CXDO on Nasdaq

Crexendo, Inc.

American telephone communications company, incorporated in Delaware1

In its 2026 annual report the company says: “Crexendo, Inc. is an award-winning software technology company that is a premier provider of cloud communication platform software and unified communications as a service (UCaaS) offering, including voice, video, contact center, and managed IT services tailored to businesses of all sizes.”5 It is headquartered in Tempe, Arizona.1 Its shares trade on Nasdaq under the symbol CXDO.1

$5.50 up 0.01 (0.09%)Price as of Oct 15, 2026 at 17:33 UTC

Last updated Oct 21, 2026.

Overview

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  • TickerCXDO on Nasdaq1
  • IndustryTelephone Communications (No Radiotelephone)1
  • HeadquartersTempe, Arizona1
  • Incorporated inDE3
  • Business address1225 W. Washington St., Suite 213, Tempe, Az 852883
  • Filer categoryNon-accelerated filer, Smaller reporting company3

Crexendo, Inc. is an award-winning software technology company that is a premier provider of cloud communication platform software and unified communications as a service (UCaaS) offering, including voice, video, contact center, and managed IT services tailored to businesses of all sizes. Our cloud communications software solutions currently support over seven million end users globally, through an extensive network of over 240 cloud communication platform software subscribers and our direct retail offering. Our products and services can be categorized in the following offerings:5 From its latest annual report

Financials

From the company’s reports to the SEC. Every number links to the filing it came from.

Key numbers, fiscal 2025

6.9%Operating margin6
7.4%Net margin6
12.0%Revenue growth, 20256
7.9%Return on equity6
0.00×Debt to equity6
$9.3MFree cash flow6

What sells

Revenue by product, business segment and region, as the company reports it to the SEC.

Products and services

Service brought in 88% of the revenue Crexendo, Inc. broke down this way in fiscal 2025.

  1. Service$33.8M688%up 6% from 2024
  2. Product$4.7M612%down 16% from 2024
Products and services by year
Products and services20242025
Service$31.8M$33.8M
Product$5.6M$4.7M

Business segments

Cloud Telecommunications brought in 28% of the revenue Crexendo, Inc. broke down this way in fiscal 2025.

  1. Cloud Telecommunications$38.5M628%up 3% from 2024
  2. Cloud Telecommunications Service$38.5M628%up 3% from 2024
  3. Software Solution$29.7M622%up 27% from 2024
  4. Software Solutions$29.7M622%up 27% from 2024
Business segments by year
Business segments20242025
Cloud Telecommunications$37.5M$38.5M
Cloud Telecommunications Service$37.5M$38.5M
Software Solution$23.4M$29.7M
Software Solutions$23.4M$29.7M

Regions

United State brought in 94% of the revenue Crexendo, Inc. broke down this way in fiscal 2025.

  1. United State$63.9M694%up 11% from 2024
  2. International$4.3M66%up 22% from 2024
Regions by year
Regions20242025
United State$57.3M$63.9M
International$3.5M$4.3M

Where the money goes

Where each dollar of revenue went, fiscal 2025

  • Research and development8¢$5.7M
  • Other costs84¢$57.1M
  • Income tax0¢$300.0K
  • Profit7¢$5.1M

