UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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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
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol (s) |
Name of each exchange on which registered |
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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. ☒
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). ☒
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.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of August 6, 2021, the registrant had
RED VIOLET, INC.
TABLE OF CONTENTS FOR FORM 10-Q
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Item 1. |
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Condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 |
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1 |
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2 |
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Condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 |
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5 |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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13 |
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Item 3. |
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20 |
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Item 4. |
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20 |
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Item 1. |
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21 |
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Item 1A. |
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21 |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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21 |
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Item 6. |
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22 |
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23 |
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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)
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June 30, 2021 |
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December 31, 2020 |
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ASSETS: |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowance for doubtful accounts of $ June 30, 2021 and December 31, 2020, respectively |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Right-of-use assets |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS' EQUITY: |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Current portion of operating lease liabilities |
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Current portion of long-term loan |
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- |
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Deferred revenue |
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Total current liabilities |
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Noncurrent operating lease liabilities |
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Long-term loan |
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- |
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Total liabilities |
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Shareholders' equity: |
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Preferred stock—$ issued and outstanding, as of June 30, 2021 and December 31, 2020 |
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Common stock—$ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
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$ |
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$ |
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See notes to condensed consolidated financial statements
1
RED VIOLET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Costs and expenses: |
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Cost of revenue (exclusive of depreciation and amortization) |
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Sales and marketing expenses |
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General and administrative expenses |
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Depreciation and amortization |
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Total costs and expenses |
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Loss from operations |
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( |
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( |
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Interest (expense) income, net |
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( |
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- |
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( |
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Gain on extinguishment of debt |
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- |
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- |
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Income (loss) before income taxes |
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( |
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( |
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Income taxes |
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- |
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- |
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- |
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- |
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Net income (loss) |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Earnings (loss) per share: |
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Basic |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Diluted |
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$ |
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$ |
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$ |
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$ |
( |
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Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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See notes to condensed consolidated financial statements
2
RED VIOLET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amounts in thousands, except share data)
(unaudited)
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Common stock |
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Treasury stock |
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Additional paid-in |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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deficit |
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Total |
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Balance at March 31, 2020 |
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$ |
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( |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Share-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
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( |
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Balance at June 30, 2020 |
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$ |
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( |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Balance at March 31, 2021 |
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$ |
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- |
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$ |
- |
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$ |
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$ |
( |
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$ |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Share-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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- |
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- |
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Balance at June 30, 2021 |
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$ |
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- |
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$ |
- |
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$ |
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$ |
( |
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$ |
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Common stock |
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Treasury stock |
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Additional paid-in |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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deficit |
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Total |
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Balance at December 31, 2019 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Share-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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Balance at June 30, 2020 |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Balance at December 31, 2020 |
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$ |
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- |
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$ |
- |
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$ |
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$ |
( |
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$ |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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Share-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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- |
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- |
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Balance at June 30, 2021 |
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$ |
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- |
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$ |
- |
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$ |
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$ |
( |
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$ |
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See notes to condensed consolidated financial statements
3
RED VIOLET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
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Six Months Ended June 30, |
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2021 |
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2020 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
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$ |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation and amortization |
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Share-based compensation expense |
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Write-off of long-lived assets |
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Provision for bad debts |
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Noncash lease expenses |
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Interest expense |
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- |
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Gain on extinguishment of debt |
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( |
) |
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- |
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Changes in assets and liabilities: |
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Accounts receivable |
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( |
) |
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Prepaid expenses and other current assets |
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( |
) |
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( |
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Other noncurrent assets |
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Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
) |
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( |
) |
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Deferred revenue |
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( |
) |
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Operating lease liabilities |
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( |
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( |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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( |
) |
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( |
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Capitalized costs included in intangible assets |
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( |
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( |
) |
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Net cash used in investing activities |
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( |
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( |
) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from long-term loan |
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- |
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Net cash provided by financing activities |
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- |
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Net increase in cash and cash equivalents |
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$ |
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$ |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURE INFORMATION |
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Cash paid for interest |
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$ |
- |
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$ |
- |
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Cash paid for income taxes |
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$ |
- |
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$ |
- |
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Share-based compensation capitalized in intangible assets |
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$ |
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$ |
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See notes to condensed consolidated financial statements
4
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 (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) 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, 2021.
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, 2020 (“Form 10-K”).
The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date included in the Form 10-K, but does not include all disclosures required by GAAP.
The Company has only
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.
2. Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings (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.
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(In thousands, except share data) |
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2021 |
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2020 |
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2021 |
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2020 |
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Numerator: |
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Net income (loss) |
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$ |
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$ |
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$ |
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$ |
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Denominator: |
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Weighted average shares outstanding: |
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Basic |
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Diluted(1) |
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Earnings (loss) per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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5
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(1) |
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3. Intangible assets, net
Intangible assets other than goodwill consist of the following:
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June 30, 2021 |
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December 31, 2020 |
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(In thousands) |
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Amortization Period |
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Gross Amount |
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Accumulated Amortization |
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Net |
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Gross Amount |
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Accumulated Amortization |
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Net |
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Software developed for internal use |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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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 $
The Company capitalized costs of software developed for internal use of $
As of June 30, 2021, estimated amortization expense related to the Company’s intangible assets for the remainder of 2021 through 2026 and thereafter are as follows:
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(In thousands) |
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Year |
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June 30, 2021 |
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Remainder of 2021 |
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$ |
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2022 |
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2023 |
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2024 |
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