Delaware
|
|
33-0711569
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
AUTO
|
The Nasdaq Capital Market
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
|
|
|
Emerging growth company☐
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|
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|
Page
Number
|
|
|
|
|
|
1
|
||
|
7
|
||
|
23
|
||
|
23
|
||
|
23
|
||
|
23
|
||
|
|||
|
|
|
|
|
23
|
||
|
24
|
||
|
24
|
||
|
32
|
||
|
32
|
||
|
32
|
||
|
32
|
||
|
33
|
||
|
|||
|
|
|
|
|
33
|
||
|
33
|
||
|
33
|
||
|
33
|
||
|
33
|
||
|
|||
|
|
|
|
|
34
|
||
|
38
|
||
|
|
39
|
|
Years ended December 31,
|
||||
|
2020
|
2019
|
2018 (1)
|
2017 (2)
|
2016
|
|
(Amounts in thousands, except per-share data)
|
||||
RESULTS
OF OPERATIONS:
|
|
|
|
|
|
Total
revenues
|
$76,570
|
$113,981
|
$125,589
|
$142,125
|
$156,684
|
Net
income (loss)
|
$(6,820)
|
$(15,229)
|
$(38,816)
|
$(64,964)
|
$3,871
|
Basic
earnings (loss) per common share
|
$(0.52)
|
$(1.17)
|
$(3.04)
|
$(5.48)
|
$0.36
|
Diluted
earnings (loss) per common share
|
$(0.52)
|
$(1.17)
|
$(3.04)
|
$(5.48)
|
$0.29
|
Weighted
average diluted shares
|
13,144
|
13,071
|
12,756
|
11,853
|
13,303
|
|
Years ended December 31,
|
||||
|
2020
|
2019
|
2018
|
2017
|
2016
|
|
(Amounts in thousands)
|
||||
FINANCIAL
POSITION:
|
|
|
|
|
|
Cash
and cash equivalents and restricted cash
|
$15,107
|
$5,946
|
$13,600
|
$24,993
|
$38,512
|
Total
assets
|
$41,129
|
$44,904
|
$57,416
|
$92,913
|
$165,281
|
Non-current
liabilities
|
$2,251
|
$1,497
|
$—
|
$9,000
|
$16,500
|
Accumulated
deficit
|
$(349,765)
|
$(342,945)
|
$(327,716)
|
$(288,900)
|
$(230,424)
|
Stockholders’
equity
|
$16,335
|
$21,096
|
$33,515
|
$67,167
|
$119,609
|
|
Years Ended December 31,
|
|
|
2020
|
2019
|
Revenues:
|
|
|
Lead
generation
|
79.8%
|
79.6%
|
Digital
advertising
|
20.2
|
20.3
|
Other
revenues
|
0.0
|
0.1
|
Total
revenues
|
100.0
|
100.0
|
Cost
of revenues
|
69.1
|
80.2
|
Gross
profit
|
30.9
|
19.8
|
Operating
expenses:
|
|
|
Sales
and marketing
|
10.7
|
9.3
|
Technology
support
|
8.6
|
7.8
|
General
and administrative
|
16.6
|
12.4
|
Depreciation
and amortization
|
2.2
|
3.8
|
Total
operating expenses
|
38.1
|
33.3
|
Operating
loss
|
(7.2)
|
(13.5)
|
Interest
and other income, net
|
(1.7)
|
0.1
|
Loss
before income tax provision
|
(8.9)
|
(13.4)
|
Income
tax provision (benefit)
|
—
|
—
|
Net
loss
|
(8.9)%
|
(13.4)%
|
|
Years Ended December 31,
|
|
||
|
2020
|
2019
|
$ Change
|
% Change
|
Revenues:
|
|
|
|
|
Lead
generation
|
$61,114
|
$90,728
|
$(29,614)
|
(33)%
|
Digital
advertising
|
15,441
|
23,173
|
(7,732)
|
(33)
|
Other
revenues
|
15
|
80
|
(65)
|
(81)
|
Total
revenues
|
76,570
|
113,981
|
(37,411)
|
(33)
|
Cost
of revenues
|
52,890
|
91,412
|
(38,522)
|
(42)
|
Gross
profit
|
$23,680
|
$22,569
|
$1,111
|
5%
|
|
Years Ended December 31,
|
|
|
|
|
2020
|
2019
|
$ Change
|
% Change
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
$8,201
|
$10,512
|
$(2,311)
|
(22)%
|
Technology
support
|
6,574
|
8,849
|
(2,275)
|
(26)
|
General
and administrative
|
12,718
|
14,175
|
(1,457)
|
(10)
|
Depreciation
and amortization
|
1,711
|
4,371
|
(2,660)
|
(61)
|
Total
operating expenses
|
$29,204
|
$37,907
|
$(8,703)
|
(23)%
|
|
|
|
|
|
Interest
and other (expense) income, net
|
$(1,286)
|
$119
|
$(1,405)
|
(1,181)
|
|
|
|
|
|
Income
tax provision
|
$10
|
$10
|
$—
|
—%
|
|
Years Ended December 31,
|
|
|
2020
|
2019
|
|
|
|
Net
cash provided by (used in) operating activities
|
$1,901
|
$(9,417)
|
Net
cash used in investing activities
|
(596)
|
(1,390)
|
Net
cash provided by financing activities
|
7,856
|
3,153
|
|
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
Credit
Facility Obligations (a)
|
$10,185
|
$—
|
$10,185
|
$—
|
$—
|
Operating
Lease Obligations (b)
|
3,589
|
1,187
|
1,678
|
724
|
—
|
Debt
Obligations (c)
|
1,509
|
1,449
|
60
|
—
|
—
|
Total
|
$15,283
|
$2,636
|
$11,923
|
$724
|
$—
|
|
|
Page
|
|
|
Index
|
|
|
F-1
|
|
Report
of Independent Registered Public Accounting Firm
|
|
|
F-2
|
|
Consolidated
Balance Sheets
|
|
|
F-4
|
|
Consolidated
Statements of Operations
|
|
|
F-5
|
|
Consolidated
Statements of Stockholders’ Equity
|
|
|
F-6
|
|
Consolidated
Statements of Cash Flows
|
|
|
F-7
|
|
Notes
to Consolidated Financial Statements
|
|
|
F-8
|
|
Schedule
II - Valuation Qualifying Accounts
|
|
|
F-32
|
|
Number
|
Description
|
|
|
3.1
|
Seventh Amended and Restated Certificate of
Incorporation of AutoWeb, Inc. (filed with the Secretary of the
State of Delaware on June 22, 2020), incorporated by reference
to Exhibit
3.1 to the Current
Report on Form 8-K filed with the SEC on June 23, 2020 (SEC File
No. 001-34761).
|
|
|
3.2
|
Seventh Amended and Restated
Bylaws of AutoWeb, Inc. dated as of October 9, 2017, incorporated
by reference to Exhibit
3.5 to the Current Report on Form 8-K filed with the
SEC on October 10, 2017 (SEC File No. 001-34761).
|
|
|
4.1*
|
Description
of AutoWeb, Inc. Securities Registered Pursuant to Section 12 of
the Securities Exchange Act of 1934.
|
|
|
4.2
|
Tax Benefit Preservation Plan dated as of May 26,
2010, by and between Company and Computershare Trust Company, N.A.,
as rights agent, together with the following exhibits thereto:
Exhibit A – Form of Right Certificate; and Exhibit B –
Summary of Rights to Purchase Shares of Preferred Stock of Company,
incorporated by reference to Exhibit
4.1 to the Current
Report on Form 8-K filed with the SEC on June 2, 2010 (SEC
File No. 000-22239); Amendment No. 1 to Tax Benefit Preservation
Plan dated as of April 14, 2014, between Company and Computershare
Trust Company, N.A., as rights agent, incorporated by reference
to Exhibit
4.1 to the Current
Report on Form 8-K filed with the SEC on April 16, 2014 (SEC
File No. 001-34761); Amendment No. 2 to Tax Benefit Preservation
Plan dated as of April 13, 2017, between Company and
Computershare Trust Company, N.A., as rights agent, incorporated by
reference to Exhibit
4.1 to the Current
Report on Form 8-K filed with the SEC on April 14, 2017 (SEC File
No. 001-34761); Amendment No. 3 to Tax Benefit Preservation Plan
dated as of March 31, 2020, between Company and Computershare Trust
Company, N.A., as rights agent, incorporated by reference
to Exhibit
4.1 to the Current
Report on Form 8-K filed with the SEC on April 2, 2020 (SEC File
No. 001-34761); Certificate of Adjustment Under Section 11(m) of
the Tax Benefit Preservation Plan, incorporated by reference
to Exhibit
4.3 to the Quarterly
Report on Form 10-Q for the Quarterly Period ended September 30,
2012 filed with the SEC on November 8, 2012 (SEC File No.
001-34761).
|
|
|
10.1■
|
Autobytel Inc. 2010 Equity
Incentive Plan, incorporated by reference to Exhibit
10.2 to the Current Report on
Form 8-K filed with the SEC on June 25, 2010 (SEC File No.
001-34761); Form of Employee Stock Option Award Agreement, Form of
2012 Performance-Based Stock Option Award Agreement, Form of
Non-Employee Director Stock Option Award Agreement and Form of
(Management) Employee Stock Option Award Agreement under the
Autobytel Inc. 2010 Equity Incentive Plan, incorporated by
reference to Exhibits 10.58, 10.59, 10.60 and 10.61,
respectively, to the Annual Report on Form 10-K for the Year Ended
December 31, 2011, filed with the SEC on March 1, 2012 (SEC File
No. 001-34761); and Form of 2013 Performance-Based Stock Option
Award Agreement under the Autobytel Inc. 2010 Equity Incentive
Plan, incorporated by reference to Exhibit
10.79 to the Annual Report on
Form 10-K for the Year Ended December 31, 2012, filed with the SEC
on February 28, 2013 (SEC File No. 001-34761).
|
|
|
10.2■
|
AutoWeb, Inc. (formerly Autobytel
Inc.) 2014 Equity Incentive Plan, incorporated by reference
to Exhibit
10.1 to the Current Report on
Form 8-K filed with the SEC on June 23, 2014 (SEC File No.
001-34761); Amended and Restated AutoWeb, Inc. (formerly Autobytel
Inc.) 2014 Equity Incentive Plan (supersedes and replaces the
AutoWeb, Inc. (formerly Autobytel Inc.) 2014 Equity Incentive Plan
filed under Exhibit
10.1 to the Current Report on
Form 8-K filed with the SEC on June 23, 2014 (SEC File No.
001-34761), incorporated by reference to Exhibit
10.11 to the Annual Report on
Form 10-K for the Year Ended December 31, 2017, filed with the SEC
on March 15, 2018 (SEC File No. 001-34761); Form of Non-Employee
Director Stock Option Award Agreement under the Amended and
Restated AutoWeb, Inc. (formerly Autobytel Inc.) 2014 Equity
Incentive Plan, incorporated by reference to
Exhibit
10.12 on
the Annual Report on Form 10-K for the Year Ended December 31,
2017, filed with the SEC on March 15, 2018 (SEC File No.
001-34761); Form of Executive Stock Option Award Agreement under
the Amended and Restated AutoWeb, Inc. (formerly Autobytel Inc.)
2014 Equity Incentive Plan, incorporated by reference to
Exhibit
10.13 on
the Annual Report on Form 10-K for the Year Ended December 31,
2017, filed with the SEC on March 15, 2018 (SEC File No.
001-34761); Form of Non-Executive Employee Stock Option Award
Agreement under the Amended and Restated AutoWeb, Inc. (formerly
Autobytel Inc.) 2014 Equity Incentive Plan, incorporated by
reference to
Exhibit
10.14 on
the Annual Report on Form 10-K for the Year Ended December 31,
2017, filed with the SEC on March 15, 2018 (SEC File No.
001-34761); Form of Subsidiary Employee Stock Option Award
Agreement under the Amended and Restated AutoWeb, Inc. (formerly
Autobytel Inc.) 2014 Equity Incentive Plan, incorporated by
reference to
Exhibit
10.15 on
the Annual Report on Form 10-K for the Year Ended December 31,
2017, filed with the SEC on March 15, 2018 (SEC File No.
001-34761); and Form of Restricted Stock Award Agreement under the
Amended and Restated AutoWeb, Inc. (formerly Autobytel Inc.) 2014
Equity Incentive Plan, incorporated by reference to
Exhibit
10.16 on
the Annual Report on Form 10-K for the Year Ended December 31,
2017, filed with the SEC on March 15, 2018 (SEC File No.
001-34761).
|
|
|
10.3■
|
AutoWeb, Inc. 2018 Equity
Incentive Plan, incorporated by reference to
Exhibit
10.1 on
the Current Report on Form 8-K filed with the SEC on June 27, 2018
(SEC File No. 001-34761); Form of Non-Employee Director Stock
Option Award Agreement (Non-Qualified Stock Option) under the
AutoWeb, Inc. 2018 Equity Incentive Plan, incorporated by reference
to
Exhibit
10.8 to
the Quarterly Report on Form 10-Q for the Quarterly Period ended
June 30, 2018, filed with the SEC on August 2, 2018 (SEC File No.
001-34761); Form of Employee Stock Option Award Agreement
(Non-Qualified Stock Option) (Executive) under the AutoWeb, Inc.
2018 Equity Incentive Plan, incorporated by reference to
Exhibit
10.9 on
the Quarterly Period ended June 30, 2018, filed with the SEC on
August 2, 2018 (SEC File No. 001-34761); Form of Employee Stock
Option Award Agreement (Non-Qualified Stock Option) (Non-Executive)
under the AutoWeb, Inc. 2018 Equity Incentive Plan, incorporated by
reference to
Exhibit
10.10 on
the Quarterly Period ended June 30, 2018, filed with the SEC on
August 2, 2018 (SEC File No. 001-34761); and Form of Restricted
Stock Award Agreement under the AutoWeb, Inc. 2018 Equity Incentive
Plan, incorporated by reference to
Exhibit
10.11 on
the Quarterly Period ended June 30, 2018, filed with the SEC on
August 2, 2018 (SEC File No. 001-34761).
|
|
|
10.4■
|
Form of Amended and Restated
Indemnification Agreement between Company and its directors and
officers, incorporated by reference to Exhibit
99.1 to the Current Report on
Form 8-K filed with the SEC on July 22, 2010 (SEC File No.
001-34761).
|
|
|
10.5■
|
Form of Indemnification Agreement
between Company and its directors and officers, incorporated by
reference to Exhibit
10.24 to the Annual Report on
Form 10-K for the Year Ended December 31, 2017, filed with the SEC
on March 15, 2018 (SEC File No. 001-34761).
|
|
|
10.6■
|
Employment Agreement dated as of April 12, 2018,
between Company and Jared Rowe, incorporated by reference
to Exhibit
10.1 to the Current Report on
Form 8-K filed with the SEC on April 18, 2018 (SEC File No.
001-34761); as amended by Amendment No. 1 to Employment Agreement
dated as of August 26, 2019, incorporated by reference to
Exhibit
10.2 to
the Quarterly Report on Form 10-Q filed with the SEC on November 7,
2019 (SEC File No. 001-34761).
|
|
|
10.7■
|
Inducement Stock Option Award Agreement dated as
of April 12, 2018, between Company and Jared Rowe,
incorporated by
reference to Exhibit
10.2 to the Current Report on
Form 8-K filed with the SEC on April 18, 2018 (SEC File No.
001-34761).
|
|
|
10.8■
|
Letter Agreement dated as of
October 10, 2006, between Company and Glenn Fuller, as amended by
Memorandum dated April 18, 2008, Memorandum dated as of December 8,
2008, and Memorandum dated as of March 1, 2009, incorporated by
reference to Exhibit
10.77 to the Annual Report on
Form 10-K for the Year Ended December 31, 2008, filed with the SEC
on March 13, 2009 (SEC File No. 000-22239); as amended by
Memorandum dated as of January 31, 2017, incorporated by reference
to Exhibit
10.13 to the Annual Report on
Form 10-K for the Year Ended December 31, 2016, filed with the SEC
on March 9, 2017 (SEC File No. 001-34761); and as amended by
Memorandum dated April 18, 2018, incorporated by reference
to
Exhibit
10.20 to
the Annual Report on Form 10-K for the Year Ended December 31,
2018, filed with the SEC on March 7, 2019 (SEC File No.
001-34761).
|
|
|
10.9■*
|
Third
Amended and Restated Severance Benefits Agreement dated as of March
3, 2021, between Company and Glenn Fuller.
|
|
|
10.10■
|
Offer of Employment dated as of
November 26, 2018, between Company and Daniel Ingle, incorporated
by reference to
Exhibit
10.1 to
the Current Report on Form 8-K filed with the SEC on January 16,
2019 (SEC File No. 001-34761).
|
|
|
10.11■
|
Inducement Stock Option Award
Agreement dated as of January 16, 2019, between Company and Daniel
Ingle, incorporated by reference to
Exhibit
10.25 to
the Annual Report on Form 10-K for the year ended December 31,
2018, filed with the SEC on March 7, 2019 (SEC File No.
001-34761).
|
|
|
10.12■
|
Amended and Restated Severance
Benefits Agreement dated as of March 3, 2021, between Company and
Daniel Ingle, incorporated by reference to
Exhibit
10.2 to the Current Report on Form 8-K
filed with the SEC on March 4, 2021 (SEC File No.
001-34761).
|
|
|
10.13■
|
Offer of Employment dated as of
November 16, 2020, between Company and Michael Sadowski,
incorporated by reference to
Exhibit
10.1 to the Current Report on Form 8-K
filed with the SEC on November 19, 2020 (SEC File No.
001-34761).
|
|
|
10.14■*
|
Inducement
Stock Option Award Agreement dated as of November 30, 2020, between
Company and Michael Sadowski.
|
|
|
10.15■
|
Amended and Restated Severance
Benefits Agreement dated as of March 3, 2021, between Company and
Michael Sadowski, incorporated by reference to
Exhibit
10.1 to the Current Report on Form 8-K
filed with the SEC on March 4, 2021 (SEC File No.
