Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GLOBALSCAPE INC | |
Trading Symbol | GSB | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 17,218,849 | |
Amendment Flag | false | |
Entity Central Index Key | 0001112920 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 14,362 | $ 9,173 |
Accounts receivable, net | 5,439 | 6,657 |
Prepaid and other current assets | 1,470 | 1,521 |
Total current assets | 21,271 | 17,351 |
Capitalized software development costs, net | 2,981 | 3,133 |
Goodwill | 12,712 | 12,712 |
Deferred tax asset, net | 410 | 395 |
Property and equipment, net | 365 | 399 |
Other assets | 464 | 502 |
Total assets | 38,203 | 34,492 |
Current liabilities: | ||
Accounts payable | 838 | 820 |
Accrued expenses | 1,280 | 1,214 |
Income tax payable | 736 | 148 |
Deferred revenue | 13,980 | 13,301 |
Total current liabilities | 16,834 | 15,483 |
Deferred revenue, non-current portion | 2,564 | 2,936 |
Other long term liabilities | 114 | 117 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001 per share, 10,000,000 authorized, no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001 per share, 40,000,000 authorized, 22,598,349 and 22,441,860 shares issued: 17,218,849 and 17,130,918 outstanding at March 31, 2019 and December 31, 2018, respectively | 22 | 22 |
Additional paid-in capital | 26,533 | 25,584 |
Treasury stock, 5,379,500 and 5,310,942 shares, at cost, at March 31, 2019 and December 31, 2018, respectively | (23,087) | (22,712) |
Retained earnings | 15,223 | 13,062 |
Total stockholders’ equity | 18,691 | 15,956 |
Total liabilities and stockholders’ equity | $ 38,203 | $ 34,492 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 22,598,349 | 22,441,860 |
Treasury stock, shares | 5,379,500 | 5,310,942 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Revenues: | ||
Total Revenues | $ 9,413 | $ 7,711 |
Cost of revenues: | ||
Total cost of revenues | 1,434 | 1,616 |
Gross profit | 7,979 | 6,095 |
Operating expenses: | ||
Sales and marketing | 1,916 | 3,107 |
General and administrative | 2,015 | 1,822 |
Legal and professional | 576 | 1,680 |
Severance | 4 | 11 |
Research and development | 325 | 718 |
Total operating expenses | 4,836 | 7,338 |
Income (loss) from operations | 3,143 | (1,243) |
Interest income (expense), net | 24 | 76 |
Income (loss) before income taxes | 3,167 | (1,167) |
Income tax expense (benefit) | 747 | (232) |
Net income (loss) | 2,420 | (935) |
Comprehensive income (loss) | $ 2,420 | $ (935) |
Net income (loss) per common share - | ||
Basic (in Dollars per share) | $ 0.14 | $ (0.04) |
Diluted (in Dollars per share) | $ 0.14 | $ (0.04) |
Weighted average shares outstanding: | ||
Basic (in Shares) | 17,197 | 21,793 |
Diluted (in Shares) | 17,664 | 21,793 |
Cash dividends declared per share (in Dollars per share) | $ 0.015 | $ 0.015 |
Software and Licenses [Member] | ||
Operating Revenues: | ||
Revenues | $ 2,634 | $ 2,160 |
Cost of revenues: | ||
Cost of revenues | 609 | 771 |
Maintenance [Member] | ||
Operating Revenues: | ||
Revenues | 6,076 | 5,100 |
Cost of revenues: | ||
Cost of revenues | 532 | 520 |
Professional Services [Member] | ||
Operating Revenues: | ||
Revenues | 703 | 451 |
Cost of revenues: | ||
Cost of revenues | $ 293 | $ 325 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Activities: | ||
Net income (loss) | $ 2,420 | $ (935) |
Items not involving cash at the time they are recorded in the statement of operations: | ||
Provision (recoveries) for doubtful accounts receivable | 9 | (75) |
Depreciation and amortization | 410 | 594 |
Share-based compensation | 875 | 671 |
Deferred taxes | (15) | (248) |
Subtotal before changes in operating assets and liabilities | 3,699 | 7 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,209 | 1,845 |
Prepaid and other current assets | 51 | (89) |
Deferred revenue | 307 | (1,317) |
Accounts payable | 18 | 202 |
Accrued expenses | 66 | 163 |
Other assets | 38 | 54 |
Accrued interest receivable | 0 | (66) |
Other long-term liabilities | (3) | 0 |
Income tax payable | 588 | 27 |
Net cash provided by operating activities | 5,973 | 826 |
Investing Activities: | ||
Software development costs capitalized | (201) | (402) |
Purchase of property and equipment | (23) | (27) |
Net cash used in investing activities | (224) | (429) |
Financing Activities: | ||
Proceeds from exercise of stock options | 519 | 0 |
Stock option cash settlement | (445) | 0 |
Purchase of Treasury Stock | (375) | 0 |
Dividends paid | (259) | (327) |
Net cash used in financing activities | (560) | (327) |
Net increase in cash | 5,189 | 70 |
Cash at beginning of period | 9,173 | 11,583 |
Cash at end of period | 14,362 | 11,653 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income tax payments | $ 16 | $ 18 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholder' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2017 | $ 22 | $ 23,793 | $ (1,452) | $ 9,353 | $ 31,716 |
Balance (in Shares) at Dec. 31, 2017 | 22,196,712 | ||||
Stock option cash settlement | 0 | ||||
Retained Earnings Adjustment due to ASC 606 | 979 | 979 | |||
Stock options | 587 | 587 | |||
Restricted stock | 84 | 84 | |||
Common stock cash dividends | (327) | (327) | |||
Net Income (loss) | (935) | (935) | |||
Balance at Mar. 31, 2018 | $ 22 | 24,464 | (1,452) | 9,070 | 32,104 |
Balance (in Shares) at Mar. 31, 2018 | 22,196,712 | ||||
Stock options | 155 | 155 | |||
Restricted stock | 36 | 36 | |||
Restricted stock (in Shares) | 80,000 | ||||
Common stock cash dividends | (328) | (328) | |||
Net Income (loss) | 593 | 593 | |||
Balance at Jun. 30, 2018 | $ 22 | 24,655 | (1,452) | 9,335 | 32,560 |
Balance (in Shares) at Jun. 30, 2018 | 22,276,712 | ||||
Purchase of Treasury Stock | (17,262) | (17,262) | |||
Cancellation of Restricted Stock (in Shares) | (40,000) | ||||
Shares issued upon exercise of stock options | 341 | 341 | |||
Shares issued upon exercise of stock options (in Shares) | 146,150 | ||||
Stock options | 110 | 110 | |||
Net Income (loss) | 998 | 998 | |||
Balance at Sep. 30, 2018 | $ 22 | 25,106 | (18,714) | 10,333 | 16,747 |
Balance (in Shares) at Sep. 30, 2018 | 22,382,862 | ||||
Purchase of Treasury Stock | (3,998) | (3,998) | |||
Shares issued upon exercise of stock options | 181 | 181 | |||
Shares issued upon exercise of stock options (in Shares) | 58,998 | ||||
Stock options | 205 | 205 | |||
Restricted stock | 92 | 92 | |||
Common stock cash dividends | (269) | (269) | |||
Net Income (loss) | 2,998 | 2,998 | |||
Balance at Dec. 31, 2018 | $ 22 | 25,584 | (22,712) | 13,062 | 15,956 |
Balance (in Shares) at Dec. 31, 2018 | 22,441,860 | ||||
Purchase of Treasury Stock | (375) | (375) | |||
Shares issued upon exercise of stock options | 519 | $ 519 | |||
Shares issued upon exercise of stock options (in Shares) | 156,489 | 156,489 | |||
Stock option cash settlement | (445) | $ (445) | |||
Stock options | 775 | 775 | |||
Restricted stock | 100 | 100 | |||
Common stock cash dividends | (259) | (259) | |||
Net Income (loss) | 2,420 | 2,420 | |||
Balance at Mar. 31, 2019 | $ 22 | $ 26,533 | $ (23,087) | $ 15,223 | $ 18,691 |
Balance (in Shares) at Mar. 31, 2019 | 22,598,349 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholder' Equity (Parentheticals) - $ / shares | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Common stock cash dividends per share | $ 0.015 | $ 0.015 | $ 0.015 | $ 0.015 |
1. Nature of Business
1. Nature of Business | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Nature of Operations [Text Block] | 1. Nature of Business GlobalSCAPE, Inc., together with its wholly-owned subsidiary (collectively referred to as the “Company”, “GlobalSCAPE”, “we”, “us” or “our”), provides secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provisioning of associated services. Our solution portfolio facilitates transmission of critical information such as financial data, medical records, customer files, vendor files, personnel files, transaction activity, and other similar documents between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. In addition to enabling secure, flexible transmission of critical information using servers, desktop and notebook computers, and a wide range of network-enabled mobile devices, our products also provide customers with the ability to monitor and audit file transfer activities. Our primary product is Enhanced File Transfer, or EFT. We have other products that complement our EFT product. We sell other products that are synergistic to EFT including Mail Express, WAFS, and CuteFTP. Collectively, these products aimed at consumers and small businesses constitute less than 3% of our total revenue. We plan to phase out Mail Express and WAFS in 2019. Throughout these notes unless otherwise noted, our references to the 2019 quarter and the 2018 quarter refer to the three months ended March 31, 2019 and 2018, respectively. |
2.Basis of Presentation
