GSE SYSTEMS INC, 10-K filed on 02 Apr 24
 | XBRL Documents
v3.24.1
Document and Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2023
Mar. 31, 2024
Jun. 30, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Annual Report true    
Document Period End Date Dec. 31, 2023    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Document Transition Report false    
Entity File Number 001-14785    
Entity Registrant Name GSE Systems, Inc.    
Entity Central Index Key 0000944480    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 52-1868008    
Entity Address, Address Line One 6940 Columbia Gateway Dr.    
Entity Address, Address Line Two Suite 470    
Entity Address, City or Town Columbia    
Entity Address, State or Province MD    
Entity Address, Postal Zip Code 21046    
City Area Code 410    
Local Phone Number 970-7800    
Title of 12(b) Security Common Stock, $0.01 Par Value    
Trading Symbol GVP    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Document Financial Statement Error Correction [Flag] false    
Entity Shell Company false    
Entity Public Float     $ 8,928,827
Entity Common Stock, Shares Outstanding   3,034,139  
Auditor Firm ID 686    
Auditor Name FORVIS, LLP    
Auditor Location Tysons, VA    
v3.24.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 2,250 $ 2,789
Restricted cash, current 378 1,052
Contract receivables, net 10,166 10,064
Prepaid expenses and other current assets 879 2,165
Total current assets 13,673 16,070
Equipment, software and leasehold improvements, net 754 772
Software development costs, net 750 574
Goodwill 4,908 6,299
Intangible assets, net 1,179 1,687
Restricted cash - long term 1,083 535
Operating lease right-of-use assets, net 413 506
Other assets 45 53
Total assets 22,805 26,496
Current liabilities:    
Line of credit 0 0
Current portion of long-term note 810 3,038
Accounts payable 3,300 1,262
Accrued expenses 1,053 2,084
Accrued legal settlements 1,010 0
Accrued compensation 1,086 1,071
Billings in excess of revenue earned 5,119 4,163
Accrued warranty 176 370
Income taxes payable 1,701 1,774
Derivative liabilities 1,132 603
Other current liabilities 956 1,286
Total current liabilities 16,343 15,651
Long-term note, less current portion 637 310
Operating lease liabilities noncurrent 357 160
Other noncurrent liabilities 126 144
Total liabilities 17,463 16,265
Commitments and contingencies (Note 21)
Shareholders' equity:    
Preferred stock $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding 0 0
Common stock $0.01 par value; 60,000,000 shares authorized, 3,194,030 and 2,404,681 shares issued, 3,034,139 and 2,244,790 shares outstanding, respectively 32 24
Additional paid-in capital 86,983 83,127
Accumulated deficit (78,708) (69,927)
Accumulated other comprehensive income (loss) 34 6
Treasury stock at cost, 159,891 shares (2,999) (2,999)
Total shareholders' equity 5,342 10,231
Total liabilities and shareholders' equity $ 22,805 $ 26,496
v3.24.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2023
Dec. 31, 2022
Shareholders' equity:    
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares) 2,000,000 2,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 60,000,000 60,000,000
Common stock, shares issued (in shares) 3,194,030 2,404,681
Common stock, shares outstanding (in shares) 3,034,139 2,244,790
Treasury stock at cost (in shares) 159,891 159,891
v3.24.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]    
Revenue $ 45,041 $ 47,734
Cost of revenue 33,111 35,824
Gross profit 11,930 11,910
Operating expenses    
Selling, general and administrative 16,092 17,028
Research and development 572 611
Goodwill and intangible asset impairment charge 1,391 7,505
Depreciation 185 304
Amortization of definite-lived intangible assets 508 868
Total operating expenses 18,748 26,316
Operating loss (6,818) (14,406)
Other income and expenses, net    
Interest expense (1,932) (1,272)
Change in fair value of derivative instruments, net 850 477
Other (loss) income, net (802) (91)
Loss before taxes (8,702) (15,292)
Provision for income taxes 22 51
Net loss $ (8,724) $ (15,343)
Net loss per common share - basic (in dollars per share) $ (3.51) $ (7.18)
Diluted loss per common share (in dollars per share) $ (3.51) $ (7.18)
Weighted average shares outstanding used to compute net loss per share - basic (in shares) 2,486,550 2,136,290
Weighted average shares outstanding - Diluted (in shares) 2,486,550 2,136,290
v3.24.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract]    
Net loss $ (8,724) $ (15,343)
Cumulative translation adjustment 28 110
Comprehensive loss $ (8,696) $ (15,233)
v3.24.1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Common Stock [Member]
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Additional Paid-in Capital [Member]
Additional Paid-in Capital [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Additional Paid-in Capital [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Accumulated Deficit [Member]
Accumulated Deficit [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Deficit [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Loss [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Other Comprehensive Loss [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Treasury Stock [Member]
Treasury Stock [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Treasury Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Total
Cumulative Effect, Period of Adoption, Adjustment [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Balance at Dec. 31, 2021 $ 23     $ 80,708     $ (54,584)     $ (104)     $ (2,999)     $ 23,043    
Balance (in shares) at Dec. 31, 2021 2,253,000                                  
Balance (in shares) at Dec. 31, 2021                         (160,000)          
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Accounting Standards Update [Extensible Enumeration]               ASC 326 [Member] ASC 326 [Member]                  
Stock-based compensation expense $ 0     1,859     0     0     $ 0     1,859    
Common stock issued for RSUs vested $ 1     (1)     0     0     0     0    
Common stock issued for RSUs vested (in shares) 53,000                                  
Shares withheld to pay taxes $ 0     (263)     0     0     0     (263)    
Foreign currency translation adjustment 0     0     0     110     0     110    
Repayment of convertible note in shares $ 1     824     0     0     0     825    
Repayment of convertible note in shares (in shares) 99,000                                  
Net loss $ 0     0     (15,343)     0     0     (15,343)    
Balance at Dec. 31, 2022 $ 24 $ 0 $ 24 83,127 $ 0 $ 83,127 (69,927) $ (57) $ (69,984) 6 $ 0 $ 6 $ (2,999) $ 0 $ (2,999) $ 10,231 $ (57) $ 10,174
Balance (in shares) at Dec. 31, 2022 2,405,000 0 2,405,000                         2,404,681    
Balance (in shares) at Dec. 31, 2022                         (160,000) 0 (160,000) (159,891)    
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Stock-based compensation expense $ 0     1,168     0     0     $ 0     $ 1,168    
Common stock issued for RSUs vested $ 1     (1)     0     0     0     0    
Common stock issued for RSUs vested (in shares) 98,000                                  
Shares withheld to pay taxes $ 0     (190)     0     0     0     (190)    
Foreign currency translation adjustment 0     0     0     28     0     28    
Repayment of convertible note in shares $ 7     2,879     0     0     0     2,886    
Repayment of convertible note in shares (in shares) 691,000                                  
Net loss $ 0     0     (8,724)     0     0     (8,724)    
Balance at Dec. 31, 2023 $ 32     $ 86,983     $ (78,708)     $ 34     $ (2,999)     $ 5,342    
Balance (in shares) at Dec. 31, 2023 3,194,000                             3,194,030    
Balance (in shares) at Dec. 31, 2023                         (160,000)     (159,891)    
v3.24.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash flows from operating activities:    
Net loss $ (8,724) $ (15,343)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Goodwill and intangible asset impairment charge 1,391 7,505
Loss on debt settled in shares 907 66
Depreciation 185 304
Amortization of intangible assets 508 868
Amortization of capitalized software development costs 322 339
Amortization of debt discount 1,940 1,289
Amortization of deferred financing costs 31 17
Stock-based compensation expense 1,158 1,954
Deferred income taxes 12 (86)
Credit loss expense 232 221
Gain on derivative instruments, net (850) (477)
Legal settlement 1,010 0
Changes in assets and liabilities:    
Contract receivables, net (408) 908
Prepaid expenses and other assets 1,841 3,710
Accounts payable, accrued compensation and accrued expenses 1,018 472
Billings in excess of revenue earned 966 (829)
Accrued warranty (217) (239)
Other liabilities 237 59
Net cash provided by operating activities 1,559 738
Cash flows from investing activities:    
Capital expenditures (168) (238)
Capitalized software development costs (498) (380)
Net cash used in investing activities (666) (618)
Cash flows from financing activities:    
Repayment of line of credit 0 (1,817)
Repayment of insurance premium financing (876) (1,068)
Proceeds from issuance of long-term debt and warrants 1,800 5,750
Payments of debt issuance and original discount on issuance of long-term debt and warrants (386) (968)
Principal repayment of convertible note (1,886) (839)
Tax paid for shares withheld (190) (263)
Net cash (used in) provided by financing activities (1,538) 795
Effect of exchange rate changes on cash (20) (89)
Net (decrease) increase in cash and cash equivalents (665) 826
Cash, cash equivalents and restricted cash at beginning of year 4,376 3,550
Cash, cash equivalents and restricted cash at the end of year 3,711 4,376
Cash and cash equivalents 2,250 2,789
Restricted cash, current 378 1,052
Restricted cash included in other long-term assets 1,083 535
Total cash, cash equivalents and restricted cash $ 3,711 $ 4,376
v3.24.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
1.  Summary of Significant Accounting Policies

Principles of consolidation

GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems, Inc. and its subsidiaries, collectively. All intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split

On October 30, 2023, the Company effected a ten-for-one reverse stock split of the Company’s common stock whereby each ten shares of the Company’s authorized and outstanding common stock was replaced with one share of common stock. The par value of the common stock was not adjusted. All common share and per share amounts for all periods presented in the consolidated financial statements and the notes to the consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split.

Accounting estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. On an ongoing basis, we evaluate the estimates used, including, but not limited to those related to revenue recognition on long-term contracts, allowance for credit loss, product warranties, valuation of goodwill and intangible assets acquired, impairment of long-lived assets to be disposed of, valuation of stock-based compensation awards and the recoverability of deferred tax assets. Actual results could differ from these estimates.

Business combinations
Business combinations are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) ASC 805, Business Combinations, using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at fair value on the acquisition date, which is the date on which control is transferred to us. Any excess purchase price is recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred.
Revenues and the results of operations of the acquired business are included in the accompanying consolidated statements of operations commencing on the date of acquisition.
Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Under ASC 805, contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Revenue recognition

We derive our revenue through three broad revenue streams: 1) System Design and Build (“SDB”), 2) software, and 3) training and consulting services. We recognize revenue from SDB and software contracts mainly through the Engineering segment and the training and consulting service contracts through both the Engineering segment and Workforce Solutions segment.

The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and PCS on the software. We generally have two main performance obligations for an SDB contract: (1) the training simulator build and (2) the PCS period. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue over time as control transfers to a customer. Estimated contract costs are reviewed and revised periodically during the contract period, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses become known.

Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to our revenue recognition as a significant change in the estimates can cause our revenue and related margins to change significantly from previous estimates.

Management judgments and estimates involved in the initial creation and subsequent updates to our estimates-at-completion and related profit recognized are critical for our revenue recognition associated with SDB contracts. Inputs and assumptions requiring significant management judgment included anticipated direct labor, subcontract labor, and other direct costs required to deliver on unfinished performance obligations.

The SDB contracts generally provide a one-year base warranty on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance that the completed project complies with agreed-upon specifications. Warranties extended beyond our typical one-year period will be evaluated on a case-by-case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation.

Revenue from the sale of perpetual standalone and term software licenses, which do not require significant modification or customization, is recognized upon its delivery to the customer.  Revenue from the sale of cloud-based, subscription-based software licenses is recognized ratably over the term of such licenses following delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software.

A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services, and PCS. The total transaction price of a software license sale contract is typically fixed and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue are recognized when the installation and training are completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation.

The contracts within the training and consulting services revenue stream are either T&M based or fixed-price based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed by type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with ASC 606-10-55-18, Revenue from contracts with customers, we elected to apply the “right to invoice” practical expedient, under which we recognize revenue in the amount to which we have the right to invoice. The invoice amount represents the number of hours of approved time worked by each temporary worker multiplied by the bill rate for the type of work, as well as approved expenses incurred. Under a typical fixed-price contract, we recognize the revenue on a Percentage of Completion basis as it relates to construction contracts with revenue recognized based on project delivery over time.

For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers.

We recognize training and consulting services revenue as services are performed and bill our customers for services that we have provided on a regular basis (i.e. weekly, biweekly or monthly).

Contract asset relates to performance under the contract for obligations that are satisfied but not yet billed, which we classify as contract receivables, net.

Contract liability, which we classify as billing-in-excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied.

Cash and cash equivalents

Cash and cash equivalents represent cash and highly liquid investments including money market accounts with maturities of three months or less at the date of purchase. Cash and cash equivalents may at times exceed the FDIC insured limits.

Restricted cash

Restricted cash represents cash that is legally or contractually restricted as to its withdrawal or usage. The Company is required to pledge or otherwise restrict a portion of our cash related to letters of credit and other vendor agreements. Restricted cash is presented as a current or long term asset in our consolidated balance sheets based on the amounts becoming unrestricted in the twelve month period following the reporting date.

Contract receivables, net and contract liabilities

Contract receivables, net include recoverable costs for both billed and unbilled receivables. Unbilled receivables include amounts earned in performance of services that have not been invoiced. Contract liabilities include billings in excess of revenue earned on contracts in advance of work performed. Generally, such amounts will be earned and recognized over the next twelve months.

Billed receivables are recorded at invoiced amounts. The allowance for credit loss are recorded in accordance with ASU 2016-13, “Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” This requires an entity identify and record the contract receivable’s lifetime expected credit loss as an allowance, which the FASB believes will result in more timely recognition of such losses. Under the CECL impairment model, the Company developed and documented its allowance for credit losses on its contract receivables based on three portfolio segments by customer geographic location:  North America, China, Rest of World (ROW). The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables.

Impairment of long-lived assets

Long-lived assets, such as equipment, purchased software, capitalized software development costs, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated.

Development expenditures

Development expenditures incurred to meet customer specifications under contracts are charged to cost of revenue. Company sponsored development expenditures are either charged to operations as incurred and are included in research and development expenses or are capitalized as software development costs. The amounts incurred for Company sponsored development activities relating to the development of new products and services or the improvement of existing products and services, were approximately $1.1 million and $1.0 million for the year ended December 31, 2023 and 2022, respectively. Of these amounts, the Company capitalized approximately $0.5 million and $0.4 million for the year ended December 31, 2023 and 2022, respectively.

Equipment, software and leasehold improvements, net

Equipment and purchased software are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from three years to ten years. Leasehold improvements are amortized over the term of the lease or the estimated useful life, whichever is shorter, using the straight-line method. Upon sale or retirement, the cost and related depreciation are eliminated from the respective accounts and any resulting gain or loss is included in operations. Maintenance and repairs are charged to expense as incurred.

Software development costs

Certain computer software development costs, including direct labor costs, are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically three years. On an annual basis, or more frequently as conditions indicate, we assess the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software cost we will write-down the carrying amount of such asset to its estimated fair value based on the future discounted cash flows. The excess of any unamortized computer software costs over the related fair value is written down and charged to operations. Included in capitalized software development costs are certain expenses associated with the development software as a service. Significant changes in the sales projections could result in an impairment with respect to the capitalized software that is reported on our consolidated balance sheets.

Goodwill and intangible assets

Our intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, trade names, non-compete agreements and alliance agreements.

Our intangible assets impairment analysis includes the use of undiscounted and discounted cash flow models that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows.

Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible asset, except for contract backlog and contractual customer relations, which are recognized in proportion to the related project revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. We do not have any intangible assets with indefinite useful lives.

Goodwill represents the excess of costs over the fair value of assets of an acquired business. We review goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. We have determined that we have two reporting units, which are the same as our two operating segments: (i) Engineering and (ii) Workforce Solutions.

We completed our annual quantitative step 1 analysis as of December 31, 2023 and 2022 and concluded that the fair value of the Workforce Solutions business segment did not exceed it’s carrying value. A discounted cashflow analysis was performed and we concluded the Goodwill on Workforce Solutions segment of $0.5 million was fully impaired at December 31, 2023. Per the annual valuation performed, no impairment was determined to exist for the Engineering segment as of December 31, 2023.

Our goodwill impairment analysis includes the use of a discounted cash flow model that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows, and risk-adjusted discount rates. We make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

Foreign currency translation

The United States Dollar (USD) is our functional currency and that of our subsidiaries operating in the United States. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the average exchange rate for the year. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are cumulative translation adjustments, which are reported as a component of accumulated other comprehensive loss included in the consolidated statements of changes in shareholders’ equity.
For any business transaction that is in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled) to the foreign currency realized gain (loss) account in the consolidated statements of operations.

Income taxes

Income taxes are provided under the asset and liability method. Under this method, deferred income taxes are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. A provision is made for our current liability for federal, state and foreign income taxes and the change in our deferred income tax assets and liabilities.

We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is not more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense.

Stock-based compensation

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Compensation expense related to restricted stock unit (RSU) awards is recognized on a pro rata straight-line basis based of the fair value of share awards that are scheduled to vest during the requisite service period. Compensation expense related to performance-vesting restricted stock unit (PRSU) awards is recognized on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. The Company can also elect to issue cash-settled RSUs or PRSUs which are subject to fair value remeasurement at each reporting date.

Significant customers and concentration of credit risk

We have a concentration of revenue from one individual customer, which accounted for 22.7% and 13.6% of our consolidated revenue for the years ended December 31, 2023 and December 31, 2022, respectively. No other individual customer accounted for more than 10% of our consolidated revenue in 2023 or 2022.
As of December 31, 2023, we had one customer who accounted for 12.1% of the Company’s consolidated contract receivables. No customer accounted for over 10% of the Company’s consolidated contract receivables as of December 31, 2022.

Fair values of financial instruments

We established mark-to-market liabilities related to certain common stock purchase warrants and certain embedded features included in our convertible debt. The fair values of these are estimated upon issuance and at each reporting period thereafter. For all accounting policies described in this document, management cautions that future events rarely develop exactly as forecasted and even our best estimates may require adjustment as facts and circumstances change.

The carrying amounts of current assets and current liabilities reported in the consolidated balance sheets approximate fair value due to their short term duration.

Reclassifications and immaterial corrections of previously issued Financial Statements

Certain prior year amounts have been reclassified to conform with the current year presentation. “Loss on debt settled in shares” and was reclassed out of “Other liabilities” and presented in its own line item within operating cash flows section on our consolidated statement of cash flows.

Liquidity and Going Concern

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and satisfy its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, are only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management determined that the implemented plans to mitigate relevant conditions may not alleviate management’s concerns that raise substantial doubt about the Company’s ability to continue as a going concern within the twelve months ended March 31, 2025.

The Company has incurred operating losses and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. During the year ended December 31, 2023, the Company generated a loss from operations of $6.8 million, which includes non-cash impairment charges of long-lived assets and goodwill from our Workforce Solutions segment totaling $1.4 million. As of December 31, 2023, the Company had domestic unrestricted cash and cash equivalents of $1.0 million which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. Although the Company has shown significant improvement in the second half of the year, it has not achieved its forecast for several periods and there is no assurance that it will achieve its forecast over the twelve months ending March 31, 2025. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited consolidated financial statements are issued.

In making this assessment we performed a comprehensive analysis of our current circumstances and to alleviate these conditions, management is monitoring the Company’s performance and evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, restructuring of operations to grow revenues and decrease expenses, obtaining equity financing, issuing debt, or entering into other financing arrangements. The analysis used to determine the Company’s ability to continue as a going concern does not include cash sources outside the Company’s direct control that management expects to be available within the next twelve months ending March 31, 2025.
v3.24.1
Recent Accounting Pronouncements
 12 Months Ended
Dec. 31, 2023
Recent Accounting Pronouncements [Abstract]  
Recent Accounting Pronouncements
2.  Recent Accounting Pronouncements

Accounting pronouncements recently adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be recognized before it is realized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard will apply to accounts receivable, loans, and other financial instruments with credit risk. This standard was effective for the Company beginning January 1, 2023. The Company adopted the new guidance starting January 1, 2023 on a modified retrospective basis. The impact of this ASU is reflected in the consolidated financial statements and was not material.

