Delaware
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1-10185
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26-1331503
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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Exhibit No.
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Description
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Press Release issued by the Company on November 5, 2014
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Issuer Direct Corporation
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Date: November 5, 2014
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By:
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/s/ Brian R. Balbirnie
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Brian R. Balbirnie
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Chief Executive Officer
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●
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Revenues increased 53% year-over-year reaching $3.2 million;
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Gross profit increased 51% year-over-year reaching $2.2 million;
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Non-GAAP earnings per share increased to $0.23 compared to $0.12 in the same period of 2013;
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Cash increased 64% to $3.5 million at September 30, 2014 compared to $2.2 million at June 30, 2014; the tenth consecutive quarter of positive cash flows from operations.
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Revenues increased 98% year-over-year, reaching $10.3 million;
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Gross profit increased 96% year over year reaching $7.3 million;
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Non-GAAP earnings per share increased to $0.66 compared to $0.53 in the same period of 2013.
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Three Months ended September 30, | ||||||||
2014
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2013
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|||||||
Amount
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Amount
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|||||||
Net income:
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$ | 76,174 | $ | 117,344 | ||||
Adjustments:
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||||||||
Depreciation and amortization
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266,950 | 143,689 | ||||||
Interest expense, net
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368,172 | 154,076 | ||||||
Income tax expense
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43,022 | 72,294 | ||||||
EBITDA:
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$ | 754,318 | $ | 487,403 |
Nine Months ended September 30, | ||||||||
2014
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2013
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|||||||
Amount
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Amount
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|||||||
Net income:
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$ | 107,255 | $ | 697,964 | ||||
Adjustments:
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||||||||
Depreciation and amortization
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829,583 | 211,212 | ||||||
Interest expense (income)
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1,090,903 | 151,778 | ||||||
Income tax expense
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43,401 | 475,294 | ||||||
EBITDA:
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$ | 2,071,142 | $ | 1,536,248 |
Three Months ended September 30,
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||||||||||||||||
2014
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2013
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Amount
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Per diluted share
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Amount
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Per diluted share
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|||||||||||||
Net income (loss):
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$ | 76,174 | $ | 0.04 | $ | 117,344 | $ | 0.05 | ||||||||
Adjustments:
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Amortization of intangible assets (1)
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230,621 | 0.11 | 113,930 | 0.05 | ||||||||||||
Stock based compensation (2)
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104,951 | 0.05 | 66,345 | 0.03 | ||||||||||||
Integration and acquisition costs (3)
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11,406 | - | 62,032 | 0.02 | ||||||||||||
Non-cash interest expense (4)
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312,500 | 0.15 | - | - | ||||||||||||
Tax impact of adjustments (5)
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(250,601 | ) | (0.12 | ) | (92,077 | ) | (0.03 | ) | ||||||||
Non-GAAP net income:
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$ | 485,051 | $ | 0.23 | $ | 267,574 | $ | 0.12 |
Nine Months ended September 30,
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2014
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2013
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Amount
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Per diluted share
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Amount
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Per diluted share
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Net income (loss):
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$ | 107,255 | $ | 0.05 | $ | 697,964 | $ | 0.34 | ||||||||
Adjustments:
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Amortization of intangible assets (1)
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690,747 | 0.33 | 165,097 | 0.08 | ||||||||||||
Stock based compensation (2)
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315,134 | 0.15 | 222,439 | 0.11 | ||||||||||||
Integration and acquisition costs (3)
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123,203 | 0.06 | 112,783 | 0.05 | ||||||||||||
Non-cash interest expense (4)
