$

49,640

 

 

$

39,827

 

 

See notes to condensed consolidated financial statements

2


RED VIOLET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share data)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

8,257

 

 

$

4,360

 

 

$

21,236

 

 

$

11,594

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization)

 

 

3,122

 

 

 

2,233

 

 

 

8,843

 

 

 

6,334

 

Sales and marketing expenses

 

 

1,925

 

 

 

1,126

 

 

 

5,428

 

 

 

3,443

 

General and administrative expenses

 

 

3,498

 

 

 

2,182

 

 

 

11,259

 

 

 

5,776

 

Depreciation and amortization

 

 

750

 

 

 

508

 

 

 

2,049

 

 

 

1,437

 

Total costs and expenses

 

 

9,295

 

 

 

6,049

 

 

 

27,579

 

 

 

16,990

 

Loss from operations

 

 

(1,038

)

 

 

(1,689

)

 

 

(6,343

)

 

 

(5,396

)

Interest income, net

 

 

46

 

 

 

31

 

 

 

123

 

 

 

31

 

Other income, net

 

 

-

 

 

 

406

 

 

 

-

 

 

 

535

 

Loss before income taxes

 

 

(992

)

 

 

(1,252

)

 

 

(6,220

)

 

 

(4,830

)

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

$

(992

)

 

$

(1,252

)

 

$

(6,220

)

 

$

(4,830

)

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.09

)

 

$

(0.12

)

 

$

(0.59

)

 

$

(0.47

)

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

10,917,673

 

 

 

10,266,613

 

 

 

10,497,036

 

 

 

10,266,613

 

 

See notes to condensed consolidated financial statements

3


RED VIOLET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

AND MEMBER’S CAPITAL

(Amounts in thousands, except share data)

(unaudited)

 

 

 

Common stock

 

 

Treasury stock

 

 

Additional paid-in

 

 

Accumulated

 

 

Member's

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

capital

 

 

Total

 

Balance at June 30, 2019

 

 

10,286,613

 

 

$

10

 

 

 

-

 

 

$

-

 

 

$

45,253

 

 

$

(10,012

)

 

$

-

 

 

$

35,251

 

Vesting of restricted stock units

 

 

666,049

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

-

 

Increase in treasury stock resulting

  from shares withheld to cover

  statutory taxes

 

 

-

 

 

 

-

 

 

 

103,147

 

 

 

(1,255

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,255

)

Issuance of common stock upon direct

  offering to certain investors, net of

  issuance costs of $55

 

 

681,000

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

7,435

 

 

 

-

 

 

 

-

 

 

 

7,436

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,615

 

 

 

-

 

 

 

-

 

 

 

1,615

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(992

)

 

 

-

 

 

 

(992

)

Balance at September 30, 2019

 

 

11,633,662

 

 

$

12

 

 

 

103,147

 

 

$

(1,255

)

 

$

54,302

 

 

$

(11,004

)

 

$

-

 

 

$

42,055

 

Balance at June 30, 2018

 

 

10,266,613

 

 

$

10

 

 

 

-

 

 

$

-

 

 

$

40,301

 

 

$

(1,494

)

 

$

-

 

 

$

38,817

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

353

 

 

 

-

 

 

 

-

 

 

 

353

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,252

)

 

 

-

 

 

 

(1,252

)

Balance at September 30, 2018

 

 

10,266,613

 

 

$

10

 

 

 

-

 

 

$

-

 

 

$

40,654

 

 

$

(2,746

)

 

$

-

 

 

$

37,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

Treasury stock

 

 

Additional paid-in

 

 

Accumulated

 

 

Member's

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

capital

 

 

Total

 

Balance at December 31, 2018

 

 

10,266,613

 

 

$

10

 

 

 

-

 

 

$

-

 

 

$

41,052

 

 

$

(4,784

)

 

$

-

 

 

$

36,278

 

Vesting of restricted stock units

 

 

686,049

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

-

 

Increase in treasury stock resulting

  from shares withheld to cover

  statutory taxes

 

 

-

 

 

 

-

 

 

 

103,147

 

 

 

(1,255

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,255

)

Issuance of common stock upon direct

  offering to certain investors, net of

  issuance costs of $55

 