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures.

Accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that adoption of this accounting standard will have on its financial disclosures.
v3.24.1
Earnings per Share
 12 Months Ended
Dec. 31, 2023
Earnings per Share [Abstract]  
Earnings per Share
3.  Earnings per share

Basic earnings per share is based on the weighted average number of outstanding common shares for the period.  Diluted earnings per share adjusts the weighted average shares outstanding for the potential dilution that could occur if outstanding vested stock options or other share equivalents were exercised. Basic and diluted earnings per share are based on the weighted average number of outstanding shares for the period.

The number of common shares and common share equivalents used in the determination of basic and diluted (loss) earnings per share were as follows:

(in thousands, except for per share data)
  
Years ended December 31,
  
   
2023
    
2022
  
Numerator:
            
Net income (loss) attributed to common shareholders
  
$
(8,724
)
  
$
(15,343
)
                 
Denominator:
                
Weighted-average shares outstanding for basic earnings per share
    
2,486,550
      
2,136,290
  
                 
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share
    
2,486,550
      
2,136,290
  
                 
Total shares considered for dilution
    
1,068,722
      
460,113
  
v3.24.1
Coronavirus Aid, Relief and Economic Security Act
 12 Months Ended
Dec. 31, 2023
Coronavirus Aid, Relief and Economic Security Act [Abstract]  
Coronavirus Aid, Relief and Economic Security Act
4.  Coronavirus Aid, Relief and Economic Security Act

Employee Retention Credits (ERC)

Employee retention tax credits, made available under the CARES Act, allow eligible employers to claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees, initially from March 27, 2020 until June 30, 2021, and extended through September 30, 2021. In 2021, we applied for $5.0 million in refunds from the Internal Revenue Service with filing of our 941s and achieved $2.2 million in credits from unremitted payroll taxes as allowed. We recorded other income of $7.2 million related to the employee retention tax credits earned for the year ended December 31, 2021. During the years ended December 31, 2023 and 2022, the Company received cash refunds related to the employee retention credits in the amounts of $1.0 million and $3.0 million, respectively. As of December 31, 2023, there is no remaining refunds owed.
v3.24.1
Revenue
 12 Months Ended
Dec. 31, 2023
Revenue [Abstract]  
Revenue
5.  Revenue

We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. We primarily generate revenue through three distinct revenue streams: (1) System Design and Build (“SDB”), (2) Software and (3) Training and Consulting Services across our Engineering and Workforce Solutions segments. We recognize revenue from SDB and software contracts mainly through our Engineering segment. We recognize training and consulting service contracts through both segments.
 
The following table represents a disaggregation of revenue by type of goods or services for the years ended December 31, 2023 and 2022, along with the reportable segment for each category:

(in thousands)


  
Twelve Months Ended December 31,
  
   
2023
    
2022
  
Engineering segment
            
System Design and Build - Over time
  
$
6,307
    
$
6,595
  
                 
Software
    
4,652
      
4,684
  
Point in time
    
568
      
921
  
Over time
    
4,084
      
3,763
  
                 
Training and Consulting Services
    
20,831
      
18,640
  
Point in time
    
448
      
245
  
Over time
    
20,383
      
18,395
  
                 
Workforce Solutions segment
                
Training and Consulting Services
    
13,251
      
17,815
  
Point in time
    
343
      
62
  
Over time
    
12,908
      
17,753
  
                 
Total revenue
  
$
45,041
    
$
47,734
  

The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers:

(in thousands)

  
December 31, 2023
    
December 31, 2022
  
Billings in excess of revenue earned (BIE)
  
$
5,119
    
$
4,163
  
Revenue recognized in the period from amounts included in BIE at the beginning of the period
  
$
3,751
     $
3,785
  

As of December 31, 2023, the aggregate amount of transaction price allocated to the remaining performance obligations of SDB, software and fixed-price training and consulting services contracts is $19.1 million. We will recognize the revenue as the performance obligations are satisfied, which is expected to occur over the next twelve months.

Part of the training and consulting services contracts are T&M based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates, which are fixed by type of work, as well as approved expenses incurred. We have elected to use the optional exemption under ASC 606-10-50-14(b) Revenue from Contracts with Customers, pursuant to which we have excluded disclosures of transaction prices allocated to remaining performance obligations under such contracts and when we expect to recognize the revenue.
v3.24.1
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets [Abstract]  
Goodwill and Intangible Assets
6.  Goodwill and Intangible Assets

The Company monitors operating results and events and circumstances that may indicate potential impairment of intangible assets.

ASC 350 Indefinite-Lived Asset Testing – Pursuant to Accounting Standards Codification (ASC) 350, “Intangibles - Goodwill and Other,” the Company evaluates goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable.

During the three months ended September 30, 2022, we experienced a deterioration in sales, decline in revenues, delayed pipeline opportunities, and overall downward performance results and forecast results related to the Workforce Solutions business segment, which was determined to be a triggering event that may result in impairment of our long-lived assets. We performed an interim analysis and determined an impairment existed at September 30, 2022 in accordance with ASC 350. As such, we recorded an impairment of the related goodwill assets of $7.0 million. Goodwill impairment was allocated to the Training Services and Technical Staffing business units based on their pro rata share of Workforce Solution’s book value of Goodwill. The annual evaluation of the Company’s Goodwill assets at December 31, 2022, determined no additional impairment existed at that time.

During the three months ended September 30, 2023, we determined that the overall market capitalization deterioration due to the falling share price, decline in revenues, and delayed pipeline opportunities was material enough to be considered a triggering event that could result in impairment of our long-lived assets. We performed an interim analysis and determined an impairment existed for the Workforce Solutions business segment at September 30, 2023 in accordance with ASC 350. As such, we recorded an impairment of the related goodwill of $0.9 million for the three and nine months ended September 30, 2023 to the Training Services and Technical Staffing business units based on their pro rata share of Workforce Solution’s book value of Goodwill. No impairment was identified related to any other asset grouping.

The annual evaluation of the Company’s Goodwill assets at December 31, 2023, determined that the remaining $0.5 million Goodwill balance on Workforce Solutions segment was fully impaired. The $0.5 million charge was recorded as a component of operating expenses during the period.

ASC 360 Long-Lived Asset Testing – ASC 360 requires the Company to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Such events may include, but are not limited to, changes in market conditions, technological obsolescence, adverse changes in customer demand, and significant decreases in revenue or earnings.

Based on the triggering events noted above during the three months ended September 30, 2022 we performed an interim analysis to determine if an impairment existed at September 30, 2022 by its individual asset groupings, which we determined to be at the subsidiary level. We used a discounted cash flow analysis to determine the fair value of our asset group, and we concluded that the carrying value of the definite-lived intangible assets of Technical Staffing, a business unit of the Workforce Solutions segment, exceeded its fair value by $0.5 million, and we recorded a loss on impairment for this amount as of September 30, 2022. No Intangible assets were determined to be impaired as of December 31, 2022.

We performed additional discounted cash flow analysis for the three months ended September 30, 2023 and December 31, 2023 in conjunction with triggering events noted above for those periods. We concluded no impairment was identified related to any other asset groupings. No Intangible assets were determined to be impaired as of December 31, 2023.

The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets:

(in thousands)
  
As of December 31, 2023
  
   
Gross
Carrying
Amount
    
Accumulated
Amortization
    
Impact of
Impairment
    
Net
  
Amortized intangible assets:
                        
Customer relationships
  
$
8,164
    
$
(7,395
)
   $ -  
$
769
  
Trade names
    
1,689
      
(1,283
)
     -      
406
  
Developed technology
    
471
      
(471
)
     -      
-
  
Non-contractual customer relationships
    
433
      
(433
)
     -      
-
  
Noncompete agreement
    
527
      
(523
)
     -      
4
  
Alliance agreement
    
527
      
(527
)
     -      
-
  
Others
    
167
      
(167
)
     -      
-
  
Total
  
$
11,978
    
$
(10,799
)
   $
 -  
$
1,179
  

(in thousands)
  
As of December 31, 2022
  
   
Gross
Carrying
Amount
    
Accumulated
Amortization
    
Impact of
Impairment
    
Net
  
Amortized intangible assets:
                        
Customer relationships
  
$
8,628
    
$
(7,050
)
   $
(464 )  
$
1,114
  
Trade names
    
1,689
      
(1,196
)
     -      
493
  
Developed technology
    
471
      
(471
)
     -      
-
  
Non-contractual customer relationships
    
433
      
(433
)
     -      
-
  
Noncompete agreement
    
527
      
(486
)
     -      
41
  
Alliance agreement
    
527
      
(488
)
     -      
39
  
Others
    
167
      
(167
)
     -      
-
  
Total
  
$
12,442
    
$
(10,291
)
   $
(464 )  
$
1,687
  

Amortization expense related to definite-lived intangible assets totaled $0.5 million and $0.9 million for the years ended December 31, 2023 and 2022, respectively. The $1.2 million of intangible assets at December 31, 2023, have a weighted average remaining life of 9.5 years.

The following table details the estimated amortization expense of the definite-lived intangible assets for the next five years:

(in thousands)
      
Years ended December 31:
      
2024
  
$
332
  
2025
    
255
  
2026
    
204
  
2027
    
169
  
2028
     108  
Thereafter
    
111
  
   
$
1,179
  

Goodwill

(in thousands)

 
  
Goodwill
    
Impairment
    
Net
  
Engineering
  
$
8,278
    
$
(3,370
)
  
$
4,908
  
Workforce Solutions
    
8,431
      
(8,431
)
    
-
  
Net book value at December 31, 2023
  
$
16,709
    
$
(11,801
)
  
$
4,908
  

 
  
Goodwill
    
Impairment
    
Net
  
Engineering
  
$
8,278
    
$
(3,370
)
  
$
4,908
  
Workforce Solutions
    
8,431
      
(7,040
)
    
1,391
  
Net book value at December 31, 2022
  
$
16,709
    
$
(10,410
)
  
$
6,299
  
v3.24.1
Contract Receivables
 12 Months Ended
Dec. 31, 2023
Contract Receivables [Abstract]  
Contract Receivables
7.  Contract Receivables

Contract receivables represent our unconditional rights to consideration due from a broad base of both domestic and international customers. Net contract receivables are considered to be collectible within twelve months.

Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Billed receivables
  
$
5,720
    
$
6,074
  
Unbilled receivables
    
4,729
      
5,146
  
Allowance for credit loss
    
(283
)
    
(1,156
)
Total contract receivables, net
  
$
10,166
    
$
10,064
  

During the first quarter of 2023, the Company adopted ASU 2016-13, “Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including accounts receivable. Under the new guidance, an entity recognizes its estimate of lifetime expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its contract receivables based on three portfolio segments by customer geographic location:  North America, China, Rest of World (ROW). The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables. During the years ended December 31, 2023 and 2022, we recorded credit loss expense of $232 thousand and $221 thousand, respectively.

During January 2024, we invoiced $4.5 million of the unbilled amounts related to the balance at December 31, 2023.

The following table sets forth the activity in allowance for credit losses:

(in thousands)
  
As of and for the
  
   
Years ended December 31,
  
   
2023
    
2022
  
             
Beginning balance
  
$
1,156
    
$
1,010
  
Adoption of ASC326 Current Expected Credit Losses (CECL)
     57       -  
Adjusted beginning balance
     1,213       1,010  
Current period provision for expected credit loss
    
178
      
221
  
Write-offs charged against the allowance, net of recoveries
    
(1,070
)
    
(7
)
Currency adjustment     (38 )     (68 )
Ending balance
  
$
283
    
$
1,156
  
v3.24.1
Prepaid Expenses and Other Current Assets
 12 Months Ended
Dec. 31, 2023
Prepaid Expenses and Other Current Assets [Abstract]  
Prepaid Expenses and Other Current Assets
8.  Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Income tax receivable
  
$
38
    
$
78
  
Prepaid expenses
    
796
      
947
  
ERC receivable
     -       1,028  
Other current assets
    
45
      
112
  
Total
  
$
879
    
$
2,165
  

Prepaid expenses primarily include prepayment for insurance and other subscription-based services. The Employee Retention Credits not yet received as of December 31, 2022, was fully collected as of December 31, 2023.
v3.24.1
Equipment, Software and Leasehold Improvements
 12 Months Ended
Dec. 31, 2023
Equipment, Software and Leasehold Improvements [Abstract]  
Equipment, Software and Leasehold Improvements
9.  Equipment, Software and Leasehold Improvements

Equipment, software and leasehold improvements, net consist of the following:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Computer and equipment
  
$
2,381
    
$
2,363
  
Software
    
2,292
      
2,291
  
Leasehold improvements
    
805
      
659
  
Furniture and fixtures
    
840
      
838
  
     
6,318
      
6,151
  
Accumulated depreciation
    
(5,564
)
    
(5,379
)
Equipment, software and leasehold improvements, net
  
$
754
    
$
772
  

Depreciation expense was approximately $0.2 and $0.3 million for the years ended December 31, 2023 and 2022, respectively.

Capitalization of internal-use software costs of $0.1 million related to the ongoing systems upgrade and implementation effort were recorded in software for the year ended December 31, 2022. There were no capitalized internal-use software costs during the year ended December 31, 2023.
v3.24.1
Product Warranty
 12 Months Ended
Dec. 31, 2023
Product Warranty [Abstract]  
Product Warranty
10.  Product Warranty

Accrued warranty

For contracts that contain a warranty provision, we provide an accrual for estimated future warranty costs based on historical experience and projected claims. Our contracts may contain warranty provisions ranging from one year to five years. The current portion of the accrued warranty is presented separately on the consolidated balance sheets within current liabilities whereas the noncurrent portion is included in other liabilities.

The activity in the accrued warranty accounts is as follows:

(in thousands)
  
As of and for the
  
   
years ended December 31,
  
   
2023
    
2022
  
             
Beginning balance
  
$
502
    
$
748
  
                 
Current year provision
    
(133
)
    
(44
)
                 
Current year claims
    
(83
)
    
(195
)
                 
Currency adjustment
    
(2
)
    
(7
)
                 
Ending balance
  
$
284
    
$
502
  

The current and non-current warranty balance is as follows:


  
December 31,
  
   
2023
    
2022
  
Current
  
$
176
    
$
370
  
Non-current
    
108
      
132
  
Total Warranty
  
$
284
    
$
502
  
v3.24.1
Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2023
Fair Value of Financial Instruments [Abstract]  
Fair Value of Financial Instruments
11.  Fair Value of Financial Instruments

ASC 820, Fair Value Measurement (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The levels of the fair value hierarchy established by ASC 820 are:

Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

As of December 31, 2023 and 2022, we considered the recorded value of certain of our financial assets and liabilities, which consist primarily of cash and cash equivalents, contract receivable and accounts payable, to approximate fair value based upon their short-term nature.



Our convertible debt issued in February 2022, amended in June 2023 and February 2024, and our new convertible debt issued in June 2023 (see Note 12) includes certain embedded redemption features that are required to be bifurcated as embedded derivatives and measured at fair value on a recurring basis. We estimate the fair value using a Monte Carlo simulation based on estimates of our future stock price and assumptions about the possible redemption scenarios.


The Company used the Monte Carlo simulation model to determine the fair value of the Warrants and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants and Convertible Note redemption features as of December 31, 2023 was estimated with the following assumptions.

 
Amended 2022
Convertible Note
  
The “2022
Warrants”
  
2023
Convertible Note
  
The “2023
Warrants”
  
                 
Exercise Price
  
$
19.40
    
$
19.40
    
$
5.00
    
$
5.00
  
Common Stock Price
  
$
2.01
    
$
2.01
    
$
2.01
    
$
2.01
  
Risk Free Rate
    
5.13
%
    
3.93
%
    
4.41
%
    
3.81
%
Volatility
    
90.0
%
    
90.0
%
    
90.0
%
    
90
%
Term (in years)
0.4 yrs.
  
3.2 yrs.
  
1.5 yrs.
  
4.5 yrs.
  


The following table presents assets measured at fair value at December 31, 2023:

   
Quoted Prices in
Active Markets
for Identical
Assets
    
Significant
Other Observable
Inputs
    
Significant
Unobservable
Inputs
        
(in thousands)
  
(Level 1)
    
(Level 2)
    
(Level 3)
    
Total
  
                         
Derivative liability
  
$
-
    
$
-
    
$
588
    
$
588
  
Warrant liability
    
-
      
-
      
520
      
520
  
Cash settled performance-vesting restricted stock units
    
-
      
-
      
24
      
24
  
Balance at December 31, 2023
  
$
-
    
$
-
    
$
1,132
    
$
1,132
  

The following table presents assets measured at fair value at December 31, 2022:
   
Quoted Prices in
Active Markets
for Identical
Assets
    
Significant
Other Observable
Inputs
    
Significant
Unobservable
Inputs
        
(in thousands)
  
(Level 1)
    
(Level 2)
    
(Level 3)
    
Level 3 Total
  
                         
  Derivative liability
  
$
-
    
$
-
    
$
285
    
$
285
  
  Warrant liability
    
-
      
-
      
267
      
267
  
Cash settled performance-vesting restricted stock units
    
-
      
-
      
51
      
51
  
Balance at December 31, 2022  
$
-
    
$
-
    
$
603
    
$
603
  


The following table summarizes changes in the fair value of our Level 3 liabilities during the twelve months ended December 31, 2023.


(in thousands)
  
Embedded
Redemption
Features
    
Warrant
    
Cash Settled PRSUs
    
Level 3 Total
  
Balance at December 31, 2022
  
$
285
    
$
267
    
$
51
    
$
603
  
FV of derivatives with new convertible note issuance
     286       1,120       -       1,406  
Change in FV included in gain on derivative instruments, net
    
17
      
(867
)
    
-
      
(850
)
Stock compensation less payments made
    
-
      
-
      
(27
)
    
(27
)
Balance at December 31, 2023
  
$
588
    
$
520
    
$
24
    
$
1,132
  
v3.24.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt [Abstract]  
Debt
12.  Debt

Convertible Notes

On February 23, 2022, we entered into a Securities Purchase Agreement, as amended, with Lind Global Fund II LP (“Lind Global”) pursuant to which we issued to Lind Global a two-year, secured, interest-free convertible promissory note in the amount of $5.75 million (the “2022 Convertible Note”) and a common stock purchase warrant to acquire 128,373 shares of our Common Stock (the “2022 Warrant”). We entered into an amendment and restatement of the 2022 Convertible Note on June 23, 2023. The 2022 Convertible Note does not bear interest but was issued at a $0.75 million discount (“OID”). We received proceeds of approximately $4.8 million net of the OID and expenses.
On June 23, 2023, the Company entered into a second Securities Purchase Agreement (the “2023 Purchase Agreement”) with Lind Global, pursuant to which we issued to Lind Global that certain Senior Convertible Promissory Note, dated February 23, 2022 (the “2023 Convertible Note” and, together with the 2022 Convertible Note, the “Convertible Notes”)(see Note 1) and a common stock purchase warrant to acquire 426,427 shares of our Common Stock (the “2023 Warrant”). The 2023 Convertible Note does not bear interest but was issued at a $0.3 million discount (“OID”). We received proceeds of approximately $1.4 million net of the OID and expenses.