2.Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X, “Interim Financial Statements”, as prescribed by the United States Securities and Exchange Commission, or the SEC. Accordingly, they do not include all information and footnotes required under United States generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all accounting entries necessary for a fair presentation of our financial position and results of operations have been made. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The information included in this Report should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 18, 2019, which we refer to as the 2018 Form 10-K, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations We follow accounting standards set by the Financial Accounting Standards Board, or FASB. The FASB sets GAAP, which we follow in preparing financial statements that report our financial position, results of operations, and sources and uses of cash. We also follow the reporting regulations of the SEC. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements. It is possible the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. |
3. Significant Accounting Polic
3. Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 3. Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. Reclassification of Expenses We have revised the classification of certain of our operating expenses. To ensure comparability between periods, we revised the previous period financial statements presented to conform to the method of presentation in the current period financial statements. These reclassifications had no impact on the net income (loss) for the periods presented or total stockholders’ equity at March 31, 2019. Revenue Recognition Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which customers install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Customers also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a customer. We measure revenue based upon the consideration set forth in an arrangement or contract with a customer. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our customer the software license key that provides the ability to access and use our product. If our customer is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our customers subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the customer consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a customer pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a customer such as rebates or other incentives that reduce amounts owed to us by customers. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Deferred revenue, beginning of period $ 16,237 $ 17,050 Deferred revenue resulting from new contracts with customers 7,102 3,898 Deferred revenue at the beginning of the period that was amortized to revenue (5,631 ) (4,786 ) Deferred revenue arising during the period that was amortized to revenue (1,164 ) (429 ) Deferred revenue, end of period $ 16,544 $ 15,733 Multi-Element Transactions At the time customers purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Customers may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to customers seeking assistance with products they have previously purchased from us, or SaaS subscriptions to customers not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among customers, we use the residual approach under FASB Accounting Standards Codification Topic 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction. Sale s Tax We collect sales tax on many of our transactions with customers as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with customers. This amount is included in accrued liabilities in our condensed consolidated balance sheet. Contract Assets We generally bill customers for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Deferred expense, beginning of period $ 1,009 $ 1,239 Deferred expense resulting from new contracts with customers 179 149 Deferred expense amortized to expense (209 ) (204 ) Deferred expense, end of period $ 979 $ 1,184 At March 31, 2019, $577,000 was recorded in prepaid and current other assets and $402,000 was recorded in other assets in our condensed consolidated balance sheet. At December 31, 2018 we had $571,000 recorded in prepaid and other current assets and $438,000 recorded in noncurrent other assets in our condensed consolidated balance sheet. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. We have computed the impact of the new lease standard and due to the immateriality of the impact on our existing leases as of and for the period ending March 31, 2019, we have not recorded ROU assets or lease liabilities at March 31, 2019. Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of March 31, 2019, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a nonrecurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. Goodwill Goodwill is not amortized. At least annually, we test goodwill for impairment at the reporting unit level using December 31 as the measurement date. We operate as a single reporting unit. When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: • Macroeconomic conditions. • Industry and market considerations. • Cost factors and trends for labor and other expenses of operating our business. • Our overall financial performance and outlook for the future. • Trends in the quoted market value and trading of our common stock. In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing, in accordance with GAAP. If we conclude otherwise, we proceed with performing the first step, and if necessary, the second step, of the two-step goodwill impairment test prescribed by GAAP. As of December 31, 2018, after assessing the totality of the relevant events and circumstances, we determined it not more likely than not that the fair value of our reporting unit was less than its carrying amount. Accordingly, we concluded there was no impairment of goodwill as of that date. There have been no material events or changes in circumstances since that time indicating that the carrying amount of goodwill may exceed its fair market value and that interim testing needed to be performed. Capitalized Software Development Costs When we complete research and development for a software product, have in place a program plan and a detailed program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. We periodically assess the carrying value of capitalized software development costs and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. Research and Development We expense research and development costs as incurred. Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was approximately $51,000 and $324,000 in the 2019 quarter and the 2018 quarter, respectively. Share-Based Compensation We measure the cost of share-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: • We estimate expected volatility based on historical volatility of our common stock. • We primarily use the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. • We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. • We estimate a dividend yield based on our historical and expected future dividend payments. For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award. Income Taxes We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. Recent accounting pronouncements ASU 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-02, Leases (Topic 842): ASU 2014-09, Revenue from Contracts with Customers (issued May 2014) ● If these costs are associated with products and services for which we recognize revenue at a point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If these costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we will recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we will recognize expense ratably monthly over the estimated life of the customer relationship. |
3. Accounts Receivable, Net
3. Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 4 . Accounts Receivable, Net We bill customers and issue invoices when we have delivered goods or services. In addition, when customers agree to purchase or renew M&S services, we bill and invoice customers at that time which could be before the date we begin delivering those services. In that event, we exclude from accounts receivable (and from the related deferred revenue, see Note 3) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the customer as of the date of our condensed consolidated financial statements. We continually assess the collectability of our accounts receivable. If we deem it less than probable that we will collect an amount due us, we write-off that balance against our allowance for doubtful accounts. Accordingly, we determine our accounts receivable, net, as follows ($ in thousands): March 31, 2019 December 31, 2018 Total invoices issued and unpaid $ 6,039 $ 7,990 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (500 ) (1,233 ) Gross accounts receivable 5,539 6,757 Allowance for doubtful accounts (100 ) (100 ) Accounts receivable, net $ 5,439 $ 6,657 |
