Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-9330 | |
Entity Registrant Name | CORECARD CORPORATION | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 58-1964787 | |
Entity Address, Address Line One | One Meca Way | |
Entity Address, City or Town | Norcross | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30093 | |
City Area Code | 770 | |
Local Phone Number | 381-2900 | |
Title of 12(b) Security | Common Stock, $0.01 par value for the class | |
Trading Symbol | CCRD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 8,440,356 | |
Entity Central Index Key | 0000320340 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 31,614 | $ 20,399 |
Marketable securities | 5,147 | 4,973 |
Accounts receivable, net | 5,875 | 13,220 |
Other current assets | 5,887 | 3,729 |
Total current assets | 48,523 | 42,321 |
Investments | 3,634 | 5,180 |
Property and equipment, at cost less accumulated depreciation | 11,681 | 12,006 |
Other long-term assets | 2,947 | 3,725 |
Total assets | 66,785 | 63,232 |
Current liabilities: | ||
Accounts payable | 1,708 | 2,011 |
Deferred revenue, current portion | 3,743 | 1,094 |
Accrued payroll | 1,941 | 1,888 |
Accrued expenses | 806 | 525 |
Other current liabilities | 2,043 | 2,025 |
Total current liabilities | 10,241 | 7,543 |
Commitments and Contingencies (see Note 8) | ||
Commitments and Contingencies | ||
Deferred revenue, net of current portion | 361 | 473 |
Deferred tax liability | 541 | 472 |
Long-term lease obligation | 1,367 | 1,981 |
Total noncurrent liabilities | 2,269 | 2,926 |
Stockholders’ equity: | ||
Outstanding shares – 8,440,356 and 8,502,735 at September 30, 2023 and December 31, 2022, respectively | 90 | 90 |
Additional paid-in capital | 16,621 | 16,471 |
Treasury stock, 575,784 and 507,384 shares at September 30, 2023 and December 31, 2022, respectively, at cost | (18,213) | (16,662) |
Accumulated other comprehensive income (loss) | (57) | (61) |
Accumulated income | 55,834 | 52,925 |
Total stockholders’ equity | 54,275 | 52,763 |
Total liabilities and stockholders’ equity | $ 66,785 | $ 63,232 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 9,016,140 | 9,010,119 |
Common stock, shares outstanding (in shares) | 8,440,356 | 8,502,735 |
Treasury Stock, Common, Shares (in shares) | 575,784 | 507,384 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Total net revenue | $ 13,399 | $ 14,450 | $ 43,847 | $ 53,940 |
Cost of revenue | ||||
Total cost of revenue | 9,279 | 8,431 | 28,380 | 23,824 |
Expenses | ||||
Marketing | 63 | 80 | 237 | 231 |
General and administrative | 1,155 | 1,107 | 4,220 | 4,048 |
Development | 2,489 | 3,129 | 6,094 | 8,916 |
Income from operations | 413 | 1,703 | 4,916 | 16,921 |
Investment income (loss) | (1,015) | 39 | (1,701) | 196 |
Other income (loss), net | 308 | 60 | 653 | 126 |
(Loss) income before income taxes | (294) | 1,802 | 3,868 | 17,243 |
Income taxes | (72) | 443 | 959 | 4,358 |
Net (loss) income | $ (222) | $ 1,359 | $ 2,909 | $ 12,885 |
us-gaap_EarningsPerShareAbstract | ||||
Basic (in dollars per share) | $ (0.03) | $ 0.16 | $ 0.34 | $ 1.50 |
Diluted (in dollars per share) | $ (0.03) | $ 0.16 | $ 0.34 | $ 1.49 |
Basic weighted average common shares outstanding (in shares) | 8,460,473 | 8,538,954 | 8,485,416 | 8,596,654 |
Diluted weighted average common shares outstanding (in shares) | 8,460,473 | 8,559,665 | 8,509,825 | 8,621,388 |
Service [Member] | ||||
Revenue | ||||
Total net revenue | $ 13,399 | $ 14,450 | $ 42,053 | $ 39,657 |
Cost of revenue | ||||
Total cost of revenue | 9,279 | 8,431 | 28,380 | 23,824 |
Product [Member] | ||||
Revenue | ||||
Total net revenue | $ 0 | $ 0 | $ 1,794 | $ 14,283 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net (loss) income | $ (222) | $ 1,359 | $ 2,909 | $ 12,885 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on marketable securities | 11 | (6) | 36 | (6) |
Foreign currency translation adjustments | 15 | 120 | (32) | 364 |
Total comprehensive (loss) income | $ (196) | $ 1,473 | $ 2,913 | $ 13,243 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock Outstanding [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance (in shares) at Dec. 31, 2021 | 8,689,815 | ||||||
Balance at Dec. 31, 2021 | $ 90 | $ 16,261 | $ (11,327) | $ (194) | $ 39,044 | $ 43,874 | |
Common stock repurchased* (in shares) | (70,864) | ||||||
Common stock repurchased* | (2,332) | ||||||
Net (loss) income | 8,670 | 8,670 | |||||
Stock compensation expense | 10 | 10 | |||||
Foreign currency translation adjustment | 1 | 1 | |||||
