0001558370-22-001601 | 10-K | XBRL Viewer

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net loss from operations	$ (30,584)	$ (5,455)	$ 7,864
Adjustments to reconcile net loss from operations to net cash provided by (used in) operations:
Depreciation and amortization of intangible assets	8,926	12,003	11,545
Loss on disposal of assets	13	118	69
Deferred tax benefit	2,823	(1,487)	(1,624)
Stock-based compensation	4,354	4,740	3,368
Changes in operating assets and liabilities:
Accounts receivable, net	2,047	5,181	(4,786)
Allowance for doubtful accounts	(2,705)	1,611	1,372
Inventories, net	2,209	6,725	(5,391)
Contract assets	3,787	(191)	1,740
Accounts payable	2,716	(5,237)	3,628
Income taxes payable	(2,525)	(5,642)	158
Accrued expenses	3,089	(3,124)	(1,286)
Deferred compensation	(725)	574	(334)
Deferred revenue	9,713	8,342	1,465
Other assets and liabilities	(5,883)	(3,236)	456
Net cash provided by (used in) operating activities	(2,745)	14,922	18,244
Cash flows from investing activities:
Purchase of short term investments	(59,925)	(34,060)	(33,839)
Maturities of short term investments	51,149	32,630	31,399
Additions to property and equipment	(2,169)	(3,101)	(7,453)
Additions to intangible assets	(35)	(133)
Net cash used in investing activities	(10,980)	(4,664)	(9,893)
Cash flows from financing activities:
Repurchase of common stock	(7,471)	(5,030)
Tax payments for restricted stock issuances	(2,923)	(2,030)	(569)
Net cash used in financing activities	(10,394)	(7,060)	(569)
Effect of exchange rate changes on cash	(895)	914	(208)
Net increase (decrease) in cash	(25,014)	4,112	7,574
Cash, cash equivalents, and restricted cash, beginning of period	89,241	85,129	77,555
Cash, cash equivalents, and restricted cash, end of period	64,227	89,241	85,129
Supplemental cash flow disclosures:
Restricted Cash	800	900	800
Cash paid for income taxes	$ 7,700	$ 9,442	$ 7,839

Allowance for credit losses (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 01, 2020	Dec. 31, 2021	Dec. 31, 2020
Changes in the allowance for credit losses
Provision		$ (16)
Write-offs		(2,689)	$ (994)
Net foreign currency translation		(11)
Ending Balance	$ 2,812	1,419
Impact of ASU 2016-13 adoption
Changes in the allowance for credit losses
Beginning Balance	2,524	$ 4,135	2,524
Provision	$ 288		2,306
Net foreign currency translation			11
Ending Balance			$ 4,135

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

Income Taxes - Summary of Income Tax Examinations (Details) - Earliest period	12 Months Ended
	Dec. 31, 2021
Australia
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2013
Austria
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2015
Belgium
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2017
Canada Revenue Agency [Member]
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2017
Netherlands
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2016
Singapore
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2016
Switzerland
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2019
United Kingdom
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2019
Internal Revenue Service (IRS) [Member]
Earliest tax year subject to audit, by jurisdiction
Earliest tax year subject to audit	2017

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Treasury - Common Stock	Additional Paid-in Capital [Member]	Accumulated Income [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Accumulated Income [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member]	Total
Balance at Dec. 31, 2018	$ 40		$ 93,310		$ 171,576	$ (13,287)		$ 251,639
Balance (in shares) at Dec. 31, 2018	40,225,000
Net income (loss)					7,864			7,864
Foreign currency translation adjustment, net of tax						1,543		1,543
Stock based compensation			3,368					3,368
Tax payments for stock issuances			(569)					(569)
Tax payments for stock issuances, Shares	(18,000)
Pension adjustment, net of tax						(1,551)		(1,551)
Balance at Dec. 31, 2019	$ 40		96,109		179,440	(13,295)		262,294
Balance (in shares) at Dec. 31, 2019	40,207,000
Net income (loss)					(5,455)			(5,455)
Foreign currency translation adjustment, net of tax						4,534		4,534
Stock based compensation			4,740					4,740
Restricted stock awards, Shares	242,000
Tax payments for stock issuances			(2,030)					(2,030)
Tax payments for stock issuances, Shares	(96,000)
Pension adjustment, net of tax						(1,459)		(1,459)
Balance at Dec. 31, 2020	$ 40	$ (5,030)	98,819	$ (254)	173,731	(10,220)	$ (254)	257,340
Balance (in shares) at Dec. 31, 2020	40,103,000	250,000
Repurchase of common share		$ (5,030)						$ (5,030)
Treasury stock, at cost	(250,000)	250,000						250
Net income (loss)					(30,584)			$ (30,584)
Foreign currency translation adjustment, net of tax					26	(2,997)		(2,971)
Stock based compensation			4,354					4,354
Restricted stock awards, Shares	385,000
Tax payments for stock issuances			(2,923)					(2,923)
Tax payments for stock issuances, Shares	(145,000)
Share repurchase		$ (7,471)						(7,471)
Share repurchased (in shares)	(342,000)	342,000
Unrealized gains on available-for-sale securities						(21)		(21)
Pension adjustment, net of tax						2,056		2,056
Balance at Dec. 31, 2021	$ 40	$ (12,501)	$ 100,250		$ 143,173	$ (11,182)		219,780
Balance (in shares) at Dec. 31, 2021	40,001,000	592,000
Repurchase of common share								$ (12,501)
Treasury stock, at cost								592

Stock Compensation Plans - Time-Based Restricted Stock Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended	12 Months Ended
	Jan. 01, 2020	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Compensation expense
Total Compensation			$ 5,202	$ 6,002	$ 5,323
Unamortized future compensation expense		$ 4,400	4,400
Summary of restricted stock activity
Shares forfeited		(9)
Weighted average grant date fair value
Shares forfeited (per share)		$ 14.91
Restricted Stock, subject to time-based criteria
Compensation expense
Total Compensation			300	700	500
Unamortized future compensation expense		$ 100	100
Tax benefit related to compensation expense			$ 100	$ 200	200
Summary of restricted stock activity
Nonvested, January 1, 2021			56
Shares vested			(40)
Nonvested, December 31, 2021		7	7	56
Weighted average remaining term (years)
Outstanding (years)			5 months 1 day	10 months 20 days
Weighted average grant date fair value
Nonvested, January 1, 2021			$ 14.60
Shares vested (per share)			14.91
Nonvested, December 31, 2021		$ 16.23	$ 16.23	$ 14.60
Restricted Stock, subject to time-based criteria \| One Year Performance Targets Based Shares [Member]
Plan information
Vesting period (in years)			1 year
Compensation expense
Vesting rights percentage			25.00%
Restricted Stock, subject to time-based criteria \| Share-based Payment Employee
Plan information
Vesting period (in years)			4 years
Restricted Stock, subject to time-based criteria \| Share-based Payment Employee \| Officer [Member]
Plan information
Vesting period (in years)			4 years
Time-Based Restricted Stock Units settled in stock
Compensation expense
Total Compensation			$ 3,700	$ 2,500	1,000
Unamortized future compensation expense		$ 9,000	9,000
Tax benefit related to compensation expense			$ 100	$ 500	$ 300
Summary of restricted stock activity
Shares vested			(196)
Shares awarded			573
Shares forfeited			(197)
Nonvested, December 31, 2021	379	559	559
Weighted average remaining term (years)
Outstanding (years)	2 years 6 months 18 days		3 years 29 days
Weighted average grant date fair value
Shares vested (per share)			$ 18.50
Shares awarded (per share)			21.21
Shares forfeited (per share)			20.51
Nonvested, December 31, 2021	$ 16.87	$ 19.30	$ 19.30
Time-Based Restricted Stock Units settled in stock \| Share-based Payment Employee \| Minimum [Member]
Plan information
Vesting period (in years)			2 years
Time-Based Restricted Stock Units settled in stock \| Share-based Payment Employee \| Maximum [Member]
Plan information
Vesting period (in years)			4 years
Time-Based Restricted Stock Units settled in stock \| Share-based Payment Employee \| Officer [Member]
Plan information
Vesting period (in years)			4 years

Related Party

12 Months Ended

Dec. 31, 2021

Related Party

Related Party

Note 20 – Related Party

Agreements with Related Parties

The Company entered into an agreement to provide e-signature and secure agreement automation services to Cox Automotive in the fourth quarter of 2020. Marianne Johnson is an Executive Vice President and the Chief Product Officer at Cox Automotive. Ms. Johnson has served on the OneSpan Board of Directors since March 2020. The amount of revenue recognized for e-signature and secure agreement automation services during the years ended December 31, 2021 and 2020 was $0.3 million and $0.1 million, respectively, and is included in subscription revenue. The amount receivable as of December 31, 2021 and 2020 was $0 million and $0.4 million.

The company purchases subscription SMS services from Twilio, Inc. Marc Boroditsky is the Chief Revenue Officer of Twilio, Inc. and has a direct ownership interest in Twilio, Inc. Mr. Boroditsky has served on the OneSpan Board of Directors since June 2020. The total amount paid to Twilio, Inc. during the year ended December 31, 2021 was $0.8 million and is included in cost of goods sold. The amount payable at December 31, 2021 was less than $0.1 million. The total amount paid to Twilio, Inc. during the year ended December 31, 2020 was $0.4 million and the amount payable at December 31, 2020 was less than $0.1 million

Summary of Significant Accounting policies - Equity Method Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Equity Method Investments
Costs of sales	$ 71,546	$ 67,632	$ 85,646
Investment In Promon A
Equity Method Investments
Ownership percentage	17.00%
Impairment of investments	$ 0	0	$ 0
Accounts Payable and Accrued Liabilities \| Investment In Promon A
Equity Method Investments
Costs and Expenses	1,500	2,200
Cost of goods \| Investment In Promon A
Equity Method Investments
Costs and Expenses	$ 4,000	$ 2,500

Leases - Supplemental unaudited consolidated balance sheet information (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Supplemental unaudited consolidated balance sheet information
Operating lease right-of-use assets	$ 9,197	$ 11,356
Operating lease liabilities current	$ 2,476	$ 2,855
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Accrued Liabilities, Current	Other Accrued Liabilities, Current
Operating lease liabilities noncurrent	$ 10,180	$ 12,399
Total lease liabilities	$ 12,656	$ 15,254

Related Party (Details) - USD ($) $ in Millions	12 Months Ended
Related Party (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Twilio Inc.
Related Party
Related Party Transaction, Due from (to) Related Party	$ 0.4	$ 0.1
Marianne Johnson \| Cox Automotive
Related Party
Related Party Transaction, Due from (to) Related Party	0.0	0.4
Officer [Member] \| Cox Automotive \| Subscription revenue
Related Party
Revenue from Related Parties	0.3	$ 0.1
Officer [Member] \| Twilio Inc.
Related Party
Related Party Transaction, Due from (to) Related Party	0.1
Officer [Member] \| Twilio Inc. \| Cost of goods
Related Party
Related Party Transaction, Due from (to) Related Party	$ 0.8

- Definition

Receivables to be collected from (obligations owed to) related parties, net as of the balance sheet date where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth.

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+ Details

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

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+ Details

Stock Compensation Plans - Performance-Based Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation			$ 4,354	$ 4,740	$ 3,368
Compensation expense
Total Compensation			5,202	$ 6,002	5,323
Unamortized future compensation expense	$ 4,400		4,400
Summary of restricted stock activity
Shares forfeited	(9,000)
Weighted average grant date fair value
Shares forfeited (per share)	$ 14.91
Restricted Stock, subject to performance criteria
Compensation expense
Unamortized future compensation expense	$ 600		$ 600
Summary of restricted stock activity
Nonvested, January 1, 2021			459,000
Shares vested			(93,000)
Shares awarded			144,000
Shares forfeited			(389,000)
Nonvested, December 31, 2021	121,000	459,000	121,000	459,000
Weighted average remaining term (years)
Outstanding (years)			3 years 3 months 14 days	9 months 29 days
Weighted average grant date fair value
Nonvested, January 1, 2021			$ 15.29
Shares vested (per share)			15.16
Shares awarded (per share)			24.92
Shares forfeited (per share)			17.09
Nonvested, December 31, 2021	$ 17.30	$ 15.29	$ 17.30	$ 15.29
Restricted Stock, subject to performance criteria \| Three Year Performance Targets Based Shares [Member]
Plan information
Performance period			3 years
Summary of restricted stock activity
Shares awarded			0
Performance-based restricted stock, earned
Compensation expense
Total Compensation			$ 300	$ 1,100	1,800
Tax benefit related to compensation expense		$ 200	$ 100		$ 200
Performance-based restricted stock, earned \| Three Year Performance Targets Based Shares [Member]
Plan information
Performance period			3 years
Vesting period (in years)			3 years
Represents information relating to market based restricted stock units.
Compensation expense
Total Compensation			$ 100	400
Tax benefit related to compensation expense			$ 0	$ 100
Summary of restricted stock activity
Nonvested, January 1, 2021			52,000
Shares awarded			291,000
Shares forfeited			(60,000)
Nonvested, December 31, 2021	283,000	52,000	283,000	52,000
Weighted average remaining term (years)
Outstanding (years)			3 years 5 months 4 days	2 years
Weighted average grant date fair value
Nonvested, January 1, 2021			$ 28.44
Shares awarded (per share)			20.09
Shares forfeited (per share)			32.17
Nonvested, December 31, 2021	$ 19.06	$ 28.44	$ 19.06	$ 28.44
Represents information relating to market based restricted stock units. \| Three Year Performance Targets Based Shares [Member]
Plan information
Performance period			3 years
Vesting period (in years)			3 years

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Description of the Company

OneSpan Inc. and its wholly owned subsidiaries design, develop, market and support hardware and software security systems that manage and secure access to information assets. OneSpan has operations in Austria, Belgium, Brazil, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K.), and the United States (U.S.).

In accordance with ASC 280, Segment Reporting, our operations are reported as a single operating segment. The chief operating decision maker is the Chief Executive Officer who reviews the statement of operations of the Company on a consolidated basis, makes decisions and manages the operations of the Company as a single operating segment.

Principles of Consolidation

The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are high-quality short-term money market instruments and commercial paper with maturities at acquisition of three months or less. Cash and cash equivalents are held by a number of U.S. and non-U.S. commercial banks and money market investment funds. We are in lease agreements that require letters of credit to secure the obligations. The restricted cash related to these letters of credit is recorded in other non-current assets on the Condensed Consolidated Balance Sheet in the amounts of $0.8 million and $0.8 million at December 31, 2021 and December 31, 2020, respectively.

Short Term Investments

Short-term Investments

The Company’s short-term investments are in debt securities which consist of U.S treasury bills and notes, U.S. government agency notes, corporate notes, and high quality commercial paper with maturities at acquisition of more than three months and less than twelve months. The Company classifies its investments in debt securities as available-for-sale. The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, on January 1, 2020, which amended our accounting for available-for-sale debt securities. Credit impairments are recorded through an allowance rather than a direct write-down of the security and are recorded through a charge to the consolidated statement of operations. Unrealized gains or losses not related to credit impairments are recorded in accumulated other comprehensive gain/(loss) in the consolidated balance sheets. The Company reviews available-for-sale debt securities for impairments related to credit losses and other factors each quarter. As of December 31, 2021 and December 31, 2020, the unrealized gains and losses were not material.

Credit Losses

Reasonable assurance of collection is a requirement for revenue recognition. Credit limit adjustments for existing customers may result from the periodic review of outstanding accounts receivable. The Company records trade accounts receivable at invoice values, which are generally equal to fair value.

