10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2022

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from          to         

Commission File Number 001-34261

SYMBOLIC LOGIC, INC.

f/k/a Evolving Systems, Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-1010843
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

9800 Pyramid Court, Suite 400 Englewood, CO	80112
(Address of principal executive offices)	(Zip code)

(303) 802-1000

(Registrant’s telephone number, including area code)

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

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EVOL	NONE

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

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

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 7, 2022, there were 10,668,992 shares outstanding of Registrant’s Common Stock (par value $0.001 per share).

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	31

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)

	September 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	16,776	$	39,445
Prepaid and other current assets		467		106
Fixed maturity securities, available for sale, fair value		4,345		—
Equity securities, fair value		6,031		—
Debt securities, available for sale, fair value		1,575		—
Total current assets		29,194		39,551
Property and equipment, net		4		4
Investments, at cost		1,000		—
Total assets	$	30,198	$	39,555
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	703	$	1,252
Escrow liability		172		—
Income taxes payable		441		575
Other liabilities		33		—
Total current liabilities		1,349		1,827
Total liabilities		1,349		1,827
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock, $0.001 par value; 40,000,000 shares authorized; 11,110,881 shares issued and 10,668,992 shares outstanding as of September 30, 2022 and 12,437,073 shares issued and 12,258,184 shares outstanding as of December 31, 2021		11		12
Additional paid-in capital		97,920		100,024
Treasury stock, 441,889 shares as of September 30, 2022 and 178,889 shares December 31, 2021, at cost		(1,661)		(1,253)
Accumulated other comprehensive loss		(3,153)		—
Accumulated deficit		(64,268)		(61,055)
Total stockholders’ equity		28,849		37,728
Total liabilities and stockholders’ equity	$	30,198	$	39,555

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	—	$	—	$	—	$	—
OPERATING EXPENSES
General and administrative		1,097		637		3,185		2,295
Depreciation		1		1		2		2
Total operating expenses		1,098		638		3,187		2,297
Loss from operations		(1,098)		(638)		(3,187)		(2,297)
Other income (expense)
Interest income		517		—		1,096		2
Interest expense		—		(2)		(2)		(2)
Other income (expense), net		93		—		2		(1)
Realized gain on investments, net		127		—		521		—
Unrealized loss on investments, net		(144)		—		(1,702)		—
Other income (expense), net		593		(2)		(85)		(1)
Loss from continuing operations before income taxes		(505)		(640)		(3,272)		(2,298)
Income tax expense (benefit)		55		15		(10)		23
Net loss from continuing operations		(560)		(655)		(3,262)		(2,321)
Income from discontinued operations before income taxes		—		1,009		—		2,925
Income tax expense (benefit) from discontinued operations		—		279		(49)		492
Net income from discontinued operations		—		730		49		2,433
Net (loss) income	$	(560)	$	75	$	(3,213)	$	112
Basic loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Basic earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20
Diluted loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Diluted earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20
Weighted average basic shares outstanding		10,803		12,258		11,801		12,240
Weighted average diluted shares outstanding		10,803		12,258		11,801		12,258

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

(unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Net (loss) income	$	(560)	$	75	$	(3,213)	$	112
Other comprehensive (loss)
Foreign currency translation (loss)		—		(36)		—		(14)
Unrealized loss on available-for-sale investments		(579)		—		(3,153)		—
Comprehensive (loss) income	$	(1,139)	$	39	$	(6,366)	$	98

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

Nine Months Ended September 30, 2022

								Accumulated
				Additional				other				Total
	Common Stock			paid-in		Treasury		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		stock		loss		deficit		equity
Balance at January 1, 2022	12,258,184	$	12	$	100,024	$	(1,253)	$	—	$	(61,055)	$	37,728
Restricted stock vested	175,000		—		—		—		—		—		—
Stock-based compensation expense	—		—		365		—		—		—		365
Treasury stock acquired	(263,000)		—		—		(408)		—		—		(408)
Retirement of common stock	(1,501,192)		(1)		(2,469)		—		—		—		(2,470)
Net loss	—		—		—		—		—		(3,213)		(3,213)
Unrealized loss on available-for-sale investments	—		—		—		—		(3,153)		—		(3,153)
Balance at September 30, 2022	10,668,992	$	11	$	97,920	$	(1,661)	$	(3,153)	$	(64,268)	$	28,849

Nine Months Ended September 30, 2021

								Accumulated
				Additional				other				Total
	Common Stock			paid-in		Treasury		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		stock		loss		deficit		equity
Balance at January 1, 2021	12,195,909	$	12	$	99,776	$	(1,253)	$	(10,345)	$	(78,500)	$	9,690
Restricted stock vested	61,806		—		—		—		—		—		—
Stock-based compensation expense	—		—		242		—		—		—		242
Net income	—		—		—		—		—		112		112
Foreign currency translation loss	—		—		—		—		(14)		—		(14)
Balance at September 30, 2021	12,257,715	$	12	$	100,018	$	(1,253)	$	(10,359)	$	(78,388)	$	10,030

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

Three Months Ended September 30, 2022

								Accumulated
				Additional				other				Total
	Common Stock			paid-in		Treasury		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		stock		loss		deficit		equity
Balance at June 30, 2022	10,831,992	$	11	$	97,760	$	(1,253)	$	(2,574)	$	(63,708)	$	30,236
Restricted stock vested	100,000		—		—		—		—		—		—
Stock-based compensation expense	—		—		160		—		—		—		160
Treasury stock acquired	(263,000)		—		—		(408)		—		—		(408)
Net loss	—		—		—		—		—		(560)		(560)
Unrealized loss on available-for-sale investments	—		—		—		—		(579)		—		(579)
Balance at September 30, 2022	10,668,992	$	11	$	97,920	$	(1,661)	$	(3,153)	$	(64,268)	$	28,849

Three Months Ended September 30, 2021

								Accumulated
				Additional				other				Total
	Common Stock			paid-in		Treasury		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		stock		loss		deficit		equity
Balance at June 30, 2021	12,257,246	$	12	$	99,990	$	(1,253)	$	(10,323)	$	(78,463)	$	9,963
Restricted stock vested	469		—		—		—		—		—		—
Stock-based compensation expense	—		—		28		—		—		—		28
Net income	—		—		—		—		—		75		75
Foreign currency translation loss	—		—		—		—		(36)		—		(36)
Balance at September 30, 2021	12,257,715	$	12	$	100,018	$	(1,253)	$	(10,359)	$	(78,388)	$	10,030

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(3,213)	$	112
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		2		308
Amortization of intangible assets		—		717
Amortization of operating leases — right of use assets		—		284
Stock-based compensation expense		365		242
Foreign currency transaction loss, net		—		148
Bad debt expense		—		14
Provision for deferred income taxes		—		(5)
Loan origination income		(14)		—
Gain on PPP Loan forgiveness		—		(319)
Realized gains on investments		(521)		—
Unrealized losses on investments		1,702		—
Change in operating assets and liabilities:
Contract receivables		—		462
Unbilled work-in-progress		—		(502)
Prepaid and other assets		(360)		(25)
Accounts payable and accrued liabilities		97		(153)
Escrow liability		172		—
Income taxes receivable		—		(417)
Income taxes payable		(134)		—
Unearned revenue		—		1,015
Long-term assets - other		—		(256)
Lease obligations — operating leases		—		(285)
Net cash (used in) provided by operating activities		(1,904)		1,340
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2)		(316)
Purchases of investments		(21,484)		—
Proceeds on sale of investments		4,245		—
Transaction fees related to prior period disposition		(646)		—
Net cash used in investing activities		(17,887)		(316)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable		—		(143)
Purchase of treasury stock		(408)		—
Retirement of common stock		(2,470)		—
Net cash used in financing activities		(2,878)		(143)
Effect of exchange rate changes on cash and cash equivalents		—		(63)
Net (decrease) increase in cash and cash equivalents		(22,669)		818
Cash and cash equivalents at beginning of period		39,445		2,763
Cash and cash equivalents at end of period	$	16,776	$	3,581
Supplemental disclosure of cash and non-cash transactions:
Interest paid	$	2	$	4
Income taxes paid, net of refunds	$	82	$	788
Deferred loan origination income	$	33	$	—
Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets	$	—	$	370

The accompanying notes are an integral part of these condensed consolidated financial statements

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SYMBOLIC LOGIC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization — On December 31, 2021, Symbolic Logic, Inc. (the “Company” or “Symbolic Logic”) f/k/a Evolving Systems, Inc. (“Evolving Systems”) closed on the terms of the Equity Purchase Agreement (the “Equity Purchase Agreement”) and two Software Purchase Agreements (the “Software Purchase Agreements” and, together with the Equity Purchase Agreement and the other transaction documents described therein, the “Purchase Agreements”) dated as of October 15, 2021, with subsidiaries and affiliates of PartnerOne Capital, Inc. (the “Purchasers”). The Purchase Agreements provided for the sale and transfer of substantially all of Evolving Systems’ operating subsidiaries and all of its assets to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements included customary terms and conditions, including an adjustment to the purchase price based on Evolving Systems’ cash and cash equivalents on hand as of the closing date and provisions that require Evolving Systems to indemnify the Purchasers for certain losses that it incurs as a result of a breach by Evolving Systems of its representations and warranties in the Purchase Agreements and certain other matters. Evolving Systems received cash proceeds of $36,032,899 and may receive up to an additional $2,500,000 in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement.

Results of the sold subsidiaries are retrospectively reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. Prior year information has been adjusted to conform to the current year presentation. Unless otherwise stated, the information disclosed in the footnotes accompanying the condensed consolidated financial statements refers to continuing operations. See Note 2 “Discontinued Operations” for more information regarding results from discontinued operations.

Simultaneously with the approval by the board of directors of the Company to execute the Purchase Agreements, the board formed a subcommittee of the board (the “Investment Committee”) to evaluate options to maximize the value of the Company’s assets, which, following the closing of the transactions contemplated under the Purchase Agreements, consists primarily of cash and cash equivalents. The board of directors has authorized the Investment Committee to retain such counsel, experts, consultants, or other professionals as the Investment Committee shall deem appropriate from time to time to aid the Investment Committee in the performance of its duties. The Company’s directors and executives have an extensive background in mergers and acquisitions (“M&A”) activity. The Company plans to use its cash assets and network of relationships to seek to acquire businesses and/or assets as well as to consider strategic partners.

Following the sale of its assets in December 2021, the Company began to evaluate two initial areas of product focus, each of which is in a research-oriented pre-release mode. The two areas of focus relate to the application of self-learning algorithms and the symbolic tagging and organizing of physical objects. The Company continues to selectively seek new opportunities through potential mergers, acquisitions, joint ventures, strategic partnerships, and future product development.

The COVID-19 global outbreak caused instability and volatility in multiple markets throughout the world. We have leveraged our ability to work remotely resulting in limited effect on our day-to-day operations.

On December 9, 2021, the Company received a letter from the Nasdaq Capital Market (“NASDAQ”) regarding the Equity Purchase Agreement and the two Software Purchase Agreements entered into by the Company pursuant to which we sold all of our assets. The NASDAQ staff requested certain information from the Company regarding its on-going business. We provided a response to the staff on January 7, 2022. We received a follow up request from the NASDAQ for additional information and we provided a response to the staff on February 15, 2022.

On April 12, 2022, Evolving Systems, Inc. filed with the Secretary of State of Delaware a Certificate of Amendment to amend its Certificate of Incorporation to change the Company’s name from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” effective as of April 12, 2022. The Company also amended and restated its Bylaws to change all Company references from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” No other amendments were made to the Certificate of Incorporation or Bylaws.

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On April 13, 2022, Symbolic Logic, Inc. f/k/a Evolving Systems, Inc. notified the NASDAQ of its intention to voluntarily withdraw its common stock, par value $0.001 per share (the “Common Stock”), from listing on Nasdaq. The Company filed a Form 25 with the Securities and Exchange Commission (the “SEC”) on Monday, April 25, 2022, relating to delisting the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to be effective ten days thereafter. After delisting, the Common Stock may be quoted on the OTC Pink Open Market.

On May 23, 2022, the Company announced a modified Dutch auction tender offer to purchase with cash up to $9.6 million of shares of its common stock which expired on June 23, 2022. Based on the final count by the depositary for the tender offer, a total of 1,501,192 shares of common stock were validly tendered and not validly withdrawn at or below the price of $1.55 per share. The Company accepted all of these shares of common stock for purchase at the purchase price of $1.55 per share, for a total cost of $2.5 million, including $0.2 million in fees and expenses. The total of 1,501,192 shares of common stock accepted for purchase represents approximately 12.2 % of the Company’s total shares of common stock outstanding.

During the month of September 2022, the Company through a direct purchase and an open market purchase which were not related to the tender offering conducted in May 2022, acquired an additional 263,000 shares at a purchase price of $1.55 per share, for a total cost of $0.4 million. These shares are currently being held as treasury stock.

On August 26, 2022, Matthew Stecker resigned as the Company’s Chief Executive Officer. In connection with the resignation, the Company and Mr. Stecker entered into an agreement that including a release of all claims and certain obligations under his employment agreement and Mr. Stecker received a payment of $0.35 million and accelerated vesting of his 0.1 million shares of unvested restricted stock awards. On the same day, the Company appointed Mr. Igor Volshteyn as its Chief Executive Officer.

On October 21, 2022 the Company’s board of directors determined that “going dark” is in the best interest of the Company and its stockholders as a result of the substantial cost savings from the elimination of accounting and other expense related to maintaining its status as a public reporting company, as well as the increased ability of management to focus on core business activities, among other things. The Company therefore plans to affect a suspension of its reporting obligation under the Securities Exchange Act of 1934, as amended, and expects to file a Form 15 with the Securities and Exchange Commission in early January 2023.

CCUR Holdings Inc. filed an amended schedule 13D on November 2, 2022, announcing that they have acquired in total 6,982,939 common shares of the Company. This represented 65% beneficial ownership of the outstanding shares of the Company as of the date of the announcement.

We believe our current liquidity from our investments and future operations will be sufficient to fund operations and meet the Company’s cash needs for future working capital and capital expenditure requirements for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. In making this assessment, we considered our $16.8 million in cash and cash equivalents and our $27.8 million in working capital at September 30, 2022.

Interim Condensed Consolidated Financial Statements — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and in conformity with the instructions to Form 10-Q and Article 8 of Regulation S-X and the related rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these condensed consolidated financial statements are adequate to make the information presented not misleading. The condensed consolidated financial statements included in this document have been prepared on the same basis as the annual consolidated financial statements, and in our opinion reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with US GAAP and SEC regulations for interim financial statements. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K as filed with the SEC on April 11, 2022.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP), requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the condensed consolidated financial

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statements, as well as the reported amounts of expenses during the reporting period. We made estimates with respect to income tax valuation and fair value of investments and stock-based compensation amounts. Actual results could differ from these estimates.

Principles of Consolidation — The unaudited condensed consolidated financial statements include the accounts of Symbolic Logic and subsidiaries, all of which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation.

Stock-based Compensation — We account for stock-based compensation by applying a fair-value-based measurement method to account for stock-based payment transactions with employees, non-employees and directors. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock instead of settling such obligations with cash payments. We use the Black-Scholes model to estimate the fair value of each option grant on the date of grant. This model requires the use of estimates for the expected term of the options and expected volatility of the price of our common stock. We recognize forfeitures as they occur rather than estimating them at the time of the grant.