(in thousands)
  
2022
Convertible
Note
    
2023
Convertible
Note
    
Total
Convertible
Notes
  
   
Amount
    
Amount
    
Amount
  
                   
2022 Convertible Note issued
  
$
5,750
    
$
1,800
    
$
7,550
  
Debt discount
    
(750
)
    
(300
)
    
(1,050
)
Issuance cost:
                        
Commitment fee
    
(175
)
    
(52
)
    
(227
)
Balance of investor’s counsel fees
    
(43
)
    
(34
)
    
(77
)
Net proceeds of Convertible Note
  
$
4,782
    
$
1,414
    
$
6,196
  
                         
Additional OID costs not in original funds flow
    
(121
)
    
(15
)
    
(136
)
Fair value of Warrant Liabilities on issuance
    
(724
)
    
(1,119
)
    
(1,843
)
Fair value of Conversion Features on issuance
    
(306
)
    
(286
)
    
(592
)
Allocated OID costs to Convertible Note
    
25
      
30
      
55
  
Allocation of Discounts on Troubled Debt Restructuring
    
(660
)
    
660
      
-
  
Interest expense accrued on Convertible Note as of December 31, 2023
    
2,946
      
283
      
3,229
  
Principal and interest payments as of December 31, 2023
    
(5,462
)
    
-
      
(5,462
)
Balance of 2022 Convertible Note as of December 31, 2023
  
$
480
    
$
967
    
$
1,447
  

The Convertible Notes provide for variable monthly principal repayments beginning 180 days from issuance (with respect to the 2022 Convertible Note) and 12 months from issuance (with respect to the 2023 Convertible Note). Remaining monthly principle payments range from $0.1 to $0.2 million and can be made in the form of cash, shares, or a combination of both at the discretion of GSE.

The following table details the future principal payments of the Convertible Note, gross of debt discounts:

(in thousands)
      
       
Years ended December 31:
      
2024
  
$
1,849
  
2025
    
750
  
Thereafter
    
-
  
   
$
2,599
  

Prior to the June 2023 amendments, described below, the 2022 Convertible Note was convertible into our Common Stock at any time after the earlier of six months from issuance of the Convertible Note or the date of an effective registration statement filed with the SEC covering the underlying shares. The conversion price of the 2022 Convertible Note was equal to $19.40 per share, subject to customary adjustments. The 2022 Convertible Note matured in February 2024, although we were permitted to prepay the 2022 Convertible Note, provided that Lind Global had the option to convert up to one third of the outstanding principal of the 2022 Convertible Note at a price per share equal to the lesser of the Repayment Share price or the conversion price (as described below).

The 2022 Convertible Note is guaranteed by each of our subsidiaries and is secured by a first priority lien on all of our assets. The 2022 Convertible Note is not subject to any financial covenants and events of default under the 2022 Convertible Note are limited to events related to payment, market capitalization, certain events pertaining to conversion and the underlying shares of Common Stock and other customary events including, but not limited to, bankruptcy or insolvency. Upon the occurrence of an event of default, the 2022 Convertible Note will become immediately due and payable at an amount equal to 120% of the outstanding principal, subject to any cure periods described in the 2022 Convertible Note, and the customer may demand that all or a portion of the outstanding principal amount be converted into shares of common stock at the lower of the then current conversion price and 80% of the average of the three lowest daily volume-weighted average price (“VWAPs”) during the twenty days prior to delivery of the conversion notice. If there is a change of control of the Company, Lind Global has the right to require us to prepay the outstanding principal amount of the 2022 Convertible Note.
On June 23, 2023, the Company and Lind Global agreed to amend and restate the 2022 Convertible Note. The 2022 Convertible Note, as now amended, is now secured, interest free convertible promissory note in the principal amount of $2,747,228, such amount being the outstanding balance of the 2022 Convertible Note as of June 23, 2023. Just prior to the amendment, there was an event of default (EOD) related to the total market capitalization provision in the original 2022 Convertible Note. The EOD that occurred was waived, and we incurred a 20% charge included in the amended and restated 2022 Convertible Note, which the Company has treated as additional interest. The 2022 Convertible Note now has a maturity date of August 23, 2024 was payable, commencing on July 23, 2023, in twelve (12) consecutive monthly payments of $186,343 each and two (2) final payments of $255,556 each. The remainder of the terms of the 2022 Convertible Note, including terms around payment, prepayment, default and conversion, are unchanged.

On October 6, 2023, the Company and Lind Global entered into that certain First Amendment to the 2022 Convertible Note (“A&R Note Amendment”), amending the 2022 Convertible Note to extend the beginning period of required compliance with certain default provisions until January 31, 2024. The A&R Note Amendment amended Section 2.1 pertaining to events of default by deleting and replacing Section 2.1(r), which previously provided for an event of default under the Note in the event that the Company’s Market Capitalization was below $7 million for ten (10) consecutive days. As amended, the A&R Note provided that, at any time after January 31, 2024, an event of default will occur in the event that the Company’s Market Capitalization is below $7 million for ten (10) consecutive days. Prior to the Amendment, the “Conversion Price” in Section 3.1(b) of the A&R Note “was $19.40, and shall be subject to adjustment as provided herein.” The A&R Note Amendment amended the definition of “Conversion Price” “the lower of (i) $19.40 and (ii) eighty-five percent (85%) of the average of the three (3) lowest daily VWAPs during the twenty (20) Trading Days prior to the delivery by the Holder of the applicable notice of conversion.” There was no accounting impact related to this amendment as conversion options are already bifurcated as an embedded derivative and recorded at fair value at each reporting period.

The 2022 Warrant entitles Lind Global to purchase up to 128,373 shares of our Common Stock until February 23, 2027, at an exercise price of $19.40 per share, subject to customary adjustments described therein. The Warrant is recorded at fair value upon issuance of $0.7 million and is classified as a current liability to be remeasured at each reporting period (see Note 8). The discount created by allocating proceeds to the Warrant results in a debt discount to be amortized as additional interest expense over the term of the Convertible Note.

On June 23, 2023 in connection with the 2022 amended and restated Convertible Note transaction, the Company evaluated the amendment and concluded it qualified as a troubled debt restructuring. The restructuring did not result in a gain or loss but revised the effective interest rate used to amortized the note going forward.

On June 23, 2023, the Company entered into a second Securities Purchase Agreement (the “2023 Purchase Agreement”) with Lind Global, pursuant to which the Company issued to Lind Global the 2023 Convertible Note at the same time that the Company and Lind Global amended and restated the 2022 Convertible Note. The closing occurred on June 23, 2023, and consisted of the issuance of a secured, two-year interest free convertible promissory note with a funding amount of $1,500,000 and a principal amount of $1,800,000 (as defined above, the ”2023 Convertible Note”) and the issuance of common stock purchase warrant to acquire 426,427 shares of the Company’s common stock (the “2023 Warrant” and, together with the 2022 Warrant, the “Warrants”). The proceeds from the transactions contemplated by the 2023 Purchase Agreement were for general working capital purposes and other corporate purposes.

On October 6, 2023, the Company and Lind Global entered into that certain First Amendment to Senior Convertible Promissory Note, amending the Company’s 2023 Convertible Note (the “Note Amendment”) to extend the beginning period of required compliance with certain default provisions until January 31, 2024. The Note Amendment amended Section 2.1 of the 2023 Convertible Note pertaining to events of default by deleting and replacing Section 2.1(r), which previously provided for an event of default under the Note in the event that the Company’s Market Capitalization (as defined in the Note) was below $7 million for ten (10) consecutive days. As amended, the Note provides that, at any time after January 31, 2024, an event of default will occur in the event that the Company’s Market Capitalization is below $7 million for ten (10) consecutive days.

Commencing one year after the issuance of the 2023 Convertible Note, the Company shall pay the outstanding principal amount of the 2023 Convertible Note in twelve (12) consecutive monthly payments of $150,000 each. At the option of the Company, the monthly payment can be made in cash, shares of the common stock of the Company (the “Repayment Shares”) at a price based on 90% of the average five (5) consecutive daily VWAPs during the twenty (20) days prior to the payment date, or a combination of cash and Repayment Shares, subject to the terms of the 2023 Convertible Note.  The Repayment Shares must either be eligible for immediate resale under Rule 144 or be registered. The number of Repayment Shares is limited such that, when added to the number of shares of common stock issued and issuable pursuant to the transactions contemplated by the 2023 Purchase Agreement, it may not exceed 493,727 shares of common stock unless the Company obtains stockholder approval to issue additional Repayment Shares. The holder of the 2023 Convertible Note may elect with respect to no more than two (2) of the above described monthly payments to increase the amount of such monthly payment up to $300,000 each in Repayment Shares upon notice to the Company. Any such increased payment shall be deducted from the amount of the last monthly payment owed under the 2023 Convertible Note.  The Company can prepay Lind Global all the outstanding principal amount of the 2023 Convertible Note, provided that Lind Global shall have the option to convert up to one third (1/3) of the outstanding principal amount of the 2023 Convertible Note at a price per share equal to the lesser of the Repayment Share price or the conversion price (as described below).

Upon the occurrence of an event of default as described in the 2023 Convertible Note, the 2023 Convertible Note will become immediately due and payable at the default premium described in the 2023 Convertible Note, subject to any cure periods described in the 2023 Convertible Note. Events of default include, but are not limited to, a payment default on any other indebtedness in excess of $250,000; the shares no longer publicly being traded or cease to be listed on a trading market; if after six months, the shares are not available for immediate resale under Rule 144; and the Company’s market capitalization is below $7,000,000 for ten (10) consecutive days. Upon an event of default, subject to any applicable cure period, the holder of the 2023 Convertible Note can, among other things, accelerate payment of the 2023 Convertible Note and demand full payment and demand that all or a portion of the outstanding principal amount be converted into shares of common stock at the at the lower of the then current conversion price and 85% of the average of the three (3) lowest daily VWAPs during the twenty (20) days prior to delivery of the conversion notice.  If there is a change of control of the Company, Lind Global has the right to require the Company to prepay 105% of the outstanding principal amount of the 2023 Convertible Note. A change of control includes a change in the composition of a majority of the Board of Directors of the Company, at a single shareholder meeting, a change, without prior written consent of Lind Global where a majority of the individuals that were directors as of June 20, 2023 cease to be directors of the Company (provided that any individual who is nominated by the board of directors (or a duly authorized committee thereof) as of June 20, 2023 and is elected or appointed as a director of the Company shall be deemed a member of the board of directors of the Company for all such purposes), a shareholder acquiring beneficial ownership of more than 50% of the common stock of the Company, or the sale or other disposition of the Company of all or substantially all of its assets.  The 2023 Convertible Note is convertible into common stock of the Company at any time after the earlier of six (6) months from issuance or the date the registration statement is effective, provided that no such conversion may be made that would result in beneficial ownership by Lind Global and its affiliates of more than 4.99% of the Company’s outstanding shares of common stock. The conversion price of the 2023 Convertible Note is equal to $5.00, subject to customary adjustments.

The 2023 Warrant entitles Lind Global to purchase up to 426,427 shares of common stock of the Company until the earlier of (a) June 23, 2028 and (b) a merger, sale event or other reclassification of the Company’s common stock, at an exercise price of $5.00 per share, subject to customary adjustments described therein. The 2023 Warrant is in addition to the 2022 Warrant.

The Company evaluated the 2022 Convertible Note and concluded that certain embedded redemption features are required to be accounted for as a derivative liability. Embedded redemption features were recorded at fair value upon issuance of $0.3 million and are classified as current liabilities to be remeasured at each reporting period (see Note 11). The discount created by allocating proceeds to the derivative liability results in a debt discount to be amortized as additional interest expense over the term of the Convertible Notes. The Warrants are accounted for as a derivative liability based on certain features included within the Convertible Note which caused the Company to not be able to assert that it would have sufficient shares in all cases to be able to settle the Warrants. As such, the proceeds (approximately $4.8 million, net of original issue discounts and other payments to lender) were allocated first to the fair value of the Warrants with the residual allocated to the Convertible Notes host instrument. The proceeds allocated to the Convertible Notes were further allocated first to the bifurcated derivative liability based on its fair value with the residual being allocated to the Convertible Notes host instrument.

Upon issuance of the 2023 Convertible Note, the Company re-evaluated the 2022 Convertible Note, in accordance with ASC 815-40-25-10 and its sequencing policy, and concluded that the embedded conversion option is required to be bifurcated and accounted for as a derivative liability as a result of the Company not being able to assert that it would have sufficient shares in all cases to be able to settle the conversion of the 2022 Convertible Note.  The embedded conversion option will be combined with the bifurcated redemption features as a single derivative and is classified as a current liability to be remeasured at each reporting period.  The discount resulting from bifurcating the embedded conversion option will be amortized as additional interest expense over the term of the 2022 Convertible Note.

The direct and incremental costs incurred are allocated to the Convertible Note and the Warrant based on a systematic and rational approach. The costs allocated to the Warrants have been expensed as incurred while those allocated to the Convertible Note have been capitalized and will be amortized as interest expense over the life of the Convertible Notes based on the effective interest rate. The Company will record ongoing changes to the fair value of the derivative liabilities as other non-operating income (expense).

The Convertible Notes are evaluated as a potentially dilutive security in both periods of loss and income for diluted earnings per share purposes. The Warrants are considered a participating security and was not included in the calculation of basic earnings per share for the year ended December 31, 2023 as Company reflected net loss for this period. The Warrant will be included in the calculation of diluted earnings per share in periods of net income.

The issuance costs with respect to the Convertible Notes, which are recorded as a debt discount, are deferred and amortized using the effective interest method as additional interest expense over the terms of the Convertible Note at an effective interest rate of 68.6%.

The Company incurred total interest expense related to the Convertible Notes of $1.9 million, including $0.5 million default charge and the amortization of the various discounts for the year ended December 31, 2023. The Company incurred total interest expense related to the Convertible Notes of $1.3 million for the year ended December 31, 2022.

Subsequent to the reporting period, on February 12, 2024, the Company and Lind Global entered into an agreement to amend certain provisions of the Convertible Notes (as amended) to extend the beginning period of required compliance with certain default provisions until June 1, 2024. The agreement amended Section 2.1 pertaining to events of default, to extend the period in which an event of default would occur, as defined above, to anytime after June 1, 2024, previously anytime after January 31, 2024 as provided in the October 6th amendment defined above. But for the amendment, the Company would have incurred an event of default after the tenth (10th) trading day following January 31, 2024 if the market capitalization of the Company was less than seven million dollars ($7,000,000). The amendments amended the definition of “Conversion Price” in the 2023 Convertible Note to “the lower of (i) $5.00 and (ii) eighty-five percent (85%) of the average of the three (3) lowest daily VWAPs during the twenty (20) Trading Days prior to the delivery by the Holder of the applicable notice of conversion.” No other concession was given with this amendment and legal fees were expenses as incurred.

At December 31, 2023, the outstanding debt under the Convertible Note agreement was as follows:

   
Principal
    
Debt Discounts
    
Net
  
                   
Current portion of Long-Term Debt
  
$
1,849
    
$
(1,039
)
  
$
810
  
                         
Long-Term Debt less current portion
    
750
      
(113
)
    
637
  
                         
Balance of Convertible Notes as of December 31, 2023
  
$
2,599
    
$
(1,152
)
  
$
1,447
  

At December 31, 2022, the outstanding debt under the Convertible Note agreement was as follows:

   
Principal
    
Debt Discounts
    
Net
  
                   
Current portion of Long-Term Debt
  
$
3,833
    
$
(795
)
  
$
3,038
  
                         
Long-Term Debt less current portion
    
320
      
(10
)
    
310
  
                         
Balance of Convertible Notes as of December 31, 2022
  
$
4,153
    
$
(805
)
  
$
3,348
  

Revolving Line of Credit (“RLOC”)

In February 2022, using proceeds from the Convertible Note, we repaid in full, all outstanding indebtedness of $1.8 million owed in connection with that certain Amended and Restated Credit and Security Agreement (“RLOC”) between us, our subsidiaries, and Citizens  Bank, N.A. (“Citizens”), and such RLOC was thereafter terminated. We continue to maintain a cash management account and certain letters of credit with Citizens and, accordingly, have entered into a certain Cash Management Agreement with Citizens, as well as certain Cash Pledge Agreements in amounts corresponding to the current outstanding letters of credits with customers. As of December 31, 2023, we had four letters of credit totaling $1.1 million outstanding to certain customers which were secured with restricted cash.
v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstract]  
Income Taxes
13.  Income Taxes

The consolidated income before income taxes, by domestic and foreign sources, is as follows:

(in thousands)
  
Years ended December 31,
  
   
2023
    
2022
  
Domestic
  
$
(8,584
)
  
$
(15,128
)
Foreign
    
(118
)
    
(164
)
Total
  
$
(8,702
)
  
$
(15,292
)

The provision (benefit) for income taxes is as follows:

(in thousands)
  
Years ended December 31,
 
   
2023
    
2022
  
Current:
            
Federal
  
$
-
    
$
-
  
State
    
33
      
42
  
Foreign
    
(23
)
    
95
  
Subtotal
    
10
      
137
  
                 
Deferred:
                
Federal
    
-
      
(47
)
State
    
12
      
(39
)
Foreign
    
-
      
-
  
Subtotal
    
12
      
(86
)
Total
  
$
22
    
$
51
  

The effective income tax rate for the years ended December 31, 2023 and 2022 differed from the statutory federal income tax rate as presented below:


  
Effective Tax Rate percentage (%)
  
   
Years ended December 31,
 
   
2023
    
2022
  
Statutory federal income tax rate
    
21.0
%
    
21.0
%
State income taxes, net of federal tax benefit
    
2.4
%
    
2.4
%
Effect of foreign operations
    
(0.3
)%
    
(0.3
)%
Change in valuation allowance
    
(16.5
)%
    
(20.7
)%
Stock-based compensation
    
(2.1
)%
    
(0.9
)%
Convertible Note transactions     (5.0 )%     (1.2 )%
Uncertain tax positions
    
0.3
%
    
(0.7
)%
Other
    
(0.1
)%
    
0.1
%
Effective tax rate
    
(0.3
)%
    
(0.3
)%

The difference between the effective tax rate and statutory rate in 2023 primarily resulted from a change in valuation allowance, permanent differences related to disallowed interest expense and mark-to-market adjustments on the Convertible Note which is a disqualified debt instrument for tax purposes, accruals related to uncertain tax positions, the tax impact of stock compensation vests, and state tax expense.

Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. A summary of the tax effect of the significant components of the deferred income tax assets and liabilities is as follows:

(in thousands)
  
As of December 31,
  
   
2023
    
2022
  
Deferred tax assets:
            
Net operating loss carryforwards
  
$
9,372
    
$
7,853
  
Accruals
    
330
      
62
  
Reserves
    
139
      
409
  
Stock-based compensation expense
    
228
      
283
  
Intangible assets
    
2,228
      
2,356
  
Goodwill
    
1,687
      
1,551
  
Operating lease liability
    
121
      
132
  
Fixed assets
     27       65  
   Sec. 174 R&D costs     228       129  
Other
    
196
      
231
  
Total deferred tax asset
    
14,556
      
13,071
  
Valuation allowance
    
(14,008
)
    
(12,572
)
Total deferred tax asset less valuation allowance
    
548
      
499
  
                 
Deferred tax liabilities:
                
Software development costs
    
(17
)
    
(59
)
Indefinite-lived intangibles
    
(440
)
    
(346
)
Operating lease - right of use asset
    
(109
)
    
(100
)
Other
    
-
      
-
Total deferred tax liability
    
(566
)
    
(505
)
                 
Net deferred tax liability
  
$
(18
)
  
$
(6
)

We file tax returns in the United States federal jurisdiction and in several state and foreign jurisdictions. Because of the net operating loss carryforwards, we are subject to U.S. federal and state income tax examinations for tax years 2003 and forward, and is subject to foreign tax examinations by tax authorities for the years 2018 and forward. Open tax years related to state and foreign jurisdictions remain subject to examination but are not considered material to our financial position, results of operations or cash flows.