001-34761).
|
|
|
10.16■
|
Offer of Employment dated as of
October 2, 2018, between Company and Sara Partin, incorporated by
reference to
Exhibit
10.1 to
the Quarterly Report on Form 10-Q for the Quarterly Period ended
September 30, 2018, filed with the SEC on November 8, 2018 (SEC
File No. 001-34761).
|
|
|
10.17■
|
Inducement Stock Option Award
Agreement dated as of October 22, 2018, between Company and Sara
Partin, incorporated by reference to
Exhibit
10.2 to
the Quarterly Report on Form 10-Q for the Quarterly Period ended
September 30, 2018, filed with the SEC on November 8, 2018 (SEC
File No. 001-34761).
|
|
|
10.18■*
|
Amended
and Restated Severance Benefits Agreement dated as of March 3,
2021, between Company and Sara Partin.
|
|
|
10.19
|
Fourth Amended and Restated Stockholder Agreement
dated as of March 1, 2017, incorporated by reference
to Exhibit
10.1 to the Current
Report on Form 8-K filed with the SEC on March 2, 2017 (SEC File
No. 001-34761).
|
|
|
10.20
|
Lease Agreement dated as of March 11, 2020,
between Company and The Irvine Company LLC, incorporated by
reference to
Exhibit
10.1 to the Current Report
on Form 8-K filed with the SEC on March 16, 2020
(SEC File No.
001-34761).
|
|
|
10.21
|
Lease Agreement dated as of
December 9, 2015, between Company and Rivergate Tower Owner, LLC,
as amended by Amendment No. 1 to Lease Agreement dated November 21,
2016, incorporated by reference to
Exhibit
10.35 to
the Annual Report on Form 10-K filed with the SEC on March 9, 2017
(SEC File No. 001-34761).
|
|
|
10.22
|
Contract for Lease and Deposit dated as of June
1, 2016, between AW GUA, Limitada, and Mertech, Sociedad Anonima,
for office No. 1101, incorporated by reference to
Exhibit
10.33 to Annual Report on
Form 10-K filed with the SEC on March 9, 2017 (SEC File No.
001-34761); Letter Agreements for Lease Extension dated as of
December 18, 2019 and January 6, 2020, between AW GUA, Limitada,
and Mertech, Sociedad Anonima, for office No. 1101,
incorporated by
reference to
Exhibit
10.32 to
the Annual Report on Form 10-K filed with the SEC on March 27, 2020
(SEC File No. 001-34761).
|
|
|
10.23
|
Contract for Lease and Deposit dated as of June
1, 2016, between AW GUA, Limitada, and Mertech, Sociedad Anonima,
for office No. 1102, incorporated by reference to
Exhibit
10.34 to Annual Report on
Form 10-K filed with the SEC on March 9, 2017 (SEC File No.
001-34761); Letter Agreements for Lease Extension dated as of
December 18, 2019 and January 6, 2020, between AW GUA, Limitada,
and Mertech, Sociedad Anonima, for office No. 1102,
incorporated by
reference to
Exhibit
10.33 to
the Annual Report on Form 10-K filed with the SEC on March 27, 2020
(SEC File No. 001-34761).
|
|
|
10.24
|
Tax Benefit Preservation Plan
Exemption Agreement and Irrevocable Proxy dated as of November 15,
2017, by and among Company, Piton Capital Partners LLC, a Delaware
limited liability company (“Piton
Capital”), and Piton
Capital’s managing members, incorporated by reference
to Exhibits
10.1 and 10.2,
respectively, to the Current Report on Form 8-K filed with the SEC
on November 17, 2017 (SEC File No. 001-34761).
|
|
|
10.25
|
Tax Benefit Preservation Plan
Exemption Agreement and Irrevocable Proxies, effective as of
November 30, 2018, by and among Company, Daniel M. Negari, The 1 8
999 Trust, a trust organized under the laws of Nevada, Michael R.
Ambrose, and The Insight Trust, a trust organized under the laws of
Nevada, incorporated by reference to Exhibits
10.1,
10.2,
10.3,
10.4 and
10.5, respectively, to the Current
Report on Form 8-K filed with the SEC on November 30, 2018 (SEC
File No. 001-34761).
|
|
|
10.26
|
Transitional License and Linking Agreement dated
as of January 1, 2017, by and among Company, Internet Brands, Inc.,
a Delaware corporation, and Car.com, Inc., a Delaware corporation,
incorporated by reference to Exhibit
10.1 to
the Current Report on Form 8-K filed
with the SEC on January 6, 2017 (SEC File No.
001-34761).
|
|
|
10.27
|
Form of Warrant to Purchase
Common Stock (on an as-converted basis following the conversion of
Series B Junior Preferred Stock) dated as of October 1, 2015,
issued by the Company to the persons listed on Schedule A thereto,
which is incorporated herein by reference to Exhibit
10.1 to the Current Report on
Form 8-K filed with the SEC on October 6, 2015 (SEC File No.
001-34761).
|
|
|
10.28
|
Loan, Security and Guarantee Agreement dated as
of March 26, 2020, by and among AutoWeb, Inc., as
Borrower, Autobytel, Inc., AW GUA USA, Inc., and Car.com, Inc., as
Guarantors, Certain Financial Institutions, as lenders, and CIT
Northbridge Credit LLC, as agent, incorporated by reference to
Exhibit
10.1 to the Current Report
on Form 8-K filed with the SEC on March 26,
2020 (SEC File No. 001-34761); as amended by First Amendment
to Loan, Security and
Guarantee Agreement dated as of May 18, 2020,
incorporated by reference to Exhibit
10.1 to the Current Report on
Form 8-K filed with the SEC on May 19, 2020 (SEC File No.
001-34761).
|
|
|
21.1*
|
Subsidiaries
of AutoWeb, Inc.
|
|
|
23.1*
|
Consent
of Independent Registered Public Accounting Firm, Moss Adams
LLP.
|
|
|
24.1*
|
Power
of Attorney (included in the signature page hereto).
|
|
|
31.1*
|
Chief
Executive Officer Section 302 Certification of Periodic Report
dated March 11, 2021.
|
|
|
31.2*
|
Chief
Financial Officer Section 302 Certification of Periodic Report
dated March 11, 2021.
|
|
|
32.1*
|
Chief
Executive Officer and Chief Financial Officer Section 906
Certification of Periodic Report dated March 11, 2021.
|
|
|
101.INS
|
XBRL
Instance Document.
|
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL
Taxonomy Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Document.
|
|
|
101.LAB
|
XBRL
Taxonomy Label Linkbase Document.
|
|
|
101.PRE
|
XBRL
Taxonomy Presentation Linkbase Document.
|
104
|
Cover
Page Interactive Data File (formatted as Inline XRBL with
applicable taxonomy extension information contained in Exhibit
101)
|
*
|
Filed
or Furnished herewith.
|
■
|
Management
Contract or Compensatory Plan or Arrangement.
|
|
AUTOWEB, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ JARED R. ROWE
|
|
|
|
Jared R. Rowe
|
|
|
|
President, Chief Executive Officer and Director
|
|
Signature
|
Title
|
Date
|
|
|
|
|
|
/s/ MICHAEL
J. FUCHS
Michael J. Fuchs
|
Chairman
of the Board and Director
|
March 11, 2021
|
|
|
|
|
|
/s/ JARED
R. ROWE
Jared R. Rowe
|
President,
Chief Executive Officer and Director
(Principal
Executive Officer)
|
March 11, 2021
|
|
|
|
|
|
/s/ MICHAEL
SADOWSKI
Michael Sadowski
|
Executive
Vice President and Chief Financial Officer
(Principal
Financial Officer)
|
March 11, 2021
|
|
|
|||
/s/ CHERAY
DURAN
Cheray Duran
|
Vice
President, Corporate Controller
(Principal
Accounting Officer)
|
March
11, 2021
|
|
|
|
|
|
/s/ MICHAEL
A. CARPENTER
Michael A. Carpenter
|
Director
|
March 11, 2021
|
|
|
|
|
|
/s/ MATIAS
DE TEZANOS
Matias de Tezanos
|
Director
|
March 11, 2021
|
|
|
|
|
|
/s/ CHAN
GALBATO
Chan Galbato
|
Director
|
March 11, 2021
|
|
|
|
|
|
/s/ MARK
N. KAPLAN
Mark N. Kaplan
|
Director
|
March 11, 2021
|
|
|
|
|
|
/s/ JANET
M. THOMPSON
Janet M. Thompson
|
Director
|
March 11, 2021
|
|
|
|
|
|
/s/ JOSE
VARGAS
Jose Vargas
|
Director
|
March 11, 2021
|
|
|
|
|
Page
|
|
|
|
F-2
|
|
|
|
|
F-4
|
|
|
|
|
F-5
|
|
|
|
|
F-6
|
|
|
|
|
F-7
|
|
|
|
|
F-8
|
|
|
December 31,
2020
|
December 31,
2019
|
Assets
|
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$10,803
|
$892
|
Restricted
cash
|
4,304
|
5,054
|
Accounts receivable, net of allowances for bad
debts and customer credits of $406 and $740 at December 31, 2020 and 2019,
respectively
|
13,955
|
24,051
|
Prepaid
expenses and other current assets
|
847
|
1,265
|
Total
current assets
|
29,909
|
31,262
|
Property
and equipment, net
|
2,953
|
3,349
|
Right-of-use
assets
|
2,892
|
2,528
|
Intangible
assets, net
|
4,733
|
7,104
|
Other
assets
|
642
|
661
|
Total
assets
|
$41,129
|
$44,904
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$7,233
|
$14,412
|
Borrowings
under revolving credit facility
|
10,185
|
3,745
|
Accrued
employee-related benefits
|
2,123
|
1,351
|
Other
accrued expenses and other current liabilities
|
538
|
1,636
|
Current
portion of the PPP loan
|
1,384
|
—
|
Current
portion of lease liabilities
|
1,015
|
1,167
|
Current
portion of financing debt
|
65
|
—
|
Total
current liabilities
|
22,543
|
22,311
|
Lease
liabilities, net of current portion
|
2,191
|
1,497
|
Financing
debt, net of current portion
|
60
|
—
|
Total
liabilities
|
24,794
|
23,808
|
Commitments
and contingencies (Note 8)
|
|
|
Stockholders’
equity:
|
|
|
Preferred
stock, $0.001 par value; 11,445,187 shares authorized
|
|
|
Series
A Preferred stock 2,000,000 shares authorized, none issued and
outstanding at December 31, 2020 and 2019,
respectively
|
—
|
—
|
Common
stock, $0.001 par value; 55,000,000 shares authorized; 13,169,204
and 13,146,831 shares issued and outstanding at December 31,
2020 and 2019, respectively
|
13
|
13
|
Additional
paid-in capital
|
366,087
|
364,028
|
Accumulated
deficit
|
(349,765)
|
(342,945)
|
Total
stockholders’ equity
|
16,335
|
21,096
|
Total
liabilities and stockholders’ equity
|
$41,129
|
$44,904
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
Revenues:
|
|
|
|
Lead
generation
|
$61,114
|
$90,728
|
$96,936
|
Digital
advertising
|
15,441
|
23,173
|
28,169
|
Other
revenues
|
15
|
80
|
484
|
Total
revenues
|
76,570
|
113,981
|
125,589
|
Cost
of revenues
|
52,890
|
91,412
|
101,315
|
Cost
of revenues – impairment
|
—
|
—
|
9,014
|
Gross
profit
|
23,680
|
22,569
|
15,260
|
Operating
expenses:
|
|
|
|
Sales
and marketing
|
8,201
|
10,512
|
12,178
|
Technology
support
|
6,574
|
8,849
|
13,838
|
General
and administrative
|
12,718
|
14,175
|
16,318
|
Depreciation
and amortization
|
1,711
|
4,371
|
4,897
|
Goodwill
impairment
|
—
|
—
|
5,133
|
Long-lived
asset impairment
|
—
|
—
|
1,968
|
Total
operating expenses
|
29,204
|
37,907
|
54,332
|
Operating
loss
|
(5,524)
|
(15,338)
|
(39,072)
|
Interest
and other (expense) income:
|
|
|
|
Interest
(expense) income
|
(1,524)
|
(410)
|
(106)
|
Other
income (expense)
|
238
|
529
|
356
|
Loss
before income tax provision
|
(6,810)
|
(15,219)
|
(38,822)
|
Income
tax provision (benefit)
|
10
|
10
|
(6)
|
Net
loss
|
$(6,820)
|
$(15,229)
|
$(38,816)
|
|
|
|
|
Basic
loss per common share
|
$(0.52)
|
$(1.17)
|
$(3.04)
|
Diluted
loss per common share
|
$(0.52)
|
$(1.17)
|
$(3.04)
|
|
Common
Stock
|
Preferred
Stock
|
|
|
|
||
|
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Additional
Paid-In-
Capital
|
Accumulated Deficit
|
Total
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2017
|
13,059,341
|
$13
|
—
|
$—
|
$356,054
|
$(288,900)
|
$67,167
|
Share-based
compensation
|
—
|
—
|
—
|
—
|
4,866
|
—
|
4,866
|
Issuance
of common stock upon exercise of stock options
|
28,467
|
—
|
—
|
—
|
98
|
—
|
98
|
Cancellation
of restricted stock
|
(188,333)
|
—
|
—
|
—
|
—
|
—
|
—
|
Issuance
of common stock
|
60,975
|
—
|
—
|
—
|
200
|
—
|
200
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(38,816)
|
(38,816)
|
Balance
at December 31, 2018
|
12,960,450
|
$13
|
—
|
$—
|
$361,218
|
$(327,716)
|
$33,515
|
Share-based
compensation
|
—
|
—
|
—
|
—
|
2,402
|
—
|
2,402
|
Issuance
of common stock upon exercise of stock options
|
213,048
|
—
|
—
|
—
|
408
|
—
|
408
|
Cancellation
of restricted stock
|
(26,667)
|
—
|
—
|
—
|
—
|
—
|
—
|
Issuance
of common stock
|
|
|
|
|
|
|
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(15,229)
|
(15,229)
|
Balance
at December 31, 2019
|
13,146,831
|
$13
|
—
|
$—
|
$364,028
|
$(342,945)
|
$21,096
|
Share-based
compensation
|
—
|
—
|
—
|
—
|
1,984
|
—
|
1,984
|
Issuance
of common stock upon exercise of stock options
|
22,373
|
—
|
—
|
—
|
75
|
—
|
75
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(6,820)
|
(6,820)
|
Balance
at December 31, 2020
|
13,169,204
|
$13
|
—
|
$—
|
$366,087
|
$(349,765)
|
$16,335
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
Cash
flows from operating activities:
|
|
|
|
Net
loss
|
$(6,820)
|
$(15,229)
|
$(38,816)
|
Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Depreciation
and amortization
|
3,624
|
6,454
|
8,544
|
Goodwill
impairment
|
—
|
—
|
5,133
|
Intangible
asset impairment
|
—
|
—
|
9,014
|
Provision
for bad debt
|
291
|
293
|
241
|
Provision
for customer credits
|
83
|
250
|
217
|
Share-based
compensation
|
1,984
|
2,402
|
4,866
|
Right-of-use-assets
|
1,426
|
1,697
|
—
|
Lease
Liabilities
|
(1,248)
|
(1,706)
|
—
|
Write-down
of assets
|
—
|
59
|
—
|
Loss
on disposal of assets
|
6
|
—
|
—
|
Long-lived
asset impairment
|
—
|
—
|
1,968
|
(Gain)/loss
on investment
|
—
|
(250)
|
(25)
|
Change
in deferred tax assets
|
—
|
—
|
692
|
Changes
in assets and liabilities:
|
|
|
|
Accounts
receivable
|
9,722
|
2,304
|
(1,445)
|
Prepaid
expenses and other current assets
|
418
|
(20)
|
814
|
Other
non-current assets
|
19
|
(145)
|
(278)
|
Accounts
payable
|
(7,279)
|
(3,753)
|
5,076
|
Accrued
expenses and other current liabilities
|
(325)
|
(1,773)
|
1,079
|
Net
cash provided by (used in) operating activities
|
1,901
|
(9,417)
|
(2,920)
|
Cash
flows from investing activities:
|
|
|
|
Purchases
of property and equipment
|
(596)
|
(1,640)
|
(896)
|
Proceeds
from sale of investment
|
—
|
250
|
125
|
Net
cash used in investing activities
|
(596)
|
(1,390)
|
(771)
|
Cash
flows from financing activities:
|
|
|
|
Borrowings
under PNC credit facility
|
28,564
|
73,968
|
—
|
Principal
payments on PNC credit facility
|
(32,308)
|
(70,223)
|
—
|
Borrowings
under CNC credit facility
|
71,072
|
—
|
—
|
Principal
payments on CNC credit facility
|
(60,887)
|
—
|
—
|
Principal
payments on MUFG Union Bank credit facility
|
—
|
—
|
(8,000)
|
Borrowings
under the PPP loan
|
1,384
|
—
|
—
|
Proceeds
from issuance of common stock
|
—
|
—
|
200
|
Payments
on convertible note
|
—
|
(1,000)
|
—
|
Payments
under financing agreement
|
(44)
|
—
|
—
|
Net
proceeds from stock option exercises
|
75
|
408
|
98
|
Net
cash provided by (used in) financing activities
|
7,856
|
3,153
|
(7,702)
|
Net
increase (decrease) in cash and cash equivalents
|
9,161
|
(7,654)
|
(11,393)
|
Cash
and cash equivalents and restricted cash, beginning of
period
|
5,946
|
13,600
|
24,993
|
Cash
and cash equivalents and restricted cash, end of
period
|
$15,107
|
$5,946
|
$13,600
|
|
|
|
|
Reconciliation
of cash and cash equivalents and restricted cash
