0000320121-24-000020 | 10-Q | XBRL Viewer

SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2024

Schedule of Segment Reporting Information, by Segment


Table 16: Results of Operations by Business Segment
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Revenues
Security Solutions	$	18,640	$	19,773
Secure Networks	10,979		15,449
Total revenue	29,619		35,222
Gross profit
Security Solutions	8,626		10,274
Secure Networks	2,335		3,208
Total gross profit	10,961		13,482
Research and development expenses	3,170		2,833
Selling, general and administrative expenses	16,229		23,619
Operating loss	(8,438)		(12,970)
Other income	1,252		2,496
Interest expense	(175)		(249)
Loss before income taxes	(7,361)		(10,723)
Provision for income taxes	(17)		(23)
Net loss	$	(7,378)	$	(10,746)

INTANGIBLE ASSETS, NET - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 40,269	$ 38,982
Accumulated Amortization	(15,497)	(13,385)
Net Carrying Value	24,772	25,597
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount	56,027	53,001
Accumulated Amortization	(15,497)	(13,385)
Net Carrying Value	40,530	39,616
In-Process Software Development Costs
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	$ 15,758	14,019
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	8 years
Gross Carrying Amount	$ 3,630	3,630
Accumulated Amortization	(1,210)	(1,097)
Net Carrying Value	2,420	2,533
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ (1,210)	(1,097)
Customer relationship
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Gross Carrying Amount	$ 40	40
Accumulated Amortization	(35)	(32)
Net Carrying Value	5	8
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(35)	(32)
Software development costs
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	36,599	35,312
Accumulated Amortization	(14,252)	(12,256)
Net Carrying Value	22,347	23,056
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ (14,252)	$ (12,256)
Software development costs \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	2 years
Software development costs \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years

ACCOUNTS RECEIVABLE, NET (Tables)

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable


Table 4: Details of Accounts Receivable, Net
	March 31, 2024		December 31, 2023

	(in thousands)
Billed accounts receivable	$	9,315	$	18,101
Unbilled accounts receivable	5,229		8,022
Contract assets	4,460		4,584
Allowance for credit losses (1)	(324)		(283)
Accounts receivable, net	$	18,680	$	30,424

(1) Includes provision for credit losses, net of recoveries.

PROPERTY AND EQUIPMENT, NET - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Gross Carrying Amount	$ 19,077		$ 19,424
Accumulated Depreciation and Amortization	(16,170)		(15,967)
Net Carrying Value	2,907		3,457
Depreciation and amortization expense	635	$ 573
Furniture and equipment
Property, Plant and Equipment [Line Items]
Gross Carrying Amount	15,866		16,213
Accumulated Depreciation and Amortization	(13,539)		(13,363)
Net Carrying Value	2,327		2,850
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross Carrying Amount	3,211		3,211
Accumulated Depreciation and Amortization	(2,631)		(2,604)
Net Carrying Value	$ 580		$ 607

SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Schedule of Changes in Restructuring Expenses Accrual

The restructuring expenses (adjustments) are included within "Selling, general and administrative expenses" on the Company's unaudited consolidated statements of operations.


Table 2.1: Restructuring Expenses (Adjustments)
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Severance and related benefit costs	$	(10)	$	(100)
Other related costs	—		1,300
Total restructuring (adjustments) expenses	$	(10)	$	1,200

At each reporting date, the Company evaluates its restructuring expense accrual to determine if the liabilities reported are still appropriate. Any changes in the estimated costs of executing the approved restructuring plan are reflected in the Company's unaudited consolidated statement of operations.


Table 2.2: Summary of Changes in Restructuring Expenses Accrual
	Severance and related benefit costs (1)

	(in thousands)
Balance at December 31, 2023	$	400
Adjustments	(10)
Cash payments	(283)
Balance at March 31, 2024	$	107

(1) Restructuring expenses accrual is included within "Other current liabilities" on the Company's unaudited consolidated balance sheets (see Note 9 - Other Balance Sheet Components for further details.)

ORGANIZATION	3 Months Ended
ORGANIZATION	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	ORGANIZATION Telos Corporation, together with its subsidiaries (collectively, the "Company," "we," "our" or "Telos"), a Maryland corporation, is a leading provider of cyber, cloud and enterprise security solutions for the world's most security-conscious organizations. We own all of the issued and outstanding shares of Xacta Corporation and ubIQuity.com, inc. (a holding company for Xacta Corporation), and 100% ownership interest in Telos Identity Management Solutions, LLC ("Telos ID"), Teloworks, Inc., and Telos APAC Pte. Ltd. ("Telos APAC"). On March 13, 2024, the Board unanimously approved the dissolution of Telos APAC, a pre-operating foreign subsidiary, pursuant to a plan of complete liquidation and dissolution.

ORGANIZATION - Narrative (Details)	Mar. 31, 2024
Telos ID
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Business acquisition, percentage of voting interests acquired	100.00%

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principle of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of Telos and its subsidiaries (see Note 1 – Organization), all of whose issued and outstanding share capital is wholly owned directly and indirectly by Telos Corporation. All intercompany transactions have been eliminated in consolidation.

Basis of Presentation for Interim Periods

Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring) necessary to state fairly our financial position and the results of operations and cash flows for the periods presented.

The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year then ended. We have continued to follow the accounting policies set forth in those financial statements.

Basis of Comparison

Certain prior-period amounts have been reclassified to conform to the current period presentation. Starting Q3 2023, we reclassified and presented depreciation and amortization separately from the cost of sales line items. Starting Q1 2024, we reclassified sales and marketing expenses and general and administrative expenses to be presented together as selling, general and administrative expenses. The reclassifications had no net impact on gross profit, total selling, general and administrative expenses or net loss in the unaudited consolidated statements of operations.

Use of Estimates

Preparing unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and disclosure of contingent assets and liabilities. The Company regularly assesses these estimates; however, actual results could differ from those estimates. We base our estimates on historical experience, currently available information, and various other assumptions that we believe are reasonable under the circumstances.

Management evaluates these estimates and assumptions on an ongoing basis, including those relating to revenue recognition on cost estimation on certain contracts, allowance for credit losses, inventory obsolescence, valuation allowance for deferred tax assets, income taxes, certain assumptions related to share-based compensation, valuation of intangible assets and goodwill, restructuring expenses accruals, and contingencies. Actual results could differ from those estimates. The impact of changes in estimates is recorded in the period in which they become known.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include general and administrative expenses, as well as direct and indirect sales and marketing expenses. These costs consists primarily of compensation and benefits (including incentive-based compensation), advertising, facilities, and certain types of depreciation and amortization.

Restructuring Expenses

In the fourth quarter of 2022, the Company committed to a restructuring plan to streamline its workforce and spending to better align its cost structure with its volume of business. The restructuring plan reduced the Company's workforce, with a majority of the affected employees separating from the business in early 2023. In connection with this restructuring plan, we incurred restructuring-related costs, including employee severance and related benefit costs. Employee severance and related benefit costs include cash payments, outplacement services and continuing health insurance coverage. Severance costs pursuant to ongoing-benefit arrangements are recognized when probable and reasonably estimated. Other related costs include external consulting and advisory fees related to implementing the restructuring plan. These costs are recognized at fair value in the period in which the costs are incurred.

The Company incurred a cumulative amount of $3.9 million of restructuring expenses, which is the total expected costs for this restructuring plan, as disclosed in the Company's recent Annual Report on Form 10-K for the year ended December 31, 2023. The restructuring actions were substantially complete in fiscal year 2023.

The restructuring expenses (adjustments) are included within "Selling, general and administrative expenses" on the Company's unaudited consolidated statements of operations.