Balance (in shares) at Mar. 31, 2022 | 8,618,951 | ||||||
Balance at Mar. 31, 2022 | 90 | 16,271 | (13,659) | (193) | 47,714 | 50,223 | |
Balance (in shares) at Dec. 31, 2021 | 8,689,815 | ||||||
Balance at Dec. 31, 2021 | 90 | 16,261 | (11,327) | (194) | 39,044 | 43,874 | |
Net (loss) income | 12,885 | ||||||
Unrealized gain (loss) on marketable securities | (6) | ||||||
Balance (in shares) at Sep. 30, 2022 | 8,510,565 | ||||||
Balance at Sep. 30, 2022 | 90 | 16,421 | (16,369) | 164 | 51,929 | 52,235 | |
Common stock repurchased* | (2,332) | ||||||
Balance (in shares) at Mar. 31, 2022 | 8,618,951 | ||||||
Balance at Mar. 31, 2022 | 90 | 16,271 | (13,659) | (193) | 47,714 | 50,223 | |
Common stock repurchased* (in shares) | (58,447) | ||||||
Common stock repurchased* | (1,347) | (1,347) | |||||
Net (loss) income | 2,856 | 2,856 | |||||
Stock compensation expense | 150 | 150 | |||||
Foreign currency translation adjustment | 243 | 243 | |||||
Stock compensation expense (in shares) | 6,504 | ||||||
Balance (in shares) at Jun. 30, 2022 | 8,567,008 | ||||||
Balance at Jun. 30, 2022 | 90 | 16,421 | (15,006) | 50 | 50,570 | 52,125 | |
Common stock repurchased* (in shares) | (56,443) | ||||||
Common stock repurchased* | (1,363) | (1,363) | |||||
Net (loss) income | 1,359 | 1,359 | |||||
Foreign currency translation adjustment | 120 | 120 | |||||
Unrealized gain (loss) on marketable securities | (6) | (6) | |||||
Balance (in shares) at Sep. 30, 2022 | 8,510,565 | ||||||
Balance at Sep. 30, 2022 | 90 | 16,421 | (16,369) | 164 | 51,929 | 52,235 | |
Balance (in shares) at Dec. 31, 2022 | 8,502,735 | ||||||
Balance at Dec. 31, 2022 | 90 | 16,471 | (16,662) | (61) | 52,925 | 52,763 | |
Net (loss) income | 1,256 | 1,256 | |||||
Foreign currency translation adjustment | (53) | (53) | |||||
Unrealized gain (loss) on marketable securities | 37 | 37 | |||||
Balance (in shares) at Mar. 31, 2023 | 8,502,735 | ||||||
Balance at Mar. 31, 2023 | 90 | 16,471 | (16,662) | (77) | 54,181 | 54,003 | |
Balance (in shares) at Dec. 31, 2022 | 8,502,735 | ||||||
Balance at Dec. 31, 2022 | 90 | 16,471 | (16,662) | (61) | 52,925 | 52,763 | |
Net (loss) income | 2,909 | ||||||
Unrealized gain (loss) on marketable securities | 36 | ||||||
Balance (in shares) at Sep. 30, 2023 | 8,440,356 | ||||||
Balance at Sep. 30, 2023 | 90 | 16,621 | (18,213) | (57) | 55,834 | 54,275 | |
Balance (in shares) at Mar. 31, 2023 | 8,502,735 | ||||||
Balance at Mar. 31, 2023 | 90 | 16,471 | (16,662) | (77) | 54,181 | 54,003 | |
Common stock repurchased* (in shares) | (18,075) | ||||||
Common stock repurchased* | (443) | (443) | |||||
Net (loss) income | 1,875 | 1,875 | |||||
Stock compensation expense | 0 | 150 | 150 | ||||
Foreign currency translation adjustment | 6 | 6 | |||||
Stock compensation expense (in shares) | 6,021 | ||||||
Unrealized gain (loss) on marketable securities | (12) | (12) | |||||
Balance (in shares) at Jun. 30, 2023 | 8,490,681 | ||||||
Balance at Jun. 30, 2023 | 90 | 16,621 | (17,105) | (83) | 56,056 | 55,579 | |
Common stock repurchased* (in shares) | (50,325) | ||||||
Common stock repurchased* | (1,108) | (1,108) | |||||
Net (loss) income | (222) | (222) | |||||
Foreign currency translation adjustment | 15 | 15 | |||||
Unrealized gain (loss) on marketable securities | 11 | 11 | |||||
Balance (in shares) at Sep. 30, 2023 | 8,440,356 | ||||||
Balance at Sep. 30, 2023 | $ 90 | $ 16,621 | $ (18,213) | $ (57) | $ 55,834 | $ 54,275 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ 2,909,000 | $ 12,885,000 |
us-gaap_AdjustmentsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivitiesAbstract | ||
Depreciation and amortization | 5,011,000 | 3,636,000 |
Stock-based compensation expense | 150,000 | 160,000 |
Deferred income taxes | 69,000 | 312,000 |
Non-cash investment loss (income) | 1,000,000 | (18,000) |
Equity in loss (gain) of affiliate company | 701,000 | (195,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 7,345,000 | (2,268,000) |
Other current assets | (2,329,000) | (2,620,000) |
Other long-term assets | 563,000 | (41,000) |
Accounts payable | (78,000) | 600,000 |
Accrued payroll | 53,000 | 336,000 |
Deferred revenue, current portion | 2,649,000 | (1,134,000) |
Accrued expenses | 281,000 | (54,000) |
Other current liabilities | 40,000 | (1,052,000) |
Deferred revenue, net of current portion | (112,000) | 310,000 |
Net cash provided by operating activities | 18,252,000 | 10,857,000 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (4,845,000) | (7,532,000) |
Advances on notes and interest receivable | 450,000 | |