|
|
|
|
Cash
and cash equivalents at beginning of period
|
$892
|
$13,600
|
$24,993
|
Restricted
cash at beginning of period
|
5,054
|
—
|
—
|
Cash
and cash equivalents and restricted cash at beginning of
period
|
$5,946
|
$13,600
|
$24,993
|
|
|
|
|
Cash
and cash equivalents at end of period
|
$10,803
|
$892
|
$13,600
|
Restricted
cash at end of period
|
4,304
|
5,054
|
—
|
Cash
and cash equivalents and restricted cash at end of
period
|
$15,107
|
$5,946
|
$13,600
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Cash
paid for income taxes
|
$1
|
$12
|
$4
|
Cash
refunds for income taxes
|
$849
|
$128
|
$223
|
Cash
paid for interest
|
$845
|
$176
|
$118
|
|
|
|
|
Supplemental
schedule of non-cash investing and financing
activities:
|
|
|
|
Right-of-use
assets obtained in exchange for operating lease
liabilities
|
$1,790
|
$—
|
$
|
Financing
for the purchase of fixed assets
|
$170
|
$—
|
$—
|
Purchases
on account related to capitalized software
|
$99
|
$—
|
$—
|
|
2020
|
2019
|
2018
|
Basic
Shares:
|
|
|
|
Weighted
average common shares outstanding
|
13,144,314
|
13,070,898
|
12,756,191
|
Weighted
average common shares repurchased
|
—
|
—
|
—
|
Basic
Shares
|
13,144,314
|
13,070,898
|
12,756,191
|
|
|
|
|
Diluted
Shares:
|
|
|
|
Basic
Shares
|
13,144,314
|
13,070,898
|
12,756,191
|
Weighted
average dilutive securities
|
—
|
—
|
—
|
Dilutive
Shares
|
13,144,314
|
13,070,898
|
12,756,191
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
|
(in thousands)
|
||
Lead
generation
|
$61,114
|
$90,728
|
$96,936
|
Digital
advertising
|
|
|
|
Clicks
|
13,058
|
19,599
|
23,387
|
Display
and other advertising
|
2,383
|
3,574
|
4,782
|
Other
revenues
|
15
|
80
|
484
|
Total
revenues
|
$76,570
|
$113,981
|
$125,589
|
|
As of December 31,
|
|
|
2020
|
2019
|
|
(in thousands)
|
|
Computer
software and hardware
|
$4,940
|
$11,267
|
Capitalized
internal use software
|
7,391
|
5,878
|
Furniture
and equipment
|
935
|
1,743
|
Leasehold
improvements
|
884
|
1,613
|
Construction
in progress
|
805
|
1,537
|
|
14,955
|
22,038
|
Less—Accumulated
depreciation and amortization
|
(12,002)
|
(18,689)
|
Property
and equipment, net
|
$2,953
|
$3,349
|
|
|
December
31, 2020
|
December
31, 2019
|
||||
Intangible
Asset
|
Estimated
Useful Life
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
Trademarks/trade
names/licenses/ domains
|
3
– 7 years
|
$16,589
|
$(15,961)
|
$628
|
$16,589
|
$(15,442)
|
$1,147
|
Customer
relationships
|
2 -
5 years
|
19,563
|
(19,563)
|
—
|
19,563
|
(18,800)
|
763
|
Developed
technology
|
5-7
years
|
8,955
|
(7,050)
|
1,905
|
8,955
|
(5,961)
|
2,994
|
|
$45,107
|
$(42,574)
|
$2,533
|
$45,107
|
$(40,203)
|
$4,904
|
|
|
December
31, 2020
|
December
31, 2019
|
||||
Indefinite-lived
Intangible
Asset
|
Estimated
Useful Life
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
Domain
|
Indefinite
|
$2,200
|
$—
|
$2,200
|
$2,200
|
$—
|
$2,200
|
Year
|
Amortization
Expense
|
|
(in thousands)
|
|
|
2021
|
$1,499
|
2022
|
902
|
2023
|
86
|
2024
|
46
|
|
$2,533
|
|
As of December 31,
|
|
|
2020
|
2019
|
|
(in thousands)
|
|
Accrued
employee related benefits
|
$2,123
|
$1,351
|
Other
accrued expenses and other current liabilities:
|
|
|
Other
accrued expenses
|
143
|
532
|
Amounts
due to customers
|
94
|
354
|
Other
current liabilities
|
301
|
750
|
Total
other accrued expenses and other current liabilities
|
538
|
1,636
|
|
|
|
Total
accrued expenses and other current liabilities
|
$2,661
|
$2,987
|
Year
(1)
|
|
2021
|
$65
|
2022
|
60
|
Total
financing debt
|
$125
|
Current
portion of lease liabilities
|
$1,015
|
Long-term
lease liabilities, net of current portion
|
2,191
|
Total
lease liabilities
|
$3,206
|
Years Ending December 31,
|
|
2021
|
$1,187
|
2022
|
881
|
2023
|
797
|
2024
|
528
|
2025
|
196
|
Total
minimum lease payments
|
3,589
|
Less
imputed interest
|
383
|
Total
lease liabilities
|
$3,206
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
|
(in thousands)
|
||
Share-based
compensation expense:
|
|
|
|
Cost
of revenues
|
$—
|
$—
|
$23
|
Sales
and marketing
|
116
|
304
|
982
|
Technology
support
|
81
|
197
|
1,247
|
General
and administrative
|
1,787
|
1,901
|
2,615
|
|
|
|
|
Share-based
compensation expense
|
1,984
|
2,402
|
4,867
|
|
|
|
|
Amount
capitalized to internal use software
|
—
|
—
|
1
|
|
|
|
|
Total
share-based compensation expense
|
$1,984
|
$2,402
|
$4,866
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
Expected
volatility
|
74%
|
65%
|
68%
|
Expected
risk-free interest rate
|
0.9%
|
2.2%
|
2.6%
|
Expected
life (years)
|
4.6
|
4.4
|
4.5
|
|
Number of
Options
|
Weighted
Average
Exercise Price
per Share
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|
|
|
(years)
|
(thousands)
|
Outstanding
at December 31, 2019
|
4,361,606
|
$5.80
|
4.8
|
$37
|
Granted
|
635,000
|
2.15
|
|
|
Exercised
|
(22,373)
|
3.35
|
|
29
|
Forfeited
or expired
|
(1,215,563)
|
8.72
|
|
|
Outstanding
at December 31, 2020
|
3,758,670
|
$4.26
|
4.7
|
$270
|
Vested
and expected to vest at December 31, 2020
|
3,625,650
|
$4.31
|
4.7
|
$254
|
Exercisable
at December 31, 2020
|
2,323,528
|
$5.12
|
4.2
|
$47
|
|
Number
of Shares
|
Stock
options outstanding
|
3,758,670
|
Authorized
for future Award grants under stockholder-approved stock-based
incentive plans
|
2,497,070
|
Warrants
outstanding
|
1,482,400
|
Total
|
7,738,140
|
|
2020
|
2019
|
2018
|
|
(in thousands)
|
||
|
|
|
|
United
States
|
$(7,089)
|
$(15,647)
|
$(39,334)
|
International
|
279
|
428
|
512
|
Total
loss before income tax provision
|
$(6,810)
|
$(15,219)
|
$(38,822)
|
|
2020
|
2019
|
2018
|
|
(in thousands)
|
||
Current:
|
|
|
|
Federal
|
$—
|
$—
|
$32
|
State
|
10
|
10
|
(6)
|
Foreign
|
—
|
—
|
—
|
|
10
|
10
|
26
|
Deferred:
|
|
|
|
Federal
|
(562)
|
(2,065)
|
(6,213)
|
State
|
(159)
|
(417)
|
(1,188)
|
Foreign
|
—
|
—
|
—
|
|
(721)
|
(2,482)
|
(7,401)
|
|
|
|
|
Change
in federal tax rate
|
—
|
—
|
—
|
|
|
|
|
Valuation
allowance
|
721
|
2,482
|
7,369
|
|
|
|
|
Total
income tax expense (benefit)
|
$10
|
$10
|
$(6)
|
|
2020
|
2019
|
2018
|
Tax
provision at U.S. federal statutory rates
|
21.0%
|
21.0%
|
21.0%
|
State
income taxes net of federal benefit
|
2.1
|
3.0
|
3.2
|
Deferred
tax asset adjustments – NOL related
|
0.0
|
(0.4)
|
(0.2)
|
Non-deductible
permanent items
|
(1.1)
|
(0.3)
|
(0.2)
|
Stock
options
|
(28.0)
|
(3.2)
|
(3.4)
|
Goodwill
impairment
|
0.0
|
—
|
(1.5)
|
Other
|
0.0
|
(3.9)
|
(0.2)
|
Change
in valuation allowance
|
5.8
|
(16.3)
|
(18.7)
|
Effective
income tax rate
|
(0.2)%
|
(0.1)%
|
0.0%
|
|
2020
|
2019
|
|
(in thousands)
|
|
Deferred
tax assets:
|
|
|
Allowance
for doubtful accounts
|
$103
|
$187
|
Accrued
liabilities
|
412
|
826
|
Net
operating loss carryforwards
|
24,798
|
23,933
|
Intangible
assets
|
4,259
|
4,334
|
Share-based
compensation expense
|
228
|
2,120
|
Other
|
1,370
|
406
|
Total
gross deferred tax assets
|
31,181
|
31,806
|
Valuation
allowance
|
(30,447)
|
(31,168)
|
Total
deferred tax assets
|
734
|
638
|
|
|
|
Deferred
tax liabilities:
|
|
|
Right
of use assets
|
(733)
|
(638)
|
Fixed
assets
|
—
|
—
|
Other
|
(1)
|
—
|
Total
gross deferred tax liabilities
|
(734)
|
(638)
|
Net
deferred tax assets
|
$—
|
$—
|
2025
|
$4.2
|
2026
|
25.5
|
2027
|
15.5
|
2028
|
5.2
|
2029
|
7.7
|
2030
|
10.6
|
2031
|
1.3
|
2032
|
—
|
2033
|
0.1
|
2034
|
2.5
|
2035
|
1.5
|
Do
not expire
|
30.0
|
|
$104.1
|
2028
|
$2.6
|
2029
|
5.8
|
2030
|
11.0
|
2034
|
1.4
|
2035
|
0.8
|
2038
|
2.3
|
2039
|
2.2
|
2040
|
0.6
|
California
NOLs
|
26.8
|
Other
State NOLs
|
22.1
|
Total
State NOLs
|
$48.9
|
|
2020
|
2019
|
|
(in thousands)
|
|
Balance
at January 1,
|
$464
|
$464
|
Reductions
based on tax positions related to prior years and
settlements
|
(275)
|
—
|
Balance
at December 31,
|
$189
|
$464
|
|
Quarter Ended
|
|||||||
|
Dec 31,
2020
|
Sep 30,
2020
|
Jun 30,
2020
|
Mar 31,
2020
|
Dec 31,
2019
|
Sep 30,
2019
|
Jun 30,
2019
|
Mar 31,
2019
|
|
(in thousands, except per-share amounts)
|
|||||||
Total
net revenues
|
$17,252
|
$17,813
|
$17,033
|
$24,472
|
$26,687
|
$28,552
|
$27,142
|
$31,604
|
Gross
profit (loss)
|
$5,860
|
$6,423
|
$6,040
|
$5,357
|
$5,522
|
$5,907
|
$5,384
|
$5,757
|
Net
income (loss)
|
$(937)
|
$(448)
|
$(1,374)
|
$(4,061)
|
$(3,177)
|
$(1,739)
|
$(4,953)
|
$(5,360)
|
Basic
earnings (loss) per share
|
$(0.07)
|
$(0.03)
|
$(0.10)
|
$(0.31)
|
$(0.24)
|
$(0.13)
|
$(0.38)
|
$(0.41)
|
Diluted
earnings (loss) per share
|
$(0.07)
|
$(0.03)
|
$(0.10)
|
$(0.31)
|
$(0.24)
|
$(0.13)
|
$(0.38)
|
$(0.41)
|
|
Years Ended December 31,
|
||
|
2020
|
2019
|
2018
|
|
(in thousands)
|
||
Allowance
for bad debts:
|
|
|
|
Beginning
balance
|
$546
|
$445
|
$679
|
Additions
|
470
|
330
|
241
|
Write-offs
|
(674)
|
(229)
|
(475)
|
Ending
balance
|
$342
|
$546
|
$445
|
Allowance
for customer credits:
|
|
|
|
Beginning
balance
|
$194
|
$121
|
$213
|
Additions
|
(26)
|
250
|
198
|
Write-offs
|
(104)
|
(177)
|
(290)
|
Ending
balance
|
$64
|
$194
|
$121
|
Tax
valuation allowance:
|
|
|
|
Beginning
balance
|
$31,168
|
$28,687
|
$21,318
|
Charged
(credited) to tax expense
|
(721)
|
2,481
|
7,369
|
Charged
(credited) to retained earnings
|
—
|
—
|
—
|
Ending
balance
|
$30,447
|
$31,168
|
$28,687
|
|
AUTOWEB,
INC.
By: /s/ Sara
Partin
Sara
Partin
Senior
Vice President, Chief People Officer
EMPLOYEE
/s/ Glenn E.
Fuller
Glenn
E. Fuller
|
|
AutoWeb Inc.
By:
______________________________
(Officer
Name)
(Title)
EMPLOYEE
_________________________________
Glenn
E. Fuller
|
|
|
|
|
“Company”
|
AutoWeb, Inc., a
Delaware corporation
|
|
By: /s/ Glenn E.
Fuller
Glenn
E. Fuller
Executive Vice
President, Chief Legal Officer and Secretary
|
|
|
“Optionee”
|
|
|
By:
/s/ Michael A.
Sadowski
Michael
A. Sadowski
|
|
|
AUTOWEB,
INC.
By: /s/ Glenn E.
Fuller
Glenn
E. Fuller
Executive Vice
President,
Chief
Legal Officer and Secretary
EMPLOYEE
/s/ Sara E.
Partin
Sara E.
Partin
|
|
AutoWeb Inc.
By:
___________________________
(Officer
Name)
(Title)
EMPLOYEE
______________________________
Sara E.
Partin
|
Subsidiary Name
|
Jurisdiction of Incorporation
|
Autobytel, Inc.
|
Delaware
|
AW GUA USA, Inc.
|
Delaware
|
Car.com, Inc.
|
Delaware
|
AW GUA, Sociedad de Responsabilidad Limitada
|
Guatemala
|
Date:
March
11, 2021
|
By: /s/ Jared R. Rowe
Jared
R. Rowe
Chief
Executive Officer
|
Date: March 11,
2021
|
By: /s/ Michael Sadowski
Michael
Sadowski
Chief
Financial Officer
|
Date: March 11,
2021
|
By: /s/ Jared R.
Rowe
|
|
Jared R.
Rowe
Chief
Executive Officer
|
|
|
|
|
Date: March 11,
2021
|
By: /s/ Michael
Sadowski
|
|
Michael
Sadowski
Chief
Financial Officer
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Mar. 08, 2021 |
Jun. 30, 2020 |
|
Cover [Abstract] | |||
Entity Registrant Name | AutoWeb, Inc. | ||
Entity Central Index Key | 0001023364 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE | ||
Entity File Number | 1-34761 | ||
Entity Common Stock, Shares Outstanding | 13,169,204 | ||
Entity Public Float | $ 11,000,000 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Current assets: | ||
Accounts receivable, allowances for bad debts and customer credits | $ 406 | $ 740 |
Stockholders' equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 55,000,000 | 55,000,000 |
Common stock, issued | 13,169,204 | 13,146,831 |
Common stock, outstanding | 13,169,204 | 13,146,831 |
Series A Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 11,445,187 | 11,445,187 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenues: | |||
Lead generation | $ 61,114 | $ 90,728 | $ 96,936 |
Digital advertising | 15,441 | 23,173 | 28,169 |
Other revenues | 15 | 80 | 484 |
Total revenues | 76,570 | 113,981 | 125,589 |
Cost of revenues | 52,890 | 91,412 | 101,315 |
Cost of revenues - impairment | 0 | 0 | 9,014 |
Gross profit | 23,680 | 22,569 | 15,260 |
Operating expenses: | |||
Sales and marketing | 8,201 | 10,512 | 12,178 |
Technology support | 6,574 | 8,849 | 13,838 |
General and administrative | 12,718 | 14,175 | 16,318 |
Depreciation and amortization | 1,711 | 4,371 | 4,897 |
Goodwill impairment | 0 | 0 | 5,133 |
Long-lived asset impairment | 0 | 0 | 1,968 |
Total operating expenses | 29,204 | 37,907 | 54,332 |
Operating loss | (5,524) | (15,338) | (39,072) |
Interest and other income (expense), net | (1,524) | (410) | (106) |
Other income (expense) | 238 | 529 | 356 |
Loss before income tax provision | (6,810) | (15,219) | (38,822) |
Income tax provision (benefit) | 10 | 10 | (6) |
Net loss | $ (6,820) | $ (15,229) | $ (38,816) |
Basic loss per common share | $ (0.52) | $ (1.17) | $ (3.04) |
Diluted loss per common share | $ (0.52) | $ (1.17) | $ (3.04) |
Operations of AutoWeb |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations of AutoWeb | AutoWeb, Inc. (“AutoWeb” or the “Company”) is a digital marketing company for the automotive industry that assists automotive retail dealers (“Dealers”) and automotive manufacturers (“Manufacturers”) market and sell new and used vehicles to consumers through its programs for online lead and traffic referrals, Dealer marketing products and services, and online advertising.
The Company’s consumer-facing automotive websites (“Company Websites”) provide consumers with information and tools to aid them with their automotive purchase decisions and the ability to submit inquiries requesting Dealers to contact the consumers regarding purchasing or leasing vehicles (“Leads”). Leads are internally-generated from Company Websites or acquired from third parties that generate Leads from their websites.
The Company’s click traffic referral program provides consumers who are shopping for vehicles online with targeted offers based on make, model and geographic location. As these consumers conduct online research on Company Websites or on the site of one of the Company’s network of automotive publishers, they are presented with relevant offers on a timely basis and, upon the consumer clicking on the displayed advertisement, are sent to the appropriate website location of one of the Company’s Dealer, Manufacturer or advertising customers.
|
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | AutoWeb, Inc. (“AutoWeb” or the “Company”) is a digital marketing company for the automotive industry that assists automotive retail dealers (“Dealers”) and automotive manufacturers (“Manufacturers”) market and sell new and used vehicles to consumers through its programs for online lead and traffic referrals, Dealer marketing products and services, and online advertising.