In accordance with ASU No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss (“CECL”) model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Fair Value of Financial Instruments

At December 31, 2021 and 2020, our financial instruments were cash and equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities. The estimated fair value of our financial instruments has been determined by using available market information and appropriate valuation methodologies, as defined in ASC 820, Fair Value Measurements. The fair values of the financial instruments were not materially different from their carrying amounts at December 31, 2021 and 2020. See Note 9 - Fair Value Measurements for additional detail.

Inventories

Inventories, consisting principally of hardware and component parts, are stated at the lower of cost or net realizable value. Cost is determined using the first-in-first-out (FIFO) method. We write down inventory when it appears that the carrying cost of the inventory may not be recovered through subsequent sale of the inventory. We analyze the quantity of inventory on hand, the quantity sold in the past year, the anticipated sales volume in the form of sales to new customers as well as sales to previous customers, the expected sales price and the cost of making the sale when evaluating the valuation of our inventory. If the sales volume or sales price of a specific model declines significantly, additional write downs may be required.

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets ranging from three to ten years. Leasehold improvements are depreciated over the lesser of the remaining lease term or 10 years. Additions and improvements are capitalized, while expenditures for maintenance and repairs are charged to operations as incurred. Gains or losses resulting from sales or retirements are recorded as incurred, at which time related costs and accumulated depreciation are removed from the accounts.

Accounting for Leases

All of our leases are operating leases.

The Company adopted ASC Topic 842, Leases as of January 1, 2019, using the modified retrospective approach. In addition, the Company elected the following practical expedients:

●

The package of practical expedients permitted under the transition guidance within the new standard. The practical expedient package applies to leases commenced prior to adoption of the new standard and permits companies not to reassess whether existing or expired contracts contain a lease, the lease classification, and any initial direct costs for existing leases.

●

The short-term lease practical expedient, which allowed the Company to exclude short-term leases from recognition in the consolidated balance sheets;

●

We have lease agreements that contain lease and non-lease components. For automobile leases, we account for lease and non-lease components together. For office leases, we account for these components separately using a relative standalone selling basis; and

●

We apply the portfolio approach to automobile leases with similar characteristics that commence in the same period.

The difference between the asset and liability is a result of lease incentives, such as tenant improvement allowances, and deferred rent on the balance sheet at transition. See Note 11 – Leases for additional information.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net identifiable assets acquired in a business combination. We assess the impairment of goodwill annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test date is October 1.

The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting unit against the planned results. Additionally, the reporting unit’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity- and reporting unit specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgments. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the estimated fair value of the reporting unit is compared with its carrying value. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.

We operate in one reporting unit and had no goodwill impairment recorded for the years ended December 31, 2021, 2020, and 2019.

Long-Lived and Intangible Assets

Finite-lived intangible assets include proprietary technology, customer relationships, and other intangible assets. Intangible assets other than patents with definite lives are amortized over the useful life, generally three to seven years for proprietary technology and five to twelve years for customer relationships. Patents are amortized over the life of the patent, generally 20 years in the U.S. Intangible assets arising from business combinations, such as acquired technology, customer relationships, and other intangible assets, are originally recorded at fair value.

Long-lived assets, including property, plant and equipment, operating lease right-of-use assets, finite-lived intangible assets being amortized and capitalized software costs for internal use, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset group may not be recoverable. An impairment loss shall be recognized if the carrying amount of a long-lived asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset group exceeds its fair value. Long-lived assets held for sale are reported at the lower of carrying value or fair value less cost to sell.

Equity Method Investment

We apply the equity method of accounting to our investment in Promon AS (Promon), because we exercise significant influence, but not controlling interest, in the investee. Promon is a technology company headquartered in Norway that specializes in mobile app security, whose solutions focus largely on Runtime Application Self-Protection (RASP). We exercise significant influence over Promon as a result of our 17% ownership interest in Promon, our representation on Promon’s Board of Directors, and the significance to Promon of our business activities with them. We integrate Promon’s RASP technology into our software solutions, which are licensed to our customers. Under the equity method of accounting, the Company’s proportionate share of the net earnings (losses) of Promon is reported in other income (expense), net in our consolidated Statements of Operations. The impact of the proportionate share of net earnings (losses) were immaterial for the years ended December 31, 2021, 2020 and 2019 as were the relative size of Promon’s assets and operations in relation to the Company’s. The carrying value of our equity method investment is reported in other noncurrent assets in the consolidated Balance Sheets and is reported originally at cost and adjusted each period for the Company’s share of the investee’s earnings (losses) and dividends paid, if any. The Company also assesses the investment for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. There were no qualitative factors that indicated that the carrying value of the investment may not be recoverable. The Company did not record any impairment charges during the years ended December 31, 2021, 2020 or 2019. The Company recorded $4.0 million and $2.5 million in costs of sales during the years ended December 31, 2021 and 2020, respectively for license fees owed to Promon for use of their software and technology. The Company owed Promon $1.5 million and $2.2 million as of December 31, 2021 and December 31, 2020, respectively, which is included in accounts payable and accrued liabilities.

Share Repurchase Program

During the year ended December 31, 2020, the Board of Directors authorized a share repurchase program (“program”), pursuant to which the Company can repurchase up to $50.0 million of issued and outstanding common stock. Share purchases under the program will take place in open market transactions or in privately negotiated transactions and may be made from time to time depending on market conditions, share price, trading volume, and other factors. The timing of the repurchases and the amount of stock repurchased in each transaction is subject to OneSpan’s sole discretion and will depend upon market and business conditions, applicable legal and credit requirements and other corporate considerations. During the year ended December 31, 2021, $7.5 million of issued and outstanding stock was repurchased under the program. The authorization is effective until June 10, 2022 unless the total amount has been used or authorization has been cancelled.

During the year ended December 31, 2021, the Company repurchased 0.3 million shares of the Company’s stock for $7.5 million in the aggregate at an average cost of $21.82 per share under its repurchase program.

Revenue Recognition

On January 1, 2019, we adopted FASB Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers”, or “Topic 606” using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 606. We recorded a net increase to opening Retained Earnings of $11.9 million, net of tax, as of January 1, 2019 due to the cumulative impact of adopting Topic 606, with the impact primarily related to the accounting impacts of our customer contracts that include a term license to our software, as well as the impact of accounting for costs incurred

to obtain our contracts. See Note 5 - Revenue for further details. We determine revenue recognition through the following steps:

●

Identification of the contract, or contracts, with a customer;

●

Identification of the performance obligations in the contract;

●

Determination of the transaction price;

●

Allocation of the transaction price to the performance obligations in the contract; and

●

Recognition of revenue when, or as, we satisfy a performance obligation.

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services, which excludes any sales incentives and amounts collected on behalf of third parties. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.

Nature of Goods and Services

We derive our revenues primarily from Product and License Revenue, which includes hardware products and software licenses, and Services and Other, which is inclusive of software-as-a-service (which we refer to as “subscription”, or “SaaS”), maintenance and support, and professional services.

Product Revenue: Revenue from the sale of security hardware is recorded upon shipment, which is the point at which control of the goods are transferred and the completion of the performance obligations, unless there are specific terms that would suggest control is transferred at a later date (e.g. delivery). No significant obligations or contingencies typically exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Customer invoices and subsequent payments normally correspond with delivery.

License Revenue: Revenue from the sale of software licenses is recorded upon delivery which is the latter of when the customer receives the ability to access the software or when they are legally allowed to use the software. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Contracts with customers for distinct licenses of intellectual property include perpetual licenses, which grant the customer unlimited access to the software, and term licenses which limit the customer’s access to the software to a specific time period. We offer term licenses ranging from one to five years in length. Customer payments normally correspond with delivery for perpetual licenses. For term licenses, payments are either on installment or in advance. In limited circumstances, we integrate third party software solutions into our software products. We have determined that, consistent with our conclusion under prior revenue recognition rules, generally we act as the principal with respect to the satisfaction of the related performance obligation and record the corresponding revenue on a gross basis from these transactions. For transactions in which we do not act as the principal, we would recognize revenue on a net basis. The fees owed to the third parties are recognized as a component of cost of goods sold when the revenue is recognized.

Subscription Revenue: We generate subscription revenues from our digital agreements and digital security cloud service offerings. Our standard customer arrangements do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time. As such, these arrangements are considered service contracts and revenue is recognized ratably over the service period of the contract. Customer payments are normally in advance for annual service.

Maintenance, Support and Other: Maintenance and support agreements generally call for us to provide software updates and technical support, respectively, to customers. The annual fee for maintenance and technical support is recognized ratably over the term of the maintenance and support agreement as this is the period the services are delivered. Customer payments are normally in advance for annual service.

Professional Services: Professional services revenues are primarily comprised of implementing, automating and extending business processes, technology infrastructure, and software applications. Professional services revenues are recognized over time as services are rendered, usually over a period of time that is generally less than a few months. Most projects are performed on a time and materials basis, while a portion of revenues is derived from projects performed on a fixed fee. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the contractual hourly rates. For fixed fee contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours to complete the services. Customer payments normally correspond with delivery.

Multiple-Element Arrangements

In our typical multiple-element arrangement, the primary deliverables include:

A client component (i.e. an item that is used by the person being authenticated in the form of either a new standalone hardware device or software that is downloaded onto a device that the customer already owns);

Server system software that is installed on the customer’s systems (i.e., software on the server system that verifies the identity of the person being authenticated) or licenses for additional users on the server system software if the server system software had been installed previously; and

Post contract support (PCS) in the form of maintenance on the server system software or support.

Our multiple-element arrangements may also include other items that are usually delivered prior to the recognition of any revenue are incidental to the overall transaction such as initialization of the hardware device, customization of the hardware device itself or the packaging in which it is delivered, deployment services where we deliver the device to our customer’s end-use customer or employee and, in some limited cases, professional services to assist with the initial implementation of a new customer.

Significant Judgments

We enter into contracts to deliver a combination of hardware devices, software licenses, subscriptions, maintenance and support and, in some situations, professional services. The Company evaluates the nature of the goods or services promised in these arrangements to identify the distinct performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment depending on the terms and conditions of the respective customer arrangement. When a hardware client device and licenses to server software are sold in a contract, they are treated as a single performance obligation because the software license is deemed to be a component of the hardware that is integral to the functionality of the hardware that is used by our customers for identity authentication. When a software client device is sold in a contract server software, the licenses are considered a single performance obligation to deliver the authentication solution to the customer. In either of these types of arrangements, maintenance and support and professional services are typically distinct separate performance obligations from the hardware or software solutions. Our contracts to deliver subscription services typically do not include multiple performance obligations; however, in certain limited cases customers may purchase professional services that are distinct performance obligations.

For contracts that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on their estimated relative standalone selling price. Judgment is required to determine the stand-alone selling price (“SSP”) of each distinct performance obligation. We determine SSP for maintenance and support and professional services based on observable inputs; specifically, the range of prices charged to customers to renew annual maintenance and support contracts and the range of hourly rates we charge our customers in standalone professional services contracts. In instances where SSP is not directly observable, and when we sell at a highly variable price range, such as for transactions involving software licenses or subscriptions, we determine the SSP for those performance obligations using the residual method.

Cost of Goods Sold

Included in product and license cost of goods sold are direct product costs and direct costs to deliver and provide software licenses. Cost of goods sold related to service and other revenues are primarily costs related to subscription solutions, including personnel and equipment costs, and personnel costs of employees providing professional services and maintenance support.

Research and Development Costs

Costs for research and development, principally the design and development of hardware, and the design and development of software prior to the determination of technological feasibility, are expensed as incurred on a project-by-project basis.

Software Development Costs

Software development costs are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed. Research costs and software development costs, prior to the establishment of technological feasibility, determined based upon the creation of a working model, are expensed as incurred. Our software capitalization policy defines technological feasibility as a functioning beta test prototype with confirmed manufacturability (a working model), within a reasonably predictable range of costs. Additional criteria include receptive customers, or potential customers, as evidenced by interest expressed in a beta test prototype, at some suggested selling price. Our policy is to amortize capitalized costs by the greater of (a) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenue for that product or (b) the straight-line method over the remaining estimated economic life of the product, generally two to five years, including the period being reported on.

Stock-Based Compensation

We have stock-based employee compensation plans, described in Note 14 – Stock Compensation. ASC 718, Stock Compensation requires us to estimate the fair value of restricted stock granted to employees, directors and others to record compensation expense equal to the estimated fair value. Compensation expense is recorded on a straight-line basis over the vesting period for time-based awards and performance and market-based awards with cliff vesting provisions and on a graded basis for performance and market-based awards with graded vesting provisions. Forfeitures are recorded as incurred.

Retirement Benefits

We record annual expenses relating to defined benefit pension plans based on calculations which include various actuarial assumptions, including discount rates, assumed asset rates of return, compensation increases, and turnover rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends. The effects of gains, losses, and prior service costs and credits are amortized over the average service life. The funded status, or projected benefit obligation less plan assets, for each plan, is reflected in our consolidated financial statements using a December 31 measurement date.

Other Income (Expense), Net

Other income (expense), net primarily includes exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries’ functional currencies, subsidies received from foreign governments in support of our research and development in those countries and other miscellaneous non-operational expenses.

Income Taxes

As a global company, we calculate and provide for income taxes in each tax jurisdiction in which we operate. The provision for income taxes includes the amounts payable or refundable for the current year, the effect of deferred

taxes and impacts from uncertain tax positions. Our provision for income taxes is significantly affected by shifts in the geographic mix of our pre-tax earnings across tax jurisdictions, changes in tax laws and regulations, and tax planning opportunities available in each tax jurisdiction.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement and tax bases of our assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those differences are expected to be recovered or settled. Valuation allowances are established for deferred tax assets when it is more likely than not that a tax benefit will not be realized. We recognize the effect of a change in tax rates on deferred tax assets and liabilities and in income in the period that includes the enactment date.

We recognize tax benefits for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in our income tax returns that do not meet these recognition and measurement standards. Assumptions, judgments, and the use of estimates are required in determining whether the “more likely than not” standard has been met when developing the provision for income taxes.

We recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. We have recognized deferred income taxes for local country income and withholding taxes that could be incurred on distributions of non-U.S. earnings because we do not plan to indefinitely reinvest such earnings.

We monitor for changes in tax laws and reflect the impacts of tax law changes in the period of enactment.

Foreign Currency Translation and Transactions

The financial position and results of operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains or (losses) resulting from foreign currency transactions were less than $0.1 million, less than $0.1 million, and $(1.5) million in 2021, 2020, and 2019, respectively, and are included in other income (expense), net in the consolidated statements of operations.