5. Capitalized Software Develop
5. Capitalized Software Development Costs, Net | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | 5. Capitalized Software Development Costs, Net Our capitalized software development costs balances and activities were as follows ($ in thousands): March 31, December 31, 2019 2018 Gross capitalized cost $ 10,655 $ 10,454 Accumulated amortization (7,674 ) (7,321 ) Capitalized software development costs, net $ 2,981 $ 3,133 Three Months Ended March 31, 2019 2018 Amount capitalized $ 201 $ 402 Amortization expense (353 ) (534 ) Released Unreleased Products Products Gross capitalized amount at March 31, 2019 $ 9,817 $ 839 Accumulated amortization (7,675 ) - Net capitalized cost at March 31, 2019 $ 2,142 $ 839 Future amortization expense: Nine months ending December 31, 2019 1,028 Year ending December 31, 2020 921 2021 182 2022 11 Total $ 2,142 The future amortization expense of the gross capitalized software development costs related to unreleased products will be determinable at a future date when those products are ready for general release to the public. |
6. Deferred Revenue
6. Deferred Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 6. Deferred Revenue As described in Note 4 regarding accounts receivable, when customers agree to purchase or renew M&S services, we bill and invoice our customers at that time which could be before the date we begin delivering those services. In that event, we exclude from deferred revenue (and from the related accounts receivable) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the customer as of the date of our financial statements. Accordingly, we determine our deferred revenue as follows ($ in thousands): March 31, 2019 December 31, 2018 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,044 $ 17,470 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (500 ) (1,233 ) Total deferred revenue $ 16,544 $ 16,237 Deferred revenue, current portion $ 13,980 $ 13,301 Deferred revenue, non-current portion 2,564 2,936 Total deferred revenue $ 16,544 $ 16,237 |
7. Stock Options, Restricted St
7. Stock Options, Restricted Stock and Share-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | 7 . Stock Options, Restricted Stock and Stock -Based Compensation We have stock-based compensation plans under which we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of our Board of Directors. Our stock-based compensation expense was as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 875 $ 671 Stock Options We have granted stock options to our officers and employees under long-term equity incentive plans that originated in 2000, 2010 and 2016. During the 2019 quarter, we granted stock options only under the 2016 Employee Long-Term Equity Incentive Plan (the “2016 Plan”). Provisions and characteristics of the options granted to our officers and employees under our long-term equity incentive plans include the following: ● The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of our Board of Directors. ● The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock at market close on that date. ● Stock options we issue generally become exercisable ratably over a three-year period, expire ten years from the date of grant, and are exercisable for a period of ninety days after the end of employment. ● Upon exercise of a stock option, we issue new shares from the shares of common stock we are authorized to issue. We currently issue stock-based awards to our officers and employees only under the 2016 Plan which authorizes the issuance of up to 5,000,000 shares of common stock for stock-based incentives including stock options and restricted stock awards. As of March 31, 2019, stock-based incentives for up to 3,498,842 shares remained available for issuance in the future under the 2016 Plan. We have not previously issued any restricted stock under any of the plans. Our stock option activity has been as follows: Weighted Average Weighted Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares Per Share Term in Years (000's) Outstanding at December 31, 2018 2,536,320 $ 3.53 6.77 $ 2,464 Granted 16,000 $ 5.08 Forfeited (336,341 ) $ 2.85 Exercised (156,489 ) $ 3.32 Outstanding at March 31, 2019 2,059,490 $ 3.67 4.93 $ 5,492 Exercisable at March 31, 2019 1,247,743 $ 3.50 2.19 $ 3,543 Additional information about our stock options is as follows: Three Months Ended March 31, 2019 2018 Weighted average fair value of options granted $ 2.10 $ 1.52 Intrinsic value of options exercised $ 258,101 $ - Cash received from stock options exercised $ 519,184 $ - Number of options that vested 626,278 360,074 Fair value of options that vested $ 964,820 $ 570,552 Unrecognized compensation expense related to non-vested options at end of period $ 1,112,499 $ 1,393,633 Weighted average years over which non-vested option expense will be recognized 2.16 1.85 Plan Shares outstanding 2000 Stock Option Plan 10,000 2010 Employee LT Equity Incentive Plan 568,989 2016 Employee LT Equity Incentive Plan 1,480,501 Total shares Outstanding at March 31, 2019 2,059,490 As of March 31, 2019 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $1.43 - $2.35 153,354 1.70 $ 1.77 153,354 $ 1.76 $2.39 - $3.59 629,301 4.60 $ 3.44 405,303 $ 3.39 $3.60 - $5.90 1,274,835 5.48 $ 4.02 689,086 $ 3.95 $6.15 - $6.15 2,000 9.95 $ 6.15 - $ - Total options 2,059,490 1,247,743 We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Three Months Ended March 31, 2019 2018 Expected volatility 49 % 49 % Expected annual dividend yield 1.50 % 1.50 % Risk free rate of return 2.52 % 2.49 % Expected option term (years) 6.00 6.00 Restricted Stock Awards Our 2015 Non-Employee Directors Long-Term Equity Incentive Plan (the “2015 Directors Plan”) provides for the issuance of either stock options or restricted stock awards for up to 500,000 shares of our common stock. Provisions and characteristics of this 2015 Directors Plan include the following: ● The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of our Board of Directors. ● Restricted stock awards are initially issued as restricted shares with a legend restricting transferability of the shares until the recipient satisfies the vesting provision of the award, which is generally continuing service for one year subsequent to the date of the award, after which time the restrictive legend is removed from the shares. ● Restricted shares participate in dividend payments and may be voted. ● As of March 31, 2019, stock based incentives for up to 160,000 shares remained available for issuance in the future under the 2015 Directors Plan. Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted shares outstanding at December 31, 2018 100,000 $ 4.06 Shares granted with restrictions - $ - Shares vested and restrictions removed - $ - $ - Restricted shares outstanding at March 31, 2019 100,000 $ 4.06 Unrecognized compensation expense for non-vested shares as of March 31, 2019 Expense to be recognized in future periods $ 214,093 Weighted average number of months over which expense is expected to be recognized 0.5 |
8. Income Taxes
8. Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 8 . Income Taxes The components of our income tax expense (benefit) are as follows ($ in thousands): Three months ended March 31, 2019 2018 Current Deferred Total Current Deferred Total Federal $ 647 $ (10 ) $ 637 $ 40 $ (258 ) $ (218 ) State 115 (5 ) 110 (24 ) 10 (14 ) Total $ 762 $ (15 ) $ 747 $ 16 $ (248 ) $ (232 ) Deferred income taxes on our consolidated balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): March 31, December 31, 2019 2018 Deferred tax assets: Deferred revenue $ 715 $ 809 Share-based compensation 352 329 Compensation and benefits 81 49 Texas franchise tax R&D credit 210 194 Allowance for doubtful accounts 37 37 Deferred state income taxes 49 45 Accrued expenses not deducted for tax 5 6 Valuation allowance (210 ) (194 ) Total deferred tax assets 1,239 1,275 Deferred tax liabilities: Intangible assets 623 667 Deferred expenses 206 213 Total gross deferred tax liabilities 829 880 Net deferred tax assets $ 410 $ 395 In assessing the realizability of deferred tax assets, we consider whether it is more-likely-than-not that some portion or all the deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We have concluded it is more-likely-than-not that our ability to generate future taxable income will allow us to realize those deferred tax assets. As of March 31, 2019, we had Texas Research and Development tax credit carryforwards of $210,000. We believe it is uncertain that we will have sufficient Texas Franchise Tax in the future to support utilization of these carryforward credits. Accordingly, we have provided a valuation allowance for the full amount of these credit carryforwards. These carryforwards expire in years 2034 through 2039. