0001564590-20-039351 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2020	Aug. 07, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Trading Symbol	RDVT
Entity Registrant Name	RED VIOLET, INC.
Entity Central Index Key	0001720116
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		12,137,576
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-38407
Entity Tax Identification Number	82-2408531
Entity Address, Address Line One	2650 North Military Trail
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	(561)
Local Phone Number	757-4000
Entity Information, Former Legal or Registered Name	None
Document Transition Report	false
Document Quarterly Report	true
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Common Stock, $0.001 par value per share
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 13,782	$ 11,776
Accounts receivable, net of allowance for doubtful accounts of $53 and $40 as of June 30, 2020 and December 31, 2019, respectively	2,691	3,543
Prepaid expenses and other current assets	861	722
Total current assets	17,334	16,041
Property and equipment, net	586	660
Intangible assets, net	26,394	24,034
Goodwill	5,227	5,227
Right-of-use assets	2,395	2,620
Other noncurrent assets	137	289
Total assets	52,073	48,871
Current liabilities:
Accounts payable	2,723	2,138
Accrued expenses and other current liabilities	644	1,571
Current portion of operating lease liabilities	521	491
Current portion of long-term loan	702
Deferred revenue	151	128
Total current liabilities	4,741	4,328
Noncurrent operating lease liabilities	2,192	2,459
Long-term loan	1,450
Total liabilities	8,383	6,787
Shareholders' equity:
Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of June 30, 2020 and December 31, 2019
Common stock—$0.001 par value, 200,000,000 shares authorized, 11,707,829 and 11,657,912 shares issued, 11,604,682 and 11,554,765 shares outstanding, as of June 30, 2020 and December 31, 2019	12	12
Treasury stock, at cost, 103,147 shares as of June 30, 2020 and December 31, 2019	(1,255)	(1,255)
Additional paid-in capital	64,806	59,187
Accumulated deficit	(19,873)	(15,860)
Total shareholders' equity	43,690	42,084
Total liabilities and shareholders' equity	$ 52,073	$ 48,871

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 53	$ 40
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	11,707,829	11,657,912
Common stock, shares outstanding	11,604,682	11,554,765
Treasury Stock, Shares	103,147	103,147

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue	$ 7,056	$ 7,245	$ 16,356	$ 12,979
Costs and expenses:
Sales and marketing expenses	1,746	2,003	3,922	3,503
General and administrative expenses	4,263	5,396	8,697	7,761
Depreciation and amortization	992	681	1,902	1,299
Total costs and expenses	9,588	11,132	20,400	18,284
Loss from operations	(2,532)	(3,887)	(4,044)	(5,305)
Interest income, net		37	31	77
Loss before income taxes	(2,532)	(3,850)	(4,013)	(5,228)
Net loss	$ (2,532)	$ (3,850)	$ (4,013)	$ (5,228)
Loss per share:
Basic and diluted	$ (0.22)	$ (0.37)	$ (0.35)	$ (0.51)
Weighted average number of shares outstanding:
Basic and diluted	11,617,342	10,298,613	11,600,278	10,283,232
Service [Member]
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)	$ 2,587	$ 3,052	$ 5,879	$ 5,721

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid- in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2018	$ 36,278	$ 10		$ 41,052	$ (4,784)
Beginning balances, shares at Dec. 31, 2018		10,266,613
Vesting of restricted stock units, Shares		20,000
Share-based compensation	4,201			4,201
Net loss	(5,228)				(5,228)
Ending balance at Jun. 30, 2019	35,251	$ 10		45,253	(10,012)
Ending balances, shares at Jun. 30, 2019		10,286,613
Beginning balance at Mar. 31, 2019	35,324	$ 10		41,476	(6,162)
Beginning balances, shares at Mar. 31, 2019		10,286,613
Share-based compensation	3,777			3,777
Net loss	(3,850)				(3,850)
Ending balance at Jun. 30, 2019	35,251	$ 10		45,253	(10,012)
Ending balances, shares at Jun. 30, 2019		10,286,613
Beginning balance at Dec. 31, 2019	42,084	$ 12	$ (1,255)	59,187	(15,860)
Beginning balances, shares at Dec. 31, 2019		11,657,912	(103,147)
Vesting of restricted stock units, Shares		49,917
Share-based compensation	5,619			5,619
Net loss	(4,013)				(4,013)
Ending balance at Jun. 30, 2020	43,690	$ 12	$ (1,255)	64,806	(19,873)
Ending balances, shares at Jun. 30, 2020		11,707,829	(103,147)
Beginning balance at Mar. 31, 2020	43,412	$ 12	$ (1,255)	61,996	(17,341)
Beginning balances, shares at Mar. 31, 2020		11,693,162	(103,147)
Vesting of restricted stock units, Shares		14,667
Share-based compensation	2,810			2,810
Net loss	(2,532)				(2,532)
Ending balance at Jun. 30, 2020	$ 43,690	$ 12	$ (1,255)	$ 64,806	$ (19,873)
Ending balances, shares at Jun. 30, 2020		11,707,829	(103,147)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,013)	$ (5,228)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,902	1,299
Share-based compensation expense	4,563	3,883
Write-off of long-lived assets	104	30
Provision for bad debts	265	326
Noncash lease expenses	225	207
Changes in assets and liabilities:
Accounts receivable	587	(1,687)
Prepaid expenses and other current assets	(139)	49
Other noncurrent assets	65	169
Accounts payable	585	44
Accrued expenses and other current liabilities	(927)
Deferred revenue	23	30
Operating lease liabilities	(237)	(212)
Net cash provided by (used in) operating activities	3,003	(1,090)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(61)	(32)
Capitalized costs included in intangible assets	(3,088)	(2,913)
Net cash used in investing activities	(3,149)	(2,945)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term loan	2,152
Net cash provided by financing activities	2,152
Net increase (decrease) in cash and cash equivalents	2,006	(4,035)
Cash and cash equivalents at beginning of period	11,776	9,950
Cash and cash equivalents at end of period	13,782	5,915
SUPPLEMENTAL DISCLOSURE INFORMATION
Share-based compensation capitalized in intangible assets	$ 1,056	318
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