Table 2.1: Restructuring Expenses (Adjustments)
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Severance and related benefit costs	$	(10)	$	(100)
Other related costs	—		1,300
Total restructuring (adjustments) expenses	$	(10)	$	1,200


Table 2.2: Summary of Changes in Restructuring Expenses Accrual
	Severance and related benefit costs (1)

	(in thousands)
Balance at December 31, 2023	$	400
Adjustments	(10)
Cash payments	(283)
Balance at March 31, 2024	$	107

Recent Accounting Pronouncements

Adopted

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU 2023-07 will affect how we report segment information, starting with our Form 10-K for the year ended December 31, 2024, and our quarterly reports on Form 10-Q starting with our quarterly report for the quarter ended March 31, 2025. This standard requires that we provide disclosures of significant segment expenses and other segment items that are regularly provided to our chief operating decision maker ("CODM") and included in each reported measure of segment profit or loss. We will also have to disclose other segment items by reportable segment (i.e. the difference between reported segment revenues less the significant segment expenses (which are disclosed) less reported segment profit or loss). We will disclose the CODM and their position within the Company and details about the information that they regularly review to make capital allocation and other operating decisions about each segment, as well as an explanation of how the CODM uses the reported measures and other disclosures. We are currently evaluating these new segment disclosure requirements and the impact of their adoption on our unaudited consolidated financial statements.

Not Yet Adopted

In December 2024, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosure," which requires public entities, on an annual basis, (1) to disclosure specific categories in the rate reconciliation, and (2) to provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). This ASU will be effective, for public entities, for the fiscal year beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of the adoption of this ASU on our unaudited consolidated financial statements.

In addition, from time to time, new accounting standards are issued by the Financial Accounting Standard Board or other standard-setting bodies and are adopted by the Company as of the specified accounting date. Unless otherwise discussed, the Company believes that issued standards not yet effective will not have a material effect on its financial statements.

STOCK-BASED COMPENSATION - Nonvested Restricted Stock Units Activity (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Total
Outstanding, beginning balance (in shares)	2,176,413
Granted (in shares)	36,626
Vested (in shares)	(1,260,068)
Forfeited (in shares)	(15,000)
Outstanding, beginning balance (in shares)	937,971
Weighted-Average Grant Date Fair Value
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 5.07
Granted (in dollars per share) \| $ / shares	3.84
Vested (in dollars per share) \| $ / shares	4.60
Forfeited (in shares) \| $ / shares	4.25
Outstanding, ending balance (in dollars per share) \| $ / shares	$ 5.68
Service-Based
Total
Outstanding, beginning balance (in shares)	2,132,613
Granted (in shares)	36,626
Vested (in shares)	(1,260,068)
Forfeited (in shares)	(15,000)
Outstanding, beginning balance (in shares)	894,171
Performance-Based
Total
Outstanding, beginning balance (in shares)	43,800
Granted (in shares)	0
Vested (in shares)	0
Forfeited (in shares)	0
Outstanding, beginning balance (in shares)	43,800

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net loss	$ (7,378)	$ (10,746)

- Definition

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

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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

INVENTORIES, NET (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Gross inventory	$ 2,224	$ 2,179
Allowance for inventory obsolescence	(759)	(759)
Inventories, net	$ 1,465	$ 1,420

ACCOUNTS RECEIVABLE, NET - Narrative (Details)	3 Months Ended	12 Months Ended
ACCOUNTS RECEIVABLE, NET - Narrative (Details)	Mar. 31, 2024	Dec. 31, 2023
Federal \| Accounts Receivable \| Customer Concentration Risk
Financing Receivable, Allowance for Credit Loss [Line Items]
Concentration risk, percentage	96.00%	91.00%

SHARE REPURCHASES - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2024	May 24, 2022
Equity [Abstract]
Stock repurchase program, authorized amount		$ 50.0
Stock repurchase program, remaining authorized repurchase amount	$ 38.7

RELATED PARTY TRANSACTIONS (Details) - USD ($)			3 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Feb. 07, 2023	Jan. 03, 2023	Mar. 31, 2024
Related Party Transaction [Line Items]
Granted (in shares)			36,626
Related Party \| Restricted Stock
Related Party Transaction [Line Items]
Granted (in shares)		16,859
Related Party \| Restricted Stock \| Share-based Payment Arrangement, Tranche One
Related Party Transaction [Line Items]
Award vesting rights, percentage		50.00%
Related Party \| Restricted Stock \| Share-based Payment Arrangement, Tranche Two
Related Party Transaction [Line Items]
Award vesting rights, percentage		50.00%
Emmett J. Wood \| Related Party
Related Party Transaction [Line Items]
Compensation paid	$ 249,000

PROPERTY AND EQUIPMENT, NET

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET


Table 6.1: Details of Property and Equipment, Net
	March 31, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Depreciation and Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Depreciation and Amortization		Net Carrying Value

	(in thousands)
Furniture and equipment	$	15,866	$	(13,539)	$	2,327	$	16,213	$	(13,363)	$	2,850
Leasehold improvements	3,211		(2,631)		580		3,211		(2,604)		607
Total	$	19,077	$	(16,170)	$	2,907	$	19,424	$	(15,967)	$	3,457


Table 6.2: Depreciation and Amortization Expense
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Depreciation and amortization expense	$	635	$	573

SIGNIFICANT ACCOUNTING POLICIES - Restructuring Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounting Policies [Abstract]
Severance and related benefit costs	$ (10)	$ (100)
Other related costs	0	1,300
Total restructuring (adjustments) expenses	$ (10)	$ 1,200

OTHER BALANCE SHEET COMPONENTS - Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Other accrued expenses	$ 1,270	$ 1,427
Restructuring expenses accrual	107	400
Other	655	497
Other current liabilities	$ 2,032	$ 2,324

STOCK-BASED COMPENSATION - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value, outstanding, exercisable, and vested or expected to vest	$ 3,900
Unrecognized stock-based compensation expense	$ 2,100
Weighted-average remaining vesting period	8 months 12 days
Unrecognized compensation costs related to non-vested stock options	$ 40
Restricted Stock Units (RSUs) \| 2016 Omnibus Long-Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Section 35
-Paragraph 1D
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+ Details

DEBT AND OTHER OBLIGATIONS - Other Financing Obligations (Details) $ in Millions	1 Months Ended	3 Months Ended
	Nov. 30, 2022 USD ($) extension_option	Mar. 31, 2024 USD ($)
Debt Instrument [Line Items]
Other income		$ 1.4
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Software Licenses Under Delivery Order
Debt Instrument [Line Items]
Consideration received	$ 9.1
Number of exercisable options \| extension_option	3
Period of exercisable extension options		12 months

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

REVENUE RECOGNITION - Narrative (Details) - USD ($)	3 Months Ended
REVENUE RECOGNITION - Narrative (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Contract with customer, asset, cumulative catch-up adjustment to revenue, modification of contract	$ 0	$ 0
Contract loss		0
Contract with customer, liability, revenue recognized	2,700,000	$ 2,500,000
Remaining performance obligations	$ 36,100,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Disaggregation of Revenue [Line Items]
Remaining performance obligation (as a percent)	89.00%
Remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Disaggregation of Revenue [Line Items]
Remaining performance obligation, period
Revenue from Contract with Customer, Product and Service Benchmark \| Revenue Timing of Transfer of Goods or Service \| Transferred over Time
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	81.00%	89.00%
Revenue from Contract with Customer, Product and Service Benchmark \| Revenue Timing of Transfer of Goods or Service \| Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	19.00%	11.00%

INVENTORIES, NET (Tables)

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories, Net


Table 5: Details of Inventories, Net
	March 31, 2024		December 31, 2023

	(in thousands)
Gross inventory	$	2,224	$	2,179
Allowance for inventory obsolescence	(759)		(759)
Inventories, net	$	1,465	$	1,420

GOODWILL	3 Months Ended
GOODWILL	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL	GOODWILLThe goodwill balance was $17.9 million as of March 31, 2024, and December 31, 2023, of which $3.0 million is allocated to the Security Solutions segment and $14.9 million is allocated to the Secure Networks segment. Goodwill is subject to annual impairment tests and if triggering events are present in the interim before the annual tests, we will assess impairment. No impairment charges were recorded for the three months ended March 31, 2024 and 2023

