1.\u00a0SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business
eGain Corporation (\u201ceGain\u201d, the \u201cCompany\u201d, \u201cour\u201d, \u201cwe\u201d or \u201cus\u201d) automates customer engagement with an innovative Software as a service (SaaS) platform, powered by deep digital, Artificial intelligence (AI), and knowledge capabilities. We sell mostly to large enterprises across financial services, telecommunications, retail, government, healthcare, and utilities. That is, organizations seeking to better serve customers at scale while coping with content silos, process complexity, and regulatory compliance. With our mantra of AX + BX + CX = DX\u2122, we guide clients to effortless digital experience (DX) by holistically optimizing agent experience (AX), business experience (BX) and customer experience (CX). Leading brands use eGain\u2019s cloud software to improve customer satisfaction, empower agents, reduce service cost, and boost sales. We are headquartered in the United States. We also operate in United Kingdom and India.
Principles of Consolidation
The consolidated financial statements include the accounts of eGain and our wholly-owned subsidiaries, eGain Communications Ltd., Exony Limited (Exony), eGain Communications Pvt. Ltd., eGain Communications (SA), eGain France S.A.R.L, Netherlands (eGain Communications B.V.) and eGain Deutschland GmbH. All significant intercompany balances and transactions have been eliminated.
Business Combinations
Business combinations are accounted for at fair value under the purchase method of accounting. Acquisition costs are expensed as incurred and recorded in general and administrative expenses and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date affect income tax expense. The accounting for business combinations requires estimates and judgment as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair value for assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management\u2019s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, or require acceleration of the amortization expense of finite-lived intangible assets.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The estimates are based upon information available as of the date of the consolidated financial statements. Actual results could differ from those estimates.
We evaluate our significant estimates, including those related to revenue recognition, provision for doubtful accounts, valuation of stock-based compensation, valuation of long-lived assets, valuation of deferred tax assets, and litigation, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We refer to accounting estimates of this type as \u201ccritical accounting estimates.\u201d
Foreign Currency
The functional currency of each of our international subsidiaries is the local currency of the country in which it operates. Assets and liabilities of our foreign subsidiaries are translated at month-end exchange rates, and revenue and expenses are translated at the average monthly exchange rates. The resulting cumulative translation adjustments are recorded as a component of accumulated other comprehensive income. Foreign currency transaction gains and losses are included in \u201cother income (expense), net\u201d in the consolidated statements of operations, and resulted in a loss of $824,000 and a gain of $570,000, in fiscal years ended June 30, 2022 and 2021, respectively.
Cash and Cash Equivalents, Restricted Cash and Investments
We consider all highly liquid investments with an original purchase to maturity date of three months or less to be cash equivalents. Time deposits held for investments that are not debt securities are included in short-term investments in the consolidated balance sheets. Investments in time deposits with original maturities of more than three months but remaining maturities of less than one year are considered short-term investments. Investments held with the intent to reinvest or hold for longer than a year, or with remaining maturities of one year or more, are considered long-term investments. As of June 30, 2022 and 2021, we did not have any short-term or long-term investments.
Cash earmarked for a specific purpose and therefore not available for immediate and general use by the Company is considered restricted cash. Expected usage of restricted cash within one year is classified as a current asset; expected usage more than a year is considered a non-current asset. As of June 30, 2022 and 2021, our restricted cash was nominal and expected to be used within one year.
Fair Value of Financial Instruments
Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities. We do not have any derivative financial instruments. We believe the reported carrying amounts of these financial instruments approximate fair value, based upon their short-term nature and comparable market information available at the respective balance sheet dates.
Concentration of Credit Risk
Financial instruments that subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and cash equivalents are deposited with high credit quality institutions. We are exposed to credit risk in the event of default by these institutions to the extent of the amount recorded on the balance sheet. We invest excess cash primarily in money market funds, which are highly liquid securities that bear minimal risk. In addition, we have investment policies and procedures that are reviewed periodically to minimize credit risk. Our cash, cash equivalents and restricted cash were $72.2 million as of June 30, 2022 and exceeded the FDIC (Federal Deposit Insurance Corporation) limits.
Our customer base extends across many different industries and geographic regions. Revenue is allocated to individual countries and geographic region by customer, based on where the product is shipped to and location of services performed. Cisco Systems, Inc. remained consistent and accounted for 21% of total revenue for the years ended June 30, 2022 and 2021. BT PLC accounted for 11% and 13% of total revenue for the years ended June 30, 2022 and 2021, respectively.
We perform ongoing credit evaluations of our customers with outstanding receivables and generally do not require collateral. In addition, we established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Three partners and customers accounted for 26%, 20%, and 13% of accounts receivable as of June 30, 2022. A of different partners and customers accounted for 30%, 17%, and 16% of accounts receivable as of June 30, 2021. \u00a0
Accounts Receivable and Allowance for Doubtful Accounts
We extend unsecured credit to our customers on a regular basis. Our accounts receivable are derived from revenue earned from customers and are not interest bearing. We also maintain an allowance for doubtful accounts to reserve for potential
uncollectible trade receivables. We review our trade receivables by aging category to identify specific customers with known disputes or collectability issues. We exercise judgment when determining the adequacy of these reserves as we evaluate historical bad debt trends, general economic conditions in the U.S. and internationally, and changes in customer financial conditions. If we made different judgments or utilized different estimates, material differences may result in additional reserves for trade receivables, which would be reflected by charges in general and administrative expenses for any period presented. We write off a receivable after all collection efforts have been exhausted and the amount is deemed uncollectible. Recovered written off receivables are recorded as they occur.
In certain revenue contracts, contractual billings do not coincide with revenue recognized on the contract. Unbilled accounts receivables are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and become billable upon certain criteria being met. Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $770,000 and $719,000 as of June 30, 2022 and 2021, respectively, and are included in the accounts receivable balance. \u00a0
Property and Equipment, Net
Property and equipment, net, is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets, which typically is between or five years. Leasehold improvements and leased equipment are depreciated on a straight-line basis over the shorter of the lease term or useful life of the asset, which is typically to five years.
Goodwill and Other Intangible Assets, Net
We review goodwill annually for impairment or sooner whenever events or changes in circumstances indicate that it may be impaired. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. In addition, we evaluate purchased intangible assets to determine that all such assets have determinable lives. We operate under a single reporting unit and accordingly, all of our goodwill is associated with the entire company. We had no indicators of impairment for fiscal years ended June 30, 2022 and 2021.
Impairment of Long-Lived Assets
We review long-lived assets for impairment, including property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. During fiscal years 2022 and 2021, we did not have any such impairment losses.
Deferred Revenue
Deferred revenue primarily consists of payments received in advance of revenue recognition from cloud, term and ratable licenses, and maintenance and support services and is recognized as the revenue recognition criteria are met. We generally invoice customers in annual or quarterly installments. The deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable cloud or maintenance and support agreements. Deferred revenue is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing and new business linearity within the quarter.
Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent.
Cost Capitalized to Obtain Revenue Contracts, Net
Under Topic 606, we capitalize incremental costs of obtaining non-cancelable subscription and support revenue contracts. The capitalized amounts consist primarily of sales commissions paid to our direct sales force. Capitalized amounts also include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual
compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees, including stock-based compensation.
Costs capitalized related to new revenue contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be five years. We determine the period of benefit by taking into consideration the historical and expected durations of our customer contracts, the expected useful lives of our technologies, and other factors. Commissions for renewal contracts relating to our cloud-based arrangements are expensed when incurred, as we do not consider renewal contracts to be commensurate with initial customer contracts. Historically, any commission associated with renewals have been immaterial. Amortization of costs to obtain revenue contracts is included as a component of sales and marketing expenses in our consolidated statements of operations.
The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfers of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. The Company assessed each of its revenue contracts in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component for the years ended June 30, 2022 and 2021.
During the fiscal years ended June 30, 2022 and 2021, we capitalized $2.4 million and $1.5 million of costs to obtain revenue contracts, respectively, and amortized $1.5 million and $1.2 million to sales and marketing expense, respectively. Capitalized costs to obtain revenue contracts, net were $4.6 million and $3.9 million as of June 30, 2022 and 2021, respectively.
Leases
Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases.
Operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the consolidated financial statements. ROU assets represent the Company\u2019s right to use leased assets over the agreed upon term. Lease liabilities represent the Company\u2019s contractual obligation to make lease payments over the lease term.
For operating leases, ROU assets and lease liabilities are recognized at the commencement date of the lease. The lease liability is measured as the present value of the lease payments over the lease term, using the rate implicit in the lease if readily determinable. If the rate implicit in the lease cannot be readily determined, the Company uses its incremental borrowing rate at lease commencement. The operating lease right-of-use assets are calculated as the present value of the remaining lease payments plus unamortized initial direct costs and any prepayments, less unamortized lease incentives received.
Operating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease component payments that are not fixed are expensed as incurred as variable lease payments.
Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize right-of-use assets and obligations for leases with an initial term of twelve months or less, and has applied a capitalization threshold to recognize a lease on
the balance sheet. The expense associated with short-term leases and leases that do not meet the Company\u2019s capitalization threshold are recorded to lease expense in the period it is incurred. \u00a0
Software Development Costs
We account for software development costs in accordance with ASC 985, Software, for costs of the software to be sold, leased or marketed, whereby costs for the development of new software products and substantial enhancements to existing software products are included in research and development expense as incurred until technological feasibility has been established, at which time any additional costs are capitalized. Technological feasibility is established upon completion of a working model. To date, software development costs incurred in the period between achieving technological feasibility and general availability of software have not been material and have been charged to operations as incurred.
Advertising Costs
We expense advertising costs as incurred. Total advertising expenses for the fiscal years ended June 30, 2022 and 2021 were $554,000 and $190,000, respectively.
Stock-Based Compensation
We account for stock-based compensation in accordance with ASC 718, Compensation\u2014Stock Compensation. Determining the fair value of the stock-based awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term. Stock-based compensation expense for employee and non-employee awards is recognized as expense over the requisite service period, which is generally in line with the vesting period.
Income Taxes
Income taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market environment due to COVID-19, we have provided a full valuation allowance against our net deferred tax assets. For the legacy eGain business in the United Kingdom, based on the positive evidence, the Company has determined it would be able to utilize the deferred tax assets and does not have a valuation allowance against the deferred tax assets. The remaining eGain foreign operations as well as Exony\u2019s business have historically been profitable and we believe it is more likely than not that those assets will be realized. Our tax provision primarily relates to foreign activities as well as state income taxes. Our income tax rate differs from the statutory tax rates primarily due to the expiration of net operating loss carry-forwards which had previously been valued against as well our change in valuation allowance.
We account for uncertain tax positions according to the provisions of ASC 740. ASC 740 contains a two-step approach for recognizing and measuring uncertain tax positions. Tax positions are evaluated for recognition by determining if the weight of available evidence indicates that it is probable that the position will be sustained on audit, including resolution of related appeals or litigation. Tax benefits are then measured as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.
As of June 30, 2022, utilization of the NOL or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company\u2019s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required. Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization. The Company has not identified a change in ownership as of June 30, 2022 that would significantly limit the net operating loss carryovers.
Comprehensive (Loss) Income
We report comprehensive income and its components in accordance with ASC 220, Comprehensive Income. Under the accounting standards, comprehensive (loss) income includes all changes in equity during a period except those resulting from investments by or distributions to owners. Total comprehensive income for each of the two years in the year ended June 30, 2022 is shown in the accompanying consolidated statements of comprehensive (loss) income. Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets as of June 30, 2022 and 2021 consists of accumulated foreign currency translation adjustments.
(Loss) Earnings Per Common Share
Basic net (loss) income per common share is computed using the weighted-average number of shares of common stock outstanding. In periods where net income is reported, the weighted average number of shares is increased by stock options in-the-money to calculate diluted net income per common share.
The following table represents the calculation of basic and diluted net (loss) income per common share (in thousands, except per share data):
Years\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Net (loss) income applicable to common stockholders | $ | (2,441) |
| $ | 6,959 | |
Basic net (loss) income per common share | $ | (0.08) |
| $ | 0.22 | |
Weighted average common shares used in computing basic net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 31,007 | |
Effect of dilutive common equivalents outstanding | \u00a0 | \u2014 |
| \u00a0 | 1,590 | |
Weighted average common shares used in computing diluted net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 32,597 | |
Diluted net (loss) income per common share | $ | (0.08) |
| $ | 0.21 |
Weighted average options to purchase 2,935,174 and 293,949 shares of common stock as of June 30, 2022 and 2021, respectively, were not included in the computation of diluted net income per common share due to their anti-dilutive effect. Such securities could have a dilutive effect in future periods.