Proceeds from payments on notes receivable | 147,000 | 165,000 |
Purchase of marketable securities | (1,776,000) | (988,000) |
Maturities of marketable securities | 1,602,000 | |
Purchase of long-term investment | (155,000) | |
Net cash used for investing activities | (5,477,000) | (8,355,000) |
FINANCING ACTIVITIES: | ||
Repurchases of common stock | (1,528,000) | (5,042,000) |
Net cash used for financing activities | (1,528,000) | (5,042,000) |
Effects of exchange rate changes on cash | (32,000) | 364,000 |
Net increase (decrease) in cash | 11,215,000 | (2,176,000) |
Cash at beginning of period | 20,399,000 | 29,244,000 |
Cash at end of period | 31,614,000 | 27,068,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during the period for income taxes | $ 168,000 | 5,330,000 |
Purchases of property and equipment, accrued but not paid | $ 207,000 |
Note 1 - Summary of Significant
Note 1 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Throughout this report, the terms “we”, “us”, “ours”, “CoreCard” and “Company” refer to CoreCard Corporation, including its wholly-owned and majority-owned subsidiaries. The unaudited Consolidated Financial Statements presented in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States applicable to interim financial statements. Accordingly, they do not include all of the information and notes required for complete financial statements. In the opinion of CoreCard management, these Consolidated Financial Statements contain all adjustments (which comprise only normal and recurring accruals) necessary to present fairly the financial position and results of operations as of and for the three and nine month periods ended September 30, 2023 and 2022. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with our Consolidated Financial Statements and notes thereto for the fiscal year ended December 31, 2022, as filed in our Annual Report on Form 10-K. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Recent Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU 2019-10 and ASU 2019-11 to provide additional guidance on the credit losses standard. The ASUs are effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. We adopted the ASUs on January 1, 2023, which did not have a material impact on our consolidated financial statements. In March 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" (ASU 2022-02), which eliminates the accounting guidance for troubled debt restructurings (TDRs) by creditors that have adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and enhances certain disclosure requirements. The ASU is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. We adopted the ASUs on January 1, 2023, which did not have a material impact on our Consolidated Financial Statements. We have considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our Consolidated Financial Statements. |
Note 2 - Revenue
Note 2 - Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | 2. REVENUE Disaggregation of Revenue In the following table, revenue is disaggregated by type of revenue for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 License $ − $ − $ 1,794 $ 14,283 Professional services 6,432 7,776 22,127 21,943 Processing and maintenance 5,814 5,267 16,933 13,837 Third party 1,153 1,407 2,993 3,877 Total $ 13,399 $ 14,450 $ 43,847 $ 53,940 Foreign revenues are based on the location of the customer. Revenues from customers by geographic area for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 United States $ 12,777 $ 13,973 $ 42,307 $ 52,836 Middle East 588 451 1,452 1,030 European Union 34 26 88 74 Total $ 13,399 $ 14,450 $ 43,847 $ 53,940 Concentration of Revenue The following table indicates the percentage of consolidated revenue represented by each customer that represented more than 10 percent of consolidated revenue in the three and nine month periods ended September 30, 2023 and 2022. Most of our customers have multi-year contracts with recurring revenue as well as professional services fees that vary by period depending on their business needs. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Customer A 62 % 70 % 68 % 77 % |
Note 3 - Note Receivable