In assessing the ability to realize our deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Our ability to realize the deferred tax assets depends primarily upon the preponderance of positive evidence that could be demonstrated by three-year cumulative positive earnings, reversal of existing deferred temporary differences, and generation of sufficient future taxable income to allow for the utilization of deductible temporary differences.
As of each reporting date, our management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. This analysis is performed on a jurisdiction by jurisdiction basis.
We performed an analysis of the valuation allowance position for its worldwide deferred tax assets and determined that a valuation allowance continues to be necessary on its U.S. and foreign deferred tax assets at December 31, 2023.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (the TCJA) eliminated the option to deduct research and development expenses currently and requires taxpayers to amortize such costs over a period of five years for expenses incurred in the United States and a period of 15 years for expenses incurred outside the United States. While it is possible the federal government may enact future legislation which would repeal this provision of the TCJA, there is no assurance such legislation will be enacted or whether, if enacted, such legislation would be enacted on a retrospective basis to 2022. This provision of the TCJA resulted in increases of $100 thousand and $129 thousand in deferred tax assets, and an equal increase to the Company’s valuation allowance, during the year ended December 31, 2023 and December 31, 2022, respectively, related to research and development expenses incurred during the period. There was no material impact to the Company’s current or deferred tax provision or operating cash flows during the year ended December 31, 2023 and December 31, 2022 as a result of this provision of the TCJA given the Company incurred net operating losses (NOLs) during both periods. The Company does not currently expect this provision of the TCJA will have a material impact on its tax provision or operating cash flows for the year ended December 31, 2023, however, the actual impact of this provision to future periods is uncertain as of this time.

As of December 31, 2023, our largest deferred tax asset was $9.4 million of net operating net loss carry forwards. It primarily relates to a U.S. net operating loss carryforward of $7.8 million; $3.8 million of the net operating loss carryforward expires in various amounts between 2024 and 2038; $4.0 million of the net operating loss carryforward is an indefinite-lived deferred tax asset. We do not believe that it is more likely than not that we will be able to realize its deferred tax assets for its U.S. and foreign deferred tax assets at December 31, 2023 and therefore we have maintained a $14.0 million valuation allowance for our net deferred tax assets. The Company has a deferred tax liability in the amount of $18 thousand at December 31, 2023 related to the portion of Goodwill which cannot be offset by deferred tax assets, which is included as a part of other non-current liabilities on the consolidated balance sheets.

As of December 31, 2023 and 2022, our consolidated cash and cash equivalents totaled $2.3 million and $2.8 million, respectively, including cash and cash equivalents held at non-U.S. entities totaling $1.2 million and $0.8 million, respectively. The non-U.S. entities include operating subsidiaries located in China. We do not assert permanent reinvestment in China. Accordingly, we analyzed the cumulative earnings and profits and determined the US deferred liability related to this position is immaterial.

Uncertain Tax Positions

During 2023 and 2022, we recorded tax liabilities for certain foreign tax contingencies. We recorded these uncertain tax positions in income taxes payable on the consolidated balance sheets.

The following table outlines our uncertain tax liabilities, including accrued interest and penalties for each jurisdiction:


  
China
    
South Korea
    
UK
        
(in thousands)
  
Tax
    
Interest and Penalties
    
Tax
    
Interest and Penalties
    
Tax
    
Interest and Penalties
    
Total
  
                                           
Balance, January 1, 2022
  
$
220
    
$
428
    
$
644
    
$
335
    
$
45
    
$
30
    
$
1,702
  
Increases
    
-
      
4
      
-
      
51
      
-
      
61
      
116
  
Decreases
    
(17
)
    
-
      
(22
)
    
-
      
(5
)
    
-
      
(44
)
Balance, December 31, 2022
  
$
203
    
$
432
    
$
622
    
$
386
    
$
40
    
$
91
    
$
1,774
  
Increases
    
-
      
25
      
-
      
57
      
-
      
-
      
82
  
Decreases
    
(5
)
    
-
      
(19
)
    
-
      
(40
)
    
(91
)
    
(155
)
Balance, December 31, 2023
  
$
198
    
$
457
    
$
603
    
$
443
    
$
-
    
$
-
    
$
1,701
  
v3.24.1
Capital Stock
 12 Months Ended
Dec. 31, 2023
Capital Stock [Abstract]  
Capital Stock
14.  Capital Stock
We are authorized to issue 62,000,000 total shares of capital stock, of which, 60,000,000 are designated as common stock and 2,000,000 are designated as preferred stock. Our Board of Directors has the authority to establish one or more classes of stock and to determine, within any class of stock, the preferences, rights and other terms of such class.
As of December 31, 2023, the Company has reserved 750,000 shares of common stock for issuance under the Plan (as further defined below); zero shares of common stock are reserved for issuance upon exercise of outstanding stock options pursuant to the Plan (because no options have presently been granted, and 164,837 shares of common stock are reserved for issuance upon vesting of certain outstanding restricted stock units. There are no shares available for future grants under the Plan (as further defined below).

The Company has registered approximately 1.7 million shares related to the Convertible Notes and separately reserved such shares for the potential issuance in accordance with the terms of the Convertible Notes (Note 12). As of December 31, 2023, 1.5 million shares remain in this plan for issuance.
v3.24.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2023
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
15.  Stock-Based Compensation


Long-term incentive plan
During 1995, we established the 1995 Long-Term Incentive Stock Option Plan (the “Plan”), which permits the granting of stock options (including incentive stock options and nonqualified stock options) stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards or any combination of these to employees, directors or consultants. The Plan was amended and restated effective April 22, 2016 and expires on  April 21, 2026; the total number of shares that could be issued under the Plan is 750,000. As of December 31, 2023, we have issued 585,163 shares under the Plan, zero stock options and 164,837 non-cash settled restricted stock units (RSUs) were outstanding under the Plan, while zero shares remain for future grants under the Plan.

We recognize compensation expense on a pro rata straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We have not capitalized any portion of our stock-based compensation. Our forfeiture rate is based on actuals.
During the years ended December 31, 2023 and 2022, we recognized $1.2 million and $2.0 million, respectively, of stock-based compensation expense under the fair value method. Accordingly, we recognized associated deferred income tax expense of $179 thousand and $140 thousand before valuation allowance, respectively, during the years ended December 31, 2023 and 2022.

During the years ended December 31, 2023 and 2022, we issued RSUs and PRSUs to employees which vest upon the achievement of specific market-based or time-based measures. The fair value of RSU’s is calculated using the stock price on the grant date and expensed ratably over the service period. The fair value for PRSU’s is determined using a Monte Carlo simulation model and expensed ratably over the derived service period, which typically ranges between one year and five years.

The following table summarizes the information about vested and unvested restricted stock units for the years ended December 31, 2023 and 2022.


  
Number of Shares
    
Weighted Average
Fair Value
  
             
Nonvested RSUs at January 1, 2022
    
159,567
    
$
17.70
  
RSUs granted
    
179,025
      
14.89
  
RSUs forfeited
    
(47,297
)
    
21.34
  
RSUs vested
    
(78,870
)
    
16.82
  
                 
Nonvested RSUs at December 31, 2022
    
212,425
    
$
13.99
  
                 
Nonvested RSUs at January 1, 2023
    
212,425
    
$
13.99
  
RSUs granted
    
199,810
      
2.17
  
RSUs forfeited
    
(60,612
)
    
11.01
  
RSUs vested
    
(176,786
)
    
7.87
  
                 
Nonvested RSUs at December 31, 2023
    
174,837
    
$
7.29
  

As of December 31, 2023, we had $0.6 million of unrecognized compensation expense related to the RSUs expected to be recognized on a pro-rata straight line basis over a weighted average remaining service period of approximately 0.9 years.

GSE’s 1995 long-term incentive program (“LTIP”) provides for the issuance of performance-vesting and time-vesting restricted stock units to certain executives and employees. Vesting of the performance-vesting restricted stock units (“PRSU”) is contingent upon the employee’s continued employment and the Company’s achievement of certain performance goals during designated performance periods as established by the Compensation Committee of the Company’s Board of Directors. We recognize compensation expense, net of estimated forfeitures, for PRSUs on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. At the end of each reporting period, we estimate the number of PRSUs that are expected to vest, based on the probability and extent to which the performance goals will be met, and take into account these estimates when calculating the expense for the period. If the number of shares expected to be earned changes during the performance period, we make a cumulative adjustment to compensation expense based on the revised number of shares expected to be earned.

Restricted Stock Units

During the year ended December 31, 2023, we granted approximately 140,044 RSUs with an aggregate fair value of approximately $0.4 million. During the year ended December 31, 2022, we granted approximately 99,025 time-based RSUs with an aggregate fair value of approximately $1.5 million. During the year ended December 31, 2023, we forfeited 5,575 RSUs compared to 10,583 RSUs forfeited for the year ended December 31, 2022. During the year ended December 31, 2023, we vested 156,786 RSUs compared to 58,870 RSUs vested during the year ended December 31, 2022. A portion of the time-based RSUs vest quarterly in equal amounts over the course of eight quarters, and the remainder vest annually in equal amounts over the course of one to three years.

Performance Restricted Stock Units

During the year ended December 31, 2023, we granted 59,767 PRSUs. These grants are subject to multiple vesting criteria including reaching a 20-day VWAP of $15.0 prior to the expiration of the awards, and a time-vesting restriction, which will vest in equal parts over the next 15 quarters ending December 31, 2026. During the year ended December 31, 2023, we forfeited 55,037 PRSUs and vested (20,000) PRSUs of which, (5,000) PRSUs were cash-settled, respectively.
During the year ended December 31, 2022, we granted 80,000 PRSUs including 20,000 cash-settled grants to employees. These grants are subject to multiple vesting criteria including reaching a 20-day VWAP of $19.4 prior to the expiration of the awards, and a time-vesting restriction, which will vest in equal portions over the next 15 quarters ending December 31, 2025. During the year ended December 31, 2022, we forfeited 36,714 PRSUs and vested (20,000) PRSUs, of which, (5,000) PRSUs were cash-settled, respectively.
v3.24.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases
16.  Leases

We have lease agreements with lease and non-lease components, which are accounted for as a single lease. We apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The operating lease ROU amortization was $388 thousand and $632 thousand for the twelve months ended December 31, 2023 and 2022, respectively.

Lease contracts are evaluated at inception to determine whether they contain a lease and whether we obtain the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets:

(in thousands)

Operating Leases
  
Classification
  
December 31, 2023
    
December 31, 2022
  
Leased Assets
  
 
            
Operating lease - right of use assets
  
Long term assets
  
$
413
     $
506
  
 
  
 
                
Lease Liabilities
  
 
                
Operating lease liabilities - Current
  
Other current liabilities
    
234
      
418
  
Operating lease liabilities
  
Long term liabilities
    357       160  

 

  $
 591
     $ 578
  

We entered into a lease agreement to lease 2,200 square feet of office space on September 26, 2022, and the lease term will end on November 30, 2024. On December 15, 2022, following a March 18, 2022 building fire that impacted our space and ensuing dispute among us and the landlord, we terminated our lease for 1332 Londontown Boulevard, Eldersburg, Maryland (our former headquarters) and entered into a release and settlement agreement whereby we agreed to pay, and the landlord agreed to accept, a reduced monthly payment through May 1, 2023 in exchange for early termination of the lease. The lease termination resulted in a gain of $94 thousand and is reflected in other (loss) income, net for the year ended December 31, 2022. As a part of this agreement, we assigned both active subleases to the landlord effective as of the execution date.

The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2023, (in thousands):

Lease Cost
  
Classification
  
Twelve months
ended, December
31, 2023
    
Twelve months
ended, December
31, 2022
  
Operating lease cost (1)
  
Selling, general and administrative expenses
  
$
418
       700  
Short-term leases costs (2)
  
Selling, general and administrative expenses
    
29
       60  
Sublease income (3)
  
Selling, general and administrative expenses
    
-
       (62 )
Net lease cost
  
 
  
$
447
       698  

(1) Includes variable lease costs which are immaterial.
(2) Include leases maturing less than twelve months from the report date.
(3) Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.

We are obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under our noncancelable operating leases as of December 31, 2023 are as follows:

(in thousands)
  
Gross Future
  
   
Minimum Lease
  
   
Payments
  
       
2024
  
$
263
  
2025
    
150
  
2026
    
96
  
2027
    
90
  
2028
     61  
Thereafter
    
-
  
Total
  
$
660
  
Less: Interest
    
69
  
Present value of lease payments
  
$
591
  

The below table summarizes the weighted-average remaining lease term, presented in years, and the weighted-average discount rate for our operating leases included in the consolidated balance sheet as of December 31, 2023:

Lease Term and Discount Rate
  
Twelve months ended
December 31, 2023
  
Weighted-average remaining lease term (years)
      
         Operating leases
    
3.38
  
Weighted-average discount rate
        
         Operating leases
    
6.10
%

There was right-of-use assets obtained in exchange for operating lease liabilities of $460 thousand during the year ended December 31, 2023. The table below sets out the classification of lease payments in the consolidated statements of cash flows:

(in thousands)
   
Twelve months ended December 31,
  
Cash paid for amounts included in measurement of liabilities
  
2023
    
2022
  
             
Cash paid for amounts included in measurement of liabilities
  
$
453
    
$
1,233
  
v3.24.1
Employee Benefits
 12 Months Ended
Dec. 31, 2023
Employee Benefits [Abstract]  
Employee Benefits
17.  Employee Benefits

We have a qualified defined contribution plan that covers all U.S. employees under Section 401(k) of the Internal Revenue Code. Under this plan, our stipulated basic contribution matches a portion of the participants’ contributions based upon a defined schedule for eligible employees. Our contributions to the plan were approximately $531 thousand and $479 thousand for the years ended December 31, 2023 and 2022, respectively.
v3.24.1
Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Information [Abstract]  
Segment Information
18.  Segment Information

We have two reportable business segments for which the Company’s president and CEO is the chief operating decision maker (CODM) for both. The Engineering segment provides simulation, training and engineering products and services delivered across the breadth of industries we serve. Workforce Solutions include simulation for both training and engineering applications. Example engineering services include, but are not limited to, plant design verification and validation, thermal performance evaluation and optimization programs, and engineering programs for plants for American Society of Mechanical Engineers (“ASME”) code and ASME Section XI. The Company provides these services across all market segments through our Systems & Simulation, Programs & Performance, and Design & Analysis subsidiaries. Example training applications include turnkey and custom training services. Contract terms are typically less than two years.
Workforce Solutions segment provides specialized workforce solutions primarily to the nuclear industry, working at clients’ facilities. This business is managed through our Training Services and Technical Staffing subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the GSE product and service portfolio.
The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant.

(in thousands)
  
Years ended December 31,
  
   
2023
    
2022
  
Revenue:
            
Engineering
  
$
31,790
    
$
29,919
  
Workforce Solutions
    
13,251
      
17,815
  
Total revenue
    
45,041
      
47,734
  
                 
Gross profit
                
Engineering     10,073       9,557  
Workforce Solutions
     1,857       2,353  
Total gross profit
     11,930       11,910  
                 
Operating loss
                
Engineering
    
(3,789
)
    
(6,388
)
Workforce Solutions
    
(3,029
)
    
(8,018
)
Operating loss
    
(6,818
)
    
(14,406
)
                 
Interest expense
    
(1,932
)
    
(1,272
)
Change in fair value of derivative instruments, net
    
850
      
477
  
Other (loss) income, net
    
(802
)
    
(91
)
Loss before taxes
  
$
(8,702
)
  
$
(15,292
)

The operating loss above for the years ended December 31, 2023 and 2022 include goodwill and intangible asset impairment charges of $1.4 million and $7.5 million for Workforce Solutions, respectively.

Additional information relating to segments is as follows:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
             
Engineering
  
$
20,980
    
$
21,705
  
Workforce Solutions
    
1,825
      
4,791
  
Total assets
  
$
22,805
    
$
26,496
  

For the years ended December 31, 2023 and 2022, 92% and 89%, respectively, of our consolidated revenue was from customers in the nuclear power industry. We design, develop and deliver business and technology solutions to the energy industry worldwide. Revenue, operating (loss) income and total assets for our United States, European, and Asian subsidiaries as of and for the years ended December 31, 2023 and 2022 are as follows:

(in thousands)
  
Year ended December 31, 2023
  
   
United States
    
Asia
    
Consolidated
  
                   
Revenue
  
$
44,040
    
$
1,001
    
$
45,041
  
Operating loss
  
$
(6,676
)
  
$
(142
)
  
$
(6,818
)
Net assets, at December 31
  
$
21,202
    
$
1,603
    
$
22,805
  

(in thousands)
  
Year ended December 31, 2022
  
   
United States
   
Asia
    
Consolidated
  
                   
Revenue
  
$
46,622
    
$
1,112
    
$
47,734
  
Operating loss
  
$
(14,225
)
  
$
(181
)
  
$
(14,406
)
Net assets, at December 31
  
$
24,631
    
$
1,865
    
$
26,496
  

Revenues by geographic location above are attributed to the contracting entity.  Therefore, revenues from a foreign customer that contracted directly with our U.S. entity are included in revenues from the United States. All revenues in Asia were attributable to our Chinese subsidiary.

Alternatively, revenue from customers domiciled in foreign countries were approximately 12% and 16%, of our consolidated 2023 and 2022 revenue, respectively.  Revenue from foreign countries where our customers reside were all individually less than 10% of our consolidated revenue during 2023 and 2022.
v3.24.1
Supplemental Disclosure of Cash Flow Information
 12 Months Ended
Dec. 31, 2023
Supplemental Disclosure of Cash Flow Information [Abstract]  
Supplemental Disclosure of Cash Flow Information
19.  Supplemental Disclosure of Cash Flow Information

(in thousands)
  
Year ended December 31,
  
   
2023
    
2022
  
Cash paid for interest and income taxes:
            
Interest
  
$
947
    
$
546
  
Income taxes
  
$
79
    
$
47
  
                 
Non-cash financing activities:
                
Repayment of convertible note in shares
   $ 2,886     $ 824  
Establishment of new right-of-use assets
     320       60  
Establishment of new operating lease liability
     (454 )     (58 )
Discount on issuance of convertible note
  
$
300
    
$
750
  
v3.24.1
Non-consolidated Variable Interest Entity
 12 Months Ended
Dec. 31, 2023
Non-consolidated Variable Interest Entity [Abstract]  
Non-consolidated Variable Interest Entity
20.  Non-consolidated Variable Interest Entity

Through our wholly owned subsidiary, DP Engineering, we effectively hold a 48% membership interest in DP-NXA Consultants LLC (“DP-NXA”).
DP-NXA was established to provide industrial services that include civil, structural, architectural, electrical, fire protection, plumbing, mechanical consulting engineering services to customers. DP-NXA sub-contracts their work to its two owners, NXA Consultants LLC (“NXA”), which owns 52% of the entity, and DP Engineering. DP Engineering and NXA contributed $48 thousand and $52 thousand, respectively, for 48% and 52% interest in DP-NXA. DP Engineering recorded the contributed cash as an equity investment.
We evaluated the nature of DP Engineering’s investment in DP-NXA and determined that DP-NXA is a variable interest entity (“VIE”). Since we do not have the power to direct activities that most significantly impact DP-NXA, we are not DP-NXA’s primary beneficiary. Furthermore, we concluded that we do not hold a controlling financial interest in DP-NXA since NXA, the VIE’s majority owner, makes all operational and business decisions. We account for DP Engineering’s investment in DP-NXA using the equity method of accounting due to the fact DP Engineering exerts significant influence with its 48% of membership interest, but does not control the financial and operating decisions.
Our maximum exposure to any losses incurred by DP-NXA is limited to DP Engineering’s investment. As of December 31, 2023, DP Engineering has not made any additional contributions to DP-NXA and we believe DP Engineering’s maximum exposure to any losses incurred by DP-NXA was not material. As of December 31, 2023, we do not have existing guarantee with or to DP-NXA, or any third-party work contracted with it.
For the year ended December 31, 2023, the carrying value of the investment in DP-NXA was zero. We do not have any investment income or loss from DP-NXA for the year ended December 31, 2023.
v3.24.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
21.  Commitments and Contingencies

Per ASC 450 Accounting for Contingencies, the Company reviews potential items and areas where a loss contingency could arise. In the opinion of management, other than items disclosed below, we are not a party to any legal proceeding, the outcome of which, in management’s opinion, individually or in the aggregate, which would be reasonably possible to have a material effect on our consolidated results of operations, financial position or cash flows. We expense legal defense costs as incurred.