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Balance at beginning of period $ 113 $ 158 Increases for tax positions related to the current year - 4 Increases for tax positions related to prior years - - Decreases for tax positions where the statue has expired - - Balance at end of period $ 113 $ 162 Our unrecognized tax benefit is related to research and development credits taken on our U.S. income tax returns in 2012, 2013, 2015, 2016, and 2017 and the uncertainty related to the realization of a portion of those credits based on prior experience. We believe it reasonably possible that we will not recognize any of our unrecognized tax benefits at least through December 31, 2019. If we realized and recognized any of our unrecognized tax benefits, such benefits would reduce our effective tax rate in the year of recognition. We record interest and penalty expense related to income taxes as interest and other expense, respectively. At March 31, 2019, no interest or penalties had been or were required to be accrued. We file income tax returns in the US and in various state jurisdictions with varying statues of limitations. We are no longer subject to income tax examination by tax authorities for years prior to 2011 with respect to our federal income tax returns and years prior to 2013 with respect to most of our state income tax returns. We do not file, and are not required to file, any foreign income tax returns. Our income tax expense (benefit) reconciles to an income tax expense resulting from applying an assumed statutory federal income tax rate of 21% for the 2019 and 2018 quarter to income (loss) before income taxes as follows ($ in thousands): Three months ended March 31, 2019 2018 Income tax expense (benefit) at federal statutory rate $ 665 $ (245 ) Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 86 5 Stock based compensation 73 30 Other 14 (6 ) R&D tax credit uncertain tax position (net) - 3 Research and development credit (17 ) (19 ) Foreign derived intangible income deduction (74 ) - Income tax expense (benefit) per the statements of operations $ 747 $ (232 ) On June 21, 2018, in South Dakota v Wayfair Inc . |
9. Earnings (Loss) per Common S
9. Earnings (Loss) per Common Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 9 . Earnings (Loss) per Common Share Earnings per share for the periods indicated were as follows (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerators Numerator for basic and diluted earnings per share: Net income (loss) $ 2,420 $ (935 ) Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 17,197 21,793 Dilutive potential common shares Stock options and awards 467 - Denominator for diluted earnings per share 17,664 21,793 Net income (loss) per common share - basic $ 0.14 $ (0.04 ) Net income (loss) per common share – diluted $ 0.14 $ (0.04 ) |
10. Dividends
10. Dividends | 3 Months Ended |
Mar. 31, 2019 | |
Dividends [Abstract] | |
Dividends [Text Block] | 1 0 . Dividends We paid dividends during the 2019 quarter and 2018 quarter as follows: Three Months Ended March 31, 2019 March 31, 2018 Dividend per share of common stock $ 0.015 $ 0.015 Dividend record date March 11, 2019 March 9, 2018 Dividend payment date March 25, 2019 March 23, 2018 On April 29, 2019 the Board of Directors announced a special dividend of $.50 per share of common stock. The dividend is payable on May 28, 2019 to shareholders of record at the close of business at 5 p.m. Eastern Time on May 13, 2019. |
11. Commitments and Contingenci
11. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 1 1 . Commitments and Contingencies Severance Payments We have agreements with key personnel that provide for severance payments to them in the event of a “change in control” of the Company, as defined in those agreements, and their employment is terminated in connection with that change in control. In such event, our aggregate severance payments to those employees would be approximately $900,000. Legal and Regulatory Matters As previously disclosed in the Company’s Current Report on Form 8-K filed on November 15, 2017, on August 9, 2017, a securities class action complaint, Anthony Giovagnoli v. GlobalSCAPE, Inc. On October 20, 2017, the Company received a demand letter from a stockholder seeking the inspection of books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law (the “Section 220 Demand”). This stockholder’s stated purpose for the demand is, inter alia On October 12, 2018, and November 30, 2018 the Company received letters from stockholders (the “Stockholder Demands”) demanding that the Company take action to remedy alleged harm caused to the Company, including to remedy alleged breaches of fiduciary duties by certain current and/or former directors and executive officers of the Company. The stockholders allege, inter alia, that certain current and former directors and executive officers violated their fiduciary duties beginning at least in July 2016, causing the Company to suffer damages by overstating financial results for the fourth quarter of 2016. The Board of Directors has established a special litigation committee (“Special Litigation Committee”) consisting of Thomas Hicks and Frank Morgan to analyze and investigate claims that could potentially be asserted in stockholder derivative litigation related to facts connected to the claims and allegations asserted in the litigation related to the restatement of (i) our condensed consolidated financial statements as of and for the years ended December 31, 2016 and 2015 and (ii) our consolidated financial statements as of and for the three months ended March 31, 2017 (the “Restatement”) and the Section 220 Demand (the “Potential Derivative Litigation”). The Special Litigation Committee will determine what actions are appropriate and in the best interests of the Company, and decide whether it is in the best interests of the Company to pursue, dismiss, or consensually resolve any claims that may be asserted in the Potential Derivative Litigation. The Board of Directors determined that each member of the Special Litigation Committee is disinterested and independent with respect to the Potential Derivative Litigation. Among other things, the Special Litigation Committee has the power to retain counsel and advisors, as appropriate, to assist it in the investigation, to gather and review relevant documents relating to the claims, to interview persons who may have knowledge of the relevant information, to prepare a report setting forth its conclusions and recommended course of action with respect to the Potential Derivative Litigation, and to take any actions, including, without limitation, directing the filing and prosecution of litigation on behalf of the Company, as the Special Litigation Committee in its sole discretion deems to be in the best interests of the Company in connection with the Potential Derivative Litigation. The Special Litigation Committee’s findings and determinations shall be final and not subject to review by the Board of Directors and in all respects shall be binding upon the Company. The Special Litigation Committee has concluded its investigation into the claims raised in the Stockholder Demands and concluded, among other things, that it is not in the best interest of the Company to pursue the claims raised in the Stockholder Demands. As disclosed in a Current Report on Form 8-K filed on March 16, 2018, the Fort Worth, Texas Regional Office of the SEC has opened a formal investigation of issues relating to the Restatement, with which the Company is cooperating fully. At this time, the Company is unable to predict the duration, scope, result or related costs associated with the SEC’s investigation. The Company is also unable to predict what, if any, action may be taken by the SEC, or what penalties or remedial actions the SEC may seek. Any determination by the SEC that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s financial position, liquidity, or results of operations. On May 31, 2018, the Company was served with a subpoena issued by a grand jury sitting in the United States District Court for the Western District of Texas (the “Grand Jury Subpoena”). The Grand Jury Subpoena requests all documents and emails relating to the Company’s investigation of the potential improper recognition of software license revenue. The Company intends to fully cooperate with the Grand Jury Subpoena and related investigation being conducted by the United States Attorney’s Office for the Western District of Texas (the “U.S. Attorney’s Investigation”). At this time, the Company is unable to predict the duration, scope, result or related costs of the U.S. Attorney’s Investigation. The Company is also unable to predict what, if any, further action may be taken in connection with the Grand Jury Subpoena and the U.S. Attorney’s Investigation, or what, if any, penalties, sanctions or remedial actions may be sought. Any determination by the U.S. Attorney’s office that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations. Leases Subsequent to March 31, 2019, we have signed a new operating lease for our existing office space location. The lease is for a period of 10 years at an average annual rent of $462,000 beginning May 1, 2019. We estimate that this will result in a Right-of-Use Asset and Lease Lability of approximately $3 million upon the commencement of the lease. |