Segment Information
We operate in one segment, the development, license, implementation, and support of our customer service infrastructure software solutions. Operating segments are identified as components of an enterprise for which discrete financial information is available and regularly reviewed by our chief operating decision-maker in order to make decisions about resources to be allocated to the segment and assess its performance. Our chief operating decision-makers under ASC 280, Segment Reporting, are our executive management team. Our chief operating decision-makers review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. \u00a0
Information relating to our geographic areas for the fiscal years ended June 30, 2022 and 2021 is as follows (in thousands): \u00a0
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | (Loss) | \u00a0\u00a0\u00a0\u00a0 | ||||||
Total | Income | Long-Lived | |||||||
Revenue | from Operations | Assets | |||||||
Year ended June 30, 2022: | \u00a0 |
|
|
|
|
| |||
North America | $ | 66,793 |
| $ | (4,128) |
| $ | 488 | |
Europe, Middle East, & Africa | \u00a0 | 25,158 |
| \u00a0 | 8,997 |
| \u00a0 | 119 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (7,007) |
| \u00a0 | 224 | |
| $ | 91,951 |
| $ | (2,138) |
| $ | 831 | |
Year ended June 30, 2021: | \u00a0 |
|
| \u00a0 |
|
| \u00a0 |
| |
North America | $ | 54,380 |
| $ | 4,936 |
| $ | 350 | |
Europe, Middle East, & Africa | \u00a0 | 23,907 |
| \u00a0 | 8,496 |
| \u00a0 | 85 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (6,093) |
| \u00a0 | 270 | |
| $ | 78,287 |
| $ | 7,339 |
| $ | 705 |
For the purposes of entity-wide geographic area disclosures, we define long-lived assets as hard assets that cannot be easily removed, such as property and equipment.
Recent Accounting Pronouncements
Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments \u00a0- Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13.
Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies (SRC) as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal year 2024 for the Company if it continues to be classified as a SRC. In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The subsequent amendments will have the same effective date and transition requirements as ASU No. 2016-13. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements or the related disclosure.
Pronouncements Recently Adopted
In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-15, Intangibles\u2014Goodwill and Other\u2014Internal-Use Software (Subtopic 350-40). This update requires a customer in a cloud computing service arrangement to follow the internal-use software guidance to determine which implementation costs to recognize and defer
as an asset. We adopted this guidance as of our first quarter of fiscal year 2021 with no impact on our consolidated financial statements.
In December 2019, FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes. This update is effective for fiscal years beginning after December 15, 2020 (our fiscal year 2022). During the current year, the Company has adopted this provision with no material impact to the consolidated financial statements.
Revenue Recognition
Revenue Recognition Policy
Our revenue is comprised of two categories including subscription and professional services. Subscription includes SaaS revenue and legacy revenue. SaaS includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Legacy revenue is associated with license, maintenance, and support contracts on perpetual license arrangements that we no longer sell. Professional services includes consulting, implementation and training.
Significant Judgment Applied in the Determination of Revenue Recognition
We enter into contractual arrangements with customers that may include promises to transfer multiple services, such as subscription, support and professional services. With respect to our business, a performance obligation is a promise to transfer a service to a customer that is distinct. Significant judgment is required to determine whether services are distinct
performance obligations that should be accounted for separately or combined as one unit of accounting. Additionally, significant judgment is required to determine the timing of revenue recognition.
We allocate the transaction price to each performance obligation based on relative standalone selling price basis (SSP). The SSP is the price at which we would sell a promised service separately to one of our customers. Judgment is required to determine the SSP for each distinct performance obligation.
We determine the SSP by considering our pricing objectives in relation to market demand. Consideration is placed based on our history of discounting prices, size and volume of transactions involved, customer demographics and geographic locations, price lists, contract prices and our market strategy.
Determination of Revenue Recognition
Under Topic 606, we recognize revenue upon the transfer of control of promised services to our customers in the amount that is commensurate with the consideration that we expect to receive in exchange for those services. If consideration includes a variable amount in the arrangement, such as service level credits or contingent fees, then we include an estimate of the amount that we expect to receive for the total transaction price.
The amount of revenue that we recognize is based on (i) identifying the contract with a customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations in the contract on a relative SSP basis; and (v) recognizing revenue when, or as, we satisfy each performance obligation in the contract typically through delivery or when control is transferred to the customer.
Subscription Revenue
The following customer arrangements are recognized ratably over the contract term as the performance obligations are delivered:
| \u25cf | Cloud delivery arrangements; |
| \u25cf | Maintenance and support arrangements; and |
| \u25cf | Term license subscriptions which incorporate on-premise software licenses and substantial cloud functionality that are not distinct in the context of our arrangements as such are considered highly interrelated and represent a single combined performance obligation. |
For contracts involving distinct software licenses, the license performance obligation is satisfied at a point in time when control is transferred to the customer.
We typically invoice our customers in advance upon execution of the contract or subsequent renewals with payment terms between 30 and 45 days. Invoiced amounts are recorded in accounts receivable, deferred revenue or revenue, depending if control transferred to our customers based on each arrangement.
The Company has a royalty revenue agreement with a customer related to the Company\u2019s embedded intellectual property. \u00a0Under the terms of the agreement, the customer is to provide a combined fixed fee, per agent, for each software license sold containing the embedded software to the Company. These embedded OEM royalties are included as subscription revenue. Under Topic 606 revenue guidance, since these arrangements are for sales-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, the Company recognizes revenue only as the subsequent sale occurs. However, the Company notes that such sales are reported by the customer with a quarter in arrears, such revenue is recognized at the time it is reported and paid by the customer given that any estimated variable consideration would have to be fully constrained due to the unpredictability of such estimate and the unavoidable risk that it may lead to significant revenue reversals.
Professional Services Revenue
Professional services revenue includes system implementation, consulting, training, and managed services. The transaction price is allocated to various performance obligations based on their stand-alone selling prices. Revenue allocated to each performance obligation is recognized at the earlier of satisfaction of discrete performance obligations, or as work is performed on a time and material basis. Our consulting and implementation service contracts are bid either on a time-and-materials basis or on a fixed-fee basis. Fixed fees are generally paid upon milestone billing or customer acceptance at pre-determined points in the contract. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether transfer of control to customers has occurred.
Training revenue that meets the criteria to be accounted for separately is recognized when training is provided. \u00a0
Contracts with Multiple Performance Obligations
The Company enters into contracts that can include various combinations of subscriptions, professional services and maintenance and support, which are generally distinct and accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the respective standalone selling prices for each performance obligation. \u00a0
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eGain Corporation (\u201ceGain\u201d, the \u201cCompany\u201d, \u201cour\u201d, \u201cwe\u201d or \u201cus\u201d) automates customer engagement with an innovative Software as a service (SaaS) platform, powered by deep digital, Artificial intelligence (AI), and knowledge capabilities. We sell mostly to large enterprises across financial services, telecommunications, retail, government, healthcare, and utilities. That is, organizations seeking to better serve customers at scale while coping with content silos, process complexity, and regulatory compliance. With our mantra of AX + BX + CX = DX\u2122, we guide clients to effortless digital experience (DX) by holistically optimizing agent experience (AX), business experience (BX) and customer experience (CX). Leading brands use eGain\u2019s cloud software to improve customer satisfaction, empower agents, reduce service cost, and boost sales. We are headquartered in the United States. We also operate in United Kingdom and India.
Principles of Consolidation
The consolidated financial statements include the accounts of eGain and our wholly-owned subsidiaries, eGain Communications Ltd., Exony Limited (Exony), eGain Communications Pvt. Ltd., eGain Communications (SA), eGain France S.A.R.L, Netherlands (eGain Communications B.V.) and eGain Deutschland GmbH. All significant intercompany balances and transactions have been eliminated.
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Business combinations are accounted for at fair value under the purchase method of accounting. Acquisition costs are expensed as incurred and recorded in general and administrative expenses and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date affect income tax expense. The accounting for business combinations requires estimates and judgment as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair value for assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management\u2019s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, or require acceleration of the amortization expense of finite-lived intangible assets.
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The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The estimates are based upon information available as of the date of the consolidated financial statements. Actual results could differ from those estimates.
We evaluate our significant estimates, including those related to revenue recognition, provision for doubtful accounts, valuation of stock-based compensation, valuation of long-lived assets, valuation of deferred tax assets, and litigation, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We refer to accounting estimates of this type as \u201ccritical accounting estimates.\u201d
"}]},{"name":"rpt:f-294","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Foreign Currency
The functional currency of each of our international subsidiaries is the local currency of the country in which it operates. Assets and liabilities of our foreign subsidiaries are translated at month-end exchange rates, and revenue and expenses are translated at the average monthly exchange rates. The resulting cumulative translation adjustments are recorded as a component of accumulated other comprehensive income. Foreign currency transaction gains and losses are included in \u201cother income (expense), net\u201d in the consolidated statements of operations, and resulted in a loss of $824,000 and a gain of $570,000, in fiscal years ended June 30, 2022 and 2021, respectively.
"}]},{"name":"rpt:f-295","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionGainLossBeforeTax","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-824000","decimals":-3}]},{"name":"rpt:f-296","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionGainLossBeforeTax","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"570000","decimals":-3}]},{"name":"rpt:f-297","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Cash and Cash Equivalents, Restricted Cash and Investments
We consider all highly liquid investments with an original purchase to maturity date of three months or less to be cash equivalents. Time deposits held for investments that are not debt securities are included in short-term investments in the consolidated balance sheets. Investments in time deposits with original maturities of more than three months but remaining maturities of less than one year are considered short-term investments. Investments held with the intent to reinvest or hold for longer than a year, or with remaining maturities of one year or more, are considered long-term investments. As of June 30, 2022 and 2021, we did not have any short-term or long-term investments.
Cash earmarked for a specific purpose and therefore not available for immediate and general use by the Company is considered restricted cash. Expected usage of restricted cash within one year is classified as a current asset; expected usage more than a year is considered a non-current asset. As of June 30, 2022 and 2021, our restricted cash was nominal and expected to be used within one year.
"}]},{"name":"rpt:f-298","factDimensions":{"xbrl:concept":"us-gaap:FairValueOfFinancialInstrumentsPolicy","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Fair Value of Financial Instruments
Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities. We do not have any derivative financial instruments. We believe the reported carrying amounts of these financial instruments approximate fair value, based upon their short-term nature and comparable market information available at the respective balance sheet dates.
"}]},{"name":"rpt:f-299","factDimensions":{"xbrl:concept":"us-gaap:ConcentrationRiskCreditRisk","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Concentration of Credit Risk
Financial instruments that subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and cash equivalents are deposited with high credit quality institutions. We are exposed to credit risk in the event of default by these institutions to the extent of the amount recorded on the balance sheet. We invest excess cash primarily in money market funds, which are highly liquid securities that bear minimal risk. In addition, we have investment policies and procedures that are reviewed periodically to minimize credit risk. Our cash, cash equivalents and restricted cash were $72.2 million as of June 30, 2022 and exceeded the FDIC (Federal Deposit Insurance Corporation) limits.
Our customer base extends across many different industries and geographic regions. Revenue is allocated to individual countries and geographic region by customer, based on where the product is shipped to and location of services performed. Cisco Systems, Inc. remained consistent and accounted for 21% of total revenue for the years ended June 30, 2022 and 2021. BT PLC accounted for 11% and 13% of total revenue for the years ended June 30, 2022 and 2021, respectively.
We perform ongoing credit evaluations of our customers with outstanding receivables and generally do not require collateral. In addition, we established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Three partners and customers accounted for 26%, 20%, and 13% of accounts receivable as of June 30, 2022. A of different partners and customers accounted for 30%, 17%, and 16% of accounts receivable as of June 30, 2021. \u00a0
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":{"xbrl:concept":"us-gaap:TradeAndOtherAccountsReceivablePolicy","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Accounts Receivable and Allowance for Doubtful Accounts
We extend unsecured credit to our customers on a regular basis. Our accounts receivable are derived from revenue earned from customers and are not interest bearing. We also maintain an allowance for doubtful accounts to reserve for potential
uncollectible trade receivables. We review our trade receivables by aging category to identify specific customers with known disputes or collectability issues. We exercise judgment when determining the adequacy of these reserves as we evaluate historical bad debt trends, general economic conditions in the U.S. and internationally, and changes in customer financial conditions. If we made different judgments or utilized different estimates, material differences may result in additional reserves for trade receivables, which would be reflected by charges in general and administrative expenses for any period presented. We write off a receivable after all collection efforts have been exhausted and the amount is deemed uncollectible. Recovered written off receivables are recorded as they occur.
In certain revenue contracts, contractual billings do not coincide with revenue recognized on the contract. Unbilled accounts receivables are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and become billable upon certain criteria being met. Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $770,000 and $719,000 as of June 30, 2022 and 2021, respectively, and are included in the accounts receivable balance. \u00a0
"}]},{"name":"rpt:f-313","factDimensions":{"xbrl:concept":"us-gaap:UnbilledContractsReceivable","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD","us-gaap:BalanceSheetLocationAxis":"us-gaap:AccountsReceivableMember"},"factValues":[{"value":"770000","decimals":-3}]},{"name":"rpt:f-314","factDimensions":{"xbrl:concept":"us-gaap:UnbilledContractsReceivable","xbrl:period":"2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD","us-gaap:BalanceSheetLocationAxis":"us-gaap:AccountsReceivableMember"},"factValues":[{"value":"719000","decimals":-3}]},{"name":"rpt:f-315","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Property and Equipment, Net
Property and equipment, net, is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets, which typically is between or five years. Leasehold improvements and leased equipment are depreciated on a straight-line basis over the shorter of the lease term or useful life of the asset, which is typically to five years.