Three former employees of Absolute Consulting, Inc. and Hyperspring, LLC, filed putative class action lawsuits against  the Company, alleging that the Company failed to pay overtime wages as required by the Fair Labor Standards Act and state law. The three cases Natalie Adams v. Absolute Consulting, Inc., Case No. 6:20-cv-01099, Matthew Waldecker v. Hyperspring, LLC, Case No. 2:20-cv-1948, Don Pharr v. Absolute Consulting, Inc., Case No. 23-cv-01558-JRR were filed on December 2, 2020, December 15, 2020, and June 8, 2023 respectively.

On August 22, 2023, Plaintiffs in Adams, Waldecker and Pharr and GSE Systems, Inc., Hyperspring and Absolute participated in private mediation. The mediation was successful and an agreement in principle was reached before the conclusion of the mediation to resolve and dismiss all three pending matters in exchange for a settlement payment.

The parties’ settlement agreement was executed on October 30, 2023 and will result in the dismissal of all three cases. In addition to customary terms, GSE Systems, Hyperspring and Absolute will be obligated to make a series of payments in 2024, eventually totaling $750,000 inclusive of attorneys’ fees and costs. This amount is included in accrued legal settlements as of December 31, 2023, and included as a part of selling, general and administrative costs for the year ended 2023.

One former employee of Hyperspring, LLC, had filed charged with the Equal Employment Opportunity Commission, alleging discrimination and retaliation, which Hyperspring, LLC, filed a response denying those claims. On December 19, 2023, a complaint was filed in the United States Eastern District of Tennessee against GSE Systems, Inc and its subsidiaries.

Subsequent to the year ended December 31, 2023, a settlement agreement was executed by the parties on February 29, 2024, dismissing the case with the obligation to pay approximately $260,000 inclusive of attorneys’ fees. As such, this amount is included in accrued legal settlements as of December 31, 2023, and included as a part of selling, general and administrative costs for the year ended 2023.
v3.24.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2023
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Summary of Significant Accounting Policies [Abstract]  
Principles of consolidation
Principles of consolidation

GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems, Inc. and its subsidiaries, collectively. All intercompany balances and transactions have been eliminated in consolidation.
Reverse Stock Split
Reverse Stock Split

On October 30, 2023, the Company effected a ten-for-one reverse stock split of the Company’s common stock whereby each ten shares of the Company’s authorized and outstanding common stock was replaced with one share of common stock. The par value of the common stock was not adjusted. All common share and per share amounts for all periods presented in the consolidated financial statements and the notes to the consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split.
Accounting estimates
Accounting estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. On an ongoing basis, we evaluate the estimates used, including, but not limited to those related to revenue recognition on long-term contracts, allowance for credit loss, product warranties, valuation of goodwill and intangible assets acquired, impairment of long-lived assets to be disposed of, valuation of stock-based compensation awards and the recoverability of deferred tax assets. Actual results could differ from these estimates.
Business combinations
Business combinations
Business combinations are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) ASC 805, Business Combinations, using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at fair value on the acquisition date, which is the date on which control is transferred to us. Any excess purchase price is recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred.
Revenues and the results of operations of the acquired business are included in the accompanying consolidated statements of operations commencing on the date of acquisition.
Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Under ASC 805, contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.
Revenue recognition
Revenue recognition

We derive our revenue through three broad revenue streams: 1) System Design and Build (“SDB”), 2) software, and 3) training and consulting services. We recognize revenue from SDB and software contracts mainly through the Engineering segment and the training and consulting service contracts through both the Engineering segment and Workforce Solutions segment.

The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and PCS on the software. We generally have two main performance obligations for an SDB contract: (1) the training simulator build and (2) the PCS period. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue over time as control transfers to a customer. Estimated contract costs are reviewed and revised periodically during the contract period, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses become known.

Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to our revenue recognition as a significant change in the estimates can cause our revenue and related margins to change significantly from previous estimates.

Management judgments and estimates involved in the initial creation and subsequent updates to our estimates-at-completion and related profit recognized are critical for our revenue recognition associated with SDB contracts. Inputs and assumptions requiring significant management judgment included anticipated direct labor, subcontract labor, and other direct costs required to deliver on unfinished performance obligations.

The SDB contracts generally provide a one-year base warranty on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance that the completed project complies with agreed-upon specifications. Warranties extended beyond our typical one-year period will be evaluated on a case-by-case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation.

Revenue from the sale of perpetual standalone and term software licenses, which do not require significant modification or customization, is recognized upon its delivery to the customer.  Revenue from the sale of cloud-based, subscription-based software licenses is recognized ratably over the term of such licenses following delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software.

A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services, and PCS. The total transaction price of a software license sale contract is typically fixed and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue are recognized when the installation and training are completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation.

The contracts within the training and consulting services revenue stream are either T&M based or fixed-price based. Under a typical T&M contract, we are compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed by type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with ASC 606-10-55-18, Revenue from contracts with customers, we elected to apply the “right to invoice” practical expedient, under which we recognize revenue in the amount to which we have the right to invoice. The invoice amount represents the number of hours of approved time worked by each temporary worker multiplied by the bill rate for the type of work, as well as approved expenses incurred. Under a typical fixed-price contract, we recognize the revenue on a Percentage of Completion basis as it relates to construction contracts with revenue recognized based on project delivery over time.

For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers.

We recognize training and consulting services revenue as services are performed and bill our customers for services that we have provided on a regular basis (i.e. weekly, biweekly or monthly).

Contract asset relates to performance under the contract for obligations that are satisfied but not yet billed, which we classify as contract receivables, net.

Contract liability, which we classify as billing-in-excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied.
Cash and cash equivalents
Cash and cash equivalents

Cash and cash equivalents represent cash and highly liquid investments including money market accounts with maturities of three months or less at the date of purchase. Cash and cash equivalents may at times exceed the FDIC insured limits.
Restricted cash
Restricted cash

Restricted cash represents cash that is legally or contractually restricted as to its withdrawal or usage. The Company is required to pledge or otherwise restrict a portion of our cash related to letters of credit and other vendor agreements. Restricted cash is presented as a current or long term asset in our consolidated balance sheets based on the amounts becoming unrestricted in the twelve month period following the reporting date.
Contract receivables, net and contract liabilities
Contract receivables, net and contract liabilities

Contract receivables, net include recoverable costs for both billed and unbilled receivables. Unbilled receivables include amounts earned in performance of services that have not been invoiced. Contract liabilities include billings in excess of revenue earned on contracts in advance of work performed. Generally, such amounts will be earned and recognized over the next twelve months.

Billed receivables are recorded at invoiced amounts. The allowance for credit loss are recorded in accordance with ASU 2016-13, “Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” This requires an entity identify and record the contract receivable’s lifetime expected credit loss as an allowance, which the FASB believes will result in more timely recognition of such losses. Under the CECL impairment model, the Company developed and documented its allowance for credit losses on its contract receivables based on three portfolio segments by customer geographic location:  North America, China, Rest of World (ROW). The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables.
Impairment of long-lived assets
Impairment of long-lived assets

Long-lived assets, such as equipment, purchased software, capitalized software development costs, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated.
Development expenditures
Development expenditures

Development expenditures incurred to meet customer specifications under contracts are charged to cost of revenue. Company sponsored development expenditures are either charged to operations as incurred and are included in research and development expenses or are capitalized as software development costs. The amounts incurred for Company sponsored development activities relating to the development of new products and services or the improvement of existing products and services, were approximately $1.1 million and $1.0 million for the year ended December 31, 2023 and 2022, respectively. Of these amounts, the Company capitalized approximately $0.5 million and $0.4 million for the year ended December 31, 2023 and 2022, respectively.
Equipment, software and leasehold improvements, net
Equipment, software and leasehold improvements, net

Equipment and purchased software are recorded at cost and depreciated using the straight-line method with estimated useful lives ranging from three years to ten years. Leasehold improvements are amortized over the term of the lease or the estimated useful life, whichever is shorter, using the straight-line method. Upon sale or retirement, the cost and related depreciation are eliminated from the respective accounts and any resulting gain or loss is included in operations. Maintenance and repairs are charged to expense as incurred.
Software development costs
Software development costs

Certain computer software development costs, including direct labor costs, are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically three years. On an annual basis, or more frequently as conditions indicate, we assess the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software cost we will write-down the carrying amount of such asset to its estimated fair value based on the future discounted cash flows. The excess of any unamortized computer software costs over the related fair value is written down and charged to operations. Included in capitalized software development costs are certain expenses associated with the development software as a service. Significant changes in the sales projections could result in an impairment with respect to the capitalized software that is reported on our consolidated balance sheets.
Goodwill and intangible assets
Goodwill and intangible assets

Our intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, trade names, non-compete agreements and alliance agreements.

Our intangible assets impairment analysis includes the use of undiscounted and discounted cash flow models that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows.

Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible asset, except for contract backlog and contractual customer relations, which are recognized in proportion to the related project revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. We do not have any intangible assets with indefinite useful lives.

Goodwill represents the excess of costs over the fair value of assets of an acquired business. We review goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. We have determined that we have two reporting units, which are the same as our two operating segments: (i) Engineering and (ii) Workforce Solutions.

We completed our annual quantitative step 1 analysis as of December 31, 2023 and 2022 and concluded that the fair value of the Workforce Solutions business segment did not exceed it’s carrying value. A discounted cashflow analysis was performed and we concluded the Goodwill on Workforce Solutions segment of $0.5 million was fully impaired at December 31, 2023. Per the annual valuation performed, no impairment was determined to exist for the Engineering segment as of December 31, 2023.

Our goodwill impairment analysis includes the use of a discounted cash flow model that requires management to make assumptions regarding estimates of revenue growth rates and operating margins used to calculate projected future cash flows, and risk-adjusted discount rates. We make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.
Foreign currency translation
Foreign currency translation

The United States Dollar (USD) is our functional currency and that of our subsidiaries operating in the United States. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated into USD using the period-end spot foreign exchange rates. Income and expenses are translated at the average exchange rate for the year. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments are cumulative translation adjustments, which are reported as a component of accumulated other comprehensive loss included in the consolidated statements of changes in shareholders’ equity.
For any business transaction that is in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled) to the foreign currency realized gain (loss) account in the consolidated statements of operations.
Income taxes
Income taxes

Income taxes are provided under the asset and liability method. Under this method, deferred income taxes are determined based on the differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. A provision is made for our current liability for federal, state and foreign income taxes and the change in our deferred income tax assets and liabilities.

We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is not more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense.
Stock-based compensation
Stock-based compensation

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Compensation expense related to restricted stock unit (RSU) awards is recognized on a pro rata straight-line basis based of the fair value of share awards that are scheduled to vest during the requisite service period. Compensation expense related to performance-vesting restricted stock unit (PRSU) awards is recognized on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. The Company can also elect to issue cash-settled RSUs or PRSUs which are subject to fair value remeasurement at each reporting date.
Significant customers and concentration of credit risk
Significant customers and concentration of credit risk

We have a concentration of revenue from one individual customer, which accounted for 22.7% and 13.6% of our consolidated revenue for the years ended December 31, 2023 and December 31, 2022, respectively. No other individual customer accounted for more than 10% of our consolidated revenue in 2023 or 2022.
As of December 31, 2023, we had one customer who accounted for 12.1% of the Company’s consolidated contract receivables. No customer accounted for over 10% of the Company’s consolidated contract receivables as of December 31, 2022.
Fair values of financial instruments
Fair values of financial instruments

We established mark-to-market liabilities related to certain common stock purchase warrants and certain embedded features included in our convertible debt. The fair values of these are estimated upon issuance and at each reporting period thereafter. For all accounting policies described in this document, management cautions that future events rarely develop exactly as forecasted and even our best estimates may require adjustment as facts and circumstances change.

The carrying amounts of current assets and current liabilities reported in the consolidated balance sheets approximate fair value due to their short term duration.
Reclassifications and immaterial corrections of previously issued Financial Statements
Reclassifications and immaterial corrections of previously issued Financial Statements

Certain prior year amounts have been reclassified to conform with the current year presentation. “Loss on debt settled in shares” and was reclassed out of “Other liabilities” and presented in its own line item within operating cash flows section on our consolidated statement of cash flows.
Liquidity and Going Concern
Liquidity and Going Concern

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and satisfy its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, are only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management determined that the implemented plans to mitigate relevant conditions may not alleviate management’s concerns that raise substantial doubt about the Company’s ability to continue as a going concern within the twelve months ended March 31, 2025.

The Company has incurred operating losses and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. During the year ended December 31, 2023, the Company generated a loss from operations of $6.8 million, which includes non-cash impairment charges of long-lived assets and goodwill from our Workforce Solutions segment totaling $1.4 million. As of December 31, 2023, the Company had domestic unrestricted cash and cash equivalents of $1.0 million which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. Although the Company has shown significant improvement in the second half of the year, it has not achieved its forecast for several periods and there is no assurance that it will achieve its forecast over the twelve months ending March 31, 2025. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited consolidated financial statements are issued.

In making this assessment we performed a comprehensive analysis of our current circumstances and to alleviate these conditions, management is monitoring the Company’s performance and evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, restructuring of operations to grow revenues and decrease expenses, obtaining equity financing, issuing debt, or entering into other financing arrangements. The analysis used to determine the Company’s ability to continue as a going concern does not include cash sources outside the Company’s direct control that management expects to be available within the next twelve months ending March 31, 2025.
v3.24.1
Recent Accounting Pronouncements (Policies)
 12 Months Ended
Dec. 31, 2023
Recent Accounting Pronouncements [Abstract]  
Accounting pronouncements recently adopted
Accounting pronouncements recently adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be recognized before it is realized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard will apply to accounts receivable, loans, and other financial instruments with credit risk. This standard was effective for the Company beginning January 1, 2023. The Company adopted the new guidance starting January 1, 2023 on a modified retrospective basis. The impact of this ASU is reflected in the consolidated financial statements and was not material.

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures.
Accounting pronouncements not yet adopted
Accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that adoption of this accounting standard will have on its financial disclosures.
v3.24.1
Earnings per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings per Share [Abstract]  
Earnings (Loss) Per Share, Basic and Diluted
The number of common shares and common share equivalents used in the determination of basic and diluted (loss) earnings per share were as follows:

(in thousands, except for per share data)
  
Years ended December 31,
  
   
2023
    
2022
  
Numerator:
            
Net income (loss) attributed to common shareholders
  
$
(8,724
)
  
$
(15,343
)
                 
Denominator:
                
Weighted-average shares outstanding for basic earnings per share
    
2,486,550
      
2,136,290
  
                 
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share
    
2,486,550
      
2,136,290
  
                 
Total shares considered for dilution
    
1,068,722
      
460,113
  
v3.24.1
Revenue (Tables)
 12 Months Ended
Dec. 31, 2023
Revenue [Abstract]  
Disaggregation of Revenue
The following table represents a disaggregation of revenue by type of goods or services for the years ended December 31, 2023 and 2022, along with the reportable segment for each category:

(in thousands)


  
Twelve Months Ended December 31,
  
   
2023
    
2022
  
Engineering segment
            
System Design and Build - Over time
  
$
6,307
    
$
6,595
  
                 
Software
    
4,652
      
4,684
  
Point in time
    
568
      
921
  
Over time
    
4,084
      
3,763
  
                 
Training and Consulting Services
    
20,831
      
18,640
  
Point in time
    
448
      
245
  
Over time
    
20,383
      
18,395
  
                 
Workforce Solutions segment
                
Training and Consulting Services
    
13,251
      
17,815
  
Point in time
    
343
      
62
  
Over time
    
12,908
      
17,753
  
                 
Total revenue
  
$
45,041
    
$
47,734
  
Balance of Contract Liabilities and Revenue Recognized in Reporting Period
The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers:

(in thousands)

  
December 31, 2023
    
December 31, 2022
  
Billings in excess of revenue earned (BIE)
  
$
5,119
    
$
4,163
  
Revenue recognized in the period from amounts included in BIE at the beginning of the period
  
$
3,751
     $
3,785
  
v3.24.1
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets [Abstract]  
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets:

(in thousands)
  
As of December 31, 2023
  
   
Gross
Carrying
Amount
    
Accumulated
Amortization
    
Impact of
Impairment
    
Net
  
Amortized intangible assets:
                        
Customer relationships
  
$
8,164
    
$
(7,395
)
   $ -  
$
769
  
Trade names
    
1,689
      
(1,283
)
     -      
406
  
Developed technology
    
471
      
(471
)
     -      
-
  
Non-contractual customer relationships
    
433
      
(433
)
     -      
-
  
Noncompete agreement
    
527
      
(523
)
     -      
4
  
Alliance agreement
    
527
      
(527
)
     -      
-
  
Others
    
167
      
(167
)
     -      
-
  
Total
  
$
11,978
    
$
(10,799
)
   $
 -  
$
1,179
  

(in thousands)
  
As of December 31, 2022
  
   
Gross
Carrying
Amount
    
Accumulated
Amortization
    
Impact of
Impairment
    
Net
  
Amortized intangible assets:
                        
Customer relationships
  
$
8,628
    
$
(7,050
)
   $
(464 )  
$
1,114
  
Trade names
    
1,689
      
(1,196
)
     -      
493
  
Developed technology
    
471
      
(471
)
     -      
-
  
Non-contractual customer relationships
    
433
      
(433
)
     -      
-
  
Noncompete agreement
    
527
      
(486
)
     -      
41
  
Alliance agreement
    
527
      
(488
)
     -      
39
  
Others
    
167
      
(167
)
     -      
-
  
Total
  
$
12,442
    
$
(10,291
)
   $
(464 )  
$
1,687
  
Finite-Lived Intangible Assets, Future Amortization Expense
The following table details the estimated amortization expense of the definite-lived intangible assets for the next five years:

(in thousands)
      
Years ended December 31:
      
2024
  
$
332
  
2025
    
255
  
2026
    
204
  
2027
    
169
  
2028
     108  
Thereafter
    
111
  
   
$
1,179
  
Goodwill

Goodwill

(in thousands)

 
  
Goodwill
    
Impairment
    
Net
  
Engineering
  
$
8,278
    
$
(3,370
)
  
$
4,908
  
Workforce Solutions
    
8,431
      
(8,431
)
    
-
  
Net book value at December 31, 2023
  
$
16,709
    
$
(11,801
)
  
$
4,908
  

 
  
Goodwill
    
Impairment
    
Net
  
Engineering
  
$
8,278
    
$
(3,370
)
  
$
4,908
  
Workforce Solutions
    
8,431
      
(7,040
)
    
1,391
  
Net book value at December 31, 2022
  
$
16,709
    
$
(10,410
)
  
$
6,299
  
v3.24.1
Contract Receivables (Tables)
 12 Months Ended
Dec. 31, 2023
Contract Receivables [Abstract]  
Contract Receivables
Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Billed receivables
  
$
5,720
    
$
6,074
  
Unbilled receivables
    
4,729
      
5,146
  
Allowance for credit loss
    
(283
)
    
(1,156
)
Total contract receivables, net
  
$
10,166
    
$
10,064
  
Allowance For Doubtful Account Rollforward
The following table sets forth the activity in allowance for credit losses:

(in thousands)
  
As of and for the
  
   
Years ended December 31,
  
   
2023
    
2022
  
             
Beginning balance
  
$
1,156
    
$
1,010
  
Adoption of ASC326 Current Expected Credit Losses (CECL)
     57       -  
Adjusted beginning balance
     1,213       1,010  
Current period provision for expected credit loss
    
178
      
221
  
Write-offs charged against the allowance, net of recoveries
    
(1,070
)
    
(7
)
Currency adjustment     (38 )     (68 )
Ending balance
  
$
283
    
$
1,156
  
v3.24.1
Prepaid Expenses and Other Current Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Prepaid Expenses and Other Current Assets [Abstract]  
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Income tax receivable
  
$
38
    
$
78
  
Prepaid expenses
    
796
      
947
  
ERC receivable
     -       1,028  
Other current assets
    
45
      
112
  
Total
  
$
879
    
$
2,165
  
v3.24.1
Equipment, Software and Leasehold Improvements (Tables)
 12 Months Ended
Dec. 31, 2023
Equipment, Software and Leasehold Improvements [Abstract]  
Equipment, Software and Leasehold Improvements
Equipment, software and leasehold improvements, net consist of the following:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
Computer and equipment
  
$
2,381
    
$
2,363
  
Software
    
2,292
      
2,291
  
Leasehold improvements
    
805
      
659
  
Furniture and fixtures
    
840
      
838
  
     
6,318
      
6,151
  
Accumulated depreciation
    
(5,564
)
    
(5,379
)
Equipment, software and leasehold improvements, net
  
$
754
    
$
772
  
v3.24.1
Product Warranty (Tables)
 12 Months Ended
Dec. 31, 2023
Product Warranty [Abstract]  
Activities in the Accrued Warranty Accounts
The activity in the accrued warranty accounts is as follows:

(in thousands)
  
As of and for the
  
   
years ended December 31,
  
   
2023
    
2022
  
             
Beginning balance
  
$
502
    
$
748
  
                 
Current year provision
    
(133
)
    
(44
)
                 
Current year claims
    
(83
)
    
(195
)
                 
Currency adjustment
    
(2
)
    
(7
)
                 
Ending balance
  
$
284
    
$
502
  
Activity in Warranty Accounts
The current and non-current warranty balance is as follows:


  
December 31,
  
   
2023
    
2022
  
Current
  
$
176
    
$
370
  
Non-current
    
108
      
132
  
Total Warranty
  
$
284
    
$
502
  
v3.24.1
Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value of Financial Instruments [Abstract]  
Level 3 Fair Value Measurement Inputs
The Company used the Monte Carlo simulation model to determine the fair value of the Warrants and Cash-Settled PRSUs, which required the input of subjective assumptions. The fair value of the Warrants and Convertible Note redemption features as of December 31, 2023 was estimated with the following assumptions.