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937,500 | 0.44 | 134,409 | 0.07 | ||||||||||||
Tax impact of adjustments (5)
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(785,302 | ) | (0.37 | ) | (241,197 | ) | (0.12 | ) | ||||||||
Non-GAAP net income:
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$ | 1,388,537 | $ | 0.66 | $ | 1,091,495 | $ | 0.53 |
(1) | The adjustments represent the amortization of intangible assets related to acquired assets and companies. |
(2) | The adjustments represent stock-based compensation expense recognized related to awards of stock options or common stock in exchange for services. |
(3) | The adjustments represent legal fees, consulting fees, integration costs, and other non-recurring cost incurred in connection with the acquisitions of PrecisionIR Group, Inc and Accesswire. |
(4) | The adjustment represents the amortization of debt-discount that was created as a result of a beneficial conversion feature that was embedded in a note payable that the Company issued in order to finance the acquisition of PrecisionIR Group, Inc. The amortization of the debt discount is recorded as non-cash interest expense and has no impact on the cash flows or operations of the Company. |
(5) | This adjustment gives effect to the tax impact of all non-GAAP adjustments at a rate of 38%, which approximates the Company's state and federal tax rates. |
September 30,
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December 31,
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|||||||
2014
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2013
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|||||||
(unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 3,549,653 | $ | 1,713,479 | ||||
Accounts receivable, (net of allowance for doubtful accounts of $508,950 and $429,509, respectively)
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1,753,146 | 1,970,531 | ||||||
Deferred income tax asset – current
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25,843 | 25,843 | ||||||
Other current assets
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633,038 | 160,756 | ||||||
Total current assets
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5,961,680 | 3,870,609 | ||||||
Furniture, equipment and improvements, net
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222,508 | 297,577 | ||||||
Goodwill
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1,056,873 | 1,056,873 | ||||||
Intangible assets (net of accumulated amortization of $1,273,527 and $582,871, respectively)
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3,322,474 | 4,013,129 | ||||||
Other noncurrent assets
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50,105 | 22,351 | ||||||
Total assets
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$ | 10,613,640 | $ | 9,260,539 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 413,333 | $ | 267,637 | ||||
Accrued expenses
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1,060,055 | 1,553,334 | ||||||
Note payable (net of debt discount of $1,115,591 on September 30, 2014)
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1,384,409 | - | ||||||
Deferred revenue
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1,095,011 | 1,053,401 | ||||||
Total current liabilities
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3,952,808 | 2,874,372 | ||||||
Note payable (net of debt discount of $2,053,091 on December 31, 2013)
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- | 446,909 | ||||||
Deferred tax liability
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1,636,446 | 1,650,460 | ||||||
Other long term liabilities
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122,466 | 83,063 | ||||||
Total liabilities
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5,711,720 | 5,054,804 | ||||||
Stockholders' equity:
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Preferred stock, $0.001 par value, 30,000,000 shares authorized, no shares issued and outstanding as of September 30, 2014 and December 31, 2013.
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- | - | ||||||
Common stock $0.001 par value, 100,000,000 shares authorized, 2,070,559 and 2,006,689 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively.
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2,071 | 2,007 | ||||||
Additional paid-in capital
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4,570,392 | 3,977,661 | ||||||
Other accumulated comprehensive loss
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(62,930 | ) | (59,065 | ) | ||||
Retained earnings
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392,387 | 285,132 | ||||||
Total stockholders' equity
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4,901,920 | 4,205,735 | ||||||
Total liabilities and stockholders’ equity
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$ | 10,613,640 | $ | 9,260,539 |
For the Three Months Ended
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For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues
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$ | 3,220,539 | $ | 2,102,831 | $ | 10,353,164 | $ | 5,238,244 | ||||||||
Cost of services
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994,847 | 627,532 | 3,091,843 | 1,539,244 | ||||||||||||
Gross profit
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2,225,692 | 1,475,299 | 7,261,321 | 3,699,000 | ||||||||||||
Operating costs and expenses:
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General and administrative
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900,142 | 610,232 | 3,190,006 | 1,405,498 | ||||||||||||
Sales and marketing
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571,232 | 377,664 | 2,000,173 | 757,254 | ||||||||||||
Depreciation and amortization
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266,950 | 143,689 | 829,583 | 211,212 | ||||||||||||
Total operating costs and expenses
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1,738,324 | 1,131,585 | 6,019,762 | 2,373,964 | ||||||||||||
Net operating income
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487,368 | 343,714 | 1,241,559 | 1,325,036 | ||||||||||||
Other expense:
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Interest expense, net