Investments — Investments in entities where the Company owns less than twenty percent of the voting stock of the individual entity, does not exercise significant influence over operating and financial policies of the entity, and the investment does not have a readily determinable fair value, are accounted for using the cost method. Under the cost method of accounting, the investment is carried at cost less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. As of September 30, 2022, the Company held one cost method investment for $1,000,000 (see Note 5, “Investments”).

Fair Value Measurements — Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which it would transact and assumptions that market participants would use when pricing the asset or liability.

ASC Topic 820, Fair Value Measurements and Disclosures, requires certain disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

● Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

● Level 3 — Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which include the use of management estimates.

Our investment portfolio consists of money market funds, equity securities, and corporate debt. All highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months when purchased are classified as available-for-sale, trading, or held-to-maturity investments.

Our fixed maturity securities and debt securities are classified as available-for-sale, and are reported at fair value, with unrealized gains and losses, net of tax, reported in the accompanying condensed consolidated balance sheets in stockholders’ equity as a component of accumulated other comprehensive income or loss. Realized gains or losses on available-for-sale investments are reclassified from other comprehensive income (loss) to net income (loss) in the condensed consolidated statements of operations. Investments in equity securities with readily determinable fair values (marketable) are measured at fair value, with changes in the fair value recognized as a component of unrealized gain on investments, net in the condensed consolidated statements of operations.

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Investments in equity investments that do not have readily determinable fair values (non-marketable) are accounted for at cost minus impairment, if any, and any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, also referred to as the measurement alternative. Any adjustments to the carrying value of these investments are recorded in unrealized gain on investments, net in the condensed consolidated statements of operations.

Interest on securities is reported in the accompanying condensed consolidated statements of operations in interest income. Dividends paid by securities are reported in the accompanying condensed consolidated statements of operations in other income. Realized gains or losses are reported in the accompanying condensed consolidated statements of operations in net realized gain on investments.

The following table presents the fair value hierarchy for those assets and liabilities the Company measured at fair value on a recurring basis:

	Fair value at September 30, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	13,799	$	13,799	$	—	$	—
Cash and cash equivalents	$	13,799	$	13,799	$	—	$	—
Common stock and common stock options	$	6,031	$	6,031	$	—	$	—
Equity securities	$	6,031	$	6,031	$	—	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Corporate bonds	$	4,345	$	—	$	4,345	$	—
Fixed maturity securities	$	4,345	$	—	$	4,345	$	—

Income Taxes — We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheets, as well as operating losses and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized.

We use a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

Recently Adopted Accounting Pronouncements — In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (ASC 260), Debt—Modifications and Extinguishments (ASC 470-50), Compensation—Stock Compensation (ASC 718) and Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815-40). The amendments in this update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in ASC 260, Earnings Per Share. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The amendments in this ASU did not have a material impact on our condensed consolidated financial statements.

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Recently Issued Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have to disclose significantly more information about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements. The Company anticipates presenting amendments on a modified-retrospective basis through a cumulative effect adjustment to opening retained earnings as of the date of adoption.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (ASC 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements.

NOTE 2 — DISCONTINUED OPERATIONS

On December 31, 2021, Evolving Systems, Inc. and certain of its subsidiaries completed the Equity Purchase Agreement and two Software Purchase Agreements with subsidiaries and affiliates of PartnerOne Capital, Inc. The Purchase Agreements contemplate the sale and transfer of substantially all of the Company’s operating subsidiaries and all of its assets to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements include customary terms and conditions, including an adjustment to the purchase price based on the Company’s cash and cash equivalents on hand and other adjustments as of the closing date and provisions that require the Company to indemnify the Purchasers for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the Purchase Agreements and certain other matters.

Proceeds from the sale was payable to the Company as follows: (1) a $37.5 million payment to the Company in cash on the closing date of December 31, 2021 (adjusted as set forth in the Equity Purchase Agreement), and (2) $2.5 million placed in escrow on the closing date as security for the Company’s indemnification obligations to the Purchasers under the Purchase Agreements, which amount will be released to the Company on or before the date that is twelve months from the closing date (less any portion of the escrow used to make indemnification payments to the Purchasers). The Company received cash proceeds of $36.0 million and may receive up to an additional $2.5 million in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement and included in the cash and cash equivalents in our condensed consolidated balance sheets.

The Purchase Agreements contain customary representations and warranties of each of the parties. The Purchase Agreements contain indemnification rights in favor of the Company following closing for (i) breaches of any of the representations or warranties by the Purchasers including, but not limited to, breaches related to organization, authorization, and governmental authorization, and (ii) breaches of the covenants or agreements of the Purchasers in the Purchase Agreements. In addition, the Purchase Agreements contain indemnification rights in favor of the Purchasers following closing for (i) breaches of certain fundamental representations and warranties by the Company, including breaches related to organization, authorization, capitalization, title to purchased assets, and finders’ fees, (ii) breaches of any of the representations and warranties by the Company, and (iii) breaches of the covenants or agreements of the Company in the Purchase Agreements.

Accordingly, the operating results of its operations in the entities and related business operations sold for September 30, 2021 presented have been reclassified in the condensed consolidated statements of operations as “income from discontinued operations.” Interest expense that is specifically identifiable to debt related to the entities sold qualifies as discontinued operations and is allocated to interest expense from discontinued operations in the Company’s condensed consolidated financial statements. Additionally, the carrying amounts of the assets and liabilities for the entities sold as of December 31, 2021 presented have been reclassified in the condensed consolidated balance sheets.

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The following table presents the financial results of the discontinued operations:

	For the Three		For the Nine
	Months Ended		Months Ended
	September 30,		September 30,
	2021		2021
Revenue	$	6,974	$	20,428
Costs of revenue		(2,081)		(6,506)
Sales and marketing		(1,325)		(4,081)
General and administrative		(603)		(1,785)
Product development		(1,348)		(3,936)
Depreciation		(181)		(306)
Amortization		(239)		(717)
Restructuring		—		(61)
Interest expense		(1)		(4)
Interest income		3		7
Other income		—		288
Foreign currency exchange loss		(190)		(402)
Income tax expense		(279)		(492)
Net income from discontinued operations	$	730	$	2,433

Cash flow information relating to the discontinued operations for the nine months ended September 30, 2021 is as follows:

	For the Nine
	Months Ended
	September 30,
	2021
Operating cash flow data:
Depreciation	$	306
Amortization of intangible assets	$	717
Amortization of operating leases — right of use assets	$	284
Provision for deferred income taxes	$	(5)
Investing cash flow data:
Purchases of property and equipment	$	(316)

NOTE 3 — BALANCE SHEET COMPONENTS

The components of accounts payable and accrued liabilities are as follows (in thousands):

	September 30,		December 31,
	2022		2021
Accounts payable and accrued liabilities:
Accounts payable	$	154	$	83
Accrued compensation and related expenses		20		538
Accrued liabilities		529		631
	$	703	$	1,252

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NOTE 4 — EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period, including common stock issuable under participating securities. Diluted earnings (loss) per share is computed using the weighted average number of shares of common stock outstanding, plus all potentially dilutive common stock equivalents using the treasury stock method. Common stock equivalents consist of stock options and restricted stock.

The following is the reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations (in thousands except per share data):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Basic earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Basic weighted average shares outstanding		10,803		12,258		11,801		12,240
Basic loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Basic earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20
Diluted earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Weighted average shares outstanding		10,803		12,258		11,801		12,240
Effect of dilutive securities		—		—		—		18
Diluted weighted average shares outstanding		10,803		12,258		11,801		12,258
Diluted loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Diluted earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20

Weighted average options to purchase approximately 0.1 million shares and 0.3 million shares of common stock equivalents for the three and nine months ended September 30, 2022 and 2021, respectively, were excluded from the computation of diluted weighted average shares outstanding because the effect would have been anti-dilutive since their exercise prices were greater than the average market value of our common stock for the period. Earnings per share calculations use basic weighted average shares outstanding, when in a net loss position.

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NOTE 5 — INVESTMENTS

Fixed-Maturity, Debt and Equity Securities Investments

On June 13, 2022, the Company entered into a line of credit to loan a counterparty 1,000,000 United States Dollar Coin (“USDC”) for a 30 day period. USDC is fully backed by the United States Dollar (“USD”) and is not subject to market fluctuations, and the Company upon maturity converted the USDC to USD immediately. The loan had interest at a rate of 4.0% per annum and had a term of one month. There was no principal balance of the loan outstanding as of September 30, 2022.

On June 14, 2022, the Company entered into a note purchase agreement with a counterparty for $1,575,000 in conjunction with CCUR Holdings, Inc. The note bears interest at a rate of 15.0% per annum and has a term of one year, when payment in full of the outstanding principal balance becomes due. The loan is collateralized by the counterparty’s and its subsidiaries’ assets including cash and intellectual property. If no event of default is outstanding and the counterparty has made all accrued interest payments, the counterparty may extend the term by two additional six-month extension periods. The entire principal balance of the loan was outstanding as of September 30, 2022.

The difference between amortized cost or cost and estimated fair value and gross unrealized gains and losses, by major investment category, consisted of the following as of September 30, 2022. There were no investments as of December 31, 2021.

			Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Equity securities
Common stock and common stock options	$	7,733	$	90	$	(1,792)	$	6,031
Total equity securities	$	7,733	$	90	$	(1,792)	$	6,031

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Debt securities
Available for sale	$	1,575	$	—	$	—	$	1,575
Total debt securities	$	1,575	$	—	$	—	$	1,575

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Fixed-maturity securities
Corporate bonds	$	7,498	$	—	$	(3,153)	$	4,345
Total fixed-maturity securities	$	7,498	$	—	$	(3,153)	$	4,345

The Company sold equity securities investments for proceeds of $1.2 million, and $3.2 million for the three and nine months ended September 30, 2022, respectively, resulting in realized gains on investments, net of $0.1 million and $0.5 million, respectively. The Company also had unrealized losses on equity securities, net of $0.1 million and $1.7 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2022, the Company did not consider any of the fixed-maturity securities to be other-than-temporarily impaired. The Company does not intend to sell, nor believe it is more likely than not that the Company will be required to sell, any of the securities in an unrealized loss position. When evaluating investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer, the ability and intent to hold the security to maturity and whether it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis.

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Maturities of Debt Securities and Fixed-Maturity Securities Available-for-Sale

The amortized cost and fair values of debt securities and fixed-maturity securities available for sale as of September 30, 2022 are shown by contractual maturity in the table below. Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Due within one year through three years	$	1,575	$	1,575
Due after three years through five years		7,498		4,345
Due after five years through ten years		—		—
Total debt securities and fixed-maturity securities	$	9,073	$	5,920

Cost Method Investment

In May 2022, the Company purchased a minority equity interest through a private placement in the amount of $1.0 million in BH3 Slate, LLC (“BH3”). As of September 30, 2022, the Company holds a 3.75% ownership interest. Distributions of available cash made by BH3 will first be made to us equal to our interest until the Internal Rate of Return is 8%, second to the manager until their Internal Rate of Return is 5%, and thereafter with 75% going to member and 25% to the manager. There were no indicators of impairment during the three and nine months ended September 30, 2022.

NOTE 6 — STOCK-BASED COMPENSATION

We recognized $0.2 million and less than $0.1 million of compensation expense within general and administrative expense in the condensed consolidated statements of operations, with respect to our stock-based compensation plans for the three months ended September 30, 2022 and 2021, respectively. We recognized $0.4 million and $0.2 million for the nine months ended September 30, 2022 and 2021, respectively.

Stock Incentive Plans

At September 30, 2022 and December 31, 2021, no shares were available for grant under the 2007 Stock Plan, as amended. At September 30, 2022 and December 31, 2021, 0.03 million options and no restricted shares, and 0.1 million options and no restricted shares were issued and outstanding under the 2007 Stock Plan as amended, respectively.

At September 30, 2022 and December 31, 2021, there were approximately 0.4 million and 0.6 million shares available for grant under the 2016 Stock Plan, respectively. At September 30, 2022 0.1 million options and 0.1 million restricted shares were outstanding. At December 31, 2021, 0.1 million options and no restricted shares were issued and outstanding under the 2016 Stock Plan. The fair value of restricted shares for stock-based compensation expense is equal to the closing price of our common stock on the date of grant. The restricted shares for stock awards vest in three tranches: the first tranche vests immediately; and the second and third tranches vest over the following two years for senior management and the board of directors.

The following is a summary of restricted stock activity under the plans for the nine months ended September 30, 2022:

	Restricted Stock
	Number of Shares
	(in thousands)
Unvested restricted stock at January 1, 2022	—
Add restricted stock granted	225
Less restricted stock vested	(175)
Less restricted stock forfeited/expired	—
Unvested restricted stock at September 30, 2022	50

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The following is a summary of stock option activity under the plans for the nine months ended September 30, 2022:

				Weighted
				Average
	Number of	Weighted-		Remaining	Aggregate
	Shares	Average		Contractual	Intrinsic Value
	(in thousands)	Exercise Price		Term (Years)	(in thousands)
Options outstanding at January 1, 2022	287	$	6.11	4.10	$	—
Less options forfeited/cancelled	(205)		4.11	—		—
Less options expired	—		—	—		—
Options outstanding at September 30, 2022	82	$	5.71	4.10	$	—
Options exercisable at September 30, 2022	82	$	5.71	4.10		—

There were 225,000 restricted shares granted and no stock options granted during the nine months ended September 30, 2022, and no restricted stock awards or options granted during the nine months ended September 30, 2021. The total fair value of restricted shares granted during the nine months ended September 30, 2022 was $0.4 million. No restricted shares were granted during the nine months ended September 30, 2021.

NOTE 7 — INCOME TAXES

The income tax provision for the fiscal year ending December 31, 2022 interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, primarily related to unrealized gains. At September 30, 2022 the Company is currently estimating an annual effective tax rate of approximately 0.63%, resulting in a net tax benefit from continuing operations of less than $0.1 million for the nine months ended September 30, 2022. The Company recorded a tax expense of less than $0.1 million from continuing operations for the nine months ended September 30, 2021. For the nine months ended September 30, 2022, the Company recorded a less than $0.1 million income tax benefit from discontinued operations and recorded $0.5 million in tax expense from discontinued operations for the nine months ended September 30, 2021.

For the three months ended September 30, 2022, we recorded $0.1 million in net tax expense from continuing operations due to adjustment of annual effective tax rate. For the three months ended September 30, 2021, we recorded less than $0.1 million in net tax expense from continuing operations. The Company recorded $0.3 million in net tax expense from discontinued operations for the three months ended September 30, 2021.

The Inflation Reduction Act (“IRA”) was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently completed three-year period exceeds $1.0 billion and a 1% excise tax on share repurchases. This is effective for tax year beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have material impact on our reported results, cash flows or financial position when it becomes effective.

Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as income tax of multiple state jurisdictions. As of September 30, 2022, the Company is subject to U.S. Federal income tax examinations for the years 2018 through 2020 and income tax examinations from various other jurisdictions for the years 2016 through 2020.