Out of $68.2M in revenue.6

Where each dollar of operating cash went, fiscal 2025

  • Capital spending0¢$18.0K
  • Kept or used elsewhere100¢$9.3M

Out of $9.3M of cash from operations.6

Financial statements

Revenue78910116$68.2M in 2025+372% since 2019
0$20.0M$40.0M$60.0M$80.0M2019: $14.4M$14.4M20192020: $16.4M$16.4M2020+14%2021: $28.1M$28.1M2021+71%2022: $37.6M$37.6M2022+34%2023: $53.2M$53.2M2023+42%2024: $60.8M$60.8M2024+14%2025: $68.2M$68.2M2025+12%
Operating income78910116$4.7M in 2025+313% since 2019
-$40.0M-$20.0M0$20.0M2019: $1.1M$1.1M20192020: $991.0K$991.0K2020−13%2021: -$2.8M-$2.8M20212022: -$37.4M-$37.4M2022+1231%2023: -$1.7M-$1.7M2023−95%2024: $1.8M$1.8M20242025: $4.7M$4.7M2025+157%
Net income78910116$5.1M in 2025+345% since 2019
-$40.0M-$20.0M0$20.0M2019: $1.1M$1.1M20192020: $7.9M$7.9M2020+597%2021: -$2.4M-$2.4M20212022: -$35.4M-$35.4M2022+1348%2023: -$362.0K-$362.0K2023−99%2024: $1.7M$1.7M20242025: $5.1M$5.1M2025+202%

Every line of the income statement as filed: the last 2 fiscal years (annual) or 8 quarters (quarterly), latest first.6

Period ending2025-12-312024-12-31
Service revenue$33.8M$31.8M
Software solutions revenue$29.7M$23.4M
Product revenue$4.7M$5.6M
Total revenue$68.2M$60.8M
Cost of service revenue$14.2M$13.1M
Cost of software solutions revenue$8.3M$6.8M
Cost of product revenue$2.8M$3.2M
Selling and marketing$17.8M$16.5M
General and administrative$14.7M$13.8M
Research and development$5.7M$5.6M
Total operating expenses$63.5M$59.0M
Income/(loss) from operations$4.7M$1.8M
Interest income$637.0K$191.0K
Interest expense-$19.0K-$42.0K
Other income/(expense)$63.0K-$84.0K
Total other income/(expense), net$681.0K$65.0K
Income/(loss) before income tax$5.4M$1.9M
Income tax benefit/(provision)-$300.0K-$212.0K
Net income/(loss)$5.1M$1.7M
Basic$0.17$0.06
Diluted$0.16$0.06
Basic29.7M shares26.8M shares
Diluted31.6M shares30.0M shares

Compare Crexendo, Inc. with another company

Corporate structure

Crexendo, Inc. sits at the top of its group. 9 entities, 3 countries on record. Switch between the flow chart and the network, and select any entity to see its details.

Major holders of Crexendo, Inc.

  • Bryan J. Dancer Filed SC 13D on Crexendo, Inc., latest Nov 29, 2022
  • Crexendo, Inc. Tempe, Arizona
    • Allegiant Networks, LLC Subsidiary · Kansas, United States
    • Crexendo Business Solutions of Virginia, Inc. Subsidiary · Virginia, United States
    • Crexendo Business Solutions, Inc. Subsidiary · Arizona, United States
    • Crexendo International, Inc. Subsidiary · Arizona, United States
    • NetSapiens Canada, Inc. Subsidiary · Canada
    • NetSapiens International Limited Subsidiary · United Kingdom
    • NetSapiens, LLC Subsidiary · Delaware, United States
    • NSHC, Inc. Subsidiary · Canada

Built from subsidiaries listed in Exhibit 21 of annual reports filed with the SEC; major holders from Schedules 13D and 13G. Each entity in the chart links to its source.

What it owns

What Crexendo, Inc. reports owning in its annual reports to the SEC: buildings, land and equipment, real estate and locations, investments, intangible assets and inventory, at the end of its latest fiscal year and a year before.

Property and equipment

ItemLatestA year beforeChange
Accumulated depreciation$2.7M6 Dec 31, 2025$2.5M6 Dec 31, 2024+8.6%
Property and equipment, net$195.0K6 Dec 31, 2025$394.0K6 Dec 31, 2024−50.5%
Operating-lease assets (leased space)$1.0M6 Dec 31, 2025$1.5M6 Dec 31, 2024−32.5%

