WaveDancer(WAVD) - 2023 Q2 - Quarterly Report

Revenue Performance - Total revenue for Q2 2023 was $2,024,622, a decrease of 46.0$3,750,520 in Q2 2022, primarily due to reduced third-party software sales[107] - Total revenue for the six months ended June 30, 2023, was $4,184,745, a decrease of 38.0$6,746,032 in the same period in 2022[112] - The sale of GMI to GMDC on March 17, 2023, resulted in a revenue decrease of $566,862 and a gross profit decrease of$220,242 for the first half of 2023 compared to the same period in 2022[117] Professional Services - Professional services revenue decreased by 13.6% to $1,967,957 in Q2 2023 from$2,277,832 in Q2 2022, driven by fewer resources deployed on a software modernization project[107] - The company is focusing on organic growth and acquisitions, particularly in professional services, to enhance margins and expand its market presence[106] Gross Profit - Gross profit for Q2 2023 was $705,013, down 22.0$903,841 in Q2 2022, with professional services gross profit as a percentage of revenue declining from 37.5% to 35.8%[108] - Gross profit for the six months ended June 30, 2023, decreased by 14.9% to $1,361,811 from$1,600,311 in the prior year[113] Operating Income and Loss - Operating income from continuing operations improved to $493,116 in Q2 2023, compared to a loss of$1,599,270 in Q2 2022, largely due to a gain on litigation settlement[110] - The operating loss from continuing operations for the first half of 2023 was $461,614, a decrease of$2,814,718 or 85.9% compared to the first half of 2022[116] - The company generated a net loss from continuing operations of 779,174 for the six months ended June 30, 2023[123] Expenses - Total selling, general and administrative (SG&A) expenses for Q2 2023 were 1,654,365, down 33.9% from 2,503,111 in Q2 2022[109] - Total SG&A expenses for the six months ended June 30, 2023, were 3,265,893, a decrease of 33.0% from $4,876,643 in the same period in 2022[115] Discontinued Operations - The company sold 75.1$335,993, a decrease of $813,497 compared to a net income of$477,504 in the first half of 2022[117] Cash Flow and Capital Needs - As of June 30, 2023, the company had a net working capital deficit of $780,357, with cash and cash equivalents of$338,300[123] - The company anticipates needing to raise additional capital by the first quarter of 2024 to meet ongoing operating cash flow requirements[124] - Cash used for continuing operations during the second quarter of 2023 was $389,177, with an anticipated total cash usage of approximately$1.0 million to $1.5 million over the next twelve months[125] - On August 9, 2023, the company received$1,400,000 from GMDC as proceeds from the sale of common stock and contingent consideration[125] - The company repaid $500,000 on its line of credit with Summit bank on August 9, 2023, and is finalizing an extension of the line of credit expiration date to December 31, 2023[125] - The company has no commitments for capital spending or plans for material capital expenditures[125]