Widepoint Corp 10-Q for FY2026 Q1
Widepoint Corp (WYY)
About this 10-Q
Widepoint Corp filed this 10-Q on May 14, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $40.58M
- up 21.1% from $33.51M a year earlier
- Net income
- $76.96K
- compared with a net loss of $724.06K a year earlier
- Diluted EPS
- $0.01
- compared with -$0.08 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the quarterly period ended | |
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or | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the transition period from __________________ to ___________________ |
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| Commission File Number: |
(Exact name of Registrant as specified in its charter) |
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(State or other jurisdiction of |
| (I.R.S. employer |
incorporation or organization) |
| identification no.) |
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(Address of principal executive offices) |
| (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities Registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Exchange on Which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
As of May 8, 2026, there were
WIDEPOINT CORPORATION
INDEX
| 2 |
| Table of Contents |
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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| THREE MONTHS ENDED |
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REVENUES |
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COST OF REVENUES (including amortization and depreciation of |
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GROSS PROFIT |
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OPERATING EXPENSES |
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Sales and marketing |
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General and administrative expenses (including share-based |
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compensation of $ |
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Depreciation and amortization |
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Total operating expenses |
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LOSS FROM OPERATIONS |
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OTHER INCOME (EXPENSE) |
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Interest income |
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Interest expense |
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Other income (expense), net |
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Total other income (expense), net |
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INCOME (LOSS) BEFORE INCOME TAX BENEFIT |
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INCOME TAX BENEFIT |
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NET INCOME (LOSS) |
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BASIC EARNINGS PER SHARE |
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BASIC WEIGHTED-AVERAGE SHARES OUTSTANDING |
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DILUTED EARNINGS PER SHARE |
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DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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NET INCOME (LOSS) |
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Other comprehensive income (loss): |
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Foreign currency translation adjustments, net of tax |
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Other comprehensive income (loss): |
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COMPREHENSIVE INCOME (LOSS) |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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Restricted cash |
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Accounts receivable, net of allowance for credit losses of $ |
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Unbilled accounts receivable |
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Other current assets |
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Total current assets |
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NONCURRENT ASSETS |
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Property and equipment, net |
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Lease right of use asset |
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Intangible assets, net |
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Goodwill |
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Deferred tax assets, net |
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Other long-term assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
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CURRENT LIABILITIES |
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Accounts payable |
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Accrued expenses |
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Current portion of deferred revenue |
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Current portion of lease liabilities |
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Total current liabilities |
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NONCURRENT LIABILITIES |
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Lease liabilities, net of current portion |
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Deferred revenue, net of current portion |
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Total liabilities |
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Commitments and contingencies (Note 16) |
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STOCKHOLDERS' EQUITY |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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| THREE MONTHS ENDED |
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| MARCH 31, |
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| 2026 |
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| 2025 |
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| (Unaudited) |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income (loss) |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Deferred income tax benefit |
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Depreciation expense |
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Provision for credit losses |
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Amortization of intangibles |
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Share-based compensation expense |
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Non-cash lease expense |
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Loss (gain) on disposal of fixed assets |
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Changes in assets and liabilities: |
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Accounts receivable and unbilled receivables |
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Inventories |
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Other current assets |
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Other assets |
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Accounts payable and accrued expenses |
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Income tax payable |
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Deferred revenue and other liabilities |
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Other liabilities |
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Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchases of property and equipment |
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Proceeds from disposal of property and equipment |
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Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Advances on bank line of credit |
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Repayments of bank line of credit advances |
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Principal repayments under finance lease obligations |
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Withholding taxes paid on behalf of employees on net settled restricted stock awards |
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Net cash used in financing activities |
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Net effect of exchange rate on cash |
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NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
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CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period |
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CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period |
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CASH, CASH EQUIVALENTS, AND RESTRICTED CASH CONSISTED OF THE FOLLOWING: |
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Cash and cash equivalents |
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Restricted cash |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
|
| THREE MONTHS ENDED |
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| MARCH 31, |
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| 2026 |
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| 2025 |
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| (Unaudited) |
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SUPPLEMENTAL CASH FLOW INFORMATION |
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Cash paid for interest |
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NONCASH INVESTING AND FINANCING ACTIVITIES |
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ROU asset obtained in exchange for lease liability |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
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| Additional |
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| Deficit |
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Balance, January 1, 2025 |
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Issuance of common stock — |
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restricted |
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Stock compensation expense — |
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restricted |
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Stock compensation expense — |
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non-qualified stock options |
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Foreign currency translation — |
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gain |
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Net loss |
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Balance, March 31, 2025 |
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| Additional |
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Balance, January 1, 2026 |
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Withholdings from vesting of restricted stock |
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Stock compensation expense — |
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restricted |
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Stock compensation expense — |
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non-qualified stock options |
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Foreign currency translation — |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
| Table of Contents |
WIDEPOINT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Nature of Operations
Organization
WidePoint Corporation (“WidePoint” or the “Company”) was incorporated in Delaware on May 30, 1997 and conducts operations through its wholly-owned operating subsidiaries throughout the continental United States, Ireland, the Netherlands and the United Kingdom. The Company’s principal executive and administrative headquarters is located in Fairfax, Virginia.