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (7,378)	$ (10,746)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation	2,984	9,499
Depreciation and amortization	3,129	1,425
Deferred income tax provision	12	12
Accretion of discount in acquisition holdback	0	2
Loss on disposal of fixed assets	0	1
Provision for doubtful accounts	41	89
Amortization of debt issuance costs	17	17
Gain on early extinguishment of other financing obligations	0	(1,427)
Changes in other operating assets and liabilities:
Accounts receivable	11,703	5,279
Inventories	(44)	1,248
Prepaid expenses, other current assets, other assets	(171)	(927)
Accounts payable and other accrued payables	(6,549)	(4,489)
Accrued compensation and benefits	(3,054)	(364)
Contract liabilities	(734)	758
Other current liabilities	(306)	(477)
Net cash used in operating activities	(350)	(100)
Cash flows from investing activities:
Capitalized software development costs	(3,202)	(3,800)
Purchase of investment	(850)	0
Purchases of property and equipment	(97)	(223)
Payment of DFT holdback amount	0	(564)
Net cash used in investing activities	(4,149)	(4,587)
Cash flows from financing activities:
Payments under finance lease obligations	(416)	(383)
Payment of tax withholding related to net share settlement of equity awards	(430)	(1,520)
Repurchase of common stock	0	(139)
Payments for debt issuance costs	0	(114)
Net cash used in financing activities	(846)	(2,156)
Net change in cash, cash equivalents, and restricted cash	(5,345)	(6,843)
Cash, cash equivalents, and restricted cash, beginning of period	99,396	119,438
Cash, cash equivalents, and restricted cash, end of period	$ 94,051	$ 112,595

DEBT AND OTHER OBLIGATIONS - Revolving Credit Facility (Details) $ in Millions	Dec. 30, 2022 USD ($) variable_rate day	Apr. 12, 2023 USD ($)
Debt Instrument [Line Items]
Maximum senior leverage ratio covenant	3
Receivables Excluded From Collateral		$ 25.0
Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, variable rates \| variable_rate	3
Credit Agreement \| Alternative Base Rate \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.90%
Debt instrument, prior notice period \| day	5
Credit Agreement \| Adjusted Daily Simple Secured Overnight Financing Rate (SOFR) \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	1.90%
Debt instrument, prior notice period \| day	3
Credit Agreement \| Adjusted Term Secured Overnight Financing Rate (SOFR) \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	1.90%
Debt instrument, prior notice period \| day	1
Line of Credit \| Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 30.0
Incremental increase in interest rates in the event of default	2.00%
Line of Credit \| Credit Agreement \| Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5.0
Expansion feature borrowing limit	$ 30.0

INTANGIBLE ASSETS, NET

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET


Table 8.1: Details of Intangible Assets, Net
		March 31, 2024						December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value

	(in years)	(in thousands)
Acquired technology	8	$	3,630	$	(1,210)	$	2,420	$	3,630	$	(1,097)	$	2,533
Customer relationship	3	40		(35)		5		40		(32)		8
Software development costs	2 - 5	36,599		(14,252)		22,347		35,312		(12,256)		23,056
Subtotal		40,269		(15,497)		24,772		38,982		(13,385)		25,597
In-process software development costs (1)		15,758		—		$	15,758	14,019		—		$	14,019
Total		$	56,027	$	(15,497)	$	40,530	$	53,001	$	(13,385)	$	39,616


(1) In-process software development costs are costs for software that is not yet available for its intended use or general release to customers as of balance sheet date, thus not yet amortized.


Table 8.2: Amortization Expense
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Amortization expense related to:
Software development costs - cost of sales (1)	$	1,158	$	—
Software development costs - research and development	837		303
Other intangible assets - general and administrative	117		117
Total	$	2,112	$	420

(1) Amortization expense for software development costs related to assets to be sold, leased, or otherwise marketed is charged under cost of sales on the unaudited consolidated statements of operations.

STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Stock Options Outstanding
Outstanding option balance at the beginning of period (in shares)	400,000
Granted (in shares)	0
Exercised (in shares)	0
Forfeited, cancelled, or expired (in shares)	0
Outstanding option balance at the end of period (in shares)	400,000	400,000
Exercisable stock option (in shares)	0
Weighted-Average Exercise Price
Outstanding option balance at the beginning of period (in dollars per share)	$ 1.80
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Forfeited, cancelled, or expired (in dollars per share)	0
Outstanding option balance at the end of period (in dollars per share)	1.80	$ 1.80
Exercisable stock option (in dollars per share)	$ 0
Stock Options Additional Disclosures
Weighted Average Remaining Contractual Term, Outstanding option balance	9 years 1 month 6 days	9 years 4 months 24 days
Aggregate Intrinsic Value, Outstanding option balance	$ 944	$ 740
Aggregate Intrinsic Value, Exercisable stock option	$ 0

OTHER BALANCE SHEET COMPONENTS (Tables)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Other Assets Noncurrent


Table 9.1: Details of Other Assets
	March 31, 2024		December 31, 2023

	(in thousands)
Investment (1)	$	3,000	$	—
Restricted cash	136		136
Other	662		749
Other assets	$	3,798	$	885

(1) In March 2024, we made a $3.0 million investment in a privately held company via a simple agreement for future equity. We paid $0.9 million in March 2024 and the remainder was paid in April 2024. The Company elected to apply the fair value option on this investment, and we did not note any changes in the fair value during the three months ended March 31, 2024.

Schedule of Accounts Payable and Other Accrued Liabilities


Table 9.2: Details of Accounts Payable and Other Accrued Liabilities
	March 31, 2024		December 31, 2023

	(in thousands)
Accounts payable	$	2,206	$	8,307
Accrued payables	6,958		5,443
Accounts payable and other accrued liabilities	$	9,164	$	13,750

Schedule of Other Current Liabilities


Table 9.3: Details of Other Current Liabilities
	March 31, 2024		December 31, 2023

	(in thousands)
Other accrued expenses	$	1,270	$	1,427
Restructuring expenses accrual	107		400
Other	655		497
Other current liabilities	$	2,032	$	2,324

REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

We account for revenue in accordance with ASC Topic 606, "Revenue from Contracts with Customers." The unit of account in ASC 606 is a performance obligation, which is a promise in a contract with a customer to transfer a good or service to the customer.

The majority of our revenue is recognized over time, as control is transferred continuously to our customers who receive and consume benefits as we perform. Revenue transferred to customers over time accounted for 81% and 89% of our revenue for the three months ended March 31, 2024 and 2023, respectively. All of our business groups earn services revenue under a variety of contract types, including time and materials, firm-fixed price, firm-fixed price level of effort, and cost-plus fixed fee contract types, which may include variable consideration.

For performance obligations in which control does not continuously transfer to the customer, we recognize revenue at the point in time in which each performance obligation is fully satisfied. This coincides with the point in time the customer obtains control of the product or service, which typically occurs upon customer acceptance or receipt of the product or service, given that we maintain control of the product or service until that point. Revenue transferred to customers at a point in time accounted for 19% and 11% of our revenue for the three months ended March 31, 2024 and 2023, respectively.

Orders for the sale of software licenses may contain multiple performance obligations, such as maintenance, training, or consulting services, which are typically delivered over time, consistent with the transfer of control disclosed above for the provision of services. When an order contains multiple performance obligations, we allocate the transaction price to the performance obligations based on the standalone selling price of the product or service underlying each performance obligation. The standalone selling price represents the amount we would sell the product or service to a customer on a standalone basis.

For certain performance obligations where we are not primarily responsible for fulfilling the promise to provide the goods or services to the customer, do not have inventory risk and have limited discretion in establishing the price for the goods or services, we recognize revenue on a net basis.

Our contracts may include various types of variable considerations and may include estimated amounts in the transaction price, based on all of the information available to us, and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when any uncertainty associated with the variable consideration is resolved. We evaluate and include these estimated amounts of variable consideration in the transaction price and as performance on these contracts is complete, we adjust our revenue, when deemed necessary. No revenue adjustments were recorded during the three months ended March 31, 2024 and 2023.