Intangibles and goodwill

ItemLatestA year beforeChange
Goodwill$9.5M6 Dec 31, 2025$9.5M6 Dec 31, 20240%
Intangible assets, net (excluding goodwill)$17.9M6 Dec 31, 2025$20.5M6 Dec 31, 2024−13.0%
Finite-lived intangibles, net$17.9M6 Dec 31, 2025$20.5M11 Dec 31, 2024−13.0%

Inventory

ItemLatestA year beforeChange
Inventory, total$454.0K6 Dec 31, 2025$393.0K6 Dec 31, 2024+15.5%

Properties, in its own words

Our corporate office consists of approximately 15,054 square feet of office space located at 1225 W. Washington Street, Tempe, Arizona 85288. We also have offices located in San Diego, California, and Overland Park, Kansas. Our San Diego office space is located at 8910 University Center Lance, Suite 400, San Diego, CA 92122, and our Overland Park, Kansas office space is located at 10983 Granada Lane, Suite 300, Overland Park, KS 66211. We maintain tenant fire and casualty insurance on our assets located in these buildings at an amount that we deem adequate.

Item 2 of the 10-K filed Mar 3, 2026.5

Leadership

Who has led Crexendo, Inc., and when. Pick a name to see everywhere that person has worked.

Board members and other officers (21)

Subsidiaries and ownership

Subsidiaries (Exhibit 21)

  • Allegiant Networks, LLC Kansas4
  • Crexendo Business Solutions of Virginia, Inc. Virginia4
  • Crexendo Business Solutions, Inc. Arizona4
  • Crexendo International, Inc. Arizona4
  • NSHC, Inc. Canada4
  • NetSapiens Canada, Inc. Canada4
  • NetSapiens International Limited United Kingdom4
  • NetSapiens, LLC Delaware4

The subsidiaries the company lists in Exhibit 21 of its annual report, as filed.

Former names

  • IMERGENT INCJul 23, 2002 to May 20, 20113
  • NETGATEWAY INCJun 1, 1999 to Jul 1, 20023

Timeline

  1. Oct 13, 20268-K Regulation FD disclosure41
  2. Aug 10, 20268-K Regulation FD disclosure42
  3. Aug 4, 20268-K Results of operations43
  4. Jul 30, 20268-K Executive or director change; Regulation FD disclosure44
  5. May 12, 20268-K Regulation FD disclosure45
  6. May 5, 20268-K Results of operations46
  7. May 5, 20268-K Entered a material agreement; New debt or obligation47
  8. May 4, 20268-K Financial statements and exhibits48
  9. Mar 6, 20268-K Regulation FD disclosure49
  10. Mar 3, 20268-K Results of operations50
  11. Mar 2, 20268-K Entered a material agreement; Completed an acquisition or sale; Regulation FD disclosure51
  12. Dec 5, 20258-K Shareholder vote52
  13. Mar 14, 2023New chief executive Jeffrey G. Korn becomes CEO14
  14. Apr 27, 2009New chief executive Brandon Lewis becomes CEO16
  15. Feb 17, 2009New chief executive Steven G. Mihaylo becomes CEO15
  16. Sep 18, 2006New chief executive Donald L. Danks becomes CEO17

Calendar

Coming up

  1. Nov 3, 2026 · After the closeReports results for the quarter ending Sep/2026 A year earlier it reported $0.07 a share, on Nov 4, 2025.53

When it reported results

  1. Aug 4, 2026Reported quarterly or annual results43
  2. May 5, 2026Reported quarterly or annual results46
  3. Mar 3, 2026Reported quarterly or annual results50
  4. Nov 4, 2025Reported quarterly or annual results54
  5. Aug 5, 2025Reported quarterly or annual results55
  6. May 6, 2025Reported quarterly or annual results56
  7. Mar 4, 2025Reported quarterly or annual results57
  8. Nov 6, 2024Reported quarterly or annual results58

Upcoming dates from Nasdaq's calendar; past results from the company's 8-K filings (Item 2.02). The full markets calendar

Filings

686 filings to the SEC since October 2021: 5 annual reports, 15 quarterly reports, 68 major events, 555 insider forms, 1 large holders, 42 other. The latest 20:

