Crexendo, Inc.
For the period ended Dec 31, 2025. Filed Mar 3, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 3, 2026
CXDO$5.07+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-04.
0001654954-25-002287
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-03.
0001654954-26-001848
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 140 previous paragraphs and 140 current paragraphs.
109 unchanged; 29 reworded; 2 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 36 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
The decrease in cost of product revenue is primarily related to the decrease in product revenue for the year ended December 31, 2025.
Current report
The decrease in general and administrative expenses is primarily related to a decrease in executive and administrative salaries, benefits, bonuses, share-based compensation, and headcount of $508, a decrease in telecommunication annual taxes and fees of $138, a decrease in rent expense of $74, and a decrease in other general and administrative expenses of $20.
Removed paragraphs (2)
Previous report
The decrease is primarily related to a higher margin product mix by eliminating the sale of low margin products.
Previous report
The decrease in general and administrative expenses is primarily related to a decrease in executive and administrative salaries, benefits, bonuses, and share-based compensation of $1,010 primarily due to a decrease in share-based compensation of $733 and an allocation of costs to the Software Solutions segment of $203, and a decrease in other general and administrative expenses of $32, offset by an increase of rent expense of $242 due to the leaseback of our previously sold corporate headquarters land and building and rent on our new corporate office of $80, and an increase in accounting software costs of $81 associated with service contract fees for our new accounting system.
Reworded paragraphs (29)
Previous wording
Our Cloud Telecommunications service revenue increased 7% or $2,181 to $31,849 for the year ended December 31, 2024 as compared to $29,668 for the year ended December 31, 2023. Our Cloud Telecommunications product revenue increased 2% or $131 to $5,615 for the year ended December 31, 2024 as compared to $5,484 for the year ended December 31, 2023.
Current wording
Our Cloud Telecommunications service revenue increased 6% or $1,933 to $33,782 for the year ended December 31, 2025 as compared to $31,849 for the year ended December 31, 2024. Our Cloud Telecommunications product revenue decreased 16% or $894 to $4,721 for the year ended December 31, 2025 as compared to $5,615 for the year ended December 31, 2024.
Previous wording
Our Software solutions revenue increased 30%, or $5,327 to $23,374 for the year ended December 31, 2024, compared to $18,047 for the year ended December 31, 2023.
Current wording
Our Software solutions revenue increased 27%, or $6,290 to $29,664 for the year ended December 31, 2025, compared to $23,374 for the year ended December 31, 2024.
Previous wording
The increase in total revenue is due to an increase in software solutions revenue of $5,327, an increase in service revenue of $2,181, and an increase in product revenue of $131.
Current wording
The increase in total revenue is due to an increase in software solutions revenue of $6,290 and an increase in service revenue of $1,933, offset by a decrease in product revenue of $894.
Previous wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $7,639, offset by an increase in operating expenses of $4,126 and a decrease in other income/(expense) of $1,360. The increase in revenue is primarily related to organic growth from new and existing customers. The increase in operating expenses is primarily related to an increase in commission expense of $1,621, an increase in contract labor and outsourced engineering services of $549, an increase in hosting service fees of $399, an increase in marketing costs of $307, and an increase in salaries, benefits, bonuses and share-based compensation of $220. The decrease in other income/(expense) is primarily related to the gain on the sale of our corporate office recognized during the year ended December 31, 2023 of $1,459 offset by an increase in interest income of $189 and a decrease in interest expense of $73.
Current wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $7,329 and an increase in other income/(expense) of $616, offset by an increase in operating expenses of $4,463. The increase in revenue is primarily related to organic growth from new and existing customers. The increase in operating expenses is primarily related to an increase in salaries, benefits, bonuses and share-based compensation of $1,267, an increase in commission expense of $986, an increase in contract labor and outsourced engineering services of $699, an increase in third-party telecommunication charges of $590, an increase in software costs of $415, an increase in hosting services fees of $295, an increase in annual user group meeting expenses of $169, and an increase in other expenses of $42. The increase in other income/(expense) is primarily related to an increase in interest income of $446, an increase in other income of $147, and a decrease in interest expense of $23.
Previous wording
We had an income tax provision of $(212) for the year ended December 31, 2024 compared to an income tax provision of $(98) for the year ended December 31, 2023. For the year ended December 31, 2024, we recorded additional valuation allowance of $635 and for the year ended December 31, 2023, we recorded additional valuation allowance of $1,603.
