Delaware
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001-36280
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05-0502529
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(State
or other jurisdiction ofIncorporation or Organization)
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(Commission
File Number)
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(I.R.S.
EmployerIdentification No.)
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5001 Celebration Pointe Avenue, Gainesville, FL
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32608
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(Address
of principal executive offices)
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(Zip
Code)
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Exhibit No.
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Description
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|
Press
Release dated August 13, 2020 – Second Quarter 2020
Results*
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|
SHARPSPRING,
INC.
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Date: August 13,
2020
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By:
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/s/
Aaron
D. Jackson
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|
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|
Aaron D.
Jackson
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Interim Chief
Financial Officer
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Three
Months Ended
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Six
Months Ended
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||
|
June
30,
|
June
30,
|
||
|
2020
|
2019
|
2020
|
2019
|
Revenue
|
$7,270,905
|
$5,517,433
|
$14,323,634
|
$10,843,718
|
|
|
|
|
|
Cost
of services
|
1,873,029
|
$1,625,818
|
4,240,671
|
3,174,200
|
Gross
profit
|
5,397,876
|
3,891,615
|
10,082,963
|
7,669,518
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
2,395,100
|
2,865,610
|
5,429,222
|
5,873,813
|
Research
and development
|
1,484,890
|
1,217,981
|
3,063,029
|
2,476,709
|
General
and administrative
|
2,244,560
|
1,935,291
|
4,658,401
|
4,162,966
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Intangible
asset amortization
|
183,746
|
95,250
|
336,547
|
190,500
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|
|
|
|
|
Total
operating expenses
|
6,308,296
|
6,114,132
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13,487,199
|
12,703,988
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|
|
|
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|
Operating
loss
|
(910,420)
|
(2,222,517)
|
(3,404,236)
|
(5,034,470)
|
|
|
|
|
|
Other
expense, net
|
(2,777)
|
(41,966)
|
(59,556)
|
(146,093)
|
Loss
on induced conversion
|
-
|
(2,162,696)
|
-
|
(2,162,696)
|
Gain
on embedded derivative
|
-
|
189,776
|
-
|
214,350
|
|
|
|
|
|
Loss
before income taxes
|
(913,197)
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(4,237,403)
|
(3,463,792)
|
(7,128,909)
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Provision
(benefit) for income taxes
|
57,187
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787
|
(1,505,331)
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3,126
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Net
loss
|
$(970,384)
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$(4,238,190)
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$(1,958,461)
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$(7,132,035)
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|
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Basic
net loss per share
|
$(0.08)
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$(0.41)
|
$(0.17)
|
$(0.75)
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Diluted
net loss per share
|
$(0.08)
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$(0.41)
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$(0.17)
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$(0.75)
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Weighted
average common shares outstanding
|
|
|
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Basic
|
11,529,324
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10,296,041
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11,525,258
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9,568,161
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Diluted
|
11,529,324
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10,296,041
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11,525,258
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9,568,161
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June
30,
2020
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December
31,
2019
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Assets
|
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Cash
and cash equivalents
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$15,286,895
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$11,881,949
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Accounts
receivable
|
448,016
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340,344
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Unbilled
receivables
|
1,134,432
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998,048
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Income
taxes receivable
|
42,179
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15,010
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Other
current assets
|
1,203,445
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1,363,366
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Total
current assets
|
18,114,967
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14,598,717
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Property
and equipment, net
|
2,336,154
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1,996,722
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Goodwill
|
10,925,003
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10,922,814
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Intangibles,
net
|
4,321,453
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4,658,000
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Deferred
income taxes
|
5,520
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-
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Right-of-use
assets
|
8,756,920
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5,281,530
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Other
long-term assets
|
579,015
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549,022
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Total
assets
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$45,039,032
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$38,006,805
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Liabilities
and Shareholders' Equity
|
|
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Accounts
payable
|
$1,931,572
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$2,052,538
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Accrued
expenses and other current liabilities
|
631,042
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919,089
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Line
of credit
|
1,900,000
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-
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Deferred
revenue
|
659,650
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860,820
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Income
taxes payable
|
73,483
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13,944
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Lease
liability, current portion
|
685,876
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370,340
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Notes
payable, current portion
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1,493,024
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Total
current liabilities
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7,374,647
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4,216,731
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Lease
liability, net of current portion
|
8,172,482
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4,976,727
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Notes
payable, net of current portion
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1,906,475
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Total
liabilities
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17,453,604
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9,193,458
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|
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Shareholders'
equity:
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Preferred
stock, $0.001 par value
|
-
|
-
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Common
stock, $0.001 par value
|
11,555
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11,537
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Additional
paid in capital
|
59,587,378
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58,851,285
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Accumulated
other comprehensive loss
|
(230,362)
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(224,793)
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Accumulated
deficit
|
(31,699,143)
|
(29,740,682)