The financial position and results of our operations in Singapore, Switzerland, and Canada are measured in U.S. Dollars. For these subsidiaries, gains and losses that result from foreign currency transactions are included in the consolidated statements of operations in other income (expense), net.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Simplification for Accounting for Income Taxes, which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2020-12 was effective beginning January 1, 2021. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides optional expedients and exceptions for applying generally accepted accounting principles to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and can be applied through December 31, 2022. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance: Disclosures by Business Entities about Government Assistance, which requires business entities to disclose certain information about certain government assistance they receive. ASU 2021-10 is effective for annual periods beginning after December 15, 2021. We are currently assessing the effect that the ASU will have on our consolidated financial statements and related disclosures.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes that the issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes

Income from Continuing Operations Before Income Taxes


	For the year ended December 31,
	2021		2020		2019

U.S.	$	(15,056)	$	1,046	$	3,223
Non-U.S.		(11,087)		(4,466)		11,186
Total	$	(26,143)	$	(3,420)	$	14,409

Provision for Income Taxes


	For the year ended December 31,
	2021		2020		2019
Current:
Federal	$	(11)	$	1,715	$	433
State		(23)		49		107
Foreign		2,478		1,758		7,629
Total current		2,444		3,522		8,169

Deferred:
Federal		3,774		1,385		(970)
State		(3)		(24)		24
Foreign		(1,774)		(2,848)		(678)
Total deferred		1,997		(1,487)		(1,624)
Total	$	4,441	$	2,035	$	6,545

Differences Between Income Tax Provisions and Provisions for Income Taxes


	For the year ended December 31,
	2021		2020		2019

Expected tax at statutory rate	$	(5,490)	$	(718)	$	3,026
Foreign taxes at other rates		307		(309)		(914)
Valuation allowance changes		15,019		2,617		2,042
Global intangible low-taxed income inclusion		—		339		(27)
State income taxes, net of federal benefit		(811)		32		108
Uncertain tax positions		12		235		1,845
Research credits		(3,466)		(1,029)		—
Disallowed expenses and other		(1,130)		868		465
Total	$	4,441	$	2,035	$	6,545

Deferred Income Tax Balances


	As of December 31,
	2021		2020
Deferred tax assets:
Stock and long-term compensation plans	$	1,337	$	2,450
Foreign NOL & other carryforwards		38,153		29,267
US and state NOL carryforwards		5,539		718
Deferred revenue		2,068		671
Pension liability		1,547		2,074
Amortization and depreciation		257		167
Lease liability		3,171		3,837
Accrued expenses and other		1,157		1,264
Total gross deferred tax assets		53,229		40,448
Less: Valuation allowance		(34,979)		(19,992)
Net deferred income tax assets	$	18,250	$	20,456

Deferred tax liabilities:
Accruals	$	231	$	286
Tax on unremitted foreign earnings		1,357		1,809
Right of use asset		2,872		3,251
Intangible assets		5,225		6,135
Tax on credits		3,439		2,241
Contract acquisition costs		2,626		1,616
Deferred tax liabilities	$	15,750	$	15,338

Net deferred tax assets (liabilities)	$	2,500	$	5,118

Summary of Net Operating Loss Carryforwards


	Carryforward		Expiration
NOL Carryforward
Canada	$	40,759	2027-2039
United States		19,113	None
United Kingdom		9,730	None
Switzerland		10,688	2028
Other foreign		6,501	None
Canada province		40,730	2027-2039
U.S. states		21,091	2021-2041
		148,612
Other Carryforwards
United States credit		390	2031
Canada		36,141	None
Canada province		50,272	None
Capital loss		407	None
Canada credits		7,227	2023-2041
Canada province credits		3,052	2036-2041
		97,489

	$	246,101

Schedule of Reserves for Uncertain Tax Position


	As of year ended December 31,
	2021		2020		2019
Reserve at beginning of year	$	500	$	2,923	$	427
Increases related to prior year tax positions		12		277		2,500
Decreases related to prior year tax positions		—		(37)		—
Lapse of statute of limitations		—		—		(4)
Settlement		—		(2,663)		—
Total	$	512	$	500	$	2,923

Summary of Income Tax Examinations


Australia		2013
Austria		2015
Belgium		2017
Canada		2017
Netherlands		2016
Singapore		2016
Switzerland		2019
United Kingdom		2019
United States		2017

Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
U.S. Treasury Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 4,038	$ 4,951
U.S. Treasury Notes \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	4,038	4,951
Corporate Notes / Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	9,585	8,780
Corporate Notes / Bonds \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	9,585	8,780
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	8,996	4,098
Commercial Paper \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	8,996	4,098
U.S. Treasury Bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	9,990	5,292
U.S. Treasury Bills \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	9,990	5,292
U.S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	2,499	3,738
U.S. Government Agencies \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 2,499	$ 3,738

Income Taxes - Summary of Net Operating Loss Carryforwards (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 148,612
Total NOL and Other Carryforwards	246,101
Canada
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 40,759
Canada \| Earliest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2027
Canada \| Latest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2039
United States
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 19,113
United States \| Earliest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2021
United States \| Latest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2041
U.S. states
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 21,091
United Kingdom
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	9,730
Switzerland
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 10,688
Operating loss carryforward expiration	2028
Other foreign
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 6,501
Canada province
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 40,730
Canada province \| Earliest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2027
Canada province \| Latest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2039
Other Carryforwards [Member]
Deferred tax assets, operating loss, and other carryforwards
Other deductible carryforwards	$ 97,489
Other Carryforwards [Member] \| Canada
Deferred tax assets, operating loss, and other carryforwards
Other deductible carryforwards	36,141
Other Carryforwards [Member] \| United States credit
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 390
Operating loss carryforward expiration	2031
Other Carryforwards [Member] \| Canada province
Deferred tax assets, operating loss, and other carryforwards
Other deductible carryforwards	$ 50,272
Other Carryforwards [Member] \| Canada credit
Deferred tax assets, operating loss, and other carryforwards
Other deductible carryforwards	$ 7,227
Other Carryforwards [Member] \| Canada credit \| Earliest period
Deferred tax assets, operating loss, and other carryforwards
Other Carryforwards, expiration date	2023
Other Carryforwards [Member] \| Canada credit \| Latest period
Deferred tax assets, operating loss, and other carryforwards
Other Carryforwards, expiration date	2041
Other Carryforwards [Member] \| Canada province credits
Deferred tax assets, operating loss, and other carryforwards
Foreign and state, net operating loss (NOL) carryforwards	$ 3,052
Other Carryforwards [Member] \| Canada province credits \| Earliest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2036
Other Carryforwards [Member] \| Canada province credits \| Latest period
Deferred tax assets, operating loss, and other carryforwards
Operating loss carryforward expiration	2041
Capital Loss Carryforward
Deferred tax assets, operating loss, and other carryforwards
Other deductible carryforwards	$ 407

Employee Benefit Plan - Projected future pension benefit payments (Details) - Non-U.S. Plan $ in Thousands	Dec. 31, 2021 USD ($)
Projected future pension benefit payments
2021	$ 872
2022	719
2023	628
2024	769
2025	1,393
Beyond	$ 4,579

Geographic, Customer and Supplier Information

12 Months Ended

Dec. 31, 2021

Geographic, Customer and Supplier Information

Geographic, Customer and Supplier Information

Note 17 – Geographic, Customer and Supplier Information

We classify our sales by our customers’ locations in three geographic regions: 1) EMEA, which includes Europe, the Middle East, and Africa; 2) the Americas, which includes sales in North, Central, Latin and South America and Canada; and 3) Asia Pacific, which includes Australia and India.

We have recast the below EMEA gross profit amounts for the years ended December 31, 2020 and 2019 for immaterial errors, consistent with the impacts disclosed in Note 3 – Revision of Previously Issued Financial Statements. For the years ended December 31, 2020 and 2019, EMEA gross profit decreased by $4.2 million and $3.7 million, respectively.


	Europe,
	Middle East,
	Africa (EMEA)		Americas		Asia Pacific		Total
2021
Revenue	$	104,878	$	68,646	$	40,957	$	214,481
Gross profit		69,893		45,747		27,295		142,935
Long-lived assets		5,978		13,634		342		19,954

2020
Revenue	$	117,086	$	53,171	$	45,434	$	215,691
Gross profit		78,456		37,532		32,071		148,059
Long-lived assets		7,482		14,968		741		23,191

2019
Revenue	$	145,942	$	61,577	$	45,965	$	253,484
Gross profit		95,069		41,667		31,102		167,838
Long-lived assets		8,085		13,240		709		22,034

For the years 2021, 2020, and 2019, our top 10 customers contributed 22%, 21% and 29%, respectively, of total worldwide revenue. The majority of our hardware products are assembled by four independent factories in China and one independent factory in Romania.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Schedule of operating lease costs

Operating lease cost details for the years ended December 31, 2021, December 31, 2020, and December 31, 2019 are as follows:



	Years ended December 31,
	2021		2020		2019

	(in thousands)
Building rent	$	2,564	$	2,978	$	3,397
Automobile rentals		1,505		1,576		1,531
Total net operating lease costs	$	4,069	$	4,554	$	4,928

Schedule of supplemental consolidated balance sheet information related to our operating leases


	December 31, 2021			December 31, 2020
in thousands
Leases
Assets		9,197		11,356
Operating lease right-of-use assets	$	9,197	$	11,356

Liabilities
Current
Operating lease liabilities	$	2,476	$	2,855

Noncurrent
Operating lease liabilities		10,180		12,399
Total lease liabilities	$	12,656	$	15,254

Schedule of supplemental consolidated cash flow information related to leases

Supplemental consolidated cash flow information related to leases is as follows:


	Years ended December 31,
	2021		2020		2019

		(in $ thousands)
Supplemental cash flow and other information related to leases:

Operating cash payments from operating leases	$	3,630	$	3,835	$	3,731

ROU assets obtained in exchange for new operating lease liabilities	$	589	$	3,549	$	4,924

Schedule of maturities of operating leases


	As of December 31, 2021
		(in $ thousands)
2022	$	3,040
2023		2,599
2024		1,823
2025		1,693
2026		1,629
Later years		4,352
Less imputed interest		(2,480)
Total lease liabilities	$	12,656

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property and Equipment

Schedule of major classes of property and equipment


in thousands	December 31, 2021		December 31, 2020
Office equipment and software	$	14,327	$	13,540
Leasehold improvements		10,296		10,593
Furniture and fixtures		4,223		3,827
Total		28,846		27,960
Accumulated depreciation		(18,089)		(16,125)
Property and equipment, net	$	10,757	$	11,835

Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Impact of ASU 2016-13 adoption
Change in allowance for doubtful accounts for trade receivables
Beginning Balance	$ 288
Ending Balance		$ 288
Provision for Doubtful Account [Member]
Change in allowance for doubtful accounts for trade receivables
Beginning Balance	4,135	2,524	$ 1,152
Provision for Bad Debts	(16)	2,306	2,215
Chargeoffs	(2,689)	(994)	(843)
Foreign Currency Translation	(11)	11
Ending Balance	1,419	4,135	2,524
Provision for Doubtful Account [Member] \| Impact of ASU 2016-13 adoption
Change in allowance for doubtful accounts for trade receivables
Beginning Balance	$ 4,135	2,812
Ending Balance		$ 4,135	$ 2,812

Stock Based Compensation - Allocation of Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Compensation expense
Stock-based compensation	$ 4,354	$ 4,740	$ 3,368
Restricted Stock or Unit Expense	4,354	4,740	3,368
Other long-term compensation plan	848	1,262	1,955
Total Compensation	$ 5,202	$ 6,002	$ 5,323

Revision of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2021

Revision of Previously Issued Financial Statements

Revision of Previously Issued Financial Statements

Note 3 – Revision of Previously Issued Financial Statements

We have revised amounts reported in previously issued financial statements for the periods presented in this Annual Report on Form 10-K related to immaterial errors. The errors relate to certain costs directly related to the production and distribution of hardware products. The costs were not properly categorized in prior periods, which led to an understatement of product and license cost of goods sold and an overstatement of sales and marketing expense. There was no impact to previously reported revenue or net income.

We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the years ended December 31, 2020 and 2019, or for any quarterly periods included therein or through our Quarterly Report on Form 10-Q for the quarterly periods ended September 30, 2021, June 30, 2021, and March 31, 2021.

The following tables present the effects of the aforementioned revisions on our consolidated statements of operations for the years ended December 31, 2020 and 2019.

Consolidated Statements of Operations


	Year Ended December 31, 2020						Year Ended December 31, 2019
in thousands	As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised
Cost of goods sold
Product and license	$	41,820	$	4,193	$	46,013	$	63,393	$	3,684	$	67,077
Total cost of goods sold		63,439		4,193		67,632		81,962		3,684		85,646

Gross profit		152,252		(4,193)		148,059		171,522		(3,684)		167,838

Operating costs
Sales and marketing		60,856		(4,193)		56,663		61,503		(3,684)		57,819
Total operating costs		157,510		(4,193)		153,317		157,333		(3,684)		153,649

Employee Benefit Plan - Net Unfunded Status (Details) - Non-U.S. Plan - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net unfunded status of pension plan
Fair value of plan assets	$ 17,394	$ 17,290	$ 14,159
Projected benefit obligation	(24,855)	(27,431)	$ (21,759)
Net unfunded benefit obligation	$ (7,461)	$ (10,141)

- Definition

Amount of asset segregated and restricted to provide benefit under defined benefit plan. Asset includes, but is not limited to, stock, bond, other investment, earning from investment, and contribution by employer and employee.

+ References + Details

Commitments and Contingencies - Rent expense and purchase obligations (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Rent expense and inventory purchase commitments
Purchase obligations	$ 45,600
Indemnification clauses
Rent expense and inventory purchase commitments
Liabilities accrued	0
Inventories [Member]
Rent expense and inventory purchase commitments
Purchase obligations expected to be consummated in the next 12 months	15,400
Hosting arrangements
Rent expense and inventory purchase commitments
Purchase obligations will be used in the next one to three years	26,900
Other software agreements
Rent expense and inventory purchase commitments
Purchase obligations will be used in the next one to three years	$ 3,300

Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Summary of Significant Accounting Policies
Lease, Practical Expedients, Package [true false]	true
Operating lease right-of-use assets	$ 9,197	$ 11,356
Operating lease liabilities	12,656	15,254
Retained earnings	$ 143,173	$ 173,731

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

Employee Benefit Plan - Net Periodic Pension Costs (Details) - Non-U.S. Plan $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) age	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Plan information
Required rate of return under Belgian law, employer contributions	1.80%
Required rate of return under Belgian law, employee contributions	1.80%
Benefit rights vests upon statutory retirement age \| age	62
Net periodic pension costs
Service cost (gross)	$ 1,587	$ 1,549	$ 1,164
Interest cost	53	106	234
Expected return on plan assets	(302)	(271)	(242)
Amortization of unrecognized actuarial gain	(12)	(40)	(22)
Net periodic pension cost	$ 1,326	$ 1,344	$ 1,134

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)	$ (30,584)	$ (5,455)	$ 7,864
Other comprehensive loss
Cumulative translation adjustment, net of tax	(2,997)	4,534	1,543
Pension adjustment, net of tax	2,056	(1,459)	(1,551)
Unrealized gains on available-for-sale securities	(21)
Comprehensive income (loss)	$ (31,546)	$ (2,380)	$ 7,856

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2021

Intangible Assets

Schedule of indefinite-lived intangible assets



in thousands	Acquired Technology		Customer Relationships		Other		Total Intangible Assets
Net balance at December 31, 2019	$	5,454		26,884		3,871		36,209
Additions		46		—		87		133
Disposals		—		—		(58)		(58)
Net foreign currency translation		53		(58)		39		34
Amortization expense		(3,276)		(3,626)		(2,220)		(9,122)
Net balance at December 31, 2020		2,277		23,200		1,719		27,196
Additions		15		—		20		35
Disposals		—		—		(21)		(21)
Net foreign currency translation		2		(46)		(8)		(52)
Amortization expense		(1,541)		(3,993)		(354)		(5,888)
Net balance at December 31, 2021	$	753	$	19,161	$	1,356	$	21,270

December 31, 2021 balance at cost	$	43,034	$	39,814	$	13,549	$	96,397
Accumulated amortization		(42,281)		(20,653)		(12,193)		(75,127)
Net balance at December 31, 2021	$	753	$	19,161	$	1,356	$	21,270

Expected Amortization of Intangible Assets


December 31, 2022	$	4,678
December 31, 2023		4,049
December 31, 2024		4,046
December 31, 2025		3,046
December 31, 2026		2,327
Thereafter		2,368
Subject to amortization		20,514
Trademarks		756
Total intangible assets	$	21,270

Revision of Previously Issued Financial Statements - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Pro forma Balance Sheet:
Costs of sales									$ 71,546	$ 67,632	$ 85,646
Gross Profit	$ 37,467	$ 36,395	$ 34,831	$ 34,242	$ 38,215	$ 34,954	$ 35,616	$ 39,274	142,935	148,059	167,838
Sales and marketing	16,092	14,449	15,021	17,168	15,680	13,569	13,581	13,833	62,730	56,663	57,819
Total operating costs	43,426	38,411	43,690	43,536	40,256	37,309	37,303	38,449	169,063	153,317	153,649
Product and license
Pro forma Balance Sheet:
Costs of sales	$ 15,377	9,502	10,565	10,752	9,489	11,071	13,689	11,764	46,196	46,013	67,077
Services and other
Pro forma Balance Sheet:
Costs of sales									$ 25,350	21,619	18,569
As Previously Reported [Member]
Pro forma Balance Sheet:
Costs of sales										63,439	81,962
Gross Profit										152,252	171,522
Sales and marketing										60,856	61,503
Total operating costs										157,510	157,333
As Previously Reported [Member] \| Product and license
Pro forma Balance Sheet:
Costs of sales										41,820	63,393
Adjustment [Member]
Pro forma Balance Sheet:
Costs of sales										4,193	3,684
Gross Profit				1,200				1,000		(4,193)	(3,684)
Sales and marketing			1,000				1,100			(4,193)	(3,684)
Total operating costs		1,000				1,000				(4,193)	(3,684)
Adjustment [Member] \| Product and license
Pro forma Balance Sheet:
Costs of sales		$ 1,000	$ 1,000	$ 1,200	$ 1,000	$ 1,000	$ 1,100	$ 1,000		$ 4,193	$ 3,684

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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+ Details

Subsequent Event

12 Months Ended

Dec. 31, 2021

Subsequent Event

Subsequent Event

Note 21 – Subsequent Events

As mentioned in Note 2 – Summary of Significant Accounting Policies, we had an equity interest of 17% in Promon AS as of December 31, 2021. Promon is a technology company headquartered in Norway that specializes in mobile app security, whose solutions focus largely on Runtime Application Self-Protection (RASP). We integrate Promon’s RASP technology into our software solutions, which are licensed to our customers.