We provide for anticipated losses on contracts during the period when the loss is determined by recording an expense for the total expected costs that exceeds the total estimated revenue for a performance obligation. We recorded an immaterial contract loss during the three months ended March 31, 2024. No contract loss was recorded during the three months ended March 31, 2023.

Disaggregated Revenues

In addition to our segment reporting, as further discussed in Note 1 6 – Segment Information, we disaggregate our revenues by customer and contract types. We treat sales to U.S. customers as sales within the U.S. regardless of where the services are performed. Substantially most of our revenues are generated from U.S. customers, while international customers are de minimis; as such, the financial information by geographic location is not presented.


Table 3.1: Revenue by Customer Type
	For the Three Months Ended
	March 31, 2024			March 31, 2023
	Amount		%	Amount		%

	(dollars in thousands)
Federal	$	26,607	90 %	$	32,989	94 %
State & local, and commercial	3,012		10 %	2,233		6 %
Total revenue	$	29,619	100 %	$	35,222	100 %


Table 3.2: Revenue by Contract Type
	For the Three Months Ended
	March 31, 2024			March 31, 2023
	Amount		%	Amount		%

	(dollars in thousands)
Firm fixed-price	$	22,836	77 %	$	27,013	77 %
Time-and-materials	3,137		11 %	3,556		10 %
Cost plus fixed fee	3,646		12 %	4,653		13 %
Total revenue	$	29,619	100 %	$	35,222	100 %


Table 3.3: Revenue Concentration Greater than 10% of Total Revenue
	For the Three Months Ended
	March 31, 2024	March 31, 2023
U.S. Department of Defense ("DoD")	56 %	68 %


Table 3.4: Contract Balances
	Balance Sheet Presentation	March 31, 2024		December 31, 2023

		(in thousands)
Billed accounts receivables (1)	Accounts receivable, net	$	8,991	$	17,818
Unbilled accounts receivable	Accounts receivable, net	5,229		8,022
Contract assets	Accounts receivable, net	4,460		4,584
Contract liabilities	Contract liabilities	5,993		6,728

(1) Net of allowance for credit losses.

The changes in the Company's contract assets and contract liabilities during the current period were primarily the result of the timing differences between the Company's performance, invoicing and customer payments. Revenue recognized for the three months ended March 31, 2024 and 2023, that was included in the contract liabilities balance at the beginning of each reporting period was $2.7 million and $2.5 million, respectively.

As of March 31, 2024, we had approximately $36.1 million of remaining performance obligations, which we also refer to as funded backlog. We expect to recognize approximately 89% of our remaining performance obligations over the next 12 months, and the balance thereafter.

- 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
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 12
-Subparagraph (c)
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

3 Months Ended

Mar. 31, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash and Cash Equivalents


Table 18.1: Details of Cash, Cash Equivalents, and Restricted Cash
	March 31, 2024		December 31, 2023

	(in thousands)
Cash and cash equivalents	$	93,915	$	99,260
Restricted cash (1)	136		136
Cash, cash equivalents, and restricted cash	$	94,051	$	99,396

(1) Restricted cash consists of a commercial money market account held as a deposit on the Ashburn lease and is included within "Other assets" on the unaudited consolidated balance sheets.

Schedule of Restrictions on Cash and Cash Equivalents


Table 18.1: Details of Cash, Cash Equivalents, and Restricted Cash
	March 31, 2024		December 31, 2023

	(in thousands)
Cash and cash equivalents	$	93,915	$	99,260
Restricted cash (1)	136		136
Cash, cash equivalents, and restricted cash	$	94,051	$	99,396

(1) Restricted cash consists of a commercial money market account held as a deposit on the Ashburn lease and is included within "Other assets" on the unaudited consolidated balance sheets.

Schedule of Supplemental Cash Flow Information


Table 18.2: Supplemental Cash Flow Information
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Cash paid during the period for:
Interest	$	146	$	219
Non-cash investing and financing activities:
Operating lease ROU assets obtained in exchange for operating lease liabilities	$	626	$	117
Capital expenditure activity in accounts payable and other accrued liabilities	154		273
Purchase of investment in accounts payable and other accrued liabilities	2,150		—
Issuance of common stock for 401K match	1,618		1,942
Intangible assets transferred to extinguish other financing obligations	—		7,089
Withholding tax on net share settlement under other current liabilities	—		65

REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 29,619	$ 35,222
Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Total revenue	$ 29,619	$ 35,222
Concentration risk, percentage	100.00%	100.00%
Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk \| Firm fixed-price
Disaggregation of Revenue [Line Items]
Total revenue	$ 22,836	$ 27,013
Concentration risk, percentage	77.00%	77.00%
Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk \| Time-and-materials
Disaggregation of Revenue [Line Items]
Total revenue	$ 3,137	$ 3,556
Concentration risk, percentage	11.00%	10.00%
Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk \| Cost plus fixed fee
Disaggregation of Revenue [Line Items]
Total revenue	$ 3,646	$ 4,653
Concentration risk, percentage	12.00%	13.00%
Federal \| Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Total revenue	$ 26,607	$ 32,989
Concentration risk, percentage	90.00%	94.00%
State & local, and commercial \| Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Total revenue	$ 3,012	$ 2,233
Concentration risk, percentage	10.00%	6.00%
U.S. Department of Defense ("DoD") \| Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	56.00%	68.00%

SUPPLEMENTAL CASH FLOW INFORMATION

3 Months Ended

Mar. 31, 2024

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION


Table 18.1: Details of Cash, Cash Equivalents, and Restricted Cash
	March 31, 2024		December 31, 2023

	(in thousands)
Cash and cash equivalents	$	93,915	$	99,260
Restricted cash (1)	136		136
Cash, cash equivalents, and restricted cash	$	94,051	$	99,396

(1) Restricted cash consists of a commercial money market account held as a deposit on the Ashburn lease and is included within "Other assets" on the unaudited consolidated balance sheets.


Table 18.2: Supplemental Cash Flow Information
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Cash paid during the period for:
Interest	$	146	$	219
Non-cash investing and financing activities:
Operating lease ROU assets obtained in exchange for operating lease liabilities	$	626	$	117
Capital expenditure activity in accounts payable and other accrued liabilities	154		273
Purchase of investment in accounts payable and other accrued liabilities	2,150		—
Issuance of common stock for 401K match	1,618		1,942
Intangible assets transferred to extinguish other financing obligations	—		7,089
Withholding tax on net share settlement under other current liabilities	—		65

RELATED PARTY TRANSACTIONS	3 Months Ended
RELATED PARTY TRANSACTIONS	Mar. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS Emmett J. Wood, the brother of our Chairman and CEO, had been an employee of the Company since 1996. In January 2023, he tendered his resignation as an employee effective February 7, 2023. The amount paid to him as compensation for his remaining tenure in 2023 was $249,000. One of the Company’s directors served as a consultant to the Company under a consultancy agreement that expired on December 31, 2023. The Company, at its election, paid the director's 2023 consultancy fees in a fixed amount, in the form of RSUs. On January 3, 2023, the Company granted the director 16,859 RSUs for his consulting services through June 30, 2023, one-half of which vested on March 3, 2023, and the other half vested on May 18, 2023. Beginning in July 2023, the director was paid a firm-fixed monthly retainer fee, plus additional fees and contingent bonus payments upon achievement of certain contract goals, payable in cash through the expiration of the agreement.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

INTANGIBLE ASSETS, NET (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, Net


Table 8.1: Details of Intangible Assets, Net
		March 31, 2024						December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value

	(in years)	(in thousands)
Acquired technology	8	$	3,630	$	(1,210)	$	2,420	$	3,630	$	(1,097)	$	2,533
Customer relationship	3	40		(35)		5		40		(32)		8
Software development costs	2 - 5	36,599		(14,252)		22,347		35,312		(12,256)		23,056
Subtotal		40,269		(15,497)		24,772		38,982		(13,385)		25,597
In-process software development costs (1)		15,758		—		$	15,758	14,019		—		$	14,019
Total		$	56,027	$	(15,497)	$	40,530	$	53,001	$	(13,385)	$	39,616


(1) In-process software development costs are costs for software that is not yet available for its intended use or general release to customers as of balance sheet date, thus not yet amortized.