Nature of Operations
The Company is a leading provider of Technology Management as a Service (TMaaS). The Company’s TMaaS platform and service solutions enable its customers to efficiently secure, manage and analyze the entire lifecycle of their mobile communications assets through its federally compliant platform Intelligent Technology Management System (ITMS™). The Company’s ITMS platform is SSAE 18 compliant and was granted an Authority to Operate by the U.S. Department of Homeland Security. Additionally, the Company was granted an Authority to Operate by the General Services Administration with regard to its identity credentialing component of its TMaaS platform. Additionally, the Company’s ITMS platform has received the FedRAMP Authorized status. The Company’s TMaaS platform is internally hosted and accessible on-demand through a secure customer portal that is specially configured for each customer. The Company can deliver these solutions in a number of configurations ranging from utilizing the platform as a service to a full-service solution that includes full lifecycle support for all end users and the organization.
A significant portion of the Company’s expenses, such as personnel and facilities costs, are fixed in the short term and may not be easily modified to manage through changes in the Company’s marketplace that may create pressure on pricing and/or costs to deliver its services.
The Company has periodic capital expense requirements to maintain and upgrade its internal technology infrastructure tied to its hosted solutions and other such costs may be significant when incurred in any given quarter.
2. Basis of Presentation and Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements as of March 31, 2026 and for each of the three month periods ended March 31, 2026 and 2025 included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. It is the opinion of management that all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results are reflected in the financial statements for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results for the full year.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and acquired entities since their respective dates of acquisition. All significant inter-company amounts were eliminated in consolidation.
| 9 |
| Table of Contents |
Foreign Currency
Assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon exchange rates prevailing at the end of each reporting period. The resulting translation adjustments, along with any related tax effects, are included in accumulated other comprehensive income, a component of stockholders’ equity. Translation adjustments are reclassified to earnings upon the sale or substantial liquidation of investments in foreign operations. Revenues and expenses are translated at the average month-end exchange rates during the year. Gains and losses related to transactions in a currency other than the functional currency, including operations outside the U.S. where the functional currency is the U.S. dollar, are reported net in the Company’s condensed consolidated statements of operations, depending on the nature of the activity.
Use of Estimates
The preparation of condensed consolidated 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 revenues and expenses during the reporting period. The more significant areas requiring use of estimates and judgment relate to revenue recognition, allowance for credit losses, ability to realize intangible assets and goodwill, ability to realize deferred income tax assets, fair value of certain financial instruments and the evaluation of contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. There were no significant changes in accounting estimates used by management during the period.
Significant Accounting Policies
There were no significant changes in the Company’s significant accounting policies during the first three months of 2026 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026.
Accounting Standards Update
Accounting Standards Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company adopted this guidance prospectively for the year ended December 31, 2025.
Accounting Standards under Evaluation
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220) Disaggregation of Income Statement Expenses (“ASU 2024-03”), to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating the impact of these new requirements on its income statement presentation and disclosures.
| 10 |
| Table of Contents |
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends the guidance under ASC 350-40 for internal-use software. The amendment removes reference to development-stages, clarify when capitalization may begin, and require entities to apply to property, plant and equipment disclosure requirements under ASC 350-10 to capitalize internal-use software costs. The ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption of ASU No. 2025-06 is permitted. The Company is evaluating the impact of these new requirements on its financial position, results of operations and cash flows.
Reclassification
Certain prior period amounts have been revised to correct an immaterial misclassification in the previously issued consolidated financial statements related to certain interchange cash back rewards. These amounts were previously recorded as revenues but should have been recorded as reductions of cost of revenues. The revision had no impact on previously reported gross profit, loss from operations, net loss, or stockholders’ equity.
3. Accounts Receivable and Significant Concentrations
A significant portion of the Company’s receivables are billed under firm fixed price contracts with agencies of the U.S. federal government and similar pricing structures with several commercial entities. Accounts receivable consist of the following by customer type in the table below as of the periods presented:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
U.S. Federal, State, and Local Government (1) |
| $ |
|
| $ |
| ||
Commercial (2) |
|
|
|
|
|
| ||
Gross accounts receivable |
|
|
|
|
|
| ||
Less: allowances for credit |
|
|
|
|
|
|
|
|
losses (3) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
| $ |
|
| $ |
| ||
(1) Government contracts are generally firm fixed price not to exceed arrangements with a term of five (5) years, which consists of a base year and four (4) annual option year renewals. Government receivables are billed under a single consolidated monthly invoice and are billed approximately thirty (30) to sixty (60) days in arrears from the date of service and payment is generally due within thirty (30) days of the invoice date. Government accounts receivable payments could be delayed due to administrative processing delays by the government agency, government shutdown, and continuing budget resolutions that may delay availability of contract funding, and/or administrative only invoice correction requests by contracting officers that may delay payment processing by our government customers.
(2) Commercial contracts are generally fixed price arrangements with contract terms ranging from two (2) to three (3) years. Commercial accounts receivables are billed based on the underlying contract terms and conditions which generally have repayment terms that range from thirty (30) to ninety (90) days. Commercial receivables are stated at amounts due from customers net of an allowance for credit losses if deemed necessary.