 
Amended 2022
Convertible Note
  
The “2022
Warrants”
  
2023
Convertible Note
  
The “2023
Warrants”
  
                 
Exercise Price
  
$
19.40
    
$
19.40
    
$
5.00
    
$
5.00
  
Common Stock Price
  
$
2.01
    
$
2.01
    
$
2.01
    
$
2.01
  
Risk Free Rate
    
5.13
%
    
3.93
%
    
4.41
%
    
3.81
%
Volatility
    
90.0
%
    
90.0
%
    
90.0
%
    
90
%
Term (in years)
0.4 yrs.
  
3.2 yrs.
  
1.5 yrs.
  
4.5 yrs.
  
Assets Measured at Fair Value
The following table presents assets measured at fair value at December 31, 2023:

   
Quoted Prices in
Active Markets
for Identical
Assets
    
Significant
Other Observable
Inputs
    
Significant
Unobservable
Inputs
        
(in thousands)
  
(Level 1)
    
(Level 2)
    
(Level 3)
    
Total
  
                         
Derivative liability
  
$
-
    
$
-
    
$
588
    
$
588
  
Warrant liability
    
-
      
-
      
520
      
520
  
Cash settled performance-vesting restricted stock units
    
-
      
-
      
24
      
24
  
Balance at December 31, 2023
  
$
-
    
$
-
    
$
1,132
    
$
1,132
  

The following table presents assets measured at fair value at December 31, 2022:
   
Quoted Prices in
Active Markets
for Identical
Assets
    
Significant
Other Observable
Inputs
    
Significant
Unobservable
Inputs
        
(in thousands)
  
(Level 1)
    
(Level 2)
    
(Level 3)
    
Level 3 Total
  
                         
  Derivative liability
  
$
-
    
$
-
    
$
285
    
$
285
  
  Warrant liability
    
-
      
-
      
267
      
267
  
Cash settled performance-vesting restricted stock units
    
-
      
-
      
51
      
51
  
Balance at December 31, 2022  
$
-
    
$
-
    
$
603
    
$
603
  
Changes in Fair Value of Level 3 Liabilities

The following table summarizes changes in the fair value of our Level 3 liabilities during the twelve months ended December 31, 2023.


(in thousands)
  
Embedded
Redemption
Features
    
Warrant
    
Cash Settled PRSUs
    
Level 3 Total
  
Balance at December 31, 2022
  
$
285
    
$
267
    
$
51
    
$
603
  
FV of derivatives with new convertible note issuance
     286       1,120       -       1,406  
Change in FV included in gain on derivative instruments, net
    
17
      
(867
)
    
-
      
(850
)
Stock compensation less payments made
    
-
      
-
      
(27
)
    
(27
)
Balance at December 31, 2023
  
$
588
    
$
520
    
$
24
    
$
1,132
  
v3.24.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2023
Debt [Abstract]  
Convertible Note
On June 23, 2023, the Company entered into a second Securities Purchase Agreement (the “2023 Purchase Agreement”) with Lind Global, pursuant to which we issued to Lind Global that certain Senior Convertible Promissory Note, dated February 23, 2022 (the “2023 Convertible Note” and, together with the 2022 Convertible Note, the “Convertible Notes”)(see Note 1) and a common stock purchase warrant to acquire 426,427 shares of our Common Stock (the “2023 Warrant”). The 2023 Convertible Note does not bear interest but was issued at a $0.3 million discount (“OID”). We received proceeds of approximately $1.4 million net of the OID and expenses.

(in thousands)
  
2022
Convertible
Note
    
2023
Convertible
Note
    
Total
Convertible
Notes
  
   
Amount
    
Amount
    
Amount
  
                   
2022 Convertible Note issued
  
$
5,750
    
$
1,800
    
$
7,550
  
Debt discount
    
(750
)
    
(300
)
    
(1,050
)
Issuance cost:
                        
Commitment fee
    
(175
)
    
(52
)
    
(227
)
Balance of investor’s counsel fees
    
(43
)
    
(34
)
    
(77
)
Net proceeds of Convertible Note
  
$
4,782
    
$
1,414
    
$
6,196
  
                         
Additional OID costs not in original funds flow
    
(121
)
    
(15
)
    
(136
)
Fair value of Warrant Liabilities on issuance
    
(724
)
    
(1,119
)
    
(1,843
)
Fair value of Conversion Features on issuance
    
(306
)
    
(286
)
    
(592
)
Allocated OID costs to Convertible Note
    
25
      
30
      
55
  
Allocation of Discounts on Troubled Debt Restructuring
    
(660
)
    
660
      
-
  
Interest expense accrued on Convertible Note as of December 31, 2023
    
2,946
      
283
      
3,229
  
Principal and interest payments as of December 31, 2023
    
(5,462
)
    
-
      
(5,462
)
Balance of 2022 Convertible Note as of December 31, 2023
  
$
480
    
$
967
    
$
1,447
  

At December 31, 2023, the outstanding debt under the Convertible Note agreement was as follows:

   
Principal
    
Debt Discounts
    
Net
  
                   
Current portion of Long-Term Debt
  
$
1,849
    
$
(1,039
)
  
$
810
  
                         
Long-Term Debt less current portion
    
750
      
(113
)
    
637
  
                         
Balance of Convertible Notes as of December 31, 2023
  
$
2,599
    
$
(1,152
)
  
$
1,447
  

At December 31, 2022, the outstanding debt under the Convertible Note agreement was as follows:

   
Principal
    
Debt Discounts
    
Net
  
                   
Current portion of Long-Term Debt
  
$
3,833
    
$
(795
)
  
$
3,038
  
                         
Long-Term Debt less current portion
    
320
      
(10
)
    
310
  
                         
Balance of Convertible Notes as of December 31, 2022
  
$
4,153
    
$
(805
)
  
$
3,348
  
Future Principal Payments of Convertible Note
The following table details the future principal payments of the Convertible Note, gross of debt discounts:

(in thousands)
      
       
Years ended December 31:
      
2024
  
$
1,849
  
2025
    
750
  
Thereafter
    
-
  
   
$
2,599
  
v3.24.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstract]  
Income Before Income Taxes by Domestic and Foreign Sources
The consolidated income before income taxes, by domestic and foreign sources, is as follows:

(in thousands)
  
Years ended December 31,
  
   
2023
    
2022
  
Domestic
  
$
(8,584
)
  
$
(15,128
)
Foreign
    
(118
)
    
(164
)
Total
  
$
(8,702
)
  
$
(15,292
)
Benefit from Income Taxes
The provision (benefit) for income taxes is as follows:

(in thousands)
  
Years ended December 31,
 
   
2023
    
2022
  
Current:
            
Federal
  
$
-
    
$
-
  
State
    
33
      
42
  
Foreign
    
(23
)
    
95
  
Subtotal
    
10
      
137
  
                 
Deferred:
                
Federal
    
-
      
(47
)
State
    
12
      
(39
)
Foreign
    
-
      
-
  
Subtotal
    
12
      
(86
)
Total
  
$
22
    
$
51
  
Effective Income Tax Rate Reconciliation
The effective income tax rate for the years ended December 31, 2023 and 2022 differed from the statutory federal income tax rate as presented below:


  
Effective Tax Rate percentage (%)
  
   
Years ended December 31,
 
   
2023
    
2022
  
Statutory federal income tax rate
    
21.0
%
    
21.0
%
State income taxes, net of federal tax benefit
    
2.4
%
    
2.4
%
Effect of foreign operations
    
(0.3
)%
    
(0.3
)%
Change in valuation allowance
    
(16.5
)%
    
(20.7
)%
Stock-based compensation
    
(2.1
)%
    
(0.9
)%
Convertible Note transactions     (5.0 )%     (1.2 )%
Uncertain tax positions
    
0.3
%
    
(0.7
)%
Other
    
(0.1
)%
    
0.1
%
Effective tax rate
    
(0.3
)%
    
(0.3
)%
Deferred Tax Assets and Liabilities
Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. A summary of the tax effect of the significant components of the deferred income tax assets and liabilities is as follows:

(in thousands)
  
As of December 31,
  
   
2023
    
2022
  
Deferred tax assets:
            
Net operating loss carryforwards
  
$
9,372
    
$
7,853
  
Accruals
    
330
      
62
  
Reserves
    
139
      
409
  
Stock-based compensation expense
    
228
      
283
  
Intangible assets
    
2,228
      
2,356
  
Goodwill
    
1,687
      
1,551
  
Operating lease liability
    
121
      
132
  
Fixed assets
     27       65  
   Sec. 174 R&D costs     228       129  
Other
    
196
      
231
  
Total deferred tax asset
    
14,556
      
13,071
  
Valuation allowance
    
(14,008
)
    
(12,572
)
Total deferred tax asset less valuation allowance
    
548
      
499
  
                 
Deferred tax liabilities:
                
Software development costs
    
(17
)
    
(59
)
Indefinite-lived intangibles
    
(440
)
    
(346
)
Operating lease - right of use asset
    
(109
)
    
(100
)
Other
    
-
      
-
Total deferred tax liability
    
(566
)
    
(505
)
                 
Net deferred tax liability
  
$
(18
)
  
$
(6
)
Uncertain Tax Liabilities
The following table outlines our uncertain tax liabilities, including accrued interest and penalties for each jurisdiction:


  
China
    
South Korea
    
UK
        
(in thousands)
  
Tax
    
Interest and Penalties
    
Tax
    
Interest and Penalties
    
Tax
    
Interest and Penalties
    
Total
  
                                           
Balance, January 1, 2022
  
$
220
    
$
428
    
$
644
    
$
335
    
$
45
    
$
30
    
$
1,702
  
Increases
    
-
      
4
      
-
      
51
      
-
      
61
      
116
  
Decreases
    
(17
)
    
-
      
(22
)
    
-
      
(5
)
    
-
      
(44
)
Balance, December 31, 2022
  
$
203
    
$
432
    
$
622
    
$
386
    
$
40
    
$
91
    
$
1,774
  
Increases
    
-
      
25
      
-
      
57
      
-
      
-
      
82
  
Decreases
    
(5
)
    
-
      
(19
)
    
-
      
(40
)
    
(91
)
    
(155
)
Balance, December 31, 2023
  
$
198
    
$
457
    
$
603
    
$
443
    
$
-
    
$
-
    
$
1,701
  
v3.24.1
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Stock-Based Compensation [Abstract]  
Restricted Stock Units
During the years ended December 31, 2023 and 2022, we issued RSUs and PRSUs to employees which vest upon the achievement of specific market-based or time-based measures. The fair value of RSU’s is calculated using the stock price on the grant date and expensed ratably over the service period. The fair value for PRSU’s is determined using a Monte Carlo simulation model and expensed ratably over the derived service period, which typically ranges between one year and five years.

The following table summarizes the information about vested and unvested restricted stock units for the years ended December 31, 2023 and 2022.


  
Number of Shares
    
Weighted Average
Fair Value
  
             
Nonvested RSUs at January 1, 2022
    
159,567
    
$
17.70
  
RSUs granted
    
179,025
      
14.89
  
RSUs forfeited
    
(47,297
)
    
21.34
  
RSUs vested
    
(78,870
)
    
16.82
  
                 
Nonvested RSUs at December 31, 2022
    
212,425
    
$
13.99
  
                 
Nonvested RSUs at January 1, 2023
    
212,425
    
$
13.99
  
RSUs granted
    
199,810
      
2.17
  
RSUs forfeited
    
(60,612
)
    
11.01
  
RSUs vested
    
(176,786
)
    
7.87
  
                 
Nonvested RSUs at December 31, 2023
    
174,837
    
$
7.29
  
v3.24.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Classification of Operating ROU Assets and Lease Liabilities on the Balance Sheet
Lease contracts are evaluated at inception to determine whether they contain a lease and whether we obtain the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets:

(in thousands)

Operating Leases
  
Classification
  
December 31, 2023
    
December 31, 2022
  
Leased Assets
  
 
            
Operating lease - right of use assets
  
Long term assets
  
$
413
     $
506
  
 
  
 
                
Lease Liabilities
  
 
                
Operating lease liabilities - Current
  
Other current liabilities
    
234
      
418
  
Operating lease liabilities
  
Long term liabilities
    357       160  

 

  $
 591
     $ 578
  
Lease Income and Expenses
The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2023, (in thousands):

Lease Cost
  
Classification
  
Twelve months
ended, December
31, 2023
    
Twelve months
ended, December
31, 2022
  
Operating lease cost (1)
  
Selling, general and administrative expenses
  
$
418
       700  
Short-term leases costs (2)
  
Selling, general and administrative expenses
    
29
       60  
Sublease income (3)
  
Selling, general and administrative expenses
    
-
       (62 )
Net lease cost
  
 
  
$
447
       698  

(1) Includes variable lease costs which are immaterial.
(2) Include leases maturing less than twelve months from the report date.
(3) Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.
Future Minimum Lease Payments
We are obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under our noncancelable operating leases as of December 31, 2023 are as follows:

(in thousands)
  
Gross Future
  
   
Minimum Lease
  
   
Payments
  
       
2024
  
$
263
  
2025
    
150
  
2026
    
96
  
2027
    
90
  
2028
     61  
Thereafter
    
-
  
Total
  
$
660
  
Less: Interest
    
69
  
Present value of lease payments
  
$
591
  
Operating Lease Weighted Average Remaining Lease Term And Discount Rate
The below table summarizes the weighted-average remaining lease term, presented in years, and the weighted-average discount rate for our operating leases included in the consolidated balance sheet as of December 31, 2023:

Lease Term and Discount Rate
  
Twelve months ended
December 31, 2023
  
Weighted-average remaining lease term (years)
      
         Operating leases
    
3.38
  
Weighted-average discount rate
        
         Operating leases
    
6.10
%
Classification of Lease Payments in the Statement of Cash Flows
There was right-of-use assets obtained in exchange for operating lease liabilities of $460 thousand during the year ended December 31, 2023. The table below sets out the classification of lease payments in the consolidated statements of cash flows:

(in thousands)
   
Twelve months ended December 31,
  
Cash paid for amounts included in measurement of liabilities
  
2023
    
2022
  
             
Cash paid for amounts included in measurement of liabilities
  
$
453
    
$
1,233
  
v3.24.1
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2023
Segment Information [Abstract]  
Reconciliation of Operating Profit (Loss) from Segments to Consolidated
The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant.

