Crexendo, Inc. - Quarter Report: 2012 March (Form 10-Q)

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Delaware		87-0591719
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)
1615 South 52nd Street, Tempe, AZ		85281
(Address of Principal Executive Offices)		(Zip Code)

 

 

 

 

 

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ

 

 

 

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PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements			3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			29
Item 4.	Controls and Procedures			29
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings			30
Item 1A.	Risk Factors			30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3.	Defaults Upon Senior Securities			30
Item 4.	Mine Safety Disclosures			30
Item 5.	Other Information			30
Item 6.	Exhibits			31
Signatures				32

 

 

		Three Months Ended March 31,
		2012				2011
Revenue		$	5,255			$	14,568
Operating expenses:
Cost of revenue			1,421				6,305
Selling and marketing			933				8,763
General and administrative			3,033				2,759
Research and development			594				872
Total operating expenses			5,981				18,699
Loss from operations			(726	)			(4,131	)
Other income (expense):
Interest income			742				1,153
Interest expense			-				(1	)
Other income, net			28				6
Total other income, net			770				1,158
Income (loss) before income tax benefit			44				(2,973	)
Income tax benefit			153				1,122
Net income (loss)		$	197			$	(1,851	)
Net income (loss) per common share:
Basic		$	0.02			$	(0.17	)
Diluted		$	0.02			$	(0.17	)
Dividends per common share:		$	0.02			$	0.02
Weighted average common shares outstanding:
Basic			10,530,066				10,638,597
Diluted			10,566,273				10,638,597

 

 

 

 

 

(1)	Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

 

 

 

 

 

 

 

 

 

 

(2)

Dividends

 

 

 

 

 

 

 

 

(4)	Trade Receivables

 

 

(5)	Income Taxes

 

(6)	Fair Value Measurements

 

 

 

 

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Quoted prices for similar assets or liabilities in active markets;

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Quoted prices for identical or similar assets in non-active markets;

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Inputs other than quoted prices that are observable for the asset or liability; and

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Inputs that are derived principally from or corroborated by other observable market data.

 

 

 

 

 

 

 

(7)	Commitments and Contingencies

 

 

 

(8)	Restricted Cash

 

 

(9)	Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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our belief that our target market will increasingly look to Internet solutions providers who leverage industry and customer practices, increase predictability of success of their Internet initiatives and decrease implementation risks by providing low-cost, scalable solutions with minimal lead time;

 

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our belief that we can compete successfully by relying on our infrastructure and marketing strategies as well as techniques, systems and procedures, and by adding additional products and services in the future;

 

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our belief that we can continue our success by periodic review and revision of our methods of doing business and by continuing our expansion into domestic and international markets;

 

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our belief that a key component of our success comes from a number of new, recently developed proprietary technologies and that these technologies and advances distinguish our services and products from our competitors and further help to substantially reduce our operating costs and expenses;

 

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our contention that we do not offer our customers a “business opportunity” or a “franchise” as those terms are defined in applicable statutes of the states in which we operate;

 

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our belief that we operate in compliance with laws concerning sales practices and more particularly that we are not obligated to offer more than a three-day right of rescission;

 

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our belief that there is a large, fragmented and under-served population of small businesses and entrepreneurs searching for professional services firms that offer business-to-consumer e-commerce solutions coupled with support and continuing education;

 

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our belief that continuously testing and implementing changes to our business model may further reduce the level of investment necessary to get customers to attend our events and to increase our value proposition to these customers;

 

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our expectation that our offering of products and services will evolve as some products are replaced by new and enhanced products intended to help our customers achieve success with their Internet-related businesses; and

 

our expectation that the costs and expenses we incur will be insignificant as deferred revenue amounts are recognized as product and other revenues when cash is collected.