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NOTE 8 — COMMITMENTS AND CONTINGENCIES

(a)Lease Commitments

Under ASC 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of less than one year. We lease office and operating facilities under non-cancelable operating leases. Current facility leases include our offices in Englewood, Colorado. Total rent expense consisted of short-term lease expense of less than $0.1 million for the three and nine months ended September 30, 2022 and 2021, respectively. There was no sublease rental income for the three and nine months ended September 30, 2022 and 2021.

Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. We did not have leases that had terms of greater than 12 months as of September 30, 2022 and December 31, 2021.

(b)Other Commitments

As permitted under Delaware law, we have agreements with officers and directors under which we agree to indemnify them for certain events or occurrences while the officer or director is, or was, serving at our request in this capacity. The term of the indemnification period is indefinite. There is no limit on the amount of future payments we could be required to make under these indemnification agreements; however, we maintain Director and Officer insurance policies, as well as an Employment Practices Liability Insurance Policy, that may enable us to recover a portion of any amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2022 or December 31, 2021.

We enter into standard indemnification terms with outside consultants, in the course of business, for third party claims arising under our contracts. Depending upon the nature of the indemnification, the potential amount of future payments we could be required to make under these indemnification agreements may be unlimited. We have never incurred costs to defend lawsuits or settle claims relating to an indemnification. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2022 or December 31, 2021.

Management Agreement with CIDM II LLC

On January 21, 2022, the Company entered into a Management Agreement (the “Management Agreement”) with CIDM II LLC (the “Manager”). Pursuant to the Management Agreement, the Manager will, subject to the Company’s Board of Directors (“Board”) and the Investment Committee of the Board, (i) provide the Company with advisory services with respect to the management and allocation of investments in equity and debt securities (“Assets”) of the Company and its subsidiaries and (ii) exercise discretionary management authority over the Company’s trading portfolio of publicly traded securities.

The Manager will receive compensation for performance under the Management Agreement consisting of a management fee of 2% of the fair market value of the Assets and a performance fee in respect of each performance period shall be equal to 20% of the appreciation of end-of-year net asset value. The management fee and performance fee may be paid through the issuance of stock appreciation rights of the Company’s common stock or in cash payment to the Manager. The Manager is also entitled to payment or reimbursement of certain administrative costs and expenses incurred in connection with the management of the Assets, such as custodial fees, brokerage commissions and similar fees and expenses. The related expense is included in general and administrative expenses on the unaudited consolidated statements of operations of $0.5 million which is approximately 0.3 million stock appreciation rights. The Manager shall be responsible for all of its operating expenses. The Management Agreement may be terminated by either party upon thirty days written notice. No stock appreciation rights have been exercised in the nine months ended September 30, 2022.

(c)Litigation

From time to time, we are involved in various legal matters arising in the normal course of business. We do not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on our financial position, cash flows or results of operations.

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On October 15, 2019, the Company’s former Chief Executive Officer filed a lawsuit in the Superior Court of New Jersey against us. That suit sought $3.5 million for claims of libel, harm of lost employment opportunities, severance payments, and benefits that he would have been entitled to receive had he been terminated without cause. The Company engaged legal counsel through its insurance carrier. The Company decided that it was prudent to avoid further legal fees and disruption to the business caused by an on-going litigation claim. Therefore, to resolve amicably and discontinue disputes regarding all claims arising from the lawsuit and with the denial of every allegation of wrongdoing, in June 2021, a settlement and mutual general release was agreed to that included payment of $0.6 million by the Company. Our insurance carrier has agreed to contribute $0.3 million toward the settlement. Settlement was paid in full in July 2021 and is included in other (expense) income, net, on the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021.

(d)Paycheck Protection Program Loan

On April 15, 2020, the Company received loan proceeds in the amount of $0.3 million under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after a period of eight to twenty-four weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. We have met the conditions of the PPP Loan forgiveness program. As authorized by section 1106 of the CARES Act, United States Small Business Administration (“SBA”) forgave the full amount of PPP loan on May 20, 2021. We recorded the forgiveness amount as other income. We had used the loan proceeds for purposes consistent with the PPP, including paying for Company wages.

(e)Potential Claim on Escrow Account

The Company has been served notice by the Purchasers making a claim for indemnification under the Equity Purchase Agreement related to a failure to file returns, make required remittances, and pay taxes to the Irish Revenue Service with respect to an employee for pre-closing periods. The Company has recorded a liability in the amount of $0.2 million related to the employer burden which had not been remitted. The Purchasers have claimed additional taxes and fees in a range of $0.7 million to $1.5 million based on their calculations. The Company has objected to the release of any funds related to the claim until the final amount can be properly calculated and agreed upon by the parties. The Company intends to defend this matter rigorously and any additional amounts in the claim are not estimable or determinable at this time.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about Symbolic Logic’s industry, management’s beliefs, and certain assumptions made by management. Forward-looking statements include our expectations regarding product, services, and maintenance revenue, annual savings associated with the organizational changes effected in prior years, and short- and long-term cash needs. In some cases, words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “estimates,” variations of these words, and similar expressions are intended to identify forward-looking statements. In addition, statements about the potential effects of the COVID-19 pandemic on the Company’s businesses, results of operations and financial condition may constitute forward-looking statements. The statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any forward-looking statements. Risks and uncertainties of our business include those set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 11, 2022, under “Item 1A. Risk Factors” as well as additional risks in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.

OVERVIEW

On December 31, 2021, the Company closed on the terms of the Equity Purchase Agreement (the “Equity Purchase Agreement”) and two Software Purchase Agreements (the “Software Purchase Agreements” and, together with the Equity Purchase Agreement and the other transaction documents described therein, the “Purchase Agreements”) dated as of October 15, 2021, with subsidiaries and affiliates of PartnerOne Capital, Inc. (the “Purchasers”). The Purchase Agreements provided for the sale and transfer of substantially all of the Company’s operating subsidiaries and all of its assets that provided real-time digital engagement solutions and services in the areas of real-time analytics, customer acquisition and activation, customer value management and loyalty for the telecom industry to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements included customary terms and conditions, including an adjustment to the purchase price based on the Company’s cash and cash equivalents on hand as of the closing date and provisions that require the Company to indemnify the Purchasers for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the Purchase Agreements and certain other matters. The Company received cash proceeds of $36.0 million and may receive up to an additional $2.5 million in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement.

Simultaneously with the approval by the board of directors of the Company to execute the Purchase Agreements, the board formed a subcommittee of the board (the “Investment Committee”) to evaluate options to maximize the value of the Company’s assets, which, following the closing of the transactions contemplated under the Purchase Agreements, will consist primarily of cash and cash equivalents. The board of directors has authorized the Investment Committee to retain such counsel, experts, consultants or other professionals as the Investment Committee shall deem appropriate from time to time to aid the Investment Committee in the performance of its duties.

Following the sale of its assets in real-time digital engagement solutions and services in December 2021, the Company has decided to evaluate new areas of business which included two initial areas of product focus. The two areas of focus are in the application of self-learning algorithms as well as the symbolic tagging and organizing of physical objects. Additionally, the Company maintains an extensive background in mergers and acquisitions (“M&A”) activity. The Company plans to use cash assets, and network of relationships to acquire businesses and/or assets, as well as consider strategic partnerships.

RECENT DEVELOPMENTS

We reported a net loss from continuing operations of $0.6 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively and $3.3 million and $2.3 million for the nine months ended September 30, 2022 and 2021, respectively.

21

COVID-19

The COVID-19 global outbreak caused instability and volatility in multiple markets throughout the world. We have leveraged our ability to work remotely resulting in limited effect on our day-to-day operations.

NAME CHANGE

On April 12, 2022, Evolving Systems, Inc. filed with the Secretary of State of Delaware Certificate of Amendment to amend its Certificate of Incorporation to change the Company’s name from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” effective as of April 12, 2022. The Company also amended and restated its Bylaws to change all Company references from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” No other amendments were made to the Certificate of Incorporation or Bylaws.

NASDAQ

On December 9, 2021, we received a letter from the Nasdaq Capital Market (“NASDAQ”) regarding the Equity Purchase Agreement and the two Software Purchase Agreements entered into by the Company pursuant to which we sold all of our assets. The staff requested certain information from the Company regarding its on-going business. We provided a response to the staff on January 7, 2022. We received a follow up request from the NASDAQ for additional information and we provided a response to the staff on February 15, 2022.

On April 13, 2022, Symbolic Logic Inc. f/k/a Evolving Systems, Inc. notified the NASDAQ of its intention to voluntarily withdraw its common stock, par value $0.001 per share (the “Common Stock”), from listing on Nasdaq. The Company filed a Form 25 with the Securities and Exchange Commission on Monday, April 25, 2022, relating to delisting the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended, to be effective ten days thereafter. After delisting, the Common Stock may be quoted on the OTC Pink Open Market.

TENDER OFFERING

On May 23, 2022, the Company announced a modified Dutch auction tender offer to purchase with cash up to $9.6 million of shares of its common stock which expired on June 23, 2022. Based on the final count by the depository for the tender offer, a total of 1,501,192 shares of common stock were validly tendered and not validly withdrawn at or below the price of $1.55 per share. The Company accepted all of these shares of common stock for purchase at the purchase price of $1.55 per share, for a total cost of $2.3 million, excluding fees and expenses. The total of 1,501,192 shares of common stock accepted for purchase represents approximately 12.2 % of the Company’s total shares of common stock outstanding.

TREASURY STOCK

During the month of September 2022, the company through a direct purchase and an open market purchase, which were not related to the tender offering conducted in May, acquired an additional 263,000 shares at a purchase price of $1.55 per share, for a total cost of $0.4 million. These shares are currently being held as treasury stock.

DEPARTURE OF OFFICER

On August 26, 2022, Matthew Stecker resigned as the Company’s Chief Executive Officer. In connection with the resignation, the Company and Mr. Stecker entered into an agreement that including a release of all claims and certain obligations under his employment agreement and Mr. Stecker received a payment of $0.35 million and accelerated vesting of his 0.1 million shares of unvested restricted stock awards. On the same day, the Company appointed Mr. Igor Volshteyn as its Chief Executive Officer.

22

SUSPENSION OF REPORTING OBLIGATIONS

On October 21, 2022, the Company’s board of directors determined that “going dark” it is in the best interests of the Company and its stockholders as a result of the substantial cost savings from the elimination of accounting and other expense related to maintaining its status as a public reporting company, as well as the increased ability of management to focus on core business activities, among other things. The company therefore plans to affect a suspension of its reporting obligation under the Securities Exchange Act of 1934, as amended, and expects to file a Form 15 with the Securities and Exchange Commission in early January 2023.

GOING CONCERN

We believe our current liquidity from the Purchase Agreements will be sufficient to fund operations and meet the Company’s cash needs for future working capital and capital expenditure requirements for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. In making this assessment, we considered our $16.8 million in cash and cash equivalents and our $27.8 million in working capital at September 30, 2022.

RESULTS OF OPERATIONS

The following table presents our condensed consolidated statements of operations in comparative format:

	For the Three Months Ended September 30,
	2022		2021		Change		%
	(in thousands, except percentages)
Revenue	$	—	$	—	$	—	0.00	%
OPERATING EXPENSES
General and administrative		1,097		637		460	72.21	%
Depreciation		1		1		—	0.00	%
Total operating expenses		1,098		638		460	72.10	%
Loss from operations		(1,098)		(638)		(460)	72.10	%
Other income (expense)
Interest income		517		—		517	100.00	%
Interest expense		—		(2)		2	100.00	%
Other income (expense), net		93		—		93	100.00	%
Realized gain on investments, net		127		—		127	100.00	%
Unrealized loss on investments, net		(144)		—		(144)	(100.00)	%
Other income (expense), net		593		(2)		595	(29,750.00)	%
Loss from continuing operations before income taxes		(505)		(640)		135	(21.09)	%
Income tax expense		55		15		40	266.67	%
Net loss from continuing operations		(560)		(655)		95	(14.50)	%
Income from discontinued operations before income taxes		—		1,009		(1,009)	(100.00)	%
Income tax expense from discontinued operations		—		279		(279)	(100.00)	%
Net income from discontinued operations		—		730		(730)	(100.00)	%
Net (loss) income	$	(560)	$	75	$	(635)	(846.67)	%

23

	For the Nine Months Ended September 30,
	2022		2021		Change		%
	(in thousands, except percentages)
Revenue	$	—	$	—	$	—		%
OPERATING EXPENSES
General and administrative		3,185		2,295		890	38.78	%
Depreciation		2		2		—	0.00	%
Total operating expenses		3,187		2,297		890	38.75	%
Loss from operations		(3,187)		(2,297)		(890)	38.75	%
Other income (expense)
Interest income		1,096		2		1,094	54,700.00	%
Interest expense		(2)		(2)		—	0.00	%
Other income (expense), net		2		(1)		3	300.00	%
Realized gain on investments, net		521		—		521	100.00	%
Unrealized loss on investments, net		(1,702)		—		(1,702)	(100.00)	%
Other (expense), net		(85)		(1)		(84)	8,400.00	%
Loss from continuing operations before income taxes		(3,272)		(2,298)		(974)	42.38	%
Income tax (benefit) expense		(10)		23		(33)	(143.48)	%
Net loss from continuing operations		(3,262)		(2,321)		(941)	40.54	%
Income from discontinued operations before income taxes		—		2,925		(2,925)	(100.00)	%
Income tax (benefit) expense from discontinued operations		(49)		492		(541)	(109.96)	%
Net income from discontinued operations		49		2,433		(2,384)	(97.99)	%
Net (loss) income	$	(3,213)	$	112	$	(3,325)	(2,968.75)	%

Expenses from Continuing Operations

General and Administrative

General and administrative expenses consist principally of employee-related costs for the following departments: finance, human resources, and certain executive management; facilities costs; and professional and legal fees. General and administrative expenses increased $0.5 million, or 83% to $1.1 million for the three months ended September 30, 2022 from $0.6 million for the three months ended September 30, 2021. There was an increase of $0.4 million of employee costs and $0.1 million of equity compensation costs related to the separation of our Chief Executive Officer. There was also an increase of $0.2 million of professional fees in bookkeeping and preparation of SEC reports, and fees to our third-party asset manager. These costs were partially offset by a $0.2 million decrease of salaries and benefits related to employee departures.

General and administrative expenses increased $0.9 million, or 39% to $3.2 million for the nine months ended September 30, 2022 from $2.3 million for the nine months ended September 30, 2021. There was an increase of $0.8 million of professional fees related to use of third-party services in bookkeeping and preparation of SEC reports, and fees to our third party asset manager, an increase of $0.4 million of employee costs and $0.1 million of equity compensation costs related to the separation of our Chief Executive Officer, and $0.1 million in contractor fees and other various costs. These costs were partially offset by a $0.5 million decrease of salaries and benefits related to employee departures.

Depreciation

Depreciation expense consists of depreciation of long-lived property and equipment. Depreciation expense remained constant at less than $0.1 million for the three and nine months ended September 30, 2022 and 2021.

24

Non-Operating Income and Expenses

Interest Expense

Interest expense remained constant at less than $0.1 million in interest expense for the three and nine months ended September 30, 2022 and 2021.