"}]},{"name":"rpt:f-316","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","srt:RangeAxis":"srt:MaximumMember"},"factValues":[{"value":"P5Y"}]},{"name":"rpt:f-317","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","srt:RangeAxis":"srt:MaximumMember","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:LeaseholdsAndLeaseholdImprovementsMember"},"factValues":[{"value":"P5Y"}]},{"name":"rpt:f-318","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Goodwill and Other Intangible Assets, Net
We review goodwill annually for impairment or sooner whenever events or changes in circumstances indicate that it may be impaired. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. In addition, we evaluate purchased intangible assets to determine that all such assets have determinable lives. We operate under a single reporting unit and accordingly, all of our goodwill is associated with the entire company. We had no indicators of impairment for fiscal years ended June 30, 2022 and 2021.
"}]},{"name":"rpt:f-319","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetImpairment","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":-5}]},{"name":"rpt:f-320","factDimensions":{"xbrl:concept":"us-gaap:GoodwillAndIntangibleAssetImpairment","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":-5}]},{"name":"rpt:f-321","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Impairment of Long-Lived Assets
We review long-lived assets for impairment, including property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. During fiscal years 2022 and 2021, we did not have any such impairment losses.
"}]},{"name":"rpt:f-322","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfLongLivedAssetsHeldForUse","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":-5}]},{"name":"rpt:f-323","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOfLongLivedAssetsHeldForUse","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":-5}]},{"name":"rpt:f-324","factDimensions":{"xbrl:concept":"egan:RevenueRecognitionDeferredRevenuePolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Deferred Revenue
Deferred revenue primarily consists of payments received in advance of revenue recognition from cloud, term and ratable licenses, and maintenance and support services and is recognized as the revenue recognition criteria are met. We generally invoice customers in annual or quarterly installments. The deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable cloud or maintenance and support agreements. Deferred revenue is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing and new business linearity within the quarter.
Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent.
"}]},{"name":"rpt:f-325","factDimensions":{"xbrl:concept":"us-gaap:CommissionsExpensePolicyPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Cost Capitalized to Obtain Revenue Contracts, Net
Under Topic 606, we capitalize incremental costs of obtaining non-cancelable subscription and support revenue contracts. The capitalized amounts consist primarily of sales commissions paid to our direct sales force. Capitalized amounts also include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual
compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees, including stock-based compensation.
Costs capitalized related to new revenue contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be five years. We determine the period of benefit by taking into consideration the historical and expected durations of our customer contracts, the expected useful lives of our technologies, and other factors. Commissions for renewal contracts relating to our cloud-based arrangements are expensed when incurred, as we do not consider renewal contracts to be commensurate with initial customer contracts. Historically, any commission associated with renewals have been immaterial. Amortization of costs to obtain revenue contracts is included as a component of sales and marketing expenses in our consolidated statements of operations.
The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfers of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. The Company assessed each of its revenue contracts in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component for the years ended June 30, 2022 and 2021.
During the fiscal years ended June 30, 2022 and 2021, we capitalized $2.4 million and $1.5 million of costs to obtain revenue contracts, respectively, and amortized $1.5 million and $1.2 million to sales and marketing expense, respectively. Capitalized costs to obtain revenue contracts, net were $4.6 million and $3.9 million as of June 30, 2022 and 2021, respectively.
"}]},{"name":"rpt:f-326","factDimensions":{"xbrl:concept":"us-gaap:CapitalizedContractCostAmortizationPeriod","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","us-gaap:CapitalizedContractCostAxis":"egan:CostsCapitalizedRelatedToNewRevenueContractsMember"},"factValues":[{"value":"P5Y"}]},{"name":"rpt:f-327","factDimensions":{"xbrl:concept":"egan:ContractCostCapitalizedDuringPeriod","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2400000","decimals":-5}]},{"name":"rpt:f-328","factDimensions":{"xbrl:concept":"egan:ContractCostCapitalizedDuringPeriod","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1500000","decimals":-5}]},{"name":"rpt:f-329","factDimensions":{"xbrl:concept":"us-gaap:CapitalizedContractCostAmortization","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1500000","decimals":-5}]},{"name":"rpt:f-330","factDimensions":{"xbrl:concept":"us-gaap:CapitalizedContractCostAmortization","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1200000","decimals":-5}]},{"name":"rpt:f-331","factDimensions":{"xbrl:concept":"us-gaap:CapitalizedContractCostNet","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"4600000","decimals":-5}]},{"name":"rpt:f-332","factDimensions":{"xbrl:concept":"us-gaap:CapitalizedContractCostNet","xbrl:period":"2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3900000","decimals":-5}]},{"name":"rpt:f-333","factDimensions":{"xbrl:concept":"us-gaap:LesseeLeasesPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Leases
Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases.
Operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the consolidated financial statements. ROU assets represent the Company\u2019s right to use leased assets over the agreed upon term. Lease liabilities represent the Company\u2019s contractual obligation to make lease payments over the lease term.
For operating leases, ROU assets and lease liabilities are recognized at the commencement date of the lease. The lease liability is measured as the present value of the lease payments over the lease term, using the rate implicit in the lease if readily determinable. If the rate implicit in the lease cannot be readily determined, the Company uses its incremental borrowing rate at lease commencement. The operating lease right-of-use assets are calculated as the present value of the remaining lease payments plus unamortized initial direct costs and any prepayments, less unamortized lease incentives received.
Operating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease component payments that are not fixed are expensed as incurred as variable lease payments.
Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize right-of-use assets and obligations for leases with an initial term of twelve months or less, and has applied a capitalization threshold to recognize a lease on
the balance sheet. The expense associated with short-term leases and leases that do not meet the Company\u2019s capitalization threshold are recorded to lease expense in the period it is incurred. \u00a0
"}]},{"name":"rpt:f-334","factDimensions":{"xbrl:concept":"us-gaap:ResearchDevelopmentAndComputerSoftwarePolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Software Development Costs
We account for software development costs in accordance with ASC 985, Software, for costs of the software to be sold, leased or marketed, whereby costs for the development of new software products and substantial enhancements to existing software products are included in research and development expense as incurred until technological feasibility has been established, at which time any additional costs are capitalized. Technological feasibility is established upon completion of a working model. To date, software development costs incurred in the period between achieving technological feasibility and general availability of software have not been material and have been charged to operations as incurred.
"}]},{"name":"rpt:f-335","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingCostsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Advertising Costs
We expense advertising costs as incurred. Total advertising expenses for the fiscal years ended June 30, 2022 and 2021 were $554,000 and $190,000, respectively.
"}]},{"name":"rpt:f-336","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"554000","decimals":-3}]},{"name":"rpt:f-337","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingExpense","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"190000","decimals":-3}]},{"name":"rpt:f-338","factDimensions":{"xbrl:concept":"us-gaap:CompensationRelatedCostsPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Stock-Based Compensation
We account for stock-based compensation in accordance with ASC 718, Compensation\u2014Stock Compensation. Determining the fair value of the stock-based awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term. Stock-based compensation expense for employee and non-employee awards is recognized as expense over the requisite service period, which is generally in line with the vesting period.
"}]},{"name":"rpt:f-339","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Income Taxes
Income taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market environment due to COVID-19, we have provided a full valuation allowance against our net deferred tax assets. For the legacy eGain business in the United Kingdom, based on the positive evidence, the Company has determined it would be able to utilize the deferred tax assets and does not have a valuation allowance against the deferred tax assets. The remaining eGain foreign operations as well as Exony\u2019s business have historically been profitable and we believe it is more likely than not that those assets will be realized. Our tax provision primarily relates to foreign activities as well as state income taxes. Our income tax rate differs from the statutory tax rates primarily due to the expiration of net operating loss carry-forwards which had previously been valued against as well our change in valuation allowance.
We account for uncertain tax positions according to the provisions of ASC 740. ASC 740 contains a two-step approach for recognizing and measuring uncertain tax positions. Tax positions are evaluated for recognition by determining if the weight of available evidence indicates that it is probable that the position will be sustained on audit, including resolution of related appeals or litigation. Tax benefits are then measured as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.
As of June 30, 2022, utilization of the NOL or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company\u2019s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required. Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization. The Company has not identified a change in ownership as of June 30, 2022 that would significantly limit the net operating loss carryovers.
"}]},{"name":"rpt:f-340","factDimensions":{"xbrl:concept":"us-gaap:ComprehensiveIncomePolicyPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Comprehensive (Loss) Income
We report comprehensive income and its components in accordance with ASC 220, Comprehensive Income. Under the accounting standards, comprehensive (loss) income includes all changes in equity during a period except those resulting from investments by or distributions to owners. Total comprehensive income for each of the two years in the year ended June 30, 2022 is shown in the accompanying consolidated statements of comprehensive (loss) income. Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets as of June 30, 2022 and 2021 consists of accumulated foreign currency translation adjustments.
"}]},{"name":"rpt:f-341","factDimensions":{"xbrl:concept":"us-gaap:EarningsPerSharePolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"(Loss) Earnings Per Common Share
Basic net (loss) income per common share is computed using the weighted-average number of shares of common stock outstanding. In periods where net income is reported, the weighted average number of shares is increased by stock options in-the-money to calculate diluted net income per common share.
The following table represents the calculation of basic and diluted net (loss) income per common share (in thousands, except per share data):
Years\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Net (loss) income applicable to common stockholders | $ | (2,441) |
| $ | 6,959 | |
Basic net (loss) income per common share | $ | (0.08) |
| $ | 0.22 | |
Weighted average common shares used in computing basic net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 31,007 | |
Effect of dilutive common equivalents outstanding | \u00a0 | \u2014 |
| \u00a0 | 1,590 | |
Weighted average common shares used in computing diluted net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 32,597 | |
Diluted net (loss) income per common share | $ | (0.08) |
| $ | 0.21 |
Weighted average options to purchase 2,935,174 and 293,949 shares of common stock as of June 30, 2022 and 2021, respectively, were not included in the computation of diluted net income per common share due to their anti-dilutive effect. Such securities could have a dilutive effect in future periods.
"}]},{"name":"rpt:f-342","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"The following table represents the calculation of basic and diluted net (loss) income per common share (in thousands, except per share data):
Years\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Net (loss) income applicable to common stockholders | $ | (2,441) |
| $ | 6,959 | |
Basic net (loss) income per common share | $ | (0.08) |
| $ | 0.22 | |
Weighted average common shares used in computing basic net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 31,007 | |
Effect of dilutive common equivalents outstanding | \u00a0 | \u2014 |
| \u00a0 | 1,590 | |
Weighted average common shares used in computing diluted net (loss) income per common share | \u00a0 | 31,553 |
| \u00a0 | 32,597 | |
Diluted net (loss) income per common share | $ | (0.08) |
| $ | 0.21 |
Segment Information
We operate in one segment, the development, license, implementation, and support of our customer service infrastructure software solutions. Operating segments are identified as components of an enterprise for which discrete financial information is available and regularly reviewed by our chief operating decision-maker in order to make decisions about resources to be allocated to the segment and assess its performance. Our chief operating decision-makers under ASC 280, Segment Reporting, are our executive management team. Our chief operating decision-makers review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. \u00a0
Information relating to our geographic areas for the fiscal years ended June 30, 2022 and 2021 is as follows (in thousands): \u00a0
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | (Loss) | \u00a0\u00a0\u00a0\u00a0 | ||||||
Total | Income | Long-Lived | |||||||
Revenue | from Operations | Assets | |||||||
Year ended June 30, 2022: | \u00a0 |
|
|
|
|
| |||
North America | $ | 66,793 |
| $ | (4,128) |
| $ | 488 | |
Europe, Middle East, & Africa | \u00a0 | 25,158 |
| \u00a0 | 8,997 |
| \u00a0 | 119 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (7,007) |
| \u00a0 | 224 | |
| $ | 91,951 |
| $ | (2,138) |
| $ | 831 | |
Year ended June 30, 2021: | \u00a0 |
|
| \u00a0 |
|
| \u00a0 |
| |
North America | $ | 54,380 |
| $ | 4,936 |
| $ | 350 | |
Europe, Middle East, & Africa | \u00a0 | 23,907 |
| \u00a0 | 8,496 |
| \u00a0 | 85 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (6,093) |
| \u00a0 | 270 | |
| $ | 78,287 |
| $ | 7,339 |
| $ | 705 |
For the purposes of entity-wide geographic area disclosures, we define long-lived assets as hard assets that cannot be easily removed, such as property and equipment.
