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 March 2, 2017.
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Issuer
Direct Corporation
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Date: March 2,
2017
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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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Exhibit
No.
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Description
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Press Release
issued by the Company on March 2, 2017.
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Three Months
ended December 31,
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2016
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2015
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Amount
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Amount
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Net income
(loss):
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$510,403
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$(293,839)
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Adjustments:
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Depreciation and
amortization
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176,880
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299,355
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Impairment loss on
intangible assets
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-
|
547,000
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Interest
income
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(1,087)
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(886)
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Income tax
benefit
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(19,327)
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(18,571)
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EBITDA:
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$666,869
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$533,059
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Year ended
December 31,
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2016
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2015
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Amount
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Amount
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Net
income:
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$1,555,208
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$144,584
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Adjustments:
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Depreciation and
amortization
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1,076,808
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1,099,870
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Impairment loss on
intangible assets
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-
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547,000
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Interest (income)
expense, net
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(4,080)
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622,139
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Income tax expense
(benefit)
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464,350
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(132,487)
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EBITDA:
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$3,092,286
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$2,281,106
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Three Months
ended December 31,
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2016
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2015
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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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|
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Net income
(loss):
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$510,403
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$0.17
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$(293,839)
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$(0.10)
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Adjustments:
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|
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Amortization and
impairment loss of intangible assets (1)
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104,657
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0.04
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804,960
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0.28
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Stock-based
compensation (2)
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131,877
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0.05
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178,428
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0.06
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Integration and
acquisition costs (3)
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-
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-
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15,834
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0.01
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Unusual,
non-recurring gains (4)
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(5,531)
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0.00
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-
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Tax impact of
adjustments (6)
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(101,818)
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(0.04)
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(339,736)
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(0.12)
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Impact of change in
valuation allowance (7)
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(141,949)
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(0.05)
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30,944
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0.01
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Non-GAAP net
income:
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$497,639
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$0.17
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$396,591
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$0.14
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Year ended
December 31,
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2016
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2015
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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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|
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Net
income:
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$1,555,208
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$0.54
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$144,584
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$0.06
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Adjustments:
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Amortization and
impairment loss of intangible assets (1)
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811,078
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0.28
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1,542,338
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0.60
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Stock-based
compensation (2)
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592,025
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0.20
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549,184
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0.21
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Integration and
acquisition costs (3)
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-
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-
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190,000
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0.07
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Unusual,
non-recurring gains (4)
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(396,205)
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(0.14)
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-
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-
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Non-cash interest
expense (5)
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-
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-
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535,397
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0.21
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Tax impact of
adjustments (6)
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(342,345)
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(0.12)
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(957,752)
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(0.37)
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Impact of change in
valuation allowance (7)
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(213,965)
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(0.07)
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(179,426)
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(0.07)
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Non-GAAP net
income:
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$2,005,796
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$0.69
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$1,824,325
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$0.71
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December 31,
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2016
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2015
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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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$5,338,978
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$4,215,145
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Accounts receivable
(net of allowance for doubtful accounts of $429,192 and $396,884,
respectively)
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1,299,698
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1,253,628
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Other current
assets
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188,584
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252,468
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Total current
assets
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6,827,260
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5,721,241
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Capitalized
software (net of accumulated amortization of $207,438 and $25,133,
respectively)
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2,048,273
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723,962
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Fixed assets (net
of accumulated depreciation of $318,077 and $262,797,
respectively)
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204,316
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175,497
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Deferred income tax
asset - noncurrent
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140,974
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97,974
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Other long-term
assets
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17,891
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18,301
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Goodwill
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2,241,872
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2,241,872
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Intangible assets
(net of accumulated amortization of $3,323,782 and $2,512,704,
respectively)
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1,380,218
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2,191,296
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Total
assets
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$12,860,804
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$11,170,143
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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Current
liabilities:
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Accounts
payable
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$343,418
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$385,285
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Accrued
expenses
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806,399
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995,999
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Income taxes
payable
|
111,961
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199,613
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Deferred
revenue
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842,642
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822,481
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Total current
liabilities
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2,104,420
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2,403,378
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Deferred income tax
liability
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66,332
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94,566
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Other long-term
liabilities
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112,154
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113,222
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Total
liabilities
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2,282,906
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2,611,166
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Commitments and
contingencies
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Stockholders'
equity:
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Preferred stock,
$0.001 par value, 30,000,000 shares authorized, no shares issued
and outstanding as of December 31, 2016 and 2015.
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-
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-
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Common stock $0.001
par value, 100,000,000 shares authorized, 2,860,944 and 2,785,044
shares issued and outstanding as of December 31, 2016 and 2015,
respectively.