Interest Income and Total Other Income (Expense), net

There was interest income and other income of $0.5 million for the three months ended September 30, 2022. There was no interest and other income for the three months ended September 30, 2021. The increase was the result of interest income related to corporate bonds and dividend income from securities held by the Company.

For the nine months ended September 30, 2022, there was interest income and other income of $1.1 million. There was less than $0.1 million in interest income or other income for the nine months ended September 30, 2021. The increase was a result of interest earned and dividend income on investments entered into during 2022, partially offset by $0.2 million in expense related to a potential claim by the Purchaser on the escrow account.

Realized Gain on Investments, net

Realized gain on investments, net consists of available for sale and equity securities. Realized gain on investments, net increased $0.1 million, or 100% for the three months ended September 30, 2022, and $0.5 million for the nine months ended September 30, 2022. The increase was a result of investments sold by the Company during the three and nine months ended September 30, 2022.

Unrealized Loss on Investments, net

Unrealized loss on investments, net increased $0.1 million, or 100% for the three months ended September 30, 2022 and $1.7 million for the nine months ended September 30, 2022. Our unrealized gains and losses on investments each period are a function of changes in the fair value of the investments that we hold as of the current reporting period balance sheet date relative to the preceding balance sheet date. Our unrealized losses during the current period were attributable to decreases in the fair value of our investment holdings during the period.

Income Taxes

We recorded net income tax expense from continuing operations of $0.1 million and net income tax expense from continuing operations and less than $0.1 million for the three months ended September 30, 2022 and 2021 respectively. We also recorded net income tax benefit from continuing operations of less than $0.1 million and net income tax expense from continuing operations and less than $0.1 million for the nine months ended September 30, 2022 and 2021, respectively.

We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. As of September 30, 2022, and 2021, we had no liability for unrecognized tax benefits. We do not believe there will be any material changes to our unrecognized tax positions over the next twelve months.

Discontinued Operations

On December 31, 2021, the Company closed on the terms for the sale and transfer of substantially all of the Company’s operating subsidiaries and all of its assets. The financial results of discontinued operations primarily reflect the results of our foreign operating subsidiaries conducting business as provider of real-time digital engagement solutions and services of software solutions and services to the wireless carriers throughout the world. This included the Company’s portfolio of solutions and services for real-time analytics, customer acquisition and activation, customer value management and loyalty for the telecom industry promoting partnerships into retail and financial services.

25

FINANCIAL CONDITION

Our working capital position decreased by $9.9 million to $27.8 million as of September 30, 2022 from $37.7 million as of December 31, 2021. The decrease in working capital is related to the loss from continuing operations, unrealized losses on purchase of investments, and the completed tender offering and purchasing of treasury stock.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed operations through cash flows from operations and bank borrowings. On December 31, 2021, the Company closed on the terms of the Purchase Agreements. Following the sale of its assets in December 2021, the Company has been researching two initial areas of product focus; each are in research-oriented pre-release mode. The two areas of focus are in the application of self-learning algorithms as well as the symbolic tagging and organizing of physical objects. At September 30, 2022, our principal source of liquidity was $16.8 million in cash and cash equivalents. Our anticipated uses of cash in the future will be to fund the expansion of our business through both organic product development, as well as possible acquisition activities. Other uses of cash may include investments, capital expenditures, and technology expansion.

Net cash used in operating activities for the nine months ended September 30, 2022 was $1.9 million due to net loss of $3.2 million plus an increase in prepaid and other assets of $0.4 million related primarily to accrued interest, and a decrease in income taxes payable of $0.1 million, partially offset by noncash charges of $1.5 million, an increase in accounts payable and accrued liabilities of $0.1 million and increase of escrow liability of $0.2 million. Net cash provided by operating activities for the nine months ended September 30, 2021 was $1.3 million due to the net income of less than $0.1 million, noncash charges of $1.4 million, increase in unearned revenue of $1.0 million and a decrease in contract receivable of $0.5 million, partially offset by the increase in unbilled work in progress of $0.5 million and income taxes receivable of $0.4 million and an increase in other assets long term of $0.3 million related to the foreign tax credit to be collected in a future period as well as a decrease in accounts payable and accrued liabilities of $0.2 million and a reduction in our lease obligations of $0.3 million

Net cash used in investing activities for the nine months ended September 30, 2022 of $17.9 million was primarily due to the purchase of investments of $21.5 million, transaction fees related to prior period disposition of $0.6 million, offset by proceeds on sale of investments of $4.2 million. Net cash used in investing activities for the nine months ended September 30, 2021 was $0.3 million and was due to the purchase of property and equipment.

Net cash used in financing activities for the nine months ended September 30, 2022 of $2.9 million was due to the retirement of common stock and purchase of treasury stock. Net cash used in financing activities was $0.1 million for the nine months ended September 30, 2021 and was primarily related to the final principal payments on our term loan.

We believe that our current cash and cash equivalents will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months from the date of issuance of this Quarterly Report on Form 10-Q. In making this assessment we considered the following:

● Our cash and cash equivalents balance at September 30, 2022 of $16.8 million; and

● Our working capital balance at September 30, 2022 of $27.8 million

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

26

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Senior Vice President of Finance, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Senior Vice President of Finance, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Senior Vice President of Finance have concluded that our disclosure controls and procedures were effective as of September 30, 2022.

In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control Over Financial Reporting

During the three months ended September 30, 2022, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

27

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding reportable legal proceedings is contained in Part I, Item 3, “Legal Proceedings,” in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to the legal proceedings previously disclosed in the Annual Report on Form 10-K, which are incorporated by reference herein. From time to time, we are involved in various legal matters arising in the normal course of business.

ITEM 1A. RISK FACTORS

Not required under Regulation S-K for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases of common stock made by the Company during the third quarter 2022:

				Total number of	Approximate dollar
				shares purchased as	value of shares that
	Total number of			part of publicly	may yet be purchased
	shares purchased	Average price		announced plans (in	under the plan (in
	(in thousands)	paid per share		thousands)	thousands)
July 1, 2022 to July 31, 2022	—	$	—	—	$	—
August 1, 2022 to August 31, 2022	—		—	—		—
September 1, 2022 to September 30, 2022*	263		1.55	—		—
Total	263	$	1.55	—	$	—

*On September 2 and September 21, 2022, the Company completed direct purchases of their stock to be held as of September 30, 2022 as treasury stock at a price of $1.55 per share.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

28

Item 6. EXHIBITS

Exhibit No.	Description of Document
2.1	Asset Purchase Agreement, dated as of April 21, 2011, by and between Evolving Systems, Inc. and NeuStar, Inc., as filed as Exhibit 2.1 to the Registrant’s Form 8-K filed on April 21, 2011 and incorporated herein by reference.
2.2	Agreement and Plan of Merger by and among Evolving Systems, Inc., Topaz Merger Sub, Inc., Telespree Communications and Gill Cogan as the exclusive representative of the Effective Time Shareholders and Change in Control Payment Recipients, as filed as Exhibit 2.1 to the Registrant’s Form 8-K filed on October 25, 2013 and incorporated herein by reference.
2.3	Merger Agreement dated as of September 30, 2015, by and among Evolving Systems, Inc., Evolving Systems NC, Inc., a wholly owned subsidiary of Evolving Systems, RateIntegration, Inc. and a representative of the stockholders and change in control payment recipients of RateIntegration, Inc., as filed as Exhibit 2.1 to the Registrant’s Form 8-K filed September 30, 2015 and incorporated herein by reference.
2.4	Evolving Systems, Inc., and Evolving Systems Holdings Ltd., ETI-NET Inc., Investissements Riv Europe Ltee, a Quebec corporation and Said Hini, as filed as Exhibit 2.1 to the Registrant’s Form 8-K filed October 18, 2021 and incorporated herein by reference.
2.5	Software Purchase Agreement, dated as of October 15, 2021, by and among Evolving Systems, Inc., Evolving Systems NC, Inc., and ETI-NET Inc., as filed as Exhibit 2.2 to the Registrant’s Form 8-K filed October 18, 2021 and incorporated herein by reference.
2.6	Software Purchase Agreement, dated as of October 15, 2021, by and among Evolving Systems, Inc., Evolving Systems Limited, and ETI-NET Inc. as filed as Exhibit 2.3 to the Registrant’s Form 8-K filed October 18, 2021 and incorporated herein by reference.
2.7	Equity Purchase Agreement, dated as of October 15, 2021, by and among Evolving Systems, Inc. and Evolving Systems Holdings Ltd., ETI-NET Inc., Investissements Riv Europe Ltee, a Quebec corporation, and Said Hini and incorporated herein by reference.
3.1	Restated Certificate of Incorporation, as filed as an exhibit to the Registrant’s registration statement on Form S-1 filed January 9, 1998 and incorporated herein by reference.
3.2	Certificate of Designation for the Series B Convertible Preferred Stock, as filed as Exhibit 3.1 to the Registrant’s Form 8-K filed November 10, 2004 and incorporated herein by reference.
3.3	Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock filed as Exhibit 3.1(c) to the Registrant’s Form 8-K filed November 17, 2005 and incorporated herein by reference.
3.4	Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock filed as Exhibit 3.01 to the Registrant’s Form 8-K filed May 4, 2007 and incorporated herein by reference.
3.5	Certificate of Amendment to the Restated Certificate of Incorporation of Evolving Systems, Inc., as filed as Exhibit 3.1 to the Registrant’s Form 8-K filed on July 21, 2009 and incorporated herein by reference.
3.6	Certificate of Amendment to Amended and Restated Certificate of Incorporation of Evolving Systems, Inc. as filed as Exhibit 3(i) to the Registrant’s Form 8-K filed on June 16, 2011 and incorporated herein by reference.
3.7	Amended and Restated Bylaws of Evolving Systems, Inc., as filed as Exhibit 3.2 to the Registrant’s Form 8-K filed on April 15, 2022 and incorporated herein by reference.
3.8	Certificate of Amendment to the Company’s Certificate of Incorporation as filed as Exhibit 3.1 to the Registrant’s Form 8-K filed on April 15, 2022 and incorporated herein by reference.
10.1	Amendment and Waiver Letter to Term Loan Facility Agreement entered into by and among Evolving Systems, Inc. as Parent Guarantor, Evolving Systems Holdings Limited, as Original Borrower, Evolving Systems Limited and Evolving Systems BLS Limited, as further Original Guarantors, Evolving Systems Lumata Limited, and East West Bank as Lender, as filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on July 7, 2020 and incorporated herein by reference.
10.2	Management Agreement by and between the Company and CIDM II LLC, dated as of January 21, 2022 filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 24, 2022 and incorporated by reference.
10.3	Employee Separation Agreement and Mutual General Release by and between the Company and Mathew Stecker, dated as of August 26, 2022 filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on September 1, 2022 and incorporated by reference.
31.1*	Certification of Chief Executive Officer and Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2*	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended.

29

32.1**	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities Exchange Act, as amended, and 18 U.S.C. Section 1350.
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(furnished herewith).
101.INS*	101 XBRL Instance Document.
101.SCH*	101 XBRL Taxonomy Extension Schema Document.
101.CAL*	101 XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	101 XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	101 XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	101 XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101

* Filed herewith.

** Furnished herewith.

30

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SYMBOLIC LOGIC, INC.

By:	/s/ Igor Volshteyn	Chief Executive Officer	November 09, 2022
	Igor Volshteyn	(Principal Executive Officer)

31

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002

I, Igor Volshteyn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Symbolic Logic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and,

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 9, 2022
	By: /s/ Igor Volshteyn
	Igor Volshteyn
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002

I, Mark P. Szynkowski, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Symbolic Logic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and,

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 9, 2022
	By: /s/ Mark P. Szynkowski
	Mark P. Szynkowski
	Senior Vice President of Finance and Secretary
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Igor Volshteyn, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Symbolic Logic, Inc. on Form 10-Q for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Symbolic Logic, Inc.

By: /s/ Igor Volshteyn

Igor Volshteyn

Chief Executive Officer

(Principal Executive Officer)

November 9, 2022

This certification is furnished with this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark P. Szynkowski, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Symbolic Logic, Inc. on Form 10-Q for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Symbolic Logic, Inc.

By: /s/ Mark P. Szynkowski

Mark P. Szynkowski

Senior Vice President of Finance and Secretary

(Principal Financial and Accounting Officer)

November 9, 2022

This certification is furnished with this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference.

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 07, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Fiscal Period Focus	Q3
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-34261
Entity Registrant Name	Symbolic Logic, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-1010843
Entity Address, Address Line One	9800 Pyramid Court
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Englewood
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80112
City Area Code	303
Local Phone Number	802-1000
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	EVOL
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,668,992
Entity Central Index Key	0001052054
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 16,776	$ 39,445
Prepaid and other current assets	467	106
Fixed maturity securities, available for sale, fair value	4,345	0
Equity securities, fair value	6,031	0
Debt securities, available for sale, fair value	1,575	0
Total current assets	29,194	39,551
Property and equipment, net	4	4
Investments, at cost	1,000	0
Total assets	30,198	39,555
Current liabilities:
Accounts payable and accrued liabilities	703	1,252
Escrow liability	172	0
Income taxes payable	441	575
Other liabilities	33	0
Total current liabilities	1,349	1,827
Total liabilities	1,349	1,827
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 40,000,000 shares authorized; 11,110,881 shares issued and 10,668,992 shares outstanding as of September 30, 2022 and 12,437,073 shares issued and 12,258,184 shares outstanding as of December 31, 2021	11	12
Additional paid-in capital	97,920	100,024
Treasury stock, 441,889 shares as of September 30, 2022 and 178,889 shares December 31, 2021, at cost	(1,661)	(1,253)
Accumulated other comprehensive loss	(3,153)	0
Accumulated deficit	(64,268)	(61,055)
Total stockholders' equity	28,849	37,728
Total liabilities and stockholders' equity	$ 30,198	$ 39,555

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	11,110,881	12,437,073
Common stock, shares outstanding	10,668,992	12,258,184
Treasury stock, shares	441,889	178,889

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 0	$ 0	$ 0	$ 0
OPERATING EXPENSES
General and administrative	1,097	637	3,185	2,295
Depreciation	1	1	2	2
Total operating expenses	1,098	638	3,187	2,297
Loss from operations	(1,098)	(638)	(3,187)	(2,297)
Other income (expense)
Interest income	517	0	1,096	2
Interest expense	0	(2)	(2)	(2)
Other income (expense), net	93	0	2	(1)
Realized gain on investments, net	127	0	521	0
Unrealized loss on investments, net	(144)	0	(1,702)	0
Other income (expense), net	593	(2)	(85)	(1)
Loss from continuing operations before income taxes	(505)	(640)	(3,272)	(2,298)
Income tax expense (benefit)	55	15	(10)	23
Net loss from continuing operations	(560)	(655)	(3,262)	(2,321)
Income from discontinued operations before income taxes	0	1,009	0	2,925
Income tax expense (benefit) from discontinued operations	0	279	(49)	492
Net income from discontinued operations	0	730	49	2,433
Net (loss) income	$ (560)	$ 75	$ (3,213)	$ 112
Basic loss per common share from continuing operations	$ (0.05)	$ (0.05)	$ (0.28)	$ (0.19)
Basic earnings per common share from discontinued operations	0	0.06	0	0.20
Diluted loss per common share from continuing operations	(0.05)	(0.05)	(0.28)	(0.19)
Diluted earnings per common share from discontinued operations	$ 0	$ 0.06	$ 0	$ 0.20
Weighted average basic shares outstanding	10,803	12,258	11,801	12,240
Weighted average diluted shares outstanding	10,803	12,258	11,801	12,258