  1. Oct 13, 20268-K EDGAR
  2. Oct 8, 2026PRE 14A EDGAR
  3. Oct 6, 20264 PRIMARY DOCUMENT EDGAR
  4. Oct 6, 20264 PRIMARY DOCUMENT EDGAR
  5. Oct 6, 20264 PRIMARY DOCUMENT EDGAR
  6. Sep 29, 20264 PRIMARY DOCUMENT EDGAR
  7. Sep 29, 20264 PRIMARY DOCUMENT EDGAR
  8. Sep 29, 20264 PRIMARY DOCUMENT EDGAR
  9. Sep 9, 20264 PRIMARY DOCUMENT EDGAR
  10. Sep 9, 20264 PRIMARY DOCUMENT EDGAR
  11. Sep 9, 20264 PRIMARY DOCUMENT EDGAR
  12. Sep 9, 20264 PRIMARY DOCUMENT EDGAR
  13. Sep 9, 20264 PRIMARY DOCUMENT EDGAR
  14. Sep 1, 20264 PRIMARY DOCUMENT EDGAR
  15. Aug 27, 20264 PRIMARY DOCUMENT EDGAR
  16. Aug 27, 20264 PRIMARY DOCUMENT EDGAR
  17. Aug 27, 20264 PRIMARY DOCUMENT EDGAR
  18. Aug 13, 2026144 EDGAR
  19. Aug 10, 20268-K EDGAR
  20. Aug 6, 20264 PRIMARY DOCUMENT EDGAR

The 686 filings since October 2021 can be filtered by form type and year here when JavaScript is on.

Every filing from the last five years, summarized. The full record is on SEC EDGAR.

Insider trades

292 open-market trades by officers, directors and large owners since October 2021: 144 buys and 148 sales. Grants, option exercises and gifts are left out.

DateWhoTradeSharesPriceValueFiling
Aug 27, 2026Wang David Tzat-kinChief Technology OfficerSale25,000$6.50$162.5KForm 4
Jun 15, 2026Wang David Tzat-kinChief Technology OfficerSale25,000$7.49$187.2KForm 4
Jun 12, 2026Wang David Tzat-kinChief Technology OfficerSale25,000$7.39$184.8KForm 4
Jun 2, 2026Wang David Tzat-kinChief Technology OfficerSale25,000$10.01$250.2KForm 4
Jun 2, 2026MIHAYLO STEVEN GDirectorSale514,352$10.18$5.2MForm 4
Jun 2, 2026Gaylor Douglas WalterChief Operating OfficerSale5,000$10.35$51.8KForm 4
Jun 1, 2026MIHAYLO STEVEN GDirectorSale1,141,965$10.46$11.9MForm 4
Jun 1, 2026Vincent RonChief Financial OfficerSale90,000$10.03$902.9KForm 4
Jun 1, 2026Gaylor Douglas WalterChief Operating OfficerSale20,000$9.99$199.8KForm 4
Jun 1, 2026Brinton JonChief Revenue OfficerSale20,000$10.69$213.8KForm 4
May 29, 2026MIHAYLO STEVEN GDirectorSale17,068$10.09$172.2KForm 4
May 29, 2026Gaylor Douglas WalterChief Operating OfficerSale55,000$10.00$550.0KForm 4
May 29, 2026Brinton JonChief Revenue OfficerSale10,000$9.99$99.9KForm 4
May 28, 2026KORN JEFFREY GChief Executive OfficerSale27,000$9.94$268.4KForm 4
May 27, 2026KORN JEFFREY GChief Executive OfficerSale8,500$9.94$84.5KForm 4
May 26, 2026Brinton JonChief Revenue OfficerSale5,000$9.85$49.2KForm 4
May 26, 2026KORN JEFFREY GChief Executive OfficerSale39,500$9.95$393.0KForm 4
May 26, 2026Vincent RonChief Financial OfficerSale46,000$9.84$452.6KForm 4
May 22, 2026Vincent RonChief Financial OfficerSale29,000$9.77$283.3KForm 4
May 18, 2026Puri Anil K.DirectorSale3,400$9.44$32.1KForm 4

All 292 trades can be filtered by person here when JavaScript is on.