(3) For the three months ended March 31, 2026 and 2025, the Company did not recognize any material provisions of recoveries of existing provision for credit losses. The Company has not historically maintained an allowance for credit losses for its government customers as it has not experienced material or recurring credit losses and the nature and size of the contracts has not necessitated the Company’s establishment of such an allowance for credit losses.
| 11 |
| Table of Contents |
Significant Concentrations
The following table presents consolidated trade accounts receivable by customer as of the periods presented below:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| As a % of |
|
| As a % of |
| ||
Customer Type |
| Receivables |
|
| Receivables |
| ||
|
| (Unaudited) |
| |||||
U.S. Federal Government |
|
| % |
|
| % | ||
The following table presents revenue by customer for each of the periods presented:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| As a % of |
|
| As a % of |
| ||
|
| Revenue |
|
| Revenue |
| ||
Customer Type |
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
U.S. Federal Government (1) |
|
| % |
|
| % | ||
(1) Sales to the U.S. federal government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government.
Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions, the balances of which frequently exceed federally insured limits. If the financial institution with whom we do business were to be placed into receivership, we may be unable to access the cash we have on deposit with such institutions. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. At March 31, 2026, the Company had deposits in excess of FDIC limits of approximately $
4. Unbilled Accounts Receivable
Unbilled accounts receivable represent revenues earned but not invoiced to the customer at the balance sheet date due to either timing of invoice processing or delays due to fixed contractual billing schedules. A significant portion of our unbilled accounts receivable consist of carrier services and hardware and software products delivered but not invoiced at the end of the reporting period.
| 12 |
| Table of Contents |
The following table presents customers that represent ten (10) percent or more of consolidated unbilled accounts receivable as of the dates presented below:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| As a % of |
|
| As a % of |
| ||
Customer Type |
| Unbilled Receivables |
|
| Unbilled Receivables |
| ||
|
| (Unaudited) |
| |||||
U.S. Federal Government |
|
| % |
|
| % | ||
5. Other Current Assets and Accrued Expenses
Other current assets consisted of the following as of the dates presented below:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Inventories |
| $ |
|
| $ |
| ||
Prepaid project costs |
|
|
|
|
|
| ||
Deferred contract costs |
|
|
|
|
|
| ||
Prepaid expenses and other assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total other current assets |
| $ |
|
| $ |
| ||
Accrued expenses consisted of the following as of the dates presented below:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Carrier service costs |
| $ |
|
| $ |
| ||
Salaries and payroll taxes |
|
|
|
|
|
| ||
Inventory purchases, consultants and other costs |
|
|
|
|
|
| ||
Other |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total accrued expenses |
| $ |
|
| $ |
| ||
| 13 |
| Table of Contents |
6. Property and Equipment
Major classes of property and equipment consisted of the following as of the dates presented below:
|
| MARCH 31, |
|
| DECEMBER 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Computer hardware and software |
| $ |
|
| $ |
| ||
Furniture and fixtures |
|
|
|
|
|
| ||
Leasehold improvements |
|
|
|
|
|
| ||
Automobiles |
|
|
|
|
|
| ||
Gross property and equipment |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Property and equipment, net |
| $ |
|
| $ |
| ||
During the three months ended March 31, 2026 and 2025 property and equipment depreciation expense was approximately $
During the three months ended March 31, 2026, the Company sold fully depreciated property and equipment with historical cost and accumulated depreciation of $
There were no changes in the estimated useful lives used to depreciate property and equipment during the three month periods ended March 31, 2026 and 2025.
7. Goodwill and Intangible Assets
The Company has recorded goodwill of $
Intangible assets consists of the following:
|
| MARCH 31, 2026 |
| |||||||||
|
| Gross Carrying |
|
| Accumulated |
|
| Net Book |
| |||
|
| Amount |
|
| Amortization |
|
| Value |
| |||
|
| (Unaudited) |
| |||||||||
Customer Relationships |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Channel Relationships |
|
|
|
|
| ( | ) |
|
|
| ||
Internally Developed Software |
|
|
|
|
| ( | ) |
|
|
| ||
Trade Name and Trademarks |
|
|
|
|
| ( | ) |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ | ( | ) |
| $ |
| ||
| 14 |
| Table of Contents |
|
| DECEMBER 31, 2025 |
| |||||||||
|
|
|
|
|
|
|
|
|
| |||
|
| Gross Carrying |
|
| Accumulated |
|
| Net Book |
| |||
|
| Amount |
|
| Amortization |
|
| Value |
| |||
|
|
|
|
|
| |||||||
Customer Relationships |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Channel Relationships |
|
|
|
|
| ( | ) |
| $ |
| ||
Internally Developed Software |
|
|
|
|
| ( | ) |
| $ |
| ||
Trade Name and Trademarks |
|
|
|
|
| ( | ) |
| $ |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ | ( | ) |
| $ |
| ||
The Company did not capitalize any internally developed software costs for the three months ended March 31, 2026 and 2025.
There were no disposals of intangible assets during the three months ended March 31, 2026 and 2025.