12. Concentration of Business V
12. Concentration of Business Volume and Credit Risk | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 1 2 . Concentration of Business Volume and Credit Risk In order to leverage the resources of third parties, we make our products available for purchase by end users through third-party, channel distributors even though those end users can also purchase those products directly from us. In the 2019 quarter and 2018 quarter, we earned approximately 19% and 12%, respectively, of our revenue from such sales through our largest third-party channel distributor. As of March 31, 2019, approximately 26% of our accounts receivable were due from this channel distributor with payment for substantially all such amounts having been received subsequent to that date. |
13. Segment and Geographic Disc
13. Segment and Geographic Disclosures | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 13 . Segment and Geographic Disclosures In accordance with ASC 280, Segment Reporting, we view our operations and manage our business as principally one segment. As a result, the financial information disclosed herein represents all of the material financial information related to our principal operating segment. Revenues derived from customers and partners located outside the United States accounted for approximately 28% and 30% of our total revenues in the 2019 quarter and 2018 quarter, respectively. Each individual foreign country accounts for less than 10% of total revenue in the 2019 quarter and 2018 quarter. We attribute revenues to countries based on the country in which the customer or partner is located. None of our property and equipment was located in a foreign country as of March 31, 2019. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying condensed consolidated financial statements are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. |
Reclassification, Policy [Policy Text Block] | Reclassification of Expenses We have revised the classification of certain of our operating expenses. To ensure comparability between periods, we revised the previous period financial statements presented to conform to the method of presentation in the current period financial statements. These reclassifications had no impact on the net income (loss) for the periods presented or total stockholders’ equity at March 31, 2019. |
Revenue [Policy Text Block] | Revenue Recognition Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which customers install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Customers also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a customer. We measure revenue based upon the consideration set forth in an arrangement or contract with a customer. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our customer the software license key that provides the ability to access and use our product. If our customer is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our customers subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the customer consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a customer pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a customer such as rebates or other incentives that reduce amounts owed to us by customers. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Deferred revenue, beginning of period $ 16,237 $ 17,050 Deferred revenue resulting from new contracts with customers 7,102 3,898 Deferred revenue at the beginning of the period that was amortized to revenue (5,631 ) (4,786 ) Deferred revenue arising during the period that was amortized to revenue (1,164 ) (429 ) Deferred revenue, end of period $ 16,544 $ 15,733 Multi-Element Transactions At the time customers purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Customers may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to customers seeking assistance with products they have previously purchased from us, or SaaS subscriptions to customers not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among customers, we use the residual approach under FASB Accounting Standards Codification Topic 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction. Sale s Tax We collect sales tax on many of our transactions with customers as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with customers. This amount is included in accrued liabilities in our condensed consolidated balance sheet. Contract Assets We generally bill customers for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Deferred expense, beginning of period $ 1,009 $ 1,239 Deferred expense resulting from new contracts with customers 179 149 Deferred expense amortized to expense (209 ) (204 ) Deferred expense, end of period $ 979 $ 1,184 At March 31, 2019, $577,000 was recorded in prepaid and current other assets and $402,000 was recorded in other assets in our condensed consolidated balance sheet. At December 31, 2018 we had $571,000 recorded in prepaid and other current assets and $438,000 recorded in noncurrent other assets in our condensed consolidated balance sheet. |
Lessee, Leases [Policy Text Block] | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. We have computed the impact of the new lease standard and due to the immateriality of the impact on our existing leases as of and for the period ending March 31, 2019, we have not recorded ROU assets or lease liabilities at March 31, 2019. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of March 31, 2019, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a nonrecurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill is not amortized. At least annually, we test goodwill for impairment at the reporting unit level using December 31 as the measurement date. We operate as a single reporting unit. When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: • Macroeconomic conditions. • Industry and market considerations. • Cost factors and trends for labor and other expenses of operating our business. • Our overall financial performance and outlook for the future. • Trends in the quoted market value and trading of our common stock. In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing, in accordance with GAAP. If we conclude otherwise, we proceed with performing the first step, and if necessary, the second step, of the two-step goodwill impairment test prescribed by GAAP. As of December 31, 2018, after assessing the totality of the relevant events and circumstances, we determined it not more likely than not that the fair value of our reporting unit was less than its carrying amount. Accordingly, we concluded there was no impairment of goodwill as of that date. There have been no material events or changes in circumstances since that time indicating that the carrying amount of goodwill may exceed its fair market value and that interim testing needed to be performed. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Capitalized Software Development Costs When we complete research and development for a software product, have in place a program plan and a detailed program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. We periodically assess the carrying value of capitalized software development costs and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. |
Cost of Goods and Service [Policy Text Block] | Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development We expense research and development costs as incurred. |
Advertising Cost [Policy Text Block] | Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was approximately $51,000 and $324,000 in the 2019 quarter and the 2018 quarter, respectively. |
Share-based Payment Arrangement [Policy Text Block] | Share-Based Compensation We measure the cost of share-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: • We estimate expected volatility based on historical volatility of our common stock. • We primarily use the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. • We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. • We estimate a dividend yield based on our historical and expected future dividend payments. For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award. |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements ASU 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-02, Leases (Topic 842): ASU 2014-09, Revenue from Contracts with Customers (issued May 2014) ● If these costs are associated with products and services for which we recognize revenue at a point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If these costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we will recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we will recognize expense ratably monthly over the estimated life of the customer relationship. |