The Company’s consumer-facing automotive websites (“Company Websites”) provide consumers with information and tools to aid them with their automotive purchase decisions and the ability to submit inquiries requesting Dealers to contact the consumers regarding purchasing or leasing vehicles (“Leads”). Leads are internally-generated from Company Websites or acquired from third parties that generate Leads from their websites.
The Company’s click traffic referral program provides consumers who are shopping for vehicles online with targeted offers based on make, model and geographic location. As these consumers conduct online research on Company Websites or on the site of one of the Company’s network of automotive publishers, they are presented with relevant offers on a timely basis and, upon the consumer clicking on the displayed advertisement, are sent to the appropriate website location of one of the Company’s Dealer, Manufacturer or advertising customers.
Basis of Presentation. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
The Company accounts for comprehensive income in accordance with ASC 220 (“Comprehensive Income”), which specifies the computation, presentation, and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no other comprehensive income.
Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, allowances for bad debts and customer credits, useful lives of depreciable assets and capitalized software costs, long-lived asset impairments, goodwill and purchased intangible asset valuations, accrued liabilities, contingent payment provisions, debt valuation and valuation allowance for deferred tax assets, warrant valuation and stock-based compensation expense. Actual results could differ from those estimates.
Cash and Cash Equivalents. For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, the Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents represent amounts held by the Company for use by the Company and are recorded at cost, which approximates fair value.
Restricted Cash. For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, restricted cash primarily consists of cash pledged pursuant to the CNC Credit Agreement (See Note 7).
Accounts Receivable. Credit is extended to customers based on an evaluation of the customer’s financial condition, and when credit is extended, collateral is generally not required. Interest is not normally charged on receivables.
Allowances for Bad Debts and Customer Credits. The allowance for bad debts is an estimate of bad debt expense that could result from the inability or refusal of customers to pay for services. Additions to the estimated allowance for bad debts are recorded to general and administrative expenses and are based on factors such as historical write-off percentages, the current business environment and known concerns within the current aging of accounts receivable. Reductions in the estimated allowance for bad debts due to subsequent cash recoveries are recorded as a decrease in general and administrative expenses. As specific bad debts are identified, they are written off against the previously established estimated allowance for bad debts with no impact on operating expenses.
The allowance for customer credits is an estimate of adjustments for services that do not meet the customer requirements. Additions to the estimated allowance for customer credits are recorded as a reduction of revenues and are based on the Company’s historical experience of: (i) the amount of credits issued; (ii) the length of time after services are rendered that the credits are issued; (iii) other factors known at the time; and (iv) future expectations. Reductions in the estimated allowance for customer credits are recorded as an increase in revenues. As specific customer credits are identified, they are written off against the previously established estimated allowance for customer credits with no impact on revenues.
Fair Value of Financial Instruments. The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
Cash equivalents, restricted cash, accounts receivable, net of allowance, accounts payable and accrued liabilities, are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments.
The Company’s investments during the year ended December 31, 2018, consisted of an investment in GoMoto and SaleMove which were accounted for under the cost method. On July 30, 2019, the Company entered into a Repurchase Agreement with GoMoto, pursuant to which GoMoto repurchased these 317,460 shares of Series Seed Preferred Stock and 1,781,047 shares of Series A-2 Preferred Stock from the Company for an aggregate purchase price of $250,000. During the year ended December 31, 2018, the Company sold its interest back to SaleMove for $0.1 million. See Note 5 for further discussion.
Concentration of Credit Risk and Risks Due to Significant Customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents are primarily maintained with two financial institutions in the United States. Deposits held by banks exceed the amount of insurance provided for such deposits. Generally, these deposits may be redeemed upon demand.
If there is a decline in the general economic environment that negatively affects the financial condition of the Company’s customers or an increase in the number of customers that are dissatisfied with their services, additional estimated allowances for bad debts and customer credits may be required, and the impact on the Company’s business, results of operations, financial condition, earnings per share, cash flow or the trading price of the Company’s stock could be material.
The Company has a concentration of credit risk with the Company’s automotive industry related accounts receivable balances, particularly with Carat Detroit (General Motors), Ford Direct, Urban Science Applications (which represents several Manufacturer programs) and Autodata Solutions. During 2020, approximately 46% of the Company’s total revenues were derived from these four customers, and approximately 62% or $8.6 million of gross accounts receivable related to these four customers at December 31, 2020. Carat Detroit accounted for 12% and 19% of total revenues and accounts receivable, respectively, as of December 31, 2020. Ford Direct accounted for 11% and 16% of total revenues and accounts receivable, respectively, as of December 31, 2020. Urban Science Applications accounted for 12% and 15% of total revenues and accounts receivable, respectively, as of December 31, 2020. Autodata Solutions accounted for 11% and 12% of total revenues and accounts receivable, respectively, as of December 31, 2020.
During 2019, approximately 25% of the Company’s total revenues were derived from Urban Science Applications and Carat Detroit. Approximately 33% or $8.4 million of gross accounts receivable related to these two customers at December 31, 2019. Urban Science Applications accounted for 15% and 13% of total revenues and accounts receivable, respectively, as of December 31, 2019. Carat Detroit accounted for 9% and 21% of total revenues and accounts receivable, respectively, as of December 31, 2019.
During 2018, approximately 37% of the Company’s total revenues were derived from Urban Science Applications (which represents several Manufacturer programs), General Motors and media.net Advertising and approximately 41% or $11.2 million of gross accounts receivable related to these three customers at December 31, 2018. Urban Science Applications accounted for 18% and 21% of total revenues and accounts receivable, respectively, as of December 31, 2018. Media.net Advertising accounted for 10% and 6% of total revenues and accounts receivable, respectively, as of December 31, 2018. General Motors accounted for 9% and 13% of total revenues and accounts receivable, respectively, as of December 31, 2018.
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, generally three years. Amortization of leasehold improvements is provided using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Repair and maintenance costs are charged to operating expenses as incurred. Gains or losses resulting from the retirement or sale of property and equipment are recorded as operating income, respectively.
Operating Leases. The Company leases office space and certain office equipment under operating lease agreements which expire on various dates through 2025, with options to renew on expiration of the original lease terms. These operating lease agreements include one material related-party agreement, whereby the Company incurred $0.1 million of operating lease payments during 2020.
The lease term begins on the date of initial possession of the leased property for purposes of recognizing rent expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term.
Capitalized Internal Use Software and Website Development Costs. The Company capitalizes costs to develop internal use software in accordance with ASC 350-40, “Internal-Use Software,” and ASC 350-50, “Website Development Costs,” which require the capitalization of external and internal computer software costs and website development costs, respectively, incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized internal use software development costs are amortized using the straight-line method over an estimated useful life of three to five years. Capitalized website development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of the related websites. The Company placed in service $1.5 million and $0.4 million of such costs for the years ended December 31, 2020 and 2019, respectively.
Indefinite-lived intangible assets. Indefinite-lived intangible assets consist of a domain name, which was acquired as part of the Dealix/Autotegrity acquisition in 2015, which is tested for impairment annually, or more frequently if an event occurs or circumstances changes that would indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, the Company may first perform a qualitative analysis to determine whether it is more-likely-than-not that the indefinite-lived intangible assets are impaired. If the Company does not perform the qualitative assessment, or if the Company determines that it is more-likely-than-not that the fair value of the indefinite-lived intangible asset exceeds its carrying amount, the Company will calculate the estimated fair value of the indefinite-lived intangible asset. Fair value is the price a willing buyer would pay for the indefinite-lived intangible asset and is typically calculated using an income approach. If the carrying amount of the indefinite-lived intangible asset exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value.
Impairment of Long-Lived Assets and Intangible Assets. The Company periodically reviews long-lived amortizing assets to determine if there is any impairment of these assets. The Company assesses the impairment of these assets, or the need to accelerate amortization, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the long-lived assets and other intangibles. Future events could cause the Company to conclude that impairment indicators exist and that the assets should be reviewed to determine their fair value. The Company assesses the assets for impairment based on the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Fair value is generally determined based on a valuation process that provides an estimate of a fair value of these assets using a discounted cash flow model, which includes many assumptions and estimates. Once the valuation is determined, the Company would write-down these assets to their determined fair value, if necessary. Any write-down could have a material adverse effect on the Company’s financial condition and results of operations. In 2018, the Company recorded impairments totaling $11.0 million, primarily attributable to a $9.0 million charge due to the Company’s decision to terminate the support provisions of the DealerX License Agreement, which significantly impacted the usability of the asset. The remaining $2.0 million is comprised of a $1.6 million customer relationships impairment related to a 2015 acquisition after determining that a significant percentage of acquired customers were no longer part of the dealer base, and the write-off of $0.4 million in cash advances to SaleMove. The Company did not record any impairment of long-lived assets and intangible assets in 2020 and 2019, respectively.
Goodwill. Goodwill represents the excess of the purchase price for business acquisitions over the fair value of identifiable assets and liabilities acquired. The Company evaluates the carrying value of enterprise goodwill for impairment by comparing the enterprise’s carrying value to its fair value. If the fair value is less than the carrying value, enterprise goodwill is potentially impaired. The Company evaluates enterprise goodwill, at a minimum, on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances suggest that the carrying amount of goodwill may be impaired. The Company recorded goodwill impairment of $5.1 million in 2018.
Cost of Revenues. Cost of revenues consists of Lead and traffic acquisition costs and other cost of revenues. Lead and traffic acquisition costs consist of payments made to the Company’s Lead providers, including internet portals and on-line automotive information providers. Other cost of revenues consists of search engine marketing (“SEM”) and fees paid to third parties for data and content, including search engine optimization (“SEO”) activity, included on the Company’s properties, connectivity costs and development costs related to the Company Websites, compensation related expense and technology license fees, server equipment depreciation and technology amortization directly related to Company Websites. SEM, sometimes referred to as paid search marketing, is the practice of bidding on keywords on search engines to drive traffic to a website.
Income Taxes. The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance, if necessary, to reduce deferred tax assets to an amount it believes is more-likely-than-not to be realized.
ASC 740, “Income Taxes”, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the Tax Cuts and Jobs Act of 2017 (“TCJA”) provisions, the staff of the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740.
In 2017, the Company recorded provisional amounts for certain enactment-date effects of the TCJA, for which the accounting had not been finalized, by applying the guidance in SAB 118. The Company recorded a decrease in deferred tax assets of $11.7 million, with a corresponding net adjustment to deferred income tax expense of $11.7 million for the year ended December 31, 2017. In addition, the Company recognized a deemed repatriation of $0.6 million of deferred foreign income from its Guatemala subsidiary, which did not result in any incremental tax cost after application of foreign tax credits. Accordingly, the Company completed accounting for the effects of the TCJA in 2018 and did not recognize any material adjustments to the 2017 provisional income tax expense.
The TCJA created a provision known as global intangible low-tax income (“GILTI”) that imposes a U.S. tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold. We have made an accounting policy election to reflect GILTI taxes, if any, as a current income tax expense in the period incurred.
In response to the coronavirus pandemic, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the TCJA. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years, which was not previously allowed under the TCJA. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020.
Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the TCJA) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the TCJA. The enactment of the CARES Act did not result in any material adjustments to the Company’s income tax provision for the year ended December 31, 2020, or to its net deferred tax assets as of December 31, 2020.
Computation of Basic and Diluted Net Earnings (Loss) per Share. Basic net earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per share is computed using the weighted-average number of common shares, and if dilutive, potential common shares outstanding, as determined under the treasury stock and if-converted method, during the period. Potential common shares consist of unvested restricted stock, common shares issuable upon the exercise of stock options, the exercise of warrants, and conversion of convertible notes.
The following are the share amounts utilized to compute the basic and diluted net earnings (loss) per share for the years ended December 31:
For the years ended December 31, 2020, 2019 and 2018, basic and diluted weighted average shares are the same as the Company generated a net loss for the period and potentially dilutive securities are excluded because they have an anti-dilutive impact.
Potentially dilutive securities representing approximately 3.8 million, 4.4 million, and 3.5 million shares of common stock for the years ended December 31, 2020, 2019, and 2018, respectively, were excluded from the computation of diluted income per share for these periods because their effect would have been anti-dilutive.
Share-Based Compensation. The Company grants stock-based awards (“Awards”) primarily in the form of stock options and restricted stock awards (“RSAs”) under several of its stock-based compensation Plans (the “Plans”), that are more fully described in Note 10. The Company recognizes share-based compensation based on the Awards’ fair value, net of estimated forfeitures on a straight-line basis over the requisite service periods, which is generally over the awards’ respective vesting period, or on an accelerated basis over the estimated performance periods for options with performance conditions.
Restricted stock fair value is measured on the grant date based on the quoted market price of the Company’s common stock, and the stock option fair value is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates.
Business Segment. The Company conducts its business within the United States and within one business segment which is defined as providing automotive and marketing services. The Company’s operations are aggregated into a single reportable operating segment based upon similar economic and operating characteristics as well as similar markets.
Advertising Expense. Advertising costs are expensed in the period incurred and the majority of advertising expense is recorded in sales and marketing expense. Advertising expense in the years ended December 31, 2020, 2019 and 2018 was $0.3 million, $0.6 million and $1.4 million, respectively.
Recent Accounting Pronouncements
The Company has reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements.
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Revenue Recognition |
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Revenue Recognition | Revenue is recognized when the Company transfers control of promised goods or services to the Company’s customers, or when the Company satisfies any performance obligations under contract. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for respective goods or services provided. Further, under ASC 606, contract assets or contract liabilities that arise from past performance but require further performance before obligation can be fully satisfied must be identified and recorded on the balance sheet until respective settlements have been met.
The Company performs the following steps in order to properly determine revenue recognition and identify relevant contract assets and contract liabilities:
The Company earns revenue by providing lead generation, digital advertising, and mobile products and services used by Dealers and Manufacturers in their efforts to market and sell new and used vehicles to consumers. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company records revenue on distinct performance obligations at a single point in time, when control is transferred to the customer.
The Company has two main revenue sources – Lead generation and Digital advertising. Accordingly, the Company recognizes revenue for each source as described below:
Variable Consideration
Leads are generally sold with a right-of-return for services that do not meet customer requirements as specified by the relevant contract. Rights-of-return can be estimated, and provisions for estimated returns are recorded as a reduction in revenue by the Company in the period revenue is recognized, and thereby accounted for as variable consideration. The Company includes the allowance for customer credits in its net accounts receivable balances on the Company’s balance sheet at period end. However, it should be noted that from time to time, the Company may issue discounts or credits on current invoices. These discounts or credits are direct reductions to revenue without a change in the allowance for customer credits. Allowance for customer credits totaled $64,000 and $194,000 as of December 31, 2020 and 2019, respectively.
See further discussion below on significant judgments exercised by the Company in regard to variable consideration.
Contract Assets and Contract Liabilities Unbilled Revenue
Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing. From time to time, the Company may have balances on its balance sheet representing revenue that has been recognized by the Company upon satisfaction of performance obligations and earning a right to receive payment. These not-yet invoiced receivable balances are driven by the timing of administrative transaction processing, and are not indicative of partially complete performance obligations.
Deferred Revenue
The Company defers the recognition of revenue when cash payments are received or due in advance of satisfying its performance obligations, including amounts which are refundable. Such activity is not a common practice of operation for the Company. The Company had zero deferred revenue included in its consolidated balance sheets as of December 31, 2020 and 2019. Payment terms and conditions can vary by contract type. Generally, payment terms within the Company’s customer contracts include a requirement of payment within 30 to 60 days from date of invoice. Typically, customers make payments after receipt of invoice for billed services, and less typically, in advance of rendered services.
Practical Expedients and Exemptions
The Company excludes from the transaction price all sales taxes related to revenue producing transactions collected from the customer for a governmental authority. The Company applies the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects of applying the revenue recognition guidance to the portfolio would not differ materially on the financial statements from that of applying the same guidance to the individual contracts (or performance obligations) within that portfolio. The Company generally expenses incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, marketing, and distribution expense.
Significant Judgments
The Company provides Dealers and Manufacturers with various opportunities to market their vehicles to potential vehicle buyers, namely via consumer lead and click traffic referrals and online advertising products and services. Proper revenue recognition of digital marketing activities, as well as proper recognition of assets and liabilities related to these activities, requires management to exercise significant judgment with the following items:
The Company enters into contracts with customers that often include multiple products and services to a customer. Determining whether products and/or services are distinct performance obligations that should be accounted for singularly or separately may require significant judgment.
The Company’s products are generally sold with a right-of-return. Additionally, the Company will sometimes provide customer credits or sales incentives. These items are accounted for as variable consideration when determining the allocation of the transaction price to performance obligations under a contract. The allowance for customer credits is an estimate of adjustments for services that do not meet customer requirements. Additions to the estimated allowance for customer credits are recorded as a reduction of revenues and are based on the Company’s historical experience of: (i) the amount of credits issued; (ii) the length of time after services are rendered that the credits are issued; (iii) other factors known at the time; and (iv) future expectations. Reductions in the estimated allowance for customer credits are recorded as an increase in revenues.
As specific customer credits are identified, they are charged against this allowance with no impact on revenues. Returns and credits are measured at contract inception, with respective obligations reviewed each reporting period or as further information becomes available, whichever is earlier, and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. The allowance for customer credits is included in the net accounts receivable balances of the Company’s balance sheets as of December 31, 2020 and 2019.
Disaggregation of Revenue
The Company disaggregates revenue from contracts with customers by revenue source and has determined that disaggregating revenue into these categories sufficiently depicts the differences in the nature, amount, timing, and uncertainty of its revenue streams.
The following table summarizes revenue from contracts with customers, disaggregated by revenue source, for the years ended December 31, 2020, 2019 and 2018. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.