 

681,000

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

7,435

 

 

 

-

 

 

 

-

 

 

 

7,436

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,816

 

 

 

-

 

 

 

-

 

 

 

5,816

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,220

)

 

 

-

 

 

 

(6,220

)

Balance at September 30, 2019

 

 

11,633,662

 

 

$

12

 

 

 

103,147

 

 

$

(1,255

)

 

$

54,302

 

 

$

(11,004

)

 

$

-

 

 

$

42,055

 

Balance at December 31, 2017

 

 

1,000

 

 

$

-

 

 

 

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

17,736

 

 

$

17,736

 

Contribution by Fluent, Inc., including

  allocation of expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,264

 

 

 

24,264

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

402

 

 

 

-

 

 

 

346

 

 

 

748

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,746

)

 

 

(2,084

)

 

 

(4,830

)

Spin-off from Fluent, Inc.

 

 

10,265,613

 

 

 

10

 

 

 

-

 

 

 

-

 

 

 

40,252

 

 

 

-

 

 

 

(40,262

)

 

 

-

 

Balance at September 30, 2018

 

 

10,266,613

 

 

$

10

 

 

 

-

 

 

$

-

 

 

$

40,654

 

 

$

(2,746

)

 

$

-

 

 

$

37,918

 

 

See notes to condensed consolidated financial statements

4


RED VIOLET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(6,220

)

 

$

(4,830

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,049

 

 

 

1,437

 

Share-based compensation expense

 

 

5,290

 

 

 

432

 

Write-off of long-lived assets

 

 

30

 

 

 

63

 

Provision for bad debts

 

 

398

 

 

 

246

 

Allocation of expenses from Fluent, Inc.

 

 

-

 

 

 

325

 

Noncash lease expenses

 

 

313

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,458

)

 

 

(781

)

Prepaid expenses and other current assets

 

 

40

 

 

 

(177

)

Other noncurrent assets

 

 

254

 

 

 

167

 

Accounts payable

 

 

235

 

 

 

(55

)

Accrued expenses and other current liabilities

 

 

(183

)

 

 

(3,619

)

Deferred revenue

 

 

9

 

 

 

(18

)

Operating lease liabilities

 

 

(322

)

 

 

-

 

Net cash provided by (used in) operating activities

 

 

435

 

 

 

(6,810

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(71

)

 

 

(51

)

Capitalized costs included in intangible assets

 

 

(4,413

)

 

 

(4,497

)

Net cash used in investing activities

 

 

(4,484

)

 

 

(4,548

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital contributed by Fluent, Inc.

 

 

-

 

 

 

23,939

 

Proceeds from issuance of shares, net of issuance costs

 

 

7,436

 

 

 

-

 

Net cash provided by financing activities

 

 

7,436

 

 

 

23,939

 

Net increase in cash and cash equivalents

 

$

3,387

 

 

$

12,581

 

Cash and cash equivalents at beginning of period

 

 

9,950

 

 

 

65

 

Cash and cash equivalents at end of period

 

$

13,337

 

 

$

12,646

 

SUPPLEMENTAL DISCLOSURE INFORMATION

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

-

 

 

$

-

 

Cash paid for income taxes

 

$

-

 

 

$

-

 

Share-based compensation capitalized in intangible assets

 

$

526

 

 

$

316

 

Right-of-use assets obtained in exchange of operating lease liabilities

 

$

3,042

 

 

$

-

 

Operating lease liabilities arising from obtaining right-of-use assets

 

$

3,387

 

 

$

-

 

 

See notes to condensed consolidated financial statements

5


RED VIOLET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share data)

(unaudited)

1. Summary of significant accounting policies

(a) Basis of preparation

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 (“US 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 US GAAP have been condensed or omitted pursuant to those rules and regulations.