From Forms 4 filed with the SEC.

Major holders

Investors who own more than 5% of the shares must tell the SEC: a 13D if they may seek to influence the company, a 13G if they hold passively.

  • Bryan J. DancerSC 13D, 1 filing Nov 29, 202259

Executive pay

What the company paid its top executives, from the summary compensation table in its proxy statement. Total pay includes salary, bonus, stock and option awards and other pay, as the company valued them.

YearExecutiveAgeSalaryTotal pay
2024Jeff Korn68$325$76160
2024Doug Gaylor59$325$71460
2024Ron Vincent50$325$71460
2024Anand Buch54$275$64960
2024Jon Brinton60$280$57660
2024David Wang65$275$57160
2023Chief Operating Officer & President$325$54760
2023Chief Financial Officer$300$52460
2023Chief Executive Officer$298$50960
2023Chief Strategy Officer$297$44160
2023Chief Technology Officer$297$44160
2023Chief Revenue Officer$275$42460
2023Former ChiefExecutive Officer$1360

Held by these funds

The largest holders among investment managers' 13F reports for the quarter ending Jun 30, 2026, the top 25 of 100. Change is in shares since the quarter before.

FundSharesValueShare of the fundChange
BlackRock, Inc.1,065,200$8.0M0.0%+205,905
Royce & Associates LP1,020,452$7.6M0.1%+323,390
Vanguard Capital Management LLC817,100$6.1M0.0%+72,058
Essex Investment Management Co LLC710,874$5.3M0.7%−32,112
Goldman Sachs Group Inc491,747$3.7M0.0%+404,911
Geode Capital Management, LLC461,170$3.4M0.0%+16,830
Renaissance Technologies LLC450,981$3.4M0.0%+104,244
Dimensional Fund Advisors LP444,639$3.3M0.0%+64,312
Qube Research & Technologies Ltd424,362$3.2M0.0%+354,467
Arrowstreet Capital, Limited Partnership410,602$3.1M0.0%+4,160
Pembroke Management, LTD366,342$2.7M0.2%+170,971
Bard Associates Inc359,974$2.7M0.6%−242,949
Jane Street Group, LLC338,110$2.5M0.0%+304,349
State Street Corp328,350$2.5M0.0%+68,231
Legato Capital Management LLC239,385$1.8M0.1%+6,809
Perkins Capital Management Inc212,825$1.6M1.2%+17,975
MidFirst Bank197,346$1.5M0.1%No change
Northern Trust Corp196,429$1.5M0.0%+12,360
Jacobs Levy Equity Management, Inc188,899$1.4M0.0%+110,087
Lazard Asset Management LLC184,086$1.4M0.0%+158,980
UBS Group AG174,232$1.3M0.0%+115,116
Sei Investments Co166,564$1.2M0.0%−75,202
Byrne Asset Management LLC12,865$1.2M0.6%−1,365
Susquehanna International Group, Llp147,533$1.1M0.0%+112,979
Globeflex Capital L P129,470$967.1K0.1%No change

13F reports cover disclosed long positions in U.S. stocks only.

SEC filer profile

How Crexendo, Inc. is registered with the Securities and Exchange Commission, from its EDGAR record and the cover page of its latest annual report.