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Net (loss) income	$ (560)	$ 75	$ (3,213)	$ 112
Other comprehensive (loss)
Foreign currency translation (loss)	0	(36)	0	(14)
Unrealized loss on available-for-sale investments	(579)	0	(3,153)	0
Comprehensive (loss) income	$ (1,139)	$ 39	$ (6,366)	$ 98

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2020	$ 12	$ 99,776	$ (1,253)	$ (10,345)	$ (78,500)	$ 9,690
Balance (in shares) at Dec. 31, 2020	12,195,909
Restricted stock vested (in shares)	61,806
Stock-based compensation expense		242				242
Net (loss) income					112	112
Foreign currency translation loss				(14)		(14)
Balance at Sep. 30, 2021	$ 12	100,018	(1,253)	(10,359)	(78,388)	10,030
Balance (in shares) at Sep. 30, 2021	12,257,715
Balance at Jun. 30, 2021	$ 12	99,990	(1,253)	(10,323)	(78,463)	9,963
Balance (in shares) at Jun. 30, 2021	12,257,246
Restricted stock vested (in shares)	469
Stock-based compensation expense		28				28
Net (loss) income					75	75
Foreign currency translation loss				(36)		(36)
Balance at Sep. 30, 2021	$ 12	100,018	(1,253)	(10,359)	(78,388)	10,030
Balance (in shares) at Sep. 30, 2021	12,257,715
Balance at Dec. 31, 2021	$ 12	100,024	(1,253)	0	(61,055)	$ 37,728
Balance (in shares) at Dec. 31, 2021	12,258,184					12,258,184
Restricted stock vested (in shares)	175,000
Stock-based compensation expense		365				$ 365
Treasury stock acquired			408			408
Treasury stock acquired (in shares)	263,000
Retirement of common stock	$ (1)	(2,469)				(2,470)
Retirement of common stock (in shares)	(1,501,192)
Net (loss) income					(3,213)	(3,213)
Unrealized loss on available-for-sale investments				(3,153)		(3,153)
Foreign currency translation loss						0
Balance at Sep. 30, 2022	$ 11	97,920	(1,661)	(3,153)	(64,268)	$ 28,849
Balance (in shares) at Sep. 30, 2022	10,668,992					10,668,992
Balance at Jun. 30, 2022	$ 11	97,760	(1,253)	(2,574)	(63,708)	$ 30,236
Balance (in shares) at Jun. 30, 2022	10,831,992
Restricted stock vested (in shares)	100,000,000
Stock-based compensation expense		160				160
Treasury stock acquired			408			408
Treasury stock acquired (in shares)	263,000
Net (loss) income					(560)	(560)
Unrealized loss on available-for-sale investments				(579)		(579)
Foreign currency translation loss						0
Balance at Sep. 30, 2022	$ 11	$ 97,920	$ (1,661)	$ (3,153)	$ (64,268)	$ 28,849
Balance (in shares) at Sep. 30, 2022	10,668,992					10,668,992

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (3,213)	$ 112
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation	2	308
Amortization of intangible assets	0	717
Amortization of operating leases - right of use assets	0	284
Stock-based compensation expense	365	242
Foreign currency transaction loss, net	0	148
Bad debt expense	0	14
Provision for deferred income taxes	0	(5)
Loan origination income	(14)	0
Gain on PPP Loan forgiveness	0	(319)
Realized gains on investments	(521)	0
Unrealized losses on investments	1,702	0
Change in operating assets and liabilities:
Contract receivables	0	462
Unbilled work-in-progress	0	(502)
Prepaid and other assets	(360)	(25)
Accounts payable and accrued liabilities	97	(153)
Escrow liability	172	0
Income taxes receivable	0	(417)
Income taxes payable	(134)	0
Unearned revenue	0	1,015
Long-term assets - other	0	(256)
Lease obligations - operating leases	0	(285)
Net cash (used in) provided by operating activities	(1,904)	1,340
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(2)	(316)
Purchases of investments	(21,484)	0
Proceeds on sale of investments	4,245	0
Transaction fees related to prior period disposition	(646)	0
Net cash used in investing activities	(17,887)	(316)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable	0	(143)
Purchase of treasury stock	(408)	0
Retirement of common stock	(2,470)	0
Net cash used in financing activities	(2,878)	(143)
Effect of exchange rate changes on cash and cash equivalents	0	(63)
Net (decrease) increase in cash and cash equivalents	(22,669)	818
Cash and cash equivalents at beginning of period	39,445	2,763
Cash and cash equivalents at end of period	16,776	3,581
Supplemental disclosure of cash and non-cash transactions:
Interest paid	2	4
Income taxes paid, net of refunds	82	788
Deferred loan origination income	33	0
Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets	$ 0	$ 370

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization — On December 31, 2021, Symbolic Logic, Inc. (the “Company” or “Symbolic Logic”) f/k/a Evolving Systems, Inc. (“Evolving Systems”) closed on the terms of the Equity Purchase Agreement (the “Equity Purchase Agreement”) and two Software Purchase Agreements (the “Software Purchase Agreements” and, together with the Equity Purchase Agreement and the other transaction documents described therein, the “Purchase Agreements”) dated as of October 15, 2021, with subsidiaries and affiliates of PartnerOne Capital, Inc. (the “Purchasers”). The Purchase Agreements provided for the sale and transfer of substantially all of Evolving Systems’ operating subsidiaries and all of its assets to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements included customary terms and conditions, including an adjustment to the purchase price based on Evolving Systems’ cash and cash equivalents on hand as of the closing date and provisions that require Evolving Systems to indemnify the Purchasers for certain losses that it incurs as a result of a breach by Evolving Systems of its representations and warranties in the Purchase Agreements and certain other matters. Evolving Systems received cash proceeds of $36,032,899 and may receive up to an additional $2,500,000 in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement.

Results of the sold subsidiaries are retrospectively reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. Prior year information has been adjusted to conform to the current year presentation. Unless otherwise stated, the information disclosed in the footnotes accompanying the condensed consolidated financial statements refers to continuing operations. See Note 2 “Discontinued Operations” for more information regarding results from discontinued operations.

Simultaneously with the approval by the board of directors of the Company to execute the Purchase Agreements, the board formed a subcommittee of the board (the “Investment Committee”) to evaluate options to maximize the value of the Company’s assets, which, following the closing of the transactions contemplated under the Purchase Agreements, consists primarily of cash and cash equivalents. The board of directors has authorized the Investment Committee to retain such counsel, experts, consultants, or other professionals as the Investment Committee shall deem appropriate from time to time to aid the Investment Committee in the performance of its duties. The Company’s directors and executives have an extensive background in mergers and acquisitions (“M&A”) activity. The Company plans to use its cash assets and network of relationships to seek to acquire businesses and/or assets as well as to consider strategic partners.

Following the sale of its assets in December 2021, the Company began to evaluate two initial areas of product focus, each of which is in a research-oriented pre-release mode. The two areas of focus relate to the application of self-learning algorithms and the symbolic tagging and organizing of physical objects. The Company continues to selectively seek new opportunities through potential mergers, acquisitions, joint ventures, strategic partnerships, and future product development.

The COVID-19 global outbreak caused instability and volatility in multiple markets throughout the world. We have leveraged our ability to work remotely resulting in limited effect on our day-to-day operations.

On December 9, 2021, the Company received a letter from the Nasdaq Capital Market (“NASDAQ”) regarding the Equity Purchase Agreement and the two Software Purchase Agreements entered into by the Company pursuant to which we sold all of our assets. The NASDAQ staff requested certain information from the Company regarding its on-going business. We provided a response to the staff on January 7, 2022. We received a follow up request from the NASDAQ for additional information and we provided a response to the staff on February 15, 2022.

On April 12, 2022, Evolving Systems, Inc. filed with the Secretary of State of Delaware a Certificate of Amendment to amend its Certificate of Incorporation to change the Company’s name from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” effective as of April 12, 2022. The Company also amended and restated its Bylaws to change all Company references from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” No other amendments were made to the Certificate of Incorporation or Bylaws.

On April 13, 2022, Symbolic Logic, Inc. f/k/a Evolving Systems, Inc. notified the NASDAQ of its intention to voluntarily withdraw its common stock, par value $0.001 per share (the “Common Stock”), from listing on Nasdaq. The Company filed a Form 25 with the Securities and Exchange Commission (the “SEC”) on Monday, April 25, 2022, relating to delisting the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to be effective ten days thereafter. After delisting, the Common Stock may be quoted on the OTC Pink Open Market.

On May 23, 2022, the Company announced a modified Dutch auction tender offer to purchase with cash up to $9.6 million of shares of its common stock which expired on June 23, 2022. Based on the final count by the depositary for the tender offer, a total of 1,501,192 shares of common stock were validly tendered and not validly withdrawn at or below the price of $1.55 per share. The Company accepted all of these shares of common stock for purchase at the purchase price of $1.55 per share, for a total cost of $2.5 million, including $0.2 million in fees and expenses. The total of 1,501,192 shares of common stock accepted for purchase represents approximately 12.2 % of the Company’s total shares of common stock outstanding.

During the month of September 2022, the Company through a direct purchase and an open market purchase which were not related to the tender offering conducted in May 2022, acquired an additional 263,000 shares at a purchase price of $1.55 per share, for a total cost of $0.4 million. These shares are currently being held as treasury stock.

On August 26, 2022, Matthew Stecker resigned as the Company’s Chief Executive Officer. In connection with the resignation, the Company and Mr. Stecker entered into an agreement that including a release of all claims and certain obligations under his employment agreement and Mr. Stecker received a payment of $0.35 million and accelerated vesting of his 0.1 million shares of unvested restricted stock awards. On the same day, the Company appointed Mr. Igor Volshteyn as its Chief Executive Officer.

On October 21, 2022 the Company’s board of directors determined that “going dark” is in the best interest of the Company and its stockholders as a result of the substantial cost savings from the elimination of accounting and other expense related to maintaining its status as a public reporting company, as well as the increased ability of management to focus on core business activities, among other things. The Company therefore plans to affect a suspension of its reporting obligation under the Securities Exchange Act of 1934, as amended, and expects to file a Form 15 with the Securities and Exchange Commission in early January 2023.

CCUR Holdings Inc. filed an amended schedule 13D on November 2, 2022, announcing that they have acquired in total 6,982,939 common shares of the Company. This represented 65% beneficial ownership of the outstanding shares of the Company as of the date of the announcement.

We believe our current liquidity from our investments and future operations will be sufficient to fund operations and meet the Company’s cash needs for future working capital and capital expenditure requirements for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. In making this assessment, we considered our $16.8 million in cash and cash equivalents and our $27.8 million in working capital at September 30, 2022.

Interim Condensed Consolidated Financial Statements — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and in conformity with the instructions to Form 10-Q and Article 8 of Regulation S-X and the related rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these condensed consolidated financial statements are adequate to make the information presented not misleading. The condensed consolidated financial statements included in this document have been prepared on the same basis as the annual consolidated financial statements, and in our opinion reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with US GAAP and SEC regulations for interim financial statements. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K as filed with the SEC on April 11, 2022.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP), requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the condensed consolidated financial

statements, as well as the reported amounts of expenses during the reporting period. We made estimates with respect to income tax valuation and fair value of investments and stock-based compensation amounts. Actual results could differ from these estimates.

Principles of Consolidation — The unaudited condensed consolidated financial statements include the accounts of Symbolic Logic and subsidiaries, all of which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation.

Stock-based Compensation — We account for stock-based compensation by applying a fair-value-based measurement method to account for stock-based payment transactions with employees, non-employees and directors. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock instead of settling such obligations with cash payments. We use the Black-Scholes model to estimate the fair value of each option grant on the date of grant. This model requires the use of estimates for the expected term of the options and expected volatility of the price of our common stock. We recognize forfeitures as they occur rather than estimating them at the time of the grant.

Investments — Investments in entities where the Company owns less than twenty percent of the voting stock of the individual entity, does not exercise significant influence over operating and financial policies of the entity, and the investment does not have a readily determinable fair value, are accounted for using the cost method. Under the cost method of accounting, the investment is carried at cost less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. As of September 30, 2022, the Company held one cost method investment for $1,000,000 (see Note 5, “Investments”).

Fair Value Measurements — Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which it would transact and assumptions that market participants would use when pricing the asset or liability.

ASC Topic 820, Fair Value Measurements and Disclosures, requires certain disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

● Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

● Level 3 — Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which include the use of management estimates.

Our investment portfolio consists of money market funds, equity securities, and corporate debt. All highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months when purchased are classified as available-for-sale, trading, or held-to-maturity investments.

Our fixed maturity securities and debt securities are classified as available-for-sale, and are reported at fair value, with unrealized gains and losses, net of tax, reported in the accompanying condensed consolidated balance sheets in stockholders’ equity as a component of accumulated other comprehensive income or loss. Realized gains or losses on available-for-sale investments are reclassified from other comprehensive income (loss) to net income (loss) in the condensed consolidated statements of operations. Investments in equity securities with readily determinable fair values (marketable) are measured at fair value, with changes in the fair value recognized as a component of unrealized gain on investments, net in the condensed consolidated statements of operations.

Investments in equity investments that do not have readily determinable fair values (non-marketable) are accounted for at cost minus impairment, if any, and any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, also referred to as the measurement alternative. Any adjustments to the carrying value of these investments are recorded in unrealized gain on investments, net in the condensed consolidated statements of operations.

Interest on securities is reported in the accompanying condensed consolidated statements of operations in interest income. Dividends paid by securities are reported in the accompanying condensed consolidated statements of operations in other income. Realized gains or losses are reported in the accompanying condensed consolidated statements of operations in net realized gain on investments.

The following table presents the fair value hierarchy for those assets and liabilities the Company measured at fair value on a recurring basis:

	Fair value at September 30, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	13,799	$	13,799	$	—	$	—
Cash and cash equivalents	$	13,799	$	13,799	$	—	$	—
Common stock and common stock options	$	6,031	$	6,031	$	—	$	—
Equity securities	$	6,031	$	6,031	$	—	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Corporate bonds	$	4,345	$	—	$	4,345	$	—
Fixed maturity securities	$	4,345	$	—	$	4,345	$	—

Income Taxes — We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheets, as well as operating losses and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized.

We use a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

Recently Adopted Accounting Pronouncements — In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (ASC 260), Debt—Modifications and Extinguishments (ASC 470-50), Compensation—Stock Compensation (ASC 718) and Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815-40). The amendments in this update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in ASC 260, Earnings Per Share. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The amendments in this ASU did not have a material impact on our condensed consolidated financial statements.

Recently Issued Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have to disclose significantly more information about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements. The Company anticipates presenting amendments on a modified-retrospective basis through a cumulative effect adjustment to opening retained earnings as of the date of adoption.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (ASC 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements.