"}]},{"name":"rpt:f-357","factDimensions":{"xbrl:concept":"us-gaap:NumberOfOperatingSegments","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"egan:segment"},"factValues":[{"value":"1"}]},{"name":"rpt:f-358","factDimensions":{"xbrl:concept":"us-gaap:NumberOfOperatingSegments","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"egan:segment"},"factValues":[{"value":"1"}]},{"name":"rpt:f-359","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfSegmentReportingInformationBySegmentTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Information relating to our geographic areas for the fiscal years ended June 30, 2022 and 2021 is as follows (in thousands): \u00a0
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | (Loss) | \u00a0\u00a0\u00a0\u00a0 | ||||||
Total | Income | Long-Lived | |||||||
Revenue | from Operations | Assets | |||||||
Year ended June 30, 2022: | \u00a0 |
|
|
|
|
| |||
North America | $ | 66,793 |
| $ | (4,128) |
| $ | 488 | |
Europe, Middle East, & Africa | \u00a0 | 25,158 |
| \u00a0 | 8,997 |
| \u00a0 | 119 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (7,007) |
| \u00a0 | 224 | |
| $ | 91,951 |
| $ | (2,138) |
| $ | 831 | |
Year ended June 30, 2021: | \u00a0 |
|
| \u00a0 |
|
| \u00a0 |
| |
North America | $ | 54,380 |
| $ | 4,936 |
| $ | 350 | |
Europe, Middle East, & Africa | \u00a0 | 23,907 |
| \u00a0 | 8,496 |
| \u00a0 | 85 | |
Asia Pacific | \u00a0 | \u2014 |
| \u00a0 | (6,093) |
| \u00a0 | 270 | |
| $ | 78,287 |
| $ | 7,339 |
| $ | 705 |
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Recent Accounting Pronouncements
Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments \u00a0- Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13.
Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies (SRC) as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal year 2024 for the Company if it continues to be classified as a SRC. In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The subsequent amendments will have the same effective date and transition requirements as ASU No. 2016-13. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements or the related disclosure.
Pronouncements Recently Adopted
In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-15, Intangibles\u2014Goodwill and Other\u2014Internal-Use Software (Subtopic 350-40). This update requires a customer in a cloud computing service arrangement to follow the internal-use software guidance to determine which implementation costs to recognize and defer
as an asset. We adopted this guidance as of our first quarter of fiscal year 2021 with no impact on our consolidated financial statements.
In December 2019, FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes. This update is effective for fiscal years beginning after December 15, 2020 (our fiscal year 2022). During the current year, the Company has adopted this provision with no material impact to the consolidated financial statements.
"}]},{"name":"rpt:f-383","factDimensions":{"xbrl:concept":"us-gaap:RevenueFromContractWithCustomerPolicyTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Revenue Recognition
Revenue Recognition Policy
Our revenue is comprised of two categories including subscription and professional services. Subscription includes SaaS revenue and legacy revenue. SaaS includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Legacy revenue is associated with license, maintenance, and support contracts on perpetual license arrangements that we no longer sell. Professional services includes consulting, implementation and training.
Significant Judgment Applied in the Determination of Revenue Recognition
We enter into contractual arrangements with customers that may include promises to transfer multiple services, such as subscription, support and professional services. With respect to our business, a performance obligation is a promise to transfer a service to a customer that is distinct. Significant judgment is required to determine whether services are distinct
performance obligations that should be accounted for separately or combined as one unit of accounting. Additionally, significant judgment is required to determine the timing of revenue recognition.
We allocate the transaction price to each performance obligation based on relative standalone selling price basis (SSP). The SSP is the price at which we would sell a promised service separately to one of our customers. Judgment is required to determine the SSP for each distinct performance obligation.
We determine the SSP by considering our pricing objectives in relation to market demand. Consideration is placed based on our history of discounting prices, size and volume of transactions involved, customer demographics and geographic locations, price lists, contract prices and our market strategy.
Determination of Revenue Recognition
Under Topic 606, we recognize revenue upon the transfer of control of promised services to our customers in the amount that is commensurate with the consideration that we expect to receive in exchange for those services. If consideration includes a variable amount in the arrangement, such as service level credits or contingent fees, then we include an estimate of the amount that we expect to receive for the total transaction price.
The amount of revenue that we recognize is based on (i) identifying the contract with a customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations in the contract on a relative SSP basis; and (v) recognizing revenue when, or as, we satisfy each performance obligation in the contract typically through delivery or when control is transferred to the customer.
Subscription Revenue
The following customer arrangements are recognized ratably over the contract term as the performance obligations are delivered:
| \u25cf | Cloud delivery arrangements; |
| \u25cf | Maintenance and support arrangements; and |
| \u25cf | Term license subscriptions which incorporate on-premise software licenses and substantial cloud functionality that are not distinct in the context of our arrangements as such are considered highly interrelated and represent a single combined performance obligation. |
For contracts involving distinct software licenses, the license performance obligation is satisfied at a point in time when control is transferred to the customer.
We typically invoice our customers in advance upon execution of the contract or subsequent renewals with payment terms between 30 and 45 days. Invoiced amounts are recorded in accounts receivable, deferred revenue or revenue, depending if control transferred to our customers based on each arrangement.
The Company has a royalty revenue agreement with a customer related to the Company\u2019s embedded intellectual property. \u00a0Under the terms of the agreement, the customer is to provide a combined fixed fee, per agent, for each software license sold containing the embedded software to the Company. These embedded OEM royalties are included as subscription revenue. Under Topic 606 revenue guidance, since these arrangements are for sales-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, the Company recognizes revenue only as the subsequent sale occurs. However, the Company notes that such sales are reported by the customer with a quarter in arrears, such revenue is recognized at the time it is reported and paid by the customer given that any estimated variable consideration would have to be fully constrained due to the unpredictability of such estimate and the unavoidable risk that it may lead to significant revenue reversals.
Professional Services Revenue
Professional services revenue includes system implementation, consulting, training, and managed services. The transaction price is allocated to various performance obligations based on their stand-alone selling prices. Revenue allocated to each performance obligation is recognized at the earlier of satisfaction of discrete performance obligations, or as work is performed on a time and material basis. Our consulting and implementation service contracts are bid either on a time-and-materials basis or on a fixed-fee basis. Fixed fees are generally paid upon milestone billing or customer acceptance at pre-determined points in the contract. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether transfer of control to customers has occurred.
Training revenue that meets the criteria to be accounted for separately is recognized when training is provided. \u00a0
Contracts with Multiple Performance Obligations
The Company enters into contracts that can include various combinations of subscriptions, professional services and maintenance and support, which are generally distinct and accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the respective standalone selling prices for each performance obligation. \u00a0
"}]},{"name":"rpt:f-384","factDimensions":{"xbrl:concept":"egan:NumberOfRevenueCategories","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"egan:item"},"factValues":[{"value":"2"}]},{"name":"rpt:f-385","factDimensions":{"xbrl:concept":"egan:RevenuePaymentTermMinimum","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"P30D"}]},{"name":"rpt:f-386","factDimensions":{"xbrl:concept":"egan:RevenuePaymentTermMaximum","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"P45D"}]},{"name":"rpt:f-387","factDimensions":{"xbrl:concept":"us-gaap:SupplementalBalanceSheetDisclosuresTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"2. BALANCE SHEET COMPONENTS
Property and equipment, net consists of the following:
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Computers and equipment | $ | 4,174 |
| $ | 3,750 | |
Furniture and fixtures | \u00a0 | 933 |
| \u00a0 | 1,029 | |
Leasehold improvements | \u00a0 | 600 |
| \u00a0 | 589 | |
Total | \u00a0 | 5,707 |
| \u00a0 | 5,368 | |
Accumulated depreciation and amortization | \u00a0 | (4,876) |
| \u00a0 | (4,663) | |
Property and equipment, net | $ | 831 |
| $ | 705 |
Depreciation and amortization expense was $478,000 and $428,000 for the fiscal years ended June 30, 2022 and 2021, respectively. Disposed fixed assets, which were substantially fully-depreciated, were $71,000 and none for the years ended June 30, 2022, and, 2021, respectively.
Accrued compensation consists of the following:
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Accrued bonuses | $ | 3,716 |
| $ | 3,601 | |
Accrued vacation | \u00a0 | 2,956 |
| \u00a0 | 2,636 | |
Payroll and other employee related costs | \u00a0 | 1,477 |
| \u00a0 | 1,559 | |
Accrued commissions | \u00a0 | 559 |
| \u00a0 | 648 | |
Accrued compensation | $ | 8,708 |
| $ | 8,444 |
Accrued liabilities consists of the following:
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Customer advances | $ | 329 |
| $ | 349 | |
Sales tax payable | 936 |
| 796 | |||
VAT liability | \u00a0 | 1,191 |
| \u00a0 | 2,190 | |
Accrued other liabilities | \u00a0 | 2,470 |
| \u00a0 | 1,017 | |
Accrued liabilities | $ | 4,926 |
| $ | 4,352 |
"}]},{"name":"rpt:f-388","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Computers and equipment | $ | 4,174 |
| $ | 3,750 | |
Furniture and fixtures | \u00a0 | 933 |
| \u00a0 | 1,029 | |
Leasehold improvements | \u00a0 | 600 |
| \u00a0 | 589 | |
Total | \u00a0 | 5,707 |
| \u00a0 | 5,368 | |
Accumulated depreciation and amortization | \u00a0 | (4,876) |
| \u00a0 | (4,663) | |
Property and equipment, net | $ | 831 |
| $ | 705 |
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Accrued bonuses | $ | 3,716 |
| $ | 3,601 | |
Accrued vacation | \u00a0 | 2,956 |
| \u00a0 | 2,636 | |
Payroll and other employee related costs | \u00a0 | 1,477 |
| \u00a0 | 1,559 | |
Accrued commissions | \u00a0 | 559 |
| \u00a0 | 648 | |
Accrued compensation | $ | 8,708 |
| $ | 8,444 |
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
(in thousands) | ||||||
Customer advances | $ | 329 |
| $ | 349 | |
Sales tax payable | 936 |
| 796 | |||
VAT liability | \u00a0 | 1,191 |
| \u00a0 | 2,190 | |
Accrued other liabilities | \u00a0 | 2,470 |
| \u00a0 | 1,017 | |
Accrued liabilities | $ | 4,926 |
| $ | 4,352 |
3. REVENUE RECOGNITION
Disaggregation of Revenue
The following table presents our subscription and professional services revenue during the fiscal years ended June 30, 2022 and 2021, respectively:
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
SaaS revenue | $ | 80,904 | $ | 66,929 | ||
Legacy revenue | 3,653 | 5,442 | ||||
Total subscription | 84,557 | 72,371 | ||||
Professional services | 7,394 | 5,916 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
The following table presents our revenue recognized over-time and at a point-in-time during the fiscal years ended June 30, 2022 and 2021, respectively:
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
Over-time | $ | 81,937 | $ | 68,649 | ||
Point-in-time | 10,014 | 9,638 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
The following table presents our revenue by geography. Revenue by geography is generally determined on the region of our contracting entity rather than the region of our customer. The relative proportion of our total revenues between each geographic region as presented in the table below was materially consistent across each of our operating segments\u2019 revenues for the periods presented.
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
North America | $ | 66,793 | $ | 54,380 | ||
Europe, Middle East, & Africa | 25,158 | 23,907 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
Contract Balances
Contract assets, if any, consist of unbilled receivables for completed performance obligations which have not been invoiced, and for which we do not have an unconditional right to consideration. Contract liabilities consist of deferred revenue for which we have an obligation to transfer services to customers and have received consideration in advance or the amount is due from customers. Once the obligations are fulfilled, then deferred revenue is recognized to revenue in the respective period. There were no contract assets for the years ended June 30, 2022 and 2021.
The following table presents the changes in contract liabilities (in thousands):
\u00a0\u00a0\u00a0\u00a0 | Balance as of | \u00a0\u00a0\u00a0\u00a0 | Balance as of | |||
Contract liabilities: | ||||||
Deferred revenue | 45,638 | 46,211 | ||||
Deferred revenue, net of current portion | \u00a0 | 3,785 | 3,332 |
$41.4 million of deferred revenue as of June 30, 2021 was recognized as revenue during the fiscal year ended June 30, 2022. $36.5 million of deferred revenue as of June 30, 2020 was recognized as revenue during the fiscal year ended June 30, 2021. Total deferred revenue includes additions of $91.4 million and deductions of $91.5 million for the fiscal year ended June 30, 2022. Deductions consist of revenue recognize from beginning of period and impact of foreign currency translation.