  • Name on EDGARCrexendo, Inc.1
  • CIK0001075736
  • Employer ID (EIN)87-05917195
  • Filer statusNon-accelerated filer not an emerging growth company; a smaller reporting company; not a shell company5
  • Incorporated inNevada5
  • Fiscal year endsDecember 311
  • Industry code (SIC)4813 Telephone Communications (No Radiotelephone)1
  • SEC reviewing officeOffice of Technology, Division of Corporation Finance1
  • Business address1225 W. Washington St., Suite 213, Tempe, AZ 852881
  • Phone80122700041
  • Shares outstanding33,253,790 as of Jul 31, 202613
  • Public float$100.2K as of Jun 30, 20255
  • AuditorUrish Popeck & Co., LLC, Pittsburgh, Pennsylvania PCAOB ID 1013; no auditor attestation of internal control over financial reporting5
  • On EDGAR sinceJun 1, 19991
  • Filings1,985 in all: 4 (1,322), 8-K (295), 10-Q (80), 144 (31), 3 (27), 10-K (26), DEF 14A (23), 4/A (20)1
    All 48 form types

    8-K/A (18), UPLOAD (18), CORRESP (16), SC 13G (15), DEFA14A (12), SC 13G/A (9), NT 10-Q (5), PRE 14A (5), S-1/A (5), S-8 (5), 5 (4), SC 13D (4), 10-K/A (3), NT 10-K (3), S-1 (3), SC TO-I/A (3), 10-Q/A (2), 3/A (2), 424B4 (2), 8-A12B (2), D (2), DEFR14A (2), EFFECT (2), REGDEX (2), SC 13D/A (2), 10-KT (1), 25 (1), 8-A12G (1), CERT (1), CERTAMX (1), DEFM14A (1), DEFS14A (1), PRER14A (1), PRES14A (1), S-3 (1), S-3/A (1), S-4 (1), S-4/A (1), S-8 POS (1), SC TO-I (1)

  • Latest filingsAnnual report (10-K) Mar 3, 2026
    Quarterly report (10-Q) Aug 4, 2026
    Proxy statement (DEF 14A) Oct 20, 2025
    Latest 8-K (8-K) Oct 13, 2026

Securities registered for trading

ClassSymbolExchange
Common Stock, par value $0.001 per shareNasdaq

From the cover page of the 10-K filed Mar 3, 2026 (Section 12(b) of the Exchange Act).5

Risk factors and legal proceedings

The risks Crexendo, Inc. names in Item 1A of its 10-K filed Mar 3, 2026: 78 risks under these headings, as written.5