Current wording
We had an income tax provision of $(300) for the year ended December 31, 2025 compared to an income tax provision of $(212) for the year ended December 31, 2024. For the year ended December 31, 2025, we recorded additional valuation allowance of $2,270 and for the year ended December 31, 2024, we recorded additional valuation allowance of $635.
Previous wording
To evaluate our business, we consider and use non-generally accepted accounting principles (“Non-GAAP”) net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), the gain/(loss) on the sale of property and equipment, goodwill and long-lived asset impairments, provision/(benefit) for income taxes, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period, as well as across companies.
Current wording
To evaluate our business, we consider and use non-generally accepted accounting principles (“Non-GAAP”) net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation and related taxes, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), the gain/(loss) on the sale of property and equipment, goodwill and long-lived asset impairments, benefit/(provision) for income tax, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation and related taxes. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period, as well as across companies.
Previous wording
The Company reviews the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Once an indicator of potential impairment has occurred, the impairment test is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. If the intent is to hold the asset for continued use, the impairment test first requires a comparison of projected undiscounted future cash flows against the carrying amount of the asset group. If the carrying value of the asset group exceeds the estimated undiscounted future cash flows, the asset group would be deemed to be potentially impaired. The impairment, if any, would be measured based on the amount by which the carrying amount exceeds the fair value. Fair value is determined primarily using the projected future undiscounted cash flows. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. We recognized impairment losses of $0 in the Consolidated Statements of Operations for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company reviews the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Once an indicator of potential impairment has occurred, the impairment test is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. If the intent is to hold the asset for continued use, the impairment test first requires a comparison of projected undiscounted future cash flows against the carrying amount of the asset group. If the carrying value of the asset group exceeds the estimated undiscounted future cash flows, the asset group would be deemed to be potentially impaired. The impairment, if any, would be measured based on the amount by which the carrying amount exceeds the fair value. Fair value is determined primarily using the projected future undiscounted cash flows. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. We recognized impairment losses of $0 in the Consolidated Statements of Operations for the years ended December 31, 2025 and 2024.
Previous wording
We currently have net deferred tax assets consisting of net operating loss carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. As of December 31, 2024, excluding the gain on the sale of property and equipment, we have three years of cumulative pretax losses and the weight of all other positive and negative evidence, such as forecasts and projections of future pretax income are inherently subjective and require management to make assumption or complex judgments about matters that are inherently uncertain and therefore are not sufficient to overcome the significant negative evidence of a three year lookback cumulative loss position. Therefore, management determined that it is not more likely than not that we will be able to realize our deferred tax assets, and we have recorded a valuation allowance of $5,417 at December 31, 2024.
Current wording
We currently have net deferred tax assets consisting of net operating loss carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. As of December 31, 2025, excluding the gain on the sale of property and equipment in 2023, we no longer have three years of cumulative pretax losses, however the weight of all other positive and negative evidence, such as amortization expenses for future acquisitions and forecasts and projections of future pretax income are inherently subjective and require management to make assumption or complex judgments about matters that are inherently uncertain. Therefore, management determined that it is not more likely than not that we will be able to realize our deferred tax assets, and we have recorded a valuation allowance of $7,687 at December 31, 2025.
Previous wording
We account for our share-based compensation awards using the fair-value method. The grant date fair value was determined using the Black-Scholes-Merton pricing model. The Black-Scholes-Merton valuation calculation requires us to make key assumptions such as future stock price volatility, expected terms, risk-free rates, and dividend yield. Our expected volatility is derived from our volatility rate as a publicly traded company. The expected term is based on our historical experience. The risk-free interest factor is based on the United States Treasury yield curve in effect at the time of the grant for zero coupon United States Treasury notes with maturities of approximately equal to each grant’s expected term. For the year ended December 31, 2023, one quarterly dividend of $0.005 was declared and paid, however we have assumed a 0% dividend yield for the year ended December 31, 2024.
Current wording
We account for our share-based compensation awards using the fair-value method. The grant date fair value was determined using the Black-Scholes-Merton pricing model. The Black-Scholes-Merton valuation calculation requires us to make key assumptions such as future stock price volatility, expected terms, risk-free rates, and dividend yield. Our expected volatility is derived from our volatility rate as a publicly traded company. The expected term is based on our historical experience. The risk-free interest factor is based on the United States Treasury yield curve in effect at the time of the grant for zero coupon United States Treasury notes with maturities of approximately equal to each grant’s expected term. For the year ended December 31, 2025, no quarterly dividends were declared and paid, therefore we have assumed a 0% dividend yield for the year ended December 31, 2025.