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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

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, 2020.

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, 2019 (“2019 Form 10-K”).

The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date included in the 2019 Form 10-K, but does not include all disclosures required by 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.

(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.

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 became effective for public companies beginning January 1, 2020, and the Company adopted it on a modified retrospective approach. The guidance had no material impact on the Company’s condensed 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.

Loss Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Loss Per Share

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.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except share data)	2020			2019			2020			2019
Numerator:
Net loss	$	(2,532	)	$	(3,850	)	$	(4,013	)	$	(5,228	)
Denominator:
Weighted average shares outstanding - Basic and diluted ⁽¹⁾		11,617,342			10,298,613			11,600,278			10,283,232
Loss per share:
Basic and diluted:	$	(0.22	)	$	(0.37	)	$	(0.35	)	$	(0.51	)

(1)	A total of 2,189,910 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three and six months ended June 30, 2020, and 2,237,000 RSUs have been excluded for the three and six months ended June 30, 2019, as the impact is anti-dilutive.

Intangible Assets, Net

6 Months Ended

Jun. 30, 2020

Intangible Assets Net Excluding Goodwill [Abstract]

Intangible Assets, Net

3. Intangible assets, net

Intangible assets other than goodwill consist of the following:

June 30, 2020

December 31, 2019

(In thousands)

Amortization

Period

Gross Amount

Accumulated Amortization

Net

Gross Amount

Accumulated Amortization

Net

Software developed for internal use

5-10 years

33,834

(7,440

)

26,394

29,690

(5,656

)

24,034

The gross amount associated with software developed for internal use represents capitalized costs of internally-developed software, including eligible salaries and staff benefits, share-based compensation, travel expenses incurred by relevant employees, and other relevant costs.

Amortization expenses of $934 and $617 for the three months ended June 30, 2020 and 2019, respectively, and $1,784 and $1,171 for the six months ended June 30, 2020 and 2019, respectively, were included in depreciation and amortization expense. As of June 30, 2020, intangible assets of $4,322, included in the gross amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use.

The Company capitalized costs of software developed for internal use of $2,018 and $1,651 during the three months ended June 30, 2020 and 2019, respectively, and $4,144 and $3,231 during the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows:

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	1,939
2021		4,728
2022		4,725
2023		4,648
2024		4,157
2025 and thereafter		6,197
Total	$	26,394

Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill Disclosure [Abstract]

Goodwill

4. Goodwill

Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As of June 30, 2020 and December 31, 2019, the balance of goodwill of $5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014.

In accordance with ASC 350, “Intangibles - Goodwill and Other,” goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value. The measurement date of the Company’s annual goodwill impairment test is October 1.

As of June 30, 2020 and December 31, 2019, no goodwill impairment charges were recorded.

Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

5. Revenue recognition

On January 1, 2018, the Company adopted ASC 606, “Revenue from Contracts with Customers,” (“Topic 606”) using the modiﬁed retrospective method applied to all contracts that were not completed contracts at the date of initial application. Revenue is recognized when control of goods or services is transferred to the Company’s customers, in an amount that reﬂects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s performance obligation is to provide on demand solutions to its customers by leveraging its proprietary technology and applying machine learning and advanced analytics to its massive data repository. The pricing for the customer contracts is based on usage, a monthly fee, or a combination of both.

Available within Topic 606, the Company has applied the portfolio approach practical expedient in accounting for customer revenue as one collective group, rather than individual contracts. Based on the Company’s historical knowledge of the contracts contained in this portfolio and the similar nature and characteristics of the customers, the Company has concluded the financial statement effects are not materially different than if accounting for revenue on a contract by contract basis.

Revenue is recognized over a period of time since the performance obligation is delivered in a series. The Company’s customers simultaneously receive and consume the benefits provided by the Company’s performance as and when provided. Furthermore, the Company has elected the “right to invoice” practical expedient, available within Topic 606, as its measure of progress, since it has a right to payment from a customer in an amount that corresponds directly with the value of its performance completed-to-date. The Company's revenue arrangements do not contain significant financing components.