  • Public health crises could materially adversely affect our business, financial condition and results of operations.
  • Adverse Macroeconomic Conditions Could Materially Adversely Affect Our Business
  • Our quarterly and annual results of operations have fluctuated in the past and may continue to do so in the future. As a result, we may fail to meet or to exceed the expectations of research analysts or investors, which could cause our stock price to fluctuate and impair our ability to raise capital.
  • Our growth and the evolving markets in which we operate make it difficult to evaluate our current business and future prospects, which may increase the risk of investing in our stock.
  • Our business may be affected by Global economic conditions, including relations between the United States and Foreign Countries.
  • Regulatory Risks in International Expansion.
  • Risks Related to Sanctions and Export Controls.
  • Risks Related to Lawful Intercept and CALEA Compliance.
  • We cannot be certain that we will be able to achieve or maintain operating profitability in the future.
  • We stopped paying a quarterly dividend in April 2023, the Company may consider a dividend in the future if there do not appear to be accretive acquisitions in 2026.
  • We expect to undertake acquisitions, mergers or change to our capital structure to expand our business, which may pose risks to our business and dilute the ownership of our existing stockholders. We may be required to incur debt to fund acquisitions or mergers.
  • We may not be able to secure financing on favorable terms, or at all, to meet future needs.
The other 66 risks
  • Our strategy to expand through acquisitions or investments in other companies may divert our management’s attention, increase expenses, disrupt our operations and harm our results of operations.
  • Our ability to use our net operating loss carry-forwards may be reduced in the event of an ownership change and could adversely affect our financial results.
  • The telecommunications industry is highly competitive. We face intense competition from traditional telephone companies, wireless companies, cable companies and alternative voice communication providers and other UCaaS companies.
  • Service Level Agreement, Crexendo VIP 100% Uptime Guarantee and Customer Credit Exposure.
  • Revenue Concentration and Enterprise Contract Renegotiation Risk.
  • Dependence on APIs, Integrations, and Third-Party Applications.
  • Feature Parity and Innovation Velocity Risk.
  • Licensees Self-Hosted Deployments.
  • Usage-Based Pricing and Revenue Volatility.
  • Risks Related to Robocalls, Spoofing, and STIR/SHAKEN Compliance.
  • Impact of AI and Automation on Core Business.
  • Risks Related to Artificial Intelligence and Automation.
  • Generative AI Evolution and Competitive Disruption Risk.
  • Limited Patents and Intellectual Property Protection.
  • Our UCaaS or cloud telecommunications service competes against established well financed alternative voice communication providers (such as 8x8 and Ring Central), who may provide comparable services at comparable or lower pricing.
  • Our Software Solutions division competes against numerous competitors including established well-financed competitors.
  • The Software Solutions Division previously sold licenses primarily as a “perpetual” license. We are now selling more subscription-based licenses on a monthly recurring revenue model, how the sale is structured may affect results on a quarter-to-quarter basis.
  • The Managed Service Provider Industry is highly competitive. We face intense competition from both large and regional providers.
  • Increasing Complexity in Managed Service Offerings.
  • Cyber-attacks impacting our networks or systems could have an adverse effect on our business.
  • Risks Related to Data Localization and Cross‑Border Transfers.
  • Natural disasters, extreme weather conditions, acts of war, terrorist or other hostile acts could cause damage to our infrastructure and result in significant disruptions to our operations.
  • Errors in our technology or technological issues outside our control could cause delays or interruptions to our customers.
  • If we do not successfully maintain our physical infrastructure and maintain sufficient diverse geo redundant locations, which require large investments, we may be unable to substantially increase our sales and retain customers.
  • Failure in our data centers or services could lead to significant costs and disruptions.
  • Migration to Oracle Cloud Infrastructure.
  • Risks Associated with Relying on Oracle Cloud.
  • Operational Risks During Migration.
  • Long-Term Dependence on Oracle's Business Strategy.
  • We depend on our senior management and other key personnel, and a loss of these individuals could adversely impact our ability to execute our business plan and grow our business.
  • We have targeted sales to mid-market and larger enterprise customers. Not properly managing these customers could negatively affect our business, margins, cash flow and operations.
  • Sales to small and medium-sized businesses face risks as they may have fewer financial resources to weather an economic downturn.
  • We must acquire new customers on an ongoing basis to maintain and increase our customers and revenues while the significant costs to acquire new customers may reduce our profitability.
  • If we do not successfully expand our sales, including our partner channel program and direct sales, we may be unable to increase our sales and that may affect our stock price.
  • Our churn rate may increase in future periods due to customer cancellations or other factors, which may adversely impact our revenue or require us to spend more money to grow our customer base.
  • We may not be able to scale our business efficiently or quickly enough to meet our customers’ growing needs, in which case our operating results could be harmed.
  • Our success depends in part upon our ability to provide customer service that effectively supports the needs of our customers.
  • Our telecommunications and managed services success depends in part upon the capacity, reliability, and performance of our several third-party providers and their network infrastructure, the failure of which could cause delays or interruptions of our service and impact our revenue and profitability. Our Software Solutions Division relies on outside contractors and service providers, the failure of which could impact service and profitability.