Schedule of Indefinite-Lived Intangible Assets


Table 8.1: Details of Intangible Assets, Net
		March 31, 2024						December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value

	(in years)	(in thousands)
Acquired technology	8	$	3,630	$	(1,210)	$	2,420	$	3,630	$	(1,097)	$	2,533
Customer relationship	3	40		(35)		5		40		(32)		8
Software development costs	2 - 5	36,599		(14,252)		22,347		35,312		(12,256)		23,056
Subtotal		40,269		(15,497)		24,772		38,982		(13,385)		25,597
In-process software development costs (1)		15,758		—		$	15,758	14,019		—		$	14,019
Total		$	56,027	$	(15,497)	$	40,530	$	53,001	$	(13,385)	$	39,616


(1) In-process software development costs are costs for software that is not yet available for its intended use or general release to customers as of balance sheet date, thus not yet amortized.

Schedule of Amortization Expense


Table 8.2: Amortization Expense
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Amortization expense related to:
Software development costs - cost of sales (1)	$	1,158	$	—
Software development costs - research and development	837		303
Other intangible assets - general and administrative	117		117
Total	$	2,112	$	420

INVENTORIES, NET

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

INVENTORIES, NET


Table 5: Details of Inventories, Net
	March 31, 2024		December 31, 2023

	(in thousands)
Gross inventory	$	2,224	$	2,179
Allowance for inventory obsolescence	(759)		(759)
Inventories, net	$	1,465	$	1,420

SIGNIFICANT ACCOUNTING POLICIES - Changes in Restructuring Expenses Accrual (Details) - Severance and related benefit costs $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 400
Adjustments	(10)
Cash payments	(283)
Ending Balance	$ 107

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets:
Cash and cash equivalents	$ 93,915	$ 99,260
Accounts receivable, net	18,680	30,424
Inventories, net	1,465	1,420
Prepaid expenses	7,787	7,520
Other current assets	1,270	1,367
Total current assets	123,117	139,991
Property and equipment, net	2,907	3,457
Finance lease right-of-use assets, net	6,307	6,612
Operating lease right-of-use assets, net	771	216
Goodwill	17,922	17,922
Intangible assets, net	40,530	39,616
Other assets	3,798	885
Total assets	195,352	208,699
Liabilities:
Accounts payable and other accrued liabilities	9,164	13,750
Accrued compensation and benefits	11,233	14,569
Contract liabilities	5,993	6,728
Finance lease obligations – current portion	1,766	1,730
Operating lease obligations – current portion	195	97
Other current liabilities	2,032	2,324
Total current liabilities	30,383	39,198
Finance lease obligations – non-current portion	9,066	9,518
Operating lease obligations – non-current portion	576	123
Deferred income taxes	825	813
Other liabilities	106	44
Total liabilities	40,956	49,696
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 250,000,000 shares authorized, 71,757,998 shares and 70,239,890 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	110	109
Additional paid-in capital	436,616	433,781
Accumulated other comprehensive loss	(125)	(60)
Accumulated deficit	(282,205)	(274,827)
Total stockholders’ equity	154,396	159,003
Total liabilities and stockholders’ equity	$ 195,352	$ 208,699

SUPPLEMENTAL CASH FLOW INFORMATION - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 93,915	$ 99,260
Restricted cash	136	136
Cash, cash equivalents, and restricted cash	$ 94,051	$ 99,396	$ 112,595	$ 119,438

STOCK-BASED COMPENSATION - Stock-Based Compensation Expense Incurred (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 2,984	$ 9,499
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	428	770
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	2,299	8,403
Cost of sales – services \| Cost of sales – services
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 257	$ 326

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company may be a party to litigation or claims arising in the ordinary course of business, including those relating to employment matters, relationship with clients and contractors, intellectual property disputes, and other business matters. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts, none of which are considered material, or are unspecified as to amount. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, management believes that the outcome of such known matters will not have a material adverse effect on the Company's business or its unaudited consolidated financial statements as of March 31, 2024. Other - Government Contracts As a U.S. government contractor, we are subject to various audits and investigations by the U.S. government to determine whether our operations are being conducted in accordance with applicable regulatory requirements. U.S. government investigations of our operations, whether relating to government contracts or conducted for other reasons, could result in administrative, civil, or criminal liabilities, including repayments, fines or penalties being imposed upon us, suspension, proposed debarment, debarment from eligibility for future U.S. government contracting, or suspension of export privileges. Suspension or debarment could have a material adverse effect on us because of our dependence on contracts with the U.S. government. U.S. government investigations often take years to complete and many result in no adverse action against us. We also provide products and services to customers outside of the United States, which are subject to U.S. and foreign laws and regulations and foreign procurement policies and practices. Our compliance with local regulations or applicable U.S. government regulations also may be audited or investigated.

LOSS PER SHARE

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

LOSS PER SHARE

For the period of net loss, potentially dilutive securities are not included in the calculation of diluted net earnings (loss) per share, because to do so would be anti-dilutive.


Table 14: Potentially Dilutive Securities
	For the Three Months Ended
	March 31, 2024	March 31, 2023

	(in thousands)
Unvested restricted stock and restricted stock units	1,245	410

For the three months ended March 31, 2024 and 2023, the outstanding PSUs aggregating to 43,800 and 265,608, respectively, have been excluded from the calculation of potentially dilutive securities above because the issuance of shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period.

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Business Acquisition [Line Items]
Restructuring charges	$ (10)	$ 1,200
Employee Severance
Business Acquisition [Line Items]
Restructuring charges			$ 3,900

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)


Table 13: Details of Changes in Accumulated Other Comprehensive Loss by Category
	Foreign currency translation adjustment		Pension liability adjustment		Total

	(in thousands)
Balance as of December 31, 2023	$	(167)	$	107	$	(60)
Other comprehensive loss before reclassification	(35)		(30)		(65)
Balance as of March 31, 2024	$	(202)	$	77	$	(125)

ACCOUNTS RECEIVABLE, NET

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

ACCOUNTS RECEIVABLE, NET


Table 4: Details of Accounts Receivable, Net
	March 31, 2024		December 31, 2023

	(in thousands)
Billed accounts receivable	$	9,315	$	18,101
Unbilled accounts receivable	5,229		8,022
Contract assets	4,460		4,584
Allowance for credit losses (1)	(324)		(283)
Accounts receivable, net	$	18,680	$	30,424

(1) Includes provision for credit losses, net of recoveries.

As our primary customer base includes agencies of the U.S. government, we have a concentration of credit risk associated with our accounts receivable, as 96% and 91% of our billed and unbilled accounts receivable as of March 31, 2024 and December 31, 2023, respectively, were directly with U.S. government customers. While we acknowledge the potential material and adverse risk of such a significant concentration of credit risk, our past experience collecting substantially all of such receivables provides us with an informed basis that such risk, if any, is manageable. We perform ongoing credit evaluations of all of our customers and generally do not require collateral or other guarantees from our customers. We maintain allowances for potential losses.

REVENUE RECOGNITION (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Customer Type


Table 3.1: Revenue by Customer Type
	For the Three Months Ended
	March 31, 2024			March 31, 2023
	Amount		%	Amount		%

	(dollars in thousands)
Federal	$	26,607	90 %	$	32,989	94 %
State & local, and commercial	3,012		10 %	2,233		6 %
Total revenue	$	29,619	100 %	$	35,222	100 %


Table 3.2: Revenue by Contract Type
	For the Three Months Ended
	March 31, 2024			March 31, 2023
	Amount		%	Amount		%

	(dollars in thousands)
Firm fixed-price	$	22,836	77 %	$	27,013	77 %
Time-and-materials	3,137		11 %	3,556		10 %
Cost plus fixed fee	3,646		12 %	4,653		13 %
Total revenue	$	29,619	100 %	$	35,222	100 %

Schedules of Concentration of Risk, by Risk Factor


Table 3.3: Revenue Concentration Greater than 10% of Total Revenue
	For the Three Months Ended
	March 31, 2024	March 31, 2023
U.S. Department of Defense ("DoD")	56 %	68 %

Schedule of Contract Balances


Table 3.4: Contract Balances
	Balance Sheet Presentation	March 31, 2024		December 31, 2023

		(in thousands)
Billed accounts receivables (1)	Accounts receivable, net	$	8,991	$	17,818
Unbilled accounts receivable	Accounts receivable, net	5,229		8,022
Contract assets	Accounts receivable, net	4,460		4,584
Contract liabilities	Contract liabilities	5,993		6,728

(1) Net of allowance for credit losses.