For the three months ended June 30, 2020 and 2019, 79% and 62% of total revenue was attributable to customers with pricing contracts, respectively, versus 21% and 38% attributable to transactional customers, respectively. For the six months ended June 30, 2020 and 2019, 73% and 64% of total revenue was attributable to customers with pricing contracts, respectively, versus 27% and 36% attributable to transactional customers, respectively. Pricing contracts are generally annual contracts or longer, with auto renewal.

If a customer pays consideration before the Company transfers services to the customer, those amounts are classiﬁed as deferred revenue. As of June 30, 2020 and December 31, 2019, the balance of deferred revenue was $151 and $128, respectively, all of which is expected to be realized in the next 12 months. In relation to the deferred revenue balance as of December 31, 2019, $37 and $128 was recognized into revenue during the three and six months ended June 30, 2020, respectively.

As of June 30, 2020, $3,105 of revenue is expected to be recognized in the future for outstanding performance obligations, primarily related to pricing contracts that have a term of more than 12 months. $1,204 of revenue will be recognized in the remainder of 2020, $1,820 in 2021, $65 in 2022, and $16 in 2023 and thereafter. The actual timing of recognition may vary due to factors outside of the Company’s control. The Company excludes variable consideration related entirely to wholly unsatisfied performance obligations and contracts and recognizes such variable consideration based upon the right to invoice the customer.

Sales commissions are incurred and recorded on an ongoing basis over the term of the customer relationship. These costs are recorded in sales and marketing expenses.

In addition, the Company elected the practical expedient to not disclose the value of unsatisﬁed performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

6. Income taxes

The Company is subject to federal and state income taxes in the United States. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter.

The Company’s effective income tax rate differed from the statutory federal income tax rate of 21% for the three and six months ended June 30, 2020 and 2019. For the three and six months ended June 30, 2020 and 2019, the effective income tax rate was 0%, and the difference is primarily the result of the full valuation allowance applied against the Company’s deferred tax assets.

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the Company’s financial statements.

The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. All of the Company’s income tax filings since 2016 remain open for tax examinations.

The Company does not have any unrecognized tax benefits as of June 30, 2020 and December 31, 2019.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Common Stock and Treasury Stock

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Common Stock and Treasury Stock

7. Common stock and treasury stock

Common stock

As of June 30, 2020 and December 31, 2019, the number of issued shares of common stock was 11,707,829 and 11,657,912, respectively, which included shares of treasury stock of 103,147 and 103,147, respectively. The change in the number of issued shares of common stock was due to an aggregate of 49,917 shares of common stock issued as a result of the vesting of RSUs.

Treasury stock

As of June 30, 2020 and December 31, 2019, the Company held 103,147 shares of treasury stock, with a cost of $1,255, as a result of the shares withheld to pay withholding taxes upon the vesting of RSUs.

Share-based Compensation

6 Months Ended

Jun. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-based Compensation

8. Share-based compensation

On March 22, 2018, the board of directors of the Company and Fluent, Inc., in its capacity as sole stockholder of the Company at that time, approved the Red Violet, Inc. 2018 Stock Incentive Plan (the “2018 Plan”). A total of 3,000,000 shares of common stock were authorized to be issued under the 2018 Plan. The primary purpose of the 2018 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

On June 3, 2020, stockholders of the Company approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance under the 2018 Plan from 3,000,000 shares to 4,500,000 shares.

As of June 30, 2020, there were 1,533,624 shares of common stock available for future issuance under the 2018 Plan, as amended.

Details of unvested RSU activity during the six months ended June 30, 2020 were as follows:

	Number of units			Weighted average grant-date fair value
Unvested as of December 31, 2019		2,237,827		$	8.88
Granted		11,000		$	21.82
Vested and delivered		(49,917	)	$	7.71
Vested not delivered		(4,000	)	$	6.10
Forfeited		(5,000	)	$	7.25
Unvested as of June 30, 2020		2,189,910		$	8.98

On September 5, 2018 and January 16, 2019, the Company granted an aggregate of 1,487,500 RSUs and 90,000 RSUs, respectively, subject to both time- and performance-based requirements, to certain of its employees and directors, at a grant date fair value of $7.69 per share and $7.25 per share, respectively, with a three-year vesting period. Such RSU grants shall not vest unless and until the Company has, for any fiscal quarter in which the RSUs are outstanding, (i) gross revenue determined in accordance with the Company’s reviewed or audited financial statements in excess of $7.0 million for such fiscal quarter, (ii) positive adjusted EBITDA, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter, and (iii) the participant continues to provide services to the Company either as an employee, director or consultant on the last day of the quarter that the performance criteria are met (collectively, the “2018 Performance Criteria”). Provided the 2018 Performance Criteria are met, the RSUs will vest in accordance with the time-based requirements contained in the award agreement over three years. In the event of a change of control, all RSUs which have not vested on the date of such change of control shall immediately vest even if the 2018 Performance Criteria have not been met.

