Delaware
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001-36280
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05-0502529
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(State
or other jurisdiction ofIncorporation or Organization)
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(Commission
File Number)
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(I.R.S.
EmployerIdentification No.)
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5001 Celebration Pointe Avenue, Gainesville, FL
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32608
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(Address
of principal executive offices)
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(Zip
Code)
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Exhibit No.
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Description
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Employee Agreement Amendment – Richard Carlson.*
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Employee Agreement Amendment – Richard Carlson (incorporated
by reference to the Company’s Form 8-K filed
2/12/18).
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Employee Agreement Amendment – Richard Carlson (incorporated
by reference to the Company’s Form 8-K filed
4/15/17).
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Employee Agreement – Richard Carlson (incorporated by
reference to the Company’s Form 8-K filed
9/14/15).
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Employee Agreement Amendment – Travis Whitton.*
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Employee Agreement Amendment – Travis Whitton (incorporated
by reference to the Company’s Form 8-K filed
2/12/18).
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Employee Agreement Amendment – Travis Whitton (incorporated
by reference to the Company’s Form 8-K filed
8/1/17).
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Employee Agreement Amendment – Travis Whitton (incorporated
by reference to the Company’s Form 8-K filed
7/8/16).
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Employee Agreement – Travis Whitton (incorporated by
reference to the Company’s Form 8-K filed
7/8/16).
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Press Release dated
February 27, 2019 –Fourth Quarter and Full Year 2018
Results*
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SHARPSPRING,
INC.
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Dated: February 27,
2019
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By:
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/s/
Bradley M. Stanczak
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Bradley M.
Stanczak,
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Chief Financial
Officer
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SHARPSPRING, INC.
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____________________________
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By:
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_____________________
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(Witness
signature)
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Bradley Stanczak, CFO
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EMPLOYEE
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|
|
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________________________
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_____________________
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(Witness
signature)
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|
Richard
Carlson
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SHARPSPRING
TECHNOLOGIES,
INC.
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|
|
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____________________________
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By:
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_____________________
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(Witness
signature)
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Bradley Stanczak, CFO
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EMPLOYEE
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________________________
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_____________________
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(Witness
signature)
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Travis
Whitton
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Three Months Ended
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Year Ended
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||
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December 31,
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December 31,
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||
|
2018
|
2017
|
2018
|
2017
|
Revenue
|
$5,151,244
|
$3,767,319
|
$18,651,525
|
$13,448,752
|
|
|
|
|
|
Cost
of services
|
1,418,201
|
1,220,392
|
5,798,269
|
4,996,745
|
Gross
profit
|
3,733,043
|
2,546,927
|
12,853,256
|
8,452,007
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|
|
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|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
2,724,563
|
1,889,775
|
10,092,691
|
6,677,807
|
Research
and development
|
1,232,342
|
789,404
|
4,298,031
|
2,883,714
|
General
and administrative
|
1,480,782
|
1,404,258
|
6,358,087
|
5,346,136
|
Non-employee