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Treasury
stock
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(84,000)
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(84,000)
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Total
shareholders' equity
|
27,585,428
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28,813,347
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Total
liabilities and shareholders' equity
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$45,039,032
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$38,006,805
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Three
Months Ended
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Six
Months Ended
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||
|
June
30,
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June
30,
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||
|
2020
|
2019
|
2020
|
2019
|
Net
loss
|
$(970,384)
|
$(4,238,190)
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$(1,958,461)
|
$(7,132,035)
|
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Adjustments
to reconcile loss from operations:
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Depreciation
and amortization
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417,560
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244,265
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774,140
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471,518
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Amortization
of costs to acquire contracts
|
202,329
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228,812
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404,767
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431,757
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Non-cash
stock compensation
|
370,418
|
262,074
|
741,051
|
565,592
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Deferred
income taxes
|
(5,504)
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-
|
(5,504)
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-
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Gain
on disposal of property and equipment
|
-
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(617)
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-
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(617)
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Non-cash
interest
|
-
|
43,373
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-
|
139,372
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Amortization
of debt issuance costs and embedded derivative
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-
|
903
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-
|
2,903
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Gain
on embedded derivative
|
-
|
(189,776)
|
-
|
(214,350)
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Loss
on induced conversion
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|
2,162,696
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-
|
2,162,696
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Unrealized
foreign currency loss
|
29,201
|
6,387
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109,928
|
17,126
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Changes
in assets and liabilities:
|
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Accounts
receivable
|
(20,988)
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(39,742)
|
(106,260)
|
(25,294)
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Unbilled
receivables
|
(40,819)
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(45,047)
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(133,315)
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(138,819)
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Right-of-use
assets
|
(3,069,671)
|
107,718
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(3,475,390)
|
213,933
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Other
assets
|
63,772
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(373,421)
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(279,099)
|
(416,276)
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Income
taxes, net
|
1,596,583
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(30,901)
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33,639
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(28,562)
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Accounts
payable
|
(1,010,945)
|
195,806
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(120,934)
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(78,830)
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Lease
liabilities
|
3,090,202
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(93,540)
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3,511,291
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(185,575)
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Other
liabilities
|
106,198
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(18,019)
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(288,041)
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(87,300)
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Deferred
revenue
|
(107,604)
|
26,027
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(201,893)
|
65,612
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Net
cash provided by (used in) operating activities
|
650,348
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(1,751,192)
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(994,081)
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(4,237,149)
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Cash
flows from investing activities
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|
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Purchases
of property and equipment
|
(211,970)
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(69,553)
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(352,900)
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(239,530)
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Proceeds
from the sale of property and equipment
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-
|
617
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-
|
617
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Capitalization
of software development costs
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(151,842)
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(195,376)
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(424,124)
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(372,574)
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Net
cash used in investing activities
|
(363,812)
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(264,312)
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(777,024)
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(611,487)
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Cash
flows used in financing activities:
|
|
|
|
|
Proceeds
from line of credit
|
-
|
-
|
1,900,000
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-
|
Proceeds
from note payable
|
3,399,500
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-
|
3,399,500
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|
Proceeds
from exercise of stock options, net
|
12,288
|
302,752
|
23,462
|
906,617
|
Proceeds
from issuance of common stock, net
|
-
|
(23,439)
|
-
|
10,649,005
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Payments
for taxes related to net share settlement of equity
awards
|
(1,869)
|
-
|
(28,402)
|
-
|
Net
cash provided by financing activities
|
3,409,919
|
279,313
|
5,294,560
|
11,555,622
|
|
|
|
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Effect
of exchange rate on cash
|
(34,609)
|
(18,901)
|
(118,509)
|
(30,186)
|
|
|
|
|
|
Change
in cash and cash equivalents
|
$3,661,846
|
(1,755,092)
|
$3,404,946
|
$6,676,800
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
$11,625,049
|
17,752,758
|
$11,881,949
|
$9,320,866
|
|
|
|
|
|
Cash
and cash equivalents, end of period
|
$15,286,895
|
15,997,666
|
$15,286,895
|
$15,997,666
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
June
30,
|
June
30,
|
||
|
2020
|
2019
|
2020
|
2019
|
Net
loss
|
$(970)
|
$(4,238)
|
$(1,958)
|
$(7,132)
|
Provision
(benefit) for income taxes
|
57
|
1
|
(1,505)
|
3
|
Other
expense, net
|
3
|
42
|
60
|
146
|
Non-cash
gain on embedded derivative
|
-
|
(190)
|
-
|
(214)
|
Non-cash
loss on induced conversion
|
-
|
2,163
|
-
|
2,163
|
Depreciation
& amortization
|
418
|
244
|
774
|
472
|
Non-cash
stock compensation
|
370
|
262
|
741
|
566
|
Restructuring
|
-
|
-
|
-
|
133
|
Franchise
tax settlement
|
-
|
-
|
-
|
318
|
Adjusted EBITDA
|
(122)
|
(1,716)
|
(1,888)
|
(3,545)
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
June
30,
|
June
30,
|
||
|
2020
|
2019
|
2020
|
2019
|
Net
loss
|
$(970)
|
$(4,238)
|
$(1,958)
|
$(7,132)
|
Amortization
of intangible assets
|
184
|
95
|
337
|
191
|
Non-cash
stock compensation
|
370
|
262
|
741
|
566
|
Non-cash
gain on embedded derivative
|
-
|
(190)
|
-
|
(214)
|
Restructuring
|
-
|
-
|
-
|
133
|
Non-cash
loss on induced conversion
|
-
|
2,163
|
-
|
2,163
|
Franchise
tax settlement
|
-
|
-
|
-
|
318
|
Tax
adjustment
|
35
|
|
(112)
|
1
|
Core net loss
|
$(381)
|
$(1,908)
|
$(992)
|
$(3,974)
|
|
|
|
|
|
Core net loss per share
|
$(0.03)
|
$(0.19)
|
$(0.09)
|
$(0.42)
|
Weighted
average common shares outstanding
|
11,529
|
10,296
|
11,525
|
9,568
|