SHARE REPURCHASES	3 Months Ended
SHARE REPURCHASES	Mar. 31, 2024
Equity [Abstract]
SHARE REPURCHASES	SHARE REPURCHASES On May 24, 2022, the Company announced that the Board of Directors approved a new share repurchase program ("SRP") authorizing the Company to repurchase up to $50.0 million of its common stock. Pursuant to this authorization, the Company may repurchase shares of its common stock on a discretionary basis from time to time through open market purchases. The repurchase program has no expiration date and may be modified, suspended, or terminated at any time. There were no share purchases during the first quarter of 2024 and 2023. As of March 31, 2024, there was approximately $38.7 million of the authorization remaining for future common stock repurchases under the SRP.

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Total revenue	$ 29,619	$ 35,222
Depreciation and amortization	1,278	176
Total cost of sales	18,658	21,740
Gross profit	10,961	13,482
Research and development expenses	3,170	2,833
Selling, general and administrative expenses	16,229	23,619
Operating loss	(8,438)	(12,970)
Other income	1,252	2,496
Interest expense	(175)	(249)
Loss before income taxes	(7,361)	(10,723)
Provision for income taxes	(17)	(23)
Net loss	$ (7,378)	$ (10,746)
Net loss per share:
Basic (in dollars per share)	$ (0.10)	$ (0.16)
Diluted (in dollars per share)	$ (0.10)	$ (0.16)
Weighted-average shares outstanding:
Basic (in shares)	70,628	68,176
Diluted (in shares)	70,628	68,176
Service
Total revenue	$ 28,851	$ 31,534
Cost of sales	17,059	19,092
Product
Total revenue	768	3,688
Cost of sales	$ 321	$ 2,472

ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

For one of our wholly-owned subsidiaries, the functional currency is the local currency. For this subsidiary, the translation of its foreign currency into U.S. dollars is performed for assets and liabilities using current foreign currency exchange rates in effect at the balance sheet date and for revenue and expense accounts using average foreign currency exchange rates during the periods presented. Translation gains and losses are included in stockholders’ equity as a component of accumulated other comprehensive (loss) income.


Table 13: Details of Changes in Accumulated Other Comprehensive Loss by Category
	Foreign currency translation adjustment		Pension liability adjustment		Total

	(in thousands)
Balance as of December 31, 2023	$	(167)	$	107	$	(60)
Other comprehensive loss before reclassification	(35)		(30)		(65)
Balance as of March 31, 2024	$	(202)	$	77	$	(125)

SEGMENT INFORMATION - Narrative (Details)	3 Months Ended
SEGMENT INFORMATION - Narrative (Details)	Mar. 31, 2024 segment
Segment Reporting [Abstract]
Number of reportable segments	2
Number of operating segments	2

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Stockholders’ equity:
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	250,000,000	250,000,000
Common stock, issued (in shares)	71,757,998	70,239,890
Common stock, outstanding (in shares)	71,757,998	70,239,890

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 03, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-08443
Entity Registrant Name	TELOS CORPORATION
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-0880974
Entity Address, Address Line One	19886 Ashburn Road
Entity Address, City or Town	Ashburn
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20147-2358
City Area Code	703
Local Phone Number	724-3800
Title of 12(b) Security	Common stock, $0.001 par value per share
Trading Symbol	TLS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		71,757,998
Entity Central Index Key	0000320121
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1

OTHER BALANCE SHEET COMPONENTS - Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 2,206	$ 8,307
Accrued payables	6,958	5,443
Accounts payable and other accrued liabilities	$ 9,164	$ 13,750

ACCOUNTS RECEIVABLE, NET (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accounts Receivable, after Allowance for Credit Loss [Abstract]
Billed accounts receivable	$ 9,315	$ 18,101
Unbilled accounts receivable	5,229	8,022
Contract assets	4,460	4,584
Allowance for credit losses	(324)	(283)
Accounts receivable, net	$ 18,680	$ 30,424

SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Presentation and Principle of Consolidation

Basis of Comparison

Use of Estimates

Selling, General and Administrative Expenses

Restructuring Expenses

The restructuring expenses (adjustments) are included within "Selling, general and administrative expenses" on the Company's unaudited consolidated statements of operations.


Table 2.1: Restructuring Expenses (Adjustments)
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Severance and related benefit costs	$	(10)	$	(100)
Other related costs	—		1,300
Total restructuring (adjustments) expenses	$	(10)	$	1,200


Table 2.2: Summary of Changes in Restructuring Expenses Accrual
	Severance and related benefit costs (1)

	(in thousands)
Balance at December 31, 2023	$	400
Adjustments	(10)
Cash payments	(283)
Balance at March 31, 2024	$	107

Recent Accounting Pronouncements

Adopted

Not Yet Adopted

Revenue Recognition

- Definition

Disclosure of accounting policy for revenue from contract with customer.

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-Name Accounting Standards Codification
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+ Details

GOODWILL (Details) - USD ($)	3 Months Ended
GOODWILL (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Goodwill [Line Items]
Goodwill	$ 17,922,000		$ 17,922,000
Goodwill impairment	0	$ 0
Security Solutions
Goodwill [Line Items]
Goodwill	3,000,000		3,000,000
Secure Networks
Goodwill [Line Items]
Goodwill	$ 14,900,000		$ 14,900,000

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

REVENUE RECOGNITION - Schedule of Contract Balances (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Billed accounts receivables	$ 8,991	$ 17,818
Unbilled accounts receivable	5,229	8,022
Contract assets	4,460	4,584
Contract liabilities	$ 5,993	$ 6,728

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

The Company grants stock-based compensation awards under the 2016 Omnibus Long-Term Incentive Plan, as amended (the "2016 LTIP"). We may grant restricted stock awards, restricted stock units with time-based vesting ("RSUs") and restricted stock units with performance-based vesting ("PSUs"). Awards granted under the 2016 LTIP vest over the periods determined by the Board of Directors or the Compensation Committee of the Board of Directors, which has the discretion to establish the terms, conditions and criteria of the various awards. The RSUs granted to eligible employees generally vest in installments over a period of up to three years. PSUs will vest upon the achievement of a defined performance target or market conditions for the Company's common stock, certain operational milestones over prescribed period, or at the end of the defined performance period from the date of grant.

There were no income tax benefits recognized on the share-based compensation expense for both periods.


Table 11.1: Details of Stock Compensation Expense by Department
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Cost of sales – services	$	257	$	326
Research and development	428		770
Selling, general and administrative	2,299		8,403
Total	$	2,984	$	9,499

Restricted Stock


Table 11.2: Restricted Stock Activity
	Service-Based	Performance-Based	Total Shares	Weighted-Average Grant Date Fair Value
Unvested outstanding units as of December 31, 2023	2,132,613	43,800	2,176,413	$	5.07
Granted	36,626	—	36,626	3.84
Vested	(1,260,068)	—	(1,260,068)	4.60
Forfeited	(15,000)	—	(15,000)	4.25
Unvested outstanding units as of March 31, 2024	894,171	43,800	937,971	$	5.68

As of March 31, 2024, the intrinsic value of the RSUs and PSUs outstanding, exercisable, and vested or expected to vest was $3.9 million. There was approximately $2.1 million of total compensation costs related to stock-based awards not yet recognized as of March 31, 2024, which is expected to be recognized on a straight-line basis over a weighted-average remaining vesting period of 0.7 years.