The aggregate amortization expense recorded for the three months ended March 31, 2026 and 2025 was approximately $
As of March 31, 2026, estimated annual amortization for intangible assets is approximately:
Remainder of 2026 |
| $ |
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total |
| $ |
|
8. Credit Agreements
The Company has a Loan and Security Agreement (the “Loan”) and Promissory Note (the “Note,” and, together with the Loan, the “Agreements”) with Old Dominion National Bank. The Agreements provide for a $
Advances under the Credit Facility are subject to a borrowing base equal to the lesser of (i) $
| 15 |
| Table of Contents |
9. Leases
Effective March 1, 2025, the Company entered into a new lease agreement to lease office space in the Hampton, Virginia area, that replaced its existing lease in Hampton, Virginia. The lease is for a term of seventy-six months, with a monthly rent obligation of $
10. Income Taxes
The Company’s effective tax rate was (
11. Stockholders’ Equity
Common Stock
The Company is authorized to issue
During the three months ended March 31, 2026, there were
During the three months ended March 31, 2025, there were
There were no stock option exercises during the three months ended March 31, 2026 and 2025.
| 16 |
| Table of Contents |
12. Share-based Compensation
Share-based compensation (including RSAs) represents both stock option-based expense and stock grant expense. The following table sets forth the composition of stock compensation expense included in general and administrative expense for the periods then ended:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Restricted share-based compensation expense |
| $ |
|
| $ |
| ||
Non-qualified option share-based compensation expense |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total share-based compensation before taxes |
| $ |
|
| $ |
| ||
Restricted Stock
The Company records the fair value of all restricted stock shares based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when granted and included in the total number of common shares issued and outstanding. There were no restricted stock awards granted during the three months ended March 31, 2026 and 2025.
Stock Options
The Company estimates the fair value of nonqualified stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is calculated using the simplified method. The Company recognizes forfeitures as they occur. There were
For the three months ended March 31, 2026, the weighted-average grant date fair value per option was $
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Expected dividend yield |
|
| % |
|
| - |
| |
Expected volatility |
|
| % |
|
| - |
| |
Risk-free interest rate |
|
| % |
|
| - |
| |
Term |
|
|
|
| -- |
| ||
At March 31, 2026, the Company had approximately $
| 17 |
| Table of Contents |
13. Earnings (Loss) Per Common Share (EPS)
The computations of basic and diluted earnings (loss) per share were as follows for the periods presented below:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Basic Earnings Per Share Computation: |
|
|
|
|
|
| ||
Net income (loss) |
| $ |
|
| $ | ( | ) | |
Weighted average number of common shares |
|
|
|
|
|
| ||
Basic and Diluted Loss Per Share |
| $ |
|
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share Computation: |
|
|
|
|
|
|
|
|
Net income (loss) |
| $ |
|
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
Weighted average number of common shares |
|
|
|
|
|
| ||
Incremental shares from assumed conversions |
|
|
|
|
|
|
|
|
of dilutive securities |
|
|
|
|
|
| ||
Adjusted weighted average number of |
|
|
|
|
|
|
|
|
common shares |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Diluted Loss Per Share |
| $ |
|
| $ | ( | ) | |
For the three months ended March 31, 2025, the Company had unexercised stock options of
| 18 |
| Table of Contents |
14. Revenue from Contracts with Customers
The following table was prepared to provide additional information about the composition of revenues from contracts with customers for the periods presented:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
Carrier Services |
| $ |
|
| $ |
| ||
Managed Services |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
The Company recognized revenues from contracts with customers for the following customer types as set forth below:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
U.S. Federal Government |
| $ |
|
| $ |
| ||
U.S. State and Local Governments |
|
|
|
|
|
| ||
Foreign Governments |
|
|
|
|
|
| ||
Commercial Enterprises |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
The Company recognized revenues from contracts with customers in the following geographic regions:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
United States |
| $ |
|
| $ |
| ||
Europe |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
During the three months ended March 31, 2026 and 2025, the Company recognized approximately $
| 19 |
| Table of Contents |
15. Segment Information
Segments are defined by authoritative guidance as components of a company in which separate financial information is available and is evaluated by the chief operating decision maker (CODM), or a decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the chief executive officer and is responsible for reviewing segment performance and making decisions regarding resource allocation.
The Company operates as one segment based on the consolidated information used by its CODM in evaluating the financial performance of its business and allocation resources. This single segment represents the Company’s business, WidePoint, which is providing managed services for government and commercial clients that include Identity Management (IdM), secure Mobility Managed Services (MMS), Telecom Lifecycle Management, Digital Billing & Analytics and IT as a service (ITaaS). The Company presents a single segment for purposes of financial reporting and prepared consolidated financial statements upon that basis.
The CODM assesses performance for the reporting segment and decides how to allocate resources based on consolidated revenue, gross profit and net income (loss), which also is reported on the Consolidated Statement of Operations, in addition to other key financial indicators, including gross margin, guiding strategic decisions to align with company-wide goals. The CODM uses the performance measures and key financial indicators in managing the business, allocating resources, making operating decisions, assessing financial performance, deciding investment decisions such as acquisitions.
The measure of segment assets is reported on the balance sheet as total consolidated assets. In addition, substantially all of the Company's revenues and long-lived assets are attributable to operations is in the United States for all periods presented.