Remaining Performance Obligations
Remaining performance obligations represent contracted revenues that had not yet been recognized, and include deferred revenues, invoices that have been issued to customers but were uncollected and have not been recognized as revenues, and amounts that will be invoiced and recognized as revenues in future periods. The transaction price allocated to the remaining performance obligation is influenced by a variety of factors, including seasonality, timing of renewals, average contract terms and foreign currency rates. As of June 30, 2022, our remaining performance obligations were $100.5 million of which we expect to recognize $63.2 million and $37.3 million as revenue within one year and beyond one year, respectively. \u00a0
"}]},{"name":"rpt:f-428","factDimensions":{"xbrl:concept":"us-gaap:DisaggregationOfRevenueTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
SaaS revenue | $ | 80,904 | $ | 66,929 | ||
Legacy revenue | 3,653 | 5,442 | ||||
Total subscription | 84,557 | 72,371 | ||||
Professional services | 7,394 | 5,916 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
Over-time | $ | 81,937 | $ | 68,649 | ||
Point-in-time | 10,014 | 9,638 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
2022 | 2021 | |||||
(in\u00a0thousands) | ||||||
Revenue: | ||||||
North America | $ | 66,793 | $ | 54,380 | ||
Europe, Middle East, & Africa | 25,158 | 23,907 | ||||
Total revenue | $ | 91,951 | $ | 78,287 |
The following table presents the changes in contract liabilities (in thousands):
\u00a0\u00a0\u00a0\u00a0 | Balance as of | \u00a0\u00a0\u00a0\u00a0 | Balance as of | |||
Contract liabilities: | ||||||
Deferred revenue | 45,638 | 46,211 | ||||
Deferred revenue, net of current portion | \u00a0 | 3,785 | 3,332 |
4. INCOME TAXES
(Loss) income before income tax (provision) benefit consisted of the following (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
United States | \u00a0 | $ | (4,214) |
| $ | 5,024 |
Foreign | \u00a0 | 3,008 |
| \u00a0 | 1,769 | |
(Loss) Income before income tax (provision) benefit | $ | (1,206) |
| $ | 6,793 |
The fiscal 2021 (provision) benefit for income tax reconciliations have been recast to dollar values versus a percentage of income before taxes for comparability to the fiscal 2022 presentation. \u00a0The reconciliation of income tax (expense) benefit at the statutory federal income tax rate and the Company\u2019s effective tax rate is as follows (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Federal statutory income tax rate | \u00a0 | $ | 253 | $ | (1,427) | |
Current state taxes, net of federal benefit | \u00a0 | 134 | \u00a0 | (145) | ||
Foreign rate differential | \u00a0 | 98 | \u00a0 | 126 | ||
Research and development credits | \u00a0 | 433 |
| 574 | ||
Foreign withholding tax | \u00a0 | (63) | \u00a0 | (31) | ||
Stock-based compensation | (102) | 51 | ||||
Deferred return to provision | (213) | 125 | ||||
Other items | \u00a0 | (12) | \u00a0 | (18) | ||
Net change in valuation allowance | 3,079 | 13,209 | ||||
Foreign income | \u2014 | (194) | ||||
Expiration of tax attributes | \u00a0 | (4,842) | \u00a0 | (12,104) | ||
Income tax (provision) benefit | \u00a0 | $ | (1,235) | $ | 166 |
The components of the income tax (provision) benefit are as follows (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Current (provision) benefit: | \u00a0 |
|
|
| ||
Federal | $ | \u2014 |
| $ | \u2014 | |
State | \u00a0 | (350) |
| \u00a0 | (107) | |
Foreign | (586) | (31) | ||||
Total current: | \u00a0 | (936) |
| \u00a0 | (138) | |
Deferred: | \u00a0 |
| \u00a0 | |||
Federal | \u2014 | \u2014 | ||||
Foreign | \u00a0 | (299) |
| \u00a0 | 304 | |
Total deferred: | \u00a0 | (299) |
| \u00a0 | 304 | |
Income tax (provision) benefit | $ | (1,235) |
| $ | 166 |
As of June 30, 2022, we had federal and state net operating loss carryforwards of approximately $67.1 million and $13.7 million, respectively. The net operating loss carryforwards will expire at various dates beginning in fiscal year ending June 30, 2023, if not utilized. We also had federal research and development credit carryforwards of approximately $3.6 million as of June 30, 2022, which will expire at various dates beginning in fiscal year ending June 30, 2023, if not utilized. The California research and development credit carryforwards are approximately $6.0 million as of June 30, 2022 and have an indefinite carryover period.
As of June 30, 2022, utilization of the NOL or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company\u2019s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required. Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization. As of June 30, 2022, the Company did not identify any ownership change that would significantly limit the net operating loss carryovers.
Deferred tax assets and liabilities reflect the net tax effects of net operating loss and credit carryforwards and of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes.
Significant components of our deferred tax assets and liabilities for federal, state and foreign income taxes are as follows (in thousands):
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Deferred tax assets: |
|
|
| |||
Net operating loss carryforwards | $ | 14,637 |
| $ | 23,418 | |
Research credits | \u00a0 | 8,321 |
| \u00a0 | 7,728 | |
Deferred revenue | \u00a0 | 1,036 |
| \u00a0 | 1,220 | |
Stock-based compensation | \u00a0 | 2,899 |
| \u00a0 | 1,136 | |
Accruals and reserves | \u00a0 | 6,057 |
| \u00a0 | 2,799 | |
Lease liability | 664 | 228 | ||||
Other | \u00a0 | 104 |
| \u00a0 | 46 | |
Gross deferred tax assets | \u00a0 | 33,718 |
| \u00a0 | 36,575 | |
Less valuation allowance | \u00a0 | (32,412) |
| \u00a0 | (35,492) | |
Net deferred tax assets | $ | 1,306 |
| $ | 1,083 | |
Gross deferred tax liabilities | ||||||
Right-of-use asset | $ | (723) | $ | (207) | ||
Fixed assets | (69) | (38) | ||||
Gross deferred tax liabilities | (792) | (245) | ||||
Total deferred tax assets, net * | $ | 514 | $ | 838 | ||
*included in other assets, net on the consolidated balance sheet |
ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance and the reported cumulative net losses in prior years, we have provided a full valuation allowance against our U.S. net deferred tax assets. With respect to our foreign operations, we expect to utilize the deferred tax assets and have not placed a valuation allowance against them. Our tax provision primarily relates to foreign activities as well as state income taxes. Our income tax rate differs from the statutory tax rates primarily due to the expiration of net operating loss carryforwards which had previously been valued against, change in valuation allowance, stock-based compensation, research and development credits, and our foreign operations.
The net valuation allowance decreased by $3.1 million and $13.2 million for the fiscal years ended June 30, 2022 and 2021, respectively. \u00a0
We have not provided for taxes on $21.3 million of undistributed earnings of our foreign subsidiaries as of June 30, 2022. It is our intention to reinvest such undistributed earnings indefinitely in our foreign subsidiaries. If we distribute these earnings, in the form of dividends or otherwise, we would be subject to withholding taxes payable to the foreign jurisdiction and potential state taxes.
For the fiscal years ended June 30, 2022 and 2021, we have none and $923,000 of Global Intangible Low Tax Income (GILTI) income inclusion and used our net operating losses to offset our taxable income.
Uncertain Tax Positions
The aggregate changes in the balance of our gross unrecognized tax benefits during fiscal years 2022 and 2021 were as follows (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Beginning balance | $ | 1,762 | $ | 1,691 | ||
Increases in balances related to tax positions taken during current periods | \u00a0 | 89 |
| \u00a0 | 71 | |
Expired Attributes | (295) | \u2014 | ||||
Ending balance | $ | 1,556 |
| $ | 1,762 |
There is no amount of unrecognized tax benefit, if recognized currently, that would impact the Company\u2019s effective tax rate as of June 30, 2022 and 2021, respectively. No accrued interest and penalties have been recognized in the tax provision related to unrecognized tax benefits.
We do not anticipate the amount of existing unrecognized tax benefit to significantly increase or decrease during the next twelve months. Our policy is to record interest and penalties related to unrecognized tax benefits as income tax expense.
We file income tax returns in the United States as well as various state and foreign jurisdictions. In these jurisdictions, tax years between 2002 and 2016 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers from those years. For U.S. tax purposes, tax years after 2016 are subject to a three year statute of limitations. The Company is not currently under audit with either the IRS, foreign, or any state or local jurisdictions, nor has it been notified of any other potential future income tax audit. The federal and California statute of limitations remains open for three and four years, respectively, from the date of utilization of any net operating loss or credits.
"}]},{"name":"rpt:f-468","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"(Loss) income before income tax (provision) benefit consisted of the following (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
United States | \u00a0 | $ | (4,214) |
| $ | 5,024 |
Foreign | \u00a0 | 3,008 |
| \u00a0 | 1,769 | |
(Loss) Income before income tax (provision) benefit | $ | (1,206) |
| $ | 6,793 |
"}]},{"name":"rpt:f-469","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-4214000","decimals":-3}]},{"name":"rpt:f-470","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"5024000","decimals":-3}]},{"name":"rpt:f-471","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3008000","decimals":-3}]},{"name":"rpt:f-472","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1769000","decimals":-3}]},{"name":"rpt:f-473","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-1206000","decimals":-3}]},{"name":"rpt:f-474","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"6793000","decimals":-3}]},{"name":"rpt:f-475","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Federal statutory income tax rate | \u00a0 | $ | 253 | $ | (1,427) | |
Current state taxes, net of federal benefit | \u00a0 | 134 | \u00a0 | (145) | ||
Foreign rate differential | \u00a0 | 98 | \u00a0 | 126 | ||
Research and development credits | \u00a0 | 433 |
| 574 | ||
Foreign withholding tax | \u00a0 | (63) | \u00a0 | (31) | ||
Stock-based compensation | (102) | 51 | ||||
Deferred return to provision | (213) | 125 | ||||
Other items | \u00a0 | (12) | \u00a0 | (18) | ||
Net change in valuation allowance | 3,079 | 13,209 | ||||
Foreign income | \u2014 | (194) | ||||
Expiration of tax attributes | \u00a0 | (4,842) | \u00a0 | (12,104) | ||
Income tax (provision) benefit | \u00a0 | $ | (1,235) | $ | 166 |
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The components of the income tax (provision) benefit are as follows (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Current (provision) benefit: | \u00a0 |
|
|
| ||
Federal | $ | \u2014 |
| $ | \u2014 | |
State | \u00a0 | (350) |
| \u00a0 | (107) | |
Foreign | (586) | (31) | ||||
Total current: | \u00a0 | (936) |
| \u00a0 | (138) | |
Deferred: | \u00a0 |
| \u00a0 | |||
Federal | \u2014 | \u2014 | ||||
Foreign | \u00a0 | (299) |
| \u00a0 | 304 | |
Total deferred: | \u00a0 | (299) |
| \u00a0 | 304 | |
Income tax (provision) benefit | $ | (1,235) |
| $ | 166 |
Significant components of our deferred tax assets and liabilities for federal, state and foreign income taxes are as follows (in thousands):
As of June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Deferred tax assets: |
|
|
| |||
Net operating loss carryforwards | $ | 14,637 |
| $ | 23,418 | |
Research credits | \u00a0 | 8,321 |
| \u00a0 | 7,728 | |
Deferred revenue | \u00a0 | 1,036 |
| \u00a0 | 1,220 | |
Stock-based compensation | \u00a0 | 2,899 |
| \u00a0 | 1,136 | |
Accruals and reserves | \u00a0 | 6,057 |
| \u00a0 | 2,799 | |
Lease liability | 664 | 228 | ||||
Other | \u00a0 | 104 |
| \u00a0 | 46 | |
Gross deferred tax assets | \u00a0 | 33,718 |
| \u00a0 | 36,575 | |
Less valuation allowance | \u00a0 | (32,412) |
| \u00a0 | (35,492) | |
Net deferred tax assets | $ | 1,306 |
| $ | 1,083 | |
Gross deferred tax liabilities | ||||||
Right-of-use asset | $ | (723) | $ | (207) | ||
Fixed assets | (69) | (38) | ||||
Gross deferred tax liabilities | (792) | (245) | ||||
Total deferred tax assets, net * | $ | 514 | $ | 838 | ||
*included in other assets, net on the consolidated balance sheet |
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The aggregate changes in the balance of our gross unrecognized tax benefits during fiscal years 2022 and 2021 were as follows (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Beginning balance | $ | 1,762 | $ | 1,691 | ||
Increases in balances related to tax positions taken during current periods | \u00a0 | 89 |
| \u00a0 | 71 | |
Expired Attributes | (295) | \u2014 | ||||
Ending balance | $ | 1,556 |
| $ | 1,762 |
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5. STOCKHOLDERS\u2019 EQUITY
On December 8, 2021, our board of directors authorized the amended and restated Certificate of Incorporation which increased the total authorized shares of common stock from 50,000,000 to 60,000,000 shares. As of June 30, 2022, and June 30, 2021, the Company had 31,930,000 and 31,231,000 shares of common stock and , respectively.