As of June 30, 2019, the Company determined that the 2018 Performance Criteria were met and one-third of the applicable awards vested and shares underlying such awards were issued in August 2019. The remaining shares underlying such awards are expected to vest and be issued in accordance with their time-based vesting requirement. As a result of meeting the 2018 Performance Criteria as of June 30, 2019, the Company recognized a total of $953 and $5,684 of share-based compensation expense relating to RSUs with the 2018 Performance Criteria for the three months ended June 30, 2020 and 2019, respectively, and $1,924 and $5,684 for the six months ended June 30, 2020 and 2019, respectively.

On August 28, 2019 and October 28, 2019, the Company granted an aggregate of 681,000 RSUs, subject to both time- and performance-based requirements, to certain employees, at a grant date fair value of $11.42 per share and $16.42 per share, respectively, with time vesting periods of either three or four years. On April 17, 2020, the Company granted an aggregate of 11,000 RSUs, subject to both time- and performance-based requirements, to certain employees, at a grant date fair value of $21.82 per share, with time vesting periods of either three or four years. Such RSU grants shall not vest unless and until the Company has, for any fiscal quarter in which the RSUs are outstanding, (i) gross revenue determined in accordance with the Company’s reviewed or audited financial statements in excess of (a) $10.0 million for such fiscal quarter and positive adjusted EBITDA of at least $1.5 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter for 267,000 RSUs, and (b) $12.5 million for such fiscal quarter and positive adjusted EBITDA of at least $2.0 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter for 425,000 RSUs, and (ii) the recipient continues to provide services to the Company either as an employee, director or consultant on the last day of the quarter that the performance criteria is met (collectively, the “2019 Performance Criteria”). Provided the respective 2019 Performance Criteria are met, the RSUs will vest in accordance with the time-based requirements contained in the award agreement over three or four years. In the event of a change of control, all RSUs which have not vested on the date of such change of control shall immediately vest even if the 2019 Performance Criteria have not been met.

As of the respective grant dates, the Company determined that it is probable that the 2019 Performance Criteria will be met and therefore, began to record the related amortization expense on the grant dates. The Company recognized a total of $1,411 and $2,800 of share-based compensation expense relating to RSUs with the 2019 Performance Criteria for the three and six months ended June 30, 2020, respectively.

As of June 30, 2020, unrecognized share-based compensation expense associated with the granted RSUs amounted to $10,086, which is expected to be recognized over a remaining weighted average period of 1.8 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Sales and marketing expenses	$	155	$	89	$	309	$	176
General and administrative expenses		2,187		3,520		4,254		3,707
Share-based compensation expense		2,342		3,609		4,563		3,883
Capitalized in intangible assets		468		168		1,056		318
Total	$	2,810	$	3,777	$	5,619	$	4,201

Related Party Transactions

6 Months Ended

Jun. 30, 2020

Related Party Transactions

9. Related party transactions

Services Agreement

On August 7, 2018, the Company entered into a services agreement with Mr. Michael Brauser (the “Consultant”), a greater than 10% stockholder, pursuant to which, the Consultant will be providing recommendations on organizational and capital structure, future financing needs and future acquisitions or strategic transactions (“Services Agreement”), for a term of one year, automatically renewing for additional one-year periods unless either party provides written notice to the other of its intent not to renew not fewer than 30 days prior to the expiration of the then-current term. Under the Services Agreement, the Consultant receives cash compensation of $30 per month and is entitled to participate in the Company’s incentive compensation plan. The Company recognized consulting service fees relating to the Services Agreement of a total of $90 during the three months ended June 30, 2020 and 2019, and $180 during the six months ended June 30, 2020 and 2019. In addition, amortization of share-based compensation expense of $338 and $1,115 in relation to the RSUs with the 2018 Performance Criteria previously granted to the Consultant was recognized during the three months ended June 30, 2020 and 2019, respectively, and $679 and $1,115 recognized during the six months ended June 30, 2020 and 2019, respectively.

Long-term loan

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long-term loan

10. Long-term loan

On May 5, 2020, the Company received funding under a promissory note dated May 5, 2020 (the “Promissory Note”) evidencing an unsecured non-recourse loan in the principal amount of $2,152 under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (the “Loan”). The Loan to the Company is being made through Legacy Bank of Florida (the “Lender”).

Long-term loan as of June 30, 2020 consists of the following:

(In thousands)	June 30, 2020
Principal amount	$	2,152
Included in condensed consolidated balance sheet:
Current portion of long-term loan	$	702
Long-term loan (non-current)		1,450
	$	2,152

The Loan has a two-year term and matures on May 5, 2022. The interest rate on the Loan is 1.0% per annum. Pursuant to the Promissory Note, payments shall be deferred for the first six months of the term of the Loan, followed by 18 approximately equal monthly installments of principal and interest. The Promissory Note contains customary events of default relating to, among other things, payment defaults, and breach of representations and warranties, or other provisions of the Promissory Note. As a result of the passage of the Paycheck Protection Program Flexibility Act of 2020 on June 5, 2020, the U.S. Small Business Administration (“SBA”), provided updated guidance that payments can be deferred until the loan forgiveness is determined, or if the Company does not apply for forgiveness, then 10 months after the Covered Period (as defined below) ends.