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Disposals | Disposal of Specialty Finance Leads Product
In December 2016, AutoWeb sold substantially all of the assets of its automotive specialty finance leads group to Internet Brands, Inc., a Delaware corporation (“Internet Brands”). In connection with this disposal of assets, the parties to the transaction entered into a Transitional License and Linking Agreement (“Transition Agreement”). Under the Transition Agreement, AutoWeb and its Car.com subsidiary provide Internet Brands certain transition services and arrangements, including (i) the grant of a limited, non-exclusive, non-transferable license to Internet Brands to use the Car.com logo and name solely for sales and marketing purposes in Internet Brand’s automotive specialty finance leads business; and (ii) certain redirect linking of consumer traffic from the Company’s specialty finance leads application forms to a landing page designated by Internet Brands. The Transition Agreement provides that Internet Brands will pay AutoWeb $1.6 million in fees over the five-year term of the Transition Agreement, and the Company received $0.3 million, $0.3 million, and $0.4 million during the years ended December 31, 2020, 2019 and 2018, respectively, related to the Transition Agreement.
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Investments [Abstract] | |
Investments | SaleMove
In September 2013, the Company entered into a Convertible Note Purchase Agreement with SaleMove in which AutoWeb invested $150,000 in SaleMove in the form of an interest bearing, convertible promissory note. In November 2014, the Company invested an additional $400,000 in SaleMove in the form of an interest bearing, convertible promissory note. Upon closing of a preferred stock financing by SaleMove in July 2015, these two notes were converted in accordance with their terms into an aggregate of 190,997 Series A Preferred Stock, which shares are classified as a long-term investment on the consolidated balance sheet as of December 31, 2016. The Company recorded an impairment charge of $0.6 million in SaleMove in 2017. On June 5, 2018, the Company sold its shares of Series A Preferred stock back to SaleMove for $125,000. The gain of $125,000 is recorded in Interest and other income (expense) on the Consolidated Statement of Operations for year ended December 31, 2018.
In October 2013, the Company entered into a Reseller Agreement with SaleMove to become a reseller of SaleMove’s technology for enhancing communications with consumers. SaleMove’s technology allows Dealers and Manufacturers to enhance the online shopping experience by interacting with consumers in real-time, including live video, audio and text-based chat or by phone. The Company and SaleMove equally share in revenues from automotive-related sales of the SaleMove products and services. In connection with this reseller arrangement, the Company advanced $1.0 million to SaleMove to fund SaleMove’s 50% share of various product development, marketing and sales costs and expenses. These previously advanced funds are repaid to the Company from SaleMove’s share of net revenues and expenses from the Reseller Agreement each reporting period. During the three months ended September 30, 2018, the Company performed a qualitative review of the agreement with SaleMove and, based on several factors related to the trend in operating results from this reseller arrangement and costs being incurred by the Company, the parties agreed to allow the arrangement to expire November 30, 2018, one month earlier than the original expiration date of December 31, 2018. Upon expiration of the Reseller Agreement, the remaining outstanding advances are no longer recoverable from SaleMove, and, accordingly, the Company has impaired the remaining balance of $364,000 of advances due from SaleMove. The impairment charge is included in “Long-lived asset impairment” in the Consolidated Statement of Operations for the year ended December 31, 2018.
GoMoto
In December 2014, the Company entered into a Series Seed Preferred Stock Purchase Agreement with GoMoto in which the Company paid $100,000 for 317,460 shares of Series Seed Preferred Stock, $0.001 par value per share. The $100,000 investment in GoMoto was recorded at cost because the Company does not have significant influence over GoMoto. In October 2015 and May 2016, the Company invested an additional $375,000 and $375,000 in each period in the form of convertible promissory notes (“GoMoto Notes”). The GoMoto Notes accrue interest at an annual rate of 4.0% and are due and payable in full upon demand by the Company or at GoMoto’s option ten days’ written notice unless converted prior to the repayment of the GoMoto Notes. The GoMoto Notes will be converted into preferred stock of GoMoto in the event of a preferred stock financing by GoMoto of at least $1.0 million prior to repayment of the GoMoto Notes. At December 31, 2018 and 2017, both the GoMoto Notes and related interest receivable are fully reserved on the Consolidated Condensed Balance Sheets because the Company believed the amounts were not recoverable. Further, the three months ended September 30, 2018, represented the third consecutive quarter of declining operating results for GoMoto and, as such, the Company performed a qualitative review of its investment in GoMoto. Based on continuing deterioration in GoMoto’s financial position, the Company believed that uncertainty existed in the recoverability of its remaining investment of $100,000 in GoMoto and, accordingly, recognized a loss on the investment which has been recorded in “Interest and other income (expense)” on the Consolidated Statement of Operations for the year ended December 31, 2018.
On January 29, 2019, the GoMoto Notes were converted into 1,781,047 shares of GoMoto’s Series A-2 Preferred Stock, $0.001 par value per share. The outstanding principal plus accrued interest under the GoMoto Notes was converted in accordance with the terms of the notes upon the closing of a new preferred stock financing and based on a discount to the price paid by the new investor for the investor’s preferred shares. On July 30, 2019, the Company entered into a Repurchase Agreement with GoMoto, pursuant to which GoMoto repurchased these 317,460 shares of Series Seed Preferred Stock and 1,781,047 shares of Series A-2 Preferred Stock from the Company for an aggregate purchase price of $250,000.
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Balance Sheet Accounts | Property and equipment consist of the following:
As of December 31, 2020 and 2019, capitalized internal use software, net of amortization, was $1.4 million and $0.6 million, respectively. Depreciation and amortization expense related to property and equipment was $1.3 million for the year ended December 31, 2020. Of this amount, $0.8 million was recorded in cost of revenues and $0.5 million was recorded in operating expenses for the year ended December 31, 2020. Depreciation and amortization expense related to property and equipment was $1.6 million for the year ended December 31, 2019. Of this amount, $0.9 million was recorded in cost of revenues and $0.7 million was recorded in operating expenses for the year ended December 31, 2019. Depreciation and amortization expense related to property and equipment was $2.0 million for the year ended December 31, 2018. Of this amount, $1.2 million was recorded in cost of revenues and $0.8 million was recorded in operating expenses for the year ended December 31, 2018.
The Company amortizes specifically identified definite-lived intangible assets using the straight-line method over the estimated useful lives of the assets.
On October 5, 2017, the Company and DealerX Partners, LLC, a Florida limited liability company (“DealerX”), entered into a Master License and Services Agreement (“DealerX License Agreement”). Pursuant to the terms of the DealerX License Agreement, AutoWeb was granted a perpetual license to access and use DealerX’s proprietary platform and technology for targeted, online marketing. DealerX was to operate the platform for AutoWeb and provide enhancements to and support for the DealerX platform for at least an initial five-year period (“Platform Support Obligations”), however the Company terminated the Platform Support Obligations effective November 2, 2018, and as a result, recorded an impairment charge.
The transaction consideration consisted of: (i) $8.0 million in cash paid to DealerX upon execution of the DealerX License Agreement and (ii) the right to 710,856 shares of the Company’s common stock, par value $0.001 per share, representing approximately 5% of the Company’s outstanding Common Stock as of the date the parties entered into the DealerX License Agreement (“Market Capitalization Shares”) if on or before October 5, 2022: (i) AutoWeb’s market capitalization averages at least $225.0 million over a consecutive 90-day period or (ii) there is a change in control of AutoWeb that reflects a market capitalization of at least $225.0 million. If the Market Capitalization Shares are issued to DealerX, DealerX’s obligation to continue to support the platform (“Platform Support Obligations”) will continue in perpetuity. Alternatively, upon the occurrence of certain events prior to the issuance of the Market Capitalization Shares, AutoWeb may elect to make an additional lump-sum payment of $12.5 million (“Alternative Cash Payment”) in order to extend DealerX’s Platform Support Obligations in perpetuity. If the Alternative Cash payment were made, DealerX’s contingent right to receive the Market Capitalization Shares would be terminated. The fair value of the Market Capitalization Shares was calculated at $2.5 million. At the transaction date, the Company recorded approximately $10.5 million as a definite-lived intangible asset which was amortized over its expected useful life of seven years.
The Company makes judgments about the recoverability of purchased intangible assets with definite lives whenever events or changes in circumstances indicate that an impairment may exist. Recoverability of purchased intangible assets with definite lives is measured by comparing the carrying amount of the asset to the future undiscounted cashflows the asset is expected to generate. In the third quarter of 2018, the Company performed an analysis of its planned future use of two intangible assets in the licenses and customer relationships asset groups. As a result of realignment activities finalized in the third quarter of 2018, the Company made a determination that the Company’s use of certain assets would not be continued as originally planned. Accordingly, the Company performed further analysis to quantitatively determine the amount of impairment for each of these intangible assets as of September 30, 2018.
An assessment was performed on the DealerX License intangible asset, whereby lead generation and acquisition cost, amongst other things, was compared to alternate sources of lead generation available to the Company. As a result of the Company’s analysis, the Company concluded that the effectiveness of the platform was not in-line with the enhanced consumer-to-client matchmaking that the Company is seeking and made the decision in the third quarter to terminate DealerX’s Platform Support Obligations, significantly impacting the usability of the asset by the Company. Accordingly, the Company recorded impairment charges of $9.0 million in connection with the impairment of this long-lived asset with the expense recorded in Cost of revenues-impairment on the Company’s Consolidated Statements of Operations for the year ended December 31, 2018.
A quantitative analysis was performed by the Company in 2018 on its customer relationship intangible assets, whereby it examined available data, namely historical activity and cashflows resulting from the customer relationships of previous acquisitions, in concert with projected future use of acquired customer relationships within the parameters of the Company’s future strategic plans. As a result of this analysis, the Company determined there to be impairment of $1.6 million related to customer relationship intangible assets acquired in a 2015 acquisition for which projected cashflows did not support the carrying values. Additionally, the Company determined that the estimated useful life of these customer relationship intangible assets had changed from 10 years to 5 years. This change in estimate will impact amortization expense in future periods as amortization will be accelerated over the remaining estimated useful life of this asset due to the change in estimate.
The Company’s intangible assets will be amortized over the following estimated useful lives (in thousands):
Amortization expense is included in “Cost of revenues” and “Depreciation and amortization” in the Statements of Operations. Amortization expense was $2.4 million, $4.9 million, and $8.1 million in 2020, 2019 and 2018, respectively. Amortization expense for 2018 includes $1.6 million related to the above-mentioned customer relationship impairment. The $9.0 million impairment related to DealerX was recorded to Cost of revenues - impairment. Amortization expense for intangible assets for the next four years is as follows:
Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized and is assessed annually for impairment or whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. The Company impaired goodwill by $5.1 million during the year ended December 31, 2018.
As of December 31, 2020, and 2019, accrued expenses and other current liabilities consisted of the following:
In connection with the acquisition of AutoUSA, LLC (“AutoUSA”) on January 13, 2014, the Company issued a convertible subordinated promissory note for $1.0 million (“AutoUSA Note”) to AutoNationDirect.com, Inc. The fair value of the AutoUSA Note as of the AutoUSA Acquisition Date was $1.3 million. This valuation was estimated using a binomial option pricing method. Key assumptions used by the Company’s outside valuation consultants in valuing the AutoUSA Note included a market yield of 1.6% and stock price volatility of 65.0%. As the AutoUSA Note was issued with a substantial premium, the Company recorded the premium as additional paid-in capital. Interest is payable at an annual interest rate of 6% in quarterly installments. The entire outstanding balance of the AutoUSA Note plus accrued interest was paid in full on January 31, 2019.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
Debt | The Company and MUFG Union Bank, N.A. (“Union Bank”), entered into a Loan Agreement dated February 26, 2013, as amended on September 10, 2013, January 13, 2014, May 20, 2015, June 1, 2016, June 28, 2017 and December 27, 2017 (the original Loan Agreement, as amended to date, is referred to collectively as the “Credit Facility Agreement).” The Credit Facility Agreement provided for (i) a $9.0 million term loan (“Term Loan 1”); (ii) a $15.0 million term loan (“Term Loan 2”); and (iii) an $8.0 million working capital revolving line of credit (“Revolving Loan”). The term loans were fully paid as of December 31, 2017. The Revolving Loan was fully paid as of March 31, 2018, at which time the Credit Facility Agreement was terminated.
Borrowings under the Revolving Loan bear interest at either (i) the London Interbank Offering Rate (“LIBOR”) plus 2.50% or (ii) the bank’s Reference Rate (prime rate) minus 0.50%, at the option of the Company. Interest under the Revolving Loan adjusts (i) at the end of each LIBOR rate period (1, 2, 3, 6 or 12 months terms) selected by the Company, if the LIBOR rate is selected; or (ii) with changes in Union Bank’s Reference Rate, if the Reference Rate is selected. The Company paid a commitment fee of 0.10% per year on the unused portion of the Revolving Loan, payable quarterly in arrears.
Term Loan 1 was amortized over a period of four years, with fixed quarterly principal payments of $562,500. Borrowings under Term Loan 1 bore interest at either (i) the bank’s Reference Rate (prime rate) minus 0.50% or (ii) LIBOR plus 2.50%, at the option of the Company. Interest under Term Loan 1 adjusted (i) at the end of each LIBOR rate period (1, 2, 3, 6 or 12 months terms) selected by the Company, if the LIBOR rate was selected; or (ii) with changes in Union Bank’s Reference Rate, if the Reference Rate was selected.
Term Loan 2 was amortized over a period of five years, with fixed quarterly principal payments of $750,000. Borrowings under Term Loan 2 bore interest at either (i) LIBOR plus 3.00% or (ii) the bank’s Reference Rate (prime rate), at the option of the Company. Interest under Term Loan 2 adjusted (i) at the end of each LIBOR rate period (1, 2, 3, 6 or 12 months terms) selected by the Company, if the LIBOR rate was selected; or (ii) with changes in Union Bank’s Reference Rate, if the Reference Rate was selected. The Company paid an upfront fee of 0.10% of the Term Loan 2 principal amount upon drawing upon Term Loan 2.
On April 30, 2019, the Company entered into a $25.0 million Revolving Credit and Security Agreement (“PNC Credit Agreement”) with PNC Bank, N.A. (“PNC”) as agent, and the Company’s U.S. subsidiaries Car.com, Inc., Autobytel, Inc., and AW GUA USA, Inc. (“Company U.S. Subsidiaries”). The obligations under the PNC Credit Agreement were guaranteed by the Company U.S. Subsidiaries and secured by a first priority lien on all of the Company’s and the Company U.S. Subsidiaries’ tangible and intangible assets. The PNC Credit Agreement provided a subfacility of up to $5.0 million for letters of credit. The PNC Credit Agreement was to expire on April 30, 2022.
The interest rates per annum applicable to borrowings under the PNC Credit Agreement were, at the Company’s option (subject to certain conditions), equal to either a domestic rate (“Domestic Rate Loans”) or a LIBOR rate for one, two, or three-month interest periods chosen by the Company (“LIBOR Rate Loans”), plus the applicable margin percentage of 2% for Domestic Rate Loans and 3% for LIBOR Rate Loans. The domestic rate for Domestic Rate Loans would be the highest of (i) the base commercial lending rate of the lender, (ii) the overnight bank funding rate plus 0.50%, or (iii) the LIBOR rate plus 1.00% so long as the daily LIBOR rate is offered, ascertainable and not unlawful. The PNC Credit Agreement also provided for commitment fees ranging from 0.5% to 1.5% applied to unused funds (with the applicable fee based on quarterly average borrowings), but with the fees fixed at 1.5% until September 30, 2019. Fees for Letters of Credit were to be equal to 3% for LIBOR Rate Loans, with a fronting fee for each Letter of Credit in an amount equal to 0.5% of the daily average aggregate undrawn amount of all Letters of Credit outstanding. The Company was required to maintain a $5.0 million pledged interest-bearing deposit account with the lender until the Company’s consolidated EBITDA is greater than $10.0 million.
On October 29, 2019, the Company, the Company’s U.S. Subsidiaries, and PNC entered into a First Amendment to the PNC Credit Agreement (“PNC Credit Agreement First Amendment”) that provided for an amended financial covenant related to the Company’s minimum required EBITDA (as defined in the PNC Credit Agreement). This amended financial covenant required the Company to maintain its consolidated EBITDA (as defined in the PNC Credit Agreement) at stated minimum levels (i) of $0.7 million for the quarter ended September 30, 2019; (ii) $250,000 for the month of October 2019; (iii) $600,000 for the two months ended November 30, 2019; and ranging from $3.6 million to $7.5 million for the later periods set forth in the PNC Credit Agreement First Amendment during the remaining term of the PNC Credit Agreement. In addition, the PNC Credit Agreement First Amendment added a new financial covenant requiring the Company to maintain at least a 1.20 to 1.00 Fixed Charge Coverage Ratio (as defined in the PNC Credit Agreement First Amendment) for the periods set forth in the PNC Credit Agreement First Amendment. If the Company failed to comply with the minimum EBITDA requirements or the Fixed Charge Coverage Ratio, the Company had the right to cure (“Cure Right”) through the application of the proceeds from the sale of new equity interests in the Company, subject to the conditions set forth in the PNC Credit Agreement First Amendment. The Cure Right could not be exercised more than three times during the term of the PNC Credit Agreement and any proceeds from a sale of equity interests could not be less than the greater of (i) the amount required to cure the applicable default; and (ii) $500,000.
On January 16, 2020, the Company received a notice of event of default and reservation of rights (“Default Notice”) from PNC Bank, under the PNC Credit Agreement advising the Company that an event of default had occurred and was continuing under Section 10.3 of the PNC Credit Agreement by reason of AutoWeb’s failure to deliver to PNC the financial statements and related compliance certificate for the month ended November 30, 2019. Although not covered by the Default Notice at the time, AutoWeb also was not in compliance with the minimum EBITDA financial covenant under the PNC Credit Agreement. As a result of the Default Notice, PNC increased the interest rate under the PNC Credit Agreement by 2.0% per annum.
