Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 1073

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 8
Chunk 1073
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 47Table of Contents

Given these factors, the related audit effort in evaluating management’s judgments in determining revenue recognition for these customer agreements required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the Company’s revenue recognition for these customer agreements included the following:

 ·We gained an understanding of internal controls related to the identification of distinct performance obligations, the determination of the timing of revenue recognition, and the relative selling value. ·We evaluated management’s significant accounting policies related to these customer agreements for reasonableness. ·We selected a sample of customer agreements and performed the following procedures:

 oObtained and read contract source documents for each selection and other documents that were part of the agreement, if applicable. oTested management’s identification of significant terms for completeness, including the identification of distinct performance obligations and relative selling prices. oAssessed the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions. oWe evaluated the reasonableness of management’s estimate of stand-alone selling prices for products and services that are not sold separately. oWe tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the consolidated financial statements.

/s/ Urish Popeck & Co., LLC

We have served as the Company's auditor since 2016.

Pittsburgh, Pennsylvania

March 4, 2025

 48Table of Contents

Crexendo, Inc. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except par value and share data)

  December 31,  2024 2023 Assets      Current assets:      Cash and cash equivalents $18,193  $10,347 Trade receivables, net of allowance of $146 and $116, respectively  4,352   3,476 Inventories  393   382 Equipment financing receivables, net of allowance of $69 and $56, respectively  1,049   856 Contract costs  1,931   1,345 Prepaid expenses  876   508 Income tax receivable  75   - Other current assets  13   35 Total current assets  26,882   16,