The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll, rent and utility costs incurred during the 24-week period that commenced on the date of funding (the “Covered Period”), and if at least 60% of the proceeds are used for covered payroll costs. Any forgiveness of the Loan will be subject to approval by the SBA and the Lender. The Company will be required to apply for such forgiveness within 10 months after the Covered Period. Because the Loan exceeds $2,000, the Company anticipate the U.S. Department of Treasury will audit the loan. Although the Company intends to use the proceeds of the Loan for such covered purposes, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.

Considering the Loan was effective in May 2020, the fair value of the Loan approximates its carrying amount as of June 30, 2020.

Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

11. Leases

On January 1, 2019, the Company adopted Leases (Topic 842) using the modified retrospective method applied to all leases existing at the date of initial application. The Company elected the practical expedients to not reassess whether any existing contracts are or contain leases, not reassess the lease classification for any existing leases, and not reassess initial direct costs for any existing leases, upon the adoption of Leases (Topic 842).

The Company leases its corporate headquarters of 21,020 rentable square feet in accordance with a non-cancelable 89-month operating lease agreement as amended and effective in January 2017. The Company also leases an additional office space of 6,003 rentable square feet in accordance with a non-cancellable 90-month operating lease agreement entered into in April 2017, with an option to extend for additional 60 months. The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised.

For the three and six months ended June 30, 2020 and 2019, a summary of the Company’s lease information is shown below:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Lease cost:
Operating lease costs	$	168	$	168	$	336	$	336
Other information:
Cash paid for operating leases	$	175	$	170	$	350	$	341
Right-of-use assets obtained in exchange for operating lease liabilities	$	-	$	-	$	-	$	3,042
Weighted average discount rate for operating leases ⁽¹⁾		-		-		-		8	%

(1)

The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the leases to determine the present value of the lease payments because the implicit rate in each lease is not readily determinable. The discount rate was calculated on the basis of information available as of January 1, 2019, the application date.

As of June 30, 2020, the weighted average remaining operating lease term was 4.3 years.

As of June 30, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	355
2021		724
2022		743
2023		765
2024		542
2025 and thereafter		77
Total maturities	$	3,206
Present value included in condensed consolidated balance sheet:
Current portion of operating lease liabilities	$	521
Noncurrent operating lease liabilities		2,192
Total operating lease liabilities	$	2,713
Difference between the maturities and the present value of operating lease liabilities	$	493

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and contingencies

(a) Capital commitment

The Company incurred data costs of $2,171 and $1,867 for the three months ended June 30, 2020 and 2019, respectively, and $4,303 and $3,555 for the six months ended June 30, 2020 and 2019, respectively, under certain data licensing agreements. As of June 30, 2020, material capital commitments under certain data licensing agreements were $10,762, shown as follows:

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	3,495
2021		5,615
2022		1,652
Total	$	10,762

(b) Contingencies

The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated.

The Company may be involved in litigation from time to time in the ordinary course of business. The Company does not believe that the ultimate resolution of any such matters will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, the results of such matters cannot be predicted with certainty and the Company cannot assure you that the ultimate resolution of any legal or administrative proceeding or dispute will not have a material adverse effect on its business, financial condition, results of operations and cash flows.

In December 2019, a novel strain of coronavirus, now known as Covid-19, was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In March 2020, the World Health Organization characterized Covid-19 as a pandemic. The Company has taken numerous steps, and will continue to take further actions as appropriate, in its approach to minimizing the impact of the Covid-19 pandemic. To ensure the health and well-being of its employees, beginning in March 2020, the Company instructed employees at its offices to work from home on a temporary basis. During the second quarter of 2020, the Company 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 which resulted in significantly reduced commercial activity, and certain temporary government-imposed moratoria on collection customers’ activities, the Company experienced reduced transactional volume. In addition, the Company took a proactive customer-centric approach working with customers who were impacted by Covid-19. Customers who had minimum contractual commitments and requested concessions because they were temporarily unable to meet their minimum contractual commitments as a result of Covid-19 were granted reductions, or eliminations where applicable, of minimums on a month-to-month basis during the second quarter. The end date of the customer’s agreement was extended by one month for each month of the temporary concession. In April 2020, the Company provided concessions to a total of 124 customers, representing $130 reduction of minimum committed spend. In May 2020, the Company provided concessions to a total of 123 customers, representing $129 reduction of minimum committed spend. In June 2020, the Company provided concessions to a total of 72 customers, representing $83 reduction of minimum committed spend. Beginning April 1, 2020, the Company elected, under Section 2302 of the 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, the Company received the Loan under the CARES Act as discussed in Note 10 above. The Company 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, the Company implemented protective safeguards, including daily temperature checks, mandatory wearing of masks, social distancing, plexiglass protective barriers, and an entire office HVAC UV-C system. The Company began its first phase of employees returning to the Boca Raton, Florida office in June 2020. The Company will continue to assess the need and timing of additional employees returning to the office. Given the dynamic nature of this health emergency, the full impact of the Covid-19 pandemic on the Company’s ongoing business, results of operations and overall financial performance cannot be reasonably estimated at this time.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Preparation	(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 (“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 GAAP have been condensed or omitted pursuant to those rules and regulations. 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, 2020. 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, 2019 (“2019 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date included in the 2019 Form 10-K, but does not include all disclosures required by 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.
Recently Issued Accounting Standards	(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. 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 became effective for public companies beginning January 1, 2020, and the Company adopted it on a modified retrospective approach. The guidance had no material impact on the Company’s condensed 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.

Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Loss Per Share

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except share data)	2020			2019			2020			2019
Numerator:
Net loss	$	(2,532	)	$	(3,850	)	$	(4,013	)	$	(5,228	)
Denominator:
Weighted average shares outstanding - Basic and diluted ⁽¹⁾		11,617,342			10,298,613			11,600,278			10,283,232
Loss per share:
Basic and diluted:	$	(0.22	)	$	(0.37	)	$	(0.35	)	$	(0.51	)

Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2020

Intangible Assets Net Excluding Goodwill [Abstract]

Intangible Assets Other than Goodwill

Intangible assets other than goodwill consist of the following:

June 30, 2020

December 31, 2019

(In thousands)

Amortization

Period

Gross Amount

Accumulated Amortization

Net

Gross Amount

Accumulated Amortization

Net

Software developed for internal use

5-10 years

33,834

(7,440

)

26,394

29,690

(5,656

)

24,034

Schedule of Estimated Amortization Expense

As of June 30, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows:

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	1,939
2021		4,728
2022		4,725
2023		4,648
2024		4,157
2025 and thereafter		6,197
Total	$	26,394

Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Unvested Restricted Stock Units

Details of unvested RSU activity during the six months ended June 30, 2020 were as follows:

	Number of units			Weighted average grant-date fair value
Unvested as of December 31, 2019		2,237,827		$	8.88
Granted		11,000		$	21.82
Vested and delivered		(49,917	)	$	7.71
Vested not delivered		(4,000	)	$	6.10
Forfeited		(5,000	)	$	7.25
Unvested as of June 30, 2020		2,189,910		$	8.98

Summary of Allocated Share-based Compensation

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Sales and marketing expenses	$	155	$	89	$	309	$	176
General and administrative expenses		2,187		3,520		4,254		3,707
Share-based compensation expense		2,342		3,609		4,563		3,883
Capitalized in intangible assets		468		168		1,056		318
Total	$	2,810	$	3,777	$	5,619	$	4,201

Long-term loan (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of long-term loan

Long-term loan as of June 30, 2020 consists of the following:

(In thousands)	June 30, 2020
Principal amount	$	2,152
Included in condensed consolidated balance sheet:
Current portion of long-term loan	$	702
Long-term loan (non-current)		1,450
	$	2,152

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 835
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 505
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 505
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Summary of Company's Lease Information

For the three and six months ended June 30, 2020 and 2019, a summary of the Company’s lease information is shown below:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Lease cost:
Operating lease costs	$	168	$	168	$	336	$	336
Other information:
Cash paid for operating leases	$	175	$	170	$	350	$	341
Right-of-use assets obtained in exchange for operating lease liabilities	$	-	$	-	$	-	$	3,042
Weighted average discount rate for operating leases ⁽¹⁾		-		-		-		8	%

(1)

Scheduled Future Maturities and Present Value of Operating Lease Liabilities

As of June 30, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	355
2021		724
2022		743
2023		765
2024		542
2025 and thereafter		77
Total maturities	$	3,206
Present value included in condensed consolidated balance sheet:
Current portion of operating lease liabilities	$	521
Noncurrent operating lease liabilities		2,192
Total operating lease liabilities	$	2,713
Difference between the maturities and the present value of operating lease liabilities	$	493

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Future Minimum Capital Payments under Certain Data Licensing Agreements

(In thousands)
Year	June 30, 2020
Remainder of 2020	$	3,495
2021		5,615
2022		1,652
Total	$	10,762

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2020 Segment
Accounting Policies [Abstract]
Operating segments	1

Loss Per Share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net loss	$ (2,532)	$ (3,850)	$ (4,013)	$ (5,228)
Weighted average shares outstanding - Basic and diluted	11,617,342	10,298,613	11,600,278	10,283,232
Loss per share:
Basic and diluted:	$ (0.22)	$ (0.37)	$ (0.35)	$ (0.51)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Loss Per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restricted Stock Units (RSUs)
Earnings Per Share [Line Items]
Shares excluded from the diluted loss per share calculation	2,189,910	2,237,000	2,189,910	2,237,000