Note 3 - Note Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Financing Receivables [Text Block] | 3. NOTES RECEIVABLE In February 2021, we entered into and advanced a $550,000 Promissory Note with a privately held technology company and program manager in the FinTech industry. The note had an interest rate of 4.6 percent annually and was paid in full in August 2023. In September 2023, we entered into and advanced a $450,000 Promissory Note with a maturity date of October 2025 and an annual interest rate of 5.25 percent. The carrying value of the current portion of our note receivable of $240,000 at September 30, 2023 is included in other current assets on the Consolidated Balance Sheets. The carrying value of the noncurrent portion of our note receivable of $210,000 at September 30, 2023 is included in other long-term assets on the Consolidated Balance Sheets. |
Note 4 - Investments
Note 4 - Investments | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Investment [Text Block] | 4. INVESTMENTS We hold a 28 percent ownership interest in a privately held identity and professional services company with ties to the FinTech industry. The carrying value of our investment was $3,479,000 at September 30, 2023, included in investments on the Consolidated Balance Sheets. We account for this investment using the equity method of accounting which resulted in losses of $15,000 and $701,000 for the three and nine months ended September 30, 2023, respectively, and income of $38,000 and $195,000 for the three and nine months ended September 30, 2022, respectively, included in investment income (loss) on the Consolidated Statement of Operations. We evaluate on a continuing basis whether any impairment indicators are present that would require additional analysis or write-downs of the investment. While we have not recorded an impairment related to this investment as of September 30, 2023, variations from current expectations could result in future impairment charges. In the second quarter of 2021, we invested $1,000,000 in a privately held company that provides supply chain and receivables financing. During the third quarter of 2023, due to the failure of the business to successfully monetize its product offerings, we recorded an impairment charge of $1,000,000 included in investment income (loss) on the Consolidated Statement of Operations, to reduce the carrying value of the investee company to $0 as of September 30, 2023. |
Note 5 - Stock-based Compensati
Note 5 - Stock-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | 5. STOCK-BASED COMPENSATION At September 30, 2023, we have two As of September 30, 2023, there is no no No Options Outstanding and Exercisable: Range of Number Wgt. Avg. Contractual Wgt. Avg. Aggregate $3.50 - $3.86 13,000 3.5 $ 3.75 $ 211,260 $7.80 8,000 4.7 $ 7.80 $ 97,600 $19.99 30,000 5.3 $ 19.99 $ 300 $39.11 8,000 5.7 $ 39.11 $ − $3.50 - $39.11 59,000 4.9 $ 17.35 $ 309,160 The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our 2022 Form 10-K. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the company’s closing stock price on the last trading day of the third quarter of 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2023. The amount of aggregate intrinsic value will change based on the market value of the company’s stock. |
Note 6 - Fair Value of Financia
Note 6 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Fair Value, Option [Text Block] | 6. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash and cash equivalents, marketable securities, accounts receivable, notes receivable, accounts payable and certain other financial instruments (such as accrued expenses, and other current liabilities) included in the accompanying Consolidated Balance Sheets approximates their fair value principally due to the short-term maturity of these instruments. Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, marketable securities, trade accounts and notes receivable. Our available cash is held in accounts managed by third-party financial institutions. Cash may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While we monitor cash balances on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, we have experienced no loss or lack of access to our cash; however, we can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. |
Note 7 - Fair Value Measurement