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DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2022

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 2 — DISCONTINUED OPERATIONS

On December 31, 2021, Evolving Systems, Inc. and certain of its subsidiaries completed the Equity Purchase Agreement and two Software Purchase Agreements with subsidiaries and affiliates of PartnerOne Capital, Inc. The Purchase Agreements contemplate the sale and transfer of substantially all of the Company’s operating subsidiaries and all of its assets to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements include customary terms and conditions, including an adjustment to the purchase price based on the Company’s cash and cash equivalents on hand and other adjustments as of the closing date and provisions that require the Company to indemnify the Purchasers for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the Purchase Agreements and certain other matters.

Proceeds from the sale was payable to the Company as follows: (1) a $37.5 million payment to the Company in cash on the closing date of December 31, 2021 (adjusted as set forth in the Equity Purchase Agreement), and (2) $2.5 million placed in escrow on the closing date as security for the Company’s indemnification obligations to the Purchasers under the Purchase Agreements, which amount will be released to the Company on or before the date that is twelve months from the closing date (less any portion of the escrow used to make indemnification payments to the Purchasers). The Company received cash proceeds of $36.0 million and may receive up to an additional $2.5 million in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement and included in the cash and cash equivalents in our condensed consolidated balance sheets.

The Purchase Agreements contain customary representations and warranties of each of the parties. The Purchase Agreements contain indemnification rights in favor of the Company following closing for (i) breaches of any of the representations or warranties by the Purchasers including, but not limited to, breaches related to organization, authorization, and governmental authorization, and (ii) breaches of the covenants or agreements of the Purchasers in the Purchase Agreements. In addition, the Purchase Agreements contain indemnification rights in favor of the Purchasers following closing for (i) breaches of certain fundamental representations and warranties by the Company, including breaches related to organization, authorization, capitalization, title to purchased assets, and finders’ fees, (ii) breaches of any of the representations and warranties by the Company, and (iii) breaches of the covenants or agreements of the Company in the Purchase Agreements.

Accordingly, the operating results of its operations in the entities and related business operations sold for September 30, 2021 presented have been reclassified in the condensed consolidated statements of operations as “income from discontinued operations.” Interest expense that is specifically identifiable to debt related to the entities sold qualifies as discontinued operations and is allocated to interest expense from discontinued operations in the Company’s condensed consolidated financial statements. Additionally, the carrying amounts of the assets and liabilities for the entities sold as of December 31, 2021 presented have been reclassified in the condensed consolidated balance sheets.

The following table presents the financial results of the discontinued operations:

	For the Three		For the Nine
	Months Ended		Months Ended
	September 30,		September 30,
	2021		2021
Revenue	$	6,974	$	20,428
Costs of revenue		(2,081)		(6,506)
Sales and marketing		(1,325)		(4,081)
General and administrative		(603)		(1,785)
Product development		(1,348)		(3,936)
Depreciation		(181)		(306)
Amortization		(239)		(717)
Restructuring		—		(61)
Interest expense		(1)		(4)
Interest income		3		7
Other income		—		288
Foreign currency exchange loss		(190)		(402)
Income tax expense		(279)		(492)
Net income from discontinued operations	$	730	$	2,433

Cash flow information relating to the discontinued operations for the nine months ended September 30, 2021 is as follows:

	For the Nine
	Months Ended
	September 30,
	2021
Operating cash flow data:
Depreciation	$	306
Amortization of intangible assets	$	717
Amortization of operating leases — right of use assets	$	284
Provision for deferred income taxes	$	(5)
Investing cash flow data:
Purchases of property and equipment	$	(316)

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BALANCE SHEET COMPONENTS

9 Months Ended

Sep. 30, 2022

BALANCE SHEET COMPONENTS

BALANCE SHEET COMPONENTS

NOTE 3 — BALANCE SHEET COMPONENTS

The components of accounts payable and accrued liabilities are as follows (in thousands):

	September 30,		December 31,
	2022		2021
Accounts payable and accrued liabilities:
Accounts payable	$	154	$	83
Accrued compensation and related expenses		20		538
Accrued liabilities		529		631
	$	703	$	1,252

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EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2022

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

NOTE 4 — EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period, including common stock issuable under participating securities. Diluted earnings (loss) per share is computed using the weighted average number of shares of common stock outstanding, plus all potentially dilutive common stock equivalents using the treasury stock method. Common stock equivalents consist of stock options and restricted stock.

The following is the reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations (in thousands except per share data):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Basic earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Basic weighted average shares outstanding		10,803		12,258		11,801		12,240
Basic loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Basic earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20
Diluted earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Weighted average shares outstanding		10,803		12,258		11,801		12,240
Effect of dilutive securities		—		—		—		18
Diluted weighted average shares outstanding		10,803		12,258		11,801		12,258
Diluted loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Diluted earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20

Weighted average options to purchase approximately 0.1 million shares and 0.3 million shares of common stock equivalents for the three and nine months ended September 30, 2022 and 2021, respectively, were excluded from the computation of diluted weighted average shares outstanding because the effect would have been anti-dilutive since their exercise prices were greater than the average market value of our common stock for the period. Earnings per share calculations use basic weighted average shares outstanding, when in a net loss position.

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INVESTMENTS

9 Months Ended

Sep. 30, 2022

INVESTMENTS.

INVESTMENTS

NOTE 5 — INVESTMENTS

Fixed-Maturity, Debt and Equity Securities Investments

On June 13, 2022, the Company entered into a line of credit to loan a counterparty 1,000,000 United States Dollar Coin (“USDC”) for a 30 day period. USDC is fully backed by the United States Dollar (“USD”) and is not subject to market fluctuations, and the Company upon maturity converted the USDC to USD immediately. The loan had interest at a rate of 4.0% per annum and had a term of one month. There was no principal balance of the loan outstanding as of September 30, 2022.

On June 14, 2022, the Company entered into a note purchase agreement with a counterparty for $1,575,000 in conjunction with CCUR Holdings, Inc. The note bears interest at a rate of 15.0% per annum and has a term of one year, when payment in full of the outstanding principal balance becomes due. The loan is collateralized by the counterparty’s and its subsidiaries’ assets including cash and intellectual property. If no event of default is outstanding and the counterparty has made all accrued interest payments, the counterparty may extend the term by two additional six-month extension periods. The entire principal balance of the loan was outstanding as of September 30, 2022.

The difference between amortized cost or cost and estimated fair value and gross unrealized gains and losses, by major investment category, consisted of the following as of September 30, 2022. There were no investments as of December 31, 2021.

			Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Equity securities
Common stock and common stock options	$	7,733	$	90	$	(1,792)	$	6,031
Total equity securities	$	7,733	$	90	$	(1,792)	$	6,031

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Debt securities
Available for sale	$	1,575	$	—	$	—	$	1,575
Total debt securities	$	1,575	$	—	$	—	$	1,575

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Fixed-maturity securities
Corporate bonds	$	7,498	$	—	$	(3,153)	$	4,345
Total fixed-maturity securities	$	7,498	$	—	$	(3,153)	$	4,345

The Company sold equity securities investments for proceeds of $1.2 million, and $3.2 million for the three and nine months ended September 30, 2022, respectively, resulting in realized gains on investments, net of $0.1 million and $0.5 million, respectively. The Company also had unrealized losses on equity securities, net of $0.1 million and $1.7 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2022, the Company did not consider any of the fixed-maturity securities to be other-than-temporarily impaired. The Company does not intend to sell, nor believe it is more likely than not that the Company will be required to sell, any of the securities in an unrealized loss position. When evaluating investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer, the ability and intent to hold the security to maturity and whether it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis.

Maturities of Debt Securities and Fixed-Maturity Securities Available-for-Sale

The amortized cost and fair values of debt securities and fixed-maturity securities available for sale as of September 30, 2022 are shown by contractual maturity in the table below. Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Due within one year through three years	$	1,575	$	1,575
Due after three years through five years		7,498		4,345
Due after five years through ten years		—		—
Total debt securities and fixed-maturity securities	$	9,073	$	5,920

Cost Method Investment

In May 2022, the Company purchased a minority equity interest through a private placement in the amount of $1.0 million in BH3 Slate, LLC (“BH3”). As of September 30, 2022, the Company holds a 3.75% ownership interest. Distributions of available cash made by BH3 will first be made to us equal to our interest until the Internal Rate of Return is 8%, second to the manager until their Internal Rate of Return is 5%, and thereafter with 75% going to member and 25% to the manager. There were no indicators of impairment during the three and nine months ended September 30, 2022.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 6 — STOCK-BASED COMPENSATION

We recognized $0.2 million and less than $0.1 million of compensation expense within general and administrative expense in the condensed consolidated statements of operations, with respect to our stock-based compensation plans for the three months ended September 30, 2022 and 2021, respectively. We recognized $0.4 million and $0.2 million for the nine months ended September 30, 2022 and 2021, respectively.

Stock Incentive Plans

At September 30, 2022 and December 31, 2021, no shares were available for grant under the 2007 Stock Plan, as amended. At September 30, 2022 and December 31, 2021, 0.03 million options and no restricted shares, and 0.1 million options and no restricted shares were issued and outstanding under the 2007 Stock Plan as amended, respectively.

At September 30, 2022 and December 31, 2021, there were approximately 0.4 million and 0.6 million shares available for grant under the 2016 Stock Plan, respectively. At September 30, 2022 0.1 million options and 0.1 million restricted shares were outstanding. At December 31, 2021, 0.1 million options and no restricted shares were issued and outstanding under the 2016 Stock Plan. The fair value of restricted shares for stock-based compensation expense is equal to the closing price of our common stock on the date of grant. The restricted shares for stock awards vest in three tranches: the first tranche vests immediately; and the second and third tranches vest over the following two years for senior management and the board of directors.

The following is a summary of restricted stock activity under the plans for the nine months ended September 30, 2022:

	Restricted Stock
	Number of Shares
	(in thousands)
Unvested restricted stock at January 1, 2022	—
Add restricted stock granted	225
Less restricted stock vested	(175)
Less restricted stock forfeited/expired	—
Unvested restricted stock at September 30, 2022	50

The following is a summary of stock option activity under the plans for the nine months ended September 30, 2022:

				Weighted
				Average
	Number of	Weighted-		Remaining	Aggregate
	Shares	Average		Contractual	Intrinsic Value
	(in thousands)	Exercise Price		Term (Years)	(in thousands)
Options outstanding at January 1, 2022	287	$	6.11	4.10	$	—
Less options forfeited/cancelled	(205)		4.11	—		—
Less options expired	—		—	—		—
Options outstanding at September 30, 2022	82	$	5.71	4.10	$	—
Options exercisable at September 30, 2022	82	$	5.71	4.10		—

There were 225,000 restricted shares granted and no stock options granted during the nine months ended September 30, 2022, and no restricted stock awards or options granted during the nine months ended September 30, 2021. The total fair value of restricted shares granted during the nine months ended September 30, 2022 was $0.4 million. No restricted shares were granted during the nine months ended September 30, 2021.

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INCOME TAXES

9 Months Ended

Sep. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 7 — INCOME TAXES

The income tax provision for the fiscal year ending December 31, 2022 interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, primarily related to unrealized gains. At September 30, 2022 the Company is currently estimating an annual effective tax rate of approximately 0.63%, resulting in a net tax benefit from continuing operations of less than $0.1 million for the nine months ended September 30, 2022. The Company recorded a tax expense of less than $0.1 million from continuing operations for the nine months ended September 30, 2021. For the nine months ended September 30, 2022, the Company recorded a less than $0.1 million income tax benefit from discontinued operations and recorded $0.5 million in tax expense from discontinued operations for the nine months ended September 30, 2021.

For the three months ended September 30, 2022, we recorded $0.1 million in net tax expense from continuing operations due to adjustment of annual effective tax rate. For the three months ended September 30, 2021, we recorded less than $0.1 million in net tax expense from continuing operations. The Company recorded $0.3 million in net tax expense from discontinued operations for the three months ended September 30, 2021.

The Inflation Reduction Act (“IRA”) was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently completed three-year period exceeds $1.0 billion and a 1% excise tax on share repurchases. This is effective for tax year beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have material impact on our reported results, cash flows or financial position when it becomes effective.

Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as income tax of multiple state jurisdictions. As of September 30, 2022, the Company is subject to U.S. Federal income tax examinations for the years 2018 through 2020 and income tax examinations from various other jurisdictions for the years 2016 through 2020.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 8 — COMMITMENTS AND CONTINGENCIES

(a)Lease Commitments

Under ASC 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of less than one year. We lease office and operating facilities under non-cancelable operating leases. Current facility leases include our offices in Englewood, Colorado. Total rent expense consisted of short-term lease expense of less than $0.1 million for the three and nine months ended September 30, 2022 and 2021, respectively. There was no sublease rental income for the three and nine months ended September 30, 2022 and 2021.

Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. We did not have leases that had terms of greater than 12 months as of September 30, 2022 and December 31, 2021.

(b)Other Commitments

As permitted under Delaware law, we have agreements with officers and directors under which we agree to indemnify them for certain events or occurrences while the officer or director is, or was, serving at our request in this capacity. The term of the indemnification period is indefinite. There is no limit on the amount of future payments we could be required to make under these indemnification agreements; however, we maintain Director and Officer insurance policies, as well as an Employment Practices Liability Insurance Policy, that may enable us to recover a portion of any amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2022 or December 31, 2021.

We enter into standard indemnification terms with outside consultants, in the course of business, for third party claims arising under our contracts. Depending upon the nature of the indemnification, the potential amount of future payments we could be required to make under these indemnification agreements may be unlimited. We have never incurred costs to defend lawsuits or settle claims relating to an indemnification. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2022 or December 31, 2021.

Management Agreement with CIDM II LLC

On January 21, 2022, the Company entered into a Management Agreement (the “Management Agreement”) with CIDM II LLC (the “Manager”). Pursuant to the Management Agreement, the Manager will, subject to the Company’s Board of Directors (“Board”) and the Investment Committee of the Board, (i) provide the Company with advisory services with respect to the management and allocation of investments in equity and debt securities (“Assets”) of the Company and its subsidiaries and (ii) exercise discretionary management authority over the Company’s trading portfolio of publicly traded securities.

The Manager will receive compensation for performance under the Management Agreement consisting of a management fee of 2% of the fair market value of the Assets and a performance fee in respect of each performance period shall be equal to 20% of the appreciation of end-of-year net asset value. The management fee and performance fee may be paid through the issuance of stock appreciation rights of the Company’s common stock or in cash payment to the Manager. The Manager is also entitled to payment or reimbursement of certain administrative costs and expenses incurred in connection with the management of the Assets, such as custodial fees, brokerage commissions and similar fees and expenses. The related expense is included in general and administrative expenses on the unaudited consolidated statements of operations of $0.5 million which is approximately 0.3 million stock appreciation rights. The Manager shall be responsible for all of its operating expenses. The Management Agreement may be terminated by either party upon thirty days written notice. No stock appreciation rights have been exercised in the nine months ended September 30, 2022.

(c)Litigation

From time to time, we are involved in various legal matters arising in the normal course of business. We do not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on our financial position, cash flows or results of operations.