The following table reflects certain financial data for our reportable segment:
|
| THREE MONTHS ENDED |
| |||||
|
| MARCH 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
| (Unaudited) |
| |||||
REVENUES |
| $ |
|
| $ |
| ||
Carrier services cost |
|
| ( | ) |
|
| ( | ) |
Managed service costs |
|
| ( | ) |
|
| ( | ) |
Depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Stock based compensation |
|
| ( | ) |
|
| ( | ) |
Other segment items (1) |
|
| ( | ) |
|
| ( | ) |
Interest expense |
|
| ( | ) |
|
| ( | ) |
Interest income |
|
|
|
|
|
| ||
Other income (expense) |
|
|
|
|
|
| ||
Income tax benefit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) FOR THE PERIOD: |
| $ |
|
| $ | ( | ) | |
(1) Other segment items include sales and marketing costs, general and administration expenses.
| 20 |
| Table of Contents |
16. Commitments and Contingencies
Employment Agreements
The Company has employment agreements with certain executives that set forth compensation levels and provide for severance payments in certain instances.
Litigation
The Company is involved in various legal proceedings arising in the ordinary course of business. Management does not believe that the outcome of these matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations, or cash flow.
17. Subsequent Event
On April 10, 2026, we entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Sales Agent”) under which we may issue and sell in a registered offering shares of our common stock having an aggregate offering price of up to $
| 21 |
| Table of Contents |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements. You can identify these statements by words such as “aim,” “anticipate,” “assume,” “believe,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “positioned,” “predict,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:
| · | Our DHS CWMS 2.0 IDIQ contract is currently subject to re-competition and there can be no assurance that we will be awarded the successor contract, or that the terms, scope, or timing of any extension, bridge arrangement, or successor award will not materially differ from the current contract. This contract represents a significant portion of our revenue. |
| · | Our market is highly competitive and we may not be able to compete effectively or gain market acceptance of our products and service. |
| · | We may not be able to respond to rapid technological changes with new software products and services, especially in the area of artificial intelligence, which could harm our sales and profitability and our competitiveness in the market. |
| · | Tariffs, inflationary pressures, and other macroeconomic forces that impact costs, such as costs for devices, labor and distribution costs may impact our financial condition or results of operations. |
| · | Our financial resources are limited and the failure of one or more new product or service offerings could materially harm our financial results. |
| · | We have significant fixed operating costs, which may be difficult to adjust in response to unanticipated fluctuations in revenues. |
| · | We have incurred net losses in the past and may incur net losses in the future. |
| · | Federal agencies and certain large customers can unexpectedly terminate their contracts with us at any time without penalty and the loss of a large customer would have an adverse impact on our financial results. |
| · | The loss of key personnel or an inability to attract and retain additional personnel may impair our ability to grow our business. |
| · | Acquisitions we undertake may present integration challenges, fail to perform as expected, increase our liabilities, and/or reduce our earnings. |
| · | Federal government contracts contain provisions giving government customers a variety of rights that are unfavorable to us, including the ability to audit us and/or assess fines and/or penalties for non-compliance. |
| · | Federal government shutdowns, the failure of the Federal government to approve a budget or reduction in government spending in the areas in which we serve could have a negative impact on our cash flows. |
| · | Federal government shutdowns, the failure of the Federal government to approve a budget or reduction in government spending in the areas in which we serve could have a negative impact on our cash flows. |
| · | Our inability to access our working capital line of credit or otherwise maintain compliance with the required covenants would have an adverse impact on our financial condition. |
| · | Security breaches or cybersecurity events could result in the loss of customers and negative publicity and materially harm our business. |
| · | Actual or perceived breaches of our security measures, or governmental required disclosure of customer information could diminish demand for our solution and subject us to substantial liability. |
| · | The negative impact of any catastrophic events, including acts of domestic or international terrorism, civil unrest, pandemics, outbreak of war or hostilities, and other regional low-intensity conflicts, adverse climate or weather events or other public health emergencies, as well as our response to any of the aforementioned factors and |
| · | The risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026. |
The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Readers are cautioned not to put undue reliance on forward-looking statements. In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, the terms “Company” and “WidePoint,” as well as the words “we,” “our,” “ours” and “us,” refer collectively to WidePoint Corporation and its consolidated subsidiaries.
| 22 |
| Table of Contents |
Business Overview
We are a leading provider of Technology Management as a Service (TMaaS) that consists of federally certified communications management, identity management, and interactive bill presentment and unified communication analytics solutions and IT as a Service (ITaaS). We help our clients achieve their organizational missions for mobility management and security objectives in this challenging and complex business environment.
We offer our TMaaS solutions through a flexible “As-a-Service” model or “Xaas” which includes both a scalable and comprehensive set of functional capabilities that can be used by any customer to meet the most common functional, technical and security requirements for mobility management. Our TMaaS solutions were designed and implemented with flexibility in mind such that it can accommodate a large variety of customer requirements through simple configuration settings rather than through costly software development. The flexibility of our TMaaS solutions enables our customers to be able to quickly expand or contract their mobility management requirements. Our TMaaS solutions are hosted and accessible on-demand through a secure federal government certified proprietary portal that provides our customers with the ability to manage, analyze and protect their valuable communications assets, and deploy identity management solutions that provide secured virtual and physical access to restricted environments.
Our Department of Homeland Security for Cellular Wireless Managed Services (CWMS) 2.0 ID/IQ Contract (DHS CWMS 2.0 IDIQ) contract is currently subject to re-competition, in a competitive process, and we are awaiting the government’s award decision; there can be no assurance that we will be awarded the successor contract, or that the terms, scope, or timing of any extension, bridge arrangement, or successor award will not materially differ from the current contract.