Note 7 - Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 7. FAIR VALUE MEASUREMENTS In determining fair value, the Company uses quoted market prices in active markets. GAAP establishes a fair value measurement framework, provides a single definition of fair value, and requires expanded disclosure summarizing fair value measurements. GAAP emphasizes that fair value is a market-based measurement, not an entity specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable input be used when available. Observable inputs are based on data obtained from sources independent of the Company that market participants would use in pricing the asset or liability. Unobservable inputs are inputs that reflect the company’s assumptions about the estimates market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is measured in three levels based on the reliability of inputs: • Level 1 Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. • Level 2 Valuations based on quoted prices in less active, dealer or broker markets. Fair values are primarily obtained from third party pricing services for identical or comparable assets or liabilities. • Level 3 Valuations derived from other valuation methodologies, including pricing models, discounted cash flow models and similar techniques, and not based on market, exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections that are not observable in the market and significant professional judgment is needed in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value of equity method investments has not been determined as it was impracticable to do so due to the fact that the investee companies are relatively small, early stage private companies for which there is no comparable valuation data available without unreasonable time and expense. The following tables present the fair value hierarchy for assets and liabilities measured at fair value: September 30, 2023 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Cash equivalents Money market accounts $ 25,947 $ − $ − $ 25,947 Marketable securities Corporate, municipal debt and treasury securities 5,147 − − 5,147 Total assets $ 31,094 $ − $ − $ 31,094 The Company classifies money market funds, commercial paper, U.S. government securities, asset-backed securities and corporate securities within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. There were no transfers of financial instruments between the fair value hierarchy levels during the nine months ended September 30, 2023. |
Note 8 - Marketable Securities
Note 8 - Marketable Securities | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 8. MARKETABLE SECURITIES The amortized cost, unrealized gain (loss), and estimated fair value of the Company's investments in securities available for sale consisted of the following: September 30, 2023 (In thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Marketable securities Corporate, municipal debt and treasury securities $ 5,109 $ 56 $ (18 ) $ 5,147 The Company had fifteen not The following table summarizes the stated maturities of the Company’s marketable securities: September 30, 2023 December 31, 2022 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 2,012 $ 2,048 $ 1,594 $ 1,602 Due after one year through three years 3,097 3,099 3,356 3,371 Total $ 5,109 $ 5,147 $ 4,950 $ 4,973 |
Note 9 - Commitments and Contin
Note 9 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Legal Matters and Contingencies [Text Block] | 9. COMMITMENTS AND CONTINGENCIES Leases We have noncancelable operating leases for offices and data centers expiring at various dates through February 2027. These operating leases are included in other long-term assets on the Company's September 30, 2023 and December 31, 2022 Consolidated Balance Sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are included in other current liabilities and long-term lease obligation on the Company's September 30, 2023 and December 31, 2022 Consolidated Balance Sheets. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Supplemental Information Leases Supplemental information related to our right-of-use assets and related lease liabilities is as follows: September 30, 2023 December 31, 2022 Right-of-use asset, net and lease liabilities (in thousands) $ 2,342 $ 3,373 Weighted average remaining lease term (years) 2.7 3.2 Weighted average discount rate 3.4 % 3.4 % For the nine-months ended September 30, 2023 and 2022, cash paid for operating leases included in operating cash flows was $1,005,000 and $994,000, respectively. Maturities of our operating lease liabilities as of September 30, 2023 is as follows: Operating Leases (in thousands) 2023 $ 362 2024 1,017 2025 635 2026 523 2027 68 Total lease liabilities $ 2,605 Lease expense for the three and nine months ended September 30, 2023 and 2022 consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Cost of Revenue $ 187 $ 183 $ 557 $ 595 General and Administrative 116 105 339 259 Development 28 47 109 140 Total $ 331 $ 335 $ 1,005 $ 994 Legal Matters There are no pending or threatened legal proceedings. However, in the ordinary course of business, from time to time we may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain, and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. We accrue for unpaid legal fees for services performed to date. |