3. Significant Accounting Pol_2
3. Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
3. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): March 31, 2019 December 31, 2018 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,044 $ 17,470 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (500 ) (1,233 ) Total deferred revenue $ 16,544 $ 16,237 Deferred revenue, current portion $ 13,980 $ 13,301 Deferred revenue, non-current portion 2,564 2,936 Total deferred revenue $ 16,544 $ 16,237 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized amount at March 31, 2019 $ 9,817 $ 839 Accumulated amortization (7,675 ) - Net capitalized cost at March 31, 2019 $ 2,142 $ 839 |
Incremental Costs of Obtaining a Contract to Deliver Goods and Services [Member] | |
3. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($in thousands): Three Months Ended March 31, 2019 2018 Deferred expense, beginning of period $ 1,009 $ 1,239 Deferred expense resulting from new contracts with customers 179 149 Deferred expense amortized to expense (209 ) (204 ) Deferred expense, end of period $ 979 $ 1,184 |
Software License Arrangement [Member] | |
3. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The activity in our deferred revenue balances has been as follows ($in thousands): Three Months Ended March 31, 2019 2018 Deferred revenue, beginning of period $ 16,237 $ 17,050 Deferred revenue resulting from new contracts with customers 7,102 3,898 Deferred revenue at the beginning of the period that was amortized to revenue (5,631 ) (4,786 ) Deferred revenue arising during the period that was amortized to revenue (1,164 ) (429 ) Deferred revenue, end of period $ 16,544 $ 15,733 |
3. Accounts Receivable, Net (Ta
3. Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | We determine our accounts receivable, net, as follows ($ in thousands): March 31, 2019 December 31, 2018 Total invoices issued and unpaid $ 6,039 $ 7,990 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (500 ) (1,233 ) Gross accounts receivable 5,539 6,757 Allowance for doubtful accounts (100 ) (100 ) Accounts receivable, net $ 5,439 $ 6,657 |
5. Capitalized Software Devel_2
5. Capitalized Software Development Costs, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Our capitalized software development costs balances and activities were as follows ($ in thousands): March 31, December 31, 2019 2018 Gross capitalized cost $ 10,655 $ 10,454 Accumulated amortization (7,674 ) (7,321 ) Capitalized software development costs, net $ 2,981 $ 3,133 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Three Months Ended March 31, 2019 2018 Amount capitalized $ 201 $ 402 Amortization expense (353 ) (534 ) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized amount at March 31, 2019 $ 9,817 $ 839 Accumulated amortization (7,675 ) - Net capitalized cost at March 31, 2019 $ 2,142 $ 839 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization expense: Nine months ending December 31, 2019 1,028 Year ending December 31, 2020 921 2021 182 2022 11 Total $ 2,142 |
6. Deferred Revenue (Tables)
6. Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): March 31, 2019 December 31, 2018 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,044 $ 17,470 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (500 ) (1,233 ) Total deferred revenue $ 16,544 $ 16,237 Deferred revenue, current portion $ 13,980 $ 13,301 Deferred revenue, non-current portion 2,564 2,936 Total deferred revenue $ 16,544 $ 16,237 |
7. Stock Options, Restricted _2
7. Stock Options, Restricted Stock and Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Cost by Plan [Table Text Block] | We have stock-based compensation plans under which we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of our Board of Directors. Our stock-based compensation expense was as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 875 $ 671 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Our stock option activity has been as follows: Weighted Average Weighted Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares Per Share Term in Years (000's) Outstanding at December 31, 2018 2,536,320 $ 3.53 6.77 $ 2,464 Granted 16,000 $ 5.08 Forfeited (336,341 ) $ 2.85 Exercised (156,489 ) $ 3.32 Outstanding at March 31, 2019 2,059,490 $ 3.67 4.93 $ 5,492 Exercisable at March 31, 2019 1,247,743 $ 3.50 2.19 $ 3,543 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Additional information about our stock options is as follows: Three Months Ended March 31, 2019 2018 Weighted average fair value of options granted $ 2.10 $ 1.52 Intrinsic value of options exercised $ 258,101 $ - Cash received from stock options exercised $ 519,184 $ - Number of options that vested 626,278 360,074 Fair value of options that vested $ 964,820 $ 570,552 Unrecognized compensation expense related to non-vested options at end of period $ 1,112,499 $ 1,393,633 Weighted average years over which non-vested option expense will be recognized 2.16 1.85 |
Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plans [Table Text Block] | Plan Shares outstanding 2000 Stock Option Plan 10,000 2010 Employee LT Equity Incentive Plan 568,989 2016 Employee LT Equity Incentive Plan 1,480,501 Total shares Outstanding at March 31, 2019 2,059,490 |
Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block] | As of March 31, 2019 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $1.43 - $2.35 153,354 1.70 $ 1.77 153,354 $ 1.76 $2.39 - $3.59 629,301 4.60 $ 3.44 405,303 $ 3.39 $3.60 - $5.90 1,274,835 5.48 $ 4.02 689,086 $ 3.95 $6.15 - $6.15 2,000 9.95 $ 6.15 - $ - Total options 2,059,490 1,247,743 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Three Months Ended March 31, 2019 2018 Expected volatility 49 % 49 % Expected annual dividend yield 1.50 % 1.50 % Risk free rate of return 2.52 % 2.49 % Expected option term (years) 6.00 6.00 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | As of March 31, 2019, stock based incentives for up to 160,000 shares remained available for issuance in the future under the 2015 Directors Plan. Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted shares outstanding at December 31, 2018 100,000 $ 4.06 Shares granted with restrictions - $ - Shares vested and restrictions removed - $ - $ - Restricted shares outstanding at March 31, 2019 100,000 $ 4.06 Unrecognized compensation expense for non-vested shares as of March 31, 2019 Expense to be recognized in future periods $ 214,093 Weighted average number of months over which expense is expected to be recognized 0.5 |
8. Income Taxes (Tables)
8. Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of our income tax expense (benefit) are as follows ($ in thousands): Three months ended March 31, 2019 2018 Current Deferred Total Current Deferred Total Federal $ 647 $ (10 ) $ 637 $ 40 $ (258 ) $ (218 ) State 115 (5 ) 110 (24 ) 10 (14 ) Total $ 762 $ (15 ) $ 747 $ 16 $ (248 ) $ (232 ) |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income taxes on our consolidated balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): March 31, December 31, 2019 2018 Deferred tax assets: Deferred revenue $ 715 $ 809 Share-based compensation 352 329 Compensation and benefits 81 49 Texas franchise tax R&D credit 210 194 Allowance for doubtful accounts 37 37 Deferred state income taxes 49 45 Accrued expenses not deducted for tax 5 6 Valuation allowance (210 ) (194 ) Total deferred tax assets 1,239 1,275 Deferred tax liabilities: Intangible assets 623 667 Deferred expenses 206 213 Total gross deferred tax liabilities 829 880 Net deferred tax assets $ 410 $ 395 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): Three Months Ended March 31, 2019 2018 Balance at beginning of period $ 113 $ 158 Increases for tax positions related to the current year - 4 Increases for tax positions related to prior years - - Decreases for tax positions where the statue has expired - - Balance at end of period $ 113 $ 162 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Our income tax expense (benefit) reconciles to an income tax expense resulting from applying an assumed statutory federal income tax rate of 21% for the 2019 and 2018 quarter to income (loss) before income taxes as follows ($ in thousands): Three months ended March 31, 2019 2018 Income tax expense (benefit) at federal statutory rate $ 665 $ (245 ) Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 86 5 Stock based compensation 73 30 Other 14 (6 ) R&D tax credit uncertain tax position (net) - 3 Research and development credit (17 ) (19 ) Foreign derived intangible income deduction (74 ) - Income tax expense (benefit) per the statements of operations $ 747 $ (232 ) |