On March 26, 2020, the Company fully paid the PNC Credit Agreement, at which time it was terminated, and in conjunction with the termination of the PNC Credit Agreement, on March 26, 2020, the Company entered into a $20.0 million Loan, Security and Guarantee Agreement (“CNC Credit Agreement”) with CIT Northbridge Credit LLC, as agent (the “Agent”), and the Company U.S. Subsidiaries. The CNC Credit Agreement provides for a $20.0 million revolving credit facility with borrowings subject to availability based primarily on limits of 85% of eligible billed accounts receivable and 75% against eligible unbilled accounts receivable. The obligations under the CNC Credit Agreement are guaranteed by the Company U.S. Subsidiaries and secured by a first priority lien on all of the Company’s and the Company U.S. Subsidiaries’ tangible and intangible assets. The CNC Credit Agreement has an average minimum borrowing usage requirement of an average of $10,000,000.
As of December 31, 2020, the Company had $10.2 million outstanding under the CNC Credit Agreement and approximately $1.1 million of net availability. To increase the borrowing base sufficient enough to meet the minimum borrowing usage requirement, the Company on June 29, 2020, placed $3.0 million into a restricted cash account that provided for greater availability under the CNC Credit Agreement. The Company placed an additional $1.0 million into the same restricted cash account in December 2020. The Company can borrow up to 97.5% of the total restricted cash amount. The restricted cash accrues interest at a variable rate currently averaging 0.25% per annum.
Financing costs related to the CNC Credit Agreement, net of accumulated amortization, of approximately $0.4 million, have been deferred over the initial term of the loan and are included in other assets as of December 31, 2020. The interest rate per annum applicable to borrowings under the CNC Credit Agreement is the LIBO plus 5.5%. The LIBO Rate is equal to the greater of (i) 1.75%, and (ii) the rate determined by the Agent to be equal to the quotient obtained by dividing (1) the LIBO Base Rate (i.e., the rate per annum determined by Agent to be the offered rate that appears on the applicable Bloomberg page) for the applicable LIBOR Loan for the applicable interest period by (2) one minus the Eurodollar Reserve Percentage (i.e., the reserve percentage in effect under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement with respect to Eurocurrency funding for the applicable LIBOR Loan for the applicable interest period). If adequate and reasonable means do not exist for ascertaining or the LIBOR rate is no longer available, the Company and the Agent may amend the CNC Credit Agreement to replace LIBOR with an alternate benchmark rate. If no LIBOR successor rate is determined, the obligation of the lenders to make or maintain LIBOR loans will be suspended and the LIBO Base Rate component will no longer be utilized in determining the base rate.
If, due to any circumstance affecting the London interbank market, the Agent determines that adequate and fair means do not exist for ascertaining the LIBO Rate on any applicable date (and such circumstances that are identified in the next two paragraphs below are not covered or governed by such provisions below), then until the Agent determines that such circumstance no longer exists, the obligation of lenders to make LIBOR Loans will be suspended and, if requested by the Agent, the Company must promptly, at its option, either (i) pay all such affected LIBOR Loans or (ii) convert such affected LIBOR Loans into loans that bear reference to the Base Rate plus the Applicable Margin.
If the Agent determines that for any reason (i) dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable loan amount or applicable interest period, (ii) adequate and reasonable means do not exist for determining the LIBO Rate for the applicable interest period, or (iii) LIBOR for the applicable interest period does not adequately and fairly reflect the cost to the lenders of funding a loan, then the lenders’ obligation to make or maintain LIBOR Loans will be suspended to the extent of the affected LIBOR Loan or interest period until all such loans are converted to loans bearing interest at the Base Rate (as defined below) plus the Applicable Margin (as specified below).
However, if Agent determines that (i) adequate and reasonable means do not exist for ascertaining LIBOR for any requested interest period and such circumstances are unlikely to be temporary; (ii) the administrator of the LIBOR screen rate or a governmental authority having jurisdiction over the Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR screen rate shall no longer be made available, or used for determining the interest rate of loans (“Scheduled Unavailability Date”); or (iii) syndicated loans currently being executed, or that include language similar to that contained in this paragraph are being executed or amended to incorporate or adopt a new benchmark interest rate to replace LIBOR, then, Agent and the Company may amend the CNC Credit Agreement to replace LIBOR with an alternate benchmark rate (“LIBOR Successor Rate”) and any such amendment will become effective unless lenders holding more than 50% in value of the loans or commitments under the CNC Credit Agreement do not accept such amendment. If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred, (x) the obligation of lenders to make or maintain LIBOR Loans will be suspended (to the extent of the affected LIBOR Loans or interest periods), and (y) the LIBO Base Rate component will no longer be utilized in determining the Base Rate. The Base Rate for any day is a fluctuating rate per annum equal to the highest of: (i) the Federal Funds Rate plus 1/2 of 1%; (ii) the rate of interest in effect for such day as publicly announced from time to time by JPMorgan Chase Bank, N.A. as its “prime rate” in effect for such day; or (iii) the most recently available LIBO Base Rate (as adjusted by any minimum LIBO Rate floor) plus 1%. The Applicable Margin is equal to 5.50%. The CNC Credit Agreement expires on March 26, 2023.
On April 16, 2020, the Company received a loan in the amount of approximately $1.38 million (“PPP Loan”) from PNC pursuant to the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration (“SBA”) under the CARES Act. The PPP Loan was granted pursuant to a Paycheck Protection Program Term Note dated April 16, 2020, issued by the Company (“PPP Note”).
On June 5, 2020 the Paycheck Protection Program Flexibility Act (“PPPFA”) was signed into law that contained important clarifications and modifications to the previous PPP loan rules under the CARES Act. These revisions provided that at least 60% of the PPP Loan proceeds must be used for payroll expenses. Also, all, or a portion of, the PPP Loan may be forgiven based on the sum of documented payroll costs, covered lease payments, covered mortgage interest and covered utilities during an eight-week or twenty-four-week period beginning on the date on which the PPP Loan was approved.
The PPP Note matures on April 16, 2022, and bears interest at a rate of 1.00% per annum. Principal and accrued interest are payable monthly in equal installments commencing November 15, 2020, unless the PPP Loan is forgiven as described below. The PPP Note may be prepaid at any time prior to maturity with no prepayment penalties. The PPP Note contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The proceeds from the PPP Loan could only be used to retain workers and maintain payroll or make mortgage interest, lease and utility payments. For purposes of the CARES Act, payroll costs excluded compensation of an individual employee in excess of $100,000, prorated annually. Not more than 40% of the forgiven amount could be for non-payroll costs. Forgiveness of the PPP Loan is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. The outstanding principal will be reduced in the event the Loan, or any portion thereof, is forgiven pursuant to the PPP. The Company originally applied for loan forgiveness on October 12, 2020, using the 8-week loan forgiveness methodology. Prior to final PNC Bank review acceptance and final submission to the SBA, the Company reapplied for loan forgiveness using the 24-week methodology on December 29, 2020. The loan forgiveness application was reviewed by PNC Bank and submitted to the SBA on December 30, 2020.
On January 13, 2021, the Company received a notice from PNC Bank regarding forgiveness of the loan in the principal amount of approximately $1.38 million that was made to the Company pursuant to the SBA PPP under the CARES Act of 2020. The notice states that SBA has remitted to PNC a loan forgiveness payment equal to $1.39 million, which constitutes full payment and forgiveness of the principal amount of the PPP loan and all accrued interest.
On June 10, 2020, the Company entered into a thirty-six-month equipment financing agreement (“Financing Agreement”) with Dimension Funding LLC. The Financing Agreement provides for an advance payment of approximately $170,000 to be used to secure furniture and fixtures for the Company’s new office location in Irvine, California. Payments of approximately $5,300 (inclusive of imputed interest) are made monthly under the Financing Agreement. As of December 31, 2020, the Company has paid approximately $45,000. The Financing Agreement will mature on December 31, 2022.
The Company’s future commitments under the Financing Agreement as of December 31, 2020, are as follows:
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Commitments and Contingencies |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Operating Leases
The Company adopted ASC 842, Leases, on January 1st, 2019. Consequently, financial information has not been updated for dates and periods before January 1, 2019. The Company determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. The Company has lease arrangements for certain equipment and facilities that typically have original terms not exceeding five years and, in some cases, contain automatic renewal provisions that provide for multiple year renewal terms unless either party, prior to the then-expiring term, notifies the other party of the intention not to renew the lease. The Company’s lease terms may also include options to terminate the lease when it is reasonably certain that the Company will exercise such options. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company had a weighted average remaining lease term of 3.0 years and a weighted average discount rate as determined by the Company CNC Credit Agreement of 6.25% as of December 31, 2020. The Company had a weighted average remaining lease term of 1.6 years and a weighted average discount rate of 5.5% as of December 31, 2019.
Lease Liabilities
Lease liabilities as of December 31, 2020, consist of the following:
The Company leases its facilities and certain office equipment under operating leases which expire on various dates through 2025. The Company’s future minimum lease payments on leases with non-cancelable terms in excess of one year were as follows (in thousands):
On March 11, 2020, the Company entered into a Lease Agreement (“New Irvine Lease”) with The Irvine Company LLC, pursuant to which the Company leases approximately 12,000 square feet of office space located in Irvine, California. The term of the New Irvine Lease commenced on August 1, 2020, and continues for a period of approximately five years, unless earlier terminated in accordance with the terms of the New Irvine Lease. The Company has the option to extend the term of the New Irvine Lease for one additional period of five years. The new office space replaced the Company’s prior, approximately 39,361 square feet of office space in Irvine, California, the lease for which expired July 31, 2020. The Company included the New Irvine Lease on its balance sheet and within the future minimum lease payment table above.
Operating lease cost was $1.7 million, $2.0 million and $1.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. In June 2017, the Company subleased one of its buildings to a third party for the remainder of the lease term which expired in February 2019. Rent expense for the years ended December 31, 2019 and 2018, is net of sublease income of $26,000 and $0.2 million, respectively.
Employment Agreements
The Company has employment agreements and retention agreements with certain key employees. A number of these agreements require severance payments, continuation of certain insurance benefits and acceleration of vesting of stock options in the event of a termination of employment without cause or for good reason.
Litigation
From time to time, the Company may be involved in litigation matters arising from the normal course of its business activities. Such litigation, even if not meritorious, could result in substantial costs and diversion of resources and management attention, and an adverse outcome in litigation could materially adversely affect its business, results of operations, financial condition and cash flows. The Company assesses the likelihood of any adverse judgments or outcomes of these matters as well as potential ranges of probable losses. The Company records a loss contingency when an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. The amount of allowances required, if any, for these contingencies is determined after analysis of each individual case. The amount of allowances may change in the future if there are new material developments in each matter. Gain contingencies are not recorded until all elements necessary to realize the revenue are present. Any legal fees incurred in connection with a contingency are expensed as incurred.
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Retirement Savings Plan |
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Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Retirement Savings Plan | The Company has a retirement savings plan which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended (“IRC”) (the “401(k) Plan”). The 401(k) Plan covers all employees of the Company who are over 21 years of age and is effective on the first day of the month following date of hire. Under the 401(k) Plan, participating employees are allowed to defer up to 100% of their pretax salaries not to exceed the maximum IRC deferral amount. The Company contributions to the 401(k) Plan are discretionary. The Company contribution for the year ended December 31, 2020, was $0.1 million. The Company contribution for the years ended December 31, 2019 and 2018, was $0.3 million each year.
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Stockholders' Equity |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stock-Based Incentive Plans
The Company has established plans that provide for stock-based awards (“Awards”), primarily in the form of stock options and restricted stock awards (“RSAs”), to employees, directors, and consultants. As of June 21, 2018, new Awards may only be granted under the 2018 Equity Incentive Plan, and as of December 31, 2020, an aggregate of approximately 2.5 million shares of Company common stock were available for granting of new Awards under the 2018 Equity Incentive Plan.
Share-based compensation expense is included in costs and expenses in the Consolidated Statements of Operations as follows:
During the year ended December 31, 2019 and 2018, certain Awards were modified or accelerated in connection with the termination of employment of certain former officers of the Company. In accordance with guidance provided under ASC 718 and related ASU No. 2017-09 and ASU No. 2018-07, the Company recognized Award modification and acceleration expenses related to these events in the period incurred. Modification expense was determined by using the Black-Scholes option pricing model to estimate the fair value of the modified awards as of the new measurement date and respective fair value assumptions. The Company recognized acceleration expense of $0.2 million and $2.1 million in the years ended December 31, 2019 and 2018, respectively. No awards were accelerated or modified for the year ended December 31, 2020.
As of December 31, 2020, 2019 and 2018, there was approximately $1.6 million, $3.0 million and $2.6 million, respectively, of unrecognized compensation expense related to unvested stock options. This expense is expected to be recognized over a weighted average period of approximately 1.5 years.
Stock Options
The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates. The expected risk-free interest rate is based on United States Treasury yield for a term consistent with the expected life of the stock option in effect at the time of grant. Expected volatility is based on the Company’s historical experience for a period equal to the expected life. The Company has used historical volatility because it has limited, or no options traded on its common stock to support the use of an implied volatility or a combination of both historical and implied volatility. The Company estimates the expected life of options granted based on historical experience, which it believes is representative of future behavior. The dividend yield is not considered in the option-pricing formula since the Company has not paid dividends in the past and has no current plans to do so in the future. The Company elected to estimate a forfeiture rate and is based on historical experience and is adjusted based on actual experience.
The Company grants its options at exercise prices that are not less than the fair market value of the Company’s common stock on the date of grant. Stock options generally have a seven or ten-year maximum contractual term and generally vest one-third on the first anniversary of the grant date and ratably over twenty-four months, thereafter. The vesting of certain stock options is contingent upon the employees continued employment with the Company during the vesting period and vesting may be accelerated under certain conditions, including upon a change in control of the Company, termination without cause of an employee and voluntary termination by an employee with good reason.
Awards granted under the Company’s stock option plans were estimated to have a weighted average grant date fair value per share of $1.27, $1.77 and $1.75 for the years ended December 31, 2020, 2019 and 2018, respectively, based on the Black-Scholes option-pricing model on the date of grant using the following weighted average assumptions:
A summary of the Company’s outstanding stock options as of December 31, 2020, and changes during the year then ended is presented below:
Service-Based Options. During the years ended December 31, 2020, 2019 and 2018, the Company granted 635,000, 1,697,883, and 2,056,700 service-based stock options, which had weighted average grant date fair values of $1.27, $1.77, and $1.75, respectively.
Stock option exercises. During 2020, there were 22,373 options exercised, with an aggregate weighted average exercise price of $3.35. During 2019, there were 213,048 options exercised, with an aggregate weighted average exercise price of $1.92. During 2018, 28,467 options were exercised, with an aggregate weighted average exercise price of $3.39. The total intrinsic value of options exercised during 2020 is de minimis. The total intrinsic value of options exercised during 2019 and 2018 was $0.5 million and $0.1 million, respectively.
In April 2018, the Company entered into an Inducement Stock Option Award Agreement with the Company’s chief executive officer, Jared Rowe (“Rowe Option Award Agreement”). Pursuant to the Rowe Option Award Agreement, Mr. Rowe was granted stock options to purchase 1,000,000 shares of common stock (“Rowe Employment Options”), which will vest monthly in 36 monthly installments on the first day of each calendar month following the date of grant. These options have an exercise price of $3.26 per share and a term of seven years from the date of grant. Upon a change in control of the Company or in the event of a termination of Mr. Rowe’s employment by the Company without cause or by Mr. Rowe with good reason, all unvested options will vest. In the event of a termination of Mr. Rowe’s employment with the Company by reason of Mr. Rowe’s death or disability, the lesser of: (i) one-third of the total number of these options and (ii) the total number of unvested options will vest upon the date of termination.
Market Condition Options. On January 21, 2016, the Company granted 100,000 stock options to its former chief executive officer (“Former CEO”) with an exercise price of $17.09 and grant date fair value of $1.47 per option, using a Monte Carlo simulation model (“Former CEO Market Condition Options”). The Former CEO Market Condition Options were previously valued at $2.94 per option but were revalued when the requisite stockholder approval for the Company’s Amended and Restated 2014 Equity Incentive Plan was obtained in June 2016. The Former CEO Market Condition Options were subject to both stock price-based and service-based vesting requirements. On April 12, 2018, pursuant to the stock option award agreement, vesting of then-unvested Former CEO Market Condition Options was accelerated with the termination of employment of the Former CEO, resulting in the recognition of approximately $0.8 million of non-recurring share-based compensation expense during the first quarter of 2018.
Market Condition Options. In August 2019, the Company awarded a total of 455,000 stock options of the Company’s common stock to certain officers under the 2018 Equity Incentive Plan. In addition to the service-based vesting described above, vesting of these options is subject to the achievement of a performance condition based on the weighted average closing price of the Company’s common stock on The Nasdaq Capital Market reaching Five Dollars ($5.00) for 10 consecutive trading days. The weighted average grant date fair value of these stock options was $1.69.
Restricted Stock Awards. The Company granted an aggregate of 125,000 RSAs on April 23, 2015, in connection with the promotion of one of its executive officers. Of these 125,000 RSAs, 25,000 were service-based and 100,000 were performance-based. The forfeiture restrictions of the service-based RSAs lapse with respect to one-third of the restricted stock on each of the first, second, and third anniversaries of the date of the award. Forfeiture restrictions lapsed on 8,333 shares and 8,333 shares of restricted stock on April 23, 2016 and April 23, 2017, respectively. During the year ended December 31, 2018, 8,333 of the foregoing service-based RSAs and 100,000 of the performance-based RSAs were forfeited upon the resignation of this executive officer.
The Company granted an aggregate of 345,000 RSAs on September 27, 2017, to senior officers of the Company. These RSAs are service-based and the forfeiture restrictions lapse with respect to one-third of the restricted stock on each of the first, second, and third anniversaries of the date of the award. During the year ended December 31, 2018, 80,000 shares of RSAs were forfeited upon the resignation of two executive officers, the forfeiture restrictions on 175,000 shares of RSA lapsed upon the termination of employment of the Former CEO and three officers of the Company, and the forfeiture restrictions on 40,000 shares of RSAs were modified upon the entry into a consulting agreement with a former executive officer (with 26,666 of these 40,000 shares being forfeited in 2019). The Company recognized expense of $0.8 million related to the acceleration of vesting and modification of these RSAs during the year ended December 31, 2018. During the year ended December 31, 2019, the forfeiture restrictions on 3,333 shares of RSA lapsed upon the termination of employment of a former officer of the Company, and the Company recognized a de minimis amount of expense related to the acceleration of vesting of these RSAs during the year ended December 31, 2019. As of December 31, 2020, the Company does not have any unvested RSAs.