Note 10 - Income Taxes
Note 10 - Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 10. INCOME TAXES We recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized, net of a valuation allowance, for the estimated future tax effects of deductible temporary differences and tax credit carry-forwards. A valuation allowance against deferred tax assets is recorded when, and if, based upon available evidence, it is more likely than not that some or all deferred tax assets will not be realized. There were no We file a consolidated U.S. federal income tax return for all subsidiaries in which our ownership equals or exceeds 80%, as well as individual subsidiary returns in various states and foreign jurisdictions. With few exceptions we are no longer subject to U.S. federal, state and local or foreign income tax examinations by taxing authorities for returns filed more than three years ago. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation Throughout this report, the terms “we”, “us”, “ours”, “CoreCard” and “Company” refer to CoreCard Corporation, including its wholly-owned and majority-owned subsidiaries. The unaudited Consolidated Financial Statements presented in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States applicable to interim financial statements. Accordingly, they do not include all of the information and notes required for complete financial statements. In the opinion of CoreCard management, these Consolidated Financial Statements contain all adjustments (which comprise only normal and recurring accruals) necessary to present fairly the financial position and results of operations as of and for the three and nine month periods ended September 30, 2023 and 2022. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with our Consolidated Financial Statements and notes thereto for the fiscal year ended December 31, 2022, as filed in our Annual Report on Form 10-K. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU 2019-10 and ASU 2019-11 to provide additional guidance on the credit losses standard. The ASUs are effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. We adopted the ASUs on January 1, 2023, which did not have a material impact on our consolidated financial statements. In March 2022, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" (ASU 2022-02), which eliminates the accounting guidance for troubled debt restructurings (TDRs) by creditors that have adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and enhances certain disclosure requirements. The ASU is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. We adopted the ASUs on January 1, 2023, which did not have a material impact on our Consolidated Financial Statements. We have considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our Consolidated Financial Statements. |
Note 2 - Revenue (Tables)
Note 2 - Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 License $ − $ − $ 1,794 $ 14,283 Professional services 6,432 7,776 22,127 21,943 Processing and maintenance 5,814 5,267 16,933 13,837 Third party 1,153 1,407 2,993 3,877 Total $ 13,399 $ 14,450 $ 43,847 $ 53,940 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 United States $ 12,777 $ 13,973 $ 42,307 $ 52,836 Middle East 588 451 1,452 1,030 European Union 34 26 88 74 Total $ 13,399 $ 14,450 $ 43,847 $ 53,940 |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Customer A 62 % 70 % 68 % 77 % |
Note 5 - Stock-based Compensa_2
Note 5 - Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Table Text Block] | Options Outstanding and Exercisable: Range of Number Wgt. Avg. Contractual Wgt. Avg. Aggregate $3.50 - $3.86 13,000 3.5 $ 3.75 $ 211,260 $7.80 8,000 4.7 $ 7.80 $ 97,600 $19.99 30,000 5.3 $ 19.99 $ 300 $39.11 8,000 5.7 $ 39.11 $ − $3.50 - $39.11 59,000 4.9 $ 17.35 $ 309,160 |
Note 7 - Fair Value Measureme_2
Note 7 - Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block] | September 30, 2023 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Cash equivalents Money market accounts $ 25,947 $ − $ − $ 25,947 Marketable securities Corporate, municipal debt and treasury securities 5,147 − − 5,147 Total assets $ 31,094 $ − $ − $ 31,094 |
Note 8 - Marketable Securities
Note 8 - Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Marketable Securities [Table Text Block] | September 30, 2023 (In thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Marketable securities Corporate, municipal debt and treasury securities $ 5,109 $ 56 $ (18 ) $ 5,147 |