On March 26, 2018, Fluent, Inc. (“Fluent”) completed a spin-off of its risk management business from its digital marketing business by way of a distribution of all the shares of common stock of Fluent’s then wholly-owned subsidiary, red violet, to Fluent’s stockholders of record as of March 19, 2018, the record date, and certain warrant holders (the “Spin-off”). The distribution occurred by way of a pro rata stock distribution to such common stock and warrant holders, each of whom received one share of red violet’s common stock for every 7.5 shares of Fluent’s common stock held on the record date or to which they were entitled to under their warrants, which resulted in a distribution of a total of 10,266,613 shares of red violet common stock. Upon the Spin-off, the Company owns Fluent subsidiaries that previously operated Fluent’s risk management business. The Company accounted for the Spin-off in accordance with ASC 805-50-30-5 Initial Measurement- Transactions Between Entities Under Common ControlTransfer Date Measurement and therefore the net assets transferred from Fluent to red violet upon the Spin-off were reflected in red violet’s condensed consolidated financial statements at Fluent’s carrying values at the time of the Spin-off.

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2019.

The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”).

The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date included in the 2018 Form 10-K, but does not include all disclosures required by US GAAP.

The Company has only one operating segment, as defined by Accounting Standards Codification (“ASC”) 280, “Segment Reporting.”

Principles of consolidation

The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant transactions among the Company and its subsidiaries have been eliminated upon consolidation. For periods prior to the Spin-off, these financial statements were prepared on a consolidated and combined basis because certain of the entities were under common control.

Although the Spin-off was completed on March 26, 2018, the Company has reflected the Spin-off in these financial statements as if it occurred on March 31, 2018 as the Company determined that the impact is not material to the condensed consolidated financial statements.

The historical condensed consolidated and combined financial results presented prior to the Spin-off may not be indicative of the results that would have been achieved by the Company had it operated as a separate, standalone entity prior to the Spin-off. The condensed consolidated and combined financial statements presented prior to the Spin-off do not reflect any changes that may occur in the Company’s operations in connection with or as a result of the Spin-off.

(b) Recently issued accounting standards

 

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.

6


In February 2016, Financial Accounting Standard Board (“FASB”) issued ASU No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842),” which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. In July 2018, FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” Topic 842 is effective for public entities and private entities in the first quarter of 2019 and the first quarter of 2020, respectively, on a modified retrospective basis. The Company adopted Topic 842 in the first quarter of 2019. The Company recorded a right-of-use asset and a total operating lease obligation on its condensed consolidated balance sheet of approximately $3.0 million and $3.4 million, respectively, upon the adoption. Refer to Note 10, Leases, for further details.

In June 2016, FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will become effective for public companies beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures.

In August 2018, FASB issued 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 will be effective for the Company for annual reporting periods beginning after December 15, 2020, on a retrospective or prospective basis and early adoption is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures.

 

2. 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. Common equivalent shares are excluded from the calculation in the loss periods as their effects would be anti-dilutive.

 

Prior to the Spin-off, the financial information of red violet represented the consolidated and combined figures of red violet and its subsidiaries. red violet only had 1,000 shares of common stock outstanding, all of which Fluent owned. On March 26, 2018, upon the Spin-off of red violet, an aggregate of 10,266,613 shares of red violet common stock were distributed to Fluent stockholders and certain warrant holders. This number of shares remained outstanding as of September 30, 2018 and is utilized to calculate loss per share for the nine months ended September 30, 2018, as shown in the table below.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(In thousands, except share data)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(992

)

 

$

(1,252

)

 

$

(6,220

)

 

$

(4,830

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - Basic and diluted

 

 

10,917,673

 

 

 

10,266,613

 

 

 

10,497,036

 

 

 

10,266,613

 

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

$

(0.09

)

 

$

(0.12

)

 

$

(0.59

)

 

$

(0.47

)

 

A total of 1,954,910 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three and nine months ended September 30, 2019, and 2,145,500 RSUs have been excluded for the three and nine months ended September 30, 2018, as the impact is anti-dilutive.

7


3. Intangible assets, net

Intangible assets other than goodwill consist of the following:

 

 

 

 

 

September 30, 2019

 

 

December 31, 2018

 

(In thousands)

 

Amortization

Period

 

Gross Amount

 

 

Accumulated Amortization

 

 

Net

 

 

Gross Amount

 

 

Accumulated Amortization

 

 

Net

 

Software developed for internal use

 

5-10 years

 

$

27,929

 

 

$

(4,879

)

 

$

23,050

 

 

$

22,990

 

 

$

(3,019

)

 

$