On October 15, 2019, the Company’s former Chief Executive Officer filed a lawsuit in the Superior Court of New Jersey against us. That suit sought $3.5 million for claims of libel, harm of lost employment opportunities, severance payments, and benefits that he would have been entitled to receive had he been terminated without cause. The Company engaged legal counsel through its insurance carrier. The Company decided that it was prudent to avoid further legal fees and disruption to the business caused by an on-going litigation claim. Therefore, to resolve amicably and discontinue disputes regarding all claims arising from the lawsuit and with the denial of every allegation of wrongdoing, in June 2021, a settlement and mutual general release was agreed to that included payment of $0.6 million by the Company. Our insurance carrier has agreed to contribute $0.3 million toward the settlement. Settlement was paid in full in July 2021 and is included in other (expense) income, net, on the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021.

(d)Paycheck Protection Program Loan

On April 15, 2020, the Company received loan proceeds in the amount of $0.3 million under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after a period of eight to twenty-four weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. We have met the conditions of the PPP Loan forgiveness program. As authorized by section 1106 of the CARES Act, United States Small Business Administration (“SBA”) forgave the full amount of PPP loan on May 20, 2021. We recorded the forgiveness amount as other income. We had used the loan proceeds for purposes consistent with the PPP, including paying for Company wages.

(e)Potential Claim on Escrow Account

The Company has been served notice by the Purchasers making a claim for indemnification under the Equity Purchase Agreement related to a failure to file returns, make required remittances, and pay taxes to the Irish Revenue Service with respect to an employee for pre-closing periods. The Company has recorded a liability in the amount of $0.2 million related to the employer burden which had not been remitted. The Purchasers have claimed additional taxes and fees in a range of $0.7 million to $1.5 million based on their calculations. The Company has objected to the release of any funds related to the claim until the final amount can be properly calculated and agreed upon by the parties. The Company intends to defend this matter rigorously and any additional amounts in the claim are not estimable or determinable at this time.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Organization — On December 31, 2021, Symbolic Logic, Inc. (the “Company” or “Symbolic Logic”) f/k/a Evolving Systems, Inc. (“Evolving Systems”) closed on the terms of the Equity Purchase Agreement (the “Equity Purchase Agreement”) and two Software Purchase Agreements (the “Software Purchase Agreements” and, together with the Equity Purchase Agreement and the other transaction documents described therein, the “Purchase Agreements”) dated as of October 15, 2021, with subsidiaries and affiliates of PartnerOne Capital, Inc. (the “Purchasers”). The Purchase Agreements provided for the sale and transfer of substantially all of Evolving Systems’ operating subsidiaries and all of its assets to the Purchasers for an aggregate purchase price of $40 million (subject to adjustment as set forth in the Equity Purchase Agreement). The Purchase Agreements included customary terms and conditions, including an adjustment to the purchase price based on Evolving Systems’ cash and cash equivalents on hand as of the closing date and provisions that require Evolving Systems to indemnify the Purchasers for certain losses that it incurs as a result of a breach by Evolving Systems of its representations and warranties in the Purchase Agreements and certain other matters. Evolving Systems received cash proceeds of $36,032,899 and may receive up to an additional $2,500,000 in consideration pursuant to the terms of an escrow agreement entered into in connection with the Equity Purchase Agreement.

Results of the sold subsidiaries are retrospectively reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. Prior year information has been adjusted to conform to the current year presentation. Unless otherwise stated, the information disclosed in the footnotes accompanying the condensed consolidated financial statements refers to continuing operations. See Note 2 “Discontinued Operations” for more information regarding results from discontinued operations.

Simultaneously with the approval by the board of directors of the Company to execute the Purchase Agreements, the board formed a subcommittee of the board (the “Investment Committee”) to evaluate options to maximize the value of the Company’s assets, which, following the closing of the transactions contemplated under the Purchase Agreements, consists primarily of cash and cash equivalents. The board of directors has authorized the Investment Committee to retain such counsel, experts, consultants, or other professionals as the Investment Committee shall deem appropriate from time to time to aid the Investment Committee in the performance of its duties. The Company’s directors and executives have an extensive background in mergers and acquisitions (“M&A”) activity. The Company plans to use its cash assets and network of relationships to seek to acquire businesses and/or assets as well as to consider strategic partners.

Following the sale of its assets in December 2021, the Company began to evaluate two initial areas of product focus, each of which is in a research-oriented pre-release mode. The two areas of focus relate to the application of self-learning algorithms and the symbolic tagging and organizing of physical objects. The Company continues to selectively seek new opportunities through potential mergers, acquisitions, joint ventures, strategic partnerships, and future product development.

The COVID-19 global outbreak caused instability and volatility in multiple markets throughout the world. We have leveraged our ability to work remotely resulting in limited effect on our day-to-day operations.

On December 9, 2021, the Company received a letter from the Nasdaq Capital Market (“NASDAQ”) regarding the Equity Purchase Agreement and the two Software Purchase Agreements entered into by the Company pursuant to which we sold all of our assets. The NASDAQ staff requested certain information from the Company regarding its on-going business. We provided a response to the staff on January 7, 2022. We received a follow up request from the NASDAQ for additional information and we provided a response to the staff on February 15, 2022.

On April 12, 2022, Evolving Systems, Inc. filed with the Secretary of State of Delaware a Certificate of Amendment to amend its Certificate of Incorporation to change the Company’s name from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” effective as of April 12, 2022. The Company also amended and restated its Bylaws to change all Company references from “Evolving Systems, Inc.” to “Symbolic Logic, Inc.” No other amendments were made to the Certificate of Incorporation or Bylaws.

On April 13, 2022, Symbolic Logic, Inc. f/k/a Evolving Systems, Inc. notified the NASDAQ of its intention to voluntarily withdraw its common stock, par value $0.001 per share (the “Common Stock”), from listing on Nasdaq. The Company filed a Form 25 with the Securities and Exchange Commission (the “SEC”) on Monday, April 25, 2022, relating to delisting the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to be effective ten days thereafter. After delisting, the Common Stock may be quoted on the OTC Pink Open Market.

On May 23, 2022, the Company announced a modified Dutch auction tender offer to purchase with cash up to $9.6 million of shares of its common stock which expired on June 23, 2022. Based on the final count by the depositary for the tender offer, a total of 1,501,192 shares of common stock were validly tendered and not validly withdrawn at or below the price of $1.55 per share. The Company accepted all of these shares of common stock for purchase at the purchase price of $1.55 per share, for a total cost of $2.5 million, including $0.2 million in fees and expenses. The total of 1,501,192 shares of common stock accepted for purchase represents approximately 12.2 % of the Company’s total shares of common stock outstanding.

During the month of September 2022, the Company through a direct purchase and an open market purchase which were not related to the tender offering conducted in May 2022, acquired an additional 263,000 shares at a purchase price of $1.55 per share, for a total cost of $0.4 million. These shares are currently being held as treasury stock.

On August 26, 2022, Matthew Stecker resigned as the Company’s Chief Executive Officer. In connection with the resignation, the Company and Mr. Stecker entered into an agreement that including a release of all claims and certain obligations under his employment agreement and Mr. Stecker received a payment of $0.35 million and accelerated vesting of his 0.1 million shares of unvested restricted stock awards. On the same day, the Company appointed Mr. Igor Volshteyn as its Chief Executive Officer.

On October 21, 2022 the Company’s board of directors determined that “going dark” is in the best interest of the Company and its stockholders as a result of the substantial cost savings from the elimination of accounting and other expense related to maintaining its status as a public reporting company, as well as the increased ability of management to focus on core business activities, among other things. The Company therefore plans to affect a suspension of its reporting obligation under the Securities Exchange Act of 1934, as amended, and expects to file a Form 15 with the Securities and Exchange Commission in early January 2023.

CCUR Holdings Inc. filed an amended schedule 13D on November 2, 2022, announcing that they have acquired in total 6,982,939 common shares of the Company. This represented 65% beneficial ownership of the outstanding shares of the Company as of the date of the announcement.

We believe our current liquidity from our investments and future operations will be sufficient to fund operations and meet the Company’s cash needs for future working capital and capital expenditure requirements for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. In making this assessment, we considered our $16.8 million in cash and cash equivalents and our $27.8 million in working capital at September 30, 2022.

Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Financial Statements — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and in conformity with the instructions to Form 10-Q and Article 8 of Regulation S-X and the related rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these condensed consolidated financial statements are adequate to make the information presented not misleading. The condensed consolidated financial statements included in this document have been prepared on the same basis as the annual consolidated financial statements, and in our opinion reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with US GAAP and SEC regulations for interim financial statements. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K as filed with the SEC on April 11, 2022.

Use of Estimates

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP), requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the condensed consolidated financial

statements, as well as the reported amounts of expenses during the reporting period. We made estimates with respect to income tax valuation and fair value of investments and stock-based compensation amounts. Actual results could differ from these estimates.

Principles of Consolidation

Principles of Consolidation — The unaudited condensed consolidated financial statements include the accounts of Symbolic Logic and subsidiaries, all of which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation.

Stock-based Compensation

Stock-based Compensation — We account for stock-based compensation by applying a fair-value-based measurement method to account for stock-based payment transactions with employees, non-employees and directors. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock instead of settling such obligations with cash payments. We use the Black-Scholes model to estimate the fair value of each option grant on the date of grant. This model requires the use of estimates for the expected term of the options and expected volatility of the price of our common stock. We recognize forfeitures as they occur rather than estimating them at the time of the grant.

Investments

Investments — Investments in entities where the Company owns less than twenty percent of the voting stock of the individual entity, does not exercise significant influence over operating and financial policies of the entity, and the investment does not have a readily determinable fair value, are accounted for using the cost method. Under the cost method of accounting, the investment is carried at cost less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. As of September 30, 2022, the Company held one cost method investment for $1,000,000 (see Note 5, “Investments”).

Fair Value Measurements

Fair Value Measurements — Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which it would transact and assumptions that market participants would use when pricing the asset or liability.

ASC Topic 820, Fair Value Measurements and Disclosures, requires certain disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

● Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

● Level 3 — Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which include the use of management estimates.

Our investment portfolio consists of money market funds, equity securities, and corporate debt. All highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months when purchased are classified as available-for-sale, trading, or held-to-maturity investments.

Our fixed maturity securities and debt securities are classified as available-for-sale, and are reported at fair value, with unrealized gains and losses, net of tax, reported in the accompanying condensed consolidated balance sheets in stockholders’ equity as a component of accumulated other comprehensive income or loss. Realized gains or losses on available-for-sale investments are reclassified from other comprehensive income (loss) to net income (loss) in the condensed consolidated statements of operations. Investments in equity securities with readily determinable fair values (marketable) are measured at fair value, with changes in the fair value recognized as a component of unrealized gain on investments, net in the condensed consolidated statements of operations.

Investments in equity investments that do not have readily determinable fair values (non-marketable) are accounted for at cost minus impairment, if any, and any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, also referred to as the measurement alternative. Any adjustments to the carrying value of these investments are recorded in unrealized gain on investments, net in the condensed consolidated statements of operations.

Interest on securities is reported in the accompanying condensed consolidated statements of operations in interest income. Dividends paid by securities are reported in the accompanying condensed consolidated statements of operations in other income. Realized gains or losses are reported in the accompanying condensed consolidated statements of operations in net realized gain on investments.

The following table presents the fair value hierarchy for those assets and liabilities the Company measured at fair value on a recurring basis:

	Fair value at September 30, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	13,799	$	13,799	$	—	$	—
Cash and cash equivalents	$	13,799	$	13,799	$	—	$	—
Common stock and common stock options	$	6,031	$	6,031	$	—	$	—
Equity securities	$	6,031	$	6,031	$	—	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Corporate bonds	$	4,345	$	—	$	4,345	$	—
Fixed maturity securities	$	4,345	$	—	$	4,345	$	—

Income Taxes

Income Taxes — We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheets, as well as operating losses and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized.

We use a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

Recently Adopted And Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements — In May 2021, the FASB issued ASU 2021-04—Earnings Per Share (ASC 260), Debt—Modifications and Extinguishments (ASC 470-50), Compensation—Stock Compensation (ASC 718) and Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815-40). The amendments in this update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in ASC 260, Earnings Per Share. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The amendments in this ASU did not have a material impact on our condensed consolidated financial statements.

Recently Issued Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have to disclose significantly more information about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements. The Company anticipates presenting amendments on a modified-retrospective basis through a cumulative effect adjustment to opening retained earnings as of the date of adoption.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (ASC 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied prospectively. The Company is currently in the process of assessing the impact of this new standard on its consolidated financial statements.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of fair value hierarchy for those assets and liabilities the company measured at fair value on a recurring basis

	Fair value at September 30, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	13,799	$	13,799	$	—	$	—
Cash and cash equivalents	$	13,799	$	13,799	$	—	$	—
Common stock and common stock options	$	6,031	$	6,031	$	—	$	—
Equity securities	$	6,031	$	6,031	$	—	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Debt securities	$	1,575	$	—	$	1,575	$	—
Corporate bonds	$	4,345	$	—	$	4,345	$	—
Fixed maturity securities	$	4,345	$	—	$	4,345	$	—

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DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2022

DISCONTINUED OPERATIONS

Summary of financial results of the discontinued operations

	For the Three		For the Nine
	Months Ended		Months Ended
	September 30,		September 30,
	2021		2021
Revenue	$	6,974	$	20,428
Costs of revenue		(2,081)		(6,506)
Sales and marketing		(1,325)		(4,081)
General and administrative		(603)		(1,785)
Product development		(1,348)		(3,936)
Depreciation		(181)		(306)
Amortization		(239)		(717)
Restructuring		—		(61)
Interest expense		(1)		(4)
Interest income		3		7
Other income		—		288
Foreign currency exchange loss		(190)		(402)
Income tax expense		(279)		(492)
Net income from discontinued operations	$	730	$	2,433

Summary of cash flow information relating to the discontinued operations

	For the Nine
	Months Ended
	September 30,
	2021
Operating cash flow data:
Depreciation	$	306
Amortization of intangible assets	$	717
Amortization of operating leases — right of use assets	$	284
Provision for deferred income taxes	$	(5)
Investing cash flow data:
Purchases of property and equipment	$	(316)

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BALANCE SHEET COMPONENTS (Tables)

9 Months Ended

Sep. 30, 2022

BALANCE SHEET COMPONENTS

Summary of accounts payable and accrued liabilities

	September 30,		December 31,
	2022		2021
Accounts payable and accrued liabilities:
Accounts payable	$	154	$	83
Accrued compensation and related expenses		20		538
Accrued liabilities		529		631
	$	703	$	1,252

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EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

EARNINGS (LOSS) PER SHARE

Summary of reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Basic earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Basic weighted average shares outstanding		10,803		12,258		11,801		12,240
Basic loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Basic earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20
Diluted earnings (loss) per common share:
Net loss from continuing operations	$	(560)	$	(655)	$	(3,262)	$	(2,321)
Net income from discontinued operations		—		730		49		2,433
Weighted average shares outstanding		10,803		12,258		11,801		12,240
Effect of dilutive securities		—		—		—		18
Diluted weighted average shares outstanding		10,803		12,258		11,801		12,258
Diluted loss per common share from continuing operations	$	(0.05)	$	(0.05)	$	(0.28)	$	(0.19)
Diluted earnings per common share from discontinued operations	$	—	$	0.06	$	—	$	0.20

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INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

INVESTMENTS.