stock issuance expense
|
508,561
|
-
|
508,561
|
-
|
Intangible
asset amortization
|
115,000
|
131,778
|
460,000
|
527,468
|
|
|
|
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Total
operating expenses
|
6,061,248
|
4,215,215
|
21,717,370
|
15,435,125
|
|
|
|
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Operating
loss
|
(2,328,205)
|
(1,668,288)
|
(8,864,114)
|
(6,983,118)
|
|
|
|
|
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Other
(expense) income, net
|
(31,723)
|
133,278
|
(545,482)
|
209,175
|
Gain
(loss) on embedded derivative
|
25,934
|
-
|
(400,220)
|
-
|
|
|
|
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Loss
before income taxes
|
(2,333,994)
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(1,535,010)
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(9,809,816)
|
(6,773,943)
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Benefit
from income taxes
|
(83,579)
|
(1,099,209)
|
(330,994)
|
(2,104,108)
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|
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Net
loss
|
$(2,250,415)
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$(435,801)
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$(9,478,822)
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$(4,669,835)
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Basic
net loss per share
|
$(0.26)
|
$(0.05)
|
$(1.11)
|
$(0.56)
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Diluted
net loss per share
|
$(0.26)
|
$(0.05)
|
$(1.11)
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$(0.56)
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Weighted
average common shares outstanding
|
|
|
|
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Basic
|
8,600,259
|
8,430,360
|
8,512,297
|
8,395,319
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Diluted
|
8,600,259
|
8,430,360
|
8,512,297
|
8,395,319
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|
December 31,
|
December 31,
|
|
2018
|
2017
|
Assets
|
|
|
Cash
and cash equivalents
|
$9,320,866
|
$5,399,747
|
Accounts
receivable
|
820,946
|
639,959
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Income
taxes receivable
|
22,913
|
2,132,616
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Other
current assets
|
1,184,217
|
899,127
|
Total
current assets
|
11,348,942
|
9,071,449
|
|
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Property
and equipment, net
|
1,260,798
|
799,145
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Goodwill
|
8,866,413
|
8,872,898
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Intangibles,
net
|
1,866,000
|
2,326,000
|
Other
long-term assets
|
665,123
|
612,631
|
Total
assets
|
$24,007,276
|
$21,682,123
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Liabilities
and Shareholders' Equity
|
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Accounts
payable
|
$1,613,477
|
$504,901
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Accrued
expenses and other current liabilities
|
774,944
|
625,680
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Deferred
revenue
|
250,656
|
279,818
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Income
taxes payable
|
23,705
|
171,384
|
Total
current liabilities
|
2,662,782
|
1,581,783
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|
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Deferred
income taxes
|
-
|
168,132
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Convertible
notes, including accrued interest
|
8,342,426
|
-
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Convertible
notes embedded derivative
|
214,350
|
-
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Total
liabilities
|
11,219,558
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1,749,915
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Shareholders'
equity:
|
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Preferred
stock, $0.001 par value
|
-
|
-
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Common
stock, $0.001 par value
|
8,639
|
8,456
|
Additional
paid in capital
|
30,446,838
|
28,362,397
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Accumulated
other comprehensive loss
|
(231,053)
|
(480,762)
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Accumulated
deficit
|
(17,352,706)
|
(7,873,883)
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Treasury
stock
|
(84,000)
|
(84,000)
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Total
shareholders' equity
|
12,787,718
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19,932,208
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|
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Total
liabilities and shareholders' equity
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$24,007,276
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$21,682,123
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Three Months Ended
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Year Ended
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||
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December 31,
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December 31,
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||
|
2018
|
2017
|
2018
|
2017
|
Net
loss
|
$(2,250,415)
|
$(435,801)
|
$(9,478,822)
|
$(4,669,835)
|
|
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Adjustments
to reconcile loss from operations:
|
|
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Depreciation