Previous wording
The increase in service revenue is due to an increase in telecommunications services fees of $1,899, an increase in fees, commissions, and other, recognized over time of $235, and an increase in sales-type lease interest of $175, offset by a decrease in one-time fees, commissions and other of $128. A substantial portion of Cloud Telecommunications service revenue is generated through thirty-six to sixty month service contracts.
Current wording
The increase in service revenue is due to an increase in telecommunications services fees of $1,749, an increase in fees, commissions, and other, recognized over time of $392, and an increase in sales-type lease interest of $165, offset by a decrease in one-time fees, commissions and other of $373. A substantial portion of Cloud Telecommunications service revenue is generated through thirty-six to sixty month service contracts.
Previous wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of December 31, 2024 and 2023. RPOs increased 24%, or $10,559 to $55,369 as of December 31, 2024 as compared to $44,810 as of December 31, 2023. Below is a table which displays the Cloud Telecommunications segment remaining performance obligations as of December 31, 2024 and 2023, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of December 31, 2025 and 2024. RPOs increased 10%, or $5,325 to $60,694 as of December 31, 2025 as compared to $55,369 as of December 31, 2024. Below is a table which displays the Cloud Telecommunications segment remaining performance obligations as of December 31, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Previous wording
The increase in cost of service revenue was primarily related to an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $201, an increase in salaries, benefits, bonuses, and share-based compensation of $94, an increase in third-party telecommunications charges of $71, an increase in credit card processing fees of $68, and an increase in other cost of service revenue of $47.
Current wording
The increase in cost of service revenue was primarily related to an increase in third-party telecommunication charges of $590, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $354, an increase in data center hosting costs of $114, an increase in software costs of $73, an increase in credit card processing fees of $39, and an increase in other cost of service revenue expense of $57, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $161.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $1,185 directly related to the increase in revenue, an increase in marketing costs of $92, and an increase in other sales and marketing expense of $36.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $592 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $355, an increase in marketing costs of $134, and an increase in other selling and marketing expenses of $44, offset by a decrease in bad debt related to a decrease in our credit loss reserve of $110 and a decrease in the amortization of customer relationship intangible assets of $131.
Previous wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to our Software Solutions segment of $380 as we finalize the migration of our customers to our VIP platform, and a decrease other research and development expenses of $4.
Current wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to our Software Solutions segment of $316, offset by an increase in other research and development expenses of $9.
Previous wording
The change in other income/(expense) is primarily from the gain on sale of our corporate office building reported during the year ended December 31, 2023 of $1,459 and a decrease in other income of $3, offset by an increase in interest income of $189 and a decrease in interest expense of $73.
Current wording
The change in other income/(expense) is primarily from an increase in interest income of $435 and a decrease in interest expense of $23, offset by a decrease in other income of $1.
Previous wording
The increase in software solutions revenue is primarily related to an increase in recurring software license and maintenance and support subscriptions of $3,278, an increase in perpetual software license revenue of $1,420, and an increase in professional services and other revenue of $629.
Current wording
The increase in software solutions revenue is primarily related to an increase in recurring software license and maintenance and support subscriptions of $3,553, an increase in perpetual software license revenue of $2,667, and an increase in professional services and other revenue of $70.
Previous wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of December 31, 2024 and 2023. RPOs increased 58%, or $11,140 to $30,262 as of December 31, 2024 as compared to $19,122 as of December 31, 2023. Below is a table which displays the Software solutions segment remaining performance obligations as of December 31, 2024 and 2023, which we expect to recognize as revenue within the next thirty-six months (in thousands):
Current wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of December 31, 2025 and 2024. RPOs decreased 6%, or $1,890 to $28,372 as of December 31, 2025 as compared to $30,262 as of December 31, 2024. Below is a table which displays the Software solutions segment remaining performance obligations as of December 31, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six months (in thousands):
Previous wording
The increase in cost of software solutions revenue is primarily related to an increase in third-party hosting service costs of $399, an increase in salaries, benefits, bonuses, and share-based compensation of $322, an increase in software costs of $293, an increase in annual user group meeting expenses of $142, and an increase in other cost of software solutions revenue of $10.