On January 31, 2022, we sold our equity interest in Promon for $18.9 million, and will record the gain on sale of $14.8 million in other income (expense) on the Consolidated Statement of Operations during the three months ended March 31, 2022.

We intend to continue to purchase and integrate Promon’s RASP technology into our customer software solutions.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Employee Benefit Plans

Employee Benefit Plans

Note 16 – Employee Benefit Plans

U.S. Plan

We maintain a defined contribution pension plan for U.S. employees established pursuant to Section 401(k) of the Internal Revenue Code. The plan allows voluntary employee contributions and discretionary employer contributions. For the years ended December 31, 2021, 2020, and 2019, we expensed contributions of $0.3 million, $0.3 million, and $0.3 million, respectively.

Non-U.S. Plans

We are subject to national mandatory pension systems and other compulsory plans, or make contributions to social pension funds based on local regulations. When our obligation is limited to the payment of the contribution into these plans or funds, the recognition of such liabilities is not required.

In addition, we have, in some countries, defined benefit plans consisting of final retirement salary and committed pension payments.

In Switzerland, the pension plan is a cash balance plan where contributions are expressed as a percentage of the pensionable salary. Contributions to Swiss plans are paid by the employees and the employer. The pension plan guarantees the amount accrued on the members’ savings accounts, as well as a minimum interest on those savings accounts. The plan assets are held in guaranteed investment contracts.

We also maintain a pension plan for our Belgian employees, in compliance with Belgian law. Contributions to Belgium plans are paid by the employees and the employer. Certain features of the plans require them to be categorized as defined benefit plans under ASC 715 due to Belgian social legislation, which prescribed a minimum annual return of 1.8% on employer contributions and 1.8% for employee contributions. The plan assets are held in guaranteed investment contracts.

The Company also includes a liability related to obligations to provide retirement benefits to employees who retire from the Company’s French subsidiary, as required by law. Per French regulations, each employee is entitled to a lump sum payment upon retirement based on years of service and salary at retirement. Benefit rights vest upon the statutory retirement age of 62. The obligation recorded represents the present value of amounts the Company expects to pay.

Components of net periodic pension cost included in earnings:


	Year ended December 31,
	2021		2020		2019

Service cost (gross)	$	1,587	$	1,549	$	1,164
Interest cost		53		106		234
Expected return on plan assets		(302)		(271)		(242)
Amortization of unrecognized actuarial gain		(12)		(40)		(22)
Net periodic pension cost	$	1,326	$	1,344	$	1,134

The net unfunded status of the Non-U.S. pension plans is as follows:


	As of December 31,
	2021		2020
Fair value of plan assets	$	17,394	$	17,290
Projected benefit obligation		(24,855)		(27,431)
Net unfunded benefit obligation	$	(7,461)	$	(10,141)

Net unfunded benefit obligation is recorded as other long-term liabilities in our consolidated Balance Sheets.

The change in the fair value of plan assets is as follows:


	Year ended December 31,
	2021		2020

Fair value of plan assets at January 1	$	17,290	$	14,159
Employee contributions		499		512
Actual return on plan assets		46		441
Benefits (paid), net of transfers		(492)		(251)
Employer contributions		1,049		1,088
Foreign exchange adjustment		(998)		1,341
Fair value of plan assets at December 31	$	17,394	$	17,290

The change in benefit obligations is as follows:


	Year ended December 31,
	2021		2020

Benefit obligations at January 1	$	27,431	$	21,759
Gross service cost		1,587		1,549
Interest cost		53		106
Employee contributions		499		512
Actuarial (gains)/losses		(2,185)		1,694
Plan amendment		(432)		—
Benefits (paid), net of transfers		(492)		(251)
Foreign exchange adjustment		(1,606)		2,062
Benefit obligations at December 31	$	24,855	$	27,431

The decrease in benefit obligations at December 31, 2021 compared to December 31, 2020 was primarily driven by service costs, actuarial gains and foreign exchange adjustments, driven by the weakened Euro and Swiss Franc currencies. The increase in benefit obligations at December 31, 2020 compared to December 31, 2019 was primarily driven by an increase in actuarial losses and the impact of foreign exchange adjustments.

Our investment policy meets our responsibility under local social legislation and aligns plan assets with liabilities, while minimizing risk. For the years ended December 31, 2021 and 2020, plan assets are invested in guaranteed investment contracts. Fair value of guaranteed investment contracts is surrender value. Fair value for the year ended December 31, 2021 was determined using Level 3 inputs as defined by ASC 820, Fair Value Measurements. Changes in our plan assets are attributable to benefit payments and contributions as we have not actively traded our assets during the years ended December 31, 2021 and December 31, 2020.

Other

The accumulated benefit obligation for the plans were $22.9 million and $25.1 million as of December 31, 2021 and 2020, respectively.

The Company expects to pay approximately $1.0 million of contributions over the next twelve months.

The amounts reclassified out of other comprehensive income during the years ended December 31, 2021, 2020, and 2019 were not material.

Actuarial Assumptions

Certain actuarial assumptions such as the discount rate and the long-term rate of return on plan assets have a significant effect on the amounts reported for net periodic cost and the benefit obligation. The assumed discount rates

reflect the prevailing market rates of a universe of high-quality, non-callable, corporate bonds currently available that, if the obligation were settled at the measurement date, would provide the necessary future cash flows to pay the benefit obligation when due. In determining the long-term return on plan assets, the Company considers long-term rates of return of comparable low risk investments, such as Euro AA bonds.

The following weighted-average assumptions between all plans were utilized in the pension calculations:


	As of December 31,
	2021			2020

	(%)
Discount rates	0.20	-	0.90	0.05	-	0.60
Inflation	0.90	-	1.90	0.90	-	1.80
Expected return on plan assets	1.25	-	2.00	1.25	-	2.00
Rate of salary increases	1.90	-	2.80	1.90	-	2.80

Projected future pension benefits as of December 31, 2021:


2022	$	872
2023		719
2024		628
2025		769
2026		1,393
Beyond		4,579

- Definition

The entire disclosure for retirement benefits.

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+ Details

Employee Benefit Plan - Defined Contribution Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
United States [Member]
Defined contribution pension plan
Employer match, contributions	$ 0.3	$ 0.3	$ 0.3

Geographic, Customer and Supplier Information (Tables)

12 Months Ended

Dec. 31, 2021

Geographic, Customer and Supplier Information

Information regarding geographic areas


	Europe,
	Middle East,
	Africa (EMEA)		Americas		Asia Pacific		Total
2021
Revenue	$	104,878	$	68,646	$	40,957	$	214,481
Gross profit		69,893		45,747		27,295		142,935
Long-lived assets		5,978		13,634		342		19,954

2020
Revenue	$	117,086	$	53,171	$	45,434	$	215,691
Gross profit		78,456		37,532		32,071		148,059
Long-lived assets		7,482		14,968		741		23,191

2019
Revenue	$	145,942	$	61,577	$	45,965	$	253,484
Gross profit		95,069		41,667		31,102		167,838
Long-lived assets		8,085		13,240		709		22,034

Allowance for credit losses (Tables)

12 Months Ended

Dec. 31, 2021

Allowance for credit losses

Schedule change in the allowance for credit losses


in thousands
Balance at December 31, 2019	$	2,524
Impact of ASU 2016-13 adoption		288
Balance at January 1, 2020		2,812
Provision		2,306
Write-offs		(994)
Net foreign currency translation		11
Balance at December 31, 2020	$	4,135
Provision		(16)
Write-offs		(2,689)
Net foreign currency translation		(11)
Balance at December 31, 2021	$	1,419

Employee Benefit Plan - Change in Fair Value of Plan Assets (Details) - Non-U.S. Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Change in fair value of plan assets
Fair value of plan assets	$ 17,290	$ 14,159
Employee contributions	499	512
Actual return on plan assets	46	441
Benefits (paid), net of transfers	(492)	(251)
Employer contributions	1,049	1,088
Foreign exchange adjustment	(998)	1,341
Fair value of plan assets	$ 17,394	$ 17,290

- Definition

Amount of contribution received by defined benefit plan from employer which increases plan assets.

+ References + Details

- Definition

+ References + Details

Quarterly Results of Operations (unaudited)

12 Months Ended

Dec. 31, 2021

Quarterly Results of Operations (unaudited)

Quarterly Results of Operations (unaudited)

Note 12 – Quarterly Results of Operations (unaudited)

The quarterly results of operations are summarized in the following select income statement line items:


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2021
Total revenues	$	50,775	$	52,277	$	52,276	$	59,153
Product and license cost of goods sold (1.)		10,752		10,565		9,502		15,377
Gross profit		34,242		34,831		36,395		37,467
Sales and marketing expense (1.)		17,168		15,021		14,449		16,092
Operating costs		43,536		43,690		38,411		43,426
Operating income (loss)		(9,294)		(8,859)		(2,016)		(5,959)
Provision (benefit) for income taxes		(501)		(1,143)		(762)		6,847
Net income (loss)		(9,151)		(6,685)		(975)		(13,773)
Net income/(loss) per share:
Basic	$	(0.23)	$	(0.17)	$	(0.02)	$	(0.35)
Diluted	$	(0.23)	$	(0.17)	$	(0.02)	$	(0.35)

2020
Total revenues	$	56,370	$	54,954	$	51,439	$	52,928
Product and license cost of goods sold (1.)		11,764		13,689		11,071		9,489
Gross profit		39,274		35,616		34,954		38,215
Sales and marketing expense (1.)		13,833		13,581		13,569		15,680
Operating costs		38,449		37,303		37,309		40,256
Operating income (loss)		825		(1,687)		(2,355)		(2,041)
Provision (benefit) for income taxes		690		973		95		277
Net income (loss)		4		(2,025)		(1,678)		(1,756)
Net income/(loss) per share:
Basic	$	(0.00)	$	(0.05)	$	(0.04)	$	(0.04)
Diluted	$	(0.00)	$	(0.05)	$	(0.04)	$	(0.04)

(1.) We have revised certain period previously issued financial statements to reflect immaterial reclassification adjustments of expenses directly attributable to the production and distribution of hardware products. Certain sales and marketing expenses were reclassified to product and license cost of goods sold. For the first, second, and third quarters of 2021, product and license cost of goods sold increased by $1.2 million, $1.0 million, and $1.0 million, respectively. For the first, second, and third quarters of 2021, gross profit, sales and marketing expense, and total operating costs decreased by $1.2 million, $1.0 million, and $1.0 million, respectively.

For the first, second, third and fourth quarters of 2020, product and license cost of goods sold increased by $1.0 million, $1.1 million, $1.0 million and $1.0 million, respectively. For the first, second, third and fourth quarters of 2020, gross profit, sales and marketing expense, and total operating costs decreased by $1.0 million, $1.1 million, $1.0 million and $1.0 million, respectively.

The adjustments had no impact on previously reported revenue or net income. See Note 3 – Revision of Previously Issued Financial Statements for additional detail.

Revenue - Performance Obligations (Details) $ in Thousands	12 Months Ended
Revenue - Performance Obligations (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Revenue
Future revenue related to current unsatisfied performance obligations	$ 57,246
Remaining performance obligations	true
Original expected durations	true
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true/false]	true
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Future revenue related to current unsatisfied performance obligations	$ 31,626
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Future revenue related to current unsatisfied performance obligations	$ 15,608
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Future revenue related to current unsatisfied performance obligations	$ 7,514
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Future revenue related to current unsatisfied performance obligations	$ 2,498

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Cash and Cash Equivalents

Short-term Investments

Credit Losses

Fair Value of Financial Instruments

Inventories

Property and Equipment

Accounting for Leases

All of our leases are operating leases.

The Company adopted ASC Topic 842, Leases as of January 1, 2019, using the modified retrospective approach. In addition, the Company elected the following practical expedients:

●

The short-term lease practical expedient, which allowed the Company to exclude short-term leases from recognition in the consolidated balance sheets;

●

We apply the portfolio approach to automobile leases with similar characteristics that commence in the same period.

Goodwill

We operate in one reporting unit and had no goodwill impairment recorded for the years ended December 31, 2021, 2020, and 2019.

Long-Lived and Intangible Assets

Equity Method Investment

Share Repurchase Program

Revenue Recognition

to obtain our contracts. See Note 5 - Revenue for further details. We determine revenue recognition through the following steps:

●

Identification of the contract, or contracts, with a customer;

●

Identification of the performance obligations in the contract;

●

Determination of the transaction price;

●

Allocation of the transaction price to the performance obligations in the contract; and

●

Recognition of revenue when, or as, we satisfy a performance obligation.

Nature of Goods and Services

Multiple-Element Arrangements

In our typical multiple-element arrangement, the primary deliverables include:

Post contract support (PCS) in the form of maintenance on the server system software or support.

Significant Judgments

Cost of Goods Sold

Research and Development Costs

Software Development Costs

Stock-Based Compensation

Retirement Benefits

Other Income (Expense), Net

Income Taxes

We monitor for changes in tax laws and reflect the impacts of tax law changes in the period of enactment.

Foreign Currency Translation and Transactions

Recently Issued Accounting Pronouncements

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 18 – Commitments and Contingencies

The company leases office space and automobiles under operating lease agreements. See Note 11 – Leases for future minimum rental payments required under non-cancelable leases.

At December 31, 2021, we have purchase obligations of $45.6 million, including $15.4 million of inventory purchase obligations which are expected to be consummated in the next 12 months, $26.9 million of committed hosting arrangements which will be used in the next one to three years, and $3.3 million for other software agreements related to the administration of our business which range from one to three years.

