Company: CXDO
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001654954-25-005149
Chunk: 36

Company: Crexendo, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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ata with the percentage of actual performance exceeding 90% of target (i.e., each 1% excess over 90% of performance target equals 5% of the weighted bonus amount payable). If actual performance reaches 110% of performance target or greater for any individual performance target, then an additional 10% of the amount apportioned to that performance target will be payable as an additional bonus. Historically, for the years ended December 31, 2024 and 2023, the employee bonus plan performance targets were achieved at 100% or greater. Based on our financial performance as of March 31, 2025 and forecasted annualized results for the year ended December 31, 2025, management determined that the achievement of 100% of the annual revenue and Adjusted EBITDA performance targets is probable. Based on management’s estimate, the Company recorded an accrual of $335 for the employee bonus plan, which is included in accrued expense in the accompanying condensed consolidated balance sheet at March 31, 2025. Purchase Obligations In February 2024, the Company entered into a $5.4 million noncancellable five-year hosting service contract with Oracle, a third-party network service provider. The contract includes minimum quarterly commitments and the requirements to maintain the service level for the entire contract period. Under this agreement, $340 remains due during fiscal year 2025, $1.1 million will be due during fiscal 2026, $1.4 million will be due during fiscal 2027, $1.7 million will be due during fiscal 2028, and $456 will be due during fiscal 2029. During the three months ended March 31, 2025 and 2024, the Company has expensed $0 and $0, respectively of the purchase obligation and $81 and $234 is included in accrued expenses at March 31, 2025 and December 31, 2024, respectively. Legal Proceedings In the ordinary course of business, the Company may be involved in a variety of claims, lawsuits, investigations, and other proceedings, including patent infringement claims, employment litigation, regulatory compliance matters, and contractual disputes, that can arise in the normal course of the Company's operations. The Company recognizes a provision when management believes information available prior to the issuance of the financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. The