Intangible Assets, Net - Intangible Assets Other than Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Net	$ 26,394	$ 24,034
Software Developed for Internal Use
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Amount	33,834	29,690
Intangible Assets, Accumulated Amortization	(7,440)	(5,656)
Intangible Assets, Net	$ 26,394	$ 24,034
Software Developed for Internal Use \| Minimum
Finite Lived Intangible Assets [Line Items]
Amortization Period	5 years
Software Developed for Internal Use \| Maximum
Finite Lived Intangible Assets [Line Items]
Amortization Period	10 years

Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Finite Lived Intangible Assets [Line Items]
Amortization expenses	$ 934	$ 617	$ 1,784	$ 1,171
Internally-developed Software
Finite Lived Intangible Assets [Line Items]
Intangible assets that have not started amortization	4,322		4,322
Capitalized costs of internally-developed software	$ 2,018	$ 1,651	$ 4,144	$ 3,231

Intangible Assets, Net - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Intangible Assets Net Excluding Goodwill [Abstract]
Remainder of 2020	$ 1,939
2021	4,728
2022	4,725
2023	4,648
2024	4,157
2025 and thereafter	6,197
Intangible Assets, Net	$ 26,394	$ 24,034

Goodwill - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
Goodwill - Additional Information (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Goodwill Disclosure [Abstract]
Goodwill	$ 5,227,000	$ 5,227,000
Date of annual goodwill impairment test	October 1
Goodwill impairment charges	$ 0	$ 0

Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Dec. 31, 2019
Revenue Recognition [Line Items]
Deferred revenue	$ 151		$ 151		$ 151	$ 128
Deferred revenue realization period			12 months
Revenue recognized, previously reported as deferred	37		$ 128
Estimated revenue expected to be recognized in the future	$ 3,105		$ 3,105
Period over which subscription contract terms exceed			12 months
Customers With Pricing Contracts
Revenue Recognition [Line Items]
Percentage of Revenue	79.00%	62.00%	73.00%	64.00%
Transactional Customers
Revenue Recognition [Line Items]
Percentage of Revenue	21.00%	38.00%	27.00%	36.00%

Revenue Recognition - Additional Information (Details 1) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 3,105
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 1,204
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue For Future Outstanding Performance Obligations	$ 3,105
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 1,820
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 65
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 16
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%
Effective income tax rate, percentage	0.00%	0.00%	0.00%	0.00%
Percentage of tax benefits likelihood of being realized upon settlement of tax authority			greater than 50%
Unrecognized tax benefits	$ 0		$ 0		$ 0

Common Stock and Treasury Stock - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Common stock, shares issued	11,707,829	11,657,912
Treasury Stock, issued	103,147	103,147
Treasury Stock, Value	$ 1,255	$ 1,255
Treasury Stock, Shares	103,147	103,147
Common Stock
Vesting of restricted stock units, Shares	49,917

Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands					1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 17, 2020	Aug. 28, 2019	Jan. 16, 2019	Sep. 05, 2018	Oct. 28, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 03, 2020	Mar. 22, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Amortization of share based compensation expense						$ 2,342	$ 3,609	$ 4,563	$ 3,883
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted								11,000
Grant date fair value per share								$ 21.82
Unrecognized share-based compensation costs in respect of granted RSUs						$ 10,086		$ 10,086
Unrecognized share-based compensation remaining weighted average period								1 year 9 months 18 days
2018 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common stock authorized										4,500,000	3,000,000
Common stock available for future issuance						1,533,624		1,533,624
2018 Stock Incentive Plan \| Performance Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Amortization of share based compensation expense						$ 953	$ 5,684	$ 1,924	$ 5,684
2018 Stock Incentive Plan \| Performance Based Restricted Stock Units \| Employees and Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted			90,000	1,487,500
Grant date fair value per share			$ 7.25	$ 7.69
Vesting period			3 years	3 years
Gross revenue threshold limit for vesting of grants				$ 7,000
2018 Stock Incentive Plan \| Performance Based Restricted Stock Units \| Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	11,000	681,000			681,000
Grant date fair value per share	$ 21.82	$ 11.42			$ 16.42
Amortization of share based compensation expense						$ 1,411		$ 2,800
2018 Stock Incentive Plan \| Performance Based Restricted Stock Units \| Employees \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	267,000	267,000			267,000
Vesting period	3 years	3 years			3 years
Gross revenue threshold limit for vesting of grants	$ 10,000	$ 10,000			$ 10,000
Positive adjusted EBITDA threshold limit for vesting of grants	$ 1,500	$ 1,500			$ 1,500
2018 Stock Incentive Plan \| Performance Based Restricted Stock Units \| Employees \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	425,000	425,000			425,000
Vesting period	4 years	4 years			4 years
Gross revenue threshold limit for vesting of grants	$ 12,500	$ 12,500			$ 12,500
Positive adjusted EBITDA threshold limit for vesting of grants	$ 2,000	$ 2,000			$ 2,000