Current wording
The increase in cost of software solutions revenue is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $631, an increase in software costs of $310, an increase in third-party hosting service costs of $181, an increase in annual user group meeting expenses of $169, an increase in outsourced services of $169, and an increase in other cost of software solutions revenue of $22.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $436 directly related to the increase in revenue, an increase in marketing materials and trade shows of $215, an increase in sales support software of $90, and an increase in other selling and marketing costs of $16, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $203 due to the allocation of marketing resources to the Cloud Telecommunications Services segment.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $394 directly related to the increase in revenue, an increase in marketing materials and trade shows of $137, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $91 due to the allocation of marketing resources to the Cloud Telecommunications Services segment, a decrease in bad debt related to a decrease in our credit loss reserve of $50, and a decrease in other selling and marketing costs of $41.
Previous wording
General and administrative expenses consist of salaries, benefits, bonuses and share-based compensation for executives and administrative personnel, amortization of trademark and trade name intangible assets, legal, rent, equipment, accounting and other professional services, consulting fees and other administrative corporate expenses. The following table reflects our general and administrative expenses for the year ended December 31, 2024, compared to the year ended December 31, 2023:
Current wording
General and administrative expenses consist of salaries, benefits, bonuses and share-based compensation for executives and administrative personnel, amortization of trademark, trade name, and capitalized software development costs intangible assets, legal, rent, equipment, accounting and other professional services, consulting fees and other administrative corporate expenses. The following table reflects our general and administrative expenses for the year ended December 31, 2025, compared to the year ended December 31, 2024:
Previous wording
The increase in general and administrative expenses is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $615, an increase in accounting software costs of $81 associated with service contract fees for our new accounting system, an increase in consulting fees of $42, and an increase in other general and administrative expenses of $17.
Current wording
The increase in general and administrative expenses is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $1,013, an increase in legal expenses of $266, an increase in the amortization of intangible assets of $119, an increase in professional service costs of $60, an increase in bank and merchant fees of $49, an increase in consulting fees of $42, an increase in accounting software costs of $32 associated with service contract fees for our new accounting system, and an increase in other general and administrative expenses of $53.
Previous wording
The increase in research and development expenses is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $782 due to the allocation of resources from the Cloud Telecommunications Services segment as we finalize the migration of our customers to the VIP platform, and an increase in outsourced engineering services expenses of $306, offset by a decrease in other research and development expenses of $12.
Current wording
The increase in research and development expenses is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $344 due to the allocation of resources from the Cloud Telecommunications Services segment as we finalize the migration of our customers to the VIP platform, and an increase in outsourced engineering services expenses of $134, offset by a decrease in other research and development expenses of $3.
Previous wording
The change in other income/(expense) is primarily related to a decrease in other income of $96 and a decrease in foreign exchange gains/(losses) of $64.
Current wording
The change in other income/(expense) is primarily related to an increase in foreign exchange gains/(losses) of $111, an increase in other income of $37, and an increase in interest income of $11.
Previous wording
Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. We finance our operations primarily through services, software solutions, and product sales to our customers. As of December 31, 2024 and 2023, we had cash and cash equivalents of $18,193 and $10,347, respectively. Changes in cash and cash equivalents are dependent upon changes in, among other things, working capital items such as contract liabilities, contract costs, accounts payable, accounts receivable, prepaid expenses, and various accrued expenses, as well as purchases of property and equipment, asset acquisitions, business combinations, and changes in our capital and financial structure due to debt repayments and issuances, stock option exercises, sales of equity investments and similar events. We believe that our operations along with existing liquidity sources will satisfy our cash requirements for at least the next 12 months.
Current wording
Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. We finance our operations primarily through services, software solutions, and product sales to our customers. As of December 31, 2025 and 2024, we had cash and cash equivalents of $31,378 and $18,193, respectively. Changes in cash and cash equivalents are dependent upon changes in, among other things, working capital items such as contract liabilities, contract costs, accounts payable, accounts receivable, prepaid expenses, and various accrued expenses, as well as purchases of property and equipment, asset acquisitions, business combinations, and changes in our capital and financial structure due to debt repayments and issuances, stock option exercises, sales of equity investments and similar events. We believe that our operations along with existing liquidity sources will satisfy our cash requirements for at least the next 12 months.
Previous wording
The net cash provided by operations for the year ended December 31, 2023 was primarily driven by non-cash expenses for depreciation and amortization of $3,573 and share-based compensation of $3,849, a decrease in inventories of $297, a decrease in other assets of $651, and an increase in accounts payable and accrued expenses of $623, offset by our net loss for the year ended December 31, 2023 of $362, the gain on disposal of property and equipment of $1,459, an increase in trade receivables of $164, an increase in contract assets of $109, an increase in equipment financing receivables of $905, an increase in contract costs of $1,473, and a decrease in contract liabilities of $997.