Common Stock
We have reserved shares of common stock for issuance as of June 30, 2022 as follows:
\u00a0\u00a0\u00a0\u00a0 | Reserved | |
Stock | ||
Options | ||
Stock options outstanding | \u00a0 | 5,443,928 |
Stock available for future grants or issuance: | \u00a0 | |
2005 Stock Incentive Plan | 679,790 | |
2005 Management Stock Option Plan | 71,983 | |
2017 Employee Stock Purchase Plan | 1,097,360 | |
Total reserved shares of common stock for issuance | \u00a0 | 7,293,061 |
Preferred Stock
We are authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001 per share. As of June 30, 2022 and 2021, no shares of preferred stock are issued or outstanding. Our board of directors has the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares
constituting any series or the designation of such series, any or all of which may be greater than the rights of the common stock.
2005 Management Stock Option Plan
In May 2005, our board of directors adopted the 2005 Management Stock Option Plan (2005 Management Plan) which provides for the grant of non-statutory stock options to directors, officers and key employees of eGain and its subsidiaries. Our board extended the expiration date of the 2005 Management Plan to September 30, 2024. Options under the 2005 Management Plan are granted at a price not less than 100% of the fair market value of the common stock on the date of grant. Options granted under the 2005 Management Plan are subject to eGain\u2019s right of repurchase, whose right shall lapse with respect to one-forty-eighth () of the shares granted to a director, officer or key employee for each month of continuous service provided by such director, officer or key employee to eGain. The options granted under this plan are exercisable for up to ten years from the date of grant.
The following table represents the activity under the 2005 Management Plan:
\u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||
Available\u00a0for | Options | Average | |||||
Grant | Outstanding | Exercise Price | |||||
Balance as of June 30, 2020 | \u00a0 | 68,649 |
| 1,278,517 |
| $ | 3.58 |
Options Granted | \u00a0 | \u2014 |
| \u2014 |
| $ | \u2014 |
Options Exercised | \u00a0 | \u2014 |
| (106,000) |
| $ | 4.30 |
Options Forfeited / Expired | \u00a0 | \u2014 |
| \u2014 |
| $ | \u2014 |
Balance as of June 30, 2021 | \u00a0 | 68,649 |
| 1,172,517 |
| $ | 3.51 |
Options Granted | \u2014 | \u2014 | $ | \u2014 | |||
Options Exercised | \u2014 | (342,466) | $ | 4.08 | |||
Options Forfeited / Expired | 3,334 |
| (3,334) | $ | 1.75 | ||
Balance as of June 30, 2022 | 71,983 |
| 826,717 | $ | 3.29 |
2005 Stock Incentive Plan
In March 2005, our board of directors adopted the 2005 Stock Incentive Plan which provides for the grant of stock options to eGain\u2019s employees, officers, directors and consultants. Our board extended the expiration date of the 2005 Stock Incentive Plan to September 30, 2024 and made certain other changes. Options granted under the 2005 Stock Incentive Plan are non-qualified stock options. Non-qualified stock options may be granted to employees with exercise prices of no less than the fair value of the common stock on the date of grant. The options generally vest ratably over a period of four years and expire no later than ten years from the date of grant. During the fiscal year ended June 30, 2022, we have increased our number of authorized shares available for grant by 3,000,000 shares.
The following table represents the activity under the 2005 Stock Incentive Plan:
\u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||
Available\u00a0for | Options | Average | |||||
Grant | Outstanding | Exercise Price | |||||
Balance as of June 30, 2020 | \u00a0 | 1,073,386 |
| 1,607,449 |
| $ | 5.60 |
Options Granted | \u00a0 | (207,700) | 207,700 |
| $ | 12.07 | |
Options Exercised | \u00a0 | \u2014 | (173,313) |
| $ | 4.41 | |
Options Forfeited / Expired | \u00a0 | 78,841 | (78,841) |
| $ | 8.69 | |
Balance as of June 30, 2021 | \u00a0 | 944,527 |
| 1,562,995 |
| $ | 6.44 |
Shares Added | 3,000,000 | \u2014 | $ | \u2014 | |||
Options Granted | (3,607,661) | 3,607,661 | $ | 11.18 | |||
Options Exercised | \u2014 | (210,521) | $ | 3.52 | |||
Options Forfeited / Expired | 342,924 | (342,924) | $ | 10.75 | |||
Balance as of June 30, 2022 | 679,790 |
| 4,617,211 |
| $ | 9.96 |
During the fiscal year ended June 30, 2022, we granted 71,100 stock options to consultants.
The following table summarizes information about stock options outstanding and exercisable under all stock option plans as of June 30, 2022:
Options\u00a0Outstanding | Options\u00a0Exercisable | ||||||||||||
Weighted | |||||||||||||
Range\u00a0of | Average | Weighted | Weighted | ||||||||||
Exercise | Number of | Remaining | Average | Number of | Average | ||||||||
Prices | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Contractual\u00a0Life | \u00a0\u00a0\u00a0\u00a0 | Exercise Price | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Exercise Price | |||
$1.6-$2.13 |
| 14,980 |
| 4.70 |
| $ | 1.80 | 14,980 |
| $ | 1.80 | ||
$2.50 |
| 1,049,534 |
| 4.37 |
| $ | 2.50 | 1,041,107 |
| $ | 2.50 | ||
$3.4-$7.96 |
| 635,227 |
| 5.05 |
| $ | 6.22 | 563,071 |
| $ | 6.03 | ||
$8.2-$10.96 |
| 592,298 |
| 8.66 |
| $ | 9.81 | 128,966 |
| $ | 9.53 | ||
$11.05-$11.26 |
| 129,900 |
| 9.24 |
| $ | 11.11 | 8,020 |
| $ | 11.24 | ||
$11.36 |
| 2,701,365 |
| 9.13 |
| $ | 11.36 | 511,788 |
| $ | 11.36 | ||
$11.47-$13.75 |
| 286,174 |
| 7.82 |
| $ | 12.40 | 137,426 |
| $ | 12.90 | ||
$14.28 |
| 8,600 |
| 8.21 |
| $ | 14.28 | 3,762 |
| $ | 14.28 | ||
$14.40 |
| 3,550 |
| 6.12 |
| $ | 14.40 | 3,402 |
| $ | 14.40 | ||
$19.11 |
| 22,300 |
| 7.75 |
| $ | 19.11 | 10,166 |
| $ | 19.11 | ||
$1.6-$19.11 |
| 5,443,928 | 7.60 | $ | 8.94 |
| 2,422,688 |
| $ | 6.29 |
The summary of options vested and exercisable as of June 30, 2022 comprised:
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||||||
Average | ||||||||||
Weighted | Aggregate | Remaining | ||||||||
Number\u00a0of | Average | Intrinsic | Contractual | |||||||
Shares | Exercise\u00a0Price | Value | Term | |||||||
Options outstanding | \u00a0\u00a0\u00a0\u00a0 | 5,443,928 |
| $ | 8.94 |
| $ | 10,098,695 |
| 7.60 |
Fully vested and expected to vest options | \u00a0 | 5,173,999 |
| $ | 8.83 |
| $ | 10,072,808 |
| 7.52 |
Options exercisable | \u00a0 | 2,422,688 |
| $ | 6.29 |
| $ | 9,806,115 |
| 5.70 |
The aggregate intrinsic value in the preceding table represents the total intrinsic value based on stock options with a weighted average exercise price less than our closing stock price of $9.75 as of June 30, 2022 that would have been
received by the option holders, had they exercised their options on June 30, 2022. The total intrinsic value of stock options exercised was $4.3 million and $2.0 million during fiscal years 2022 and 2021, respectively.
Stock-Based Compensation
We account for stock-based compensation in accordance with ASC 718, Compensation\u2014Stock Compensation. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period. Stock-based compensation expense consists of expenses for stock options and our employee stock purchase plan (ESPP).
2017 Employee Stock Purchase Plan
In October 2017, our board of directors adopted the 2017 Employee Stock Purchase Plan (ESPP) which provided eligible employees the option purchase the Company\u2019s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchasing period. The offering period, meaning a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods. Eligible employees may join the ESPP at the beginning of any six-month purchase period. Under the terms of the ESPP, employees can choose to have between 1% and 15% of their base earnings withheld to purchase the Company\u2019s common stock. On December 17, 2021, our board of directors authorized an additional 600,000 shares of common stock to be available for issuance under ESPP. As of June 30th, 2022 we have 1,097,360 reserved stock available for issuance under ESPP.
Determining the fair value of the stock-based awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term.
The table below summarizes the effect of stock-based compensation (in thousands):
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Non-cash stock-based compensation expense | $ | (11,380) | $ | (1,700) | ||
Income tax expense | \u00a0 | (102) |
| \u00a0 | (51) | |
Net (loss) income effect | $ | (11,482) | $ | (1,751) |
The Company recognized $102,000 and $51,000 of tax expense related to stock-based compensation expense for eGain UK and Exony for the fiscal years ended June 30, 2022 and 2021, respectively. There is no income tax effect that has been recognized relating to the stock-based compensation expense in the US due to full valuation allowance.
Total stock-based compensation includes expense related to non-employee awards of $232,000 and $47,000 during the fiscal years ended June 30, 2022 and 2021, respectively. \u00a0
Total stock-based compensation includes expense related to the ESPP of $457,000 and $473,000 during the fiscal years ended June 30, 2022 and 2021, respectively.
\u00a0\u00a0
We utilized the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options granted. All shares of our common stock issued pursuant to our stock option plans are only issued out of an authorized reserve of shares of common stock, which were previously registered with the Securities and Exchange Commission on a registration statement on Form\u00a0S-8.
During the fiscal years ended June 30, 2022 and 2021, there were 3,607,661 and 207,700 options granted, respectively, with a weighted average grant date fair value of $5.83 and $6.60, per share, respectively.
We used the following assumptions as inputs into the Black-Scholes valuation model to estimate the fair value of the options granted:
Fiscal Year\u00a0Ended\u00a0June\u00a030, | |||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | 2021 | |||||
Dividend yield | \u00a0 | \u2014 |
| \u2014 |
| ||
Expected volatility | \u00a0 | 70 | %\u00a0\u00a0 | 72 | %\u00a0\u00a0 | ||
Average risk-free interest rate | \u00a0 | 1.01 | %\u00a0\u00a0 | 0.50 | %\u00a0\u00a0 | ||
Expected life (in years) | \u00a0 | 4.68 |
| 4.35 |
|
We used the following weighted-average assumptions as inputs to estimate the fair value of the ESPP stock purchase right:
Fiscal Year Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dividend yield | \u2014 | \u2014 | ||||||
Expected volatility | 57 | %\u00a0\u00a0 | 69 | % | ||||
Average risk-free interest rate | 1.22 | %\u00a0\u00a0 | 1.27 | %\u00a0\u00a0 | ||||
Expected term (in years) | 0.50 | 0.50 | ||||||
Fair Value of grants per share | $ | 2.96 | $ | 3.64 |
During the fiscal year ended June 30, 2022, employees were granted the right and purchased an aggregate of 145,715 shares pursuant to the 2017 ESPP. Compensation expense related to those purchase rights was $457,000 and $473,000 for the fiscal years ended June 30, 2022 and 2021, respectively.
As of June 30, 2022, unrecognized compensation expense related to purchase rights that will be recognized over a weighted average period of 0.42 years was $220,000.
The dividend yield of zero is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. We determined the appropriate measure of expected volatility by reviewing historic volatility in the share price of our common stock, as adjusted for certain events that management deemed to be non-recurring and non-indicative of future events. The risk-free interest rate is derived from the average U.S. Treasury Strips rate.
We base our estimate of expected life of a stock option on the historical exercise behavior, and cancellations of all past option grants made by the Company during the time period which its common stock has been publicly traded, the contractual term of the option, the vesting period and the expected remaining term of the outstanding options.
In accordance with Accounting Standards Updates (ASU) 2016-09, Compensation\u2014Stock Compensation: Improvements to Employee Share-Based Accounting, we elected to continue to estimate forfeitures in the calculation of stock-based compensation expense.
The following table summarizes stock-based compensation expense relating to stock options for the years ended June 30, 2022 and 2021, respectively (in thousands):
Fiscal Year Ended June 30, | ||||||
2022 | 2021 | |||||
Cost of revenue | $ | 2,916 | $ | 222 | ||
Research and development | 2,797 | 347 | ||||
Sales and marketing | 2,248 | 501 | ||||
General and administrative | 2,962 | 157 | ||||
Total | $ | 10,923 | $ | 1,227 |
Total unamortized compensation cost, net of forfeitures, for all options granted but not yet vested as of June 30, 2022 was $11.8 million which is expected to be recognized over the weighted average period of 1.64 years.