(in thousands)
  
Years ended December 31,
  
   
2023
    
2022
  
Revenue:
            
Engineering
  
$
31,790
    
$
29,919
  
Workforce Solutions
    
13,251
      
17,815
  
Total revenue
    
45,041
      
47,734
  
                 
Gross profit
                
Engineering     10,073       9,557  
Workforce Solutions
     1,857       2,353  
Total gross profit
     11,930       11,910  
                 
Operating loss
                
Engineering
    
(3,789
)
    
(6,388
)
Workforce Solutions
    
(3,029
)
    
(8,018
)
Operating loss
    
(6,818
)
    
(14,406
)
                 
Interest expense
    
(1,932
)
    
(1,272
)
Change in fair value of derivative instruments, net
    
850
      
477
  
Other (loss) income, net
    
(802
)
    
(91
)
Loss before taxes
  
$
(8,702
)
  
$
(15,292
)
Reconciliation of Assets from Segment to Consolidated
Additional information relating to segments is as follows:

(in thousands)
  
December 31,
  
   
2023
    
2022
  
             
Engineering
  
$
20,980
    
$
21,705
  
Workforce Solutions
    
1,825
      
4,791
  
Total assets
  
$
22,805
    
$
26,496
  
Segment Reporting Information, by Segment
For the years ended December 31, 2023 and 2022, 92% and 89%, respectively, of our consolidated revenue was from customers in the nuclear power industry. We design, develop and deliver business and technology solutions to the energy industry worldwide. Revenue, operating (loss) income and total assets for our United States, European, and Asian subsidiaries as of and for the years ended December 31, 2023 and 2022 are as follows:

(in thousands)
  
Year ended December 31, 2023
  
   
United States
    
Asia
    
Consolidated
  
                   
Revenue
  
$
44,040
    
$
1,001
    
$
45,041
  
Operating loss
  
$
(6,676
)
  
$
(142
)
  
$
(6,818
)
Net assets, at December 31
  
$
21,202
    
$
1,603
    
$
22,805
  

(in thousands)
  
Year ended December 31, 2022
  
   
United States
   
Asia
    
Consolidated
  
                   
Revenue
  
$
46,622
    
$
1,112
    
$
47,734
  
Operating loss
  
$
(14,225
)
  
$
(181
)
  
$
(14,406
)
Net assets, at December 31
  
$
24,631
    
$
1,865
    
$
26,496
  
v3.24.1
Supplemental Disclosure of Cash Flow Information (Tables)
 12 Months Ended
Dec. 31, 2023
Supplemental Disclosure of Cash Flow Information [Abstract]  
Supplemental Disclosure of Cash Flow Information
(in thousands)
  
Year ended December 31,
  
   
2023
    
2022
  
Cash paid for interest and income taxes:
            
Interest
  
$
947
    
$
546
  
Income taxes
  
$
79
    
$
47
  
                 
Non-cash financing activities:
                
Repayment of convertible note in shares
   $ 2,886     $ 824  
Establishment of new right-of-use assets
     320       60  
Establishment of new operating lease liability
     (454 )     (58 )
Discount on issuance of convertible note
  