Investments Classified by Contractual Maturity Date [Table Text Block] | September 30, 2023 December 31, 2022 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 2,012 $ 2,048 $ 1,594 $ 1,602 Due after one year through three years 3,097 3,099 3,356 3,371 Total $ 5,109 $ 5,147 $ 4,950 $ 4,973 |
Note 9 - Commitments and Cont_2
Note 9 - Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Lease, Cost [Table Text Block] | September 30, 2023 December 31, 2022 Right-of-use asset, net and lease liabilities (in thousands) $ 2,342 $ 3,373 Weighted average remaining lease term (years) 2.7 3.2 Weighted average discount rate 3.4 % 3.4 % Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Cost of Revenue $ 187 $ 183 $ 557 $ 595 General and Administrative 116 105 339 259 Development 28 47 109 140 Total $ 331 $ 335 $ 1,005 $ 994 |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Operating Leases (in thousands) 2023 $ 362 2024 1,017 2025 635 2026 523 2027 68 Total lease liabilities $ 2,605 |
Note 2 - Revenue - Disaggregati
Note 2 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | $ 13,399 | $ 14,450 | $ 43,847 | $ 53,940 |
UNITED STATES | ||||
Revenue | 12,777 | 13,973 | 42,307 | 52,836 |
Middle East [Member] | ||||
Revenue | 588 | 451 | 1,452 | 1,030 |
European Union [Member] | ||||
Revenue | 34 | 26 | 88 | 74 |
License [Member] | ||||
Revenue | 0 | 0 | 1,794 | 14,283 |
Professional Services [Member] | ||||
Revenue | 6,432 | 7,776 | 22,127 | 21,943 |
Processing and Maintenance [Member] | ||||
Revenue | 5,814 | 5,267 | 16,933 | 13,837 |
Third party [Member] | ||||
Revenue | $ 1,153 | $ 1,407 | $ 2,993 | $ 3,877 |
Note 2 - Revenue - Concentratio
Note 2 - Revenue - Concentration of Revenue (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||||
Concentration | 62% | 70% | 68% | 77% |
Note 3 - Note Receivable (Detai
Note 3 - Note Receivable (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Feb. 28, 2021 | Sep. 30, 2023 | |
Payments to Acquire Notes Receivable | $ 450,000 | $ 450,000 | |
Notes Receivable, Stated Interest Rate | 5.25% | 5.25% | |
Financing Receivable, after Allowance for Credit Loss, Current | $ 240,000 | $ 240,000 | |
Financing Receivable, after Allowance for Credit Loss, Noncurrent | $ 210,000 | $ 210,000 | |
Privately-Held Identity and Professional Services Company With Ties to the FinTech Industry [Member] | |||
Payments to Acquire Notes Receivable | $ 550,000 | ||
Notes Receivable, Stated Interest Rate | 4.60% |
Note 4 - Investments (Details T
Note 4 - Investments (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity Method Investments | $ 3,479,000 | $ 3,479,000 | |||||
Gain (Loss) on Investments | 15,000 | $ (38,000) | 701,000 | $ (195,000) | |||
Gain (Loss) on Investments | (15,000) | $ 38,000 | (701,000) | $ 195,000 | |||
Payments to Acquire Investments, Total | 155,000 | ||||||
Long-Term Investments | $ 3,634,000 | $ 3,634,000 | $ 5,180,000 | ||||
Privately-Held Identity and Professional Services Company With Ties to the FinTech Industry [Member] | |||||||
Equity Method Investment, Ownership Percentage | 28% | 28% | |||||
Privately Held Company Providing Supply Chain and Receivables Financing [Member] | |||||||
Payments to Acquire Investments, Total | $ 1,000,000 | ||||||
Asset Impairment Charges | $ 1,000,000 | ||||||
Long-Term Investments | $ 0 | $ 0 |
Note 5 - Stock-based Compensa_3
Note 5 - Stock-based Compensation (Details Textual) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | |
Number of Stock-based Compensation Plans in Effect | 2 | 2 | ||
Share-Based Payment Arrangement, Expense | $ | $ 0 | $ 0 | $ 150,000 | $ 160,000 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 0 | $ 0 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) | shares | 0 | 0 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Expirations in Period (in shares) | shares | 0 |
Note 5 - Stock-based Compensa_4
Note 5 - Stock-based Compensation - Stock Options Outstanding and Exercisable (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Lower Range of Exercise Price (in dollars per share) | $ 3.50 |
Upper Range of Exercise Price (in dollars per share) | $ 39.11 |
Number Outstanding (in shares) | shares | 59,000 |
Outstanding Weighted Average Contractual Life Remaining (Year) | 4 years 10 months 24 days |
Outstanding Weighted Average Exercise Price (in dollars per share) | $ 17.35 |
Outstanding Aggregate Intrinsic Value | $ | $ 309,160 |