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\u00a0\u00a0\u00a0\u00a0 | Reserved | |
Stock | ||
Options | ||
Stock options outstanding | \u00a0 | 5,443,928 |
Stock available for future grants or issuance: | \u00a0 | |
2005 Stock Incentive Plan | 679,790 | |
2005 Management Stock Option Plan | 71,983 | |
2017 Employee Stock Purchase Plan | 1,097,360 | |
Total reserved shares of common stock for issuance | \u00a0 | 7,293,061 |
\u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||
Available\u00a0for | Options | Average | |||||
Grant | Outstanding | Exercise Price | |||||
Balance as of June 30, 2020 | \u00a0 | 68,649 |
| 1,278,517 |
| $ | 3.58 |
Options Granted | \u00a0 | \u2014 |
| \u2014 |
| $ | \u2014 |
Options Exercised | \u00a0 | \u2014 |
| (106,000) |
| $ | 4.30 |
Options Forfeited / Expired | \u00a0 | \u2014 |
| \u2014 |
| $ | \u2014 |
Balance as of June 30, 2021 | \u00a0 | 68,649 |
| 1,172,517 |
| $ | 3.51 |
Options Granted | \u2014 | \u2014 | $ | \u2014 | |||
Options Exercised | \u2014 | (342,466) | $ | 4.08 | |||
Options Forfeited / Expired | 3,334 |
| (3,334) | $ | 1.75 | ||
Balance as of June 30, 2022 | 71,983 |
| 826,717 | $ | 3.29 |
\u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||
Available\u00a0for | Options | Average | |||||
Grant | Outstanding | Exercise Price | |||||
Balance as of June 30, 2020 | \u00a0 | 1,073,386 |
| 1,607,449 |
| $ | 5.60 |
Options Granted | \u00a0 | (207,700) | 207,700 |
| $ | 12.07 | |
Options Exercised | \u00a0 | \u2014 | (173,313) |
| $ | 4.41 | |
Options Forfeited / Expired | \u00a0 | 78,841 | (78,841) |
| $ | 8.69 | |
Balance as of June 30, 2021 | \u00a0 | 944,527 |
| 1,562,995 |
| $ | 6.44 |
Shares Added | 3,000,000 | \u2014 | $ | \u2014 | |||
Options Granted | (3,607,661) | 3,607,661 | $ | 11.18 | |||
Options Exercised | \u2014 | (210,521) | $ | 3.52 | |||
Options Forfeited / Expired | 342,924 | (342,924) | $ | 10.75 | |||
Balance as of June 30, 2022 | 679,790 |
| 4,617,211 |
| $ | 9.96 |
"}]},{"name":"rpt:f-600","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant","xbrl:period":"2020-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"1073386"}]},{"name":"rpt:f-601","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber","xbrl:period":"2020-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"1607449"}]},{"name":"rpt:f-602","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice","xbrl:period":"2020-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"5.60","decimals":2}]},{"name":"rpt:f-603","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedAwardNumberOfSharesAvailableForGrantGranted","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"207700"}]},{"name":"rpt:f-604","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"207700"}]},{"name":"rpt:f-605","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"12.07","decimals":2}]},{"name":"rpt:f-606","factDimensions":{"xbrl:concept":"us-gaap:StockIssuedDuringPeriodSharesStockOptionsExercised","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"173313"}]},{"name":"rpt:f-607","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"4.41","decimals":2}]},{"name":"rpt:f-608","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedAwardNumberOfSharesAvailableForGrantForfeitedExpired","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"78841"}]},{"name":"rpt:f-609","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriod","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"78841"}]},{"name":"rpt:f-610","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice","xbrl:period":"2020-07-01T00:00:00/2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"8.69","decimals":2}]},{"name":"rpt:f-611","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant","xbrl:period":"2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"944527"}]},{"name":"rpt:f-612","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber","xbrl:period":"2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"1562995"}]},{"name":"rpt:f-613","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice","xbrl:period":"2021-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"6.44","decimals":2}]},{"name":"rpt:f-614","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorizedForFutureIssuance","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"3000000"}]},{"name":"rpt:f-615","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedAwardNumberOfSharesAvailableForGrantGranted","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"3607661"}]},{"name":"rpt:f-616","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"3607661"}]},{"name":"rpt:f-617","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"11.18","decimals":2}]},{"name":"rpt:f-618","factDimensions":{"xbrl:concept":"us-gaap:StockIssuedDuringPeriodSharesStockOptionsExercised","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"210521"}]},{"name":"rpt:f-619","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"3.52","decimals":2}]},{"name":"rpt:f-620","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedAwardNumberOfSharesAvailableForGrantForfeitedExpired","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"342924"}]},{"name":"rpt:f-621","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriod","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"342924"}]},{"name":"rpt:f-622","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"10.75","decimals":2}]},{"name":"rpt:f-623","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"679790"}]},{"name":"rpt:f-624","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"4617211"}]},{"name":"rpt:f-625","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice","xbrl:period":"2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"9.96","decimals":2}]},{"name":"rpt:f-626","factDimensions":{"xbrl:concept":"egan:ShareBasedCompensationArrangementByShareBasedAwardNumberOfSharesAvailableForGrantGranted","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"xbrla:shares","srt:TitleOfIndividualAxis":"egan:ConsultantMember","us-gaap:PlanNameAxis":"egan:TwoThousandFiveStockIncentivePlanMember"},"factValues":[{"value":"-71100"}]},{"name":"rpt:f-627","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"
The following table summarizes information about stock options outstanding and exercisable under all stock option plans as of June 30, 2022:
Options\u00a0Outstanding | Options\u00a0Exercisable | ||||||||||||
Weighted | |||||||||||||
Range\u00a0of | Average | Weighted | Weighted | ||||||||||
Exercise | Number of | Remaining | Average | Number of | Average | ||||||||
Prices | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Contractual\u00a0Life | \u00a0\u00a0\u00a0\u00a0 | Exercise Price | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Exercise Price | |||
$1.6-$2.13 |
| 14,980 |
| 4.70 |
| $ | 1.80 | 14,980 |
| $ | 1.80 | ||
$2.50 |
| 1,049,534 |
| 4.37 |
| $ | 2.50 | 1,041,107 |
| $ | 2.50 | ||
$3.4-$7.96 |
| 635,227 |
| 5.05 |
| $ | 6.22 | 563,071 |
| $ | 6.03 | ||
$8.2-$10.96 |
| 592,298 |
| 8.66 |
| $ | 9.81 | 128,966 |
| $ | 9.53 | ||
$11.05-$11.26 |
| 129,900 |
| 9.24 |
| $ | 11.11 | 8,020 |
| $ | 11.24 | ||
$11.36 |
| 2,701,365 |
| 9.13 |
| $ | 11.36 | 511,788 |
| $ | 11.36 | ||
$11.47-$13.75 |
| 286,174 |
| 7.82 |
| $ | 12.40 | 137,426 |
| $ | 12.90 | ||
$14.28 |
| 8,600 |
| 8.21 |
| $ | 14.28 | 3,762 |
| $ | 14.28 | ||
$14.40 |
| 3,550 |
| 6.12 |
| $ | 14.40 | 3,402 |
| $ | 14.40 | ||
$19.11 |
| 22,300 |
| 7.75 |
| $ | 19.11 | 10,166 |
| $ | 19.11 | ||
$1.6-$19.11 |
| 5,443,928 | 7.60 | $ | 8.94 |
| 2,422,688 |
| $ | 6.29 |
The summary of options vested and exercisable as of June 30, 2022 comprised:
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Weighted | |||||||
Average | ||||||||||
Weighted | Aggregate | Remaining | ||||||||
Number\u00a0of | Average | Intrinsic | Contractual | |||||||
Shares | Exercise\u00a0Price | Value | Term | |||||||
Options outstanding | \u00a0\u00a0\u00a0\u00a0 | 5,443,928 |
| $ | 8.94 |
| $ | 10,098,695 |
| 7.60 |
Fully vested and expected to vest options | \u00a0 | 5,173,999 |
| $ | 8.83 |
| $ | 10,072,808 |
| 7.52 |
Options exercisable | \u00a0 | 2,422,688 |
| $ | 6.29 |
| $ | 9,806,115 |
| 5.70 |
Fiscal Year\u00a0Ended\u00a0June\u00a030, | ||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | \u00a0\u00a0\u00a0\u00a0 | 2021 | |||
Non-cash stock-based compensation expense | $ | (11,380) | $ | (1,700) | ||
Income tax expense | \u00a0 | (102) |
| \u00a0 | (51) | |
Net (loss) income effect | $ | (11,482) | $ | (1,751) |
Fiscal Year\u00a0Ended\u00a0June\u00a030, | |||||||
\u00a0\u00a0\u00a0\u00a0 | 2022 | 2021 | |||||
Dividend yield | \u00a0 | \u2014 |
| \u2014 |
| ||
Expected volatility | \u00a0 | 70 | %\u00a0\u00a0 | 72 | %\u00a0\u00a0 | ||
Average risk-free interest rate | \u00a0 | 1.01 | %\u00a0\u00a0 | 0.50 | %\u00a0\u00a0 | ||
Expected life (in years) | \u00a0 | 4.68 |
| 4.35 |
|
We used the following weighted-average assumptions as inputs to estimate the fair value of the ESPP stock purchase right:
Fiscal Year Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dividend yield | \u2014 | \u2014 | ||||||
Expected volatility | 57 | %\u00a0\u00a0 | 69 | % | ||||
Average risk-free interest rate | 1.22 | %\u00a0\u00a0 | 1.27 | %\u00a0\u00a0 | ||||
Expected term (in years) | 0.50 | 0.50 | ||||||
Fair Value of grants per share | $ | 2.96 | $ | 3.64 |
Fiscal Year Ended June 30, | ||||||
2022 | 2021 | |||||
Cost of revenue | $ | 2,916 | $ | 222 | ||
Research and development | 2,797 | 347 | ||||
Sales and marketing | 2,248 | 501 | ||||
General and administrative | 2,962 | 157 | ||||
Total | $ | 10,923 | $ | 1,227 |
6. INTANGIBLE ASSETS
Intangible assets are amortized over the estimated lives, as follows (in thousands, except expected life):
Gross | Consolidated | ||||||||||||
Carrying | Accumulated | Net\u00a0Balance | Statements of Operations | ||||||||||
Intangible\u00a0Asset | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Amortization | \u00a0\u00a0\u00a0\u00a0 | June\u00a030,\u00a02022 | \u00a0\u00a0\u00a0\u00a0 | Life | \u00a0\u00a0\u00a0\u00a0 | Category\u00a0\u00a0 | |||
Customer relationships - maintenance contracts | \u00a0 | 1,610 |
| \u00a0 | (1,610) | \u00a0 | \u2014 | \u00a0 | 6 |
| Cost of recurring | ||
$ | 1,610 | $ | (1,610) | $ | \u2014 | ||||||||
Gross | Consolidated | ||||||||||||
Carrying | Accumulated | Net\u00a0Balance | Statements of Operations | ||||||||||
Intangible\u00a0Asset | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Amortization | \u00a0\u00a0\u00a0\u00a0 | June\u00a030,\u00a02021 | \u00a0\u00a0\u00a0\u00a0 | Life | \u00a0\u00a0\u00a0\u00a0 | Category\u00a0\u00a0 | |||
Customer relationships - maintenance contracts | \u00a0 | 1,610 |
| \u00a0 | (1,610) | \u00a0 | \u2014 | \u00a0 | 6 |
| Cost of recurring | ||
$ | 1,610 | $ | (1,610) | $ | \u2014 |
Amortization expense related to the above intangible assets were $0 and $26,000 for fiscal years ended June 30, 2022 and 2021, respectively.
"}]},{"name":"rpt:f-779","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"Intangible assets are amortized over the estimated lives, as follows (in thousands, except expected life):
Gross | Consolidated | ||||||||||||
Carrying | Accumulated | Net\u00a0Balance | Statements of Operations | ||||||||||
Intangible\u00a0Asset | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Amortization | \u00a0\u00a0\u00a0\u00a0 | June\u00a030,\u00a02022 | \u00a0\u00a0\u00a0\u00a0 | Life | \u00a0\u00a0\u00a0\u00a0 | Category\u00a0\u00a0 | |||
Customer relationships - maintenance contracts | \u00a0 | 1,610 |
| \u00a0 | (1,610) | \u00a0 | \u2014 | \u00a0 | 6 |
| Cost of recurring | ||
$ | 1,610 | $ | (1,610) | $ | \u2014 | ||||||||
Gross | Consolidated | ||||||||||||
Carrying | Accumulated | Net\u00a0Balance | Statements of Operations | ||||||||||
Intangible\u00a0Asset | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Amortization | \u00a0\u00a0\u00a0\u00a0 | June\u00a030,\u00a02021 | \u00a0\u00a0\u00a0\u00a0 | Life | \u00a0\u00a0\u00a0\u00a0 | Category\u00a0\u00a0 | |||
Customer relationships - maintenance contracts | \u00a0 | 1,610 |
| \u00a0 | (1,610) | \u00a0 | \u2014 | \u00a0 | 6 |
| Cost of recurring | ||
$ | 1,610 | $ | (1,610) | $ | \u2014 |
7.\u00a0LEASES
During our fiscal year ended June 30, 2022, we leased our office facilities under non-cancelable operating leases that expire on various dates through the fiscal year 2027; and we were the sublessor for some office spaces through March 2022. We also modified one of the existing operating leases by extending it through 2027, which resulted in an increase in operating lease right-of-use assets and operating lease liabilities in the amount of $2.8 million during our fiscal year ended June 30. 2022. All of our office leases are classified as operating leases with lease expense recognized on a straight-line basis over the lease term. Lease right-of-use assets and liabilities are recognized on the commencement date at the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments.