We are a party to or have intellectual property subject to litigation and other proceedings that arise in the ordinary course of our business. These types of matters could result in fines, penalties, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of each of these matters, including the legal proceedings described below, will have a material adverse effect on the corporation as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our financial results in any particular interim reporting period. Among the factors that we consider in this assessment are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if estimable), the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar cases and the experience of other companies, the facts available to us at the time of assessment and how we intend to respond to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress.

Although we cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, U.S. GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. We follow a process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated.

We include various types of indemnification clauses in our customer agreements. These indemnifications may include, but are not limited to, infringement claims related to our intellectual property, direct damages and consequential damages. The type and amount of such indemnifications vary substantially based on our assessment of risk and reward associated with each agreement. We believe the estimated fair value of these indemnification clauses is minimal, and we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions. We have no liabilities recorded for these clauses as of December 31, 2021.

A complaint was filed on August 20, 2020 against OneSpan and certain of its officers, asserting claims for purported violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and SEC Rule 10b-5 promulgated thereunder, based on certain alleged material misstatements and omissions. The case is captioned Almendariz v. OneSpan Inc., et al., No. 1:20-cv-04906 (N.D. Ill.) (the “Securities Class Action”). Specifically, the plaintiff in the Securities Class Action alleges, among other things, that certain statements about OneSpan’s business were misleading because of defendants’ failure to disclose that OneSpan purportedly had inadequate internal procedures and controls over financial reporting and related disclosures; and OneSpan purportedly downplayed the negative impacts of immaterial errors in its financial statements. On April 28, 2021, the Securities Class Action was dismissed by the court without prejudice.

A complaint, related in subject matter to the Securities Class Action, was filed on October 23, 2020 against certain of OneSpan’s officers and directors, and names OneSpan as a nominal defendant. The case is captioned Klein v. Boroditzky, et al., No. 1:20-cv-06310 (N.D. Ill.) (the “Derivative Action” and, collectively with the Securities Class

Action, the “Litigation”). The plaintiff asserts claims for breach of fiduciary duty, abuse of control and corporate waste, as well as a claim for contribution under Sections 10(b) and 21D of the Exchange Act, based on the same alleged wrongdoing pled in the Securities Class Action. On February 16, 2021, on the parties’ agreed motion, the court stayed the action pending a decision on the then-anticipated motion to dismiss in the Securities Class Action. On June 28, 2021 the Klein case was dismissed by the court without prejudice.

On April 2, 2021, a different purported shareholder of the Company, represented by one of the same law firms representing plaintiff in the Klein case, filed second derivative suit in the Northern District of Illinois arising out of the same events that led to the filing of the Securities Class Action. The case is captioned Herrera v. Boroditsky, et al., 1:21-cv-01789 (N.D. Ill.). The factual allegations are substantially similar to those in Klein, except that the complaint does not contain express allegations regarding the pendency of the Securities Class Action and only one cause of action, for breach of fiduciary duty, is asserted. On June 28, 2021 the Herrera case was dismissed by the court without prejudice.

From time to time, we have been involved in litigation and claims incidental to the conduct of our business, such as compensation claims from current or former employees or commercial disputes with vendors. We expect that to continue. Excluding matters specifically disclosed above, we are not a party to any lawsuit or proceeding that, in management’s opinion, is likely to have a material adverse effect on its business, financial condition or results of operations.

From time to time, we have been involved in litigation and claims incidental to the conduct of our business, such as compensation claims from current or former employees in Europe. We expect that to continue. Excluding matters specifically disclosed above, we are not a party to any lawsuit or proceeding that, in management’s opinion, is likely to have a material adverse effect on its business, financial condition or results of operations.

Summary of Significant Accounting Policies - Software Development Costs (Details) - Software development	12 Months Ended
	Dec. 31, 2021
Minimum [Member]
Software Development Costs
Estimated useful lives of assets	2 years
Maximum [Member]
Software Development Costs
Estimated useful lives of assets	5 years

Inventories, net (Tables)

12 Months Ended

Dec. 31, 2021

Inventories, net

Summary of Inventories, net


	2021		2020

	(in thousands)
Component parts	$	3,841	$	5,439
Work-in-process and finished goods		6,504		7,654
Total	$	10,345	$	13,093

Summary of Significant Accounting Policies - Long-Lived and Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2021
Patents [Member]
Impairment of Long-Lived and Intangible Assets
Estimated useful lives of assets	20 years
Minimum [Member] \| Proprietary Technology [Member]
Impairment of Long-Lived and Intangible Assets
Estimated useful lives of assets	3 years
Minimum [Member] \| Customer Relationships [Member]
Impairment of Long-Lived and Intangible Assets
Estimated useful lives of assets	5 years
Maximum [Member] \| Proprietary Technology [Member]
Impairment of Long-Lived and Intangible Assets
Estimated useful lives of assets	7 years
Maximum [Member] \| Customer Relationships [Member]
Impairment of Long-Lived and Intangible Assets
Estimated useful lives of assets	12 years

Employee Benefit Plan - Other (Details) - Non-U.S. Plan - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Accumulated benefit obligation	$ 22.9	$ 25.1
Expected employer contributions over the next twelve months	$ 1.0

Intangible Assets

12 Months Ended

Dec. 31, 2021

Intangible Assets

Intangible Assets

Note 7 – Intangible Assets

Intangible asset activity for the two years ended December 31, 2021 is detailed in the following table;



in thousands	Acquired Technology		Customer Relationships		Other		Total Intangible Assets
Net balance at December 31, 2019	$	5,454		26,884		3,871		36,209
Additions		46		—		87		133
Disposals		—		—		(58)		(58)
Net foreign currency translation		53		(58)		39		34
Amortization expense		(3,276)		(3,626)		(2,220)		(9,122)
Net balance at December 31, 2020		2,277		23,200		1,719		27,196
Additions		15		—		20		35
Disposals		—		—		(21)		(21)
Net foreign currency translation		2		(46)		(8)		(52)
Amortization expense		(1,541)		(3,993)		(354)		(5,888)
Net balance at December 31, 2021	$	753	$	19,161	$	1,356	$	21,270

December 31, 2021 balance at cost	$	43,034	$	39,814	$	13,549	$	96,397
Accumulated amortization		(42,281)		(20,653)		(12,193)		(75,127)
Net balance at December 31, 2021	$	753	$	19,161	$	1,356	$	21,270

Certain intangible assets are denominated in local currencies and are subject to currency fluctuations.

Expected amortization of the intangible assets for the years ended:


December 31, 2022	$	4,678
December 31, 2023		4,049
December 31, 2024		4,046
December 31, 2025		3,046
December 31, 2026		2,327
Thereafter		2,368
Subject to amortization		20,514
Trademarks		756
Total intangible assets	$	21,270

Allowance for credit losses

12 Months Ended

Dec. 31, 2021

Allowance for credit losses

Allowance for credit losses

Note 10 – Allowance for Credit Losses

The change in the allowance for credit losses during the years ended December 31, 2020 and 2021 were as follows:


in thousands
Balance at December 31, 2019	$	2,524
Impact of ASU 2016-13 adoption		288
Balance at January 1, 2020		2,812
Provision		2,306
Write-offs		(994)
Net foreign currency translation		11
Balance at December 31, 2020	$	4,135
Provision		(16)
Write-offs		(2,689)
Net foreign currency translation		(11)
Balance at December 31, 2021	$	1,419

During the year ended December 31, 2021, we wrote off $2.7 million of accounts receivable that were fully reserved for and no longer deemed collectible.

- Definition

The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security.

+ References + Details

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2021

Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

SCHEDULE II

ONESPAN INC.

VALUATION AND QUALIFYING ACCOUNTS

Credit losses for trade receivables.



				Provision		Foreign
	Beginning			for Bad		Currency	Ending
	Balance			Debts	Chargeoffs	Translation	Balance
For the year ended December 31,
2021	$	4,135		(16)	(2,689)	(11)	$	1,419
2020	$	2,812	(1)	2,306	(994)	11	$	4,135
2019	$	1,152		2,215	(843)	—	$	2,524

(1)

Includes the $288 impact of the initial ASU 2016-13 adoption on January 1, 2020.

See accompanying independent auditors’ report.

Revenue

12 Months Ended

Dec. 31, 2021

Revenue

Revenue

Note 5 – Revenue

We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” (“Topic 606”), as described below.

Disaggregation of Revenues

The following tables present our revenues disaggregated by major products and services, geographical region and timing of revenue recognition.

Revenue by major products and services (in thousands)


		Years ended December 31,
	2021		2020			2019

Hardware products	$	79,501	$	81,849	$	127,005
Software licenses		40,857		51,137		56,308
Subscription		38,213		27,788		22,280
Professional services		4,634		5,689		5,759
Maintenance, support, and other		51,276		49,228		42,132
Total Revenue	$	214,481	$	215,691	$	253,484

Revenue by location of customer for the years ended December 31, 2021, 2020, and 2019 (in thousands)


	EMEA			Americas			APAC			Total
Total Revenue:
2021	$	104,878		$	68,646		$	40,957		$	214,481
2020	$	117,086		$	53,171		$	45,434		$	215,691
2019	$	145,942		$	61,577		$	45,965		$	253,484

Percent of Total:
2021		49	%		32	%		19	%		100	%
2020		54	%		25	%		21	%		100	%
2019		58	%		24	%		18	%		100	%

Timing of revenue recognition (in thousands)


	Years ended December 31,
	2021		2020		2019
Products and Licenses transferred at a point in time	$	120,358	$	132,986	$	183,313
Services transferred over time		94,123		82,705		70,171
Total Revenue	$	214,481	$	215,691	$	253,484

Contract balances (in thousands)

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.


		December 31,
in thousands		2021		2020
Receivables, inclusive of trade and unbilled	$	56,612	$	57,537
Contract Assets (current and non-current)	$	4,889	$	9,079
Contract Liabilities (Deferred Revenue current and non-current)	$	63,742	$	55,147

Contract assets relate primarily to multi-year term license arrangements and the remaining contractual billings. These contract assets are transferred to receivables when the right to billing occurs, which is normally over 1-5 years. The contract liabilities primarily relate to the advance consideration received from customers for subscription and maintenance services. Revenue is recognized for these services over time.

As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with customers.

Revenue recognized during the year ended December 31, 2021 included $41.3 million that was included on the December 31, 2020 balance sheet in contract liabilities. Deferred revenue increased in the same period due to timing of annual renewals.

Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.


in thousands	2022		2023		2024		Beyond 2024		Total
Future revenue related to current unsatisfied performance obligations	$	31,626	$	15,608	$	7,514	$	2,498	$	57,246

The Company applies practical expedients and does not disclose information about remaining performance obligations (a) that have original expected durations of one year or less, or (b) where revenue is recognized as invoiced.

Costs of obtaining a contract

The Company incurs incremental costs related to commissions, which can be directly tied to obtaining a contract. Under Topic 606, the Company capitalizes commissions associated with certain new contracts and amortizes the costs over a period of benefit based on the transfer of goods or services that we have determined to be up to seven years. We determined the period of benefit by taking into consideration our customer contracts, our technology and other

factors, including customer attrition. Commissions and amortization expense are included in Sales and Marketing expenses on the consolidated statements of operations.

Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period for the assets that the Company otherwise would have recognized is one year or less. These costs are included in Sales and Marketing expense in the consolidated statements of operations.

The following tables provide information related to the capitalized costs and amortization recognized in the current and prior period:



in thousands		December 31, 2021		December 31, 2020
Capitalized costs to obtain contracts, current	$	2,134	$	1,222
Capitalized costs to obtain contracts, non-current	$	8,675	$	5,464


		Twelve months ended December,
in thousands		2021		2020
Amortization of capitalized costs to obtain contracts	$	1,555	$	904
Impairments of capitalized costs to obtain contracts	$	-	$	-

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Goodwill

12 Months Ended

Dec. 31, 2021

Goodwill

Goodwill

Note 6 – Goodwill

Goodwill activity for the two years ended December 31, 2021 consisted of the following:


in thousands
Net balance at December 31, 2019	$	94,612
Net foreign currency translation		2,940
Net balance at December 31, 2020	$	97,552
Net foreign currency translation		(1,378)
Net balance at December 31, 2021	$	96,174

Certain portions of goodwill are denominated in local currencies and are subject to currency fluctuations. No impairment of goodwill was recorded during the years ended December 31, 2021, 2020, or 2019.

Income Taxes - Statutory Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Statutory tax rate percentage	21.00%	21.00%	21.00%
Reconciliation of statutory tax and provision
Expected tax at statutory rate	$ (5,490)	$ (718)	$ 3,026
Foreign taxes at other rates	307	(309)	(914)
Valuation reserves on NOL carryforwards	15,019	2,617	2,042
Global intangible low-taxed income inclusion		339	(27)
State income taxes, net of federal benefit	(811)	32	108
Uncertain tax positions	12	235	1,845
Research credits	(3,466)	(1,029)
Disallowed expenses and other	(1,130)	868	465
Total	$ 4,441	$ 2,035	$ 6,545

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash and equivalents	$ 63,380	$ 88,394
Short term investments	35,108	26,859
Accounts receivable, net of allowances of $1,419 in 2021 and $4,135 in 2020	56,612	57,537
Inventories, net	10,345	13,093
Prepaid expenses	7,594	7,837
Contract assets	4,694	7,202
Other current assets	9,356	6,256
Total current assets	187,089	207,178
Property and equipment, net	10,757	11,835
Operating lease right-of-use assets	9,197	11,356
Goodwill	96,174	97,552
Intangible assets, net of accumulated amortization	21,270	27,196
Deferred income taxes	3,786	7,030
Contract assets - non-current	195	1,877
Other assets	13,803	11,179
Total assets	342,271	375,203
Current liabilities
Accounts payable	8,204	5,684
Deferred revenue	54,617	43,417
Accrued wages and payroll taxes	16,607	13,649
Short-term income taxes payable	1,103	2,618
Other accrued expenses	7,668	8,334
Deferred compensation	877	1,602
Total current liabilities	89,076	75,304
Long-term deferred revenue	9,125	11,730
Long-term lease liabilities	10,180	12,399
Other long-term liabilities	7,770	10,423
Long-term income taxes payable	5,054	6,095
Deferred income taxes	1,286	1,912
Total liabilities	122,491	117,863
Stockholders' equity
Preferred stock: 500 shares authorized, none issued and outstanding at December 31, 2021 and December 31, 2020
Common stock: $.001 par value per share, 75,000 shares authorized; 40,593 and 40,353 shares issued; 40,001 and 40,103 shares outstanding at December 31, 2021 and December 31, 2020, respectively	40	40
Additional paid-in capital	100,250	98,819
Repurchase of common share	(12,501)	(5,030)
Retained earnings	143,173	173,731
Accumulated other comprehensive loss	(11,182)	(10,220)
Total stockholders' equity	219,780	257,340
Total liabilities and stockholders' equity	$ 342,271	$ 375,203

Income Taxes - Deferred Income Tax Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Stock and long-term compensation plans	$ 1,337	$ 2,450
Foreign NOL & other carryforwards	38,153	29,267
US state NOL carryforwards	5,539	718
Deferred revenue	2,068	671
Pension liability	1,547	2,074
Amortization and depreciation	257	167
Lease liability	3,171	3,837
Accrued expenses and other	1,157	1,264
Total gross deferred tax assets	53,229	40,448
Less: Valuation allowance	(34,979)	(19,992)
Net deferred tax assets (liabilities)	18,250	20,456
Deferred tax liabilities:
Accruals	231	286
Tax on unremitted foreign earnings	1,357	1,809
Right of use asset	2,872	3,251
Intangible assets	5,225	6,135
Tax on credits	3,439	2,241
Contract acquisition costs	2,626	1,616
Deferred tax liabilities	15,750	15,338
Net deferred tax assets (liabilities)	$ 2,500	$ 5,118

Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Jan. 01, 2019
Revenue Recognition
Retained earnings	$ 143,173	$ 173,731
ASC 606
Revenue Recognition
Retained earnings			$ 11,900
Minimum [Member]
Revenue Recognition
License Term	1 year
Maximum [Member]
Revenue Recognition
License Term	5 years

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

Summary of Significant Accounting Policies - Foreign Currency Translation and Transactions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Gain (loss) from foreign currency transactions			$ (1.5)
Maximum [Member]
Gain (loss) from foreign currency transactions	$ 0.1	$ 0.1

Revenue - Capitalized Costs and Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue
Amortization period	7 years
Capitalized costs to obtain contracts, current	$ 2,134	$ 1,222
Capitalized costs to obtain contracts, non-current	8,675	5,464
Amortization of capitalized costs to obtain contracts	$ 1,555	$ 904

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total	$ 28,846	$ 27,960
Accumulated depreciation	(18,089)	(16,125)
Property and equipment, net	10,757	11,835
Depreciation expense	3,000	2,900	$ 2,100
Office equipment and software
Property, Plant and Equipment [Line Items]
Total	14,327	13,540
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Total	10,296	10,593
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	$ 4,223	$ 3,827

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts	$ 1,419	$ 4,135
Preferred stock, shares authorized	500	500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	40,593,000	40,353,000
Common stock, shares outstanding	40,001,000	40,103,000
Treasury stock, at cost	592	250

Income Taxes - Income from Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income from continuing operations before income taxes
U.S	$ (15,056)	$ 1,046	$ 3,223
Non-U.S	(11,087)	(4,466)	11,186
Income (loss) before income taxes	(26,143)	(3,420)	14,409
Intercompany dividend income	$ 0	$ (38,000)	$ (6,300)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
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-Subparagraph (c)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenue
Total revenue	$ 214,481	$ 215,691	$ 253,484
Cost of goods sold
Costs of sales	71,546	67,632	85,646
Gross profit	142,935	148,059	167,838
Operating costs
Sales and marketing	62,730	56,663	57,819
Research and development	47,414	41,194	42,463
General and administrative	53,031	46,338	43,897
Amortization of intangible assets	5,888	9,122	9,470
Total operating costs	169,063	153,317	153,649
Operating income (loss)	(26,128)	(5,258)	14,189
Interest income, (expense), net	(1)	404	747
Other income, net	(14)	1,434	(527)
Income (loss) before income taxes	(26,143)	(3,420)	14,409
Provision for income taxes	4,441	2,035	6,545
Net income (loss)	$ (30,584)	$ (5,455)	$ 7,864
Net income (loss) per share
Basic	$ (0.77)	$ (0.14)	$ 0.20
Diluted	$ (0.77)	$ (0.14)	$ 0.20
Weighted average common shares outstanding
Basic	39,614	40,035	40,050
Diluted	39,614	40,035	40,136
Product and license
Revenue
Total revenue	$ 120,358	$ 132,986	$ 183,313
Cost of goods sold
Costs of sales	46,196	46,013	67,077
Services and other
Revenue
Total revenue	94,123	82,705	70,171
Cost of goods sold
Costs of sales	$ 25,350	$ 21,619	$ 18,569

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Note 11 – Leases

The Company leases certain real estate and automobiles. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the consolidated balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception. All of our leases are operating leases.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company uses its imputed collateralized rate based on the information available at the commencement date in determining the present value of lease payments. Operating lease ROU assets are comprised of the lease liability plus prepaid rents and are reduced by lease incentives or deferred rents. The Company has lease agreements with non-lease components which are not bifurcated.

Some of our leases include one or more options to renew, with renewal terms that can extend the lease from one to five years. The exercise of a lease renewal option typically occurs at the discretion of both parties. Certain leases also include options to purchase the leased property at fair value. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease termination until it is reasonably certain that the Company will exercise that option. Certain of the Company’s lease agreements include payments adjusted periodically for inflation based on the consumer price index. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease cost details for the years ended December 31, 2021, December 31, 2020, and December 31, 2019 are as follows:



	Years ended December 31,
	2021		2020		2019

	(in thousands)
Building rent	$	2,564	$	2,978	$	3,397
Automobile rentals		1,505		1,576		1,531
Total net operating lease costs	$	4,069	$	4,554	$	4,928

Short-term lease costs and variable lease costs recognized during the years ended December 31, 2021, December 31, 2020, and December 31, 2019 are immaterial.

Supplemental consolidated balance sheet information related to our operating leases is as follows:


	December 31, 2021			December 31, 2020
in thousands
Leases
Assets		9,197		11,356
Operating lease right-of-use assets	$	9,197	$	11,356

Liabilities
Current
Operating lease liabilities	$	2,476	$	2,855

Noncurrent
Operating lease liabilities		10,180		12,399
Total lease liabilities	$	12,656	$	15,254

The weighted average remaining lease term for our operating leases is 6.4 years. The weighted-average discount rate for our operating leases is 5%.

Supplemental consolidated cash flow information related to leases is as follows:


	Years ended December 31,
	2021		2020		2019

		(in $ thousands)
Supplemental cash flow and other information related to leases:

Operating cash payments from operating leases	$	3,630	$	3,835	$	3,731

ROU assets obtained in exchange for new operating lease liabilities	$	589	$	3,549	$	4,924

Maturities of our operating leases are as follows:


	As of December 31, 2021
		(in $ thousands)
2022	$	3,040
2023		2,599
2024		1,823
2025		1,693
2026		1,629
Later years		4,352
Less imputed interest		(2,480)
Total lease liabilities	$	12,656

Earnings per Common Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings per Common Share

Details of Earnings Per Share Calculations


	For the year ended December 31,
in thousands, except per share data	2021		2020		2019
Net loss	$	(30,584)	$	(5,455)	$	7,864
Weighted average common shares outstanding:
Basic		39,614		40,035		40,050
Incremental shares with dilutive effect:
Restricted stock awards		—		—		86
Diluted		39,614		40,035		40,136

Net loss per share:
Basic	$	(0.77)	$	(0.14)	$	0.20
Diluted	$	(0.77)	$	(0.14)	$	0.20

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 13 – Income Taxes

Income (loss) before income taxes was generated in the following jurisdictions:


	For the year ended December 31,
	2021		2020		2019

U.S.	$	(15,056)	$	1,046	$	3,223
Non-U.S.		(11,087)		(4,466)		11,186
Total	$	(26,143)	$	(3,420)	$	14,409

For the years ended December 31, 2021, 2020, and 2019, domestic income excludes intercompany dividend income of $0 million, $38.0 million, and $6.3 million, respectively. The provision (benefit) for income taxes consists of the following:


	For the year ended December 31,
	2021		2020		2019
Current:
Federal	$	(11)	$	1,715	$	433
State		(23)		49		107
Foreign		2,478		1,758		7,629
Total current		2,444		3,522		8,169

Deferred:
Federal		3,774		1,385		(970)
State		(3)		(24)		24
Foreign		(1,774)		(2,848)		(678)
Total deferred		1,997		(1,487)		(1,624)
Total	$	4,441	$	2,035	$	6,545

For 2021, 2020, and 2019, our U.S. federal statutory rate was 21%. The differences between the income tax provisions computed using the statutory federal income tax rate and the provisions for income taxes reported in the consolidated statements of operations are as follows:


	For the year ended December 31,
	2021		2020		2019

Expected tax at statutory rate	$	(5,490)	$	(718)	$	3,026
Foreign taxes at other rates		307		(309)		(914)
Valuation allowance changes		15,019		2,617		2,042
Global intangible low-taxed income inclusion		—		339		(27)
State income taxes, net of federal benefit		(811)		32		108
Uncertain tax positions		12		235		1,845
Research credits		(3,466)		(1,029)		—
Disallowed expenses and other		(1,130)		868		465
Total	$	4,441	$	2,035	$	6,545

Significant components of our deferred tax assets and liabilities are as follows:


	As of December 31,
	2021		2020
Deferred tax assets:
Stock and long-term compensation plans	$	1,337	$	2,450
Foreign NOL & other carryforwards		38,153		29,267
US and state NOL carryforwards		5,539		718
Deferred revenue		2,068		671
Pension liability		1,547		2,074
Amortization and depreciation		257		167
Lease liability		3,171		3,837
Accrued expenses and other		1,157		1,264
Total gross deferred tax assets		53,229		40,448
Less: Valuation allowance		(34,979)		(19,992)
Net deferred income tax assets	$	18,250	$	20,456

Deferred tax liabilities:
Accruals	$	231	$	286
Tax on unremitted foreign earnings		1,357		1,809
Right of use asset		2,872		3,251
Intangible assets		5,225		6,135
Tax on credits		3,439		2,241
Contract acquisition costs		2,626		1,616
Deferred tax liabilities	$	15,750	$	15,338

Net deferred tax assets (liabilities)	$	2,500	$	5,118

Deferred tax assets and liabilities are netted by tax jurisdiction.

At December 31, 2021, we had foreign and state net operating loss (NOL) carryforwards and other foreign deductible carryforwards as shown in the following table:


	Carryforward		Expiration
NOL Carryforward
Canada	$	40,759	2027-2039
United States		19,113	None
United Kingdom		9,730	None
Switzerland		10,688	2028
Other foreign		6,501	None
Canada province		40,730	2027-2039
U.S. states		21,091	2021-2041
		148,612
Other Carryforwards
United States credit		390	2031
Canada		36,141	None
Canada province		50,272	None
Capital loss		407	None
Canada credits		7,227	2023-2041
Canada province credits		3,052	2036-2041
		97,489

	$	246,101

The valuation allowance against the net deferred tax assets as of December 31, 2021 and 2020 was $35.0 million and $20.0 million, respectively.

The Company recorded changes in valuation allowance of $15.0 million and $2.7 million, as of December 31, 2021 and 2020, respectively, against deferred tax assets that, based on Management’s assessment are considered not to be more likely than not to be realized. The increase in the valuation allowance in 2021 reflects Net Operating Losses (“NOLs”), other deduction carryforwards, and credits for which the realization is not more likely than not. The change in valuation allowance also reflects other factors including, but not limited to, changes in Management’s assessment of the ability to use existing deferred tax assets, including NOLs and other deduction carryforwards.

Management assesses the need for a valuation allowance on a regular basis, weighing all positive and negative evidence to determine whether a deferred tax asset will be fully or partially realized. In evaluating the realizability of deferred tax assets, significant pieces of negative evidence such as 3-year cumulative losses are considered. Management also reviewed reversal patterns of temporary differences to determine if the Company would have sufficient taxable income due to the reversal of temporary differences to support the realization of deferred tax assets. In 2021 Management made the decision to establish a valuation allowance against certain deferred tax assets in jurisdictions that were not previously valued as the deferred tax assets were no longer more likely than not to be realized. Management continues to maintain a valuation allowance against certain deferred tax assets in other jurisdictions where assets had been previously valued. For all other remaining deferred tax assets, Management believes it is still more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

Our policy is to record interest and penalties on income taxes as income tax expense. We provided less than $0.1 million in 2021, less than $0.1 million in 2020 and $0.2 million during 2019.

ASC 740, Income Taxes sets a “more likely than not” criterion for recognizing the tax benefit of uncertain tax positions. As of December 31, 2021, 2020, and 2019, we had reserves of $0.5 million, $0.5 million, and $2.9 million, respectively.


	As of year ended December 31,
	2021		2020		2019
Reserve at beginning of year	$	500	$	2,923	$	427
Increases related to prior year tax positions		12		277		2,500
Decreases related to prior year tax positions		—		(37)		—
Lapse of statute of limitations		—		—		(4)
Settlement		—		(2,663)		—
Total	$	512	$	500	$	2,923

We file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. We are subject to examination of our income tax returns by the IRS and other tax authorities.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs. Included in the balance of unrecognized tax benefits as of December 31, 2021 is $0.5 million, of tax benefits that, if recognized, would affect the effective tax rate.

We estimate that our unrecognized tax benefits as of December 31, 2021 could decrease by as much as $0.5 million in the next 12 months.

Our primary tax jurisdictions and the earliest tax year subject to audit are presented in the following table.


Australia		2013
Austria		2015
Belgium		2017
Canada		2017
Netherlands		2016
Singapore		2016
Switzerland		2019
United Kingdom		2019
United States		2017

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Goodwill (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill

Schedule of Goodwill Activity


in thousands
Net balance at December 31, 2019	$	94,612
Net foreign currency translation		2,940
Net balance at December 31, 2020	$	97,552
Net foreign currency translation		(1,378)
Net balance at December 31, 2021	$	96,174

Quarterly Results of Operations (unaudited) (Tables)

12 Months Ended

Dec. 31, 2021

Quarterly Results of Operations (unaudited)

Schedule of Quarterly Results of Operations


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2021
Total revenues	$	50,775	$	52,277	$	52,276	$	59,153
Product and license cost of goods sold (1.)		10,752		10,565		9,502		15,377
Gross profit		34,242		34,831		36,395		37,467
Sales and marketing expense (1.)		17,168		15,021		14,449		16,092
Operating costs		43,536		43,690		38,411		43,426
Operating income (loss)		(9,294)		(8,859)		(2,016)		(5,959)
Provision (benefit) for income taxes		(501)		(1,143)		(762)		6,847
Net income (loss)		(9,151)		(6,685)		(975)		(13,773)
Net income/(loss) per share:
Basic	$	(0.23)	$	(0.17)	$	(0.02)	$	(0.35)
Diluted	$	(0.23)	$	(0.17)	$	(0.02)	$	(0.35)

2020
Total revenues	$	56,370	$	54,954	$	51,439	$	52,928
Product and license cost of goods sold (1.)		11,764		13,689		11,071		9,489
Gross profit		39,274		35,616		34,954		38,215
Sales and marketing expense (1.)		13,833		13,581		13,569		15,680
Operating costs		38,449		37,303		37,309		40,256
Operating income (loss)		825		(1,687)		(2,355)		(2,041)
Provision (benefit) for income taxes		690		973		95		277
Net income (loss)		4		(2,025)		(1,678)		(1,756)
Net income/(loss) per share:
Basic	$	(0.00)	$	(0.05)	$	(0.04)	$	(0.04)
Diluted	$	(0.00)	$	(0.05)	$	(0.04)	$	(0.04)

Quarterly Results of Operations - unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total Revenue	$ 59,153	$ 52,276	$ 52,277	$ 50,775	$ 52,928	$ 51,439	$ 54,954	$ 56,370	$ 214,481	$ 215,691	$ 253,484
Costs of sales									71,546	67,632	85,646
Gross profit	37,467	36,395	34,831	34,242	38,215	34,954	35,616	39,274	142,935	148,059	167,838
Sales and marketing	16,092	14,449	15,021	17,168	15,680	13,569	13,581	13,833	62,730	56,663	57,819
Operating costs	43,426	38,411	43,690	43,536	40,256	37,309	37,303	38,449	169,063	153,317	153,649
Operating income (loss)	(5,959)	(2,016)	(8,859)	(9,294)	(2,041)	(2,355)	(1,687)	825	(26,128)	(5,258)	14,189
Provision (benefit) for income taxes	6,847	(762)	(1,143)	(501)	277	95	973	690
Net income	$ (13,773)	$ (975)	$ (6,685)	$ (9,151)	$ (1,756)	$ (1,678)	$ (2,025)	$ 4	$ (30,584)	$ (5,455)	$ 7,864
Net income/(loss) per share:
Basic	$ (0.35)	$ (0.02)	$ (0.17)	$ (0.23)	$ (0.04)	$ (0.04)	$ (0.05)	$ 0.00	$ (0.77)	$ (0.14)	$ 0.20
Diluted	$ (0.35)	$ (0.02)	$ (0.17)	$ (0.23)	$ (0.04)	$ (0.04)	$ (0.05)	$ 0.00	$ (0.77)	$ (0.14)	$ 0.20
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Costs of sales										$ 4,193	$ 3,684
Gross profit				$ 1,200				$ 1,000		(4,193)	(3,684)
Sales and marketing			$ 1,000				$ 1,100			(4,193)	(3,684)
Operating costs		$ 1,000				$ 1,000				(4,193)	(3,684)
Product and license
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total Revenue									$ 120,358	132,986	183,313
Costs of sales	$ 15,377	9,502	10,565	10,752	$ 9,489	11,071	13,689	11,764	$ 46,196	46,013	67,077
Product and license \| Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Costs of sales		$ 1,000	$ 1,000	$ 1,200	$ 1,000	$ 1,000	$ 1,100	$ 1,000		$ 4,193	$ 3,684