For additional information related to our business operations, see the description of our business set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 25, 2026.
Strategic Focus
Our longer-term strategic focus and goals are driven by our need to expand our critical mass so that we have more flexibility to fund investments in technology solutions and introduce new sales and marketing initiatives in order to expand our marketplace share and increase the breadth of our offerings in order to improve company sustainability and growth.
In fiscal 2026, we will continue to focus on the goals identified in our Annual Report on Form 10-K as well as the following:
| · | Capturing LA 28 with our strategic partner CDW, |
| · | Capture DaaS with Fortune 500 companies that will improve the Company’s overall gross margins, |
| · | Fully implement cellular carrier SaaS contract by the end of Q2 for government customers and capture cellular carrier commercial contracts, |
| · | Improve EPS metric with goal of EPS positive in 2026 and beyond. |
| 23 |
| Table of Contents |
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Revenues. Revenues for the three months ended March 31, 2026 were $40.6 million, an increase of $7.1 million (or 21%) compared to $33.5 million in the same period in 2025. Our mix of revenues for the periods presented is set forth below:
|
| THREE MONTHS ENDED |
|
|
|
| ||||||
|
| MARCH 31, |
|
| Dollar |
| ||||||
|
| 2026 |
|
| 2025 |
|
| Variance |
| |||
|
|
|
|
|
|
|
| |||||
Carrier Services |
| $ | 25,784,040 |
|
| $ | 22,401,299 |
|
| $ | 3,382,741 |
|
Managed Services: |
|
|
|
|
|
|
|
|
|
|
|
|
Managed Service Fees |
|
| 9,289,806 |
|
|
| 8,538,000 |
|
|
| 751,806 |
|
Billable Service Fees |
|
| 1,278,306 |
|
|
| 1,782,196 |
|
|
| (503,890 | ) |
Reselling and Other Services |
|
| 4,223,878 |
|
|
| 788,544 |
|
|
| 3,435,334 |
|
Total Managed Services: |
|
| 14,791,990 |
|
|
| 11,108,740 |
|
|
| 3,683,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 40,576,030 |
|
| $ | 33,510,039 |
|
| $ | 7,065,991 |
|
Managed Service Revenues. Total managed services revenue was $14.8 million, an increase of $3.6 million compared with $11.1 million in the same period in 2025 as follows:
| · | Our managed service fees increased by $0.8 million to $9.3 million for the three months ended March 31, 2026 compared to $8.5 million in the same period in the prior year. The increase is primarily due to an additional task order with the Customs and Border Protection in September of 2025 to manage 30,000 phone lines |
|
|
|
| · | Our billable service fees were $1.3 million, which is $0.5 million lower compared to the same period last year. Billable service fees were adversely impacted by the partial shutdown of the Department of Homeland Security (“DHS”) beginning February 2026, which resulted in reduced billable activity on certain contracts. |
|
|
|
| · | Reselling and other services increased by $3.4 million to $4.2 million for the three months ended March 31, 2026, compared to $0.8 million for the same period in the prior year. The increase is primarily attributable to the absence of the out-of-period adjustment recorded in the first quarter of 2025, which reduced revenues by approximately $2.7 million, as well as higher revenue from certain reselling and contracts during the current-year period. |
Carrier Service Revenues. We also procure, process and pay communications carrier invoices on behalf of customers. Under many of our carrier services arrangements, we recognize revenues and related costs on a gross basis. A significant portion of our overall reported revenue consists of revenue from carrier services; however, it represents an insignificant portion of our overall reported gross profit. This is a commodity type service and margins are nominal, but this is a necessary service to deliver to federal government customers that engage us to provide a full-service solution. Our carrier services revenue was $25.8 million, an increase of $3.4 million, as compared with the same period in 2025. The increase in carrier services revenues over the same period last year is a result of the growth in the number of phone lines under management during 2025 for our DHS customer.
Cost of Revenues. Our cost of revenues include employee labor, excluding fringe benefit costs, and subcontractors directly associated with satisfying customer performance obligations, cash back rewards received associated with vendor payments made on behalf of customers, and the associated cost of products and third-party software that we resell to our end customers. Cost of revenues also includes depreciation and amortization of capitalized software related to delivering our solutions. Cost of revenues for the three months ended March 31, 2026 were $34.9 million (or 86% of revenues), an increase of $6.2 million from $28.7 million (or 86% of revenues) in the same period in 2025. Included in cost of revenues is carrier costs paid on behalf of our federal government customers of approximately $25.1 million and $21.6 million for the three months ended March 31, 2026 and 2025, respectively.
| 24 |
| Table of Contents |
Gross Profit. Gross profit for the three month period ended March 31, 2026 increased on a dollar basis by $0.8 million to $5.6 million (or 14% of revenues), compared to $4.8 million (or 14% of revenues) in the same period in 2025.