Stock Options


Table 11.3: Stock Option Activity
	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding option balance as of December 31, 2023	400,000	$	1.80	9.4	$	740,000
Granted	—	—		0.0	—
Exercised	—	—		0.0	—
Forfeited, cancelled, or expired	—	—		0.0	—
Outstanding option balance as of March 31, 2024	400,000	1.80		9.1	$	944,000
Exercisable stock option as of March 31, 2024	—	—		0	$	—

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the quoted closing price of the Company's common stock as of March 31, 2024.

The fair value of the stock options is expensed on a straight-line basis over the vesting period of one year, including the stock options granted to directors, as the next annual stockholders meeting is expected to occur at the same approximate time each year.

As of March 31, 2024, there were approximately $0.04 million of unrecognized compensation costs related to non-vested stock options.

SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SEGMENT INFORMATION

We operate our business in two reportable and operating segments: Security Solutions and Secure Networks. These segments enable the alignment of our strategies and objectives and provide a framework for the timely and rational allocation of resources within the business lines.

Our Security Solutions segment is primarily focused on cybersecurity, cloud and identity solutions, and secure messaging through Xacta®, Telos Ghost®, Telos Advanced Cyber Analytics ("Telos ACATM"), Telos Automated Message Handling System ("AMHS") and Telos ID offerings. We recognize revenue on contracts from providing various system platforms in the cloud, on-premises, and in hybrid cloud environments, as well as software sales or software-as-a-service. Revenue associated with the segment's custom solutions is recognized as work progresses or upon delivery of services and products. Fluctuation in revenue from period to period is the result of the volume of software sales, and the progress or completion of cloud or cybersecurity solutions during the period. The majority of the operating costs relate to labor, material, and overhead costs. Software sales have immaterial operation costs associated with them, thus yielding higher margins. Gross profit and margin are a function of operational efficiency on security solutions and changes in the volume of software sales.

Our Secure Networks segment provides secure networking architectures and solutions to our customers through secure mobility solutions, and network management and defense services. Revenue is recognized over time as the work progresses on contracts related to managing network services and information delivery. Contract costs include labor, material, and overhead costs. Variances in costs recognized from period to period primarily reflect increases and decreases in activity levels on individual contracts.


Table 16: Results of Operations by Business Segment
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Revenues
Security Solutions	$	18,640	$	19,773
Secure Networks	10,979		15,449
Total revenue	29,619		35,222
Gross profit
Security Solutions	8,626		10,274
Secure Networks	2,335		3,208
Total gross profit	10,961		13,482
Research and development expenses	3,170		2,833
Selling, general and administrative expenses	16,229		23,619
Operating loss	(8,438)		(12,970)
Other income	1,252		2,496
Interest expense	(175)		(249)
Loss before income taxes	(7,361)		(10,723)
Provision for income taxes	(17)		(23)
Net loss	$	(7,378)	$	(10,746)

We measure each segment's profitability based on gross profit. We account for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. Interest income, interest expense, other income and expense items, and income taxes, as reported in the consolidated financial statements, are not part of the segment profitability measure and are primarily recorded at the corporate level.

Management does not utilize total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment, and therefore, total assets by segment are not disclosed.

- 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

PROPERTY AND EQUIPMENT, NET (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net


Table 6.1: Details of Property and Equipment, Net
	March 31, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Depreciation and Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Depreciation and Amortization		Net Carrying Value

	(in thousands)
Furniture and equipment	$	15,866	$	(13,539)	$	2,327	$	16,213	$	(13,363)	$	2,850
Leasehold improvements	3,211		(2,631)		580		3,211		(2,604)		607
Total	$	19,077	$	(16,170)	$	2,907	$	19,424	$	(15,967)	$	3,457


Table 6.2: Depreciation and Amortization Expense
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Depreciation and amortization expense	$	635	$	573

SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash paid during the period for:
Interest	$ 146	$ 219
Non-cash investing and financing activities:
Operating lease ROU assets obtained in exchange for operating lease liabilities	626	117
Capital expenditure activity in accounts payable and other accrued liabilities	154	273
Purchase of investment in accounts payable and other accrued liabilities	2,150	0
Issuance of common stock for 401K match	1,618	1,942
Intangible assets transferred to extinguish other financing obligations	0	7,089
Withholding tax on net share settlement under other current liabilities	$ 0	$ 65

INTANGIBLE ASSETS, NET - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Software development costs - cost of sales	$ 1,158	$ 0
Total	2,112	420
Research and Development Netting
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	837	303
Selling, general and administrative
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 117	$ 117

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

OTHER BALANCE SHEET COMPONENTS - Other Assets (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Investments	$ 3,000	$ 3,000		$ 0
Restricted cash	136	136		136
Other	662	662		749
Other assets	3,798	3,798		$ 885
Investment owned cost	3,000	3,000
Payments to acquire investments	$ 900	$ 850	$ 0

- Definition

Cost of the investment.

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+ Details

LOSS PER SHARE (Details) - shares	3 Months Ended
LOSS PER SHARE (Details) - shares	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Unvested antidilutive stock units excluded from the dilutive effect (stock units) (in shares)	43,800	265,608
Unvested restricted stock and restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	1,245,000	410,000

ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 159,003
Other comprehensive loss before reclassification	(65)
Ending balance	154,396
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(60)
Ending balance	(125)
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(167)
Other comprehensive loss before reclassification	(35)
Ending balance	(202)
Pension liability adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	107
Other comprehensive loss before reclassification	(30)
Ending balance	$ 77