The following table presents information about the weighted average lease term and discount rate as follows:
\u00a0\u00a0\u00a0\u00a0 | As of June\u00a030,\u00a02022 | |||
Weighted average remaining lease term (in years) | 4.05 | |||
Weighted average discount rate | 4.92 | % |
The following table presents information about leases on our consolidated statement of operations (in thousands):
Fiscal Year Ended | |||
June\u00a030,\u00a02022 | |||
Operating lease expense | $ | 1,346 | |
Short-term lease expense | 4 | ||
Sublease income | 463 |
The following table presents supplemental cash flow information about our leases (in thousands):
Fiscal Year Ended | |||
June\u00a030,\u00a02022 | |||
Operating cash outflows from operating leases | $ | 1,691 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | \u2014 |
As of June 30, 2022, remaining maturities of lease liabilities are as follows (in thousands):
Fiscal Period: | |||
Fiscal 2023 | $ | 1,193 | |
Fiscal 2024 | 878 | ||
Fiscal 2025 | \u00a0 | 668 | |
Fiscal 2026 | \u00a0 | 688 | |
Thereafter | 528 | ||
Total minimum lease payments | 3,955 | ||
Less: Imputed interest | (374) | ||
Total | $ | 3,581 |
"}]},{"name":"rpt:f-793","factDimensions":{"xbrl:concept":"egan:OperatingLeasesNumberOfLeasesModified","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"egan:lease"},"factValues":[{"value":"1"}]},{"name":"rpt:f-794","factDimensions":{"xbrl:concept":"egan:OperatingLeaseOperatingLeaseLiabilityIncreaseDecreaseDueToLeaseModification","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2800000","decimals":-5}]},{"name":"rpt:f-795","factDimensions":{"xbrl:concept":"us-gaap:LeaseCostTableTextBlock","xbrl:period":"2021-07-01T00:00:00/2022-07-01T00:00:00","xbrl:entity":"cik:0001066194"},"factValues":[{"value":"
\u00a0\u00a0\u00a0\u00a0 | As of June\u00a030,\u00a02022 | |||
Weighted average remaining lease term (in years) | 4.05 | |||
Weighted average discount rate | 4.92 | % |
The following table presents information about leases on our consolidated statement of operations (in thousands):
Fiscal Year Ended | |||
June\u00a030,\u00a02022 | |||
Operating lease expense | $ | 1,346 | |
Short-term lease expense | 4 | ||
Sublease income | 463 |
The following table presents supplemental cash flow information about our leases (in thousands):
Fiscal Year Ended | |||
June\u00a030,\u00a02022 | |||
Operating cash outflows from operating leases | $ | 1,691 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | \u2014 |
As of June 30, 2022, remaining maturities of lease liabilities are as follows (in thousands):
Fiscal Period: | |||
Fiscal 2023 | $ | 1,193 | |
Fiscal 2024 | 878 | ||
Fiscal 2025 | \u00a0 | 668 | |
Fiscal 2026 | \u00a0 | 688 | |
Thereafter | 528 | ||
Total minimum lease payments | 3,955 | ||
Less: Imputed interest | (374) | ||
Total | $ | 3,581 |
8. COMMITMENTS AND CONTINGENCIES
Employee benefit plans
Defined Contribution Plans
We sponsor an employee savings and retirement plan, the 401(k) Plan, as allowed under Section\u00a0401(k) of the Internal Revenue Code. The 401(k) Plan is available to all domestic employees who meet minimum age and service requirements, and provides employees with tax deferred salary deductions and alternative investment options. Employees may contribute up to 60% of their salary, subject to certain limitations. We, at the discretion of our board of directors, may contribute to the 401(k) Plan. In fiscal years 2022 and 2021, we contributed approximately $704,000 and $569,000 to the 401(k) Plan, respectively. We also have a defined contribution plan related to our foreign subsidiaries. Amounts expensed under this plan were $542,000 and $534,000, for the fiscal years ended June 30, 2022 and 2021, respectively.
Gratuity Plan\u2014India
In accordance with Gratuity Act of 1972, we sponsor a defined benefit plan (Gratuity Plan) for all of our India employees. The Gratuity Plan is required by local law, which provides a lump sum payment to vested employees upon retirement or termination of employment in an amount based on each employee\u2019s salary and duration of employment with the Company. The Gratuity Plan benefit cost for the year is calculated on an actuarial basis. Current service costs and actuarial gains or losses, or prior service cost, for the Gratuity Plan were insignificant for the fiscal years 2022 and 2021.
Warranty
We generally warrant that the program portion of our software will perform substantially in accordance with certain specifications for a period up to one year from the date of delivery. Our liability for a breach of this warranty is either a return of the license fee or providing a fix, patch, work-around or replacement of the software.
We also provide standard warranties against and indemnification for the potential infringement of third party intellectual property rights to our customers relating to the use of our products, as well as indemnification agreements with certain officers and employees under which we may be required to indemnify such persons for liabilities arising out of their duties to us. The terms of such obligations vary. Generally, the maximum obligation is the amount permitted by law.
Historically, costs related to these warranties have not been significant. However, we cannot guarantee that a warranty reserve will not become necessary in the future.
Indemnification
We have agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person\u2019s service as a director or officer, including any action by us, arising out of that person\u2019s services as our director or officer or that person\u2019s services provided to any other company or enterprise at our request.
Transfer Pricing
We have received transfer-pricing assessments from tax authorities with regard to transfer pricing issues for certain fiscal years, which we have appealed with the appropriate authority. We review the status of each significant matter and assess its potential financial exposure. We believe that such assessments are without merit and would not have a significant impact on our consolidated financial statements.
Contractual Obligations and Commitments
Contractual agreements with third parties consist of software licenses, maintenance and support for our operations. As of June 30, 2022, we have paid all non-cancelable contractual agreements related to these software licenses.
We have no significant commitments related to co-location services for cloud operations as of June 30, 2022 and 2021.
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In the ordinary course of business, we are involved in various legal proceedings and claims related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour, and other claims that are not expected to have a material impact. We have been, and may in the future be, put on notice and/or sued by third parties for alleged infringement of their proprietary rights, including patent infringement.
We evaluate all claims and lawsuits with respect to their potential merits, our potential defenses and counterclaims, settlement or litigation potential and the expected effect on us. Our technologies may be subject to injunction if they are found to infringe the rights of a third party. In addition, our agreements require us to indemnify our customers for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling on such a claim.
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ASC 820, Fair Value Measurement and Disclosures, defines fair value, establishes a framework for measuring fair value of assets and liabilities, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the assets or liabilities in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive income when they occur. ASC 820 applies whenever other statements require or permit assets or liabilities to be measured at fair value.
ASC 820 includes a fair value hierarchy, of which the first two are considered observable and the last unobservable, that is intended to increase the consistency and comparability in fair value measurements and related disclosures. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity\u2019s pricing based upon their own market assumptions.
The fair value hierarchy consists of the following three levels:
Level\u00a01 \u2013 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.
Level\u00a02 \u2013 instrument valuations are obtained from readily-available pricing sources for comparable instruments.
Level\u00a03 \u2013 instrument valuations are obtained without observable market value and require a high level of judgment to determine the fair value.
Our money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy. As of June 30, 2022 and 2021, cash equivalents classified as level 1 instruments, including money market account investments, were measured at $57.9 million and $55.4 million, respectively.
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11. QUARTERLY FINANCIAL DATA (Unaudited)
Following is a summary of quarterly operating results and share data for the years ended June 30, 2022 and 2021, respectively:
1st\u00a0Quarter | 2nd\u00a0Quarter | \u00a0 3rd\u00a0Quarter | \u00a0 4th\u00a0Quarter | \u00a0 Fiscal\u00a0Year | |||||||||||
(in\u00a0thousands,\u00a0except\u00a0per\u00a0share\u00a0data) | |||||||||||||||
Fiscal Year 2022 | \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
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| |||||
Revenue | $ | 21,451 |
| $ | 23,093 |
| $ | 23,904 |
| $ | 23,503 |
| $ | 91,951 | |
Gross profit | $ | 16,153 |
| $ | 16,992 |
| $ | 17,367 |
| $ | 16,902 |
| $ | 67,414 | |
Income (loss) from operations | $ | 691 | $ | (630) | $ | (476) | $ | (1,723) | $ | (2,138) | |||||
Net income (loss) | $ | 551 | $ | (826) | $ | (615) | $ | (1,551) | $ | (2,441) | |||||
Basic net income (loss) per share | $ | 0.02 | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.08) | |||||
Diluted net income (loss) per share | $ | 0.02 | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.08) | |||||
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Fiscal Year 2021 | \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
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Revenue | $ | 19,063 |
| $ | 19,233 |
| $ | 19,743 |
| $ | 20,248 |
| $ | 78,287 | |
Gross profit | $ | 14,432 |
| $ | 14,522 |
| $ | 14,897 |
| $ | 15,169 |
| $ | 59,020 | |
Income from operations | $ | 2,352 | $ | 1,896 | $ | 1,577 | $ | 1,514 | $ | 7,339 | |||||
Net income | $ | 2,044 | $ | 1,606 | $ | 1,261 | $ | 2,048 | $ | 6,959 | |||||
Basic net income per share | $ | 0.06 | $ | 0.05 | $ | 0.04 | $ | 0.07 | $ | 0.22 | |||||
Diluted net income per share | $ | 0.06 | $ | 0.05 | $ | 0.04 | $ | 0.06 | $ | 0.21 |
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1st\u00a0Quarter | 2nd\u00a0Quarter | \u00a0 3rd\u00a0Quarter | \u00a0 4th\u00a0Quarter | \u00a0 Fiscal\u00a0Year | |||||||||||
(in\u00a0thousands,\u00a0except\u00a0per\u00a0share\u00a0data) | |||||||||||||||
Fiscal Year 2022 | \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| |||||
Revenue | $ | 21,451 |
| $ | 23,093 |
| $ | 23,904 |
| $ | 23,503 |
| $ | 91,951 | |
Gross profit | $ | 16,153 |
| $ | 16,992 |
| $ | 17,367 |
| $ | 16,902 |
| $ | 67,414 | |
Income (loss) from operations | $ | 691 | $ | (630) | $ | (476) | $ | (1,723) | $ | (2,138) | |||||
Net income (loss) | $ | 551 | $ | (826) | $ | (615) | $ | (1,551) | $ | (2,441) | |||||
Basic net income (loss) per share | $ | 0.02 | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.08) | |||||
Diluted net income (loss) per share | $ | 0.02 | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.08) | |||||
| \u00a0 |
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| \u00a0 |
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| \u00a0 |
|
| \u00a0 |
|
| \u00a0 |
| |
Fiscal Year 2021 | \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| \u00a0\u00a0\u00a0\u00a0 |
| |||||
Revenue | $ | 19,063 |
| $ | 19,233 |
| $ | 19,743 |
| $ | 20,248 |
| $ | 78,287 | |
Gross profit | $ | 14,432 |
| $ | 14,522 |
| $ | 14,897 |
| $ | 15,169 |
| $ | 59,020 | |
Income from operations | $ | 2,352 | $ | 1,896 | $ | 1,577 | $ | 1,514 | $ | 7,339 | |||||
Net income | $ | 2,044 | $ | 1,606 | $ | 1,261 | $ | 2,048 | $ | 6,959 | |||||
Basic net income per share | $ | 0.06 | $ | 0.05 | $ | 0.04 | $ | 0.07 | $ | 0.22 | |||||
Diluted net income per share | $ | 0.06 | $ | 0.05 | $ | 0.04 | $ | 0.06 | $ | 0.21 |
SCHEDULE II\u2014VALUATION AND QUALIFYING ACCOUNTS
Years Ended June 30, 2022 and 2021
(in thousands)
Amounts | ||||||||||||
\u00a0\u00a0\u00a0\u00a0 | Balance\u00a0at | \u00a0\u00a0\u00a0\u00a0 | Additions | \u00a0\u00a0\u00a0\u00a0 | Written Off, | \u00a0\u00a0\u00a0\u00a0 | ||||||
Beginning\u00a0of | Charged\u00a0to | Net\u00a0of | Balance\u00a0at | |||||||||
Period | Expense | Recoveries | End\u00a0of\u00a0Period | |||||||||
Allowance for Doubtful Accounts: | \u00a0 |
|
|
|
|
| ||||||
Year ended June 30, 2022 | $ | 434 |
| $ | 68 |
| $ | (379) | $ | 123 | ||
Year ended June 30, 2021 | $ | 384 |
| $ | 400 |
| $ | (350) | $ | 434 |