$
300
    
$
750
  
v3.24.1
Summary of Significant Accounting Policies, Summary (Details)
$ in Thousands
 12 Months Ended
Oct. 30, 2023
Dec. 31, 2023
USD ($)
Obligation
Segment
Stream
Dec. 31, 2022
USD ($)
Reverse Stock Split [Abstract]      
Reverse stock split 10    
Revenue Recognition [Abstract]      
Number of broad revenue streams | Stream   3  
Number of performance obligations | Obligation   2  
Warranty terms for SDB contracts   1 year  
Contract Receivables, Net and Contract Liabilities {Abstract}      
Number of geographic portfolio segments | Segment   3  
Development Expenditures [Abstract]      
Development expenditures   $ 1,100 $ 1,000
Capitalized software development costs   $ 498 $ 380
Software Development Costs [Abstract]      
Software development costs useful life   3 years  
Goodwill and Intangible Assets [Abstract]      
Number of reporting segments | Segment   2  
Number of operating segments | Segment   2  
Workforce Solutions [Member]      
Goodwill and Intangible Assets [Abstract]      
Goodwill impairment loss   $ 500  
Engineering [Member]      
Goodwill and Intangible Assets [Abstract]      
Goodwill impairment loss   $ 0  
Equipment, Software and Leasehold Improvements, net [Member] | Minimum [Member]      
Equipment, Software and Leasehold Improvements [Abstract]      
Estimated useful life   3 years  
Equipment, Software and Leasehold Improvements, net [Member] | Maximum [Member]      
Equipment, Software and Leasehold Improvements [Abstract]      
Estimated useful life   10 years  
v3.24.1
Summary of Significant Accounting Policies, Concentration of Credit Risk (Details) - Customer Concentration Risk [Member] - Customer
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Revenue [Member]    
Revenue by major customers [Abstract]    
Number of major customers 1 1
Revenue [Member] | Customer One [Member]    
Revenue by major customers [Abstract]    
Percentage contributed by major customers 22.70% 13.60%
Contract Receivables [Member]    
Revenue by major customers [Abstract]    
Number of major customers 1 0
Contract Receivables [Member] | Customer One [Member]    
Revenue by major customers [Abstract]    
Percentage contributed by major customers 12.10%  
v3.24.1
Summary of Significant Accounting Policies, Liquidity and Going Concern (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Summary of Significant Accounting Policies [Abstract]    
Operating loss $ (6,818) $ (14,406)
Goodwill and intangible asset impairment charge 1,391 $ 7,505
Unrestricted cash $ 1,000  
v3.24.1
Earnings per Share (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Numerator [Abstract]    
Net income (loss) attributed to common shareholders $ (8,724) $ (15,343)
Denominator [Abstract]    
Weighted-average shares outstanding for basic earnings per share (in shares) 2,486,550 2,136,290
Effect of dilutive securities [Abstract]    
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) 2,486,550 2,136,290
Total shares considered for dilution (in shares) 1,068,722 460,113
v3.24.1
Coronavirus Aid, Relief and Economic Security Act (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Employee Retention Credits [Abstract]      
Tax benefit recognized $ 22 $ 51  
Employee Retention Credits [Member]      
Employee Retention Credits [Abstract]      
Refund of employee retention credit $ 1,000 $ 3,000 $ 5,000
Tax benefit recognized     2,200
Other income     $ 7,200
v3.24.1
Revenue (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Stream
Dec. 31, 2022
USD ($)
Disaggregation of Revenue [Abstract]    
Number of broad revenue streams | Stream 3  
Revenue $ 45,041 $ 47,734
Contract with Customer, Asset and Liability [Abstract]    
Billings in excess of revenue earned (BIE) 5,119 4,163
Revenue recognized in the period from amounts included in Billings-in-Excess of Revenue Earned at the beginning of the period 3,751 3,785
Revenue, Performance Obligation [Abstract]    
Remaining performance obligation 19,100  
Engineering Segment [Member] | System Design and Build [Member] | Over Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 6,307 6,595
Engineering Segment [Member] | Software [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 4,652 4,684
Engineering Segment [Member] | Software [Member] | Point in Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 568 921
Engineering Segment [Member] | Software [Member] | Over Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 4,084 3,763
Engineering Segment [Member] | Training and Consulting Services [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 20,831 18,640
Engineering Segment [Member] | Training and Consulting Services [Member] | Point in Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 448 245
Engineering Segment [Member] | Training and Consulting Services [Member] | Over Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 20,383 18,395
Workforce Solutions [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 13,251 17,815
Workforce Solutions [Member] | Training and Consulting Services [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 13,251 17,815
Workforce Solutions [Member] | Training and Consulting Services [Member] | Point in Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue 343 62
Workforce Solutions [Member] | Training and Consulting Services [Member] | Over Time [Member]    
Disaggregation of Revenue [Abstract]    
Revenue $ 12,908 $ 17,753
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-31    
Revenue, Performance Obligation [Abstract]    
Expected period to recognize revenue as performance obligations are satisfied 12 months  
v3.24.1
Goodwill and Intangible Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Amortized Intangible Assets [Abstract]        
Gross carrying amount $ 11,978 $ 12,442    
Accumulated amortization (10,799) (10,291)    
Impact of Impairment $ 0 (464)    
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] Intangible assets, net      
Net $ 1,179 1,687    
Amortization of intangible assets $ 508 868    
Weighted average remaining life of intangible assets 9 years 6 months      
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
2024 $ 332      
2025 255      
2026 204      
2027 169      
2028 108      
Thereafter 111      
Total 1,179 1,687    
Goodwill, Impaired [Abstract]        
Goodwill 16,709 16,709    
Accumulated Impairment (11,801) (10,410)    
Net 4,908 6,299    
Engineering [Member]        
Goodwill, Impaired [Abstract]        
Goodwill 8,278 8,278    
Accumulated Impairment (3,370) (3,370)    
Net 4,908 4,908    
Workforce Solutions [Member]        
Goodwill, Impaired [Abstract]        
Goodwill 8,431 8,431    
Accumulated Impairment (8,431) (7,040)    
Net 0 1,391    
Goodwill impairment loss 500      
Workforce Solutions [Member] | Training Services and Technical Staffing [Member]        
Goodwill, Impaired [Abstract]        
Accumulated Impairment       $ 7,000
Workforce Solutions [Member] | Training Services [Member]        
Goodwill, Impaired [Abstract]        
Accumulated Impairment     $ 900  
Workforce Solutions [Member] | Technical Staffing [Member]        
Goodwill, Impaired [Abstract]        
Accumulated Impairment     $ 900  
Customer Relationships [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 8,164 8,628    
Accumulated amortization (7,395) (7,050)    
Impact of Impairment 0 (464)    
Net 769 1,114    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 769 1,114    
Trade Names [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 1,689 1,689    
Accumulated amortization (1,283) (1,196)    
Impact of Impairment 0 0    
Net 406 493    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 406 493    
Developed Technology [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 471 471    
Accumulated amortization (471) (471)    
Impact of Impairment 0 0    
Net 0 0    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 0 0    
Non Contractual Customer Relationships [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 433 433    
Accumulated amortization (433) (433)    
Impact of Impairment 0 0    
Net 0 0    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 0 0    
Noncompete Agreement [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 527 527    
Accumulated amortization (523) (486)    
Impact of Impairment 0 0    
Net 4 41    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 4 41    
Alliance Agreement [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 527 527    
Accumulated amortization (527) (488)    
Impact of Impairment 0 0    
Net 0 39    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total 0 39    
Others [Member]        
Amortized Intangible Assets [Abstract]        
Gross carrying amount 167 167    
Accumulated amortization (167) (167)    
Impact of Impairment 0 0    
Net 0 0    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]        
Total $ 0 $ 0    
v3.24.1
Contract Receivables (Details)
$ in Thousands
 12 Months Ended
Jan. 31, 2024
USD ($)
Dec. 31, 2023
USD ($)
Segment
Dec. 31, 2022
USD ($)
Contract Receivables [Abstract]      
Maximum term of contract receivables   12 months  
Components of contract receivables [Abstract]      
Billed receivables   $ 5,720 $ 6,074
Unbilled receivables   4,729 5,146
Allowance for credit loss   (283) (1,156)
Total contract receivables, net   $ 10,166 10,064
Number of geographic portfolio segments | Segment   3  
Credit loss expense   $ 232 221
Allowance for Doubtful Accounts Receivable [Roll Forward]      
Beginning balance   1,156 1,010
Current period provision for expected credit loss   178 221
Write-offs charged against the allowance, net of recoveries   (1,070) (7)
Currency adjustment   (38) (68)
Ending balance   283 1,156
ASC 326 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]      
Components of contract receivables [Abstract]      
Allowance for credit loss     (57)
Allowance for Doubtful Accounts Receivable [Roll Forward]      
Beginning balance   57 0
Ending balance     57
ASC 326 [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member]      
Components of contract receivables [Abstract]      
Allowance for credit loss     (1,213)
Allowance for Doubtful Accounts Receivable [Roll Forward]      
Beginning balance   $ 1,213 1,010
Ending balance     $ 1,213
Subsequent Event [Member]      
Unbilled Contract Receivables [Abstract]      
Subsequent billing $ 4,500    
v3.24.1
Prepaid Expenses and Other Current Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Prepaid Expenses and Other Current Assets [Abstract]    
Income tax receivable $ 38 $ 78
Prepaid expenses 796 947
ERC receivable 0 1,028
Other current assets 45 112
Total $ 879 $ 2,165
v3.24.1
Equipment, Software and Leasehold Improvements (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Equipment, Software and Leasehold Improvements, Net [Abstract]    
Equipment, software and leasehold improvements $ 6,318 $ 6,151
Accumulated depreciation (5,564) (5,379)
Equipment, software and leasehold improvements, net 754 772
Depreciation expense 185 304
Computer and Equipment [Member]    
Equipment, Software and Leasehold Improvements, Net [Abstract]    
Equipment, software and leasehold improvements 2,381 2,363
Software [Member]    
Equipment, Software and Leasehold Improvements, Net [Abstract]    
Equipment, software and leasehold improvements 2,292 2,291
Capitalization of internal-use software cost 0 100
Leasehold Improvements [Member]    
Equipment, Software and Leasehold Improvements, Net [Abstract]    
Equipment, software and leasehold improvements 805 659
Furniture and Fixtures [Member]    
Equipment, Software and Leasehold Improvements, Net [Abstract]    
Equipment, software and leasehold improvements $ 840 $ 838
v3.24.1
Product Warranty (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Activities in product warranty account [Abstract]    
Beginning balance $ 502 $ 748
Current year provision (133) (44)
Current year claims (83) (195)
Currency adjustment (2) (7)
Ending balance 284 502
Standard Product Warranty Accrual, Balance Sheet Classification [Abstract]    
Current 176 370
Non-current 108 132
Total Warranty $ 284 $ 502
Minimum [Member]    
Product warranty provision [Abstract]    
Warranty provision contract period 1 year  
Maximum [Member]    
Product warranty provision [Abstract]    
Warranty provision contract period 5 years  
v3.24.1
Fair Value of Financial Instruments (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
$ / shares
Dec. 31, 2022
USD ($)
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets $ 1,132 $ 603
Changes in Fair Value of Level 3 Liabilities [Abstract]    
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net  
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets $ 0 0
Significant Other Observable Inputs (Level 2) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Significant Unobservable Inputs (Level 3) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 1,132 603
Changes in Fair Value of Level 3 Liabilities [Abstract]    
Balance, Beginning Period 603  
FV of derivatives with new convertible note issuance 1,406  
Change in fair value included in gain on derivative instruments, net (850)  
Stock compensation less payments made (27)  
Balance, Ending Period 1,132  
Embedded Redemption Features [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Changes in Fair Value of Level 3 Liabilities [Abstract]    
Balance, Beginning Period 285  
FV of derivatives with new convertible note issuance 286  
Change in fair value included in gain on derivative instruments, net 17  
Stock compensation less payments made 0  
Balance, Ending Period 588  
Cash Settled Performance-Vesting Restricted Stock Units [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 24 51
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Cash Settled Performance-Vesting Restricted Stock Units [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 24 51
Changes in Fair Value of Level 3 Liabilities [Abstract]    
Balance, Beginning Period 51  
FV of derivatives with new convertible note issuance 0  
Change in fair value included in gain on derivative instruments, net 0  
Stock compensation less payments made (27)  
Balance, Ending Period 24  
Derivative Liability [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 588 285
Derivative Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Derivative Liability [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Derivative Liability [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 588 285
Warrant Liability [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 520 267
Warrant Liability [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Warrant Liability [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 0 0
Warrant Liability [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets and Liabilities Measured at Fair Value [Abstract]    
Assets 520 $ 267
Changes in Fair Value of Level 3 Liabilities [Abstract]    
Balance, Beginning Period 267  
FV of derivatives with new convertible note issuance 1,120  
Change in fair value included in gain on derivative instruments, net (867)  
Stock compensation less payments made 0  
Balance, Ending Period $ 520  
Warrant Liability [Member] | Convertible Promissory Notes 2022 [Member]    
Fair Value Measurements [Abstract]    
Term (in years) 4 months 24 days  
Warrant Liability [Member] | The "2022 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Term (in years) 3 years 2 months 12 days  
Warrant Liability [Member] | Convertible Promissory Notes Payable 2023 [Member]    
Fair Value Measurements [Abstract]    
Term (in years) 1 year 6 months  
Warrant Liability [Member] | The "2023 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Term (in years) 4 years 6 months  
Warrant Liability [Member] | Exercise Price [Member] | Convertible Promissory Notes 2022 [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 19.4  
Warrant Liability [Member] | Exercise Price [Member] | The "2022 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 19.4  
Warrant Liability [Member] | Exercise Price [Member] | Convertible Promissory Notes Payable 2023 [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 5  
Warrant Liability [Member] | Exercise Price [Member] | The "2023 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 5  
Warrant Liability [Member] | Common Stock Price [Member] | Convertible Promissory Notes 2022 [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 2.01  
Warrant Liability [Member] | Common Stock Price [Member] | The "2022 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 2.01  
Warrant Liability [Member] | Common Stock Price [Member] | Convertible Promissory Notes Payable 2023 [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 2.01  
Warrant Liability [Member] | Common Stock Price [Member] | The "2023 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input | $ / shares 2.01  
Warrant Liability [Member] | Risk Free Rate [Member] | Convertible Promissory Notes 2022 [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.0513  
Warrant Liability [Member] | Risk Free Rate [Member] | The "2022 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.0393  
Warrant Liability [Member] | Risk Free Rate [Member] | Convertible Promissory Notes Payable 2023 [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.0441  
Warrant Liability [Member] | Risk Free Rate [Member] | The "2023 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.0381  
Warrant Liability [Member] | Volatility [Member] | Convertible Promissory Notes 2022 [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.90  
Warrant Liability [Member] | Volatility [Member] | The "2022 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.90  
Warrant Liability [Member] | Volatility [Member] | Convertible Promissory Notes Payable 2023 [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.90  
Warrant Liability [Member] | Volatility [Member] | The "2023 Warrants" [Member]    
Fair Value Measurements [Abstract]    
Measurement input 0.90  
v3.24.1
Debt, Convertible Note (Details)
 12 Months Ended
Jan. 24, 2024
USD ($)
$ / shares
Oct. 06, 2023
$ / shares
Jun. 23, 2023
USD ($)
$ / shares
shares
Feb. 23, 2022
USD ($)
$ / shares
shares
Dec. 31, 2023
USD ($)
d
Repayment
Dec. 31, 2022
USD ($)
d
$ / shares
Long-Term Debt, Rolling Maturity [Abstract]            
Minimum market capitalization requirement amount         $ 7,000,000  
Number of consecutive trading days         10 days  
Maximum number of monthly repayments | Repayment         2  
Percentage of outstanding principal required to be prepaid         105.00%  
Maximum beneficial ownership percentage         50.00%  
Maximum percentage of beneficial ownership of outstanding shares of common stock         4.99%  
Amortization of debt discount         $ 1,940,000 $ 1,289,000
Convertible Note [Member]            
Line of Credit Facility [Line Items]            
Purchase of warrant to acquire shares of common stock (in shares) | shares       128,373    
Convertible Note issued         2,599,000 4,153,000
Debt discount         (1,152,000) (805,000)
Balance of Convertible Notes         $ 1,447,000 $ 3,348,000
Period for repayment of convertible note from issuance         180 days  
Long-Term Debt, Rolling Maturity [Abstract]            
2024         $ 1,849,000  
2025         750,000  
Thereafter         0  
Long-term debt         $ 2,599,000  
Number of trading days | d           20
Exercise price (in dollars per share) | $ / shares           $ 19.4
Effective interest rate         68.60%  
Amortization of debt discount         $ 1,900,000 $ 1,300,000
Default charge         $ 500,000  
2022 Convertible Note [Member]            
Line of Credit Facility [Line Items]            
Debt instrument term         2 years  
Convertible Note issued         $ 5,750,000  
Debt discount         (750,000)  
Balance of Convertible Notes         4,782,000  
Additional OID costs not in original funds flow         (121,000)  
Allocated OID costs to Warrants         25,000  
Allocation of Discounts on Troubled Debt Restructuring         (660,000)  
Interest expense accrued on Convertible Note as of December 31, 2023         2,946,000  
Principal and interest payments as of December 31, 2023         (5,462,000)  
Convertible Note         $ 480,000  
Long-Term Debt, Rolling Maturity [Abstract]            
Period for conversion         6 months  
Conversion price (in dollars per share) | $ / shares       $ 19.4    
Maturity date         Feb. 29, 2024  
Conversion ratio       0.33    
Percentage of outstanding principal amount to become due         120.00%  
Percentage of volume-weighted average price       80.00%    
Number of trading days | d         20  
Average of trading days | d         3  
Percentage charge of debt default         20.00%  
Fair value       $ 700,000    
Debt Instrument, Term         2 years  
Exercise price (in dollars per share) | $ / shares       $ 19.4    
Net proceeds from issuance of convertible note       $ 4,800,000    
2022 Convertible Note [Member] | Embedded Redemption Features [Member]            
Line of Credit Facility [Line Items]            
Fair value of Conversion Features on issuance         $ (306,000)  
2022 Convertible Note [Member] | Commitment Fee [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (175,000)  
2022 Convertible Note [Member] | Investor's Counsel Fees [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (43,000)  
2022 Convertible Note [Member] | Warrant Liability [Member]            
Line of Credit Facility [Line Items]            
Fair value of Warrant Liabilities on issuance         (724,000)  
Amended Convertible Note 2022 [Member]            
Line of Credit Facility [Line Items]            
Balance of Convertible Notes     $ 2,747,228      
Monthly principal repayments         $ 186,343  
Long-Term Debt, Rolling Maturity [Abstract]            
Number of monthly payments | Repayment         12  
Maturity date         Aug. 23, 2024  
Number of final payments | Repayment         2  
Amended Convertible Note 2022 [Member] | Payment One [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments     255,556      
Amended Convertible Note 2022 [Member] | Payment Two [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments     $ 255,556      
A&R Note Amendment [Member]            
Long-Term Debt, Rolling Maturity [Abstract]            
Conversion price (in dollars per share) | $ / shares   $ 19.4        
Percentage of volume-weighted average price   85.00%        
Number of trading days | d         20  
Average of trading days | d         3  
Minimum market capitalization requirement amount         $ 7,000,000  
Number of consecutive trading days         10 days  
Note Amendment [Member]            
Long-Term Debt, Rolling Maturity [Abstract]            
Number of trading days | d         20  
Average of trading days | d         3  
Minimum market capitalization requirement amount         $ 7,000,000  
Number of consecutive trading days         10 days  
Note Amendment [Member] | Subsequent Event [Member]            
Long-Term Debt, Rolling Maturity [Abstract]            
Conversion price (in dollars per share) | $ / shares $ 5          
Percentage of volume-weighted average price 85.00%          
Minimum market capitalization requirement amount $ 7,000,000          
2023 Convertible Note [Member]            
Line of Credit Facility [Line Items]            
Debt instrument term         2 years  
Purchase of warrant to acquire shares of common stock (in shares) | shares     426,427      
Convertible Note issued     $ 1,800,000   $ 1,800,000  
Debt discount         (300,000)  
Balance of Convertible Notes     1,500,000   1,414,000  
Additional OID costs not in original funds flow         (15,000)  
Allocated OID costs to Warrants         30,000  
Allocation of Discounts on Troubled Debt Restructuring         660,000  
Interest expense accrued on Convertible Note as of December 31, 2023         283,000  
Principal and interest payments as of December 31, 2023         0  
Convertible Note         $ 967,000  
Monthly principal repayments     $ 150,000      
Long-Term Debt, Rolling Maturity [Abstract]            
Period for conversion         1 year  
Number of monthly payments | Repayment         12  
Conversion price (in dollars per share) | $ / shares     $ 5      
Conversion ratio         0.33  
Percentage of volume-weighted average price     90.00%   85.00%  
Number of trading days | d         20  
Average of trading days | d         5  
Debt Instrument, Term         2 years  
Number of repayment shares issued and issuable (in shares) | shares     493,727      
Threshold period for shares available for resale         6 months  
Lowest trading days | d         3  
Exercise price (in dollars per share) | $ / shares     $ 5      
2023 Convertible Note [Member] | Embedded Redemption Features [Member]            
Line of Credit Facility [Line Items]            
Fair value of Conversion Features on issuance         $ (286,000)  
2023 Convertible Note [Member] | Commitment Fee [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (52,000)  
2023 Convertible Note [Member] | Investor's Counsel Fees [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (34,000)  
2023 Convertible Note [Member] | Payment One [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments     $ 300,000      
2023 Convertible Note [Member] | Payment Two [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments     $ 300,000      
2023 Convertible Note [Member] | Warrant Liability [Member]            
Line of Credit Facility [Line Items]            
Fair value of Warrant Liabilities on issuance         (1,119,000)  
Total Convertible Notes [Member]            
Line of Credit Facility [Line Items]            
Convertible Note issued         7,550,000  
Debt discount         (1,050,000)  
Balance of Convertible Notes         6,196,000  
Additional OID costs not in original funds flow         (136,000)  
Allocated OID costs to Warrants         55,000  
Allocation of Discounts on Troubled Debt Restructuring         0  
Interest expense accrued on Convertible Note as of December 31, 2023         3,229,000  
Principal and interest payments as of December 31, 2023         (5,462,000)  
Convertible Note         1,447,000  
Total Convertible Notes [Member] | Embedded Redemption Features [Member]            
Line of Credit Facility [Line Items]            
Fair value of Conversion Features on issuance         (592,000)  
Total Convertible Notes [Member] | Commitment Fee [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (227,000)  
Total Convertible Notes [Member] | Investor's Counsel Fees [Member]            
Line of Credit Facility [Line Items]            
Issuance cost         (77,000)  
Total Convertible Notes [Member] | Warrant Liability [Member]            
Line of Credit Facility [Line Items]            
Fair value of Warrant Liabilities on issuance         (1,843,000)  
Maximum [Member]            
Long-Term Debt, Rolling Maturity [Abstract]            
Indebtedness to be maintained in event of default to avoid triggering of default terms         250,000  
Maximum [Member] | Convertible Note [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments         200  
Minimum [Member] | Convertible Note [Member]            
Line of Credit Facility [Line Items]            
Monthly principal repayments         $ 100  
v3.24.1
Debt, Outstanding Debt under Convertible Debt Agreement (Details) - Convertible Note [Member] - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Convertible Debt [Abstract]    
Current portion of Long-Term Debt, Principal $ 1,849 $ 3,833
Long-Term Debt less current portion, Principal 750 320
Balance of Convertible Notes, Principal 2,599 4,153
Current portion of Long-Term Debt, Debt Discounts (1,039) (795)
Long-Term Debt less current portion, Debt Discount (113) (10)
Balance of Convertible Notes, Debt Discount (1,152) (805)
Current portion of Long-Term Debt, Net 810 3,038
Long-Term Debt less current portion, Net 637 310
Balance of Convertible Notes $ 1,447 $ 3,348
v3.24.1
Debt, Revolving Line of Credit (Details)
$ in Thousands
 1 Months Ended 12 Months Ended
Feb. 28, 2022
USD ($)
Dec. 31, 2023
USD ($)
Letter
Dec. 31, 2022
USD ($)
Line of Credit Facility [Abstract]      
Repayment on line of credit   $ 0 $ 1,817
Revolving Credit Facility [Member]      
Line of Credit Facility [Abstract]      
Repayment on line of credit $ 1,800    
Number of letters of credit | Letter   4  
Outstanding letter of credit balance   $ 1,100  
v3.24.1
Income Taxes, Summary (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income (Loss) Before Income Taxes [Abstract]    
Domestic $ (8,584) $ (15,128)
Foreign (118) (164)
Loss before taxes (8,702) (15,292)
Current [Abstract]    
Federal 0 0
State 33 42
Foreign (23) 95
Subtotal 10 137
Deferred [Abstract]    
Federal 0 (47)
State 12 (39)
Foreign 0 0
Subtotal 12 (86)
Total $ 22 $ 51
Effective Income Tax Rate, Reconciliation [Abstract]    
Statutory federal income tax rate 21.00% 21.00%
State income taxes, net of federal tax benefit 2.40% 2.40%
Effect of foreign operations (0.30%) (0.30%)
Change in valuation allowance (16.50%) (20.70%)
Stock-based compensation (2.10%) (0.90%)
Convertible note transactions (5.00%) (1.20%)
Uncertain tax positions 0.30% (0.70%)
Other (0.10%) 0.10%
Effective tax rate (0.30%) (0.30%)
Deferred tax assets [Abstract]    
Net operating loss carryforwards $ 9,372 $ 7,853
Accruals 330 62
Reserves 139 409
Stock-based compensation expense 228 283
Intangible assets 2,228 2,356
Goodwill 1,687 1,551
Operating lease liability 121 132
Fixed assets 27 65
Sec. 174 R&D costs 228 129
Other 196 231
Total deferred tax asset 14,556 13,071
Valuation allowance (14,008) (12,572)
Total deferred tax assets less valuation allowance 548 499
Deferred tax liabilities [Abstract]    
Software development costs (17) (59)
Indefinite-lived intangibles (440) (346)
Operating lease - right of use asset (109) (100)
Other 0 0
Total deferred tax liability (566) (505)
Net deferred tax liability (18) (6)
Operating Loss Carryforwards, expiration dates [Line Items]    
Net operating net loss carry forwards 9,372 7,853
Deferred tax assets, operating loss carryforwards, domestic 7,800  
Deferred tax assets, operating loss carryforwards, domestic, expiring 3,800  
Deferred tax assets, operating loss carryforwards, domestic, indefinite lived 4,000  
Income Tax Examination [Line Items]    
Provision of increase in deferred tax assets 100 129
Cash and cash equivalents $ 2,250 2,789
Minimum [Member]    
Operating Loss Carryforwards, expiration dates [Line Items]    
Operating loss carryforwards, expiration date Dec. 31, 2024  
Maximum [Member]    
Operating Loss Carryforwards, expiration dates [Line Items]    
Operating loss carryforwards, expiration date Dec. 31, 2038  
U.S. Federal and State Tax Authority [Member]    
Income Tax Examination [Line Items]    
Research and development cost amortization period 5 years  
Income tax examination, year under examination 2003  
Foreign [Member]    
Income Tax Examination [Line Items]    
Research and development cost amortization period 15 years  
Income tax examination, year under examination 2018  
Cash and cash equivalents $ 1,200 $ 800
v3.24.1
Income Taxes, Uncertain Tax Liabilities (Details) - Foreign [Member] - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Uncertain Tax Liabilities, Total [Roll Forward]    
Beginning balance $ 1,774 $ 1,702
Increases 82 116
Decreases (155) (44)
Ending balance 1,701 1,774
China [Member]    
Tax [Roll Forward]    
Beginning balance 203 220
Increases 0 0
Decreases (5) (17)
Ending balance 198 203
Interest and Penalties [Roll Forward]    
Beginning balance 432 428
Increases 25 4
Decreases 0 0
Ending balance 457 432
South Korea [Member]    
Tax [Roll Forward]    
Beginning balance 622 644
Increases 0 0
Decreases (19) (22)
Ending balance 603 622
Interest and Penalties [Roll Forward]    
Beginning balance 386 335
Increases 57 51
Decreases 0 0
Ending balance 443 386
U.K. [Member]    
Tax [Roll Forward]    
Beginning balance 40 45
Increases 0 0
Decreases (40) (5)
Ending balance 0 40
Interest and Penalties [Roll Forward]    
Beginning balance 91 30
Increases 0 61
Decreases (91) 0
Ending balance $ 0 $ 91
v3.24.1
Capital Stock (Details) - shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Capital Stock [Abstract]    
Capital stock, shares authorized (in shares) 62,000,000  
Common stock, shares authorized (in shares) 60,000,000 60,000,000
Preferred stock, shares authorized (in shares) 2,000,000 2,000,000
Share-based Compensation [Abstract]    
Stock options granted (in shares) 0  
Convertible Note [Member]    
Share-based Compensation [Abstract]    
Common stock reserved for issuance (in shares) 1,700,000  
Shares available for future grants (in shares) 1,500,000  
The Plan [Member]    
Share-based Compensation [Abstract]    
Common stock reserved for issuance (in shares) 750,000  
Shares under options outstanding (in shares) 0  
Shares reserved upon vesting of restricted stock units (in shares) 164,837  
Shares available for future grants (in shares) 0  
v3.24.1
Stock-Based Compensation (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
qtr
d
$ / shares
shares
Dec. 31, 2022
USD ($)
d
$ / shares
shares
Long-term Incentive Plan [Abstract]    
Share based compensation expense | $ $ 1,200 $ 2,000
Deferred income tax expense | $ $ 179 $ 140
Convertible Promissory Note [Member]    
Long-term Incentive Plan [Abstract]    
Shares remaining for future grants (in shares) 1,500,000  
Weighted Average Fair Value [Roll Forward]    
Number of trading days | d   20
Exercise price (in dollars per share) | $ / shares   $ 19.4
Non-Cash Settled Restricted Stock Units [Member]    
Number of Shares [Roll Forward]    
Nonvested RSUs, ending balance (in shares) 164,837  
Restricted Stock Units [Member]    
Number of Shares [Roll Forward]    
Nonvested RSUs, beginning balance (in shares) 212,425 159,567
RSUs granted (in shares) 199,810 179,025
RSUs forfeited (in shares) (60,612) (47,297)
RSUs vested (in shares) (176,786) (78,870)
Nonvested RSUs, ending balance (in shares) 174,837 212,425
Weighted Average Fair Value [Roll Forward]    
Nonvested RSUs, beginning balance (in dollars per share) | $ / shares $ 13.99 $ 17.7
RSUs granted (in dollars per share) | $ / shares 2.17 14.89
RSUs forfeited (in dollars per share) | $ / shares 11.01 21.34
RSUs vested (in dollars per share) | $ / shares 7.87 16.82
Nonvested RSUs, ending balance (in dollars per share) | $ / shares $ 7.29 $ 13.99
Unrecognized compensation expense | $ $ 600  
Weighted average remaining service period 10 months 24 days  
Aggregate fair value for time-based RSUs | $ $ 400 $ 1,500
Period to fully vest performance RSUs | qtr 8  
Restricted Stock Units [Member] | Minimum [Member]    
Long-term Incentive Plan [Abstract]    
Requisite service period for time-based RSU's 1 year  
Weighted Average Fair Value [Roll Forward]    
Period in which time-based RSU's will vest annually in equal amounts 1 year  
Restricted Stock Units [Member] | Maximum [Member]    
Long-term Incentive Plan [Abstract]    
Requisite service period for time-based RSU's 5 years  
Weighted Average Fair Value [Roll Forward]    
Period in which time-based RSU's will vest annually in equal amounts 3 years  
PRSUs [Member]    
Number of Shares [Roll Forward]    
RSUs granted (in shares) 59,767 80,000
RSUs forfeited (in shares) (55,037) (36,714)
RSUs vested (in shares)   (20,000)
Weighted Average Fair Value [Roll Forward]    
Number of trading days | d 20  
Exercise price (in dollars per share) | $ / shares $ 15  
Period to fully vest performance RSUs | qtr 15  
Cash Settled PRSUs [Member]    
Number of Shares [Roll Forward]    
RSUs granted (in shares)   20,000
RSUs vested (in shares)   (5,000)
Time-Based RSUs [Member]    
Number of Shares [Roll Forward]    
RSUs granted (in shares) 140,044 99,025
RSUs forfeited (in shares) (5,575) (10,583)
RSUs vested (in shares) (156,786) (58,870)
1995 Long-Term Incentive Stock Option Plan [Member]    
Long-term Incentive Plan [Abstract]    
Number of shares authorized (in shares) 750,000  
Number of shares issued upon exercise of options (in shares) 585,163  
Stock options outstanding (in shares) 0  
Shares remaining for future grants (in shares) 0  
Number of Shares [Roll Forward]    
Nonvested RSUs, ending balance (in shares) 164,837  
v3.24.1
Leases (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
ft²
Tenant
Dec. 31, 2022
USD ($)
Leases [Abstract]    
Operating lease ROU amortization $ 388 $ 632
Leased Assets [Abstract]    
Operating lease - right of use assets $ 413 $ 506
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Operating lease - right of use assets Operating lease - right of use assets
Lease Liabilities [Abstract]    
Operating lease liabilities - current $ 234 $ 418
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Other Liabilities, Current Other Liabilities, Current
Operating lease liabilities $ 357 $ 160
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Operating lease liabilities Operating lease liabilities
Lease liabilities $ 591 $ 578
Area of office space leased | ft² 2,200  
Lease agreement date Sep. 26, 2022  
Lease expiration date Nov. 30, 2024  
Gain on termination of lease   94
Consolidated Statement of Operations Information [Abstract]    
Operating lease cost [1] $ 418 700
Short-term leases costs [2] 29 60
Sublease income [3] 0 (62)
Net lease cost $ 447 698
Number of tenants | Tenant 2  
Minimum Lease Payments [Abstract]    
2024 $ 263  
2025 150  
2026 96  
2027 90  
2028 61  
Thereafter 0  
Total 660  
Less: Interest 69  
Lease liabilities $ 591 578
Lease Term and Discount Rate [Abstract]    
Weighted-average remaining lease term (in years) 3 years 4 months 17 days  
Weighted-average discount rate 6.10%  
Cash paid for amounts included in measurement of liabilities [Abstract]    
Right-of-use assets obtained in exchange for new operating lease liabilities $ 460  
Cash paid for amounts included in measurement of liabilities $ 453 $ 1,233
[1] Includes variable lease costs which are immaterial.
[2] Include leases maturing less than twelve months from the report date.
[3] Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.
v3.24.1
Employee Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Employee Benefits [Abstract]    
Company's contribution to the plan $ 531 $ 479
v3.24.1
Segment Information, Summary (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Segment
Dec. 31, 2022
USD ($)
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]    
Number of reportable business segments | Segment 2  
Contract term 2 years  
Goodwill and intangible asset impairment charge $ 1,391 $ 7,505
Workforce Solutions [Member]    
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]    
Goodwill and intangible asset impairment charge $ 1,400 $ 7,500
v3.24.1
Segment Information, Loss Before Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information, Profit (Loss) [Abstract]    
Revenues $ 45,041 $ 47,734
Gross profit 11,930 11,910
Operating loss (6,818) (14,406)
Interest expense (1,932) (1,272)
Change in fair value of derivative instruments, net 850 477
Other (loss) income, net (802) (91)
Loss before taxes (8,702) (15,292)
Engineering [Member]    
Segment Reporting Information, Profit (Loss) [Abstract]    
Revenues 31,790 29,919
Gross profit 10,073 9,557
Operating loss (3,789) (6,388)
Workforce Solutions [Member]    
Segment Reporting Information, Profit (Loss) [Abstract]    
Revenues 13,251 17,815
Gross profit 1,857 2,353
Operating loss $ (3,029) $ (8,018)
v3.24.1
Segment Information, Reconciliation of Assets from Segment to Consolidated (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information, Assets [Abstract]    
Assets $ 22,805 $ 26,496
Engineering [Member]    
Segment Reporting Information, Assets [Abstract]    
Assets 20,980 21,705
Workforce Solutions [Member]    
Segment Reporting Information, Assets [Abstract]    
Assets $ 1,825 $ 4,791
v3.24.1
Segment Information, Geographic Segments (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Segment Information [Abstract]    
Percentage of revenues derived from customers in the nuclear power industry 92.00% 89.00%
Segments, Geographical Areas [Abstract]    
Revenue $ 45,041 $ 47,734
Operating loss (6,818) (14,406)
Net assets $ 22,805 $ 26,496
Percentage of revenues derived from international sales 12.00% 16.00%
United States [Member]    
Segments, Geographical Areas [Abstract]    
Operating loss $ (6,676) $ (14,225)
Net assets 21,202 24,631
United States [Member] | Operating Segments [Member]    
Segments, Geographical Areas [Abstract]    
Revenue 44,040 46,622
Asia [Member]    
Segments, Geographical Areas [Abstract]    
Operating loss (142) (181)
Net assets 1,603 1,865
Asia [Member] | Operating Segments [Member]    
Segments, Geographical Areas [Abstract]    
Revenue $ 1,001 $ 1,112
v3.24.1
Supplemental Disclosure of Cash Flow Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash paid for interest and income taxes: [Abstract]    
Interest $ 947 $ 546
Income taxes 79 47
Non-cash financing activities: [Abstract]    
Repayment of convertible note in shares 2,886 824
Establishment of new right-of-use assets 320 60
Establishment of new operating lease liability (454) (58)
Discount on issuance of convertible note $ 300 $ 750
v3.24.1
Non-consolidated Variable Interest Entity (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Owners
Variable Interest Entity [Abstract]  
Number of owners | Owners 2
DP-NXA Consultants LLC [Member]  
Variable Interest Entity [Abstract]  
Ownership percentage 48.00%
NXA Consultants LLC [Member]  
Variable Interest Entity [Abstract]  
Ownership percentage 52.00%
Contribution amount $ 52
DP Engineering Ltd, Co [Member]  
Variable Interest Entity [Abstract]  
Ownership percentage 48.00%
Contribution amount $ 48
Variable Interest Entity, Not Primary Beneficiary [Member] | DP-NXA Consultants LLC [Member]  
Variable Interest Entity [Abstract]  
Carrying amount $ 0
v3.24.1
Commitments and Contingencies (Details)
 12 Months Ended 30 Months Ended
Oct. 30, 2023
USD ($)
Case
Dec. 31, 2023
USD ($)
Employee
Jun. 08, 2023
Case
Employee
Litigation Settlement [Abstract]      
Number of former employees in subsidiaries that filed lawsuits | Employee     3
Number of cases filed | Case     3
Number of cases dismissed | Case 3    
Damages awarded value | $ $ 750,000    
Number of former employees filed charged with equal employment opportunity commission | Employee   1  
Selling, General and Administrative Expenses [Member]      
Litigation Settlement [Abstract]      
Accrued litigation expenses | $   $ 260,000