  • Risks Related to Number Portability and Carrier Dependency.
  • Risks Related to E‑911 and Emergency Call Failures
  • We depend upon industry standard protocols, best practices, solutions, third-party software, technology, and tools, including but not limited to open-source software.
  • Risks Related to Open‑Source Software Licensing.
  • Potential Regulatory Reclassification of VoIP Services.
  • Changes to rates by our suppliers and increasing regulatory charges or tariffs may require us to raise prices, which could impact results.
  • Vendor Concentration Risks.
  • Changes in laws and regulations and the interpretation and enforcement of such laws and regulations could adversely impact our financial results or ability to conduct business.
  • Our telecommunications services are required to comply with industry standards, FCC regulations, privacy laws as well as certain state and local jurisdiction specific regulations. Failure to comply with existing laws and any new laws that may become applicable to us may subject us to penalties, increase our operation costs, and may also require us to modify existing products and/or service.
  • Our collection, processing, storage, use, and transmission of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements, differing views on data privacy, or security breaches.
  • We face risks in our sales to certain market segments including, but not limited to, sales subject to HIPAA Regulations.
  • We could be liable for breaches of security on our website, fraudulent activities of our users, or the failure of third-party vendors to deliver credit card transaction processing services.
  • We could experience security breaches in the transmission and analysis of confidential and proprietary information of the consumer, the merchant, or both, as well as our own confidential and proprietary information.
  • We collect personal and credit card information from our customers and employees could misuse this information.
  • Our ability to offer services outside the U.S. is subject to different regulations which may be unknown and uncertain.
  • Examinations by relevant tax authorities may result in material changes in related tax reserves for tax positions taken in previously filed tax returns or may impact the valuation of certain deferred income tax assets, such as net operating loss carry-forwards.
  • The FCC net neutrality rules have changed. There may be a negative effect to our business going forward as a consequence of those changes.
  • States are adding regulations for VoIP providers which could increase our costs and change certain aspects of our service.
  • Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added, or similar taxes, and any such assessments could adversely affect our business, financial condition, and results of operations.
  • We incur increased costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our future operating results.
  • From time to time we had been the subject of governmental inquiries and investigations related to our discontinued seminar sales model and business practices that could require us to pay refunds, damages or fines, which could negatively impact our financial results or ability to conduct business. We have received customer complaints and civil actions.
  • We may incur substantial expenses in defending against third-party patent and trademark infringement claims regardless of their merit.
  • Risks Related to Our Common Stock
  • Our stock price may be volatile and may decline.
  • An active trading market in our equity securities may cease to exist, which would adversely affect the market price and liquidity of our common stock, in addition our stock price has been subject to fluctuating prices. Our stock price may also be affected by any merger, acquisition, or need for future sales of our common stock or equity-linked securities in the public market.
  • We are a “smaller reporting company,” and the reduced disclosure requirements applicable to us as such may make our common shares less attractive to our stockholders and investors.
  • Our actual operating results may not meet expectations, which could likely cause our stock price to decline.
  • Our stock price, volatility and acceptance of our securities may be influenced by the research and reports that securities or industry analysts may publish about us or our business.
  • Lack of sufficient stockholder equity or continued losses from operations could subject us to fail to comply with the listing requirements of the Nasdaq Capital Market, if that occurred, the price of our common stock and our ability to access the capital markets could be negatively impacted, and our business will be harmed.
  • We may invest or spend the proceeds of our cash both from operations and from past and future offerings in ways with which you may not agree or in ways which may not yield a favorable return.

Legal proceedings

From time to time, we receive inquiries from federal, state, city and local government officials as well as the FCC and taxing authorities in the various jurisdictions in which we operate. These inquiries and investigations related primarily to our discontinued seminar operations and concern compliance with various city, county, state, and/or federal regulations involving sales, representations made, customer service, refund policies, services and marketing practices. We respond to these inquiries and have generally been successful in addressing the concerns of these officials and authorities, without a formal complaint or charge being made, although there is often no formal closing of the inquiry or investigation. There can be no assurance that the ultimate resolution of these or other inquiries and investigations will not have a material adverse effect on our business or operations, or that a formal complaint will not be initiated. We also receive complaints and inquiries in the ordinary course of our business from both customers and governmental and non-governmental bodies on behalf of customers, and in some cases these customer complaints have risen to the level of litigation. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on our business or results of operations.

The opening of Item 3, Legal Proceedings.5

Sources

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