Summary of difference between amortized cost or cost and estimated fair value and gross unrealized gains and losses, by major investment category

			Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Equity securities
Common stock and common stock options	$	7,733	$	90	$	(1,792)	$	6,031
Total equity securities	$	7,733	$	90	$	(1,792)	$	6,031

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Debt securities
Available for sale	$	1,575	$	—	$	—	$	1,575
Total debt securities	$	1,575	$	—	$	—	$	1,575

			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Fixed-maturity securities
Corporate bonds	$	7,498	$	—	$	(3,153)	$	4,345
Total fixed-maturity securities	$	7,498	$	—	$	(3,153)	$	4,345

Summary of amortized cost and fair values of debt securities and fixed-maturity securities available for sale

	Amortized Cost		Fair Value
Due within one year through three years	$	1,575	$	1,575
Due after three years through five years		7,498		4,345
Due after five years through ten years		—		—
Total debt securities and fixed-maturity securities	$	9,073	$	5,920

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2022

STOCK-BASED COMPENSATION

'Summary of restricted stock activity

	Restricted Stock
	Number of Shares
	(in thousands)
Unvested restricted stock at January 1, 2022	—
Add restricted stock granted	225
Less restricted stock vested	(175)
Less restricted stock forfeited/expired	—
Unvested restricted stock at September 30, 2022	50

Summary of stock option activity

				Weighted
				Average
	Number of	Weighted-		Remaining	Aggregate
	Shares	Average		Contractual	Intrinsic Value
	(in thousands)	Exercise Price		Term (Years)	(in thousands)
Options outstanding at January 1, 2022	287	$	6.11	4.10	$	—
Less options forfeited/cancelled	(205)		4.11	—		—
Less options expired	—		—	—		—
Options outstanding at September 30, 2022	82	$	5.71	4.10	$	—
Options exercisable at September 30, 2022	82	$	5.71	4.10		—

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)				1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	Nov. 02, 2022 shares	Aug. 26, 2022 USD ($) shares	May 23, 2022 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) agreement $ / shares	Apr. 13, 2022 $ / shares
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Common stock, par value | $ / shares				$ 0.001	$ 0.001	$ 0.001		$ 0.001	$ 0.001
Share repurchase authorized amount			$ 9,600,000
Number of shares repurchased | shares			1,501,192
Number of shares purchased | shares				263,000
Shares purchased				$ 400,000	$ 408,000	$ 408,000
Price per share | $ / shares			$ 1.55	$ 1.55
Total cost of repurchases excluding fees and expenses			$ 2,500,000			2,470,000	$ 0
Stock-based compensation expense			$ 200,000			$ 365,000	$ 242,000
Retired shares as percentage of total shares of common stock outstanding			12.20%
Number of shares sold | shares						300,000
Mr. Stecker
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Payment of claims and obligations		$ 350,000
Restricted Stock
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accelerated vesting of unvested stock awards | shares		100,000				175,000
Subsequent Event | CCUR Holdings Inc.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares sold | shares	6,982,939
Beneficial ownership percentage	65.00%
Disposed by sale
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of software purchase agreements | agreement								2
Aggregate purchase price								$ 40,000,000
Cash proceeds								36,032,899
Additional consideration placed in escrow								$ 2,500,000

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value hierarchy for those assets and liabilities the company measured at fair value on a recurring basis (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	$ 16,776,000	$ 39,445,000
Working capital	27,800,000
Cost method investment	1,000,000
Assets
Debt securities	1,575,000	$ 0
Recurring
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	13,799,000
Assets
Equity securities	6,031,000
Corporate bonds	4,345,000
Fixed maturity securities	4,345,000
Recurring | Money market funds
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	13,799,000
Recurring | Common stock and common stock options
Assets
Equity securities	6,031,000
Recurring | Debt securities.
Assets
Debt securities	1,575,000
Recurring | Level 1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	13,799,000
Assets
Equity securities	6,031,000
Corporate bonds	0
Fixed maturity securities	0
Recurring | Level 1 | Money market funds
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	13,799,000
Recurring | Level 1 | Common stock and common stock options
Assets
Equity securities	6,031,000
Recurring | Level 1 | Debt securities.
Assets
Debt securities	0
Recurring | Level 2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	0
Assets
Equity securities	0
Corporate bonds	4,345,000
Fixed maturity securities	4,345,000
Recurring | Level 2 | Money market funds
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	0
Recurring | Level 2 | Common stock and common stock options
Assets
Equity securities	0
Recurring | Level 2 | Debt securities.
Assets
Debt securities	1,575,000
Recurring | Level 3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	0
Assets
Equity securities	0
Corporate bonds	0
Fixed maturity securities	0
Recurring | Level 3 | Money market funds
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents	0
Recurring | Level 3 | Common stock and common stock options
Assets
Equity securities	0
Recurring | Level 3 | Debt securities.
Assets
Debt securities	$ 0

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DISCONTINUED OPERATIONS (Details) - Disposed by sale	12 Months Ended
	Dec. 31, 2021 USD ($) agreement
DISCONTINUED OPERATIONS
Number of software purchase agreements | agreement	2
Aggregate purchase price	$ 40,000,000
Aggregate purchase price payable in cash	37,500,000
Additional consideration placed in escrow	2,500,000
Cash proceeds	$ 36,032,899

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DISCONTINUED OPERATIONS - Financial results of the discontinued operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Financial results of the discontinued operations
Income tax expense	$ 0	$ (279)	$ 49	$ (492)
Net income from discontinued operations	$ 0	730	$ 49	2,433
Disposed by sale
Financial results of the discontinued operations
Revenue		6,974		20,428
Costs of revenue		(2,081)		(6,506)
Sales and marketing		(1,325)		(4,081)
General and administrative		(603)		(1,785)
Product development		(1,348)		(3,936)
Depreciation		(181)		(306)
Amortization		(239)		(717)
Restructuring		0		(61)
Interest expense		(1)		(4)
Interest income		3		7
Other income		0		288
Foreign currency exchange loss		(190)		(402)
Income tax expense		(279)		(492)
Net income from discontinued operations		$ 730		$ 2,433

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DISCONTINUED OPERATIONS - Non cash items and capital expenditures for the discontinued operations (Details) - Disposed by sale - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Operating cash flow data:
Depreciation	$ 181	$ 306
Amortization of intangible assets	$ 239	717
Amortization of operating leases - right of use assets		284
Provision for deferred income taxes		(5)
Investing cash flow data:
Purchases of property and equipment		$ (316)

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BALANCE SHEET COMPONENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
BALANCE SHEET COMPONENTS
Accounts payable	$ 154	$ 83
Accrued compensation and related expenses	20	538
Accrued liabilities	529	631
Total accounts payable and accrued liabilities	$ 703	$ 1,252

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EARNINGS (LOSS) PER SHARE (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Common Stock
EARNINGS (LOSS) PER SHARE
Shares excluded from the dilutive stock calculation	0.1	0.3	0.1	0.3

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EARNINGS (LOSS) PER SHARE - Reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Basic earnings (loss) per common share:
Net loss from continuing operations	$ (560)	$ (655)	$ (3,262)	$ (2,321)
Net income from discontinued operations		$ 730	$ 49	$ 2,433
Weighted average basic shares outstanding	10,803	12,258	11,801	12,240
Basic loss per common share from continuing operations	$ (0.05)	$ (0.05)	$ (0.28)	$ (0.19)
Basic earnings per common share from discontinued operations	$ 0	$ 0.06	$ 0	$ 0.20
Diluted earnings (loss) per common share:
Net loss from continuing operations	$ (560)	$ (655)	$ (3,262)	$ (2,321)
Net income from discontinued operations		$ 730	$ 49	$ 2,433
Weighted average shares outstanding	10,803	12,258	11,801	12,240
Effect of dilutive securities	0	0	0	18
Diluted weighted average shares outstanding	10,803	12,258	11,801	12,258
Diluted loss per common share from continuing operations	$ (0.05)	$ (0.05)	$ (0.28)	$ (0.19)
Diluted earnings per common share from discontinued operations	$ 0	$ 0.06	$ 0	$ 0.20

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INVESTMENTS - Difference between amortized cost or cost and estimated fair value and gross unrealized gains and losses, by major investment category (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Equity securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Cost	$ 7,733
Unrealized Gains	90
Unrealized Losses	(1,792)
Fair Value	6,031
Debt securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	1,575
Unrealized Gains	0
Unrealized Losses	0
Fair Value	1,575
Fixed-maturity securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	7,498
Unrealized Gains	0
Unrealized Losses	(3,153)
Fair Value	4,345
Common stock and common stock options | Equity securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Cost	7,733
Unrealized Gains	90
Unrealized Losses	(1,792)
Fair Value	6,031
Available for sale | Debt securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	1,575
Unrealized Gains	0
Unrealized Losses	0
Fair Value	1,575
Corporate bonds | Fixed-maturity securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	7,498
Unrealized Gains	0
Unrealized Losses	(3,153)
Fair Value	$ 4,345

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INVESTMENTS - Maturities of Debt Securities and Fixed-Maturity Securities Available-for-Sale (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Amortized Cost
Due within one year through three years	$ 1,575
Due after three years through five years	7,498
Due after five years through ten years	0
Total debt securities and fixed-maturity securities	9,073
Fair Value
Due within one year through three years	1,575
Due after three years through five years	4,345
Due after five years through ten years	0
Total debt securities and fixed-maturity securities	$ 5,920

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INVESTMENTS (Details) $ in Thousands			1 Months Ended	3 Months Ended	9 Months Ended
	Jun. 14, 2022 USD ($) item	Jun. 13, 2022 USD ($)	May 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Debt and Equity Securities, FV-NI [Line Items]
Investments						$ 0
Payments to acquire investments	$ 1,575,000	$ 1,000,000
Interest rate per annum	15.00%	4.00%
Term of investments	1 year	1 month
Number of additional term options | item	2
Extension period	6 months
Proceeds from sale of investments				$ 1,200	$ 3,200
Realized gains on sale of investments, net				100	500
Unrealized loss on equity securities, net				$ 100	$ 1,700
Payments to acquire cost method investments			$ 1,000
Ownership interest held					3.75%
Distributions of available cash to manager					25.00%
Until the Internal Rate of Return is 8%
Debt and Equity Securities, FV-NI [Line Items]
Internal rate of return					8.00%
Until the Internal Rate of Return is 5%
Debt and Equity Securities, FV-NI [Line Items]
Internal rate of return					5.00%
Thereafter
Debt and Equity Securities, FV-NI [Line Items]
Distributions of available cash					75.00%

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STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
STOCK-BASED COMPENSATION
Stock options granted			0	0
General and administrative expense
STOCK-BASED COMPENSATION
Share-based compensation expense	$ 0.2	$ 0.1	$ 0.4	$ 0.2
2007 Stock Plan
STOCK-BASED COMPENSATION
Shares available for grant	0		0		0
2016 Stock Plan
STOCK-BASED COMPENSATION
Shares available for grant	400,000		400,000		600,000
Number of restricted shares	100,000		100,000
Option | 2007 Stock Plan
STOCK-BASED COMPENSATION
Shares issued and outstanding	30,000.00		30,000.00		100,000
Option | 2016 Stock Plan
STOCK-BASED COMPENSATION
Shares issued and outstanding	100,000		100,000		100,000
Restricted shares
STOCK-BASED COMPENSATION
Number of restricted shares			$ 0.4
Grant made during the period				0
Number of shares restricted stock forfeited			0
Number of restricted shares granted			225,000	0
Restricted shares | 2007 Stock Plan
STOCK-BASED COMPENSATION
Number of restricted shares	0		0		0
Restricted shares | 2016 Stock Plan
STOCK-BASED COMPENSATION
Number of restricted shares					0
Senior Management | 2016 Stock Plan
STOCK-BASED COMPENSATION
Vesting period			2 years

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STOCK-BASED COMPENSATION - Restricted stock activity (Details) - Restricted shares - shares		9 Months Ended
	Aug. 26, 2022	Sep. 30, 2022	Sep. 30, 2021
STOCK-BASED COMPENSATION
Unvested restricted stock, beginning		0
Add restricted stock granted		225,000	0
Less restricted stock vested	(100,000)	(175,000)
Less restricted stock forfeited/expired		0
Unvested restricted stock, ending		50,000

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STOCK-BASED COMPENSATION - Stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
STOCK-BASED COMPENSATION
Number of Shares, Options outstanding at beginning	287
Number of Shares, Less options forfeited/cancelled	(205)
Number of Shares, Less options expired	0
Number of Shares, Options outstanding at ending	82		287
Number of Shares, Options exercisable at March 31, 2022	82
Weighted-Average Exercise Price, Options outstanding at beginning	$ 6.11
Weighted-Average Exercise Price, Less options forfeited/cancelled	4.11
Weighted-Average Exercise Price, Less options expired	0
Weighted-Average Exercise Price, Options outstanding at ending	5.71		$ 6.11
Weighted-Average Exercise Price, Options exercisable	$ 5.71
Weighted-Average Remaining Contractual Term (Years), Options outstanding	4 years 1 month 6 days		4 years 1 month 6 days
Weighted-Average Remaining Contractual Term (Years), Options exercisable	4 years 1 month 6 days
Aggregate Intrinsic Value, Options outstanding at beginning	$ 0
Aggregate Intrinsic Value, Options outstanding at ending	0		$ 0
Aggregate Intrinsic Value, Options exercisable	$ 0
Stock options granted	0	0

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
INCOME TAXES
Annual effective tax rate			0.63%
Income tax expense (benefit) from discontinued operations	$ 0	$ 279	$ (49)	$ 492
Tax expense (benefit) from continuing operations	$ 100
Corporate alternative minimum tax percentage under IRA Act			15.00%
Minimum average annual adjusted financial statement income under IRA Act			$ 1,000,000
Percentage of excise tax on share repurchases under IRA Act			1.00%
Period for calculating average annual adjusted financial statement income under IRA Act			3 years
Maximum
INCOME TAXES
Income tax expense (benefit) from discontinued operations			$ (100)
Tax expense (benefit) from continuing operations		$ 100	$ (100)	$ 100

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 15, 2019	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Apr. 15, 2020
COMMITMENTS AND CONTINGENCIES
Short-term lease expense		$ 100	$ 100	$ 100	$ 100
Sublease rental income		0	$ 0	0	0
Liabilities		0		0		$ 0
Litigation, amount seeking	$ 3,500
Litigation settlement and mutual general release, amount agreed to pay to the other party					600
Litigation settlement, paid by insurance carrier					$ 300
Contingent liability		200		$ 200
Management fee				2.00%
Assets and performance fee				20.00%
Related expense, included in general and administrative expense				$ 500
Stock appreciation rights				300,000
Minimum
COMMITMENTS AND CONTINGENCIES
Additional employee tax range		700		$ 700
Maximum
COMMITMENTS AND CONTINGENCIES
Additional employee tax range		$ 1,500		$ 1,500
Paycheck Protection Program Loan
COMMITMENTS AND CONTINGENCIES
Proceeds from PPP loan							$ 300
Stock Appreciation Rights (SARs)
COMMITMENTS AND CONTINGENCIES
Stock appreciation rights				0