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2,861
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2,785
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Additional paid-in
capital
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9,119,610
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8,202,605
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Other accumulated
comprehensive loss
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(35,798)
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(35,154)
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Retained
earnings
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1,491,225
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388,741
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Total stockholders'
equity
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10,577,898
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8,558,977
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Total
liabilities and stockholders’ equity
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$12,860,804
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$11,170,143
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For the three
months ended
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For the twelve
months ended
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December 31,
2016 |
December
31,
2015
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December
31,
2016
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December
31,
2015
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(unaudited)
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(unaudited)
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Revenues
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$2,774,520
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$2,682,607
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$12,058,866
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$11,619,883
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Cost of
services
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691,105
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792,568
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3,024,339
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3,447,992
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Gross
profit
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2,083,415
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1,890,039
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9,034,527
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8,171,891
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Operating costs and
expenses:
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General and
administrative
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703,688
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694,438
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3,185,308
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3,241,404
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Sales and
marketing
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653,546
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612,884
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2,600,851
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2,343,330
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Product
Development
|
112,104
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70,191
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403,623
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326,584
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Depreciation and
amortization
|
129,619
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278,822
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909,432
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1,079,337
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Impairment loss on
intangible assets
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-
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547,000
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-
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547,000
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Total operating
costs and expenses
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1,598,957
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2,203,335
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7,099,214
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7,537,655
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Operating
income
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484,458
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(313,296)
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1,935,313
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634,236
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Other income
(expense):
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Other income,
net
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5,531
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-
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80,165
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-
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Interest income
(expense), net
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1,087
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886
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4,080
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(622,139)
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Total other
income (expense)
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6,618
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886
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84,245
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(622,139)
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Income (Loss)
before taxes
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491,076
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(312,410)
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2,019,558
|
12,097
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Income
tax (benefit) expense
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(19,327)
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(18,571)
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464,350
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(132,487)
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Net income
(loss)
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$510,403
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$(293,839)
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$1,555,208
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$144,584
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Income (loss) per
share – basic
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$0.18
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$(0.11)
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$0.55
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$0.06
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Income (loss) per
share - fully diluted
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$0.17
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$(0.10)
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$0.54
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$0.06
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Weighted average
number of common shares outstanding - basic
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2,858,520
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2,772,027
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2,819,720
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2,486,684
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Weighted average
number of common shares outstanding - fully diluted
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2,932,327
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2,880,322
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2,903,255
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2,575,952
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For the Years
ended December 31,
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2016
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2015
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Cash
flows from operating activities
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(unaudited)
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|
Net
income
|
$1,555,208
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$144,584
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Adjustments to
reconcile net income to net cash provided by operating
activities:
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|
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Bad debt
expense
|
195,327
|
169,020
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Depreciation and
amortization
|
1,076,808
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1,099,870
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Impairment loss on
intangible assets
|
-
|
547,000
|
Deferred income
taxes
|
(210,406)
|
(631,938)
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Non-cash interest
expense
|
-
|
535,397
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Stock-based
compensation expense
|
592,025
|
549,184
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Changes in
operating assets and liabilities:
|
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Decrease (increase)
in accounts receivable
|
(259,132)
|
586,518
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Decrease (increase)
in deposits and prepaid assets
|
63,171
|
68,813
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Increase (decrease)
in accounts payable
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(38,602)
|
132,168
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Increase (decrease)
in deferred revenue
|
42,748
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(44,680)
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Increase (decrease)
in accrued expenses
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(255,821)
|
20,630
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Net cash provided
by operating activities
|
2,761,326
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3,176,566
|
|
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Cash
flows from investing activities
|
|
|
Capitalized
software
|
(1,077,382)
|
(553,684)
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Purchase of fixed
assets
|
(112,244)
|
(109,512)
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Net cash used in
investing activities
|
(1,189,626)
|
(663,196)
|
|
|
|
Cash
flows from financing activities
|
|
|
Proceeds from
exercise of stock options, net of income taxes
|
34,994
|
28,100
|
Excess tax benefit
from share based compensation
|
-
|
38,235
|
Payment of
dividend
|
(452,724)
|
(83,101)
|
Net cash used in
financing activities
|
(417,730)
|
(16,766)
|
|
|
|
Net change in
cash
|
1,153,970
|
2,496,604
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Cash-
beginning
|
4,215,145
|
1,721,343
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Currency
translation adjustment
|
(30,137)
|
(2,802)
|
Cash-
ending
|
$5,338,978
|
$4,215,145
|
|
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|
Supplemental disclosures:
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Cash paid for
interest
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$-
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$85,870
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Cash paid for
income taxes
|
$715,614
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$282,951
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Non-cash
activities:
|
|
|
Stock-based
compensation - capitalized software
|
$429,234
|
$195,411
|
Conversion of note
payable to common stock
|
$-
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$1,666,673
|