Options and Warrants Outstanding and Shares Available for New Awards Under Stockholder-Approved Plans
As of December 31, 2020, the Company had outstanding the following options and warrants to purchase shares of common stock and shares available for new Awards under stockholder-approved plans:
Tax Benefit Preservation Plan
The Company’s Tax Benefit Preservation Plan dated as of May 26, 2010 between AutoWeb and Computershare Trust Company, N.A., as rights agent, as amended by Amendment No. 1 to Tax Benefit Preservation Plan dated as of April 14, 2014, Amendment No. 2 to Tax Benefit Preservation Plan dated as of April 13, 2017, Amendment No. 3 to Tax Benefit Preservation Plan dated as of March 31, 2020, and Certificate of Adjustment Under Section 11(m) of the Tax Benefit Preservation Plan dated July 12, 2012 (collectively, the “Tax Benefit Preservation Plan”) was adopted by the Company’s Board of Directors to protect stockholder value by preserving the Company’s net operating loss carryovers and other tax attributes that the Tax Benefit Preservation Plan is intended to preserve (“Tax Benefits”). Under the Tax Benefit Preservation Plan, rights to purchase capital stock of the Company (“Rights”) have been distributed as a dividend at the rate of five Rights for each share of common stock. Each Right entitles its holder, upon triggering of the Rights, to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock of the Company at a price of $20.00 (as such price may be adjusted under the Tax Benefit Preservation Plan) or, in certain circumstances, to instead acquire shares of common stock. The Rights will convert into a right to acquire common stock or other capital stock of the Company in certain circumstances and subject to certain exceptions. The Rights will be triggered upon the acquisition of 4.9% or more of the Company’s outstanding common stock or future acquisitions by any existing holder of 4.9% or more of the Company’s outstanding common stock. If a person or group acquires 4.9% or more of the Company’s common stock, all rights holders, except the acquirer, will be entitled to acquire, at the then exercise price of a Right, that number of shares of the Company common stock which, at the time, has a market value of two times the exercise price of the Right. The Rights will expire upon the earliest of: (i) the close of business on May 26, 2023 unless that date is advanced or extended, (ii) the time at which the Rights are redeemed or exchanged under the Tax Benefit Preservation Plan, (iii) the repeal of Section 382 or any successor statute if the Board determines that the Tax Benefit Preservation Plan is no longer necessary for the preservation of the Company’s Tax Benefits, (iv) the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward, or (v) such time as the Board determines that a limitation on the use of the Tax Benefits under Section 382 would no longer be material to the Company. The Tax Benefit Preservation Plan was reapproved by the Company’s stockholders at the Company’s 2020 Annual Meeting of Stockholders and will expire on May 26, 2023 unless that date is advanced or extended by the Company’s Board of Directors.
Warrant
On October 1, 2015 (“AWI Merger Date”), AutoWeb entered into and consummated an Agreement and Plan of Merger by and among AutoWeb, New Horizon Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of AutoWeb (“Merger Sub”), Autobytel, Inc. (formerly AutoWeb, Inc.), a Delaware corporation (“AWI”), and Jose Vargas, in his capacity as Stockholder Representative. On the AWI Merger Date, Merger Sub merged with and into AWI, with AWI continuing as the surviving corporation and as a wholly owned subsidiary of AutoWeb. AWI was a privately owned company providing an automotive search engine that enables Manufacturers and Dealers to optimize advertising campaigns and reach highly targeted car buyers through an auction-based click marketplace. Prior to the acquisition, the Company previously owned approximately 15% of the outstanding shares of AWI, on a fully converted and diluted basis, and accounted for the investment on the cost basis.
The warrant to purchase up to 148,240 shares of Series B Preferred Stock issued in connection with the acquisition of AWI (“AWI Warrant”) was valued at $1.72 per share for a total value of $2.5 million. The Company used an option pricing model to determine the value of the AWI Warrant. Key assumptions used in valuing the AWI Warrant are as follows: risk-free rate of 1.9%, stock price volatility of 74.0% and a term of 7.0 years. The AWI Warrant was valued based on long-term stock price volatilities of the Company’s common stock. On June 22, 2017, the Company received stockholder approval which resulted in the automatic conversion of the AWI Warrant into warrants to acquire up to 1,482,400 shares of the Company’s common stock at an exercise price of $18.45 per share of common stock. The AWI Warrant became exercisable on October 1, 2018, subject to the following vesting conditions: (i) with respect to the first one-third of the warrant shares, if at any time after the issuance date of the AWI Warrant and prior to the expiration date of the AWI Warrant the Weighted Average Closing Price of the Company’s common stock is at or above $30.00; (ii) with respect to the second one-third of the warrant shares, if at any time after the issuance date of the AWI Warrant and prior to the expiration date the Weighted Average Closing Price is at or above $37.50; and (iii) with respect to the last one-third of the warrant shares, if at any time after the issuance date of the AWI Warrant and prior to the expiration date the Weighted Average Closing Price is at or above $45.00. The AWI Warrant expires on October 1, 2022.
Stock Repurchase
On June 7, 2012, September 17, 2014 and September 6, 2017, the Company announced that its Board of Directors had authorized the Company to repurchase up to $2.0 million, $1.0 million and $3.0 million of the Company’s common stock, respectively. Under these repurchase programs, the Company may repurchase common stock from time to time on the open market or in private transactions. These authorizations do not require the Company to purchase a specific number of shares, and the Board of Directors may suspend, modify or terminate the programs at any time. The Company will fund future repurchases through the use of available cash. No shares were repurchased in 2020 or 2019. As of December 31, 2020, $2.3 million remains available for stock repurchases under the program.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | The components of income (loss) before income tax provision are as follows for the years ended December 31:
Income tax expense (benefit) from continuing operations consists of the following for the years ended December 31:
The reconciliations of the U.S. federal statutory rate to the effective income tax rate for the years ended December 31, 2020, 2019 and 2018, are as follows:
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31, 2020 and 2019 are as follows:
On December 22, 2017, the U.S. government enacted comprehensive tax legislation known as the TCJA. The TCJA established new tax laws that will take effect in 2018, including, but not limited to (i) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (ii) elimination of the corporate AMT; (iii) a new limitation on deductible interest expense; (iv) the Transition Tax; (v) limitations on the deductibility of certain executive compensation; (vi) changes to the bonus depreciation rules for fixed asset additions; and (vii) limitations on NOLs generated after December 31, 2017, to 80% of taxable income.
ASC 740, “Income Taxes,” requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the TCJA’s provisions, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740.
In 2017, we recorded provisional amounts for certain enactment date effects of the TCJA, for which the accounting had not been finalized, by applying the guidance in SAB 118. At December 31, 2017, the Company recorded a decrease in deferred tax assets and deferred tax liabilities of $11.7 million and $0.0 million, respectively, with a corresponding net adjustment to deferred income tax expense of $11.7 million for the year ended December 31, 2017. In addition, the Company recognized a deemed repatriation of $0.6 million of deferred foreign income from its Guatemala subsidiary, which did not result in any incremental tax cost after application of foreign tax credits. Accordingly, the Company completed our accounting for the effects of the TCJA in 2018 and did not recognize any material adjustments to the 2017 provisional income tax expense.
The TCJA created a provision known as GILTI that imposes a U.S. tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold. The Company has made an accounting policy election to reflect GILTI taxes, if any, as a current income tax expense in the period incurred.
During 2020 and 2019, the Company continued to experience losses and is not projecting taxable income in the near future. Based on this evaluation, the Company recorded an additional valuation allowance of $0.7 million and $2.5 million against its deferred tax assets during the years ended 2020 and 2019, respectively. Based on the weight of available evidence, the Company believes that it is more likely than not that these deferred tax assets will not be realized.
In response to the coronavirus pandemic, the CARES Act was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the TCJA. Corporate taxpayers may carryback net operating losses (“NOL’s”) originating during 2018 through 2020 for up to five years, which was not previously allowed under the TCJA. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020.
Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the TCJA) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the TCJA. The enactment of the CARES Act did not result in any material adjustments to the Company’s income tax provision for the year ended December 31, 2020, or to its net deferred tax assets as of December 31, 2020.
The CARES Act lifts certain deduction limitations originally imposed by the TCJA. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years, which was not previously allowed under the TCJA. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020.
On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (the “Act”). The Act enhances and expands certain provisions of the CARES Act. The Act permits taxpayers whose PPP loans are forgiven to deduct the expenses relating to their loans to the extent they would otherwise qualify as ordinary and necessary business expenses. This rule applies retroactively to the effective date of the CARES Act, so that expenses paid using funds from PPP loans previously issued under the CARES Act are deductible, regardless of when the loan was forgiven. The Company’s $1.4M PPP loan was completely forgiven in January 2021 and the expenses are currently deductible on the Company’s 2020 Federal tax return.
On December 31, 2020, the Company had federal and state NOLs of approximately $104.1 million and $48.9 million, respectively. $30.0 million of the federal NOLs have an indefinite life and do not expire. The remaining $74.1 million of the federal and all of the state NOLs expire through 2035 and 2040, respectively, as follows:
The federal NOLs expire through 2035 as follows (in millions):
The state NOLs expire through 2040 as follows (in millions):
Utilization of the NOLs and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the IRC, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. A Section 382 ownership change occurred in 2006 and any changes have been reflected in the NOLs presented above as of December 31, 2020.
The federal and state NOLs begin to expire in 2025 and 2028, respectively. Approximately $10.8 million and $5.0 million, respectively, of the federal and state NOLs were incurred by subsidiaries prior to the date of the Company’s acquisition of such subsidiaries. The Company established a valuation allowance of $4.1 million at the date of acquisitions related to these subsidiaries. The tax benefits associated with the realization of such NOLs was credited to the provision for income taxes.
At December 31, 2020, the Company has state research and development tax credit carryforwards of $0.2 million. The previous federal tax credits have been written off in the current year and the state credits do not expire.
As of December 31, 2020, and 2019, the Company had unrecognized tax benefits of approximately $0.2 million and $0.5 million, respectively, all of which, if subsequently recognized, would have affected the Company’s tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The Company is subject to taxation in the United States and various foreign and state jurisdictions. In general, the Company is no longer subject to U.S. federal and state income tax examinations for years prior to 2017 and 2016, respectively (except for the use of tax losses generated prior to 2017 that may be used to offset taxable income in subsequent years). The Company does not anticipate a significant change to the total amount of unrecognized tax benefits within the next twelve months.
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company has not accrued any interest associated with its unrecognized tax benefits in the years ended December 31, 2020 and 2019.
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Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | The following table presents quarterly unaudited consolidated financial information for the eight quarters preceding December 31, 2020. Such information is presented on the same basis as the annual information presented in the accompanying consolidated financial statements. In management’s opinion, this information reflects all normal recurring adjustments that are necessary for a fair statement of the results for these periods.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
The Company accounts for comprehensive income in accordance with ASC 220 (“Comprehensive Income”), which specifies the computation, presentation, and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no other comprehensive income.
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Use of Estimates in the Preparation of Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, allowances for bad debts and customer credits, useful lives of depreciable assets and capitalized software costs, long-lived asset impairments, goodwill and purchased intangible asset valuations, accrued liabilities, contingent payment provisions, debt valuation and valuation allowance for deferred tax assets, warrant valuation and stock-based compensation expense. Actual results could differ from those estimates.
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Cash and Cash Equivalents | For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, the Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents represent amounts held by the Company for use by the Company and are recorded at cost, which approximates fair value.
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Restricted Cash | For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, restricted cash primarily consists of cash pledged pursuant to the CNC Credit Agreement (See Note 7).
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Accounts Receivable | Credit is extended to customers based on an evaluation of the customer’s financial condition, and when credit is extended, collateral is generally not required. Interest is not normally charged on receivables.
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Allowances for Bad Debts and Customer Credits | The allowance for bad debts is an estimate of bad debt expense that could result from the inability or refusal of customers to pay for services. Additions to the estimated allowance for bad debts are recorded to general and administrative expenses and are based on factors such as historical write-off percentages, the current business environment and known concerns within the current aging of accounts receivable. Reductions in the estimated allowance for bad debts due to subsequent cash recoveries are recorded as a decrease in general and administrative expenses. As specific bad debts are identified, they are written off against the previously established estimated allowance for bad debts with no impact on operating expenses.
The allowance for customer credits is an estimate of adjustments for services that do not meet the customer requirements. Additions to the estimated allowance for customer credits are recorded as a reduction of revenues and are based on the Company’s historical experience of: (i) the amount of credits issued; (ii) the length of time after services are rendered that the credits are issued; (iii) other factors known at the time; and (iv) future expectations. Reductions in the estimated allowance for customer credits are recorded as an increase in revenues. As specific customer credits are identified, they are written off against the previously established estimated allowance for customer credits with no impact on revenues.
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Fair Value of Financial Instruments | The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
Cash equivalents, restricted cash, accounts receivable, net of allowance, accounts payable and accrued liabilities, are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments.
The Company’s investments during the year ended December 31, 2018, consisted of an investment in GoMoto and SaleMove which were accounted for under the cost method. On July 30, 2019, the Company entered into a Repurchase Agreement with GoMoto, pursuant to which GoMoto repurchased these 317,460 shares of Series Seed Preferred Stock and 1,781,047 shares of Series A-2 Preferred Stock from the Company for an aggregate purchase price of $250,000. During the year ended December 31, 2018, the Company sold its interest back to SaleMove for $0.1 million. See Note 5 for further discussion.
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Concentration of Credit Risk and Risks Due to Significant Customers | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents are primarily maintained with two financial institutions in the United States. Deposits held by banks exceed the amount of insurance provided for such deposits. Generally, these deposits may be redeemed upon demand.
If there is a decline in the general economic environment that negatively affects the financial condition of the Company’s customers or an increase in the number of customers that are dissatisfied with their services, additional estimated allowances for bad debts and customer credits may be required, and the impact on the Company’s business, results of operations, financial condition, earnings per share, cash flow or the trading price of the Company’s stock could be material.
The Company has a concentration of credit risk with the Company’s automotive industry related accounts receivable balances, particularly with Carat Detroit (General Motors), Ford Direct, Urban Science Applications (which represents several Manufacturer programs) and Autodata Solutions. During 2020, approximately 46% of the Company’s total revenues were derived from these four customers, and approximately 62% or $8.6 million of gross accounts receivable related to these four customers at December 31, 2020. Carat Detroit accounted for 12% and 19% of total revenues and accounts receivable, respectively, as of December 31, 2020. Ford Direct accounted for 11% and 16% of total revenues and accounts receivable, respectively, as of December 31, 2020. Urban Science Applications accounted for 12% and 15% of total revenues and accounts receivable, respectively, as of December 31, 2020. Autodata Solutions accounted for 11% and 12% of total revenues and accounts receivable, respectively, as of December 31, 2020.
During 2019, approximately 25% of the Company’s total revenues were derived from Urban Science Applications and Carat Detroit. Approximately 33% or $8.4 million of gross accounts receivable related to these two customers at December 31, 2019. Urban Science Applications accounted for 15% and 13% of total revenues and accounts receivable, respectively, as of December 31, 2019. Carat Detroit accounted for 9% and 21% of total revenues and accounts receivable, respectively, as of December 31, 2019.
During 2018, approximately 37% of the Company’s total revenues were derived from Urban Science Applications (which represents several Manufacturer programs), General Motors and media.net Advertising and approximately 41% or $11.2 million of gross accounts receivable related to these three customers at December 31, 2018. Urban Science Applications accounted for 18% and 21% of total revenues and accounts receivable, respectively, as of December 31, 2018. Media.net Advertising accounted for 10% and 6% of total revenues and accounts receivable, respectively, as of December 31, 2018. General Motors accounted for 9% and 13% of total revenues and accounts receivable, respectively, as of December 31, 2018.
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Property and Equipment | Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, generally three years. Amortization of leasehold improvements is provided using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Repair and maintenance costs are charged to operating expenses as incurred. Gains or losses resulting from the retirement or sale of property and equipment are recorded as operating income, respectively.
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Operating Leases | The Company leases office space and certain office equipment under operating lease agreements which expire on various dates through 2025, with options to renew on expiration of the original lease terms. These operating lease agreements include one material related-party agreement, whereby the Company incurred $0.1 million of operating lease payments during 2020.
The lease term begins on the date of initial possession of the leased property for purposes of recognizing rent expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. |
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Capitalized Internal Use Software and Website Development Costs | The Company capitalizes costs to develop internal use software in accordance with ASC 350-40, “Internal-Use Software,” and ASC 350-50, “Website Development Costs,” which require the capitalization of external and internal computer software costs and website development costs, respectively, incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized internal use software development costs are amortized using the straight-line method over an estimated useful life of three to five years. Capitalized website development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of the related websites. The Company placed in service $1.5 million and $0.4 million of such costs for the years ended December 31, 2020 and 2019, respectively.
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Indefinite-lived intangible assets | Indefinite-lived intangible assets consist of a domain name, which was acquired as part of the Dealix/Autotegrity acquisition in 2015, which is tested for impairment annually, or more frequently if an event occurs or circumstances changes that would indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, the Company may first perform a qualitative analysis to determine whether it is more-likely-than-not that the indefinite-lived intangible assets are impaired. If the Company does not perform the qualitative assessment, or if the Company determines that it is more-likely-than-not that the fair value of the indefinite-lived intangible asset exceeds its carrying amount, the Company will calculate the estimated fair value of the indefinite-lived intangible asset. Fair value is the price a willing buyer would pay for the indefinite-lived intangible asset and is typically calculated using an income approach. If the carrying amount of the indefinite-lived intangible asset exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value.