9. Earnings (Loss) per Common_2
9. Earnings (Loss) per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Earnings per share for the periods indicated were as follows (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerators Numerator for basic and diluted earnings per share: Net income (loss) $ 2,420 $ (935 ) Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 17,197 21,793 Dilutive potential common shares Stock options and awards 467 - Denominator for diluted earnings per share 17,664 21,793 Net income (loss) per common share - basic $ 0.14 $ (0.04 ) Net income (loss) per common share – diluted $ 0.14 $ (0.04 ) |
10. Dividends (Tables)
10. Dividends (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Dividends [Abstract] | |
Schedule of Dividends Payable [Table Text Block] | We paid dividends during the 2019 quarter and 2018 quarter as follows: Three Months Ended March 31, 2019 March 31, 2018 Dividend per share of common stock $ 0.015 $ 0.015 Dividend record date March 11, 2019 March 9, 2018 Dividend payment date March 25, 2019 March 23, 2018 |
3. Significant Accounting Pol_3
3. Significant Accounting Policies (Details) - USD ($) | Jan. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
3. Significant Accounting Policies (Details) [Line Items] | ||||
Deferred Costs, Current | $ 577,000 | $ 571,000 | ||
Deferred Costs, Noncurrent | 402,000 | 438,000 | ||
Goodwill, Impairment Loss | $ 0 | |||
Advertising Expense | $ 51,000 | $ 324,000 | ||
Probability of occurrence of event | 50.00% | |||
Contract with Customer, Deferred Expense | $ 1,200,000 | |||
Computer Equipment [Member] | ||||
3. Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Software and Software Development Costs [Member] | ||||
3. Significant Accounting Policies (Details) [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||
Minimum [Member] | Furniture and Fixtures [Member] | ||||
3. Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Maximum [Member] | Furniture and Fixtures [Member] | ||||
3. Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 7 years |
3. Significant Accounting Poli
3. Significant Accounting Policies (Details) - Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Deferred Revenue, by Arrangement, Disclosure [Abstract] | ||
Deferred revenue, beginning of period | $ 16,237 | $ 17,050 |
Deferred revenue resulting from new contracts with customers | 7,102 | 3,898 |
Deferred revenue at the beginning of the period that was amortized to revenue | (5,631) | (4,786) |
Deferred revenue arising during the period that was amortized to revenue | (1,164) | (429) |
Deferred revenue, end of period | $ 16,544 | $ 15,733 |
3. Significant Accounting Po_2
3. Significant Accounting Policies (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Abstract] | ||
Deferred expense, beginning of period | $ 1,009 | $ 1,239 |
Deferred expense resulting from new contracts with customers | 179 | 149 |
Deferred expense amortized to expense | (209) | (204) |
Deferred expense, end of period | $ 979 | $ 1,184 |
3. Accounts Receivabl
3. Accounts Receivable, Net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Accounts, Notes, Loans and Financing Receivable [Abstract] | ||
Total invoices issued and unpaid | $ 6,039 | $ 7,990 |
Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date | (500) | (1,233) |
Gross accounts receivable | 5,539 | 6,757 |
Allowance for doubtful accounts | (100) | (100) |
Accounts receivable, net | $ 5,439 | $ 6,657 |
5. Capitalized Softw
5. Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Finite-Lived Intangible Assets [Abstract] | ||
Gross capitalized cost | $ 10,655 | $ 10,454 |
Accumulated amortization | (7,674) | (7,321) |
Capitalized software development costs, net | $ 2,981 | $ 3,133 |
5. Capitalized Sof_2
5. Capitalized Software Development Costs, Net (Details) - Finite-lived Intangible Assets Amortization Expense - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-lived Intangible Assets Amortization Expense [Abstract] | ||
Amount capitalized | $ 201 | $ 402 |
Amortization expense | $ (353) | $ (534) |
5. Capitalized Sof_3
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure - Computer Software, Intangible Asset [Member] $ in Thousands | Mar. 31, 2019USD ($) |
Released Products [Member] | |
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized at December 31, 2018 | $ 9,817 |
Accumulated amortization | (7,675) |
Total | 2,142 |
Unreleased Products [Member] | |
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized at December 31, 2018 | 839 |
Accumulated amortization | 0 |
Total | $ 839 |
5. Capitalized Sof_4
5. Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense $ in Thousands | Mar. 31, 2019USD ($) |
Future amortization expense: | |
Nine months ending December 31, 2019 | $ 1,028 |
Year ending December 31, | |
2020 | 921 |
2021 | 182 |
2022 | 11 |
Total | $ 2,142 |
6. Deferred Revenue (D
6. Deferred Revenue (Details) - Schedule of Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Deferred Revenue, by Arrangement, Disclosure [Abstract] | ||||
Total invoiced for M&S contracts for which revenue will be recognized in future periods | $ 17,044 | $ 17,470 | ||
Less: Unpaid invoices relating to M&S agreements with a start date subsequent to the balance sheet date | (500) | (1,233) | ||
Total deferred revenue | 16,544 | 16,237 | $ 15,733 | $ 17,050 |
Deferred revenue, current portion | 13,980 | 13,301 | ||
Deferred revenue, non-current portion | $ 2,564 | $ 2,936 |
7. Stock Options, Restricted _3
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 160,000 |
Stock-Based Awards [Member] | |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,498,842 |
Long-Term Equity Incentive Plans [Member] | Share-based Payment Arrangement, Option [Member] | |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 90 days |
2015 Directors Plan [Member] | |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 1 year |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 500,000 |
7. Stock Options, Re
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Abstract] | ||
Stock-based compensation expense | $ 875 | $ 671 |
7. Stock Options, _2
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | Mar. 31, 2019 |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Number of Shares, Outstanding | 2,536,320 | |
Weighted Average Exercise Price, Outstanding | $ 3.53 | |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 281 days | 4 years 339 days |
Aggregate Intrinsic Value, Outstanding | $ 2,464 | |
Number of Shares, Exercisable | 1,247,743 | |
Weighted Average Exercise Price, Exercisable | $ 3.50 | |
Weighted Average Remaining Contractual Term, Exercisable | 2 years 69 days | |
Aggregate Intrinsic Value, Exercisable | $ 3,543 | |
Number of Shares, Granted | 16,000 | |
Weighted Average Exercise Price, Granted | $ 5.08 | |
Number of Shares, Forfeitures | (336,341) | |
Weighted Average Exercise Price, Forfeitures | $ 2.85 | |
Number of Shares, Exercised | (156,489) | |
Weighted Average Exercise Price, Exercised | $ 3.32 | |
Number of Shares, Outstanding | 2,059,490 | |
Weighted Average Exercise Price, Outstanding | $ 3.67 | |
Aggregate Intrinsic Value, Outstanding | $ 5,492 |
7. Stock Options, _3
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - Share-based Payment Arrangement, Option [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Line Items] | ||
Weighted average fair value of options granted (in Dollars per share) | $ 2.10 | $ 1.52 |
Intrinsic value of options exercised | $ 258,101 | $ 0 |
Cash received from stock options exercised | $ 519,184 | $ 0 |
Number of options that vested (in Shares) | 626,278 | 360,074 |
Fair value of options that vested | $ 964,820 | $ 570,552 |
Unrecognized compensation expense related to non-vested options at end of period | $ 1,112,499 | $ 1,393,633 |
Weighted average years over which non-vested option expense will be recognized | 2 years 58 days | 1 year 310 days |
7. Stock Options, _4
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan - shares | Mar. 31, 2019 | Dec. 30, 2018 |
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | ||
Options Outstanding | 2,059,490 | 2,536,320 |
2000 Stock Option Plan [Member] | ||
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | ||
Options Outstanding | 10,000 | |
2010 Employee LT Equity Incentive Plan [Member] | ||
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | ||
Options Outstanding | 568,989 | |
2016 Employee LT Equity Incentive Plan [Member] | ||
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | ||
Options Outstanding | 1,480,501 |
7. Stock Options, _5
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range shares in Millions | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Underlying Shares Outstanding (in Shares) | shares | 2,059,490 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 1,247,743 |