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368,172 | 154,076 | 1,090,903 | 151,778 | ||||||||||||
Total other expense
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368,172 | 154,076 | 1,090,903 | 151,778 | ||||||||||||
Net income before taxes
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119,196 | 189,638 | 150,656 | 1,173,258 | ||||||||||||
Income tax expense
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43,022 | 72,294 | 43,401 | 475,294 | ||||||||||||
Net income
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$ | 76,174 | $ | 117,344 | $ | 107,255 | $ | 697,964 | ||||||||
Income per share - basic
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$ | 0.04 | $ | 0.06 | $ | 0.05 | $ | 0.36 | ||||||||
Income per share - fully diluted
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$ | 0.04 | $ | 0.05 | $ | 0.05 | $ | 0.34 | ||||||||
Weighted average number of common shares outstanding - basic
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2,062,399 | 1,968,871 | 2,042,813 | 1,954,314 | ||||||||||||
Weighted average number of common shares outstanding - fully diluted
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2,117,526 | 2,273,497 | 2,108,396 | 2,056,995 |
For the Three Months Ended
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For the Nine Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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||||||||||||
2014
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2013
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2014
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2013
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Net income
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$ | 76,174 | $ | 117,344 | $ | 107,255 | $ | 697,964 | |||||||
Foreign currency translation adjustment
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6,555 | (39,247 | ) | (3,865 | ) | (39,247 | ) | ||||||||
Comprehensive income
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$ | 82,729 | $ | 78,097 | $ | 103,390 | $ | 658,717 |
Nine months ended
September 30,
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||||||||
2014
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2013
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|||||||
Cash flows from operating activities:
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Net income (loss)
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$ | 107,255 | $ | 697,964 | ||||
Adjustments to reconcile net income (loss) to net cash
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provided by operating activities:
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Depreciation and amortization
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829,583 | 211,212 | ||||||
Bad debt expense
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206,206 | 131,409 | ||||||
Deferred income taxes
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(14,014 | ) | 7,326 | |||||
Stock-based compensation expense
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315,134 | 222,439 | ||||||
Non-cash interest expense
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937,500 | 134,409 | ||||||
Changes in operating assets and liabilities:
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Decrease (increase) in accounts receivable
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8,694 | 130,098 | ||||||
Decrease (increase) in deposits and other current assets
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(500,281 | ) | (172,189 | ) | ||||
Increase (decrease) in accounts payable
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146,126 | 89,538 | ||||||
Increase (decrease) in accrued expenses
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(453,286 | ) | 74,982 | |||||
Increase (decrease) in deferred revenue
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45,035 | (376,466 | ) | |||||
Net cash provided by operating activities
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1,627,952 | 1,150,722 | ||||||
Cash flows from investing activities:
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Purchase of property and equipment
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(63,767 | ) | (40,444 | ) | ||||
Purchase of acquired business, net of cash acquired
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- | (3,178,399 | ) | |||||
Net cash used in investing activities
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(63,767 | ) | (3,218,843 | ) | ||||
Cash flows from financing activities:
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Proceeds from exercise of stock options
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128,492 | 50,685 | ||||||
Payment of dividend
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- | (117,286 | ) | |||||
Tax benefit on stock-based compensation awards
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149,170 | - | ||||||
Borrowings on long term debt
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- | 2,500,000 | ||||||
Advances from line of credit (net)
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- | 350,000 | ||||||
Net cash provided by financing activities
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277,662 | 2,783,399 | ||||||
Net change in cash
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1,841,847 | 715,278 | ||||||
Cash – beginning
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1,713,479 | 1,250,643 | ||||||
Currency translation adjustment
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(5,673 | ) | (39,247 | ) | ||||
Cash – ending
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$ | 3,549,653 | $ | 1,926,674 | ||||
Supplemental disclosure for non-cash investing and financing activities:
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Cash paid for interest
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$ | 150,000 | $ | 21,739 | ||||
Cash paid for income taxes
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$ | 641,600 | $ | 446,564 | ||||
Non cash activities:
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Issuance of beneficial conversion feature to holder of note payable
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$ | - | $ | 2,500,000 |