Share-based Compensation - Schedule of Unvested RSU Activity (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2020 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested, Number of units Beginning balance \| shares	2,237,827
Granted, Number of units \| shares	11,000
Vested and delivered, Number of units \| shares	(49,917)
Vested not delivered, Number of units \| shares	(4,000)
Forfeited, Number of units \| shares	(5,000)
Unvested, Number of units Ending balance \| shares	2,189,910
Unvested, Weighted average grant-date fair value, Beginning balance \| $ / shares	$ 8.88
Granted, Weighted average grant-date fair value \| $ / shares	21.82
Vested and delivered, Weighted average grant-date fair value \| $ / shares	7.71
Vested not delivered, Weighted average grant-date fair value \| $ / shares	6.10
Forfeited, Weighted average grant-date fair value \| $ / shares	7.25
Unvested, Weighted average grant-date fair value, Ending balance \| $ / shares	$ 8.98

Share-based Compensation - Summary of Allocated Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based compensation recognized
Share-based compensation expense	$ 2,342	$ 3,609	$ 4,563	$ 3,883
Capitalized in intangible assets	468	168	1,056	318
Total	2,810	3,777	5,619	4,201
Sales and Marketing Expenses
Share-based compensation recognized
Share-based compensation expense	155	89	309	176
General and Administrative Expenses
Share-based compensation recognized
Share-based compensation expense	$ 2,187	$ 3,520	$ 4,254	$ 3,707

Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Aug. 07, 2018	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
Share-based compensation expense		$ 2,342	$ 3,609	$ 4,563	$ 3,883
Services Agreement \| Michael Brauser-Former Executive Chairman
Related Party Transaction [Line Items]
Related party stockholder, percent	10.00%
Term of agreement, related party	1 year
Renewal term of agreement, related party	1 year
Consulting service fee monthly payment	$ 30
Consulting service fee recognized amount		90	90	180	180
Services Agreement \| Michael Brauser-Former Executive Chairman \| Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Share-based compensation expense		$ 338	$ 1,115	$ 679	$ 1,115

Long-term loan - Additional Information (Details) - Promissory Notes - Cares Act - Legacy Bank Of Florida $ in Thousands	May 05, 2020 USD ($)
Debt Instrument [Line Items]
Unsecured non-recourse loan in the principal amount	$ 2,152
Term of loan	2 years
Loan maturity date	May 05, 2022
Loan Interest rate	1.00%
Debt Instrument, limit amount	$ 2,000
Minimum
Debt Instrument [Line Items]
Percentage of loan proceeds used for covered payroll costs	60.00%

Long-term loan - Schedule of Long-term loan (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Debt Disclosure [Abstract]
Principal amount	$ 2,152
Included in condensed consolidated balance sheet:
Current portion of long-term loan	702
Long-term loan (non-current)	1,450
Long-term loan, gross	$ 2,152

Leases - Additional Information (Details) - ft²	3 Months Ended
Leases - Additional Information (Details) - ft²	Mar. 31, 2020	Jun. 30, 2020	Apr. 30, 2017	Jan. 31, 2017
Leases [Abstract]
Operating leases rentable square feet			6,003	21,020
Operating lease agreement			90 months	89 months
Operating lease, existence of option to extend	true
Operating lease, extended term			60 months
Weighted average remaining operating lease		4 years 3 months 18 days

Leases - Summary of Company's Lease Information (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2020

Jun. 30, 2019

Jun. 30, 2020

Jun. 30, 2019

Dec. 31, 2018

Lease cost:

Operating lease costs

$ 168

$ 336

Other information:

Cash paid for operating leases

$ 175

$ 170

$ 350

341

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

$ 3,042

Weighted average discount rate for operating leases

8.00%

^[1]

8.00%

^[1]

8.00%

[1]

Leases - Summary of Company's Lease Information (Paranthetical) (Details)

Jun. 30, 2019

Dec. 31, 2018

Leases [Abstract]

Weighted average discount rate for operating leases

8.00%

^[1]

8.00%

[1]

Leases - Scheduled Future Maturities and Present Value of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Remainder of 2020	$ 355
2021	724
2022	743
2023	765
2024	542
2025 and thereafter	77
Total maturities	3,206
Present value included in condensed consolidated balance sheet:
Current portion of operating lease liabilities	521	$ 491
Noncurrent operating lease liabilities	2,192	$ 2,459
Total operating lease liabilities	2,713
Difference between the maturities and the present value of operating lease liabilities	$ 493

Commitments and Contingencies - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($) Customer	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) Customer	Jun. 30, 2019 USD ($)	May 31, 2020 USD ($) Customer	Apr. 30, 2020 USD ($) Customer
Commitments And Contingencies Disclosure [Abstract]
Data cost incurred	$ 2,171	$ 1,867	$ 4,303	$ 3,555
Total capital commitment under certain data licensing agreements	10,762		10,762
Loss contingency, concessions granted	$ 83		$ 83		$ 129	$ 130
Number Of Customers \| Customer	72		72		123	124

Commitments and Contingencies - Future Minimum Capital Payments under Certain Data Licensing Agreements (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2020	$ 3,495
2021	5,615
2022	1,652
Total	$ 10,762