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Impairment of Long-Lived Assets and Intangible Assets | The Company periodically reviews long-lived amortizing assets to determine if there is any impairment of these assets. The Company assesses the impairment of these assets, or the need to accelerate amortization, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the long-lived assets and other intangibles. Future events could cause the Company to conclude that impairment indicators exist and that the assets should be reviewed to determine their fair value. The Company assesses the assets for impairment based on the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Fair value is generally determined based on a valuation process that provides an estimate of a fair value of these assets using a discounted cash flow model, which includes many assumptions and estimates. Once the valuation is determined, the Company would write-down these assets to their determined fair value, if necessary. Any write-down could have a material adverse effect on the Company’s financial condition and results of operations. In 2018, the Company recorded impairments totaling $11.0 million, primarily attributable to a $9.0 million charge due to the Company’s decision to terminate the support provisions of the DealerX License Agreement, which significantly impacted the usability of the asset. The remaining $2.0 million is comprised of a $1.6 million customer relationships impairment related to a 2015 acquisition after determining that a significant percentage of acquired customers were no longer part of the dealer base, and the write-off of $0.4 million in cash advances to SaleMove. The Company did not record any impairment of long-lived assets and intangible assets in 2020 and 2019, respectively.
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Goodwill | Goodwill represents the excess of the purchase price for business acquisitions over the fair value of identifiable assets and liabilities acquired. The Company evaluates the carrying value of enterprise goodwill for impairment by comparing the enterprise’s carrying value to its fair value. If the fair value is less than the carrying value, enterprise goodwill is potentially impaired. The Company evaluates enterprise goodwill, at a minimum, on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances suggest that the carrying amount of goodwill may be impaired. The Company recorded goodwill impairment of $5.1 million in 2018.
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Cost of Revenues | Cost of revenues consists of Lead and traffic acquisition costs and other cost of revenues. Lead and traffic acquisition costs consist of payments made to the Company’s Lead providers, including internet portals and on-line automotive information providers. Other cost of revenues consists of search engine marketing (“SEM”) and fees paid to third parties for data and content, including search engine optimization (“SEO”) activity, included on the Company’s properties, connectivity costs and development costs related to the Company Websites, compensation related expense and technology license fees, server equipment depreciation and technology amortization directly related to Company Websites. SEM, sometimes referred to as paid search marketing, is the practice of bidding on keywords on search engines to drive traffic to a website.
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Income Taxes | The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance, if necessary, to reduce deferred tax assets to an amount it believes is more-likely-than-not to be realized.
ASC 740, “Income Taxes”, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the Tax Cuts and Jobs Act of 2017 (“TCJA”) provisions, the staff of the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740.
In 2017, the Company recorded provisional amounts for certain enactment-date effects of the TCJA, for which the accounting had not been finalized, by applying the guidance in SAB 118. The Company recorded a decrease in deferred tax assets of $11.7 million, with a corresponding net adjustment to deferred income tax expense of $11.7 million for the year ended December 31, 2017. In addition, the Company recognized a deemed repatriation of $0.6 million of deferred foreign income from its Guatemala subsidiary, which did not result in any incremental tax cost after application of foreign tax credits. Accordingly, the Company completed accounting for the effects of the TCJA in 2018 and did not recognize any material adjustments to the 2017 provisional income tax expense.
The TCJA created a provision known as global intangible low-tax income (“GILTI”) that imposes a U.S. tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold. We have made an accounting policy election to reflect GILTI taxes, if any, as a current income tax expense in the period incurred.
In response to the coronavirus pandemic, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the TCJA. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years, which was not previously allowed under the TCJA. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020.
Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the TCJA) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the TCJA. The enactment of the CARES Act did not result in any material adjustments to the Company’s income tax provision for the year ended December 31, 2020, or to its net deferred tax assets as of December 31, 2020.
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Computation of Basic and Diluted Net Earnings (Loss) per Share | Basic net earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per share is computed using the weighted-average number of common shares, and if dilutive, potential common shares outstanding, as determined under the treasury stock and if-converted method, during the period. Potential common shares consist of unvested restricted stock, common shares issuable upon the exercise of stock options, the exercise of warrants, and conversion of convertible notes.
The following are the share amounts utilized to compute the basic and diluted net earnings (loss) per share for the years ended December 31:
For the years ended December 31, 2020, 2019 and 2018, basic and diluted weighted average shares are the same as the Company generated a net loss for the period and potentially dilutive securities are excluded because they have an anti-dilutive impact.
Potentially dilutive securities representing approximately 3.8 million, 4.4 million, and 3.5 million shares of common stock for the years ended December 31, 2020, 2019, and 2018, respectively, were excluded from the computation of diluted income per share for these periods because their effect would have been anti-dilutive.
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Share-Based Compensation | The Company grants stock-based awards (“Awards”) primarily in the form of stock options and restricted stock awards (“RSAs”) under several of its stock-based compensation Plans (the “Plans”), that are more fully described in Note 10. The Company recognizes share-based compensation based on the Awards’ fair value, net of estimated forfeitures on a straight-line basis over the requisite service periods, which is generally over the awards’ respective vesting period, or on an accelerated basis over the estimated performance periods for options with performance conditions.
Restricted stock fair value is measured on the grant date based on the quoted market price of the Company’s common stock, and the stock option fair value is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates.
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Business Segment | The Company conducts its business within the United States and within one business segment which is defined as providing automotive and marketing services. The Company’s operations are aggregated into a single reportable operating segment based upon similar economic and operating characteristics as well as similar markets.
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Advertising Expense | Advertising costs are expensed in the period incurred and the majority of advertising expense is recorded in sales and marketing expense. Advertising expense in the years ended December 31, 2020, 2019 and 2018 was $0.3 million, $0.6 million and $1.4 million, respectively.
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Recent Accounting Pronouncements | The Company has reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted net earnings (loss) per share |
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Revenue Recognition (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue |
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Selected Balance Sheet Accounts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
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Amortization of intangible assets, estimated useful lives |
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Amortization expense |
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Accrued expenses and other current liabilities |
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||
Debt |
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Commitments and Contingencies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Lease liabilities |
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Future minimum lease payments |
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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense included in costs and expenses |
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Fair value of stock options granted using the following weighted average assumptions |
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Outstanding stock options |
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Shares reserved for issuance |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income (loss) before income tax provision |
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Income tax expense (benefit) from continuing operations |
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The reconciliations of the U.S. federal statutory rate to the effective income tax rate |
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Deferred income taxes |
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Federal and state net operating loss carry-forwards | The federal NOLs expire through 2035 as follows (in millions):
The state NOLs expire through 2040 as follows (in millions):
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A reconciliation of the beginning and ending amount of unrecognized tax benefits |
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Selected Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial information |
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS |
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Organization and Operations of Autobytel (Details Narrative) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Date of incorporation | May 17, 1996 |
Auto USA | |
Date of acquisition | Jan. 13, 2014 |
Car.com | |
Date of acquisition | Dec. 19, 2016 |
Autoweb | |
Date of acquisition | Oct. 01, 2015 |
Dealix/Autotegrity | |
Date of acquisition | May 21, 2015 |
Auto Holdings | |
Date of acquisition | Apr. 27, 2015 |
Summary of Significant Accounting Policies (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Weighted average common shares outstanding, basic | |||
Weighted average common shares outstanding, basic | 13,144,314 | 13,070,898 | 12,756,191 |
Weighted average common shares outstanding, basic, repurchased | 0 | 0 | 0 |
Weighted average common shares outstanding, basic, total | 13,144,314 | 13,070,898 | 12,756,191 |
Weighted average dilutive securities | |||
Weighted average common shares outstanding, basic | 13,144,314 | 13,070,898 | 12,756,191 |
Weighted average dilutive securities (in shares) | 0 | 0 | 0 |
Dilutive Shares (in shares) | 13,144,314 | 13,070,898 | 12,756,191 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Accounting Policies [Abstract] | |||
Capitalized software and website development costs | $ 1,500 | $ 400 | $ 500 |
Antidilutive shares excluded for EPS computation | 3,800,000 | 4,400,000 | 3,500,000 |
Advertising expense | $ 300 | $ 600 | $ 1,400 |
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenue Recognition [Abstract] | |||||||||||
Lead fees | $ 61,114 | $ 90,728 | $ 96,936 | ||||||||
Advertising - Clicks | 13,058 | 19,599 | 23,387 | ||||||||
Advertising - Display and other advertising | 2,383 | 3,574 | 4,782 | ||||||||
Advertising - Other | 15 | 80 | 484 | ||||||||
Revenues | $ 17,252 | $ 17,813 | $ 17,033 | $ 24,472 | $ 26,687 | $ 28,552 | $ 27,142 | $ 31,604 | $ 76,570 | $ 113,981 | $ 125,589 |
Selected Balance Sheet Accounts (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Property and Equipment | ||
Computer software and hardware | $ 4,940 | $ 11,267 |
Capitalized internal use software | 7,391 | 5,878 |
Furniture and equipment | 935 | 1,743 |
Leasehold improvements | 884 | 1,613 |
Construction in progress | 805 | 1,537 |
Property and equipment, gross | 14,955 | 22,038 |
Less - Accumulated depreciation and amortization | (12,002) | (18,689) |
Property and equipment, net | $ 2,953 | $ 3,349 |
Selected Balance Sheet Accounts (Details 2) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Amortization expense for the remainder of the year and for the next five years | |
2021 | $ 1,499 |
2022 | 902 |
2023 | 86 |
2024 | 46 |
Total | $ 2,533 |
Selected Balance Sheet Accounts (Details 3) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Accrued employee-related benefits | $ 2,123 | $ 1,351 |
Other accrued expenses and other current liabilities: | ||
Other accrued expenses | 143 | 532 |
Amounts due to customers | 94 | 354 |
Other current liabilities | 301 | 750 |
Total other accrued expenses and other current liabilities | 538 | 1,636 |
Total accrued expenses and other current liabilities | $ 2,661 | $ 2,987 |
Selected Balance Sheet Accounts (Details Narrative) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Balance Sheet Related Disclosures [Abstract] | |||
Amortization expense | $ 2,400 | $ 4,900 | $ 8,100 |
Debt (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2021 | $ 65 |
2022 | 60 |
Total financing debt | $ 125 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Current portion of lease liabilities | $ 1,015 | $ 1,167 |
Long-term lease liabilities, net of current portion | 2,191 | $ 1,497 |
Total lease liabilities | $ 3,206 |
Commitments and Contingencies (Details 1) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 1,187 |
2022 | 881 |
2023 | 797 |
2024 | 528 |
2025 | 196 |
Total | 3,589 |
Less imputed interest | 383 |
Total lease liabilities | $ 3,206 |
Commitments and Contingencies (Detail Narrative) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense included in operating expenses | $ 1,700 | $ 2,000 | $ 1,700 |
Retirement Savings Plan (Details Narrative) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Postemployment Benefits [Abstract] | |||
Employer Discretionary Contribution Amount | $ 100 | $ 300 | $ 300 |
Stockholders' Equity (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation | |||
Share-based compensation costs | $ 1,984 | $ 2,402 | $ 4,867 |
Amount capitalized to internal use software | 0 | 0 | 1 |
Total share-based compensation costs | 1,984 | 2,402 | 4,866 |
Cost of Revenues | |||
Share-based Compensation | |||
Share-based compensation costs | 0 | 0 | 23 |
Sales and Marketing | |||
Share-based Compensation | |||
Share-based compensation costs | 116 | 304 | 982 |
Technology Support | |||
Share-based Compensation | |||
Share-based compensation costs | 81 | 197 | 1,247 |
General and Administrative | |||
Share-based Compensation | |||
Share-based compensation costs | $ 1,787 | $ 1,901 | $ 2,615 |
Stockholders' Equity (Details 1) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Fair value of stock options granted using the following weighted average assumptions | |||
Expected volatility | 74.00% | 65.00% | 68.00% |
Expected risk-free interest rate | 0.90% | 2.20% | 2.60% |
Expected life (years) | 4 years 7 months 6 days | 4 years 4 months 24 days | 4 years 6 months |
Stockholders' Equity (Details 3) - shares |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Share-based Payment Arrangement [Abstract] | |||
Stock options outstanding | 3,758,670 | 4,361,606 | 3,346,066 |
Authorized for future grants under stock-based incentive plans | 2,497,070 | ||
Reserved for exercise of warrants | 1,482,400 | ||
Total reserved for future issuance | 7,738,140 |
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Unrecognized compensation expense | $ 1,600 | $ 3,000 | $ 2,600 |
Options granted (in shares) | 635,000 | 1,697,883 | 2,056,700 |
Options, weighted average fair value at grant date | $ 1.27 | $ 1.77 | $ 1.75 |
Equity Incentive Plan 2018 | |||
Shares reserved for future issuance | 25,000,000 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Total income (loss) before income tax provision | $ (6,810) | $ (15,219) | $ (38,822) |
United States | |||
Total income (loss) before income tax provision | (7,089) | (15,647) | (39,334) |
International | |||
Total income (loss) before income tax provision | $ 279 | $ 428 | $ 512 |
Income Taxes (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
Current income tax expense (benefit), Federal | $ 0 | $ 0 | $ 32 |
Current income tax expense (benefit), State | 10 | 10 | (6) |
Current income tax expense (benefit), Foreign | 0 | 0 | 0 |
Total current income tax expense (benefit) | 10 | 10 | 26 |
Deferred income tax expense (benefit), Federal | (562) | (2,065) | (6,213) |
Deferred income tax expense (benefit), State | (159) | (417) | (1,188) |
Deferred income tax expense (benefit), Foreign | 0 | 0 | 0 |
Total deferred income tax expense (benefit) | (721) | (2,482) | (7,401) |
Change in federal tax rate | 0 | 0 | 0 |
Valuation allowance | 721 | 2,482 | 7,369 |
Total income tax expense (benefit) | $ 10 | $ 10 | $ (6) |
Income Taxes (Details 2) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
The reconciliations of the U.S. federal statutory rate to the effective income tax rate | |||
Tax provision at U.S. federal statutory rates | 21.00% | 21.00% | 21.00% |
State income taxes net of federal benefit | 2.10% | 3.00% | 3.20% |
Deferred tax asset adjustments - NOL related | 0.00% | (0.40%) | (0.20%) |
Non-deductible permanent items | (1.10%) | (0.30%) | (0.20%) |
Stock options | (28.00%) | (3.20%) | (3.40%) |
Goodwill impairment | 0.00% | 0.00% | (1.50%) |
Other | 0.00% | (3.90%) | (0.20%) |
Change in valuation allowance | 5.80% | (16.30%) | (18.70%) |
Effective income tax rate | (0.20%) | (0.10%) | 0.00% |
Income Taxes (Details 3) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 103 | $ 187 |
Accrued liabilities | 412 | 826 |
Net operating loss carry-forwards | 24,798 | 23,933 |
Intangible assets | 4,259 | 4,334 |
Share-based compensation expense | 228 | 2,120 |
Other | 1,370 | 406 |
Total gross deferred tax assets | 31,181 | 31,806 |
Valuation allowance | (30,447) | (31,168) |
Deferred tax assets, net of valuation allowance | 734 | 638 |
Deferred tax liabilities: | ||
Right of use assets | (733) | (638) |
Fixed assets | 0 | 0 |
Other | (1) | 0 |
Total gross deferred tax liabilities | (734) | (638) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details 5) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Unrecognized tax benefits | $ 464 | $ 464 |
Reductions based on tax positions related to prior years and settlements | (275) | 0 |
Unrecognized tax benefits | $ 189 | $ 464 |
Income Taxes (Details Narrative) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
NOL Limitation | $ 30,000 |
Valuation allowance, subsidiaries | 4,100 |
Research and development tax credit carry-forwards | 200 |
Federal | |
Net operating loss carry-forwards | 104,100 |
NOL carry-forwards incurred by subsidiaries | 10,800 |
State | |
Net operating loss carry-forwards | 48,900 |
NOL carry-forwards incurred by subsidiaries | $ 5,000 |
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total net revenues | $ 17,252 | $ 17,813 | $ 17,033 | $ 24,472 | $ 26,687 | $ 28,552 | $ 27,142 | $ 31,604 | $ 76,570 | $ 113,981 | $ 125,589 |
Gross profit (loss) | 5,860 | 6,423 | 6,040 | 5,357 | 5,522 | 5,907 | 5,384 | 5,757 | 23,680 | 22,569 | 15,260 |
Net income (loss) | $ (937) | $ (448) | $ (1,374) | $ (4,061) | $ (3,177) | $ (1,739) | $ (4,953) | $ (5,360) | $ (6,820) | $ (15,229) | $ (38,816) |
Basic earnings (loss) per share | $ (0.07) | $ (0.03) | $ (0.10) | $ (0.31) | $ (0.24) | $ (0.13) | $ (0.38) | $ (0.41) | $ (0.52) | $ (1.17) | $ (3.04) |
Diluted earnings (loss) per share | $ (0.07) | $ (0.03) | $ (0.10) | $ (0.31) | $ (0.24) | $ (0.13) | $ (0.38) | $ (0.41) | $ (0.52) | $ (1.17) | $ (3.04) |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Allowance for Bad Debts | |||
Movement in Valuation Allowances and Reserves | |||
Beginning Balance | $ 546 | $ 445 | $ 679 |
Additions | 470 | 330 | 241 |
Charged (credit) to tax expense | 0 | 0 | 0 |
Charged (credited) to retained earnings | 0 | 0 | 0 |
Write-offs | (674) | (229) | (475) |
Ending Balance | 342 | 546 | 445 |
Allowance for Customer Credits | |||
Movement in Valuation Allowances and Reserves | |||
Beginning Balance | 194 | 121 | 213 |
Additions | (26) | 250 | 198 |
Charged (credit) to tax expense | 0 | 0 | 0 |
Charged (credited) to retained earnings | 0 | 0 | 0 |
Write-offs | (104) | (177) | (290) |
Ending Balance | 64 | 194 | 121 |
Tax Valuation Allowance | |||
Movement in Valuation Allowances and Reserves | |||
Beginning Balance | 31,168 | 28,687 | 21,318 |
Additions | 0 | 0 | 0 |
Charged (credit) to tax expense | (721) | 2,481 | 7,369 |
Charged (credited) to retained earnings | 0 | 0 | 0 |
Write-offs | 0 | 0 | 0 |
Ending Balance | $ 30,447 | $ 31,168 | $ 28,687 |
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