Current wording
The net cash provided by operations for the year ended December 31, 2025 was primarily driven by our net income of $5,071, non-cash expenses for depreciation and amortization of $3,295, share-based compensation of $2,932, an increase in accounts payable and accrued expenses of $1,045 and an increase in contract liabilities of $164, offset by an increase in equipment financing receivables of $1,124, an increase in contract costs of $827, and an increase in trade receivables of $539.
Previous wording
Net cash provided by investing activities for the year ended December 31, 2023 primarily relates to the sale of the corporate headquarters located in Tempe, Arizona, which generated $3,792 in proceeds from the sale, offset by the purchases of property and equipment of $92.
Current wording
Net cash used in investing activities for the year ended December 31, 2025 primarily relates to the purchases of property and equipment of $18.
Previous wording
Net cash used in financing activities for the year ended December 31, 2023 primarily relates to repayments made on finance leases and notes payable of $2,349, payments of employee tax withholdings related to the net settlement of stock options and RSUs of $264, dividend payments of $130, and repayments on the line of credit of $82, offset by proceeds from notes payable of $278 and cash proceeds from the exercise of stock options of $241.
Current wording
Net cash provided by financing activities for the year ended December 31, 2025 primarily relates to cash received from the exercise of stock options of $4,870, offset by the payments of employee tax withholdings from the net settlement of stock options and RSUs of $489, repayments made on notes payable of $478, and repayments made on finance leases of $21.
Previous wording
On November 1, 2022, the Company completed the acquisition of Allegiant Networks, LLC, a Kansas limited liability company (the “Allegiant Networks”) to acquire from Seller one hundred percent (100%) of the issued and outstanding shares of Allegiant Networks in exchange for (i) a cash payment at closing in the amount of $2.0 million, (ii) a three-year promissory note by the Company in favor of Seller in the amount of $1.1 million, and (iii) 2,461,538 shares of the Company’s common stock, par value $0.001 per share. In connection with this transaction, the seller Bryan Dancer, became a greater than five percent shareholder of the Company. Therefore, the three-year promissory note in the amount of $1.1 million, is considered a related party transaction. The loan agreement has a term of three (3) years with quarterly payments of Ninety-Eight Thousand Three Hundred Eighty-one Dollars ($98,381), including interest at 4.00%, beginning on April 1, 2023. As of December 31, 2024 and 2023, the outstanding balance of the related party note payable was $478 and $843, respectively. During the years ended December 31, 2024 and 2023, the Company paid principal of $365 and $257, respectively, and interest of $27 and $37, respectively.
Current wording
On November 1, 2022, the Company completed the acquisition of Allegiant Networks, LLC, a Kansas limited liability company (the “Allegiant Networks”) to acquire from Seller one hundred percent (100%) of the issued and outstanding shares of Allegiant Networks in exchange for (i) a cash payment at closing in the amount of $2.0 million, (ii) a three-year promissory note by the Company in favor of Seller in the amount of $1.1 million, and (iii) 2,461,538 shares of the Company’s common stock, par value $0.001 per share. In connection with this transaction, the seller Bryan Dancer, became a greater than five percent shareholder of the Company. Therefore, the three-year promissory note in the amount of $1.1 million, is considered a related party transaction. The loan agreement has a term of three (3) years with quarterly payments of Ninety-Eight Thousand Three Hundred Eighty-one Dollars ($98,381), including interest at 4.00%, beginning on April 1, 2024. As of December 31, 2025 and 2024, the outstanding balance of the related party note payable was $98 and $478, respectively. During the years ended December 31, 2025 and 2024, the Company paid principal of $380 and $365, respectively, and interest of $12 and $27, respectively.
Previous wording
On February 1, 2024, the Company entered into a consulting agreement with Steven G. Mihaylo, Chairman Emeritus of the board of directors and a greater than five percent shareholder. In exchange for his consulting services, Mr. Mihaylo is to receive monthly consideration of $14 or $168 annually. During the years ended December 31, 2024 and 2023, the company paid $154 and $0, respectively.
Current wording
On February 1, 2024, the Company entered into a consulting agreement with Steven G. Mihaylo, Chairman Emeritus of the board of directors and a greater than five percent shareholder. In exchange for his consulting services, Mr. Mihaylo is to receive monthly consideration of $14 or $168 annually. During the years ended December 31, 2025 and 2024, the company paid $168 and $154, respectively.