$1.43 - $2.35 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $ 1.43 |
Range of Exercise Prices, Upper Limit | $ 2.35 |
Underlying Shares Outstanding (in Shares) | shares | 153,354 |
Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 255 days |
Options Outstanding, Weighted Average Exercise Price | $ 1.77 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 153,354 |
Options Exercisable, Weighted Average Exercise Price | $ 1.76 |
$2.39 - $3.59 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 2.39 |
Range of Exercise Prices, Upper Limit | $ 3.59 |
Underlying Shares Outstanding (in Shares) | shares | 629,301 |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years 219 days |
Options Outstanding, Weighted Average Exercise Price | $ 3.44 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 405,303 |
Options Exercisable, Weighted Average Exercise Price | $ 3.39 |
$3.60 - $5.90 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 3.60 |
Range of Exercise Prices, Upper Limit | $ 5.90 |
Underlying Shares Outstanding (in Shares) | shares | 1,274,835 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 175 days |
Options Outstanding, Weighted Average Exercise Price | $ 4.02 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 689,086 |
Options Exercisable, Weighted Average Exercise Price | $ 3.95 |
$6.15 - $6.15 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 6.15 |
Range of Exercise Prices, Upper Limit | $ 6.15 |
Underlying Shares Outstanding (in Shares) | shares | 2,000 |
Options Outstanding, Weighted Average Remaining Contractual Life | 9 years 346 days |
Options Outstanding, Weighted Average Exercise Price | $ 6.15 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 0 |
Options Exercisable, Weighted Average Exercise Price | $ 0 |
7. Stock Options, _6
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract] | ||
Expected volatility | 49.00% | 49.00% |
Expected annual dividend yield | 1.50% | 1.50% |
Risk free rate of return | 2.52% | 2.49% |
Expected option term (years) | 6 years | 6 years |
7. Stock Options, _7
7. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Nonvested Restricted Stock Shares Activity [Abstract] | |
Number of Shares, Restricted Shares Outstanding | shares | 100,000 |
Grant Date Fair Value Per Share, Restricted Shares Outstanding | $ / shares | $ 4.06 |
Unrecognized compensation expense for non-vested shares as of March 31, 2019 | |
Expense to be recognized in future periods | $ | $ 214,093,000 |
Weighted average number of months over which expense is expected to be recognized | 15 days |
Number of Shares, Shares granted with restrictions | shares | 0 |
Grant Date Fair Value Per Share, Shares granted with restrictions | $ / shares | $ 0 |
Number of Shares, Shares vested and restrictions removed | shares | 0 |
Grant Date Fair Value Per Share, Shares vested and restrictions removed | $ / shares | $ 0 |
Total Fair Value of Shares That Vested, Shares vested and restrictions removed | $ | $ 0 |
Number of Shares, Restricted Shares Outstanding | shares | 100,000 |
Grant Date Fair Value Per Share, Restricted Shares Outstanding | $ / shares | $ 4.06 |
8. Income Taxes (Details)
8. Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
8. Income Taxes (Details) [Line Items] | |||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 49,000 | $ 45,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | |
Research Tax Credit Carryforward [Member] | |||
8. Income Taxes (Details) [Line Items] | |||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 210,000 | ||
Minimum [Member] | Research Tax Credit Carryforward [Member] | |||
8. Income Taxes (Details) [Line Items] | |||
Franchise Tax Credit Carryforwards Expiration Date | 2034 | ||
Maximum [Member] | Research Tax Credit Carryforward [Member] | |||
8. Income Taxes (Details) [Line Items] | |||
Franchise Tax Credit Carryforwards Expiration Date | 2039 |
8. Income Taxes (De
8. Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||
Federal | $ 647 | $ 40 |
Federal | (10) | (258) |
Federal | 637 | (218) |
State | 115 | (24) |
State | (5) | 10 |
State | 110 | (14) |
Total | 762 | 16 |
Total | (15) | (248) |
Total | $ 747 | $ (232) |
8. Income Taxes (_2
8. Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Deferred revenue | $ 715 | $ 809 |
Share-based compensation | 352 | 329 |
Compensation and benefits | 81 | 49 |
Texas franchise tax R&D credit | 210 | 194 |
Allowance for doubtful accounts | 37 | 37 |
Deferred state income taxes | 49 | 45 |
Accrued expenses not deducted for tax | 5 | 6 |
Valuation allowance | (210) | (194) |
Total deferred tax assets | 1,239 | 1,275 |
Deferred tax liabilities: | ||
Intangible assets | 623 | 667 |
Deferred expenses | 206 | 213 |
Total gross deferred tax liabilities | 829 | 880 |
Net deferred tax assets | $ 410 | $ 395 |
8. Income Taxes (_3
8. Income Taxes (Details) - Schedule of Unrecognized Tax Benefits Roll Forward - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | ||
Balance at beginning of period | $ 113 | $ 158 |
Balance at end of period | 113 | 162 |
Increases for tax positions related to the current year | 0 | 4 |
Increases for tax positions related to prior years | 0 | 0 |
Decreases for tax positions where the statue has expired | $ 0 | $ 0 |
8. Income Taxes (_4
8. Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Income tax expense | $ 665 | $ (245) |
Increase (decrease) in taxes resulting from: | ||
State taxes, net of federal benefit | 86 | 5 |
Stock based compensation | 73 | 30 |
Other | 14 | (6) |
R&D tax credit uncertain tax position (net) | 0 | 3 |
Research and development credit | (17) | (19) |
Foreign derived intangible income | (74) | 0 |
Income tax expense | $ 747 | $ (232) |
9. Earnings (L
9. Earnings (Loss) per Common Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Numerator for basic and diluted earnings per share: | |||||
Net income (loss) (in Dollars) | $ 2,420 | $ 2,998 | $ 998 | $ 593 | $ (935) |
Denominators for basic and diluted earnings per share: | |||||
Weighted average shares outstanding - basic | 17,197 | 21,793 | |||
Dilutive potential common shares | |||||
Stock options and awards | 467 | 0 | |||
Denominator for diluted earnings per share | 17,664 | 21,793 | |||
Net income (loss) per common share - basic (in Dollars per share) | $ 0.14 | $ (0.04) | |||
Net income (loss) per common share – diluted (in Dollars per share) | $ 0.14 | $ (0.04) |
10. Dividends (Details)
10. Dividends (Details) - Subsequent Event [Member] | Apr. 29, 2019$ / shares |
10. Dividends (Details) [Line Items] | |
Common Stock, Dividends, Per Share, Declared | $ 50 |
Dividends Payable, Date to be Paid | May 28, 2019 |
Dividends Payable, Date of Record | May 13, 2019 |
10. Dividends (De
10. Dividends (Details) - Schedule of Dividends Payable - $ / shares | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Schedule of Dividends Payable [Abstract] | ||||
Dividend per share of common stock | $ 0.015 | $ 0.015 | $ 0.015 | $ 0.015 |
Dividend record date | Mar. 11, 2019 | Mar. 9, 2018 | ||
Dividend payment date | Mar. 25, 2019 | Mar. 23, 2018 |
11. Commitments and Contingen_2
11. Commitments and Contingencies (Details) - USD ($) | May 01, 2019 | Dec. 18, 2018 | Sep. 13, 2018 | Dec. 31, 2018 | Mar. 31, 2019 |
11. Commitments and Contingencies (Details) [Line Items] | |||||
Other Commitment | $ 900,000 | ||||
Loss Contingency, Damages Awarded, Value | $ 1,400,000 | ||||
Settlement Liabilities, Percentage | 25.00% | ||||
Settlement Liabilities, Current | $ 350,000 | ||||
Litigation Settlement, Expense | $ 12,721 | ||||
Subsequent Event [Member] | |||||
11. Commitments and Contingencies (Details) [Line Items] | |||||
Lessee, Operating Lease, Term of Contract | 10 years | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 462,000 | ||||
Operating Lease, Liability | $ 3,000,000 |
12. Concentration of Business_2
12. Concentration of Business Volume and Credit Risk (Details) - Revenue Benchmark [Member] | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Customer Concentration Risk [Member] | ||
12. Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||
Concentration Risk, Percentage | 19.00% | 12.00% |
Geographic Concentration Risk [Member] | ||
12. Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||
Concentration Risk, Percentage | 26.00% |
13. Segment and Geographic Di_2
13. Segment and Geographic Disclosures (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
13. Segment and Geographic Disclosures (Details) [Line Items] | ||
Number of Operating Segments | 1 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
13. Segment and Geographic Disclosures (Details) [Line Items] | ||
Concentration Risk, Percentage | 19.00% | 12.00% |
UNITED STATES | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
13. Segment and Geographic Disclosures (Details) [Line Items] | ||
Concentration Risk, Percentage | 28.00% | 30.00% |