Income Taxes - Valuation allowances, uncertain tax positions and accrued interest and penalties (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Valuation allowance
Deferred tax assets, valuation allowance	$ 19,992	$ 34,979	$ 19,992
Increase (decrease) in valuation allowance	2,700	15,000
Interest and penalties
Accrued interest or penalties for income tax liabilities	100	100	100	$ 200
Change in reserve for uncertain tax benefits
Reserve at beginning of year		500	2,923	427
Increases related to prior year tax positions		12	277	2,500
Decreases related to prior year tax positions			(37)
Lapse of statute of limitations				(4)
Settlement			(2,663)
Total	$ 500	512	$ 500	$ 2,923
Uncertain tax positions
Uncertain tax positions that would impact of effective tax rate		500
Unrecognized tax benefits estimated decrease		$ 500

Employee Benefit Plan (Tables) - Non-U.S. Plan

12 Months Ended

Dec. 31, 2021

Employee Benefit Plan

Schedule of net periodic pension cost


	Year ended December 31,
	2021		2020		2019

Service cost (gross)	$	1,587	$	1,549	$	1,164
Interest cost		53		106		234
Expected return on plan assets		(302)		(271)		(242)
Amortization of unrecognized actuarial gain		(12)		(40)		(22)
Net periodic pension cost	$	1,326	$	1,344	$	1,134

Summary of net unfunded status of pension plans


	As of December 31,
	2021		2020
Fair value of plan assets	$	17,394	$	17,290
Projected benefit obligation		(24,855)		(27,431)
Net unfunded benefit obligation	$	(7,461)	$	(10,141)

Schedule of change in the fair value of plan assets


	Year ended December 31,
	2021		2020

Fair value of plan assets at January 1	$	17,290	$	14,159
Employee contributions		499		512
Actual return on plan assets		46		441
Benefits (paid), net of transfers		(492)		(251)
Employer contributions		1,049		1,088
Foreign exchange adjustment		(998)		1,341
Fair value of plan assets at December 31	$	17,394	$	17,290

Schedule of change in benefit obligations


	Year ended December 31,
	2021		2020

Benefit obligations at January 1	$	27,431	$	21,759
Gross service cost		1,587		1,549
Interest cost		53		106
Employee contributions		499		512
Actuarial (gains)/losses		(2,185)		1,694
Plan amendment		(432)		—
Benefits (paid), net of transfers		(492)		(251)
Foreign exchange adjustment		(1,606)		2,062
Benefit obligations at December 31	$	24,855	$	27,431

Summary of weighted average assumptions


	As of December 31,
	2021			2020

	(%)
Discount rates	0.20	-	0.90	0.05	-	0.60
Inflation	0.90	-	1.90	0.90	-	1.80
Expected return on plan assets	1.25	-	2.00	1.25	-	2.00
Rate of salary increases	1.90	-	2.80	1.90	-	2.80

Schedule of projected future pension benefits


2022	$	872
2023		719
2024		628
2025		769
2026		1,393
Beyond		4,579

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ (11)	$ 1,715	$ 433
State	(23)	49	107
Foreign	2,478	1,758	7,629
Total current	2,444	3,522	8,169
Deferred:
Federal	3,774	1,385	(970)
State	(3)	(24)	24
Foreign	(1,774)	(2,848)	(678)
Total deferred	1,997	(1,487)	(1,624)
Total	$ 4,441	$ 2,035	$ 6,545

Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($) segment
Summary of Significant Accounting Policies
Number of Reporting Units \| segment	1	1	1
Goodwill, Impairment Loss \| $	$ 0	$ 0	$ 0

Stock Compensation Plans

12 Months Ended

Dec. 31, 2021

Stock Compensation Plans

Stock Compensation Plans

Note 14 – Stock Compensation Plans

The Company has a share-based compensation plan, the OneSpan Inc. 2019 Omnibus Incentive Plan (“Plan”), which was approved by its Shareholders in June 2019 under which the Board of Directors may grant share-based awards including restricted stock units (RSUs) and performance restricted stock units (PSUs).

The Plan may provide performance incentives to employees and non-employee directors, consultants and other key persons of the Company. The plan is administered by the Compensation Committee as appointed by the Board of Directors and is intended to be a non-qualified plan.

As of December 31, 2021, the remaining number of shares allowed to be issued under the Plan was 3.4 million shares of the company’s common stock, representing 9% of the issued and outstanding shares of the company as of such date.

The following table details long-term compensation plan and stock-based compensation expense for the years ended December 31, 2021, 2020, and 2019.


	For the year ended December 31,
	2021		2020		2019
in thousands
Stock-based compensation	$	4,354	$	4,740	$	3,368
Other long-term incentive plan compensation		848		1,262		1,955
Total compensation	$	5,202	$	6,002	$	5,323

Time-Based Restricted Stock Awards (sharecounts in thousands)

Time-based restricted stock awards granted to certain executive officers under the OneSpan Inc. 2009 Equity Plan vest in equal semi-annual installments over four years. Awards granted to certain other employees vest ratably over a four-year period with the first one-fourth of the grant vesting one year after the date of the grant. Shares are subject to forfeiture if the service period requirement is not met. Compensation expense was $0.3 million, $0.7 million, and $0.5 million for 2021, 2020, and 2019, respectively. Tax benefit related to the compensation expense was less than $0.1 million, $0.2 million, and $0.2 million for 2021, 2020, and 2019, respectively. The following table summarizes the time-based restricted stock activity for the year ended December 31, 2021.


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Outstanding at January 1, 2021	56	0.89	$	14.60
Shares vested	(40)			14.91
Shares forfeited	(9)			14.91
Outstanding at December 31, 2021	7	0.42	$	16.23

The unamortized future compensation expense for time-based restricted stock awards was less than $0.1 million at December 31, 2021.

Time-Based Restricted Stock Units (sharecounts in thousands)

Beginning in 2019, under the OneSpan Inc. 2019 Omnibus Incentive Plan, the company grants certain eligible employees RSUs that settle in Company stock. RSUs granted to non-employee directors vest on the first anniversary date of the grant. Awards granted to certain executive officers vest in equal semi-annual installments over four years. Awards granted to certain other employees vest over two-year to four-year period. Shares are subject to forfeiture if the service period is not met. Compensation expense was $3.7 million, $2.5 million, and $1.0 million for 2021, 2020, and 2019, respectively, and the related tax benefit was $0.1 million, $0.5 million, and $0.3 million, respectively. The following table summarizes the time-based restricted stock activity for the year ended December 31, 2021:


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	379	2.55	$	16.87
Shares vested	(196)			18.50
Shares awarded	573			21.21
Shares forfeited	(197)			20.51
Unearned, December 31, 2021	559	3.08	$	19.30

The unamortized future compensation expense for time-based restricted stock awards was $9.0 million at December 31, 2021.

Performance-Based Restricted Stock Units settled in stock (sharecounts in thousands)

Performance-based restricted stock units granted to executive officers and certain other employees were subject to achievement of three year performance criteria established by the Board of Directors Under certain grants, earned shares related to three-year targets cliff vest upon fulfillment of the performance criteria and completion of the three-year period and per recommendation of the Compensation Committee of the OneSpan Inc. Board of Directors (“Compensation Committee”). Shares are subject to forfeiture if the performance criteria and service period are not met.

The restricted stock units subject to achievement of future performance criteria awarded during the year ended December 31, 2021 will be earned if the performance criteria and service period are met at the end of the three-year performance period. None of the restricted stock units subject to the achievement of future performance criteria awarded during the year ended December 31, 2020 were earned, and the related expense was reversed during the year ended December 31, 2020. Certain restricted stock units subject to the achievement of future performance criteria awarded during the year ended December 31, 2019 are not expected to be earned. The compensation cost recorded for 81 unvested shares issued during the year ended December 31, 2019 subject to performance criteria no longer considered probable of achievement was reversed during the year ended December 31, 2020. Approximately 9 additional restricted stock units issued during the year ended December 31, 2019, subject to the achievement of performance criteria, are no longer considered probable of achievement and the related compensation expense will be reversed upon recommendation of the Compensation Committee.

Compensation expense in 2021, 2020, and 2019 was $0.3 million, $1.1 million, and $1.8 million. Tax benefit related to the compensation expense was less than $0.1 million, $0.2 million, and $0.2 million for 2021, 2020, and 2019, respectively.

The following table summarizes activity related to unvested performance restricted stock shares during 2021:


		Weighted-		Weighted-
	Total	average		average
	Unvested	remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	459	0.83	$	15.29
Shares vested	(93)			15.16
Shares awarded	144			24.92
Shares forfeited	(389)			17.09
Unearned, December 31, 2021	121	3.29	$	17.30

Unamortized future compensation expense for performance-based restricted stock was $0.6 million at December 31, 2021.

Market-Based Restricted Stock Units settled in stock (sharecounts in thousands)

Market-based restricted stock units granted to executive officers and certain other employees were subject to achievement of three year market-based performance criteria established by the Board of Directors Under certain grants, earned shares related to three-year targets cliff vest upon fulfillment of the market-based performance criteria and completion of the three-year period. Shares are subject to forfeiture if the performance criteria and service period are not met. Compensation expense for the years ended December 31, 2021 and December 31, 2020 was less than $0.1 million and $0.4 million, respectively, and the related tax benefit was $0 million and $0.1 million, respectively.

The following table summarizes activity related to unvested market and service restricted stock units settled in stock:


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	52	2.00	$	28.44
Shares awarded	291			20.09
Shares forfeited	(60)			32.17
Unearned, December 31, 2021	283	3.43	$	19.06

Unamortized future compensation expense for market-based restricted stock was $4.4 million at December 31, 2021.

Inventories, net - Summary of Inventories, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Inventories, net
Component parts	$ 3,841	$ 5,439
Work-in-process and finished goods	6,504	7,654
Total	$ 10,345	$ 13,093

Earnings per Common Share

12 Months Ended

Dec. 31, 2021

Earnings per Common Share

Earnings per Common Share

Note 15 – Earnings per Common Share (sharecounts in thousands)

Basic earnings per share is based on the weighted average number of shares outstanding and excludes the dilutive effect of common stock equivalents. Diluted earnings per share is based on the weighted average number of shares outstanding and includes the dilutive effect of common stock equivalents to the extent they are not anti-dilutive. Because the Company is in a net loss position for the years ended December 31, 2021 and December 31, 2020, diluted net loss per share for these periods exclude the effects of all common stock equivalents, which are anti-dilutive. For the year ended December 31, 2019, the anti-dilutive effect of our securities is immaterial.

A reconciliation of the shares included in the basic and fully diluted earnings per share calculations is as follows:


	For the year ended December 31,
in thousands, except per share data	2021		2020		2019
Net loss	$	(30,584)	$	(5,455)	$	7,864
Weighted average common shares outstanding:
Basic		39,614		40,035		40,050
Incremental shares with dilutive effect:
Restricted stock awards		—		—		86
Diluted		39,614		40,035		40,136

Net loss per share:
Basic	$	(0.77)	$	(0.14)	$	0.20
Diluted	$	(0.77)	$	(0.14)	$	0.20

Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restricted Cash	$ 800	$ 900	$ 800
Amount of unrealized gain loss on investments	0	0
Letter of Credit
Restricted Cash	$ 800	$ 800
Restricted Cash, Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent	Other Assets, Noncurrent

Property and Equipment

12 Months Ended

Dec. 31, 2021

Property and Equipment

Property and Equipment

Note 8 – Property and Equipment

The major classes of property and equipment are as follows:


in thousands	December 31, 2021		December 31, 2020
Office equipment and software	$	14,327	$	13,540
Leasehold improvements		10,296		10,593
Furniture and fixtures		4,223		3,827
Total		28,846		27,960
Accumulated depreciation		(18,089)		(16,125)
Property and equipment, net	$	10,757	$	11,835

Depreciation expense was $3.0 million, $2.9 million, and $2.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Stock Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2021

Long-Term Compensation Plan and Stock Based Compensation

Summary of compensation expense


	For the year ended December 31,
	2021		2020		2019
in thousands
Stock-based compensation	$	4,354	$	4,740	$	3,368
Other long-term incentive plan compensation		848		1,262		1,955
Total compensation	$	5,202	$	6,002	$	5,323

Restricted Stock, subject to time-based criteria

Long-Term Compensation Plan and Stock Based Compensation

Summary of restricted stock activity


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Outstanding at January 1, 2021	56	0.89	$	14.60
Shares vested	(40)			14.91
Shares forfeited	(9)			14.91
Outstanding at December 31, 2021	7	0.42	$	16.23

Time-Based Restricted Stock Units settled in stock

Long-Term Compensation Plan and Stock Based Compensation

Summary of restricted stock activity


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	379	2.55	$	16.87
Shares vested	(196)			18.50
Shares awarded	573			21.21
Shares forfeited	(197)			20.51
Unearned, December 31, 2021	559	3.08	$	19.30

Restricted Stock, subject to performance criteria

Long-Term Compensation Plan and Stock Based Compensation

Summary of restricted stock activity


		Weighted-		Weighted-
	Total	average		average
	Unvested	remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	459	0.83	$	15.29
Shares vested	(93)			15.16
Shares awarded	144			24.92
Shares forfeited	(389)			17.09
Unearned, December 31, 2021	121	3.29	$	17.30

Represents information relating to market based restricted stock units.

Long-Term Compensation Plan and Stock Based Compensation

Summary of restricted stock activity


		Weighted-		Weighted-
		average		average
		remaining		grant date
(in thousands)	Shares	term (years)		fair value
Unearned, January 1, 2021	52	2.00	$	28.44
Shares awarded	291			20.09
Shares forfeited	(60)			32.17
Unearned, December 31, 2021	283	3.43	$	19.06

Revision of Previously Issued Financial Statements (Tables)

12 Months Ended

Dec. 31, 2021

Description of the Company and Basis of Presentation

Revised Consolidated Statements

Consolidated Statements of Operations


	Year Ended December 31, 2020						Year Ended December 31, 2019
in thousands	As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised
Cost of goods sold
Product and license	$	41,820	$	4,193	$	46,013	$	63,393	$	3,684	$	67,077
Total cost of goods sold		63,439		4,193		67,632		81,962		3,684		85,646

Gross profit		152,252		(4,193)		148,059		171,522		(3,684)		167,838

Operating costs
Sales and marketing		60,856		(4,193)		56,663		61,503		(3,684)		57,819
Total operating costs		157,510		(4,193)		153,317		157,333		(3,684)		153,649

Goodwill - Schedule of Goodwill Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Goodwill
Net balance at beginning of period	$ 97,552	$ 94,612
Net foreign currency translation	(1,378)	2,940
Net balance at end of period	96,174	97,552	$ 94,612
Goodwill impairment	$ 0	$ 0	$ 0

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Measurements

Schedule of assets that are measured at fair value on a recurring basis


			Fair Value Measurement at Reporting Date Using
in thousands		December 31, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury Notes	$	4,038	-	$	4,038	-
Corporate Notes / Bonds	$	9,585	-	$	9,585	-
Commercial Paper	$	8,996	-	$	8,996	-
U.S. Treasury Bills	$	9,990	-	$	9,990	-
U.S. Government Agencies	$	2,499	-	$	2,499	-


			Fair Value Measurement at Reporting Date Using
in thousands		December 31, 2020	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury Notes	$	4,951	-	$	4,951	-
Corporate Notes / Bonds	$	8,780	-	$	8,780	-
Commercial Paper	$	4,098	-	$	4,098	-
U.S. Treasury Bills	$	5,292	-	$	5,292	-
U.S. Government Agencies	$	3,738	-	$	3,738	-

Intangible Assets - Expected Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Intangible Assets
December 31, 2022	$ 4,678
December 31, 2023	4,049
December 31, 2024	4,046
December 31, 2025	3,046
December 31, 2026	2,327
Thereafter	2,368
Subject to amortization	20,514
Trademarks	756
Total intangible assets	$ 21,270	$ 27,196	$ 36,209

Inventories, net

12 Months Ended

Dec. 31, 2021

Inventories, net

Inventories, net

Note 4 – Inventories, net

Inventories, net, consisting principally of hardware and component parts, are stated at the lower of cost or net realizable value. Cost is determined using the FIFO method.