Gross profit attributable to carrier services revenue (excluding managed services), for the three-months ended March 31, 2026 was 2% compared to 3% in the same period last year, the gross profit reflected related to carrier services results from cash back rewards received from third party payment platforms associated with vendor payments made on behalf of customers. Gross profit as a percentage of managed services revenue (excluding carrier services) for the three months ended March 31, 2026 was 34% compared to 37% in the same period last year due to slightly higher labor costs, as we bolster our customer delivery and relatively more reselling revenues which carry lower margins, compared to the same period last year.
|
| THREE MONTHS ENDED |
|
|
|
| ||||||
|
| MARCH 31, |
|
| Dollar |
| ||||||
|
| 2026 |
|
| 2025 |
|
| Variance |
| |||
Revenues: |
|
|
|
|
|
|
|
|
| |||
Carrier Services |
| $ | 25,784,040 |
|
| $ | 22,401,299 |
|
| $ | 3,382,741 |
|
Managed Services |
|
| 14,791,990 |
|
|
| 11,108,740 |
|
|
| 3,683,250 |
|
Total revenue |
|
| 40,576,030 |
|
|
| 33,510,039 |
|
|
| 7,065,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Carrier Services |
|
| 613,713 |
|
|
| 716,616 |
|
|
| (102,903 | ) |
Managed Services |
|
| 4,983,913 |
|
|
| 4,061,905 |
|
|
| 922,008 |
|
Total gross profit |
|
| 5,597,626 |
|
|
| 4,778,521 |
|
|
| 819,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
Carrier Services |
|
| 2 | % |
|
| 3 | % |
|
|
|
|
Managed Services |
|
| 34 | % |
|
| 37 | % |
|
|
|
|
Total gross margin |
|
| 14 | % |
|
| 14 | % |
|
|
|
|
Sales and Marketing. Sales and marketing expenses include employee labor, excluding fringe benefit costs, and sales commissions associated with our sales force, commission fees paid to non-employee sales agents and partners, and costs associated with travel and trade shows. Sales and marketing expense for the three months ended March 31, 2026 was $0.6 million (or 1% of revenues) and remained relatively consistent compared to $0.6 million (or 2% of revenues) in 2025.
General and Administrative. General and administrative expenses include employees in finance, human resources, information technology, and other administrative support functions; employee labor not associated with any single revenue producing activity, all company fringe benefits, including paid time off, employee health and medical insurance, 401k matching contributions, and payroll taxes. General and administrative expenses also include professional services to include audit, consulting, outside legal, and outsourcing services. Certain of these expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to the changes in revenue. General and administrative expenses for the three months ended March 31, 2026 were $4.8 million (or 12% of revenues), compared to $4.7 million (or 14% of revenues) in 2025, with the slight increase primarily due to higher share-based compensation of approximately $50,000. The increase was partially offset by approximately $0.5 million of internal IT labor costs that are typically reflected within general and administrative expenses but were reassigned during the current period to implementation activities associated with a long-term customer contract. These costs were deferred during the period in connection with implementation activities under the long-term customer contract. Because the implementation services do not represent a distinct performance obligation, the related revenue and costs are deferred and will be recognized over the contract term.
| 25 |
| Table of Contents |
Excluding the impact of these deferred implementation costs, operating expenses would have increased more significantly period over period. Upon go-live, the deferred costs will be amortized to cost of sales over the contract term. To the extent internal IT personnel continue to perform billable customer work after go-live, related labor costs are expected to be classified as direct costs rather than general and administrative expenses.
Depreciation and Amortization. Depreciation and amortization expense for the three months ended March 31, 2026 was $228,000 which is consistent as compared to $223,700 in 2025.
Other Income (Expense), Net. Other income, net for the three months ended March 31, 2026 was $91,650 compared to other expense, net of $1,600 in 2025 as a result of higher earnings on cash deposits and a gain on sale of property and equipment.
Income Taxes. Income tax benefit for the three months ended March 31, 2026 was $43,700 as compared to income tax benefit of $94,000 in 2025. Income taxes were accrued at an estimated effective tax rate of (131.22)% for the three months ended March 31, 2026 compared to 11.5% for the three month period ended March 31, 2025.
Net Income (Loss). As a result of the cumulative factors described above, net income for the three months ended March 31, 2026 increased by $801,100 to $77,000 compared to net loss of $724,100 for the three months ended March 31, 2025.
Liquidity and Capital Resources
Our immediate sources of liquidity include cash, accounts receivable, unbilled receivables and access to our credit agreement with Old Dominion National Bank.
At March 31, 2026, our net working capital was approximately $2.8 million compared to $2.3 million at December 31, 2025. In response to the DHS-specific partial government shutdown, the Company took prudent steps to preserve liquidity, including the temporary deferral of approximately $7 million of cumulative payments. We believe that our existing unrestricted cash balance of $10.9 million and our anticipated cash flows from operations and access to our credit facility, will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for the next 12 months. The Company is working with Old Dominion National Bank to extend the maturity date under substantially the same terms as previous iterations of the line of credit.
On April 10, 2026, we entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Sales Agent”) under which we may issue and sell in a registered offering shares of our common stock having an aggregate offering price of up to $15.5 million from time to time through or to the Sales Agent (the “ATM Offering”). We expect to use net proceeds, if any, from the ATM Offering over time as a source for general corporate purposes, including potentially expanding existing businesses, acquiring businesses and investing in other business opportunities.
Cash Flows from Operating Activities
For the three months ended March 31, 2026, net cash used in operations was approximately $0.9 million driven by increases in accounts receivables and is partially offset by temporary payable timing differences. In the same period in 2025, $3.2 million net cash was used in operations.