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

DEBT AND OTHER OBLIGATIONS	3 Months Ended
DEBT AND OTHER OBLIGATIONS	Mar. 31, 2024
Debt Disclosure [Abstract]
DEBT AND OTHER OBLIGATIONS	DEBT AND OTHER OBLIGATIONS Revolving Credit Facility On December 30, 2022, we entered into a Credit Agreement (the "Credit Agreement"), by and among the Company, as borrower, Xacta Corporation, ubIQuity.com, inc., Teloworks, Inc., and Telos Identity Management Solutions, LLC, as guarantors, the lenders party thereto (the "Lenders"), and JPMorgan Chase Bank N.A., as administrative agent for the Lenders (in such capacity, the "Agent"). The Credit Agreement provides for a $30.0 million senior secured revolving credit facility with a maturity date of December 30, 2025, with the option of issuing letters of credit thereunder with a sub-limit of $5.0 million, and with an uncommitted expansion feature of up to $30.0 million of additional revolver capacity (the "Loan"). The Loan is subject to acceleration in the event of customary events of default. The Company has not drawn any amount under the Loan. Borrowings under the Credit Agreement will accrue interest, at our option, at one of three variable rates, plus a specified margin. We can elect to borrow at (i) the Alternative Base Rate, plus 0.9%; (ii) Adjusted Daily Simple Secured Overnight Financing Rate ("SOFR"), plus 1.9%; and (iii) Adjusted Term SOFR, plus 1.9%, as such capitalized terms are defined and calculated in the Credit Agreement. The Company may elect to convert borrowings from one type of borrowing to another type per the terms of the Credit Agreement. After the occurrence and during the continuance of any event of default, the interest rate may increase by an additional 2.0%. We are obligated to pay accrued interest (i) with respect to amounts accruing interest based on the Alternative Base Rate, each calendar quarter and on the maturity date, (ii) with respect to amounts accruing interest based on Adjusted Daily Simple SOFR, on each one-month anniversary of the borrowing and on the maturity date, and (iii) with respect to amounts accruing interest based on Adjusted Term SOFR, at the end of the period specified per the Credit Agreement and on the maturity date. Upon five, three, or one day's prior notice, as applicable, we may prepay any portion or the entire amount of the Loan. We also paid costs and customary fees, including a closing fee, commitment fees and letter of credit participation fee, if any, payable to the Agent and Lenders, as applicable, in connection with the Loan. The Loan under the Credit Agreement is collateralized by substantially all of the Company's assets, including the Company's pledge of its domestic and material foreign subsidiary equity interests. The Loan has various covenants that may, among other things, affect our ability to create, incur, assume or suffer any indebtedness, merge into or consolidate with another entity, acquire entity interests, sell or transfer certain assets, enter into certain arrangements (such as sale and leaseback and swap agreements) or restrictive agreements, pay dividends and make certain restricted payments, and amend material documents related to any subordinated indebtedness and corporate agreements. The Credit Agreement also requires certain financial covenants to maintain a Senior Leverage Ratio on the last day of any fiscal quarter, no greater than 3 to 1. We were in compliance with all covenants as of March 31, 2024. The occurrence of an event of default under the Credit Agreement could result in the Loan and other obligations becoming immediately due and payable and allow the Lenders to exercise all rights and remedies available to them under the Credit Agreement. On April 12, 2023, the Credit Agreement was amended to exclude from collateral the (i) amount collectible from a third party related to an Accounts Receivable Purchase Agreement and (ii) receivables generated by the Company from the sale of goods supplied to this third party in an amount not to exceed $25.0 million. Other Financing Obligations We entered into a Master Purchase Agreement ("MPA") with a third-party buyer ("Buyer") for $9.1 million relating to software licenses under a specific delivery order ("DO") with our customer resulting in proceeds from other financing obligations of $9.1 million in November 2022. Under the MPA, we sold, assigned and transferred all of our rights, title and interest in (i) the DO payments from the customer and (ii) the underlying licenses. The DO covers a base period with an option for the customer to exercise three (3) additional 12-month periods through January 2026. The DO payments assigned to the Buyer are billable to the customer at the beginning of the base period and for each option year exercised. The underlying licenses were acquired for resale. On February 9, 2023, the customer notified us that it would not exercise the first option period under the DO. The MPA provides that, if the customer terminates the DO for non-renewal and the Buyer reasonably concludes that the customer's actions constitute grounds for filing a claim with the customer's contracting officer, Buyer and Telos will cooperate in preparing such a claim, which would be filed in Telos' name. Buyer has notified Telos of its intent to pursue a claim against the customer. Concurrently, the Company transferred all the rights, title and interest in the underlying licenses in exchange for the extinguishment of the outstanding financing obligations. The Company evaluated the transfer of the underlying licenses as consideration paid for the outstanding financing obligations under ASC 470-10, Debt, and the provisions of the MPA, and concluded that the transaction resulted in an extinguishment of debt. The Company recorded the difference between the carrying value of the Company's debt instrument and the underlying licenses as a gain on early extinguishment of other financing obligations. During the three months ended March 31, 2023, the Company reported a gain of $1.4 million, which was recorded as "Other income" in the unaudited consolidated statements of operations.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Compensation Expense

There were no income tax benefits recognized on the share-based compensation expense for both periods.


Table 11.1: Details of Stock Compensation Expense by Department
	For the Three Months Ended
	March 31, 2024		March 31, 2023

	(in thousands)
Cost of sales – services	$	257	$	326
Research and development	428		770
Selling, general and administrative	2,299		8,403
Total	$	2,984	$	9,499

Schedule of Restricted Stock Unit Activity


Table 11.2: Restricted Stock Activity
	Service-Based	Performance-Based	Total Shares	Weighted-Average Grant Date Fair Value
Unvested outstanding units as of December 31, 2023	2,132,613	43,800	2,176,413	$	5.07
Granted	36,626	—	36,626	3.84
Vested	(1,260,068)	—	(1,260,068)	4.60
Forfeited	(15,000)	—	(15,000)	4.25
Unvested outstanding units as of March 31, 2024	894,171	43,800	937,971	$	5.68

Schedule of Stock Option Activity


Table 11.3: Stock Option Activity
	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding option balance as of December 31, 2023	400,000	$	1.80	9.4	$	740,000
Granted	—	—		0.0	—
Exercised	—	—		0.0	—
Forfeited, cancelled, or expired	—	—		0.0	—
Outstanding option balance as of March 31, 2024	400,000	1.80		9.1	$	944,000
Exercisable stock option as of March 31, 2024	—	—		0	$	—

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (7,378)	$ (10,746)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(35)	13
Actuarial loss on pension liability adjustment	(30)	0
Comprehensive loss	$ (7,443)	$ (10,733)

- Definition

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

+ References

+ Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022		67,431,000
Beginning balance at Dec. 31, 2022	$ 172,354	$ 106	$ 412,708	$ (55)	$ (240,405)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,746)				(10,746)
Foreign currency translation gain (loss)	13			13
Actuarial loss on pension liability adjustment	0
Restricted stock unit awards vested, net of shares withheld to cover tax withholding (in shares)		1,180,000
Restricted stock unit awards vested, net of shares withheld to cover tax withholding	(1,584)	$ 1	(1,585)
Stock-based compensation	7,916		7,916
Issuance of common stock for 401K match (in shares)		777,000
Issuance of common stock for 401K match	1,942	$ 1	1,941
Ending balance (in shares) at Mar. 31, 2023		69,388,000
Ending balance at Mar. 31, 2023	$ 169,895	$ 108	420,980	(42)	(251,151)
Beginning balance (in shares) at Dec. 31, 2023	70,239,890	70,240,000
Beginning balance at Dec. 31, 2023	$ 159,003	$ 109	433,781	(60)	(274,827)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(7,378)				(7,378)
Foreign currency translation gain (loss)	(35)			(35)
Actuarial loss on pension liability adjustment	(30)			(30)
Restricted stock unit awards vested, net of shares withheld to cover tax withholding (in shares)		1,148,000
Restricted stock unit awards vested, net of shares withheld to cover tax withholding	(430)	$ 1	(431)
Stock-based compensation	1,648		1,648
Issuance of common stock for 401K match (in shares)		370,000
Issuance of common stock for 401K match	$ 1,618		1,618
Ending balance (in shares) at Mar. 31, 2024	71,757,998	71,758,000
Ending balance at Mar. 31, 2024	$ 154,396	$ 110	$ 436,616	$ (125)	$ (282,205)

OTHER BALANCE SHEET COMPONENTS

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

OTHER BALANCE SHEET COMPONENTS


Table 9.1: Details of Other Assets
	March 31, 2024		December 31, 2023

	(in thousands)
Investment (1)	$	3,000	$	—
Restricted cash	136		136
Other	662		749
Other assets	$	3,798	$	885


Table 9.2: Details of Accounts Payable and Other Accrued Liabilities
	March 31, 2024		December 31, 2023

	(in thousands)
Accounts payable	$	2,206	$	8,307
Accrued payables	6,958		5,443
Accounts payable and other accrued liabilities	$	9,164	$	13,750


Table 9.3: Details of Other Current Liabilities
	March 31, 2024		December 31, 2023

	(in thousands)
Other accrued expenses	$	1,270	$	1,427
Restructuring expenses accrual	107		400
Other	655		497
Other current liabilities	$	2,032	$	2,324

SEGMENT INFORMATION - Operations by Business Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenues [Abstract]
Total revenue	$ 29,619	$ 35,222
Gross profit
Total gross profit	10,961	13,482
Research and development expenses	3,170	2,833
Selling, general and administrative expenses	16,229	23,619
Operating loss	(8,438)	(12,970)
Other income	1,252	2,496
Interest expense	(175)	(249)
Loss before income taxes	(7,361)	(10,723)
Provision for income taxes	(17)	(23)
Net loss	(7,378)	(10,746)
Security Solutions
Revenues [Abstract]
Total revenue	18,640	19,773
Gross profit
Total gross profit	8,626	10,274
Secure Networks
Revenues [Abstract]
Total revenue	10,979	15,449
Gross profit
Total gross profit	$ 2,335	$ 3,208

LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Potentially Dilutive Securities


Table 14: Potentially Dilutive Securities
	For the Three Months Ended
	March 31, 2024	March 31, 2023

	(in thousands)
Unvested restricted stock and restricted stock units	1,245	410