Inventories, net are comprised of the following:


	2021		2020

	(in thousands)
Component parts	$	3,841	$	5,439
Work-in-process and finished goods		6,504		7,654
Total	$	10,345	$	13,093

Leases - Maturities of our operating leases (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Maturities of operating leases
2022	$ 3,040
2023	2,599
2024	1,823
2025	1,693
2026	1,629
Later years	4,352
Less imputed interest	(2,480)
Total lease liabilities	$ 12,656	$ 15,254

Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Revenue

Revenues disaggregated by geography, major product line and timing of revenue recognition

The following tables present our revenues disaggregated by major products and services, geographical region and timing of revenue recognition.

Revenue by major products and services (in thousands)


		Years ended December 31,
	2021		2020			2019

Hardware products	$	79,501	$	81,849	$	127,005
Software licenses		40,857		51,137		56,308
Subscription		38,213		27,788		22,280
Professional services		4,634		5,689		5,759
Maintenance, support, and other		51,276		49,228		42,132
Total Revenue	$	214,481	$	215,691	$	253,484

Revenue by location of customer for the years ended December 31, 2021, 2020, and 2019 (in thousands)


	EMEA			Americas			APAC			Total
Total Revenue:
2021	$	104,878		$	68,646		$	40,957		$	214,481
2020	$	117,086		$	53,171		$	45,434		$	215,691
2019	$	145,942		$	61,577		$	45,965		$	253,484

Percent of Total:
2021		49	%		32	%		19	%		100	%
2020		54	%		25	%		21	%		100	%
2019		58	%		24	%		18	%		100	%

Timing of revenue recognition (in thousands)


	Years ended December 31,
	2021		2020		2019
Products and Licenses transferred at a point in time	$	120,358	$	132,986	$	183,313
Services transferred over time		94,123		82,705		70,171
Total Revenue	$	214,481	$	215,691	$	253,484

Schedule of changes in contract assets and contract liabilities


		December 31,
in thousands		2021		2020
Receivables, inclusive of trade and unbilled	$	56,612	$	57,537
Contract Assets (current and non-current)	$	4,889	$	9,079
Contract Liabilities (Deferred Revenue current and non-current)	$	63,742	$	55,147

Schedule of estimated revenue expected to be recognized in the future


in thousands	2022		2023		2024		Beyond 2024		Total
Future revenue related to current unsatisfied performance obligations	$	31,626	$	15,608	$	7,514	$	2,498	$	57,246

Schedule of information related to the capitalized costs and amortization recognized in the current and prior period



in thousands		December 31, 2021		December 31, 2020
Capitalized costs to obtain contracts, current	$	2,134	$	1,222
Capitalized costs to obtain contracts, non-current	$	8,675	$	5,464


		Twelve months ended December,
in thousands		2021		2020
Amortization of capitalized costs to obtain contracts	$	1,555	$	904
Impairments of capitalized costs to obtain contracts	$	-	$	-

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Leasehold Improvements
Property and Equipment
Useful life (in years)	10 years
Minimum [Member]
Property and Equipment
Useful life (in years)	3 years
Maximum [Member]
Property and Equipment
Useful life (in years)	10 years

Employee Benefit Plan - Change in Benefit Obligation (Details) - Non-U.S. Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Change in benefit obligations
Benefit obligations	$ 27,431	$ 21,759
Gross service cost	1,587	1,549	$ 1,164
Interest cost	53	106	234
Employee contributions	499	512
Actuarial (gains)/losses	(2,185)	1,694
Plan Amendment	(432)
Benefits (paid), net of transfers	(492)	(251)
Foreign exchange adjustment	(1,606)	2,062
Benefit obligations	$ 24,855	$ 27,431	$ 21,759

Summary of Significant Accounting policies - Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Summary of Significant Accounting Policies
Amount the company can repurchase		$ 50.0
Treasury Stock, Value, Acquired, Cost Method	$ 7.5
Treasury Stock, Shares, Acquired	0.3
Treasury Stock Acquired, Average Cost Per Share	$ 21.82

Geographic, Customer and Supplier Information - Sales Details of Customers Locations in Four Geographic Regions (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 segment
Geographic, Customer and Supplier Information
Number of geographic regions \| segment										3	3	3
Total revenue	$ 59,153	$ 52,276	$ 52,277	$ 50,775	$ 52,928	$ 51,439	$ 54,954	$ 56,370	$ 214,481	$ 215,691	$ 253,484
Gross profit	37,467	$ 36,395	$ 34,831	$ 34,242	38,215	$ 34,954	$ 35,616	$ 39,274	142,935	148,059	167,838
Long-lived assets	19,954				23,191				19,954	23,191	22,034
Europe, Middle East, Africa (EMEA)
Geographic, Customer and Supplier Information
Gross profit										(4,200)	3,700
Operating Segments \| Europe, Middle East, Africa (EMEA)
Geographic, Customer and Supplier Information
Total revenue									104,878	117,086	145,942
Gross profit									69,893	78,456	95,069
Long-lived assets	5,978				7,482				5,978	7,482	8,085
Operating Segments \| Americas.
Geographic, Customer and Supplier Information
Total revenue									68,646	53,171	61,577
Gross profit									45,747	37,532	41,667
Long-lived assets	13,634				14,968				13,634	14,968	13,240
Operating Segments \| Asia Pacific
Geographic, Customer and Supplier Information
Total revenue									40,957	45,434	45,965
Gross profit									27,295	32,071	31,102
Long-lived assets	$ 342				$ 741				$ 342	$ 741	$ 709

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

+ References

+ Details

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

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+ Details

Revenue - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenue
Revenue	$ 59,153	$ 52,276	$ 52,277	$ 50,775	$ 52,928	$ 51,439	$ 54,954	$ 56,370	$ 214,481	$ 215,691	$ 253,484
Percent of Total									100.00%	100.00%	100.00%
Products and Licenses transferred at a point in time
Revenue
Revenue									$ 120,358	$ 132,986	$ 183,313
Services transferred over time
Revenue
Revenue									94,123	82,705	70,171
Europe, Middle East, Africa (EMEA) [Member]
Revenue
Revenue									$ 104,878	$ 117,086	$ 145,942
Percent of Total									49.00%	54.00%	58.00%
Americas
Revenue
Revenue									$ 68,646	$ 53,171	$ 61,577
Percent of Total									32.00%	25.00%	24.00%
Asia Pacific [Member]
Revenue
Revenue									$ 40,957	$ 45,434	$ 45,965
Percent of Total									19.00%	21.00%	18.00%
Hardware products
Revenue
Revenue									$ 79,501	$ 81,849	$ 127,005
Software licenses
Revenue
Revenue									40,857	51,137	56,308
Subscription
Revenue
Revenue									38,213	27,788	22,280
Professional services
Revenue
Revenue									4,634	5,689	5,759
Maintenance, support and other
Revenue
Revenue									$ 51,276	$ 49,228	$ 42,132

Geographic, Customer and Supplier Information - Major Customers (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] - customer	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Major customers
Number of customers		10	10	10
Top Ten Customers [Member]
Major customers
Percentage of revenue contributed by customer	22.00%	21.00%	29.00%

Earnings per Common Share - Details of Earnings Per Share Calculations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings per Common Share
Net income (loss)	$ (13,773)	$ (975)	$ (6,685)	$ (9,151)	$ (1,756)	$ (1,678)	$ (2,025)	$ 4	$ (30,584)	$ (5,455)	$ 7,864
Weighted average common shares outstanding:
Basic									39,614	40,035	40,050
Incremental shares with dilutive effect:
Restricted stock awards (in shares)											86
Diluted (in shares)									39,614	40,035	40,136
Basic	$ (0.35)	$ (0.02)	$ (0.17)	$ (0.23)	$ (0.04)	$ (0.04)	$ (0.05)	$ 0.00	$ (0.77)	$ (0.14)	$ 0.20
Diluted	$ (0.35)	$ (0.02)	$ (0.17)	$ (0.23)	$ (0.04)	$ (0.04)	$ (0.05)	$ 0.00	$ (0.77)	$ (0.14)	$ 0.20

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Intangible asset activity
Net balance	$ 27,196	$ 36,209
Additions	35	133
Disposals-Other	(21)	(58)
Net foreign currency translation	(52)	34
Amortization expense	(5,888)	(9,122)
Net balance	21,270	27,196
Intangible assets, net
Balance at cost	96,397
Accumulated amortization	(75,127)
Total intangible assets	21,270	27,196
Acquired Technology [Member]
Intangible asset activity
Net balance	2,277	5,454
Additions	15	46
Net foreign currency translation	2	53
Amortization expense	(1,541)	(3,276)
Net balance	753	2,277
Intangible assets, net
Balance at cost	43,034
Accumulated amortization	(42,281)
Total intangible assets	753	2,277
Customer Relationships [Member]
Intangible asset activity
Net balance	23,200	26,884
Net foreign currency translation	(46)	(58)
Amortization expense	(3,993)	(3,626)
Net balance	19,161	23,200
Intangible assets, net
Balance at cost	39,814
Accumulated amortization	(20,653)
Total intangible assets	19,161	23,200
Other [Member]
Intangible asset activity
Net balance	1,719	3,871
Additions	20	87
Disposals-Other	(21)	(58)
Net foreign currency translation	(8)	39
Amortization expense	(354)	(2,220)
Net balance	1,356	1,719
Intangible assets, net
Balance at cost	13,549
Accumulated amortization	(12,193)
Total intangible assets	$ 1,356	$ 1,719

Revenue - Contract balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Contract balances
Accounts receivable	$ 56,612	$ 57,537
Contract Assets (current and non-current)	4,889	9,079
Contract Liabilities (Deferred Revenue current and non-current)	$ 63,742	$ 55,147
Revenue, Practical Expedient, Financing Component [true/false]	true
Contract liabilities increase due to annual renewals	$ 41,300
Minimum [Member]
Contract balances
The amount of time contract assets are transferred to receivables	1 year
Maximum [Member]
Contract balances
The amount of time contract assets are transferred to receivables	5 years

Subsequent Events (Details) - Investment In Promon A $ in Millions	Jan. 22, 2022 USD ($)
Subsequent Event [Line Items]
Equity Method Investment, Amount Sold	$ 18.9
Equity Method Investment, Realized Gain (Loss) on Disposal	$ 14.8

Description of the Company and Basis of Presentation

12 Months Ended

Dec. 31, 2021

Description of the Company and Basis of Presentation

Description of the Company and Basis of Presentation

Note 1 – Description of the Company and Basis of Presentation

Description of the Company

Impact of COVID-19 pandemic

We continue to actively address the effects of the COVID-19 pandemic and its impact globally Due to economic uncertainty connected to the COVID-19 pandemic, we have experienced lengthened sales cycles and reduced demand for some of our security solutions. While we hope that the negative consequences on our business associated with the COVID-19 pandemic will subside, we cannot predict the impact with certainty.

Principles of Consolidation

The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Estimates and Assumptions

Leases (Details) $ in Thousands	12 Months Ended
Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($) Option	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Initial term of lease	12 months
Number of options to renew lease \| Option	1
Operating lease cost	$ 4,069	$ 4,554	$ 4,928
Other information related to operating leases
Operating cash flows from operating leases	3,630	3,835	3,731
Right-of-use assets obtained in exchange for new lease liabilities	$ 589	3,549	4,924
Weighted-average discount rate	5.00%
Weighted average remaining lease term	6 years 4 months 24 days
Minimum [Member]
Renewal terms to extend the lease	1 year
Maximum [Member]
Renewal terms to extend the lease	5 years
Building
Operating lease cost	$ 2,564	2,978	3,397
Automobile
Operating lease cost	$ 1,505	$ 1,576	$ 1,531

Employee Benefit Plan - Actuarial Assumptions (Details) - Non-U.S. Plan	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Minimum [Member]
Actuarial assumptions, net periodic cost
Discount rate, net periodic benefit cost	0.20%	0.05%
Inflation rate, net period benefit cost	0.90%	0.90%
Expected return on plan assets	1.25%	1.25%
Rate of salary increases, net periodic benefit cost	1.90%	1.90%
Maximum [Member]
Actuarial assumptions, net periodic cost
Discount rate, net periodic benefit cost	0.90%	0.60%
Inflation rate, net period benefit cost	1.90%	1.80%
Expected return on plan assets	2.00%	2.00%
Rate of salary increases, net periodic benefit cost	2.80%	2.80%

Stock Compensation Plans (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Plan information
Restricted stock awards	$ 4,354	$ 4,740	$ 3,368
Restricted Stock, subject to time-based criteria
Plan information
Unissued shares	7	56
Restricted Stock, subject to performance criteria
Plan information
Unissued shares	121	459
2019 Omnibus Incentive Plan
Plan information
Percentage of Shares issued and outstanding	9.00%
Stock based compensation awards issued shares	3,400

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Measurements

Fair Value Measurements

Note 9 – Fair Value Measurements

The fair values of cash equivalents, receivables, net, and accounts payable approximate their carrying amounts due to their short duration. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing base upon its own market assumptions.

The Company classifies its investments in debt securities as available-for-sale. We review available-for-sale debt securities for impairments related to losses and other factors each quarter. The unrealized gains and losses on the available-for-sale debt securities were not material as of December 31, 2021 and December 31, 2020.

The estimated fair value of our financial instruments has been determined by using available market information and appropriate valuation methodologies, as defined in ASC 820, Fair Value Measurements. The fair value hierarchy consists of the following three levels:

●

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.

●

Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived primarily from or corroborated by observable market data.

●

Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following tables summarize assets that are measured at fair value on a recurring basis as of December 31, 2021 and December 31, 2020:


			Fair Value Measurement at Reporting Date Using
in thousands		December 31, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury Notes	$	4,038	-	$	4,038	-
Corporate Notes / Bonds	$	9,585	-	$	9,585	-
Commercial Paper	$	8,996	-	$	8,996	-
U.S. Treasury Bills	$	9,990	-	$	9,990	-
U.S. Government Agencies	$	2,499	-	$	2,499	-


			Fair Value Measurement at Reporting Date Using
in thousands		December 31, 2020	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
U.S. Treasury Notes	$	4,951	-	$	4,951	-
Corporate Notes / Bonds	$	8,780	-	$	8,780	-
Commercial Paper	$	4,098	-	$	4,098	-
U.S. Treasury Bills	$	5,292	-	$	5,292	-
U.S. Government Agencies	$	3,738	-	$	3,738	-

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details