Our single largest cash operating expense is the cost of labor and the Company sponsored healthcare benefit programs. Our second largest cash operating expense is our facility costs and related technology communication costs to support delivery of our services to our customers. We lease most of our facilities under non-cancellable long term contracts that may limit our ability to reduce fixed infrastructure expenditures in the short term. Any changes to our fixed labor and/or infrastructure costs may require a significant amount of time to take effect depending on the nature of the change made. We also may experience temporary collection timing differences from time to time due to customer invoice processing delays that are often beyond our control. New customers often take more time to implement our billing processes. Further, changes within existing customers deployment of our services can cause temporary delays in billings. While we have historically been able to resolve these administrative matters timely, given the scale of several new customer implementations, failure to resolve these matters on a timely basis could negatively impact our cashflows from operations.
| 26 |
| Table of Contents |
Cash Flows from Investing Activities
Cash used in investing activities provides an indication of our long term infrastructure investments. We maintain our own technology infrastructure and may need to make additional purchases of computer hardware, software and other fixed infrastructure assets to ensure our Information Technology environment is properly maintained and can support our customer obligations. We typically fund purchases of long term infrastructure assets with available cash or capital lease financing agreements.
For the three months ended March 31, 2026, cash used in investing activities was approximately $28,800 and consisted of purchases of property and equipment offset by proceeds received in disposal of property and equipment.
For the three months ended March 31, 2025, cash used in investing activities was approximately $27,600 and consisted of purchases of property and equipment.
Cash Flows from Financing Activities
Cash provided by (used in) financing activities provides an indication of our debt financing and stock option exercises.
For the three months ended March 31, 2026, cash used in financing activities was approximately $0.2 million and reflects finance lease principal repayments of approximately $131,600 and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $106,900.
For the three months ended March 31, 2025, cash used in financing activities was approximately $0.2 million and reflects line of credit advances and payments of $2.8 million, finance lease principal repayments of approximately $120,000, and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $115,200.
Net Effect of Exchange Rate on Cash and Equivalents
For the three months ended March 31, 2026 and 2025, respectively, fluctuations in the Euro and U.S. dollar exchange rate increased the translated value of our foreign cash balances by $5,845 as compared to last year.
Off-Balance Sheet Arrangements
The Company has no existing off-balance sheet arrangements as defined under SEC regulations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
| 27 |
| Table of Contents |
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 28 |
| Table of Contents |
PART II – OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The Company is not currently involved in any material legal proceeding.
ITEM 1A RISK FACTORS
Our risk factors have not changed materially from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Repurchase of Securities
The following table represents information with respect to shares of common stock withheld from vesting’s of stock-based compensation awards for employee income tax withholding for the periods indicated:
|
| Total Number of Shares Withheld |
|
| Average Price Per Share |
|
| Dollar Value of Shares Purchased as as Part of Publicly Announced Plans or Programs |
|
| Maximum Dollar Value of Shares that may be Purchased Under Approved Plans or Programs |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
January 2026 |
|
| 19,903 |
|
| $ | 5.37 |
|
|
| - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
| 19,903 |
|
| $ | 5.37 |
|
|
| - |
|
| $ | - |
|
ITEM 3 DEFAULT UPON SENIOR SECURITIES
None
ITEM 4 MINE SAFETY DISCLOSURES
None
ITEM 5 OTHER INFORMATION
Directors and Executive Officers. Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) and in compliance with guidelines specified by the Company. In accordance with Rule 10b5-1 and the Company’s insider trading policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information about the Company are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including shares acquired pursuant to the Company’s equity plans (“Rule 10b5-1 Trading Plans”). Under a Rule 10b5-1 Trading Plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them.
No contracts, instructions or written plans for the sale or purchase of our securities
| 29 |
| Table of Contents |
ITEM 6. EXHIBITS
EXHIBIT NO |
| DESCRIPTION |
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
101. |
| Interactive Data Files |
|
|
|
101.INS+ |
| XBRL Instance Document |
|
|
|
101.SCH+ |
| XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL+ |
| XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF+ |
| XBRL Taxonomy Definition Linkbase Document |
|
|
|
101.LAB+ |
| XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE+ |
| XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104. |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
| 30 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WIDEPOINT CORPORATION | ||
| Date: May 14, 2026 | /s/ JIN H. KANG | |
| Jin H. Kang | |
President and Chief Executive Officer | ||
Date: May 14, 2026 | /s/ ROBERT J. GEORGE |
|
| Robert J. George |
|
| Chief Financial Officer |
|
| 31 |
EXHIBIT 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Jin H. Kang, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of WidePoint Corporation; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and |
|
|
|
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| d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 14, 2026 | By: | /s/ JIN H. KANG | |
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| Jin H. Kang | |
| Chief Executive Officer |
EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Robert J. George, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of WidePoint Corporation; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and |
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| d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 14, 2026 | By: | /s/ ROBERT J. GEORGE | |
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| Robert J. George | |
| Chief Financial Officer |
EXHIBIT 32
Written Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. § 1350
Solely for the purposes of complying with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of WidePoint Corporation (the “Company”), respectively, hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2026 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ JIN H. KANG |
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| Jin H. Kang |
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| Chief Executive Officer |
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| /s/ ROBERT J. GEORGE |
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| Robert J. George |
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| Chief Financial Officer |
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| Date: May 14, 2026 |
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