Options Outstanding Exercise Price Range1 [Member] | |
Lower Range of Exercise Price (in dollars per share) | $ 3.50 |
Upper Range of Exercise Price (in dollars per share) | $ 3.86 |
Number Outstanding (in shares) | shares | 13,000 |
Outstanding Weighted Average Contractual Life Remaining (Year) | 3 years 6 months |
Outstanding Weighted Average Exercise Price (in dollars per share) | $ 3.75 |
Outstanding Aggregate Intrinsic Value | $ | $ 211,260 |
Options Outstanding Exercise Price Range2 [Member] | |
Upper Range of Exercise Price (in dollars per share) | $ 7.80 |
Number Outstanding (in shares) | shares | 8,000 |
Outstanding Weighted Average Contractual Life Remaining (Year) | 4 years 8 months 12 days |
Outstanding Weighted Average Exercise Price (in dollars per share) | $ 7.80 |
Outstanding Aggregate Intrinsic Value | $ | $ 97,600 |
Options Outstanding Exercise Price Range 3 [Member] | |
Upper Range of Exercise Price (in dollars per share) | $ 19.99 |
Number Outstanding (in shares) | shares | 30,000 |
Outstanding Weighted Average Contractual Life Remaining (Year) | 5 years 3 months 18 days |
Outstanding Weighted Average Exercise Price (in dollars per share) | $ 19.99 |
Outstanding Aggregate Intrinsic Value | $ | $ 300 |
Options Outstanding Exercise Price Range 4 [Member] | |
Upper Range of Exercise Price (in dollars per share) | $ 39.11 |
Number Outstanding (in shares) | shares | 8,000 |
Outstanding Weighted Average Contractual Life Remaining (Year) | 5 years 8 months 12 days |
Outstanding Weighted Average Exercise Price (in dollars per share) | $ 39.11 |
Note 7 - Fair Value Measureme_3
Note 7 - Fair Value Measurements - Fair Value Hierarchy for Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Corporate, municipal debt and treasury securities | $ 5,147 | $ 4,973 |
Total assets | 31,094 | |
Corporate Debt Securities [Member] | ||
Corporate, municipal debt and treasury securities | 5,147 | |
Money Market Funds [Member] | ||
Money market accounts | 25,947 | |
Fair Value, Inputs, Level 1 [Member] | ||
Total assets | 31,094 | |
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | ||
Corporate, municipal debt and treasury securities | 5,147 | |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Money market accounts | $ 25,947 |
Note 8 - Marketable Securitie_2
Note 8 - Marketable Securities (Details Textual) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Number of Positions | 15 | |
Other-than-temporary Impairment Loss, Debt Securities, Available-for-Sale | $ 0 | $ 0 |
Note 8 - Marketable Securitie_3
Note 8 - Marketable Securities - Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | $ 5,109 | $ 4,950 |
Estimated Fair Value | 5,147 | $ 4,973 |
Corporate and Municipal Debt Securities [Member] | ||
Amortized Cost | 5,109 | |
Unrealized Gain | 56 | |
Unrealized Loss | (18) | |
Estimated Fair Value | $ 5,147 |
Note 8 - Marketable Securitie_4
Note 8 - Marketable Securities - Maturity of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Due within one year, Amortized cost | $ 2,012 | $ 1,594 |
Due within one year, Fair Value | 2,048 | 1,602 |
Due after one year through three years, Amortized cost | 3,097 | 3,356 |
Due after one year through three years, Fair Value | 3,099 | 3,371 |
Amortized Cost | 5,109 | 4,950 |
Estimated Fair Value | $ 5,147 | $ 4,973 |
Note 9 - Commitments and Cont_3
Note 9 - Commitments and Contingencies (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Lease, Payments | $ 1,005,000 | $ 994,000 |
Note 9 - Commitments and Cont_4
Note 9 - Commitments and Contingencies - Supplemental Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Right-of-use asset, net and lease liabilities (in thousands) | $ 2,342 | $ 2,342 | $ 3,373 | ||
Lease expense | $ 331 | $ 335 | $ 1,005 | $ 994 | |
Weighted average remaining lease term (years) (Year) | 2 years 8 months 12 days | 2 years 8 months 12 days | 3 years 2 months 12 days | ||
Weighted average discount rate | 3.40% | 3.40% | 3.40% | ||
Cost of Sales [Member] | |||||
Lease expense | $ 187 | 183 | $ 557 | 595 | |
General and Administrative Expense [Member] | |||||
Lease expense | 116 | 105 | 339 | 259 | |
Research and Development Expense [Member] | |||||
Lease expense | $ 28 | $ 47 | $ 109 | $ 140 |
Note 9 - Commitments and Cont_5
Note 9 - Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
2023 | $ 362 |
2024 | 1,017 |
2025 | 635 |
2026 | 523 |
2027 | 68 |
Total lease liabilities | $ 2,605 |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Unrecognized Tax Benefits, Ending Balance | $ 0 | $ 0 |