and amortization
|
260,101
|
204,794
|
892,233
|
807,574
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Amortization
of costs to acquire contracts
|
(43,814)
|
(67,894)
|
(106,696)
|
(305,401)
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Non-cash
stock compensation
|
253,797
|
209,340
|
964,676
|
768,778
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Non-employee
stock issuance expense
|
-
|
-
|
508,561
|
-
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Deferred
income taxes
|
(14,229)
|
(19,156)
|
(168,119)
|
5,618
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Loss/(gain)
on disposal of property and equipment
|
(4,700)
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-
|
(4,700)
|
3,481
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Non-cash
interest
|
100,000
|
-
|
304,301
|
-
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Change
in fair value of embedded derivative features
|
(25,934)
|
-
|
400,220
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-
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Amortization
of debt issuance costs
|
(19,078)
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-
|
(6,088)
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-
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Unearned
foreign currency gain/loss
|
(1,047)
|
(123,115)
|
289,339
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(70,769)
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Changes
in assets and liabilities:
|
|
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Accounts
receivable
|
(79,888)
|
47,156
|
(183,350)
|
665,296
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Other
assets
|
(79,965)
|
33,425
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(232,973)
|
136,769
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Income
taxes, net
|
(83,643)
|
(425,474)
|
1,966,648
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(1,105,771)
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Accounts
payable
|
424,807
|
(389,330)
|
1,094,281
|
(22,860)
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Accrued
expenses and other current liabilities
|
135,200
|
66,409
|
162,984
|
(256,969)
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Deferred
revenue
|
(87,255)
|
4,298
|
(27,283)
|
(8,795)
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Net
cash used in operating activities
|
(1,516,063)
|
(895,348)
|
(3,624,788)
|
(4,052,884)
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Cash flows from investing activities
|
|
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Purchases
of property and equipment
|
(497,733)
|
(28,555)
|
(893,886)
|
(177,110)
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Proceeds
from the sale of property and equipment
|
4,700
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-
|
4,700
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-
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Acquisitions
of customer assets from resellers
|
-
|
-
|
-
|
(64,268)
|
Proceeds
from the sale of discontinued operations
|
-
|
-
|
-
|
1,000,000
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Net
cash (used in) provided by investing activities
|
(493,033)
|
(28,555)
|
(889,186)
|
758,622
|
|
|
|
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|
Cash flows used in financing activities:
|
|
|
|
|
Proceeds
from issance of convertible note
|
-
|
-
|
8,000,000
|
-
|
Debt
issuance costs
|
-
|
-
|
(141,657)
|
-
|
Proceeds
from exercise of stock options
|
147,128
|
3,274
|
596,387
|
22,133
|
Net
cash provided by financing activities
|
147,128
|
3,274
|
8,454,730
|
22,133
|
|
|
|
|
|
Effect
of exchange rate on cash
|
(950)
|
3,493
|
(19,637)
|
20,502
|
|
|
|
|
|
Change
in cash and cash equivalents
|
$(1,862,918)
|
$(917,136)
|
$3,921,119
|
$(3,251,627)
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
$11,183,784
|
$6,316,883
|
$5,399,747
|
$8,651,374
|
|
|
|
|
|
Cash
and cash equivalents, end of period
|
$9,320,866
|
$5,399,747
|
$9,320,866
|
$5,399,747
|
|
Three Months Ended
|
Year Ended
|
||
|
December 31,
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December 31,
|
||
|
2018
|
2017
|
2018
|
2017
|
Net
loss
|
$(2,250)
|
$(436)
|
$(9,479)
|
$(4,670)
|
Benefit
from income taxes
|
(84)
|
(1,099)
|
(331)
|
(2,104)
|
Other
(expense) income, net
|
32
|
(133)
|
545
|
(209)
|
Gain
(loss) on embedded derivative
|
(26)
|
-
|
400
|
-
|
Depreciation
& amortization
|
260
|
205
|
892
|
808
|
Non-cash
stock compensation
|
254
|
209
|
965
|
769
|
Non-employee
stock issuance expense
|
-
|
-
|
509
|
-
|
Acquisition-related
charges
|
-
|
2
|
-
|
69
|
Restructuring
|
252
|
-
|
252
|
-
|
Adjusted EBITDA
|
(1,562)
|
(1,252)
|
(6,247)
|
(5,337)
|
|
Three Months Ended
|
Year Ended
|
||
|
December 31,
|
December 31,
|
||
|
2018
|
2017
|
2018
|
2017
|
Net
loss
|
$(2,250)
|
$(436)
|
$(9,479)
|
$(4,670)
|
Amortization
of intangible assets
|
115
|
132
|
460
|
527
|
Non-cash
stock compensation
|
254
|
209
|
965
|
769
|
Non-employee
stock issuance expense
|
-
|
-
|
509
|
-
|
Gain
(loss) on embedded derivative
|
(26)
|
-
|
400
|
-
|
Acquisition-related
charges
|
-
|
2
|
-
|
69
|
Restructuring
|
252
|
-
|
252
|
-
|
Tax
adjustment
|
(10)
|
(225)
|
(87)
|
(406)
|
Core net loss
|
$(1,665)
|
$(318)
|
$(6,980)
|
$(3,711)
|
|
|
|
|
|
Core net loss per share
|
$(0.19)
|
$(0.04)
|
$(0.82)
|
$(0.44)
|
Weighted
average common shares outstanding
|
8,600
|
8,430
|
8,512
|
8,395
|